# EDGAR Filing Document

**Accession Number:** 0001830197
**File Stem:** 0001830197-23-000011
**Filing Date:** 2023-3
**Character Count:** 1000616
**Document Hash:** ef28f6a114f0bd1d0e9c2b2d83a9975e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001830197-23-000011.hdr.sgml**: 20230309

**ACCESSION NUMBER**: 0001830197-23-000011

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 140

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230309

**DATE AS OF CHANGE**: 20230309

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Home Point Capital Inc.
- **CENTRAL INDEX KEY:** 0001830197
- **STANDARD INDUSTRIAL CLASSIFICATION:** MORTGAGE BANKERS & LOAN CORRESPONDENTS [6162]
- **IRS NUMBER:** 901116426
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39964
- **FILM NUMBER:** 23720065

**BUSINESS ADDRESS:**
- **STREET 1:** 2211 OLD EARHART ROAD
- **STREET 2:** SUITE 250
- **CITY:** ANN ARBOR
- **STATE:** MI
- **ZIP:** 48105
- **BUSINESS PHONE:** (888) 616-6866

**MAIL ADDRESS:**
- **STREET 1:** 2211 OLD EARHART ROAD
- **STREET 2:** SUITE 250
- **CITY:** ANN ARBOR
- **STATE:** MI
- **ZIP:** 48105

?xml version="1.0" ? hmpt-20221231

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

**(Mark One)**

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2022** 

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from <u>______________</u> to <u>______________</u>** 

**Commission file number 001-39964** 

**Home Point Capital Inc.** 

**(Exact name of registrant as specified in its charter)**

---

| | |
|:---|:---|
| **Delaware** | **90-1116426** |
| (State or other jurisdiction of<br>incorporation or organization) | (I.R.S. Employer Identification No.) |
| **2211 Old Earhart Road, Suite 250**<br>**Ann Arbor, Michigan** | **48105** |
| (Address of Principal Executive Offices) | **(Zip Code)** |

---

**(888) 616-6866** 

Registrant's telephone number, including area code

**Securities registered pursuant to Section 12(b) of the Act:** 

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which<br>registered** |
| Common Stock, par value<br>$0.0000000072 per share | HMPT | The Nasdaq Stock Market LLC<br>(The Nasdaq Global Select Market) |

---

**Securities registered pursuant to section 12(g) of the Act: None.**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of June 30, 2022, the aggregate value of the registrant's common stock held by non-affiliates was approximately $29.4 million, based on the closing price of the registrant's common stock on the Nasdaq Global Select Market on that date. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purposes.

The registrant had outstanding 138,401,090 shares of common stock as of March 3, 2023.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement relating to its 2023 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**TABLE OF CONTENTS** 

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| | |
|:---|:---|
| **PART I** | **Page** |
| <u>[Item 1. Business](#i8bd68193849d495d89bf8c04be5f437f_13)</u> | [1](#i8bd68193849d495d89bf8c04be5f437f_13) |
| <u>[Item 1A. Risk Factors](#i8bd68193849d495d89bf8c04be5f437f_16)</u> | [10](#i8bd68193849d495d89bf8c04be5f437f_16) |
| <u>[Item 1B. Unresolved Staff Comments](#i8bd68193849d495d89bf8c04be5f437f_19)</u> | [41](#i8bd68193849d495d89bf8c04be5f437f_19) |
| <u>[Item 2. Properties](#i8bd68193849d495d89bf8c04be5f437f_22)</u> | [41](#i8bd68193849d495d89bf8c04be5f437f_22) |
| <u>[Item 3. Legal Proceedings](#i8bd68193849d495d89bf8c04be5f437f_25)</u> | [41](#i8bd68193849d495d89bf8c04be5f437f_25) |
| <u>[Item 4. Mine Safety Disclosures](#i8bd68193849d495d89bf8c04be5f437f_28)</u> | [41](#i8bd68193849d495d89bf8c04be5f437f_28) |
| **PART II** |  |
| <u>[Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#i8bd68193849d495d89bf8c04be5f437f_34)</u> | [42](#i8bd68193849d495d89bf8c04be5f437f_34) |
| <u>[Item 6. \[Reserved\]](#i8bd68193849d495d89bf8c04be5f437f_37)</u> | [42](#i8bd68193849d495d89bf8c04be5f437f_37) |
| <u>[Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](#i8bd68193849d495d89bf8c04be5f437f_40)</u> | [43](#i8bd68193849d495d89bf8c04be5f437f_40) |
| <u>[Item 7A. Quantitative and Qualitative Disclosures About Market Risk](#i8bd68193849d495d89bf8c04be5f437f_76)</u> | [62](#i8bd68193849d495d89bf8c04be5f437f_76) |
| <u>[Item 8. Financial Statements and Supplementary Data](#i8bd68193849d495d89bf8c04be5f437f_79)</u> | [63](#i8bd68193849d495d89bf8c04be5f437f_79) |
| <u>[Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#i8bd68193849d495d89bf8c04be5f437f_181)</u> | [105](#i8bd68193849d495d89bf8c04be5f437f_181) |
| <u>[Item 9A. Controls and Procedures](#i8bd68193849d495d89bf8c04be5f437f_184)</u> | [105](#i8bd68193849d495d89bf8c04be5f437f_184) |
| <u>[Item 9B. Other Information](#i8bd68193849d495d89bf8c04be5f437f_187)</u> | [105](#i8bd68193849d495d89bf8c04be5f437f_187) |
| <u>[Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i8bd68193849d495d89bf8c04be5f437f_190)</u> | [105](#i8bd68193849d495d89bf8c04be5f437f_190) |
| **PART III** |  |
| <u>[Item 10. Directors, Executive Officers and Corporate Governance](#i8bd68193849d495d89bf8c04be5f437f_196)</u> | [106](#i8bd68193849d495d89bf8c04be5f437f_196) |
| <u>[Item 11. Executive Compensation](#i8bd68193849d495d89bf8c04be5f437f_199)</u> | [106](#i8bd68193849d495d89bf8c04be5f437f_199) |
| <u>[Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#i8bd68193849d495d89bf8c04be5f437f_202)</u>  | [106](#i8bd68193849d495d89bf8c04be5f437f_202) |
| <u>[Item 13. Certain Relationships and Related Transactions](#i8bd68193849d495d89bf8c04be5f437f_205)</u> | [106](#i8bd68193849d495d89bf8c04be5f437f_205) |
| <u>[Item 14. Principal Accountant Fees and Services](#i8bd68193849d495d89bf8c04be5f437f_208)</u> | [106](#i8bd68193849d495d89bf8c04be5f437f_208) |
| **PART IV** |  |
| <u>[Item 15. Exhibits](#i8bd68193849d495d89bf8c04be5f437f_214)</u> | [107](#i8bd68193849d495d89bf8c04be5f437f_214) |
| <u>[Item 16. Form 10-K Summary](#i8bd68193849d495d89bf8c04be5f437f_217)</u> | [111](#i8bd68193849d495d89bf8c04be5f437f_217) |
| <u>[Signatures](#i8bd68193849d495d89bf8c04be5f437f_220)</u> | [112](#i8bd68193849d495d89bf8c04be5f437f_220) |

---

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**Cautionary Note on Forward-Looking Statements**

This Annual Report on Form 10-K (this "Report") contains certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements include, but are not limited to, statements relating to our future financial performance, our business prospects and strategy, anticipated financial position, liquidity and capital needs, the industry in which we operate and other similar matters. Words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "could," "would," "will," "may," "can," "continue," "potential," "should" and the negative of these terms or other comparable terminology often identify forward-looking statements. Forward-looking statements are not guarantees of future performance, are based upon assumptions, and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, including the risks discussed in this Report. Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those contemplated include, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our reliance on our financing arrangements to fund mortgage loans and otherwise operate our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the dependence of our loan origination and servicing revenues on macroeconomic and U.S. residential real estate market conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement to repurchase mortgage loans or indemnify investors if we breach representations and warranties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• counterparty risk;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks related to any subservicer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition for mortgage assets that may limit the availability of desirable originations, acquisitions and result in reduced risk-adjusted returns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to continue to grow our loan origination business or effectively manage significant increases in our loan production volume;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficult conditions or disruptions in the MBS, mortgage, real estate and financial markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition in the industry in which we operate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to acquire loans and sell the resulting MBS in the secondary markets on favorable terms in our production activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to adapt to and implement technological changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effectiveness of our risk management efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to detect misconduct and fraud;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any failure to attract and retain a highly skilled workforce, including our senior executives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to obtain, maintain, protect and enforce our intellectual property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any cybersecurity risks, cyber incidents and technology failures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our vendor relationships;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our failure to deal appropriately with various issues that may give rise to reputational risk, including legal and regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any employment litigation and related unfavorable publicity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exposure to new risks and increased costs as a result of initiating new business activities or strategies or significantly expanding existing business activities or strategies;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of changes in political or economic stability or by government policies on our material vendors with operations in India;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to fully utilize our NOL and other tax carryforwards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any challenge by the IRS of the amount, timing and/or use of our NOL carryforwards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• possible changes in legislation and the effect on our ability to use the tax benefits associated with our NOL carryforwards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of other changes in tax laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of interest rate fluctuations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with hedging against interest rate exposure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of any prolonged economic slowdown, recession or declining real estate values;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with financing our assets with borrowings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with a decrease in value of our collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the dependence of our operations on access to our financing arrangements, which are mostly uncommitted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with the financial and restrictive covenants included in our financing agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to raise the debt or equity capital required to finance our assets and maintain and grow our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with derivative financial instruments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to comply with continually changing federal, state and local laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of revised rules and regulations and enforcement of existing rules and regulations by the CFPB;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of revised rules and regulations and enforcement of existing rules and regulations by state regulatory agencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to comply with the GSE, FHA, VA and USDA guidelines and changes in these guidelines or GSE and Ginnie Mae guarantees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in regulations or the occurrence of other events that impact the business, operations or prospects of government agencies such as Ginnie Mae, the FHA or the VA, the USDA, or GSEs such as Fannie Mae or Freddie Mac, or such changes that increase the cost of doing business with such entities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to obtain and/or maintain licenses and other approvals in those jurisdictions where required to conduct our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to comply with the regulations applicable to our investment management subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of private legal proceedings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with our acquisition of MSRs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of our counterparties terminating our servicing rights under which we conduct servicing activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with higher risk loans that we service;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to foreclose on our mortgage assets in a timely manner or at all; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effects of the COVID-19 (as defined herein) pandemic on our business.

Many of the important factors that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date of this Report. Except as otherwise required by law, we do not assume any obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated

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events. You should refer to the risks and uncertainties listed under the heading "Risk Factors" in Part I, Item 1A. of this Report, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission ("SEC"), for a discussion of other important factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements.

**Website and Social Media Disclosure**

We use our website (www.investors.homepoint.com) and our corporate Facebook, LinkedIn, and Twitter accounts as routine channels of distribution of Company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. The contents of our website and social media channels are not, however, incorporated herein by reference or otherwise a part of this Report.

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**Glossary of Defined Terms**

As used in this Report, unless the context otherwise requires:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "An Agency" or "Agencies" refers to Ginnie Mae, the FHA, the VA, the USDA and/or GSEs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "CFPB" refers to the Consumer Financial Protection Bureau.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Fannie Mae" refers to the Federal National Mortgage Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "FHA" refers to the Federal Housing Administration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "FOA" refers to fallout adjusted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Freddie Mac" refers to the Federal Home Loan Mortgage Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Ginnie Mae" refers to the Government National Mortgage Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "GSE" refers to Government-Sponsored Enterprises, such as Fannie Mae and Freddie Mac.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Holdings" refers to Home Point Capital LP, a Delaware limited partnership, the direct parent of Home Point Capital Inc. prior to the consummation of the merger in connection with our initial public offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "HUD" refers to the U.S. Department of Housing and Urban Development.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "MBS" refers to mortgage-backed securities—a type of asset-backed security that is secured by a group of mortgage loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "MSRs" refers to mortgage servicing rights—the right and obligation to service a loan or pool of loans and to receive a servicing fee as well as certain ancillary income. MSRs may be bought and sold, resulting in the transfer of loan servicing obligations. MSRs are designated as such when the benefits of servicing the loans are expected to adequately compensate the servicer for performing the servicing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Sponsor" or "Stone Point Capital" refers to Stone Point Capital LLC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Trident Stockholders" refers, collectively, to one or more investment entities directly or indirectly managed by Stone Point Capital, including Trident VI, L.P., Trident VI Parallel Fund, L.P., Trident VI DE Parallel Fund, L.P. and Trident VI Professionals Fund, L.P.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "UPB" refers to unpaid principal balance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "USDA" means the U.S. Department of Agriculture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "VA" means the U.S. Department of Veterans Affairs.

Unless the context otherwise indicates, any reference in this Report to "Home Point," "our Company," "the Company," "us," "we" and "our" refers to Home Point Capital Inc.

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**Part I.**

**Item 1. Business** 

**Company Overview**

We are a leading residential mortgage originator and servicer driven by a mission to create financially healthy, happy homeowners. We do this by delivering scale, efficiency and savings to our partners and customers. Our business model is focused on leveraging a nationwide network of partner relationships to drive sustainable originations. We support our origination operations through a robust operational infrastructure and a highly responsive customer experience. We then leverage our servicing platform to manage the customer experience. We believe that the complementary relationship between our origination and servicing businesses allows us to provide a best-in-class experience to our customers throughout their homeownership lifecycle.

Our primary focus is our Wholesale channel, a business-to-business-to-customer distribution model in which we utilize our relationships with independent mortgage brokerages, which we refer to as our Broker Partners, to reach our end-borrower customers. In this channel, while our Broker Partners establish and maintain the relationship with the end-borrower, we as the lender underwrite the loan in-house and act as the original lender. To emphasize focus on the Wholesale channel, on June 1, 2022, we completed the sale of our Delegated Correspondent channel and subsequently redirected our Direct channel resources to wholesale.

According to *Inside Mortgage Finance*, we are the third largest wholesale lender by origination volume for the year ended December 31, 2022. We propel the success of our more than 9,000 Broker Partners through a combination of full service, localized sales coverage and an efficient loan fulfillment process supported by our fully integrated technology platform. We differentiate ourselves from our peers focused on the wholesale channel by following a partnership approach towards our Broker Partners, where we seek to mitigate any conflict of interest by allowing the Broker Partners to maintain their customer relationships while we support them with our best-in-class technology platform. Broker Partners, which we define to include brokerage businesses that may include multiple broker employees, represent wholesale and non-delegated correspondent accounts that Home Point is authorized to conduct business with at a given point in time (whether or not we have recently originated mortgages through such broker).

The wholesale channel share of the U.S. residential mortgage market continues to increase. According to *Inside Mortgage Finance*, our market share in the wholesale channel was 6.6% in 2022 compared to 1.6% in 2017. This growth trend, together with our distinct wholesale strategy, enable highly scalable production volumes, a strong mix of purchase transactions and favorable unit economics, driven by lower fixed costs.

In February 2022, we announced an agreement with ServiceMac, LLC ("ServiceMac"), a wholly owned subsidiary of First American Financial Corporation, pursuant to which ServiceMac will subservice all mortgage loans underlying MSRs we hold. ServiceMac began subservicing loans for us in the second quarter of 2022. While ServiceMac is performing the servicing functions on our behalf, we continue to hold the MSRs. The transition of our servicing operation to ServiceMac enables the redeployment of technology and process resources to support our Wholesale channel, including expanding product offerings and enhancing the partner experience. Strategically retaining the servicing on our originations gives us the opportunity to establish productive relationships with our customers. The opportunity for productive relationships with our customers continues after ServiceMac began subservicing loans for us since customers receive the same high-quality service they are accustomed to and they will continue to see our brand on all communications. Our relationship with ServiceMac allows us to maintain a lower, more variable cost structure and provides greater flexibility when strategically selling certain non-core MSRs.

We have built a flexible technology infrastructure that is highly componentized, which we believe allows us to leverage nimble internal development teams and market leading third-party systems to provide a best-in-class experience for our partners and customers. We believe that our ability to rapidly reconfigure individual solutions using technology in areas such as underwriting, pricing and disclosure preparation reduces the complexity and improves the efficiency of the origination process.

**Our Business**

Our business model is focused on growing originations by leveraging a network of partner relationships that we support through reliable loan origination infrastructure and a highly responsive customer experience. Our operations are organized into two separate reportable segments: Origination and Servicing.

***Origination***

We originate mortgages in the Wholesale channel and choose to operate in this channel because we believe that it:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provides us efficient access to both purchase and refinance transactions throughout market cycles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• benefits from the premise that in-market advisors will continue to be a cornerstone of the mortgage origination process;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• is highly scalable and flexible; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provides an optimized experience for our customers.

Our primary source of revenue consists of (i) gains on loans, which is the difference between the cost of originating or purchasing the mortgage loans and the price at which we sell such loans to investors, primarily the GSEs and Ginnie Mae, and (ii) gains on fair value of MSRs.

Our originations are comprised of both purchase and refinance originations. While refinancing origination levels in the market vary based on a number of market dynamics, including interest rate levels, inflation, unemployment and the strength of the overall economy, we are focused on maintaining steady purchase origination volumes, which gives us a considerable advantage over many of our competitors as purchase originations tend to be more stable and reduce earnings volatility. In 2021, our purchase origination mix was 31.1%. In 2022, the higher interest rate environment resulted in an increase in our purchase origination mix to 61.3%.

*Wholesale Channel*

We originate residential mortgages in our Wholesale channel through a nationwide network of more than 9,000 Broker Partners. We are strategically focused on this channel given that the underlying cost structure is more efficient than that of Distributed Retail channel, where the costs and overhead associated with originating loans are the full responsibility of the lender. As a result, we are able to operate with a lower fixed cost than many of our competitors. This highly leverageable cost structure allows for improved financial flexibility in varying interest rate environments.

Our Broker Partners have local and personal relationships with their customers and therefore can provide tailored and thoughtful advice. However, they do not have the underwriting, funding, distributing or servicing capabilities for these loans. We provide these resources, which allow them to operate with scale and compete against larger market participants. This enables our Broker Partners to be nimble and run their business in an entrepreneurial fashion. Our Broker Partners are focused on providing the best possible experience, service, and price to their customers, while we concentrate on maximizing the efficiency of the origination platform leveraged by our partners. While our Broker Partners are responsible for originating the loan, we, as the lender, are responsible for making the loan. As a result, the decision to extend credit to the borrower, and the associated credit risk exposure, is our sole responsibility and not the responsibility of our Broker Partners.

The efficiency of our sales team, combined with our flexible cost structure, has positioned us to further consolidate volume from the smaller and less efficient wholesale lenders that still control nearly 45% of the wholesale market. We plan to do this by increasing the number of independent brokerages that serve as our Broker Partners. We believe that further penetration of the highly fragmented brokerage market will allow us to maintain our industry leading profile.

The strategy we employ in our Wholesale channel is closely tied to our servicing strategy. Strategically retaining the servicing on our originations gives us the opportunity to establish productive relationships with our customers. This provides us the ability to include our Broker Partners in the management of the customer relationship and ultimately the retention of customers in our collective ecosystem. The opportunity for productive relationships with our customers continues since ServiceMac began subservicing loans for us as customers receive the same high-quality service they are accustomed to and they continue to see our brand on all communications. In addition, the transition of our servicing operation to ServiceMac enables the redeployment of technology and process resources to support our Wholesale channel, including expanding product offerings and enhancing the partner experience.

*Legacy Correspondent and Direct Channels*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In mid-2022, we sold our delegated correspondent channel and redirected our direct channel resources to focus solely on our Wholesale channel.

*Correspondent Channel*

In our Correspondent channel, we purchased closed and funded mortgages from a trusted network of our Correspondent Partners. Our Correspondent Partners included primarily small- to medium-sized independent mortgage banks, builder affiliates and financial institutions. Our partners underwrote, processed and funded loans, but typically lacked the scale to economically retain servicing. Our financial institution partners preferred to sell to non-bank originators to avoid conflicting customer solicitation. This channel provided a flexible alternative for us to achieve our customer acquisition goals at a low cost.

*Direct Channel*

In our Direct channel, we originated residential mortgages primarily for existing servicing customers who are seeking new financing options. Our Direct strategy was focused on maximizing the customer retention opportunity in our servicing portfolio, but was differentiated from our competitors in that it was designed to be inclusive of both of our customers' preferences and our Broker Partners' in-market presence. For example, if a Broker Partner-initiated customer proactively contacts us about a refinancing, we referred the customer to the applicable Broker Partner that originally established the relationship. This strategy removed the conflict of interest that some competitors have between their direct and wholesale channels. If the customer preferred to use our Direct functionality, or if there is no Broker Partner perhaps because the customer was sourced through a Correspondent Partner, we could still fulfill the customer's preference and retain the customer relationship.

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***Servicing***

While we initiate our customer relationships at the time the mortgage is originated, we maintain ongoing connectivity with our nearly 317,000 servicing portfolio customers. Additionally, retaining the MSR provides the Company with opportunities to strategically manage liquidity. Our Servicing segment is authorized to conduct business in all 50 states and D.C.

In February 2022, we announced an agreement with ServiceMac, pursuant to which ServiceMac began to subservice all mortgage loans underlying MSRs we hold in the second quarter of 2022. They perform servicing functions on our behalf, but we continue to hold the MSRs. The transition of our servicing operation to ServiceMac enables the redeployment of technology and process resources to support our Wholesale channel, including expanding product offerings and enhancing the partner experience. Strategically retaining the servicing on our originations gives us the opportunity to establish productive relationships with our customers while opportunistically participating in the dynamic MSR sale market. Productive relationships with our customers continues after ServiceMac began subservicing loans for us since customers receive the same high-quality service they are accustomed to and they continue to see our brand on all communications. Our relationship with ServiceMac allows us to maintain a lower, more variable cost structure and provides greater flexibility when strategically selling certain non-core MSRs.

As of December 31, 2022, we had approximately 317,000 servicing portfolio customers, as compared to 442,000 at the end of 2021. During this same period, our servicing portfolio UPB decreased from $133.9 billion at the end of 2021 to $89.3 billion at the end of 2022.

***Technology***

Mortgage banking technology is evolving rapidly. Historically, it has been an advantage to develop technology in-house, but in today's marketplace, there are various alternative technology solutions that provide a competitive advantage through increased flexibility and lower costs. Building and maintaining a monolithic, proprietary loan origination system is not only costly, but highly complex. This makes it increasingly challenging to evolve with emerging technologies. We have developed a multi-prong strategy whereby we (i) partner with best-in-class third-party software providers to meet our core technology needs and (ii) deploy internal resources to build proprietary software in areas where we believe we can create a strategic advantage. We integrate our third-party providers with our proprietarily built software to provide a unified, seamless experience for our partners and customers. We believe that our componentized approach promotes nimbleness and allows us to provide technology solutions faster than our competition, while retaining control in areas that we deem strategically important.

Our servicing platform supports our customers' home ownership journey. This is done together with third-party providers that offer a variety of products and services to our customers, including insurance, loans and other ancillary home service products. In addition to revenue generation, the successful execution of these offerings is intended to build a stronger relationship between us and our customers with the goal of retaining the customer in our ecosystem.

We believe the combination of customer-centric technology and process execution is key to creating the best overall technology platform. As a result, we have placed a heavy emphasis on process design and have assembled a team of process engineers that possess a unique combination of business acumen and an understanding of how to deploy mortgage technology. This process engineering team is integrated within the operations of our business to ensure our technology solutions are strategically aligned in developing and delivering efficiencies to the business. These efficiencies promote our ability to drive scale and better serve the needs of both our customers and our partners. The dedicated focus of this team enables us to constantly identify and streamline operational areas that can be best served through technological improvement.

**U.S. Mortgage Market** 

The U.S. mortgage market is one of the largest and consistently growing financial markets in the world. As of September 30, 2022, according to the Federal Reserve Bank of New York there was approximately $11.67 trillion of residential mortgage debt outstanding in the United States. Despite continued aggregate growth, the pace of new mortgage originations slowed in 2022 in a rapidly rising interest rate environment from pandemic new mortgage origination highs. According to Fannie Mae's January 2023 Housing Forecast, total purchase and refinance originations are expected to be $1.6 trillion in 2023, down from $2.3 trillion in originations in 2022. Periods of outsized refinancing opportunities, such as those opportunities experienced in 2020, provided significant upside in the mortgage market. The shifting interest rate environment has emphasized long-term stability through purchase mortgages, which represent $1.3 trillion of the market of the 2023 forecast.

**Regulation**

We operate in a heavily regulated industry that is highly focused on consumer protection. Both the scope of the laws and regulations and the intensity of the supervision to which we are subject have increased in recent years, initially in response to the financial crisis, and more recently in light of other factors such as technological and market changes. Regulatory enforcement and fines have also increased across the financial services sector. We expect to continue to face regulatory scrutiny as a participant in the mortgage sector.

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Our business is subject to extensive oversight and regulation by federal, state and local governmental authorities, including the CFPB, HUD and various state agencies that license and conduct examinations of our origination, loan servicing, loss mitigation, and collection activities. From time to time, we also receive requests from federal, state and local agencies for records, documents and information relating to the policies, procedures and practices of our origination, loan servicing, loss mitigation and collection activities. The GSEs and Ginnie Mae, and various investors and lenders also conduct periodic reviews and audits of our operations.

The descriptions below summarize certain significant state and federal laws to which we are subject. The descriptions are qualified in their entirety by reference to the particular statutory or regulatory provisions summarized. They do not summarize all possible or proposed changes in current laws or regulations and are not intended to be a substitute for the related statues or regulatory provisions.

***Federal, State and Local Laws and Regulations***

We must comply with a large number of federal, state and local consumer protection laws and regulations including, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Real Estate Settlement Procedures Act ("RESPA") and Regulation X, which (1) require certain disclosures to be made to the borrower at application, as to the lender's good faith estimate of loan origination costs, and at closing with respect to the real estate settlement statement, (2) apply to certain loan servicing practices including escrow accounts, customer complaints, servicing transfers, lender-placed insurance, error resolution and loss mitigation, and (3) prohibit giving or accepting any fee, kickback or a thing of value for the referral of real estate settlement services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Truth In Lending Act ("TILA"), Home Ownership and Equity Protection Act of 1994, and Regulation Z, which regulate mortgage loan origination activities, require certain disclosures be made to borrowers throughout the loan process regarding terms of mortgage financing, provide for a three-day right to rescind some transactions, regulate certain higher-priced and high-cost mortgages, require lenders to make a reasonable and good faith determination that consumers have the ability to repay the loan, mandate home ownership counseling for mortgage applicants, impose restrictions on loan originator compensation, and apply to certain loan servicing practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Regulation N, covering Mortgage Acts and Practices, prohibits certain unfair and deceptive acts and practices related to mortgage advertising;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• certain provisions of the Dodd-Frank Act, including the Consumer Financial Protection Act, which, among other things, prohibit unfair, deceptive or abusive acts or practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act, and Regulation V, which regulate the use and reporting of information related to the credit history of consumers, require disclosures to consumers regarding the use of credit report information in certain credit decisions and require lenders to undertake remedial actions if there is a breach in the lender's data security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Equal Credit Opportunity Act and Regulation B, which prohibit discrimination on the basis of age, race and certain other characteristics in the extension of credit and require certain disclosures to applicants for credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Homeowners Protection Act, which requires certain disclosures and the cancellation or termination of mortgage insurance once certain equity levels are reached;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Home Mortgage Disclosure Act and Regulation C, which require reporting of loan origination data, including the number of loan applications taken, approved, denied and withdrawn;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Fair Housing Act, which prohibits discrimination in housing on the basis of race, sex, national origin, and certain other characteristics;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Fair Debt Collection Practices Act, which regulates the timing and content of third-party debt collection communications;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Gramm-Leach-Bliley Act, which requires initial and periodic communication with consumers on privacy matters and the maintenance of privacy safeguards regarding certain consumer data in our possession;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Bank Secrecy Act and related regulations from the Office of Foreign Assets Control, and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act, or the USA PATRIOT Act, which impose certain due diligence and recordkeeping requirements on lenders to detect and block money laundering that could support terrorist or other illegal activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Secure and Fair Enforcement for Mortgage Licensing Act (the "SAFE Act"), which imposes state licensing requirements on mortgage loan originators;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Military Lending Act, or MLA, which restricts, among other things, the interest rate and other terms that can be offered to active military personnel and their dependents on most types of consumer credit, requires certain disclosures and prohibits certain terms, such as mandatory arbitration if a dispute arises concerning the consumer credit product;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Servicemembers Civil Relief Act, which provides financial protections for eligible service members;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Federal Trade Commission Act, the FTC Credit Practices Rules and the FTC Telemarketing Sales Rule, which prohibit unfair or deceptive acts or practices and certain related practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Telephone Consumer Protection Act, which restricts telephone and text solicitations and communications and the use of automatic telephone equipment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Electronic Signatures in Global and National Commerce Act, or ESIGN, and similar state laws, particularly the Uniform Electronic Transactions Act, or UETA, which require businesses that use electronic records or signatures in consumer transactions and provide required disclosures to consumers electronically, to obtain the consumer's consent to receive information electronically;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Electronic Fund Transfer Act of 1978, or EFTA, and Regulation E, which protect consumers engaging in electronic fund transfers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 and the FTC's rules promulgated pursuant to such Act, or the CAN-SPAM Act, which establish requirements for certain "commercial messages" and "transactional or relationship messages" transmitted via email; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Bankruptcy Code and bankruptcy injunctions and stays, which can restrict collection of debts.

In addition to applicable federal laws and regulations governing our operations, our ability to originate and service loans in any particular state is subject to that state's laws, regulations and licensing requirements, which may differ from the laws, regulations and licensing requirements of other states. State laws often include limits on the fees and interest rates we may charge, disclosure requirements with respect to fees and interest rates and other requirements. Many states have adopted regulations that prohibit various forms of "predatory" lending and place obligations on lenders to substantiate that a customer will derive a tangible benefit from the proposed home financing transaction and/or have the ability to repay the loan. Many of these laws are vague and subject to differing interpretation, which exposes us to additional risks.

We also must comply with federal, state, and local laws related to data privacy and the handling of personally identifiable information and other sensitive, regulated, or non-public data. These include the California Consumer Privacy Act ("CCPA") and the California Privacy Rights Act which amends and expands on the CCPA (together, the "Amended CCPA"), and we expect other states to enact legislation similar to the Amended CCPA. The Amended CCPA limits how companies can use customer data and impose obligations on companies in their management of such data, and requires us to modify our data processing practices and policies and to incur costs and expenses in an effort to fully comply. Generally speaking, the Amended CCPA provides consumers with certain privacy rights such as the right to request deletion of their data, the right to receive data on record for them, and the right to know what categories of data (generally) are maintained about them. It also mandates disclosures prior to, and at, the point of data collection and increases the privacy and security obligations of entities handling certain personal information of such consumers. The Amended CCPA allows consumers to submit verifiable consumer requests regarding their personal information and requires our business to implement procedures to comply with such requests. The Amended CCPA provides for civil money penalties for violations, as well as a private right of action for certain data breaches that result from a failure to implement reasonable safeguards.

These laws and regulations apply to many facets of our business, including loan origination, loan servicing, default servicing and collections, use of credit reports, safeguarding of non-public personally identifiable information about our customers, foreclosure and claims handling, investment of and interest payments on escrow balances and escrow payment features, and mandate certain disclosures and notices to borrowers. These requirements can and do change as statutes and regulations are enacted, promulgated, amended, interpreted and enforced.

In response to COVID-19, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") imposed several new compliance obligations on our mortgage servicing activities, including, but not limited to, mandatory forbearance offerings, altered credit reporting obligations, and moratoriums on foreclosure actions and late fee assessments. Many states have taken similar measures to provide mortgage payment and other relief to consumers, which create additional complexity around our mortgage servicing compliance activities. Federal, state and local executive, legislative and regulatory responses to COVID-19 have not been consistent in scope or application. For example, while certain foreclosure moratorium and forbearance programs have expired, other such programs have been extended. The regulatory response to COVID-19 has been characterized by rapid evolution and may continue to evolve in unpredictably ways.

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Our failure to comply with applicable federal, state and local laws, regulations and licensing requirements could lead to, without limitation, any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• loss of our licenses and approvals to engage in our servicing and lending businesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• governmental investigations and enforcement actions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• administrative fines and penalties and litigation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• civil and criminal liability, including class action lawsuits and actions to recover incentive and other payments made by governmental entities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• breaches of covenants and representations resulting in defaults and cross-defaults under our servicing and trade agreements and financing arrangements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• damage to our reputation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to obtain new financing and maintain existing financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to raise capital; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to execute on our business strategy.

***Supervision and Enforcement***

Since its formation, the CFPB has taken a very active role in the mortgage industry. The CFPB has rulemaking authority with respect to many of the federal consumer protection laws applicable to mortgage lenders and servicers, and its rulemaking and regulatory agenda relating to loan servicing and origination continues to evolve. The CFPB also has broad supervisory and enforcement powers with regard to non-depository financial institutions that engage in the origination and servicing of mortgage loans. The CFPB has conducted routine examinations of our business and will conduct future examinations.

As part of its enforcement authority, the CFPB can order, among other things, rescission or reformation of contracts, the refund of moneys or the return of real property, restitution, disgorgement or compensation for unjust enrichment, the payment of damages or other monetary relief, public notifications regarding violations, remediation of practices, external compliance monitoring and civil money penalties. The CFPB has been active in investigations and enforcement actions and has issued large civil money penalties since its inception to parties the CFPB determines violated the laws and regulations it enforces.

Individual states have also been active in the mortgage industry, as have other regulatory organizations such as the Multistate Mortgage Committee, a multistate coalition of various mortgage banking regulators. We also believe there has been a shift among certain regulators towards a broader view of the scope of regulatory oversight responsibilities with respect to mortgage lenders and servicers. In addition to their traditional focus on licensing and examination matters, certain regulators have begun to make observations, recommendations or demands with respect to areas such as corporate governance, safety and soundness and risk and compliance management.

In addition, we receive information requests and other inquiries, both formal and informal in nature, from our federal and state regulators as part of their general regulatory oversight of our servicing and lending businesses.

The CFPB and state regulators have also increasingly focused on the use and adequacy of technology in the mortgage servicing industry. In 2016, the CFPB issued a special edition supervisory report that stressed the need for mortgage servicers to assess and make necessary improvements to their information technology systems to ensure compliance with the CFPB's mortgage servicing requirements. The New York Department of Financial Services, or the NYDFS, also issued Cybersecurity Requirements for Financial Services Companies, which took effect in 2017, and which required banks, insurance companies, and other financial services institutions regulated by the NYDFS to establish and maintain a cybersecurity program designed to protect consumers and ensure the safety and soundness of New York State's financial services industry.

New regulatory and legislative measures, or changes in enforcement practices, including those related to the technology we use, could, either individually or in the aggregate, require significant changes to our business practices, impose additional costs on us, limit our product offerings, limit our ability to efficiently pursue business opportunities, negatively impact asset values or reduce our revenues.

***State Licensing, State Attorneys General and Other Matters***

Because we are not a depository institution, we must comply with state licensing requirements to conduct our business, and we are licensed to originate loans in all 50 states and the District of Columbia. We also are able to purchase and service loans in all 50 states and the District of Columbia, either because we have the required licenses in such jurisdictions or are exempt or otherwise not required to be licensed to perform such activity in such jurisdictions.

Under the SAFE Act, all states have laws that require mortgage loan originators employed by non-depository institutions to be individually licensed to offer mortgage loan products. These licensing requirements require individual loan originators employed by us to register in a nationwide mortgage licensing system, submit application and background information to state

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regulators for a character and fitness review, submit to a criminal background check, complete a minimum of 20 hours of pre-licensing education, complete an annual minimum of eight hours of continuing education and successfully complete an examination. As a result of each license we maintain, we are subject to regulatory oversight, supervision and enforcement authority in connection with the activities that we conduct pursuant to the license, including to determine our compliance with applicable law.

We also must comply with state licensing requirements to conduct our business, and we incur significant ongoing costs to comply with these licensing requirements. Our licensed entities are required to renew their licenses, typically on an annual basis, and to do so they must satisfy the license renewal requirements of each jurisdiction. This generally will include financial requirements such as providing audited financial statements or satisfying minimum net worth requirements and non-financial requirements such as satisfactorily completing examinations as to the licensee's compliance with applicable laws and regulations.

Failure to satisfy any of the requirements to which our licensed entities are subject could result in a variety of regulatory actions such as a fine, a directive requiring a certain step to be taken, a prohibition or restriction on certain activities, a suspension of a license or ultimately a revocation of a license. Certain types of regulatory actions could limit our ability to continue to conduct our business in the relevant jurisdictions or result in a breach of representations, warranties and covenants, and potentially cross-defaults in our financing arrangements which could limit or prohibit our access to liquidity to operate our business.

**Competition**

We compete with third-party businesses in originating forward mortgages, including bank and other non-bank financial services companies focused on one or more of these business lines. Competition in our industry can take many forms, including the variety of loan programs being made available, interest rates and fees charged for a loan, convenience in obtaining a loan, customer service levels, the amount and term of a loan, and marketing and distribution channels. Many of our competitors for forward mortgage originations are commercial banks or savings institutions. These financial institutions typically have access to greater financial resources, have more diverse funding sources with lower funding costs, are less reliant on loan sales or securitizations of mortgage loans into the secondary markets to maintain their liquidity, and may be able to participate in government programs in which we are unable to participate because we are not a state or federally chartered depository institution, all of which places us at a competitive disadvantage. In addition, our competitors seek to compete aggressively on the basis of pricing factors. To the extent that we match our competitors' lower pricing, we may experience lower gain on sale margins. Fluctuations in interest rates, inflation and general economic conditions may also affect our competitive position. During periods of rising interest rates, competitors that have locked in low borrowing costs may have a competitive advantage. Furthermore, a cyclical decline in the industry's overall level of originations or decreased demand for loans due to a higher interest rate environment, may lead to increased competition for the remaining loans. Any increase in these competitive pressures could be detrimental to our business.

**Intellectual Property**

We use a combination of proprietary and third-party intellectual property, including trade secrets, unregistered copyrights, trademarks, service marks, and domain names, and the intellectual property rights in our proprietary software, all of which we believe maintain and enhance our competitive position and protect our products.

**Cyclicality and Seasonality**

The demand for loan originations is affected by consumer demand for home loans and the market for buying, selling, financing and/or re-financing residential, which in turn, is affected by the national economy, regional trends, property valuations, interest rates, and socio-economic trends and by state and federal regulations and programs which may encourage and accelerate or discourage and slowdown certain real estate trends. Our business is generally subject to seasonal trends with activity generally decreasing during the winter months, especially home purchase loans and related services.

**Human Capital Resources**

As of December 31, 2022, we employed approximately 830 full-time associates globally. None of our associates are covered by collective bargaining agreements, and we consider our associate relations to be good. Our culture and technology has allowed many of our associates to work remotely, which has allowed us to recruit and hire top managers and executives regardless of geography and to continue our business and operations. In 2022, we announced actions taken to reduce the number of full-time associates in response to the sale of our delegated correspondent channel, the transition to subservicing with ServiceMac, and decreased origination volume.

For additional information, please see the section titled "Human Capital" in the Company's definitive proxy statement relating to its 2023 Annual Meeting of Stockholders.

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**Available Information**

Our website address is www.investors.homepoint.com. We make available on or through our website certain reports and amendments to those reports that we file with or furnish to the SEC in accordance with the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These include our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. We make this information available on or through our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. References to our website address do not constitute incorporation by reference of the information contained on the website, and the information contained on the website is not part of this document or any other document that we file with or furnish to the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov.

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**Summary Risks**

The following is a summary of the principal risks that could adversely affect our business, results of operations and financial condition. If any of these risks actually occurs, our business, results of operations and financial condition may be materially adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our reliance on our financing arrangements to fund mortgage loans and otherwise operate our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the dependence of our loan origination and servicing revenues on macroeconomic and U.S. residential real estate market conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement to repurchase mortgage loans or indemnify investors if we breach representations and warranties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• counterparty risk;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks related to any subservicer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition for mortgage assets that may limit the availability of desirable originations, acquisitions and result in reduced risk-adjusted returns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to continue to grow our loan origination business or effectively manage significant increases or decreases in our loan production volume;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to comply with the laws and regulations to which we are subject, whether actual or alleged;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition in the industry in which we operate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to acquire loans and sell the resulting MBS in the secondary markets on favorable terms in our production activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to adapt to and implement technological changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any failure to attract and retain a highly skilled workforce, including our senior executives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any cybersecurity risks, cyber incidents and technology failures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our failure to deal appropriately with various issues that may give rise to reputational risk, including legal and regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of interest rate fluctuations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of private legal proceedings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with our acquisition of MSRs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our being a "controlled company" within the meaning of Nasdaq rules and, as a result, qualifying for exemptions from certain corporate governance requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our Sponsor controlling us and its interests conflicting with ours or yours in the future; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effects of the COVID-19 pandemic on our business.

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**Item 1A. Risk Factors**

*You should carefully consider the risks and uncertainties described below and the other information set forth in this Report before deciding to invest in us. If any of the following risks actually occurs, our business, results of operations and financial condition may be materially adversely affected. The risks described below are not the only risks that we face. Additional risks not presently known to us or that we currently deem immaterial may also materially adversely affect our business, financial condition, liquidity and results of operations in future periods.*

**Risks Related to Our Business**

**General Business Risks**

***Our business relies on our financing arrangements to fund mortgage loans and otherwise operate our business. If one or more of such facilities are terminated other than in the ordinary course, we may be unable to find replacement financing at commercially favorable terms, or at all, which could be detrimental to our business.***

We currently fund substantially all of the MSRs and mortgage loans we close through borrowings under our financing arrangements and warehouse lines of credit along with funds generated by our operations. In the ordinary course of our business, we manage the number and size of our mortgage warehouse lines of credit in light of various factors, including origination volumes and broader macroeconomic conditions. As of December 31, 2022, we held mortgage warehouse lines of credit with eight separate financial institutions with a total maximum borrowing capacity of $2.8 billion. Each mortgage funding arrangement is collateralized by the underlying mortgage loans.

Of the nine existing mortgage warehouse lines of credit as of December 31, 2022, five of the facilities are 364-day facilities, one of the facilities renews every two years, and the remaining mortgage warehouse lines of credit are evergreen agreements. As of December 31, 2022, approximately $50 million of borrowing capacity under our mortgage warehouse lines of credit was committed, while the remaining borrowing capacity was uncommitted and can be terminated by the applicable lender at any time. Two of the facilities require that we establish a cash reserve of $6.3 million in the aggregate, which is reflected within Restricted cash on the consolidated balance sheet as of December 31, 2022.

Our borrowings are generally repaid with the proceeds we receive from mortgage loan sales. We are currently, and may in the future continue to be, dependent upon our lenders to provide the primary mortgage warehouse lines of credit for our loans. We currently believe that we maintain appropriate financing arrangements for our business needs and expect to be able to renew our existing warehouse facilities prior to their expiration. However, there is no guarantee that our current uncommitted facilities will be available for future financing needs, nor that we will be able to secure alternative funding facilities to address unanticipated changes in market conditions or to replace any current facilities that we are unable to renew upon their scheduled expiration. In the event that any of our mortgage warehouse lines of credit is terminated or is not renewed, or if the principal amount that may be drawn under our funding agreements that provide for immediate funding at closing were to significantly decrease, in each case outside of the ordinary course management of our capital resources, we may be unable to find replacement financing on commercially favorable terms, or at all, which could be detrimental to our business.

Our ability to refinance existing debt and borrow additional funds is affected by a variety of factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictive covenants and borrowing conditions in our existing or future financing arrangements that may limit our ability to raise additional debt;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a decline in the liquidity in the credit markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prevailing interest rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the financial strength of our lenders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the decisions of lenders from whom we borrow to reduce their exposure to mortgage loans; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• accounting changes that impact the calculations of covenants in our debt agreements.

If we are unable to refinance our existing debt or borrow additional funds due to any of the foregoing or other factors, our ability to maintain or grow our business could be limited.

***Our loan origination and servicing revenues are highly dependent on macroeconomic and U.S. residential real estate market conditions.***

Our success depends largely on the health of the U.S. residential real estate industry, which is seasonal, cyclical and affected by changes in general economic conditions beyond our control. We also have significant exposure to certain states such as California and are particularly susceptible to adverse economic conditions in those states. Economic factors such as increased interest rates, slow economic growth or recessionary conditions, the pace of home price appreciation or lack thereof, changes in household debt levels and increased unemployment or stagnant or declining wages affect our customers' income and thus their ability and willingness to make loan payments. National or global events, including, but not limited to, health crises,

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unprovoked attacks on sovereign nations and geopolitical conflicts, affect all such macroeconomic conditions. Weak or a significant deterioration in economic conditions reduces the amount of disposable income consumers have, which in turn reduces consumer spending and the willingness of qualified potential borrowers to take out loans. As a result, such economic factors affect loan origination volume, and recent market conditions, such as rapidly rising interest rates, high inflation and home price appreciation due to limited housing supply, have led to a decrease in the affordability index and negatively impacted Origination volume.

Additional macroeconomic factors including, but not limited to, rising government debt levels, the withdrawal or augmentation of government interventions into the financial markets, changing U.S. consumer spending patterns, recession or inflationary pressures, and weak credit markets may create low consumer confidence in the U.S. economy or the U.S. residential real estate industry or result in increased volatility in the United States and worldwide financial markets and economy. Excessive home building or historically high foreclosure rates resulting in an oversupply of housing in a particular area may also increase the amount of losses incurred on defaulted mortgage loans, or may limit our ability to make additional loans in those affected areas. The economic impact of these events could also adversely affect the credit quality of some of our loans and investments and the properties underlying our interests.

Market conditions that lead to a decrease in loan originations result in lower revenue on loans sold into the secondary market. Lower loan origination volumes generally place downward pressure on margins, thus compounding the effect of the deteriorating market conditions. Such events could be detrimental to our business. Moreover, any deterioration in market conditions that leads to an increase in loan delinquencies will result in lower revenue from GSE and Ginnie Mae loans that we service because we ultimately collect servicing fees from them only for performing loans. While increased delinquencies generate higher ancillary revenues, including late fees, these fees are likely unrecoverable when the related loan is liquidated.

Increased delinquencies may also increase the cost of servicing loans. The decreased cash flow from lower servicing fees could decrease the estimated value of our MSRs, resulting in recognition of losses when we write down those values. In addition, an increase in delinquencies lowers the interest income we receive on cash held in collection and other accounts and increases our obligation to advance certain principal, interest, tax and insurance obligations owed by the delinquent mortgage loan borrower. An increase in delinquencies could therefore be detrimental to our business. See the risk factor entitled, "Risks Related to our Mortgage Assets—*A significant increase in delinquencies for the loans serviced could have a material impact on our revenues, expenses and liquidity and on the valuation of our MSRs*."

Additionally, origination of loans can be seasonal. Historically, our loan origination has increased activity in the second and third quarters and reduced activity in the first and fourth quarters as home buyers tend to purchase their homes during the spring and summer in order to move to a new home before the start of the school year. As a result, our loan origination revenues vary from quarter to quarter.

Any of the circumstances described above, alone or in combination, may lead to volatility in or disruption of the credit markets at any time and have a detrimental effect on our business.

***We may be required to repurchase mortgage loans or indemnify investors if we breach representations and warranties.***

When we sell loans, we are required to make customary representations and warranties about such loans to the loan purchaser. If a mortgage loan does not comply with the representations and warranties that we made with respect to it at the time of its sale, we could be required to repurchase the loan, replace it with a substitute loan and/or indemnify secondary market purchasers for losses.

In our Direct and Wholesale channels, we underwrite each loan prior to funding and attempt to comply with applicable investor guidelines. However, no assurance can be given that such underwriting will result in all cases with loans that fully comply with such guidelines, and state or federal law.

Prior to the sale of our Correspondent Channel, which we completed in June 2022, we would re-underwrite a percentage of acquired loans to ensure quality underwriting by our Correspondent Partners. However, no assurance can be given that this re-underwriting of a sample population of such loans identified any, or all, underwriting and regulatory compliance issue related to such loans. In the event of a breach of any representations or warranties we make to purchasers, insurers or investors, we believe, based on our experience, that in a majority of cases, for correspondent originated loans acquired using the "delegated underwriting" option, we will have recourse to the Correspondent Partner that sold the mortgage loans to us and breached similar or other representations and warranties. Although we believe we will have the right to seek a recovery of related repurchase losses from that Correspondent Partner, we cannot assure you that this will always be the case. For Correspondent loans where we do the underwriting, referred to as the "non-delegated underwriting" option, our ability to seek a recovery of repurchase and other losses from Correspondent Partners is more limited.

In addition to the customary representations and warranties we make, the documents governing our securitized pools of loans and our contracts with certain purchasers of our whole loans contain additional provisions that require us to indemnify or repurchase the related loans under certain circumstances. While our contracts vary, they contain provisions that require us to repurchase loans if the borrower fails to make loan payments due to the purchaser on a timely basis in the first few months after we sell the loan. We have been and continue to be subject to repurchase claims from investors for various reasons, and we will

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continue to be subject to such claims in the future. If we are required to indemnify or repurchase loans that we have sold or securitized, or will sell or securitize in the future, and this results in losses that exceed our reserve, such occurrence could have a material adverse effect on our business, financial condition and results of operations.

Furthermore, the repurchased loan typically can only be financed at a steep discount to its repurchase price, if at all, and can generally be sold only at a discount to the unpaid principal balance, which in some cases can be significant. Significant loan repurchase activity without offsetting recourse to a counterparty that we purchased the loan from could materially and adversely affect our business, financial condition, liquidity and results of operations.

***We have historically been subject to counterparty risk and may be unable to seek indemnity from, or require our correspondent counterparties or sellers to repurchase mortgage loans if they breach representations and warranties, which could cause us to suffer losses.***

When we have purchased mortgage assets, our correspondent counterparty or seller typically makes customary representations and warranties to us about such assets. Our residential mortgage loan purchase agreements may entitle us to seek indemnity or demand repurchase or substitution of the loans in the event our counterparty breaches such a representation or warranty. However, there can be no assurance that our mortgage loan purchase agreements contain appropriate representations and warranties, that we will be able to enforce our contractual right to demand repurchase or substitution, or that our counterparty will remain solvent or otherwise be willing and able to honor its obligations under our mortgage loan purchase agreements. Our inability to obtain indemnity or enforce repurchase obligations of counterparties and sellers for a significant number of loans could materially and adversely affect our business, financial condition, liquidity and results of operations.

***We are required to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances, which could adversely affect our business, financial condition, liquidity and results of operations.***

During any period in which a borrower is not making payments on a loan we service, we are required under most of our servicing agreements to advance our own funds to pass through scheduled principal and interest payments to security holders of the MBS or whole loans into which the loans are sold, and pay property taxes and insurance premiums, legal expenses and other protective advances. We also advance funds under these agreements to maintain, repair and market real estate properties on behalf of investors. In certain situations, our contractual obligations may require us to make advances for which we may not be reimbursed. If a mortgage loan serviced by us is in default or becomes delinquent, the repayment to us of the advance may be delayed until the mortgage loan is repaid or refinanced or a liquidation occurs. When a relatively young MSR portfolio such as ours ages, it is expected that the percentage of delinquent loans will typically increase and the amount of advances that are required and become outstanding in connection with such loans will increase in the aggregate. This increase in advances could have a material adverse effect on our business, financial condition, liquidity and results of operations.

In response to the COVID-19 pandemic, on March 27, 2020, the CARES Act was signed into law, allowing borrowers affected by the COVID-19 pandemic to request temporary loan forbearance for federally backed mortgage loans. In addition, in February 2021 the federal government announced an additional extension of three to six months depending on loan type, and the federal government announced an additional extension of six months depending on certain criteria in September 2021. Nevertheless, servicers of mortgage loans are contractually bound to advance monthly payments to investors, insurers and taxing authorities regardless of whether the borrower actually makes those payments. While the GSEs and Ginnie Mae issued guidance in April 2020 limiting the number of payments a servicer must advance in the case of a forbearance, we expect that a borrower who has experienced a loss of employment or a reduction of income may not repay the forborne payments at the end of the forbearance period. Additionally, we are prohibited by the CARES Act from collecting certain servicing related fees, such as late fees, during the forbearance plan period. We are further prohibited from initiating foreclosure and/or eviction proceedings under applicable investor and/or state law requirements.

In addition, multiple forbearance programs, moratoria of foreclosure and eviction and other requirements to assist borrowers enduring financial hardship due to the COVID-19 pandemic have been issued by states, agencies and regulators. While certain foreclosure moratorium and forbearance programs have expired, other such programs have been extended and remain available. These measures could stay in place for an extended period of time. If we are unable to comply with, or face allegations that we are in breach of, applicable laws, regulations or other requirements, we may face regulatory action, including fines, penalties and restrictions on our business. In addition, we could face litigation and reputational damage.

***We have risks related to any Subservicer which could have a material adverse effect on our business, liquidity, financial condition and results of operation.***

We act as named servicer with respect to MSRs that we retain or acquire or otherwise for loans that we are required to service (including as an issuer of Ginnie Mae securities) and in each such case, we may contract with a third party (the "Subservicer") for the subservicing of the loans. For example, in February 2022, Home Point Financial Corporation ("Homepoint"), our wholly-owned subsidiary, entered into a subservicing agreement with ServiceMac, LLC ("ServiceMac"), a wholly-owned subsidiary of First American Financial Corporation. ServiceMac currently subservices our agency loan portfolio. We have agreed to indemnify ServiceMac for any losses resulting from their subservicing of the mortgage loans in accordance with the related subservicing agreement (so long as such loss does not result from a breach by ServiceMac under the related

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subservicing agreement). To the extent that we do not have a right to reimburse ourselves for the same amounts under our servicing agreement or if there are insufficient collections in respect of the mortgage loans for such reimbursements, we may face losses in our servicing business. Any subservicing relationship may present a number of risks to us.

Although ServiceMac performs servicing functions on the Company's behalf, we continue to hold the MSRs. Failure by any Subservicer, including ServiceMac, to meet stipulations of the Fannie Mae and Freddie Mac servicing guidelines, when applicable, including forbearance requirements, can result in the assessment of fines and loss of reimbursement of loan related advances, expenses, interest and servicing fees. The Subservicer has obligations to promptly apply payments received from borrowers, to properly manage and reconcile tax and insurance escrow accounts, and to comply with obligations to pay taxes and insurance in a timely manner for escrowed accounts. If the Subservicer is not vigilant in encouraging borrowers to make their monthly payments or to keep their hazard insurance premiums or property taxes current, the borrowers may be less likely to make these payments, which could result in a higher frequency of default. If the Subservicer takes longer to mitigate losses or liquidate non-performing assets, loss severities may be higher than originally anticipated. If fines or any amounts lost are not recovered from the Subservicer, such events may lead to the eventual realization of a loss by us.

If any Subservicer fails to perform its duties pursuant to its subservicing agreement, our business acting as the named servicer will be required to perform the servicing functions previously performed by such Subservicer or cause another Subservicer to perform such duties, to the extent required pursuant to the servicing agreement. The process of transitioning the functions performed by the Subservicer to a successor subservicer could result in delays in collections and other functions performed by the Subservicer and expose our business to breach of contract and indemnity claims. If any Subservicer experiences financial difficulties, including as a result of a bankruptcy, it may not be able to perform its subservicing duties under the subservicing agreement. There can be no assurance that any Subservicer will remain solvent or that such Subservicer will not file for bankruptcy at any time. Any such financial difficulties, insolvency, or bankruptcy could have a negative impact on our business.

The recovery process against a Subservicer can be prolonged and is subject to our meeting minimum loss deductibles under the indemnification provisions in our agreements with the Subservicer. The time may be extended as the Subservicer has the right to review underlying loss events and our request for indemnification. The amounts ultimately recovered from the Subservicers may differ from our estimated recoveries recorded based on the Subservicer's interpretation of responsibility for loss, which could lead to our realization of additional losses. We are also subject to counterparty risk for collection of amounts which may be owed to us by a Subservicer.

Any Subservicer may also be required to be licensed under applicable state law, and they are subject to various federal and state laws and regulations, including regulation by the CFPB. Failure of any Subservicer to comply with applicable laws and regulations may expose them to fines, responsibility for refunds to borrowers, loss of licenses needed to conduct their business, and third party litigation, all of which may adversely impact the Subservicer's ability to perform its responsibilities under the subservicing agreement. Such occurrences may also impact its financial condition and ability to provide indemnification as agreed in the subservicing agreement. In addition, regulators or third parties may take the position that we were responsible for the Subservicer's actions or failures to act; in that event, we might be exposed to the same risks as the Subservicer.

***Competition for mortgage assets may limit the availability of desirable originations, acquisitions and result in reduced risk-adjusted returns and adversely affect our business, financial condition, liquidity and results of operations.***

We face substantial competition in originating and acquiring attractive assets, particularly in our loan origination activities. The competition for mortgage loan assets may compress margins and reduce yields, making it difficult for us to acquire assets with attractive risk-adjusted returns. There can be no assurance that we will be able to successfully maintain returns, transition from assets producing lower returns into investments that produce better returns, or that we will not seek investments with greater risk to obtain the same level of returns. Any or all of these factors could cause the profitability of our operations to decline substantially and have a material adverse effect on our business, financial condition, liquidity and results of operations.

In addition, the financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial and lending institutions to better serve customers and reduce costs. We may not be able to effectively implement new technology-driven products and services as quickly as competitors or be successful in marketing these products and services to our Broker Partners and consumers. Failure to successfully keep pace with technological change affecting the financial services industry could harm our ability to attract customers and adversely affect our results of operations, financial condition and liquidity.

Our profitability depends, in part, on our ability to continue to acquire our targeted mortgage assets at favorable prices. We compete with mortgage REITs, specialty finance companies, private funds, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, depository institutions, governmental bodies and other entities, many of which focus on acquiring mortgage assets. Many of our competitors also have competitive advantages over us, including size, financial strength, access to capital, cost of funds, federal pre-emption and higher risk tolerance. Competition may result in fewer acquisitions, higher prices, acceptance of greater risk, lower yields and a narrower spread of yields over our financing costs.

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***We may not be able to continue to grow our loan origination business or effectively manage significant increases in our loan production volume, both of which could negatively affect our reputation and business, financial condition and results of operations.***

Our mortgage loan origination business consists of providing purchase money loans to homebuyers and refinancing existing loans. The origination of purchase money mortgage loans is greatly influenced by traditional business customers in the home buying process such as realtors and builders. As a result, our or our partners' ability to secure relationships with such traditional business customers will influence our ability to grow our loan origination business. Our loan origination business also operates through third-party mortgage professionals who do business with us on a best efforts basis (i.e., they are not contractually obligated to do business with us). Further, our competitors also have relationships with these brokers and actively compete with us in our efforts to expand our broker networks. Accordingly, we may not be successful in maintaining our existing relationships or expanding our broker networks. Our business is also subject to overall market factors that can impact our ability to grow our loan production volume. For example, increased competition from new and existing market participants, reductions in the overall level of refinancing activity or slow growth in the level of new home purchase activity can impact our ability to continue to grow our loan production volumes, and we may be forced to accept lower margins in our respective businesses in order to continue to compete and keep our volume of activity consistent with past or projected levels. If we are unable to continue to grow our loan origination business, this could adversely affect our business, financial condition and results of operations.

On the other hand, we may experience material growth in our mortgage loan volume and MSRs. If we do not effectively manage our growth, the quality of our services could suffer. For example, in connection with our increased loan origination volume in recent years, we identified a higher rate of errors in our post-closing loan quality control review of our originations function, and we implemented certain remedial measures to address these errors, including additional training programs for our associates. If these remedial measures are not effective or if these or other errors arise in connection with future growth in our loan volume, the quality of our loans could be impacted, which could in turn negatively affect our reputation and business, financial condition and results of operations.

***Difficult conditions or disruptions in the MBS, mortgage, real estate and financial markets and the economy generally may adversely affect our business, financial condition, liquidity and results of operations.***

Most of the Agency-eligible mortgage loans that we originate or acquire are delivered to the GSEs and Ginnie Mae to be pooled into an Agency MBS or sold directly to the Agencies through the cash window or other third parties. Any significant disruption or period of illiquidity in the general MBS market would directly affect our liquidity because no existing alternative secondary market would likely be able to accommodate on a timely basis the volume of loans that we typically acquire and sell in any given period. Accordingly, if the MBS market experiences a period of illiquidity, we might be prevented from selling the loans that we acquire into the secondary market in a timely manner or at favorable prices or we may be required to repay a portion of the debt securing these assets, which could impact the availability and cost of financing arrangements and would likely result in a material adverse effect on our business, financial condition and results of operations.

The success of our business strategies and our results of operations are also materially affected by current conditions in the broader mortgage markets, the financial markets and the economy generally. Continuing concerns over factors including inflation, deflation, unemployment, personal and business income taxes, healthcare, energy costs, geopolitical issues, the availability and cost of credit, the mortgage markets and the real estate markets have contributed to increased volatility and unclear expectations for the economy and markets going forward. The mortgage markets have been and continue to be affected by changes in the lending landscape, defaults, credit losses and significant liquidity concerns. A destabilization of the real estate and mortgage markets or deterioration in these markets may adversely affect the performance and fair value of our assets, reduce our loan production volume, reduce the profitability of servicing mortgages or adversely affect our ability to sell mortgage loans that we acquire, either at a profit or at all. Any of the foregoing could materially and adversely affect our business, financial condition, liquidity and results of operations.

***The industry in which we operate is highly competitive, and could become more competitive, which could adversely affect us.***

We operate in a highly competitive industry that could become even more competitive as a result of economic, legislative, regulatory and technological changes. Non-banks of various sizes and types have become increasingly competitive in the acquisition of newly originated mortgage loans and servicing rights. Many banks and large savings institutions have significantly greater resources or access to capital than we do, as well as a lower cost of funds. Additionally, some of our existing and potential competitors may decide to modify their business models to compete more directly with our wholesale production business. For example, non-bank loan servicers may try to leverage their servicing operations to develop or expand a wholesale and correspondent production business. Since the withdrawal of a number of large participants from the mortgage markets following the financial crisis in 2007, non-bank participants have become more active in these markets. As more non-bank entities enter these markets, or if more of the large commercial banks decide to become aggressive in the mortgage space once again, our production activities may generate lower volumes and/or margins. Accordingly, our inability to compete successfully or a material decrease in profit margins resulting from increased competition could adversely affect our business, financial condition, liquidity and results of operations.

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***We depend on our ability to acquire loans and sell the resulting MBS in the secondary markets on favorable terms in our production activities. If our ability to acquire and sell is impaired, this could subject us to increased risk of loss.***

In our production activities, we acquire and originate new loans, including non-Agency loans, primarily from our Broker Partners, and sell or securitize those loans to or through the Agencies or other third-party investors. We also may sell the resulting securities into the MBS markets. However, there can be no assurance that we will continue to be successful in operating this business or that we will continue to be able to capitalize on these opportunities on favorable terms or at all. In particular, we have committed, and expect to continue to commit, capital and other resources to this operation. However, we may not be able to continue to source sufficient loan acquisition opportunities to justify the expenditure of such capital and other resources. In the event that we are unable to continue to source sufficient opportunities for this operation, there can be no assurance that we would be able to acquire such assets on favorable terms or at all, or that such loans, if acquired, would be profitable to us. In addition, we may be unable to finance the acquisition of these loans or may be unable to sell the resulting loans or MBS in the secondary mortgage market on favorable terms or at all. We are also subject to the risk that the fair value of the acquired loans may decrease prior to their disposition either due to changes in market conditions, the delinquencies of our mortgage loans or a change in the condition of the underlying mortgage property. The occurrence of any one or more of these risks could adversely impact our business, financial condition, liquidity and results of operations.

The gain recognized from sales in the secondary market represents a significant portion of our revenues and net earnings. Further, we are dependent on the cash generated from such sales to fund our future loan closings and repay borrowings under our mortgage warehouse lines of credit. A decrease in the prices paid to us upon sale of our loans could materially adversely affect our business, financial condition and results of operations. The prices we receive for our loans vary from time to time and may be materially adversely affected by several factors, including, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an increase in the number of similar loans available for sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• conditions in the loan securitization market or in the secondary market for loans in general or for our loans in particular, which could make our loans less desirable to potential investors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• defaults under loans in general;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• loan-level pricing adjustments imposed by Fannie Mae and Freddie Mac, including any adjustments for the purchase of loans in forbearance and refinancing loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the types and volume of loans being originated or sold by us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the level and volatility of interest rates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the quality of loans previously sold by us.

The MBS market is also particularly affected by the policies of the U.S. Federal Reserve, which influences interest rates and impacts the size of the loan origination market. In response to the COVID-19 pandemic in 2020, the U.S. Federal Reserve announced programs to increase its purchase of certain MBS products to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses. Following signals in early 2022 that the Federal Reserve would begin moving away from accommodative monetary policies, in mid-March 2022 the Federal Reserve began increasing interest rates with steady increases continuing throughout the remainder of 2022 and into 2023. Any change to the Federal Reserve's policies could have a negative impact on the liquidity of MBS markets in the future.

Further, to the extent we become subject to delays in our ability to sell future mortgage loans which we originate, we would need to reduce our origination volume to the amount that we can sell plus any excess capacity under our mortgage warehouse lines of credit. Delays in the sale of mortgage loans also increase our exposure to increases in interest rates, which could adversely affect our profitability on sales of loans.

***The success and growth of our production will depend, in part, upon our or any of our Subservicers' ability to adapt to and implement technological changes.***

The production process and our or any of our Subservicers' servicing platforms are becoming more dependent upon technological advancement and depends, in part, upon our ability to effectively interface with our Broker Partners and other third parties. Maintaining, improving and becoming proficient with new technology may require us, or any of our Subservicers, to make significant capital expenditures. To the extent we or our Subservicers are dependent on any particular technology or technological solution, we may be harmed if such technology or technological solution becomes non-compliant with existing industry standards, fails to meet or exceed the capabilities of our competitors' equivalent technologies or technological solutions, becomes increasingly expensive to service, retain and update, becomes subject to third-party claims of intellectual property infringement, misappropriation or other violation or malfunctions or functions in a way we did not anticipate that results in loan defects potentially requiring repurchase.

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We also rely on third-party software products and services to operate our business. If we lose our rights to such products or services, or our current software vendors become unable to continue providing services to us on acceptable terms, we may not be able to procure alternatives in a timely and efficient manner and on acceptable terms, or at all.

Additionally, new technologies and technological solutions are continually being released. We need to continue to develop and invest in our technological capabilities to remain competitive and our failure to do so could adversely affect our business, financial condition, liquidity and results of operations.

There is no assurance that we or our Subservicers will be able to successfully adopt new technology as critical systems and applications become obsolete and better ones become available. Additionally, if we fail to respond to technological developments in a cost-effective manner, or fail to acquire, integrate or interface with third-party technologies effectively, we may experience disruptions in our operations, lose market share or incur substantial costs.

***Our risk management efforts may not be effective.***

We could incur substantial losses and our business operations could be disrupted if we are unable to effectively identify, manage, monitor and mitigate financial risks, such as credit risk, interest rate risk, prepayment risk, liquidity risk and other market-related risks, as well as operational, cybersecurity, tax and legal risks related to our business, assets and liabilities. We also are subject to various federal, state, local and foreign laws, regulations and rules that are not industry specific, including health and safety laws, environmental laws, privacy laws and other federal, state, local and foreign laws and other regulations and rules in the jurisdictions in which we operate. Our risk management policies, procedures and techniques may not be sufficient to identify all of the risks to which we are exposed, mitigate the risks we have identified or identify additional risks to which we may become subject in the future. Expansion of our business activities may also result in our being exposed to risks to which we have not previously been exposed or may increase our exposure to certain types of risks including risks related to our hedging transactions and strategy, as well as access to cash reserves, and we may not effectively identify, manage, monitor and mitigate these risks as our business activity changes or increases.

***We could be harmed by misconduct or fraud that is difficult to detect.***

We are exposed to risks relating to fraud and misconduct by our associates, contractors, custodians, Broker Partners, Subservicers, and other third parties with whom we have relationships. For example, associates could execute unauthorized transactions, use our assets improperly or without authorization, use confidential information for improper purposes or misreport or otherwise try to hide improper activities from us. This type of misconduct can be difficult to detect and if not prevented or detected could result in claims or enforcement actions against us or losses. In addition, such persons or entities may misrepresent facts about a mortgage loan, including the information contained in the loan application, property appraisal, title information and employment and income stated on the loan application. If any of this information was intentionally or negligently misrepresented and such misrepresentation was not detected prior to the acquisition or funding of the loan, the value of the loan could be significantly lower than expected. A mortgage loan subject to a material misrepresentation is typically unsalable or subject to repurchase if it is sold before detection of the misrepresentation. In addition, the persons and entities making a misrepresentation are often difficult to locate and it is often difficult to collect from them any monetary losses we have suffered. Our controls may not be completely effective in detecting this type of activity. Accordingly, such undetected instances of fraud may subject us to regulatory sanctions, litigation and losses, including those under our indemnification arrangements, and may seriously harm our reputation.

***Cybersecurity risks, cyber incidents and technology failures may adversely affect our business by causing a disruption to our operations, an unauthorized use or disclosure of confidential or regulated data and information, and/or damage to our business relationships, all of which could negatively impact our business.***

The financial services industry as a whole is characterized by rapidly changing technologies. As our reliance on rapidly changing technology has increased, so have the risks posed to our information systems and the information therein, both internal and those of third-party service providers.

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A cyber incident refers to any adverse event that threatens the confidentiality, integrity or availability of our information technology resources, or those of our third-party providers, that result in the unauthorized access to, or disclosure, use, loss or destruction of, personally identifiable information or other sensitive, non-public, confidential or regulated data and information (including our borrowers' personal information and transaction data), the misappropriation of assets, or a significant breakdown, invasion, corruption, destruction or interruption of any part of such information technology resources and the data therein. System disruptions and failures caused by fire, power loss, telecommunications outages, unauthorized intrusion, computer viruses and disabling devices, employee and contractor error, negligence or malfeasance, failures during the process of upgrading or replacing software and databases, hardware failures, natural disasters and other similar events may interrupt or delay our ability to provide services to our customers. We have faced, and may continue to face, a variety of cyber incidents. Our cybersecurity costs, including cybersecurity insurance, are significant and will likely rise in tandem with the sophistication and frequency of system attacks.

We have undertaken measures intended to protect the safety and security of our information systems and the information systems of our third-party providers and the data therein, including physical and technological security measures, employee training, contractual precautions and business continuity plans, and implementation of policies and procedures designed to help mitigate the risk of system disruptions and failures and the occurrence of cyber incidents. Despite our efforts, there can be no assurance that any such risks will not occur or, if they do occur, that they will be adequately addressed in a timely manner. It is possible that advances in computer capabilities, undetected fraud, inadvertent violations of our policies or procedures or other developments could result in a cyber incident or system disruption or failure. We may not be able to anticipate or implement effective preventive measures against all such risks, especially with respect to cyber incidents, as the methods of attack change frequently or are not recognized until launched, and because cyber incidents can originate from a wide variety of sources, including persons involved with organized crime or associated with external service providers. Those parties may also attempt to fraudulently induce associates, customers or other users of our systems to disclose sensitive information in order to gain access to our data or that of our Broker Partners or borrowers. These risks have increased in recent years and may increase in the future as we continue to increase our reliance on the internet and use of web-based product offerings and on the use of cybersecurity. In addition, our current work-from-home policy may increase the risk for the unauthorized disclosure or use of personal information or other data.

We may also be held accountable for the actions and inactions of third-party vendors regarding cybersecurity and other consumer-related matters, which may not be covered by indemnification arrangements with our third-party vendors.

Additionally, cyberattacks on local and state government databases and offices, including the rising trend of ransomware attacks, expose us to the risk of losing access to critical data and the ability to provide services to our customers.

In addition, through 2021, we transitioned a substantial portion of our operations to remote working environments and continue to permit many of our associates, including executives, mortgage loan officers and staff, to work remotely. The increase in the number of our associates working from home may increase certain business and procedural control risks. For example, cybersecurity risks have increased following our transition into a substantially work-from-home environment.

Any of the foregoing events could result in violations of applicable privacy and other laws, financial loss to us or to our customers, loss of confidence in our security measures, customer dissatisfaction, regulatory action or investigation, fines or penalties, additional regulatory scrutiny, significant litigation exposure and harm to our reputation, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations. We may be required to expend significant capital and other resources to protect against and remedy any potential or existing security breaches and their consequences. In addition, our remediation efforts may not be successful and we may not have adequate insurance to cover these losses.

***We rely on our senior executive team and will require additional key personnel to grow our business, and the loss of key management members or key employees, or an inability to hire key personnel, could harm our business.***

Our future success will depend on the efforts and talents of the members of our senior executive team, who have significant experience in the residential mortgage origination and servicing industry, are responsible for our core competencies and would be difficult to replace. Our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. Qualified individuals are in high demand, and we may incur significant costs to attract and retain them. In addition, the loss of any of our senior management or key employees could materially adversely affect our ability to execute our business plan and strategy, and we may not be able to find adequate replacements on a timely basis, or at all.

Changes to our senior executive team may occur from time to time, and their knowledge of our business and industry may be difficult to replace. For example, on February 24, 2023, Mark E. Elbaum submitted his resignation as the Chief Financial Officer of the Company. Mr. Elbaum's resignation will be effective April 3, 2023. We do not expect his departure to have a material impact on our business or operations. However, future changes to our senior executive team, particularly if they occur on short notice, could have an adverse effect on our business, financial condition and results of operations. If we do not succeed in attracting new members for our senior executive team or retaining and motivating existing members of our senior executive team, our business could be materially and adversely affected.

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***The competitive job market creates a challenge and potential risk as we strive to attract and retain a highly skilled workforce.***

Competition for our employees, including highly skilled technology and management professionals, loan servicers, debt default specialists, loan officers and underwriters, is extremely intense, reflecting a tight labor market. This can present a risk as we compete for experienced candidates, especially if the competition is able to offer more attractive financial terms of employment. This risk of increased competition extends to our ability to retain our current employees. We also invest significant time and expense in engaging and developing our employees, which also increases their value to other companies that may seek to recruit them. Turnover can result in significant replacement costs and lost productivity. If we are unable to attract, develop and maintain an adequate skilled workforce necessary to operate our businesses, it could materially affect our business, financial condition and results of operations.

***We could be adversely affected if we inadequately obtain, maintain, protect and enforce our intellectual property and proprietary rights, and we may encounter disputes from time to time relating to our use of the intellectual property of third parties.***

We rely on a combination of strategies to protect our intellectual property and proprietary rights, including the use of trademarks, service marks, domain names, trade secrets and unregistered copyrights, as well as confidentiality procedures and contractual provisions. Nevertheless, these measures may not prevent misappropriation, infringement, reverse engineering or other violation of these rights by third parties. Any intellectual property rights owned by or licensed to us may be challenged, invalidated, held unenforceable or circumvented in litigation or other proceedings, and such intellectual property rights may be lost or no longer provide us meaningful competitive advantages. We cannot guarantee that we will be able to conduct our operations in such a way as to avoid all alleged infringements, misappropriations or other violations of such intellectual property rights. Third parties may raise claims against us alleging an infringement, misappropriation or other violation of their intellectual property or proprietary rights.

Whether it is to defend against such claims or to protect and enforce our intellectual property and proprietary rights, we may be required to spend significant resources including bringing litigation, which could be costly, time consuming and could divert the time and attention of our management team and result in the impairment or loss of portions of our rights, and we may not prevail. Our failure to secure, maintain, protect and enforce our intellectual property and proprietary rights, or defend against claims related to same, could adversely affect our brands and adversely impact our business.

***Our vendor relationships subject us to a variety of risks.***

We have significant vendors that, among other things, provide us with financial, technology and other services to support our mortgage loan servicing and origination businesses. If our current vendors were to stop providing services to us on acceptable terms, including as a result of one or more vendor bankruptcies due to poor economic conditions or other events, we may be unable to procure alternatives from other vendors in a timely and efficient manner and on acceptable terms, or at all. Further, we may incur significant costs to resolve any such disruptions in service and this could adversely affect our business, financial condition and results of operations. Additionally, in April 2012, the CFPB issued Bulletin 2012-03, as amended in 2016 by bulletin 2016-02, which states that supervised banks and non-banks could be held liable for actions of their service providers. As a result, we could be exposed to liability, CFPB enforcement actions or other administrative actions and/or penalties if the vendors with whom we do business violate consumer protection laws.

***Our failure to deal appropriately with various issues that may give rise to reputational risk, including legal and regulatory requirements, could cause harm to our business and adversely affect our business and financial condition and may negatively impact our reputation.***

Maintaining our reputation is critical to attracting and retaining customers, trading and financing counterparties, investors and associates. If we fail to deal with, or appear to fail to deal with, various issues that may give rise to reputational risk, we could significantly harm our business. Reputational risk could negatively affect our financial condition and business, strain our working relationships with regulators and government agencies, expose us to litigation and regulatory action, impact our ability to attract and retain customers, trading counterparties, investors and associates and adversely affect our business, financial condition, liquidity and results of operations.

Reputational risk from negative public opinion is inherent in our business and can result from a number of factors. Negative public opinion can result from our actual or alleged conduct in any number of activities, including lending and debt collection practices, corporate governance and actions taken by government regulators and community organizations in response to those activities. Negative public opinion can also result from social media and media coverage, whether accurate or not. Like other consumer-facing companies, we have received some amount of negative comment. These factors could tarnish or otherwise strain our working relationships with regulators and government agencies, expose us to litigation and regulatory action, negatively affect our ability to attract and retain customers, trading and financing counterparties and associates and adversely affect our business, financial condition, liquidity and results of operations.

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Large-scale natural or man-made disasters may lead to further reputational risk in the servicing area. Our mortgage properties are generally required to be covered by hazard insurance in an amount sufficient to cover repairs to or replacement of the residence. However, when a large scale disaster occurs, the demand for inspectors, appraisers, contractors and building supplies may exceed availability, insurers and mortgage servicers may be overwhelmed with inquiries, mail service and other communications channels may be disrupted, borrowers may suffer loss of employment and unexpected expenses which cause them to default on payments and/or renders them unable to pay deductibles required under the insurance policies, and widespread casualties may also affect the ability of borrowers or others who are needed to effect the process of repair or reconstruction or to execute documents. Loan originations may also be disrupted, as lenders are required to re-inspect properties which may have been affected by the disaster prior to funding. In these situations, borrowers and others in the community may believe that servicers and originators are penalizing them for being the victims of the initial disaster and making it harder for them to recover, potentially causing reputational damage to us.

Moreover, the proliferation of social media websites as well as the personal use of social media by our associates and others, including personal blogs and social network profiles, also may increase the risk that negative, inappropriate or unauthorized information may be posted or released publicly that could harm our reputation or have other negative consequences, including as a result of our associates interacting with our customers in an unauthorized manner in various social media outlets.

In addition, our ability to attract and retain customers is highly dependent upon the external perceptions of our level of service, trustworthiness, business practices, financial condition and other subjective qualities. Negative perceptions or publicity regarding these matters—even if related to seemingly isolated incidents, or even if related to practices not specific to the origination or servicing of loans, such as debt collection—could erode trust and confidence and damage our reputation among existing and potential customers. In turn, this could decrease the demand for our products, increase regulatory scrutiny and detrimentally effect our business, financial condition and results of operations.

***Employment litigation and related unfavorable publicity could negatively affect our business.***

Team members and former team members may, from time to time, bring lawsuits against us regarding injury, creation of a hostile workplace, discrimination, wage and hour, employee benefits, sexual harassment and other employment issues. In recent years there has been an increase in the number employment-related actions in states with favorable employment laws, such as California, as well as an increase in the number of discrimination and harassment claims against employers generally. Coupled with the expansion of social media platforms and similar devices that allow individuals access to a broad audience, these claims have had a significant negative impact on some businesses. Companies that have faced employment or harassment related lawsuits have had to terminate management or other key personnel and have suffered reputational harm that has negatively impacted their businesses. If we experience significant incidents involving employment or harassment related claims, we could face substantial out-of-pocket losses and fines if claims are not covered by our liability insurance, as well as negative publicity. In addition, such claims may give rise to litigation, which may be time-consuming, costly and distracting to our management team.

***Initiating new business activities or strategies or significantly expanding existing business activities or strategies may expose us to new risks and will increase our cost of doing business.***

Initiating new business activities or strategies or significantly expanding existing business activities or strategies may expose us to new or increased financial, regulatory, reputational and other risks. Such innovations are important and necessary ways to grow our businesses and respond to changing circumstances in our industry; however, we cannot be certain that we will be able to manage the associated risks and compliance requirements effectively. Such risks include a lack of experienced management-level personnel, increased administrative burden, increased logistical problems common to large, expansive operations, increased credit and liquidity risk and increased regulatory scrutiny.

Furthermore, our efforts may not succeed and any revenues we earn from any new or expanded business initiative or strategy may not be sufficient to offset the initial and ongoing costs of that initiative, which would result in a loss with respect to that initiative, strategy or acquisition.

***Certain of our material vendors have operations in India that could be adversely affected by changes in political or economic stability or by government policies.***

Certain of our material vendors currently have operations located in India, which is subject to relatively higher political and social instability than the United States and may lack the infrastructure to withstand political unrest, natural disasters or global pandemics. The political or regulatory climate in the United States, or elsewhere, also could change so that it would not be lawful or practical for us to use vendors with international operations in the manner in which we currently use them. If we could no longer utilize vendors operating in India or if those vendors were required to transfer some or all of their operations to another geographic area, we would incur significant transition costs as well as higher future overhead costs that could materially and adversely affect our results of operations. In some foreign countries with developing economies, it may be common to engage in business practices that are prohibited by laws and regulations applicable to us, such as the Foreign Corrupt Practices Act of 1977, as amended (the "FCPA"). Any violations of the FCPA or local anti-corruption laws by us, our subsidiaries or our

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local vendors could have an adverse effect on our business and reputation and result in substantial financial penalties or other sanctions.

***We may not be able to fully utilize our net operating loss, or NOL, and other tax carryforwards.***

As of December 31, 2022, we had $443.6 million of NOL carryforwards for federal income tax purposes, a portion of which begin to expire in 2035. Our ability to utilize NOLs and other tax carryforwards to reduce taxable income in future years could be limited due to various factors, including (i) our projected future taxable income, which could be insufficient to recognize the full benefit of such NOL carryforwards prior to their expiration; (ii) limitations imposed as a result of one or more ownership changes under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), (which subject NOLs to an annual limitation on usage); and/or (iii) challenges by the Internal Revenue Service (the "IRS") that a transaction or transactions were concluded with the principal purpose of evasion or avoidance of federal income tax. As of December 31, 2022, $14.0 million of our NOL carryforwards for federal income tax purposes are subject to limitations under Section 382 of the Code, which we anticipate being able to fully utilize in the normal course.

***The IRS could challenge the amount, timing and/or use of our NOL carryforwards.***

The amount of our NOL carryforwards has not been audited or otherwise validated by the IRS after the tax year ended December 31, 2016. Among other things, the IRS could challenge the amount, timing and/or our use of our NOLs. Any such challenge, if successful, could significantly limit our ability to utilize a portion or all of our NOL carryforwards. In addition, calculating whether an ownership change has occurred within the meaning of Section 382 is subject to inherent uncertainty, both because of the complexity of applying Section 382 and because of limitations on a publicly traded company's knowledge as to the ownership of, and transactions in, its securities. Therefore, the calculation of the amount of our utilizable NOL carryforwards could be changed as a result of a successful challenge by the IRS or as a result of new information about the ownership of, and transactions in, our securities.

***Possible changes in legislation could negatively affect our ability to use the tax benefits associated with our NOL carryforwards.***

The rules relating to U.S. federal income taxation are periodically under review by persons involved in the legislative and administrative rulemaking processes, by the IRS and by the U.S. Department of the Treasury, resulting in revisions of regulations and revised interpretations of established concepts as well as statutory changes, including increase or decreases in the tax rate. Future revisions in U.S. federal tax laws and interpretations thereof could adversely impact our ability to use some or all of the tax benefits associated with our NOL carryforwards.

***Changes in tax laws may adversely affect us.***

The Tax Cuts and Jobs Act (the "TCJA") enacted on December 22, 2017, significantly affected U.S. federal tax law, including by changing how the U.S. imposes tax on certain types of income of corporations and by reducing the U.S. federal corporate income tax rate to 21%. It also imposed new limitations on a number of tax benefits, including deductions for business interest, use of net operating loss carryforwards, taxation of foreign income, and the foreign tax credit, among others.

It also imposed new limitations on deductions for mortgage interest, which may affect the demand for loans which we acquire and service. The CARES Act, enacted on March 27, 2020, in response to the COVID-19 pandemic, further altered U.S. federal tax law, including in respect of certain changes that were made by the TCJA, generally on a temporary basis.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the "Inflation Reduction Act"), which, among other things, imposed a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. Proposed tax changes that may be enacted in the future could impact our current or future tax structure and effective tax rates. The Biden administration has previously proposed other legislation that would further broaden the tax base and limit tax deductions in certain situations. It is unclear at this time if any of these proposals will be enacted in the future. Proposed tax changes that may be enacted in the future could impact our current or future tax structure and effective tax rates.

There can be no assurance that future tax law changes will not increase the rate of the corporate income tax significantly, impose new limitations on deductions, credits or other tax benefits, or make other changes that may adversely affect our business, cash flows or financial performance. In addition, the IRS has yet to issue guidance on a number of important issues regarding the changes made by the TCJA, the CARES Act, and the Inflation Reduction Act.

***The effects of the COVID-19 pandemic could adversely impact our business.***

On March 13, 2020, the World Health Organization declared SARS-CoV-2, and the related disease it causes in humans ("COVID-19") a pandemic. Subsequently, certain variants of COVID-19 have from time-to-time caused surges in the number and/or severity of COVID-19 cases regionally and globally. The impact of such variants cannot be predicted and this time and may depend on numerous factors, including transmissibility of specific variants, vaccine availability and vaccination rates. The long-term impacts of the social, economic and financial disruptions caused by the COVID-19 pandemic and the government

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responses to such disruptions are unknown. See the risk factor entitled, "Market Risks—Interest rate fluctuations could significantly decrease our results of operations and cash flows and the fair value of our assets."

As long as the COVID-19 pandemic, including any existing or new variants, remains a public health threat, global economic conditions may continue to be volatile and uncertainty as to the effects of the COVID-19 pandemic will persist across all industries and geographies. The extent of the impact of the COVID-19 pandemic, or other similar public health crises, on our business (including any adverse impact) will depend on numerous factors that we are not able to accurately predict.

The impact of the COVID-19 pandemic may also exacerbate other risks discussed in this Item 1A. "Risk Factors," any of which could have a material effect on us.

**Market Risks**

***Interest rate fluctuations could significantly decrease our results of operations and cash flows and the fair value of our assets.***

Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. Interest rate fluctuations present a variety of risks to our operations. Our primary interest rate exposures relate to the yield on our assets, their fair values and the financing cost of our debt, as well as to any derivative financial instruments that we utilize for hedging purposes. Increasing interest rates could adversely impact our origination volume because refinancing an existing loan may be less attractive for homeowners and qualifying for a purchase loan may be more difficult for some borrowers. Furthermore, an increase in interest rates could also adversely affect our margins due to increased competition among originators. On the other hand, decreasing interest rates may cause a large number of borrowers to refinance, which could result in the loss of future net servicing revenues with an associated write-down of the related MSRs. In addition, significant savings in interest rate movement may impact our gains and losses from interest rate hedging arrangements and result in our need to change our hedging strategy. Any such scenario with respect to increasing or decreasing interest rates could have a material adverse effect on our business, results of operations and financial condition.

Changes in the level of interest rates also may affect our ability to acquire assets (including the purchase or origination of mortgage loans), the value of our assets (including our pipeline of mortgage loan commitments and our portfolio of MSRs) and any related hedging instruments, the value of newly originated or purchased loans, and our ability to realize gains from the disposition of assets. Changes in interest rates may also affect borrower default rates and may impact our ability to refinance or modify loans and/or to sell real estate owned, or REO, assets.

Borrowings under some of our financing agreements are at variable rates of interest, which also expose us to interest rate risk. If interest rates increase, our debt service obligations on certain of our variable-rate indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. We currently have entered into, and in the future we may continue to enter into, interest rate swaps or interest rate swap futures that involve the exchange of floating for fixed-rate interest payments to reduce interest rate volatility. However, we may not maintain interest rate swaps or interest rate swap futures with respect to all of our variable-rate indebtedness, and any such swaps may not fully mitigate our interest rate risk, may prove disadvantageous, or may create additional risks.

In addition, our business is materially affected by the monetary policies of the U.S. government and its agencies. We are particularly affected by the policies of the U.S. Federal Reserve, which influence interest rates and impact the size of the loan origination market. In 2017, the U.S. Federal Reserve ended its quantitative easing program and started its balance sheet reduction plan. The U.S. Federal Reserve's balance sheet consists of U.S. Treasuries and MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae. To shrink its balance sheet prior to the COVID-19 pandemic, the U.S. Federal Reserve had slowed the pace of MBS purchases to a point at which natural runoff exceeded new purchases, resulting in a net reduction. In response to the COVID-19 pandemic, the Federal Reserve implemented policies to support the financial markets, including through increased purchases of certain MBS products and decreased interest rates. Following signals in early 2022 that the Federal Reserve would begin moving away from accommodative monetary policies, in mid-March 2022 the Federal Reserve began increasing interest rates with steady increases continuing throughout the remainder of 2022 and into 2023. The results of these actions have been, and are expected to continue to be, upward pressure on mortgage rates and reduced liquidity of MBS. However, the full effect and duration of this policy change and future policy changes by the U.S. Federal Reserve are unknown at this time and could have a material adverse effect on our business, results of operations and financial condition.

***Hedging against interest rate exposure may materially and adversely affect our business, financial condition, liquidity and results of operations.***

We pursue hedging strategies to reduce our exposure to changes in interest rates. However, while we enter into such transactions seeking to reduce interest rate risk, unanticipated changes in interest rates may result in poorer overall performance than if we had not engaged in any such hedging transactions, in addition to directly affecting the percentage of loan applications

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in the underwriting process that ultimately close. Interest rate hedging may fail to protect or could adversely affect us because, among other things, it may not fully eliminate interest rate risk, it could expose us to counterparty and default and cross-default risk that may result in greater losses or the loss of unrealized profits, and it will create additional expense. Generally, hedging activity requires the investment of capital and the amount of capital required often varies as interest rates and asset valuations change. Thus, hedging activity, while intended to limit losses, may materially and adversely affect our business, financial condition, liquidity and results of operations.

***A prolonged economic slowdown, recession or declining real estate values could materially and adversely affect us.***

Our business and earnings are sensitive to general business and economic conditions in the U.S. A downturn in economic conditions resulting in adverse changes in interest rates, inflation, the debt capital markets, unemployment rates, consumer and commercial bankruptcy filings, the general strength of national and local economies and other factors that negatively impact household incomes could decrease demand for our mortgage loan products as a result of a lower volume of housing purchases and reduced refinancings of mortgages and could lead to higher mortgage defaults and lower prices for our loans upon sale.

In addition, a weakening economy, high unemployment and declining real estate values may increase the likelihood that borrowers will become delinquent and ultimately default on their debt service obligations. Our cost to service increases when borrowers become delinquent. In the event of a default, we may incur additional costs, the size of which depends on a number of factors, including, but not limited to, the instruction of the loan investor, location and condition of the underlying property, the terms of the guarantee or insurance on the loan, the level of interest rates and the time it takes to liquidate the property.

***We finance our assets with borrowings, which may materially and adversely affect the income derived from our assets.***

We currently leverage and, to the extent available, we intend to continue to leverage our assets through borrowings, the level of which may vary based on the particular characteristics of our asset portfolio and on market conditions. We have financed certain of our assets through repurchase agreements, pursuant to which we sell mortgage loans to lenders (i.e., repurchase agreement counterparties) and receive cash from the lenders. The lenders are obligated to resell the same assets back to us at the end of the term of the transaction. Because the cash we receive from the lender when we initially sell the assets to the lender is less than our cost to acquire the assets as well as the fair value of those assets (this difference is referred to as the haircut), if the lender defaults on its obligation to resell the same assets back to us we could incur a loss on the transaction equal to the amount of the difference in asset value sold back to us reduced further by interest accrued on the financing (assuming there was no change in the fair value of the assets). Additionally, if the market value of the loans pledged or sold by us under a repurchase agreement to a counterparty lender declines, the lender may initiate a margin call and require us to either post additional collateral to cover such decrease or repay a portion of the outstanding borrowing. We may not have the funds available to do so, and we may be required to liquidate assets at a disadvantageous time to avoid a default, which could cause us to incur further losses and limit our ability to leverage our assets. If we are unable to satisfy a margin call, our counterparty may accelerate repayment of our indebtedness, increase interest rates, liquidate the collateral (which may result in significant losses to it) or terminate our ability to borrow. Such a situation would likely result in a rapid deterioration of our financial condition and possibly necessitate a filing for bankruptcy protection. A rapidly rising interest rate environment may increase the likelihood of additional margin calls that could adversely impact our liquidity.

***The value of our collateral may decrease, which could lead to our lenders initiating margin calls and requiring us to post additional collateral or repay a portion of our outstanding borrowings.***

We originate or acquire certain assets, including MSRs, for which financing has historically been difficult to obtain. We currently leverage certain of our MSRs under secured financing arrangements. Our MSRs are pledged to secure borrowings under a loan and security agreement. Our Fannie Mae, Freddie Mac, and Ginnie Mae MSRs are financed on a $1.0 billion line of credit with a three year revolving period ending on May 4, 2024, followed by a one year amortization period which ends on May 20, 2025. Similar to our mortgage warehouse lines of credit, the cash that we receive under this MSR facility is less than the fair value of the assets and a decrease in the fair value of the pledged collateral can result in a margin call. Our secured financing arrangements pursuant to which we finance MSRs are further subject to the terms of an acknowledgement agreement with the related GSE and Ginnie Mae, pursuant to which our and the secured parties' rights are subordinate in all respects to the rights of the applicable GSE or Ginnie Mae and subject to financial covenants similar to our financing arrangements. Accordingly, the exercise by any GSE or Ginnie Mae of its rights under the applicable acknowledgment agreement, including at the direction of the secured parties and whether or not we are in breach of our financing arrangement, could result in the extinguishment of our and the secured parties' rights in the related collateral and result in significant losses to us.

We may in the future utilize other sources of borrowings, including term loans, bank credit facilities and structured financing arrangements, among others. The amount of leverage we employ varies depending on the asset class being financed, our available capital, our ability to obtain and access financing arrangements with lenders and the lenders' and rating agencies' estimate of, among other things, the stability of our asset portfolio's cash flow.

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***Our operations are dependent on access to our financing arrangements, which are mostly uncommitted. If the lenders under these financing facilities terminate, or modify the terms of, these facilities, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.***

We depend on short-term debt financing in the form of secured borrowings under various financing arrangements with financial institutions. These facilities are primarily uncommitted, which means that any request we make to borrow funds under these facilities may be declined for any reason, even if at the time of the borrowing request we have then-outstanding borrowings that are less than the borrowing limits under these facilities. We may not be able to obtain additional financing under our financing arrangements when necessary, which could have a material adverse effect on our business, financial condition, results of operations and cash flows and exposing us to, among other things, liquidity risks which could adversely affect our profitability and operations.

***Our financing agreements contain financial and restrictive covenants that could adversely affect our financial condition and our ability to operate our businesses.***

The lenders under our financing agreements require us and/or our subsidiaries to comply with various financial covenants, including those relating to tangible net worth, profitability and our ratio of total liabilities to tangible net worth. Our lenders also require us to maintain minimum amounts of cash or cash equivalents sufficient to maintain a specified liquidity position and maintain collateral having a market value sufficient to support the related borrowings. From time to time, as a result of market conditions or otherwise, we may need to seek amendments or waivers to our financing arrangements to address an anticipated inability to satisfy one or more of these financial covenants. For example, we have entered into amendments to certain warehouse lines that contain profitability covenants to the extent necessary to allow for a net loss under such covenants for specified reporting periods. If we are unable to meet these financial covenants and lenders are unwilling to waive their application, our financial condition could deteriorate rapidly and could also result in a default or cross-defaults under our financing arrangements.

Our existing financing agreements also impose other financial and non-financial covenants and restrictions on us that impact our flexibility to determine our operating policies by limiting our ability to, among other things: incur certain types of indebtedness; grant liens; engage in consolidations and mergers and asset sales; make restricted payments and investments; and enter into transactions with affiliates. In our financing agreements, we agree to certain covenants and restrictions and we make representations about the assets sold or pledged under these agreements. We also agree to certain events of default (subject to certain materiality thresholds and grace periods), including payment defaults, breaches of financial and other covenants and/or certain representations and warranties, cross-defaults, servicer termination events, ratings downgrades, bankruptcy or insolvency proceedings, legal judgments against us, loss of licenses, loss of Agency, FHA, VA and/or USDA approvals and other events of default and remedies customary for these types of agreements. If we default on our obligations under our financing arrangements, fail to comply with certain covenants and restrictions or breach our representations and are unable to cure, the lender may be able to terminate the transaction or its commitments, accelerate any amounts outstanding, repurchase the assets, and/or cease entering into any other financing arrangements with us, which could also result in defaults or cross-defaults in our financing arrangements.

Because our financing agreements typically contain cross-default provisions, a default that occurs under any one agreement could allow the lenders under our other agreements to also declare a default, thereby exposing us to a variety of lender remedies, such as those described above, and potential losses arising therefrom. In addition, defaults and cross-defaults under our financing arrangements could trigger a cross-defaults under our trading agreements, which could have a negative impact on our ability to enter into hedging transactions. Any losses that we incur on our financing agreements could have a material adverse effect on our business, financial condition, liquidity and results of operations.

***We may not be able to raise the debt or equity capital required to finance our assets and maintain or grow our businesses.***

Our businesses require continued access to debt and equity capital that may or may not be available on favorable terms, at the desired times or at all. In addition, we own certain assets, including MSRs, for which financing has historically been difficult to obtain. Our inability to continue to maintain debt financing for MSRs could require us to seek equity capital that may be more costly or unavailable to us.

We are also dependent on a limited number of banking institutions that extend us credit on terms that we have determined to be commercially reasonable. These banking institutions are subject to their own regulatory supervision, liquidity and capital requirements, risk management frameworks and risk thresholds and tolerances, any of which may materially and negatively impact their willingness to extend credit to us specifically or mortgage lenders and servicers generally. Such actions may increase our cost of capital and limit or otherwise eliminate our access to capital.

Our access to any debt or equity capital on favorable terms or at all is uncertain. Our inability to raise such capital or obtain such debt or equity financing on favorable terms or at all could materially and adversely impact our business, financial condition, liquidity and results of operations.

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***We utilize derivative financial instruments, which could subject us to risk of loss.***

We enter into a variety of hedging arrangements such as derivative contracts, to hedge the fair value of the MSR portfolio and minimize market rate risk although we cannot assure you that these hedging arrangements will protect the value of our MSR assets. We utilize derivative financial instruments for hedging purposes, which may include swap futures, options, "to be announced" contracts and futures. However, the prices of derivative financial instruments, including futures and options, are highly volatile. As a result, the cost of utilizing derivatives may reduce our income and liquidity, and the derivative instruments that we utilize may fail to effectively hedge our positions. We are also subject to credit risk with regard to the counterparties involved in the derivative transactions.

The use of derivative instruments is also subject to an increasing number of laws and regulations, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and its implementing regulations. These laws and regulations are complex, compliance with them may be costly and time consuming, and our failure to comply with any of these laws and regulations could subject us to lawsuits or government actions and damage our reputation, which could materially and adversely affect our business, financial condition, liquidity and results of operations.

**Regulatory Risks**

***We operate in a highly regulated industry with continually changing federal, state and local laws and regulations.***

The mortgage industry is highly regulated, and we are required to comply with a wide array of federal, state and local laws and regulations that restrict, among other things, the manner in which we conduct our loan production and servicing businesses, including the fees that we may charge and the collection, use, retention, protection, disclosure and other processing of personal information. These regulations directly impact our business and require constant compliance, monitoring and internal and external audits. Both the scope of the laws and regulations and the intensity of the supervision to which our business is subject have increased over time in response to the financial crisis, as well as other factors, such as technological and market changes.

The laws and regulations and judicial and administrative decisions relating to mortgage loans and consumer protection to which we are subject include, for example, those pertaining to real estate settlement procedures, equal credit opportunity, fair lending, fair credit reporting, truth in lending, fair debt collection practices, service members protections, unfair, deceptive and abusive acts and practices, federal and state advertising requirements, high-cost loans and predatory lending, compliance with net worth and financial statement delivery requirements, compliance with federal and state disclosure and licensing requirements, the establishment of maximum interest rates, finance charges and other charges, ability-to-repay and qualified mortgages, licensing of loan originators and other personnel, loan originator compensation, secured transactions, property valuations, insurance, servicing transfers, payment processing, escrow, communications with consumers, loss mitigation, debt collection, prompt payment crediting, periodic statements, foreclosure, bankruptcies, repossession and claims-handling procedures, disclosures related to and cancellation of private mortgage insurance, flood insurance, the reporting of loan application and origination data, and other trade practices. For a more detailed description of the regulations to which we are subject, see "Item 1. Business—Regulation."

We also must comply with federal, state and local laws related to data privacy and the handling of personally identifiable information ("PII") and other sensitive, regulated or non-public data. These include the California Consumer Privacy Act (the "CCPA") and the California Privacy Rights Act which amends and expands the CCPA (together, the "Amended CCPA") and we expect other states to enact legislation similar to the Amended CCPA, which limit how companies can use customer data and impose obligations on companies in their management of such data, and require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply. The Amended CCPA, among other things, requires certain disclosures to California consumers and affords such consumers new abilities to opt out of certain sales of personal information, in addition to limiting our ability to use their information. The Amended CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result from a failure to implement reasonable safeguards. This private right of action may increase the likelihood of, and risks associated with, data breach litigation. The service providers we use, including outside counsel retained to process foreclosures and bankruptcies, must also comply with some of these legal requirements. Changes to laws, regulations or regulatory policies or their interpretation or implementation and the continued heightening of regulatory requirements could affect us in substantial and unpredictable ways.

The influx of new laws, regulations, and other directives adopted by federal, state and local governments in response to the COVID-19 pandemic exemplifies the ever-changing and increasingly complex regulatory landscape in which we operate. While some regulatory reactions to COVID-19 relaxed certain compliance obligations, the forbearance requirements imposed on mortgage servicers in the CARES Act added new regulatory responsibilities. The GSEs and the Federal Housing Finance Agency (the "FHFA"), Ginnie Mae, HUD, state and local governments, various investors and others have also issued guidance relating to COVID-19. Future regulatory scrutiny and enforcement resulting from COVID-19 is not yet fully known.

Our failure to comply with applicable federal, state and local consumer protection and data privacy laws could lead to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• loss of our licenses and approvals to engage in our servicing and lending/loan purchasing businesses;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• damage to our reputation in the industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• governmental investigations and enforcement actions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• administrative fines and penalties and litigation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• civil and criminal liability, including class action lawsuits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• diminished ability to sell loans that we originate or purchase, requirements to sell such loans at a discount compared to other loans or repurchase or address indemnification claims from purchasers of such loans, including the GSEs and Ginnie Mae;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to raise capital; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to execute on our business strategy, including our growth plans.

Furthermore, situations involving a potential violation of law or regulation, even if limited in scope, may give rise to numerous and overlapping investigations and proceedings, either by multiple federal and state agencies and officials in the United States. In addition, our failure, or the failure of our Broker Partners to comply with these laws and regulations may result in increased costs of doing business, reduced payments by borrowers, modification of the original terms of mortgage loans, rescission of mortgages and return of interest payments, permanent forgiveness of debt, delays in the foreclosure process, litigation, reputational damage, enforcement actions, and repurchase and indemnification obligations, which could affect our investor approval status and our ability to sell or service loans. Our failure to adequately supervise vendors and service providers may lead to significant liabilities, inclusive of assignee liabilities, as a result of the errors and omissions of those vendors and service providers.

As regulatory guidance and enforcement and the views of the CFPB, state attorneys general, the GSEs and Ginnie Mae and other market participants evolve, we may need to modify further our loan origination processes and systems in order to adjust to evolution in the regulatory landscape and successfully operate our lending business. In such circumstances, if we are unable to make the necessary adjustments, our business and operations could be adversely affected.

Our failure to comply with the laws and regulations to which we are subject, whether actual or alleged, would expose us to fines, penalties or potential litigation liabilities, including costs, settlements and judgments, and also trigger defaults under our financing arrangements, any of which could have a material adverse effect on our business, liquidity, financial condition and results of operations.

***We may be subject to liability for potential violations of anti-predatory lending laws, which could adversely impact our results of operations, financial condition and business.***

Various federal, state and local laws have been enacted that are designed to discourage predatory lending and servicing practices. The Home Ownership and Equity Protection Act of 1994 ("HOEPA") prohibits inclusion of certain provisions in residential loans that have mortgage rates or origination costs in excess of prescribed levels and requires that borrowers be given certain disclosures prior to origination. Some states have enacted, or may enact, similar laws or regulations, which in some cases impose restrictions and requirements greater than those in HOEPA. In addition, under the anti-predatory lending laws of some states, the origination of certain residential loans, including loans that are not classified as "high cost" loans under applicable law, must satisfy a net tangible benefits test with respect to the related borrower. This test may be highly subjective and open to interpretation. As a result, a court may determine that a residential loan, for example, does not meet the test even if the related originator reasonably believed that the test was satisfied. The VA has also adopted rules to protect veterans from predatory lending in connection with certain home loans.

Failure of residential loan originators or servicers to comply with these laws, to the extent any of their residential loans are or become part of our mortgage-related assets, could subject us, as a servicer or, in the case of acquired loans, as an assignee or purchaser, to monetary penalties and could result in the borrowers rescinding the affected loans. Lawsuits have been brought in various states making claims against originators, servicers, assignees and purchasers of high cost loans for violations of state law. Named defendants in these cases have included numerous participants within the secondary mortgage market. If our loans are found to have been originated in violation of predatory or abusive lending laws, we could be subject to lawsuits or governmental actions, or we could be fined or incur losses.

***The CFPB is active in its monitoring of the residential mortgage origination and servicing sectors. New or revised rules and regulations and more stringent enforcement of existing rules and regulations by the CFPB could result in increased compliance costs, enforcement actions, fines, penalties and the inherent reputational harm that results from such actions.***

The CFPB has oversight of non-depository mortgage lending and servicing institutions and is empowered with broad supervision, rulemaking and examination authority to enforce laws involving consumer financial products and services and to ensure, among other things, that consumers receive clear and accurate disclosures regarding financial products and are protected from hidden fees and unfair, deceptive or abusive acts or practices. The CFPB has adopted a number of regulations under long-standing consumer financial protection laws and the Dodd-Frank Act, including rules regarding truth in lending, assessments of

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a borrower's ability to repay, home mortgage loan disclosure, home mortgage loan origination, fair credit reporting, fair debt collection practices, foreclosure protections and mortgage servicing rules, including provisions regarding loss mitigation, prompt crediting of borrowers' accounts for payments received, delinquency and early intervention, prompt investigation of complaints by borrowers, periodic statement requirements, lender-placed insurance, requests for information and successors-in-interest to borrowers. The CFPB also periodically issues guidance documents, such as bulletins, setting forth informal guidance regarding compliance with these and other laws under its jurisdiction, and issues public enforcement actions, which provide additional guidance on its interpretation of these legal requirements.

The CFPB also has enforcement authority and can order, among other things, rescission or reformation of contracts, the refund of moneys or the return of real property, restitution, disgorgement or compensation for unjust enrichment, the payment of damages or other monetary relief, public notifications regarding violations, limits on activities or functions, remediation of practices, external compliance monitoring and civil money penalties. The CFPB has made it clear that it expects non-bank entities to maintain an effective process for managing risks associated with third-party vendor relationships, including compliance-related risks. In connection with this vendor risk management process, we are expected to perform due diligence reviews of potential vendors, review vendors' policies and procedures and internal training materials to confirm compliance-related focus, include enforceable consequences in contracts with vendors regarding failure to comply with consumer protection requirements, and take prompt action, including terminating the relationship, in the event that vendors fail to meet our expectations. Through enforcement actions and guidance, the CFPB is also applying scrutiny to compensation payments to third-party providers for marketing services and may issue guidance that narrows the range of acceptable payments to third-party providers as part of marketing services agreements, lead generation agreements and other third-party marketer relationships.

In addition to its supervision and examination authority, the CFPB is authorized to conduct investigations to determine whether any person is engaging in, or has engaged in, conduct that violates federal consumer financial protection laws, and to initiate enforcement actions for such violations, regardless of its direct supervisory authority. Investigations may be conducted jointly with other regulators. The CFPB has the authority to impose monetary penalties for violations of applicable federal consumer financial laws, require remediation of practices and pursue administrative proceedings or litigation for violations of applicable federal consumer financial laws. The CFPB also has the authority to obtain cease and desist orders, orders for restitution or rescission of contracts and other kinds of affirmative relief and monetary penalties.

December 2020, the CFPB issued revised Qualified Mortgage ("QM") rules that replaced Appendix Q and the strict 43% debt-to-income ratio ("DTI") underwriting threshold with a price-based QM loan definition. The revised QM rules also terminated the QM Patch, under which certain loans eligible for sale to Fannie Mae and Freddie Mac do not have to be underwritten to Appendix Q or satisfy the capped 43% DTI requirement. The rule was to take effect on March 1, 2021, but compliance would not be mandatory until July 1, 2021. However, on April 27, 2021, the CFPB published a final rule delaying the mandatory compliance date of the revised QM rule from July 1, 2021, to October 1, 2022, which gave lenders the option of originating QM rules under either the legacy QM rules or the revised QM rules between March 1, 2021 and October 1, 2022. This "optionality" was partially negated by the GSEs' (that is, Fannie Mae and Freddie Mac) April 2021 pronouncements in which they announced that they, in effect will adhere to the mandatory effective date of the revised QM rules as originally promulgated by the CFPB in December 2020. We cannot predict what other actions the CFPB will take and how it might affect us as well as other mortgage lenders.

Consistent with its active monitoring of residential mortgage origination and servicing, the CFPB may impose new regulations under existing statutes or revise its existing regulations to more stringently limit our business activities. In addition, uncertainty regarding changes in leadership or authority levels within the CFPB and changes in supervisory and enforcement priorities, including potentially more stringent enforcement actions, could result in heightened regulation and oversight of our business activities, materially and adversely affect the manner in which we conduct our business, and increase costs and potential litigation associated with our business activities. Our failure to comply with the laws and regulations to which we are subject, whether actual or alleged, would expose us to fines, penalties or potential litigation liabilities, including costs, settlements and judgments, and also trigger defaults under our financing arrangements, any of which could have a material adverse effect on our business, liquidity, financial condition and results of operations.

***The state regulatory agencies continue to be active in their supervision of the loan origination and servicing sectors and the results of these examinations may be detrimental to our business. New or revised rules and regulations and more stringent enforcement of existing rules and regulations by state regulatory agencies could result in increased compliance costs, enforcement actions, fines, penalties and the inherent reputational harm that results from such actions.***

We are also supervised by regulatory agencies under state law. State attorneys general, state licensing regulators, and state and local consumer protection offices have authority to investigate consumer complaints and to commence investigations and other formal and informal proceedings regarding our operations and activities. In addition, the GSEs and the FHFA, Ginnie Mae, the FTC, HUD, various investors, non-agency securitization trustees and others subject us to periodic reviews and audits.

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State regulatory agencies have been and continue to be active in their supervision of loan origination and servicing companies, including us. If a state regulatory agency imposes new rules or revises its rules or otherwise engages in more stringent supervisory and enforcement activities with respect to existing or new rules, we could be subject to enforcement actions, fines or penalties, as well as reputational harm as a result of these actions. We also may face increased compliance costs as a direct result of new or revised rules or in response to any such stringent enforcement or supervisory activities. A determination of our failure to comply with applicable law could lead to enforcement action, administrative fines and penalties, or other administrative action.

***Failure to comply with the GSEs, FHA, VA and USDA guidelines and changes in these guidelines or GSE and Ginnie Mae guarantees could adversely affect our business.***

Loan servicers and originators are required to follow specific guidelines and eligibility standards that impact the way GSE and U.S. government agency loans are serviced and originated, including guidelines and standards with respect to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• underwriting standards and credit standards for mortgage loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our staffing levels and other servicing practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the servicing and ancillary fees that we may charge;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our modification standards and procedures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount of reimbursable and non-reimbursable advances that we may make; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the types of loan products that are eligible for sale or securitization.

These guidelines provide the GSEs and Ginnie Mae and other government agencies with the ability to provide monetary incentives for loan servicers that perform well and to assess penalties for those that do not. In addition, these guidelines directly limit the types of loan products that we may offer in general and the mortgage loans that we may underwrite for specific borrowers to the extent that we those products to be supported by the GSEs and Ginnie Mae and other government agencies. As a result, failure to comply with these guidelines could adversely impact our ability to benefit from GSE and other government agency support and could therefore impact our business.

At the direction of the FHFA, Fannie Mae and Freddie Mac have aligned their guidelines for servicing delinquent mortgages, which could result in monetary incentives for servicers that perform well and to assess compensatory penalties against servicers in connection with the failure to meet specified timelines relating to delinquent loans and foreclosure proceedings, and other breaches of servicing obligations. We generally cannot negotiate these terms with the Agencies and they are subject to change at any time without our specific consent. A significant change in these guidelines, that decreases the fees we charge or requires us to expend additional resources to provide mortgage services, could decrease our revenues or increase our costs.

In addition, changes in the nature or extent of the guarantees provided by Fannie Mae, Freddie Mac, Ginnie Mae, the USDA or the VA, or the insurance provided by the FHA, or coverage provided by private mortgage insurers, could also have broad adverse market implications. Any future increases in guarantee fees or changes to their structure or increases in the premiums we are required to pay to the FHA or private mortgage insurers for insurance or to the VA or the USDA for guarantees could increase mortgage origination costs and insurance premiums for our customers. These industry changes could negatively affect demand for our mortgage services and consequently our origination volume, which could be detrimental to our business. We cannot predict whether the impact of any proposals to move Fannie Mae and Freddie Mac out of conservatorship would require them to increase their fees. For further discussion, see "—*We are highly dependent on the GSEs and Ginnie Mae and the FHFA, as the conservator of the GSEs, and any changes in these entities or their current roles could materially and adversely affect our business, liquidity, financial condition and results of operations*."

***We are highly dependent on the GSEs and Ginnie Mae and the FHFA, as the conservator of the GSEs, and any changes in these entities or their current roles could materially and adversely affect our business, liquidity, financial condition and results of operations.***

Our ability to generate revenues through mortgage loan sales depends to a significant degree on programs administered by the GSEs and Ginnie Mae and others that facilitate the issuance of MBS in the secondary market. The GSEs, Ginnie Mae and FHFA play a critical role in the mortgage industry and we have significant business relationships with them. Presently, almost all of the newly originated conventional conforming loans that we acquire from mortgage lenders through our correspondent production activities qualify under existing standards for inclusion in mortgage securities backed by the GSEs and Ginnie Mae or for purchase by a GSE directly through its cash window. We also derive other material financial benefits from these relationships, including the assumption of credit risk by the GSEs and Ginnie Mae on loans included in such mortgage securities in exchange for our payment of guarantee fees, our retention of such credit risk through structured transactions that lower our guarantee fees, and the ability to avoid certain loan inventory finance costs through streamlined loan funding and sale procedures to the Agencies and other third-party purchasers.

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As a result of our dependence on the GSEs and Ginnie Mae, any adverse change in our relationship with them could materially and adversely affect our business, financial condition, liquidity and results of operations.

There is significant uncertainty regarding the future of the GSEs and Ginnie Mae, including with respect to how long they will continue to be in existence, the extent of their roles in the market and what forms they will have, and whether they will be government agencies, government-sponsored agencies or private for-profit entities. Since they have been placed into conservatorship, many legislative and administrative plans for GSE reform have been put forth, but all have been met with resistance from various constituencies. At this point, it remains unclear whether any of these legislative or regulatory reforms will be enacted or implemented. Any changes in laws and regulations affecting the relationship between the GSEs and Ginnie Mae and the U.S. federal government could adversely affect our business and prospects. Although the U.S. Treasury has committed capital to the GSEs and Ginnie Mae, these actions may not be adequate for their needs. If the GSEs and Ginnie Mae are adversely affected by events such as ratings downgrades, inability to obtain necessary government funding, lack of success in resolving repurchase demands to lenders, foreclosure problems and delays and problems with mortgage insurers, they could suffer losses and fail to honor their guarantees and other obligations. Any discontinuation of, or significant reduction in, the operation of the GSEs and Ginnie Mae or any significant adverse change in their capital structure, financial condition, activity levels in the primary or secondary mortgage markets or underwriting criteria could materially and adversely affect our business, liquidity, financial condition and results of operations. The roles of the GSEs and Ginnie Mae could be significantly restructured, reduced or eliminated and the nature of the guarantees could be considerably limited relative to historical measurements. Elimination of the traditional roles of the GSEs and Ginnie, or any changes to the nature or extent of the guarantees provided by the GSEs and Ginnie Mae or the fees, terms and guidelines that govern our selling and servicing relationships with them, such as increases in the guarantee fees we are required to pay, initiatives that increase the number of repurchase demands and/or the manner in which they are pursued, or possible limits on delivery volumes imposed upon us and other sellers/servicers, could also materially and adversely affect our business, including our ability to sell and securitize loans that we acquire through our correspondent production activities or our Direct channel activities, and the performance, liquidity and market value of our assets. Moreover, any changes to the nature of the GSEs and Ginnie Mae or their guarantee obligations could redefine what constitutes an Agency MBS and could have broad adverse implications for the market and our business, financial condition, liquidity and results of operations.

***We are required to have various Agency approvals and state licenses in order to conduct our business and there is no assurance we will be able to maintain those Agency approvals or state licenses or that changes in Agency guidelines will not materially and adversely affect our business, financial condition and results of operations.***

We are subject to state mortgage lending, purchase and sale, loan servicing or debt collection licensing and regulatory requirements. Our failure to obtain any necessary licenses, comply with applicable licensing laws or satisfy the various requirements to maintain them over time could restrict our Direct channel activities or loan purchase and sale or servicing activities, result in litigation, or civil and other monetary penalties, or criminal penalties, or cause us to default under certain of our lending arrangements, any of which could materially and adversely impact our business, financial condition, liquidity and results of operations.

We are required to hold Agency approvals in order to sell mortgage loans to a particular Agency and/or service such mortgage loans on their behalf. Our failure to satisfy the various requirements necessary to maintain such Agency approvals over time would also substantially restrict our business activities and could adversely impact our results of operations and financial condition including defaults under our financing agreements.

We are also required to follow specific guidelines that impact the way that we originate and service Agency loans. A significant change in these guidelines that has the effect of decreasing the fees we charge or requires us to expend additional resources in providing mortgage services could decrease our revenues or increase our costs, which could also adversely affect our business, financial condition and results of operations.

In addition, we are subject to periodic examinations by federal and state regulators, our lenders and the Agencies, which can result in increases in our administrative costs, the requirement to pay substantial penalties due to compliance errors or the loss of our licenses. Negative publicity or fines and penalties incurred in one jurisdiction may cause investigations or other actions by regulators in other jurisdictions and could adversely impact our business.

In addition, because we are not a state or federally chartered depository institution, we do not benefit from exemptions from state mortgage lending, loan servicing or debt collection licensing and regulatory requirements. We must comply with state licensing requirements and varying compliance requirements in all states in which we operate and the District of Columbia, and regulatory changes may increase our costs through stricter licensing laws, disclosure laws or increased fees or may impose conditions to licensing that we or our personnel are unable to meet.

In most states in which we operate, a regulatory agency or agencies regulate and enforce laws relating to mortgage servicers and mortgage originators. Future state legislation and changes in existing regulation may significantly increase our compliance costs or reduce the amount of ancillary income we are entitled to collect from borrowers or otherwise. This could make our business cost-prohibitive in the affected state or states and could materially affect our business, financial condition and results of operations.

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***If we are unable to comply with TRID rules, our business and operations could be materially and adversely affected.***

The CFPB's TILA-RESPA Integrated Disclosure ("TRID") rules impose requirements on consumer facing disclosure rules and impose certain waiting periods to allow consumers time to shop for and consider the loan terms after receiving the required disclosures. If we fail to comply with the TRID rules, we may be unable to sell loans that we originate or purchase, or we may be required to sell such loans at a discount compared to other loans. We could also be subject to repurchase or indemnification claims from purchasers of such loans, including the GSEs and Ginnie Mae.

***The conduct of mortgage brokers with whom we produce our wholesale mortgage loans could subject us to lawsuits, regulatory action, fines or penalties.***

The failure to comply with any applicable laws, regulations and rules by the mortgage lenders from whom loans were acquired through our wholesale production activities may subject us to lawsuits, regulatory actions, fines or penalties. We have in place a due diligence program designed to assess areas of risk with respect to these acquired loans, including, without limitation, compliance with underwriting guidelines and applicable law. However, we may not detect every violation of law by these mortgage lenders. Further, to the extent any other third-party originators with whom we do business fail to comply with applicable law, and subsequently any of their mortgage loans become part of our assets, or prior servicers from whom we acquire MSR fail to comply with applicable law, it could subject us, as an assignee or purchaser of the related mortgage loans or MSR, respectively, to monetary penalties or other losses. In general, if any of our loans are found to have been originated, serviced or owned by us or a third party in violation of applicable law, we could be subject to lawsuits or governmental actions, or we could be fined or incur losses.

The independent third-party mortgage brokers through whom we produce wholesale mortgage loans have parallel and separate legal obligations to which they are subject. These independent mortgage brokers are not considered our employees and are treated as independent third parties. While the applicable laws may not explicitly hold the originating lenders responsible for the legal violations of mortgage brokers, federal and state agencies increasingly have sought to impose such liability. The U.S. Department of Justice, through its use of a disparate impact theory under the Fair Housing Act, is actively holding home loan lenders responsible for the pricing practices of brokers, alleging that the lender is directly responsible for the total fees and charges paid by the borrower even if the lender neither dictated what the broker could charge nor kept the money for its own account. In addition, under the TRID rule, we may be held responsible for improper disclosures made to customers by brokers. We may be subject to claims for fines or other penalties based upon the conduct of the independent home loan brokers with which we do business.

***Mortgage loan modification and refinance programs, future legislative action and other actions and changes may materially and adversely affect the value of, and the returns on, the assets in which we invest.***

The U.S. government, primarily through the Agencies, has established loan modification and refinance programs designed to provide homeowners with assistance in avoiding residential mortgage loan foreclosures. We can provide no assurance that we will be eligible to use any government programs or, if eligible, that we will be able to utilize them successfully. These programs, future U.S. federal, state or local legislative or regulatory actions that result in the modification of outstanding mortgage loans, as well as changes in the requirements necessary to qualify for modifications or refinancing mortgage loans with the GSEs or Ginnie Mae, may adversely affect the value of, and the returns on MSRs, residential mortgage loans, residential MBS, real estate-related securities and various other asset classes in which we invest, all of which could require us to repurchase loans, generally, and specifically from Ginnie Mae and the GSEs, which may result in a material adverse effect on our business and liquidity.

***Private legal proceedings alleging failures to comply with applicable laws or regulatory requirements, and related costs, could adversely affect our financial condition and results of operations.***

We are subject to various pending private legal proceedings challenging, among other things, whether certain of our loan origination and servicing practices and other aspects of our business comply with applicable laws and regulatory requirements. The outcome of any legal matter is never certain. In the future, we are likely to become subject to other private legal proceedings alleging failures to comply with applicable laws and regulations, including putative class actions, in the ordinary course of our business. Please see "Item 8 – Note 13 - Commitments and Contingencies."

With respect to legal actions for impending or expected foreclosures, we may incur costs if we are required to, or if we elect to, execute or re-file documents or take other actions in our capacity as a servicer. We may incur increased litigation costs if the validity of a foreclosure action is challenged by a borrower or a class of borrowers. In addition, if a court rules that the lien of a homeowners association takes priority over the lien we service, we may incur legal liabilities and costs to defend such actions. If a court dismisses or overturns a foreclosure because of errors or deficiencies in the foreclosure process, we may have liability in our capacity as seller, servicer or otherwise to the loan owner, a borrower, title insurer or the purchaser of the property sold in foreclosure. These costs and liabilities may not be legally or otherwise reimbursable to us, particularly to the extent they relate to securitized mortgage loans or loans that we sell to the GSEs and Ginnie Mae or other third parties. A significant increase in litigation costs and losses occurring from lawsuits could trigger a default or cross-defaults under our

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financing arrangements, which could have a material adverse effect on our liquidity, business, financial condition and results of operations.

***Residential mortgage foreclosure proceedings in certain states have been delayed due to lack of judicial resources and legislation.***

Several states have enacted Homeowner's Bill of Rights legislation to establish mandatory loss mitigation practices for homeowners which cause delays in foreclosure proceedings. It is possible that additional states could enact similar laws in the future. Delays in foreclosure proceedings could require us to delay the recovery of advances, which could materially affect our business, results of operations and liquidity and increase our need for capital.

When a mortgage loan we service is in foreclosure, we are generally required to continue to advance delinquent principal and interest to the securitization trust and to make advances for delinquent taxes and insurance and foreclosure costs and the upkeep of vacant property in foreclosure to the extent that we determine that such amounts are recoverable. These servicing advances are generally recovered when the delinquency is resolved. Regulatory actions that lengthen the foreclosure process will increase the amount of servicing advances that we are required to make, lengthen the time it takes for us to be reimbursed for such advances and increase the costs incurred during the foreclosure process.

Increased regulatory scrutiny and new laws and procedures could cause us to adopt additional compliance measures and incur additional compliance costs in connection with our foreclosure processes. We may incur legal and other costs responding to regulatory inquiries or any allegation that we improperly foreclosed on a borrower. We could also suffer reputational damage and could be fined or otherwise penalized if we are found to have breached regulatory requirements.

***We may incur increased costs and related losses if a customer challenges the validity of a foreclosure action, if a court overturns a foreclosure or if a foreclosure subjects us to environmental liabilities.***

We may incur costs if we are required to, or if we elect to, execute or re-file documents or take other action in our capacity as a servicer in connection with pending or completed foreclosures. In addition, if certain documents required for a foreclosure action are missing or defective or if a court overturns a foreclosure because of errors or deficiencies in the foreclosure process, we may have liability to a title insurer or the purchaser of the property sold in foreclosure or could be obligated to cure the defect or repurchase the loan. We may also incur litigation costs, timeline delays and other protective advance expenses if the validity of a foreclosure action is challenged by a customer. These costs and liabilities may not be legally or otherwise reimbursable to us, particularly to the extent they relate to securitized mortgage loans. A significant increase in such costs and liabilities could adversely affect our liquidity and our inability to be reimbursed for advances could adversely affect our business, financial condition and results of operations.

***Regulatory agencies and consumer advocacy groups are becoming more aggressive in asserting claims that the practices of lenders and loan servicers result in a disparate impact on protected classes.***

Anti-discrimination statutes, such as the Fair Housing Act and the Equal Credit Opportunity Act, prohibit creditors from discriminating against loan applicants and borrowers based on certain characteristics, such as race, sex, religion and national origin. The Fair Housing Act also expressly prohibits discrimination with respect to the purchase of mortgage loans. Various federal regulatory agencies and departments, including the U.S. Department of Justice and CFPB, take the position that these laws apply not only to intentional discrimination, but also to neutral practices that have a disparate impact on a group that shares a characteristic that a creditor may not consider in making credit decisions (i.e., creditor or servicing practices that have a disproportionate negative affect on a protected class of individuals).

These regulatory agencies, as well as consumer advocacy groups and plaintiffs' attorneys, are focusing greater attention on "disparate impact" claims. The U.S. Supreme Court recently confirmed that the "disparate impact" theory applies to cases brought under the FHA, while emphasizing that a causal relationship must be shown between a specific policy of the defendant and a discriminatory result that is not justified by a legitimate objective of the defendant. Although it is still unclear whether the theory applies under the Equal Credit Opportunity Act, regulatory agencies and private plaintiffs can be expected to continue to apply it to both the Fair Housing Act and the Equal Credit Opportunity Act in the context of home loan lending and servicing. To the extent that the "disparate impact" theory continues to apply, we may be faced with significant administrative burdens in attempting to comply and potential liability for failures to comply.

Furthermore, many industry observers believe that the "ability to repay" rule issued by the CFPB, discussed above may have the unintended consequence of having a disparate impact on protected classes. Specifically, it is possible that lenders that make only qualified mortgages may be exposed to discrimination claims under a disparate impact theory.

In addition to reputational harm, violations of the Equal Credit Opportunity Act and the Fair Housing Act can result in actual damages, punitive damages, injunctive or equitable relief, attorneys' fees and civil money penalties.

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**Risks Related to Our Mortgage Assets**

***Our acquisition of MSRs exposes us to significant risks.***

MSRs arise from contractual agreements between us and the investors (or their agents) in mortgage securities and mortgage loans that we service on their behalf. We generally create MSRs in connection with our sale of mortgage loans to the Agencies or others where we assume the obligation to service such loans on their behalf. We may also purchase MSRs from third-party sellers. All MSR capitalizations are recorded at fair value on our balance sheet. The determination of the fair value of MSRs requires our management to make numerous estimates and assumptions. Such estimates and assumptions include, without limitation, estimates of future cash flows associated with MSRs based upon assumptions involving interest rates as well as the prepayment rates, delinquencies and foreclosure rates of the underlying serviced mortgage loans. The ultimate realization of future cash flows from the MSRs may be materially different than the values of such MSRs as may be reflected in our consolidated balance sheet as of any particular date. The use of different estimates or assumptions in connection with the valuation of these assets could produce materially different fair values for such assets, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. Accordingly, there may be material uncertainty about the fair value of any MSRs we acquire or hold.

Prepayment speeds significantly affect MSRs. Prepayment speed is the measurement of how quickly borrowers pay down the unpaid principal balance of their loans or how quickly loans are otherwise brought current, modified, liquidated or charged off. We base the value of MSRs on, among other things, our projection of the cash flows from the related mortgage loans. Our expectation of prepayment speeds is a significant assumption underlying those cash flow projections. If prepayment speed expectations increase significantly, the fair value of the MSRs could decline and we may be required to record a non-cash charge, which would have a negative impact on our financial results. Furthermore, a significant increase in prepayment speeds could materially reduce the ultimate cash flows we receive from MSRs, and we could ultimately receive substantially less than what we estimated when initially capitalizing such assets.

Moreover, delinquency rates may also have an effect on the valuation of any MSRs. An increase in delinquencies generally results in lower revenue because typically we only collect servicing fees from Agencies or mortgage owners for performing loans. Our expectation of delinquencies is also a consideration in projecting our cash flows. If delinquencies are significantly greater than we expect, the estimated fair value of the MSRs could be diminished. Increased delinquencies also typically translate into increased defaults and liquidations, and as an MSR owner we are also responsible for certain expenses and losses associated with the loans we service, particularly on loans sold to Ginnie Mae. A reduction in the fair value of the MSR or an increase in defaults and liquidations would adversely impact our business, financial condition, liquidity and results of operations.

Changes in interest rates are a key driver of the performance of MSRs. Historically, in periods of rising interest rates, the fair value of the MSRs generally increases as prepayments decrease, and therefore the estimated life of the MSRs and related expected cash flows increase. In a declining interest rate environment, the fair value of MSRs generally decreases as prepayments increase and therefore the estimated life of the MSRs, and related cash flows, decrease.

Until recently, there has been a long-term trend of falling interest rates, with intermittent periods of rate increases. More recently, there was a rising interest rate environment for the majority of 2018, 2021, and 2022 and a falling interest rate environment in 2019 and 2020.

In addition, we may pursue various hedging strategies to seek to further reduce our exposure to adverse changes in fair value resulting from changes in interest rates. Our hedging activity will vary in scope based on the level and volatility of interest rates, the type of assets held and other changing market conditions. Interest rate hedging may fail to protect or could adversely affect us. To the extent we do not utilize derivative financial instruments to fully hedge against changes in fair value of MSRs or the derivatives we use in our hedging activities do not perform as expected, our business, financial condition, liquidity and results of operations would be more susceptible to volatility due to changes in the fair value of, or cash flows from, MSRs as interest rates change.

Furthermore, MSRs and the related servicing activities are subject to numerous federal, state and local laws and regulations and may be subject to various judicial and administrative decisions imposing various requirements and restrictions on our business. Our failure to comply with the laws, rules or regulations to which we or they are subject by virtue of ownership of MSRs, whether actual or alleged, could expose us to fines, penalties or potential litigation liabilities, including costs, settlements and judgments, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations.

***Our counterparties may terminate our servicing rights under which we conduct servicing activities.***

The majority of the mortgage loans we service are serviced on behalf of the GSEs and Ginnie Mae. These entities establish the base service fee to compensate us for servicing loans as well as the assessment of fines and penalties that may be imposed upon us for failing to meet servicing standards.

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As is standard in the industry, under the terms of our master servicing agreements with the GSEs and Ginnie Mae, the GSEs and Ginnie Mae have the right to terminate us as servicer of the loans we service on their behalf at any time and also have the right to cause us to sell the MSRs to a third party. In addition, failure to comply with servicing standards could result in termination of our agreements with the GSEs or Ginnie Mae with little or no notice and without any compensation. If any of Fannie Mae, Freddie Mac or Ginnie Mae were to terminate us as a servicer, or increase our costs related to such servicing by way of additional fees, fines or penalties, such changes could have a material adverse effect on the revenue we derive from servicing activity, as well as the value of the related MSRs. These agreements, and other servicing agreements under which we service mortgage loans for non-GSE loan purchasers, also require that we service in accordance with GSE servicing guidelines and contain financial covenants. If we were to have our servicing rights terminated on a material portion of our servicing portfolio, this could adversely affect our business.

***A significant increase in delinquencies for the loans serviced could have a material impact on our revenues, expenses and liquidity and on the valuation of our MSRs.***

An increase in delinquencies will result in lower revenue for loans we service for the GSEs and Ginnie Mae because we only collect servicing fees from the GSEs and Ginnie Mae from payments made on the mortgage loans. Additionally, while increased delinquencies generate higher ancillary revenues, including late fees, these fees may not be collected until the related loan reinstates or in the event that the related loan is liquidated. In addition, an increase in delinquencies may result in certain other advances being made on behalf of delinquent loans, which may not be entirely reversible and would decrease the interest income we receive on cash held in collection and other accounts to the extent permitted under applicable requirements.

We base the price we pay for MSRs on, among other things, our projections of the cash flows from the related mortgage loans. Our expectation of delinquencies is an assumption underlying those cash flow projections. If delinquencies were significantly greater than expected, the estimated fair value of our MSRs could be diminished. If the estimated fair value of MSRs is reduced, we may not be able to satisfy minimum net worth covenants and borrowing conditions in our debt agreements and we could suffer a loss, which could trigger a default and cross-defaults under our other financing arrangements and trading agreements (impacting our ability to enter into hedging transactions) and the possible loss of our eligibility to sell loans to the Agencies or issue an Agency MBS, all of which would likely have a material adverse effect on our business, financial condition and results of operations.

We are also subject to risks of borrower defaults and bankruptcies in cases where we might be required to repurchase loans sold with recourse or under representations and warranties. A borrower filing for bankruptcy during foreclosure would have the effect of staying the foreclosure and thereby delaying the foreclosure process, which may potentially result in a reduction or discharge of a borrower's mortgage debt. Even if we are successful in foreclosing on a loan, the liquidation proceeds upon sale of the underlying real estate may not be sufficient to recover our cost basis in the loan, resulting in a loss to us. For example, foreclosure may create a negative public perception of the related mortgaged property, resulting in a diminution of its value. Furthermore, any costs or delays involved in the foreclosure of the loan or a liquidation of the underlying property will further reduce the net proceeds and, thus, increase the loss. If these risks materialize, they could have a material adverse effect on our business, financial condition and results of operations. In addition, in the event of a default under any mortgage loan we have not sold, we will bear the risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and of the mortgage loan.

***Our inability to promptly foreclose upon defaulted mortgage loans could increase our cost of doing business and/or diminish our expected cash flows.***

Our ability to promptly foreclose upon defaulted mortgage loans and liquidate the underlying real property plays a critical role in our valuation of the assets which we acquire and our expected cash flows on such assets. There are a variety of factors that may inhibit our ability to foreclose upon a mortgage loan and liquidate the real property within the time frames we model as part of our valuation process or within the statutes of limitation under applicable state law. These factors include, without limitation: extended foreclosure timelines in states that require judicial foreclosure, including states where we hold high concentrations of mortgage loans, significant collateral documentation deficiencies, federal, state or local laws that are borrower friendly, including legislative action or initiatives designed to provide homeowners with assistance in avoiding residential mortgage loan foreclosures and that serve to delay the foreclosure process and programs that may require specific procedures to be followed to explore the refinancing of a mortgage loan prior to the commencement of a foreclosure proceeding and declines in real estate values and sustained high levels of unemployment that increase the number of foreclosures and place additional pressure on the judicial and administrative systems.

***A decline in the fair value of the real estate that we acquire, or that underlies the mortgage loans we own or service, may result in reduced risk-adjusted returns or losses.***

A substantial portion of our assets are measured at fair value. The fair value of the real estate that we own or that underlies mortgage loans that we own or service is subject to market conditions and requires the use of assumptions and complex analyses. Changes in the real estate market may adversely affect the fair value of the collateral and thereby lower the cash to be received from its liquidation. Depending on the investor and/or insurer or guarantor, we may suffer financial losses that increase

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when we or they receive less cash upon liquidation of the collateral for defaulted loans that we service. The same would apply to loans that we own. In addition, adverse changes in the real estate market increase the probability of default of the loans we own or service.

***We may be adversely affected by concentration risks of various kinds that apply to our mortgage or MSR assets at any given time, as well as from unfavorable changes in the related geographic regions containing the properties that secure such assets.***

Our mortgage and MSR assets are not subject to any geographic, diversification or concentration limitations except that we will be concentrated in mortgage-related assets. Accordingly, our mortgage and MSR assets may be concentrated by geography, investor, originator, insurer, loan program, property type and/or borrower, increasing the risk of loss to us if the particular concentration in our portfolio is subject to greater risks or is undergoing adverse developments. We may be disproportionately affected by general risks such as natural disasters, including major hurricanes, tornadoes, wildfires, floods, earthquakes and severe or inclement weather should such developments occur in or near the markets in California or the Gulf Coast region in which such properties are located. For example, as of December 31, 2022, approximately 20.4% of our mortgage and MSR assets had underlying properties in California. In addition, adverse conditions in the areas where the properties securing or otherwise underlying our mortgage and MSR assets are located (including business layoffs or downsizing, industry slowdowns, changing demographics, natural disasters and other factors) and local real estate conditions (such as oversupply or reduced demand) may have an adverse effect on the value of those assets. A material decline in the demand for real estate in these areas, regardless of the underlying cause, may materially and adversely affect us. Concentration or a lack of diversification can increase the correlation of non-performance and foreclosure risks among subsets of our mortgage and MSR assets, which could have a material adverse effect on our business, financial condition and results of operations.

***Many of our mortgage assets may be illiquid and we may not be able to adjust our portfolio in response to changes in economic and other conditions.***

Our MSRs, securities and mortgage loans that we acquire may be or become illiquid. It may also be difficult or impossible to obtain or validate third-party pricing on the assets that we purchase. Illiquid investments typically experience greater price volatility, as a ready market does not exist, or may cease to exist, and such investments can be more difficult to value. Contractual restrictions on transfer or the illiquidity of our assets may make it difficult for us to sell such assets if the need or desire arises, which could impair our ability to satisfy margin calls or access capital for other purposes when needed. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the recorded value, or may not be able to obtain any liquidation proceeds at all, thus exposing us to a material or total loss.

***Fair values of our MSRs are estimates and the realization of reduced values from our recorded estimates may materially and adversely affect our financial results and credit availability.***

The fair values of our MSRs are not readily determinable and the fair value at which our MSRs are recorded may differ from the values we ultimately realize. Ultimate realization of the fair value of our MSRs depends to a great extent on economic and other conditions that change during the time period over which it is held and are beyond our control. Further, fair value is only an estimate based on good faith judgment of the price at which an asset can be sold since transacted prices of MSRs can only be determined by negotiation between a willing buyer and seller. In certain cases, our estimation of the fair value of our MSRs includes inputs provided by third-party dealers and pricing services, and valuations of certain securities or other assets in which we invest are often difficult to obtain and are subject to judgments that may vary among market participants. Changes in the estimated fair values of those assets are directly charged or credited to earnings for the period. If we were to liquidate a particular asset, the realized value may be more than or less than the amount at which such asset was recorded. Accordingly, in either event, our financial condition could be materially and adversely affected by our determinations regarding the fair value of our MSRs, and such valuations may fluctuate over short periods of time.

***We utilize analytical models and data in connection with the valuation of our assets, and any incorrect, misleading or incomplete information used in connection therewith would subject us to potential risks.***

We rely heavily on models and data to value our assets, including analytical models (both proprietary models developed by us and those supplied by third parties) and information and data supplied by third parties. Models and data are also used in connection with our potential acquisition of assets and the hedging of those acquisitions. Models are inherently imperfect predictors of actual results because they are based on historical data available to us and our assumptions about factors such as future mortgage loan demand, default rates, severity rates, home price trends and other factors that may overstate or understate future experience. Our models could produce unreliable results for a number of reasons, including the limitations of historical data to predict results due to unprecedented events or circumstances, invalid or incorrect assumptions underlying the models, the need for manual adjustments in response to rapid changes in economic conditions, incorrect coding of the models, incorrect data being used by the models or inappropriate application of a model to products or events outside of the model's intended use. In particular, models are less dependable when the economic environment is outside of historical experience.

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In the event models and data prove to be incorrect, misleading or incomplete, any decisions made in reliance thereon expose us to potential risks. For example, by relying on incorrect models and data, especially valuation models, we may be induced to buy certain assets at prices that are too high, to sell certain other assets at prices that are too low or to miss favorable opportunities altogether. Similarly, any hedging based on faulty models and data may prove to be unsuccessful.

***We rely on internal models to manage risk and to make business decisions. Our business could be adversely affected if those models fail to produce reliable and/or valid results.***

We make significant use of business and financial models in connection with our proprietary technology to measure and monitor our risk exposures and to manage our business. For example, we use models to measure and monitor our exposures to interest rate, credit and other market risks. The information provided by these models is used in making business decisions relating to strategies, initiatives, transactions, pricing and products. If these models are ineffective at predicting future losses or are otherwise inadequate, we may incur unexpected losses or otherwise be adversely affected.

We build these models using historical data and our assumptions about factors such as future mortgage loan demand, default rates, home price trends and other factors that may overstate or understate future experience. Our assumptions may be inaccurate and our models may not be as predictive as expected for many reasons, including the fact that they often involve matters that are inherently beyond our control and difficult to predict, such as macroeconomic conditions, and that they often involve complex interactions between a number of variables and factors.

Our models could produce unreliable results for a variety of reasons, including, but not limited to, the limitations of historical data to predict results due to unprecedented events or circumstances, invalid or incorrect assumptions underlying the models, the need for manual adjustments in response to rapid changes in economic conditions, incorrect coding of the models, incorrect data being used by the models, or inappropriate application of a model to products or events outside of the model's intended use. In particular, models are less dependable when the economic environment is outside of historical experience, as was the case from 2008 to 2010 or during the COVID-19 pandemic.

We continue to monitor the markets and make necessary adjustments to our models and apply appropriate management judgment in the interpretation and adjustment of the results produced by our models. As a result of the time and resources, including technical and staffing resources, that are required to perform these processes effectively, it may not be possible to replace existing models quickly enough to ensure that they will always properly account for the impacts of recent information and actions.

***We depend on the accuracy and completeness of information from and about borrowers, mortgage loans and the properties securing them, and any misrepresented information could adversely affect our business, financial condition and results of operations.***

Fraudulent emails have been sent, and may in the future be sent, on behalf of the Company which introduce malware, including spyware, through malicious links in order to redirect funds to the fraudster's account. Such incidents could adversely affect our reputation, business, financial condition and results of operation.

The technology and other controls and processes we have created to help us identify misrepresented information in our mortgage loan production operations were designed to obtain reasonable, not absolute, assurance that such information is identified and addressed appropriately. Accordingly, such controls may not have detected, and may fail in the future to detect, all misrepresented information in our mortgage loan production operations. In the future, we may experience financial losses and reputational damage as a result of mortgage loan fraud.

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**General Risk Factors**

***We are a "controlled company" within the meaning of the rules of Nasdaq and the rules of the SEC and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements.***

As of December 31, 2022, our Sponsor beneficially owned approximately 92.3% of the voting power of our common stock. As a result, we are a "controlled company" within the meaning of the corporate governance standards of Nasdaq. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including the requirement that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a majority of our board of directors consist of "independent directors" as defined under the rules of Nasdaq;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our director nominees be selected, or recommended for our board of directors' selection by a nominating/governance committee comprised solely of independent directors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the compensation of our executive officers be determined, or recommended to our board of directors for determination, by a compensation committee comprised solely of independent directors.

We have and intend to continue to utilize these exemptions. As a result, we do not have a majority of independent directors and our Compensation Committee and Nominating and Corporate Governance Committee do not consist entirely of independent directors. Accordingly, stockholders of the Company do not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

***Our Sponsor controls us and their interests may conflict with yours in the future.***

As of December 31, 2022, our Sponsor beneficially owned approximately 92.3% of the voting power of our common stock. As a result, our Sponsor is able to control the election and removal of our directors and thereby determine our corporate and management policies, including potential mergers or acquisitions, payment of dividends, asset sales, amendment of our amended and restated certificate of incorporation or amended and restated bylaws and other significant corporate transactions for so long as our Sponsor and its affiliates retain significant ownership of us. Our Sponsor and its affiliates may also direct us to make significant changes to our business operations and strategy, including with respect to, among other things, new product and service offerings, team member headcount levels and initiatives to reduce costs and expenses. This concentration of our ownership may delay or deter possible changes in control of the Company, which may reduce the value of an investment in our common stock. So long as our Sponsor continues to own a significant amount of our voting power, even if such amount is less than 50%, our Sponsor will continue to be able to strongly influence or effectively control our decisions and, so long as our Sponsor and its affiliates collectively own at least 5% of all outstanding shares of our stock entitled to vote generally in the election of directors, our Sponsor will be able to appoint individuals to our board of directors under the stockholders' agreement that we entered into in connection with the initial public offering on February 2, 2021 (the "IPO"). The interests of our Sponsor may not coincide with the interests of other holders of our common stock.

In the ordinary course of their business activities, our Sponsor and its affiliates may engage in activities where their interests conflict with our interests or those of our stockholders. Our amended and restated certificate of incorporation provides that our Sponsor, any of its affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his or her director and officer capacities) or his or her affiliates do not have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. Our Sponsor and its affiliates also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. In addition, our Sponsor may have an interest in pursuing acquisitions, divestitures and other transactions that, in their judgment, could enhance their investment, even though such transactions might involve risks to you.

In addition, our Sponsor and its affiliates are able to determine the outcome of all matters requiring stockholder approval and are able to cause or prevent a change of control of the Company or a change in the composition of our board of directors and could preclude any acquisition of the Company. This concentration of voting control could deprive you of an opportunity to receive a premium for your shares of common stock as part of a sale of the Company and ultimately might affect the market price of our common stock.

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***We have incurred, and will continue to incur, significantly increased costs and we became subject to additional regulations and requirements as a result of becoming a public company, and our management is, and will continue to be, required to devote substantial time to new compliance matters, which could lower our profits or make it more difficult to run our business.***

As a public company, we have incurred, and will continue to incur, significant legal, regulatory, finance, accounting, investor relations, insurance and other expenses that we did not incur as a private company, including costs associated with public company reporting requirements and costs of recruiting and retaining non-executive directors. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act and the Dodd-Frank Act and related rules implemented by the SEC and Nasdaq. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. Our management will need to devote a substantial amount of time to ensure that we comply with all of these requirements, diverting the attention of management away from revenue-producing activities. These laws and regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.

***While we are no longer an "emerging growth company," we are a "smaller reporting company" and we cannot be certain if the reduced disclosure requirements applicable to "smaller reporting companies" will make our common stock less attractive to investors.***

Because our gross revenue exceeded $1.07 billion in fiscal year 2020, we ceased to be an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act as of December 31, 2020. However, we are a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K. As such, we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not "smaller reporting companies," including, among other things, providing only two years of audited financial statements, we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and we will be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We will remain a "smaller reporting company" until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of the prior second fiscal quarter, or (2) our annual revenues exceed $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

We cannot predict if investors may find our common stock less attractive if we rely on the exemptions and relief granted to "smaller reporting companies." If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may decline and/or become more volatile.

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***Failure to comply with requirements to design, implement and maintain effective internal controls could have a material adverse effect on our business and stock price.***

As a public company, we have significant requirements for enhanced financial reporting and internal controls. Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We may in the future discover areas of our internal controls that need improvement. We cannot assure you that we will be successful in maintaining adequate control over our financial reporting and financial processes. Furthermore, as we continue to grow our business, our internal controls will become more complex, and we will require significantly more resources to ensure our internal controls remain effective. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our results of operations.

In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by our independent registered public accounting firm in connection with the issuance of their attestation report. Our testing, or the subsequent testing (if required) by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses. Any material weaknesses could result in a material misstatement of our annual or quarterly consolidated financial statements. As a smaller reporting company, our independent registered public accounting firm is not required to conduct, and has not conducted, an audit of our internal control over financial reporting. It is possible that, had our independent registered public accounting firm conducted an audit of our internal control over financial reporting, such firm might have identified material weaknesses and deficiencies that we have not identified. If we or our independent auditors discover a material weakness, the disclosure of that fact, even if quickly remedied, could result in a default and cross-defaults under our financing arrangements.

We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 or our independent registered public accounting firm may not issue an unqualified opinion. If either we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified report, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common stock.

***Our stock price may change significantly, and you may not be able to resell shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.***

The market price of our common stock may be highly volatile and could be subject to wide fluctuations. You may not be able to resell your shares at or above your purchase price due to a number of factors such as those listed in "—Risks Related to Our Business" and the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• results of operations that vary from the expectations of securities analysts and investors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• results of operations that vary from those of our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in economic conditions for companies in our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in market valuations of, or earnings and other announcements by, companies in our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• declines in the market prices of stocks generally, particularly those of companies in our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• additions or departures of key management personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• strategic actions by us or our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• announcements by us, our competitors, our suppliers of significant contracts, price reductions, new products or technologies, acquisitions, dispositions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in preference of our customers and our market share;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in general economic or market conditions or trends in our industry or the economy as a whole;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in business or regulatory conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future sales of our common stock or other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• investor perceptions of or the investment opportunity associated with our common stock relative to other investment alternatives;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in the way we are perceived in the marketplace, including due to negative publicity or campaigns on social media to boycott certain of our products, our business or our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the public's response to press releases or other public announcements by us or third parties, including our filings with the SEC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• announcements relating to litigation or governmental investigations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the development and sustainability of an active trading market for our common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exchange rate fluctuations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax developments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in accounting principles; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other events or factors, including those resulting from informational technology system failures and disruptions, epidemics, pandemics, natural disasters, war, acts of terrorism, civil unrest or responses to these events.

Furthermore, the stock market may experience extreme volatility that, in some cases, may be unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock is low.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation against various issuers. For example, in June 2021, we and certain of our directors and officers were named as defendants in a putative class action alleging various securities law violations. We may be the target of this type of litigation in the future as well. Any such litigation could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation, which may adversely affect the market price of our common stock.

***You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.***

As of December 31, 2022, we had 861,601,293 shares of common stock authorized but unissued. Our amended and restated certificate of incorporation authorizes us to issue these shares of common stock, options and other equity awards relating to common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise. As of December 31, 2022, we have reserved 7,584,217 shares for issuance under the 2021 Incentive Plan; substitute options granted in connection with the IPO are not counted against the share reserve under the 2021 Incentive Plan. Any common stock that we issue, including under the 2021 Incentive Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership currently held by our stockholders. In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.

***Our board of directors is authorized to issue and designate shares of our preferred stock in additional series without stockholder approval.***

Our amended and restated certificate of incorporation authorizes our board of directors, without the approval of our stockholders, to issue 250 million shares of our preferred stock, subject to limitations prescribed by applicable law, rules and regulations and the provisions of our amended and restated certificate of incorporation, as shares of preferred stock in series, to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. The powers, preferences and rights of these additional series of preferred stock may be senior to or on parity with our common stock, which may reduce its value.

***Our ability to raise capital in the future may be limited.***

Our business and operations may consume resources faster than we anticipate. In the future, we may need to raise additional funds through the issuance of new equity securities, debt or a combination of both. Additional financing may not be available on favorable terms or at all. If adequate funds are not available on acceptable terms, we may be unable to fund our capital requirements. If we issue new debt securities, the debt holders would have rights senior to holders of our common stock to make claims on our assets and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity securities or securities convertible into equity securities, existing stockholders

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will experience dilution and the new equity securities could have rights senior to those of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, you bear the risk of our future securities offerings reducing the market price of our common stock and diluting their interest.

***As a holding company, we depend on the ability of our subsidiaries to transfer funds to us to meet our obligations, including to pay dividends.***

We are a holding company for all of our operations and are a legal entity separate from our subsidiaries. Dividends and other distributions from our subsidiaries are the principal sources of funds available to us to pay corporate operating expenses, to pay stockholder dividends, to repurchase stock and to meet our other obligations. The inability to receive dividends from our subsidiaries could have a material adverse effect on our business, financial condition, liquidity or results of operations.

Our subsidiaries have no obligation to pay amounts due on any of our liabilities or to make funds available to us for such payments. The ability of our subsidiaries to pay dividends or other distributions to us in the future will depend, among other things, on their earnings, tax considerations and covenants contained in any financing or other agreements. In addition, such payments may be limited as a result of claims against our subsidiaries by their creditors, including suppliers, vendors, lessors and employees.

If the ability of our subsidiaries to pay dividends or make other distributions or payments to us is materially restricted by cash needs, bankruptcy or insolvency, or is limited due to operating results or other factors, we may be required to raise cash through the incurrence of debt, the issuance of equity or the sale of assets. However, there is no assurance that we would be able to raise sufficient cash by these means. This could materially and adversely affect our ability to pay our obligations or pay dividends, which could have an adverse effect on the trading price of our common stock.

***We may not pay cash dividends in the future.***

We have, from time to time, declared cash dividends in respect of our common stock. Our Board reassesses the payment of cash dividends on a quarterly basis, and determinations as to whether to declare and pay cash dividends, if any, depend on a variety of factors, including general macroeconomic, business and financial market conditions; applicable laws; our financial condition, results of operations, contractual restrictions, capital requirements, and business prospects; and other factors the Board may deem relevant at the time. Accordingly, we make no assurance that we will pay dividends in the future for any particular quarter or at all. To the extent that the Board determines to declare cash dividends for any particular quarter, we make no assurance that such dividends will be consistent with dividends paid in any prior period.

***Future sales, or the perception of future sales, by us or our existing stockholders in the public market could cause the market price for our common stock to decline.***

The sale of substantial amounts of shares of our common stock in the public market, or the perception that such sales could occur, including sales by our existing stockholders, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

As of December 31, 2022, we had a total of 138,398,707 shares of our common stock outstanding. Of the outstanding shares, 7,509,299 shares are freely tradable without restriction or further registration under the Securities Act, except for any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act, or Rule 144, including our directors, executive officers and other affiliates (including our Sponsor).

The remaining outstanding 130,889,408 shares of common stock held by certain of our existing stockholders, including our Sponsor and certain of our directors and executive officers, representing approximately 94.6% of the total outstanding shares of our common stock as of December 31, 2022, are "restricted securities" within the meaning of Rule 144 and subject to certain restrictions on resale. Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144.

Pursuant to a registration rights agreement, our Sponsor has the right, subject to certain conditions, to require us to register the sale of their shares of our common stock under the Securities Act. See "Item 13. Certain Relationships and Related Party Transactions." By exercising its registration rights and selling a large number of shares, our Sponsor could cause the prevailing market price of our common stock to decline. Certain of our existing stockholders may have "piggyback" registration rights with respect to future registered offerings of our common stock. As of December 31, 2022, the shares covered by registration rights represent approximately 92.3% of our total common stock outstanding. Registration of any of these outstanding shares of common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement.

On January 29, 2021, we filed a registration statement on Form S-8 under the Securities Act to register an aggregate of 22,344,275 shares of common stock subject to outstanding stock options and subject to issuance under the 2021 Incentive Plan

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and Employee Stock Purchase Plan. Shares registered under the registration statement on Form S-8 are eligible for sale in the open market.

If our existing stockholders exercise their registration rights, the market price of our shares of common stock could drop significantly if the holders of these restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

***Anti-takeover provisions in our organizational documents could delay or prevent a change of control.***

Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt, or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.

These provisions provide for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a classified board of directors, as a result of which our board of directors is divided into three classes, with each class serving for staggered three-year terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our board of directors to issue one or more series of preferred stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• advance notice requirements for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• certain limitations on convening special stockholder meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% of the shares of common stock entitled to vote generally in the election of directors if our Sponsor and its affiliates cease to beneficially own at least 40% of shares of common stock entitled to vote generally in the election of directors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that certain provisions may be amended only by the affirmative vote of at least 66 2/3% of shares of common stock entitled to vote generally in the election of directors if our Sponsor and its affiliates cease to beneficially own at least 40% of shares of common stock entitled to vote generally in the election of directors.

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party's offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares.

***Our amended and restated certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders and the federal district courts will be the exclusive forum for Securities Act claims, which could limit our stockholders' ability to bring a suit in a different judicial forum than they may otherwise choose for disputes with us or our directors, officers, team members or stockholders.***

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other team members or stockholders. Alternatively, if a court were to find the choice of forum

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provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial conditions.

**Item 1B. Unresolved Staff Comments**

None.

**Item 2. Properties**

We operated through a network of 7 leased corporate offices located throughout the United States, totaling approximately 210,000 square feet as of December 31, 2022. Our headquarters and principal executive offices are located at 2211 Old Earhart Road, Suite 250, Ann Arbor, Michigan 48105. At this location, we lease office space totaling approximately 30,000 square feet. The lease for this location expires on June 30, 2029.

We believe that our facilities are in good operating condition and are sufficient for our current needs. Any additional space needed to support future needs and growth will be available on commercially reasonable terms.

**Item 3. Legal and Regulatory Proceedings**

As an organization that, among other things, provides consumer residential mortgage lending and servicing as well as related services and engages in online marketing and advertising, we operate within highly regulated industries on a federal, state and local level. We are routinely subject to various examinations and legal and administrative proceedings in the normal and ordinary course of business. This can include, on occasion, investigations, subpoenas, enforcement actions involving the CFPB or FTC, state regulatory agencies and attorney generals. In the ordinary course of business, we are, from time to time, a party to civil litigation matters, including class actions. None of these matters have had, nor are pending matters expected to have, a material impact on our assets, business, operations or prospects.

**Item 4. Mine Safety Disclosures**

Not applicable.

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**Part II.**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities** 

**Market Information for Common Stock**

Our common stock has been listed and traded on Nasdaq under the symbol "HMPT" since January 29, 2021.

**Holders of Record**

As of March 3, 2023, there were approximately 12 shareholders of record of our common stock. This does not include the significant number of beneficial owners whose stock is in nominee or "street name" accounts through brokers, banks or other nominees.

**Dividend Policy**

Beginning with the conclusion of the second fiscal quarter of 2021, we began to pay cash dividends on a quarterly basis. Our board of directors (the "Board") determined not to declare a dividend on our common stock for the second, third, and fourth quarters of 2022. The Board's determination reflects our desire to maintain a strong liquidity position to support operations in the current macroeconomic environment, including rising interest rates and inflationary pressure, and the potential impact on our results of operations and financial condition.

The Board intends to reassess the payment of cash dividends on a quarterly basis. Future determinations to declare and pay cash dividends, if any, will be made at the discretion of the Board and will depend on a variety of factors, including general macroeconomic, business and financial market conditions; applicable laws; our financial condition, results of operations, contractual restrictions, capital requirements, and business prospects; and other factors the Board may deem relevant at the time.

**Purchases of Equity Securities by the Issuer and Affiliated Purchases**

On February 24, 2022, we announced a stock repurchase program whereby we could repurchase up to a total of $8.0 million of our issued and outstanding stock from time to time until the program's expiration on December 31, 2022 on the open market or in privately negotiated transactions. Repurchases under the stock repurchase program may also be made from time to time pursuant to one or more plans adopted under Rule 10b5-1 of the Exchange Act. The program did not require us to repurchase any specific number of shares. Shares repurchased under the program were subsequently retired.

**Recent Sales of Unregistered Equity Securities**

None.

**Item 6. [Reserved]**

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**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*Management's discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Report. The following discussion includes forward-looking statements that reflect our plans, estimates and assumptions and involves numerous risks and uncertainties, including, but not limited to, those described in the "<u>[Item 1A. Risk Factors](#i8bd68193849d495d89bf8c04be5f437f_16)</u>" section of this Report. Refer to "<u>[Cautionary Note on Forward-Looking Statements](#i8bd68193849d495d89bf8c04be5f437f_10)</u>." Future results could differ significantly from the historical results presented in this section.*

**Overview**

We are a leading residential mortgage originator and servicer driven by a mission to create financially healthy, happy homeowners. We do this by delivering scale, efficiency and savings to our partners and customers. Our business model is focused on leveraging a nationwide network of partner relationships to drive sustainable originations. We support our origination operations through a robust operational infrastructure and a highly responsive customer experience. We then leverage our servicing platform to manage the customer experience. We believe that the complementary relationship between our origination and servicing businesses allows us to provide a best-in-class experience to our customers throughout their homeownership lifecycle.

Our primary focus is our Wholesale channel, which is a business-to-business-to-customer distribution model in which we utilize our relationships with 9,259 partnering independent mortgage brokers ("Broker Partners") to reach our end-borrower customers. We had 1,658 active broker partners as of December 31, 2022. Through our Wholesale channel, we propel the success of our Broker Partners through a combination of full service, localized sales coverage and an efficient loan fulfillment process supported by our fully integrated technology platform. On June 1, 2022, the Company completed the previously announced sale of the Correspondent channel, through which we purchased closed and funded mortgages from a trusted network of correspondent sellers ("Correspondent Partners"). For additional information refer to *Note 26 – Sale of The Correspondent Channel and Home Point Asset Management LLC*. In our Direct channel, we originate residential mortgages primarily for existing servicing customers who are seeking new financing options.

While we initiate our customer relationships at the time the mortgage is originated, we maintain ongoing connectivity with our approximately 315 thousand servicing customers. In February 2022, we announced an agreement with ServiceMac, pursuant to which ServiceMac subservices all mortgage loans underlying Mortgage servicing rights ("MSRs") we hold. ServiceMac began subservicing newly originated agency loans for us in the second quarter of 2022. The Company completed transitioning to ServiceMac the balance of the agency portfolio and all of the Government National Mortgage Association ("Ginnie Mae") portfolio in the third quarter of 2022. ServiceMac performs subservicing functions on the Company's behalf, but we continue to hold the MSRs. We believe that our relationship with ServiceMac allows us to maintain a leaner cost structure with a greater variable component and provides greater flexibility when strategically selling certain non-core MSRs. The number of our servicing portfolio customers was 315,478 and 425,989, while the servicing portfolio unpaid principal balance ("UPB") was $88.7 billion and $128.4 billion as of December 31, 2022 and 2021, respectively.

In the environment of rapidly rising interest rates and increased competition, we are strategically managing our business by managing our liquidity, reducing expenses, and concentrating our efforts on margins over volume.

***Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Summary***

We generated $255.6 million of total revenue, net for the year ended December 31, 2022 compared to $961.5 million of total revenue, net for the year ended December 31, 2021. We had $163.5 million of net loss for the year ended December 31, 2022 compared to $166.3 million of net income for the year ended December 31, 2021. We generated $195.2 million of Adjusted revenue for the year ended December 31, 2022 compared to $746.2 million for the year ended December 31, 2021. We had $189.6 million of Adjusted net loss for the year ended December 31, 2022 compared to $0.4 million Adjusted net loss for the year ended December 31, 2021. Refer to "*Non-GAAP Financial Measures*" for further information regarding our use of Adjusted revenue and Adjusted net income, including limitations related to such non-GAAP measures and a reconciliation of such measures to net income, the nearest comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

We originated $27.7 billion of mortgage loans for the year ended December 31, 2022 compared to $96.2 billion for the year ended December 31, 2021, representing a decrease of $68.5 billion or 71.2%. Our MSR Servicing Portfolio was $88.7 billion as of December 31, 2022 compared to $128.4 billion as of December 31, 2021. Year-over-year decreases were due to rising interest rates, increased competition in the industry, and MSR sales. Our gain on sale margins decreased 47 basis points for the year ended December 31, 2022 compared to the year ended December 31, 2021. Additionally, according to the Mortgage Bankers Association Mortgage Finance Forecast, average 30-year mortgage rates increased by approximately 340 basis points from December 31, 2021 to December 31, 2022. An increase of this nature generally results in our Origination volume declining as refinance opportunities decrease, which also increases competition, resulting in lower gain on sale margins.

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However, when rates increase, we experience lower prepayment speeds and a subsequent upward adjustment to the fair value of our MSRs for the loans that still exist in our portfolio.

**Segments**

Our operations are organized into two separate reportable segments: Origination and Servicing.

In our Origination segment, we source loans through two distinct production channels: Direct and Wholesale. As discussed in *Note 26 – Sale of The Correspondent Channel and Home Point Asset Management LLC*, on June 1, 2022, the Company completed the sale of its Correspondent channel.

The Direct channel provides the Company's existing servicing customers with various financing options. At the same time, it supports the servicing assets in the ecosystem by retaining existing servicing customers who may otherwise refinance their existing mortgage loans with a competitor. The Wholesale channel consists of mortgages originated through a nationwide network of 9,259 Broker Partners. Prior to its sale, the Correspondent channel consisted of closed and funded mortgages that we purchased from a trusted network of Correspondent Partners. Once a loan is locked, it becomes channel agnostic. The channels in our Origination segment function in unison through the following activities: hedging, funding, and production. Our Origination segment has contribution loss of $106.9 million and contribution margin of $237.1 million for the years ended December 31, 2022 and 2021, respectively.

Our Servicing segment consists of servicing loans that were produced in our Originations segment where the Company retained the servicing rights. In February 2022, the Company entered into an agreement with ServiceMac, pursuant to which ServiceMac subservices all mortgage loans underlying the Company's MSRs. We also strategically buy and sell MSRs. Our Servicing segment generated Contribution margins of $121.8 million and $185.8 million for the years ended December 31, 2022 and 2021, respectively.

We believe that maintaining both an Origination segment and a Servicing segment provides us with a more balanced business model in both rising and declining interest rate environments, as compared to other industry participants that predominantly focus on either origination or servicing, instead of both.

**Key Factors Affecting Results of Operations for Periods Presented**

***Residential Real Estate Market Conditions***

Our Origination volume is impacted significantly by broader residential real estate market conditions and the general economy. Housing affordability, availability and general economic conditions influence the demand for our products. Housing affordability and availability are impacted by mortgage interest rates, availability of funds to finance purchases, availability of alternative investment products, and the relative relationship of supply and demand. General economic conditions are impacted by unemployment rates, changes in real wages, inflation, consumer confidence, seasonality, and the overall economic environment. Recent market conditions, such as rapidly rising interest rates, high inflation, and home price appreciation due to limited housing supply, have led to a decrease in the affordability index and negatively impacted Origination volume.

***Changes in Interest Rates***

Origination volume is impacted by changes in interest rates. Decreasing interest rates tend to increase the volume of purchase loan origination and refinancing whereas increasing interest rates tend to decrease the volume of purchase loan origination and refinancing.

Changes in interest rates impact the value of interest rate lock commitments ("IRLCs") and loans held for sale ("MLHS"). IRLCs represent an agreement to extend credit to a customer whereby the interest rate is set prior to the loan funding. These commitments bind us to fund the loan at a specified rate. When loans are funded, they are classified as held for sale until they are sold. During the origination and sale process, the value of IRLC and MLHS inventory fluctuates with changes in interest rates; for example, if we enter into IRLC at low interest rates followed by an increase in interest rates in the market, the value of our IRLC will decrease.

The fair value of MSRs is also driven primarily by interest rates, which impact the likelihood of loan prepayments. In periods of rising interest rates, the fair value of the MSRs generally increases as prepayments decrease, and therefore the estimated life of the MSRs and related expected cash flows increase. In a declining interest rate environment, the fair value of MSRs generally decreases as prepayments increase and therefore the estimated life of the MSRs, and related cash flows, decrease.

To mitigate the interest rate risk impact, we employ economic hedging strategies through forward delivery commitments on mortgage-backed securities or whole loans and options on forward contracts.

Early 2021 had a falling interest rate environment. In the second half of 2021, interest rates started to rise at a rapid pace, which continued into 2022. The rapid rise in interest rates has adversely impacted our Origination volumes.

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**Key Performance Indicators**

We review several operating metrics, including the following key performance indicators to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We believe these key metrics are useful to investors both because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and they may be used by investors to help analyze the health of our business.

Our origination metrics enable us to monitor our ability to generate revenue and expand our market share across different channels. In addition, they help us track origination quality and compare our performance against the nationwide originations market and our competitors. Other key performance indicators include the number of Broker Partners and, prior to the sale of our Correspondent channel, number of Correspondent Partners, which enable us to monitor key inputs of our business model. As noted above, in June, 2022 the Company completed the previously announced sale of the Correspondent channel. For additional information refer to *Note 26 – Sale of The Correspondent Channel and Home Point Asset Management LLC*. Our servicing metrics enable us to monitor the size of our customer base, the characteristics and value of our MSR Servicing Portfolio, and help drive retention efforts.

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***Origination Segment KPIs***

The following presents key performance indicators for our business:

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| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| **<u>Origination Volume by Channel</u>** |  |  |
| Wholesale | $22393275 | $69450704 |
| Correspondent | 4529238 | 21872389 |
| Direct | 757771 | 4880301 |
| &nbsp;&nbsp;**Origination volume** | $27680284 | $96203394 |
| **<u>Fallout Adjusted ("FOA") Lock Volume by Channel</u>** |  |  |
| Wholesale | $22132356 | $61021701 |
| Correspondent | 3879896 | 18827684 |
| Direct | 592908 | 3295243 |
| &nbsp;&nbsp;**FOA Lock Volume** | $26605160 | $83144628 |
| **<u>Gain on sale margin by Channel</u>** |  |  |
| Wholesale | $139704 | $557946 |
| Correspondent | 5452 | 47155 |
| Direct | 15271 | 100846 |
| &nbsp;&nbsp;Gain on sale margin attributable to channels | 160427 | 705947 |
| Other (loss) gain on sale<sup>(a)</sup> | (45807) | 44633 |
| &nbsp;&nbsp;Total gain on sale margin<sup>(b)</sup> | $114620 | $750580 |
| **<u>Gain on sale margin by Channel (bps)</u>** |  |  |
| Wholesale | 63 | 91 |
| Correspondent | 14 | 25 |
| Direct | 258 | 306 |
| &nbsp;&nbsp;Gain on sale margin attributable to channels  | 60 | 85 |
| Other (loss) gain on sale<sup>(a)</sup> | (17) | 5 |
| &nbsp;&nbsp;Total gain on sale margin<sup>(b)</sup> | 43 | 90 |
| **<u>Origination Volume by Purpose</u>** |  |  |
| Purchase | 61.3% | 31.1% |
| Refinance | 38.7% | 68.9% |
| **<u>Market Share</u>** |  |  |
| Overall share of origination market<sup>(c)</sup> | 1.3% | 2.1% |
| Share of wholesale channel<sup>(d)</sup> | 6.6% | 9.8% |
| **<u>Third Party Partners</u>** |  |  |
| Number of Broker Partners<sup>(e)</sup> | 9259 | 8012 |
| Number of Correspondent Partners<sup>(f)</sup> | N/A | 676 |

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(a) Includes loan fee income, interest income (expense), net, realized and unrealized gains (losses) on locks and mortgage loans held for sale, net hedging results, the provision for the representation and warranty reserve and differences between modeled and actual pull-through.

(b) Gain on sale margin calculated as gain on sale divided by Fallout Adjusted Lock volume. Gain on sale includes gain on loans, net, loan fee income, and interest income (expense), net for the Origination segment.

(c) Overall share of origination market share data for December 31, 2022 is obtained from *Inside Mortgage Finance,* a third party provider of residential mortgage industry news and statistics.

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(d) Share of wholesale channel for December 31, 2022 is obtained from *Inside Mortgage Finance,* a third party provider of residential mortgage industry news and statistics.

(e) Number of Broker Partners with whom the Company sources loans.

(f) Number of Correspondent Partners from whom the Company purchased loans prior to the completion of the previously announced sale of the Correspondent channel.

***Servicing Segment KPIs***

The following presents key performance indicators for our business:

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| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| **<u>Mortgage Servicing</u>** |  |  |
| MSR Servicing Portfolio - UPB <sup>(a)</sup> | $88668633 | $128359574 |
| MSR Servicing Portfolio - Units <sup>(b)</sup> | 315478 | 425989 |
| 60 days or more delinquent <sup>(c)</sup> | 0.9% | 0.7% |
| **<u>MSR Portfolio</u>** |  |  |
| MSR Multiple <sup>(d)</sup> | 6.0 | 4.6 |
| Weighted Average Note Rate <sup>(e)</sup> | 3.35% | 2.96% |

---

(a) The unpaid principal balance of loans we service on behalf of Ginnie Mae, Fannie Mae, Freddie Mae and others, at period end.

(b) Number of loans in our capitalized servicing portfolio at period end.

(c) Total balances of outstanding loan principals for which installment payments are at least 60 days past due as a percentage of the outstanding loan principal as of a specified date.

(d) Calculated as the MSR fair market value as of a specified date divided by the related UPB divided by the weighted average service fee.

(e) Weighted average interest rate of our MSR portfolio at period end.

**Non-GAAP Financial Measures**

We believe that certain non-GAAP financial measures presented in this Report, including Adjusted revenue and Adjusted net income provide useful information to investors and others in understanding and evaluating our operating results. These measures are not financial measures calculated in accordance with U.S. GAAP and should not be considered as a substitute for net income, or any other operating performance measure calculated in accordance with U.S. GAAP and may not be comparable to a similarly titled measure reported by other companies.

We believe that the presentation of Adjusted revenue and Adjusted net income provides useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted revenue and Adjusted net income provide indicators of performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. The Company measures the performance of the segments primarily on a contribution margin basis. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures. However, other companies may define Adjusted revenue and Adjusted net income differently, and as a result, our measures of Adjusted revenue and Adjusted net income may not be directly comparable to those of other companies.

*Adjusted revenue.* We define Adjusted revenue as Total revenue, net exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs hedge, and adjusted for Income from equity method investment.

*Adjusted net income.* We define Adjusted net (loss) income as Net (loss) income exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs economic hedging results.

The non-GAAP information presented below should be read in conjunction with the Company's consolidated financial statements and the related notes.

The following presents a reconciliation of Adjusted revenue and Adjusted net loss to the nearest U.S. GAAP financial measures of Total revenue, net and Net (loss) income, as applicable:

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

***Reconciliation of Total Revenue, Net to Adjusted Revenue***

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| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| **Total revenue, net** | $**255647** | $**961516** |
| &nbsp;&nbsp;(Loss) income from equity method investment | (26278) | 15373 |
| &nbsp;&nbsp;Change in fair value of MSR (due to inputs and assumptions), net of hedge<sup>(a)</sup> | (34132) | (230727) |
| **Adjusted revenue** | $**195237** | $**746162** |

---

***Reconciliation of Total Net (Loss) Income to Adjusted Net Loss***

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| **Net (loss) income** | $**(163454)** | $**166272** |
| &nbsp;&nbsp;Change in fair value of MSR (due to inputs and assumptions), net of hedge<sup>(a)</sup> | (34132) | (230727) |
| &nbsp;&nbsp;Income tax effect of change in fair value of MSR (due to inputs and assumptions), net of hedge<sup>(b)</sup> | 7988 | 64059 |
| **Adjusted net loss** | $**(189598)** | $**(396)** |

---

(a) MSR fair value changes due to valuation inputs and assumptions are measured using a static discounted cash flow model that includes assumptions such as prepayment speeds, delinquencies, discount rates, and effects of changes in market interest rates. Refer to *Note 4 - Mortgage Servicing Rights* to our consolidated financial statements included elsewhere in this Report. We exclude changes in fair value of MSRs (due to inputs and assumptions), net of hedge from Adjusted revenue and Adjusted net loss as they add volatility and we believe that they are not indicative of the Company's operating performance or results of operations. This adjustment does not include changes in fair value of MSRs due to realization of cash flows. Realization of cash flows occurs when cash is collected as customers make scheduled payments, partial prepayments of principal, or pay their mortgage in full. The adjustment includes the gain (loss) on MSR sales since it is not indicative of the Company's results of operations.

(b) The income tax effect of change in fair value of MSR (due to inputs and assumptions), net of hedge is calculated as the MSR valuation change, net of hedge multiplied by the quotient of Income tax benefit (expense) divided by (Loss) income before income tax.

**Description of Certain Components of our Results of Operations**

***Components of Revenue***

*Gain on loans, net* includes the realized and unrealized gains and losses on mortgage loans, as well as the changes in fair value of all loan-related derivatives, including but not limited to, forward mortgage-backed securities sales commitments, IRLCs, freestanding loan-related derivative instruments and the representation and warranty reserve.

*Loan fee income* consists of fee income earned on all loan originations, including amounts earned related to application and underwriting fees. Fees associated with the origination and acquisition of mortgage loans are recognized when earned, which is the date the loan is originated or acquired.

*Interest income (expense), net* consists of interest income recognized on MLHS for the period from loan funding to sale, which is typically less than 30 days. Loans are placed on non-accrual status and the related accrued interests is reserved when any portion of the principal or interest is 90 days past due or earlier if factors indicate that the ultimate collectability of the principal or interest is not probable. Interest received for loans on non-accrual status is recorded as income when collected. Loans return to accrual status when the principal and interest become current and it is probable that the amounts are fully collectible. Interest income (expense), net is presented net of interest expense related to our loan funding warehouse and other facilities as well as expenses related to amortization of capitalized debt expense, original issue discount, gains or losses upon extinguishment of debt, and commitment fees paid on certain debt agreements.

*Loan servicing fees* consist of fees received from loan servicing. Loan servicing involves the servicing of residential mortgage loans on behalf of an investor. Total loan servicing fees include servicing and other ancillary servicing revenue earned for servicing mortgage loans owned by investors. Servicing fees received for servicing mortgage loans owned by investors are based on a stipulated percentage of the outstanding monthly principal balance on such loans, or the difference between the weighted-average yield received on the mortgage loans and the amount paid to the investor, less guaranty fees and interest on curtailments (reduction of principal balance). Loan servicing fees are receivable only out of interest collected from mortgagors and are recorded as income when earned, which is generally upon collection. Late charges and other miscellaneous fees collected from mortgagors are also recorded as income when collected.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

*Change in fair value of mortgage servicing rights.* MSRs represent the fair value assigned to contracts that obligate us to service the mortgage loans on behalf of the owners of the mortgage loans in exchange for service fees and the right to collect certain ancillary income from the borrower. We recognize MSRs at our estimate of the fair value of the contract to service loans. Changes in the fair value of MSRs are recognized as current period income as a component of Change in fair value of MSRs. To hedge against interest rate exposure on these assets, we enter into various derivative instruments, which may include but are not limited to swaps and forward loan purchase commitments. Changes in the value of derivatives designed to protect against MSR value fluctuations, or MSR hedging gains and losses, are also included as a component of Change in fair value of MSRs. This account also includes gains and losses from the sale of MSRs.

*Other income* consists of income that is dissimilar in nature to revenues the Company earns from its ongoing central operations. Other income includes gain from the sale of certain assets.

***Components of Operating Expenses***

*Compensation and benefits* expense includes all salaries, commissions, bonuses and benefit-related expenses for our associates.

*Loan expense* primarily includes loan origination costs, loan processing costs, and fees related to loan funding. Certain passthrough fees such as flood certification, credit report, and appraisal fees, among others, are presented net within Loan expense.

*Loan servicing expense* primarily includes subservicing fees, non-performing servicing expenses, and general servicing expenses, such as printing expenses, recording fees, and title search fees.

*Production technology* includes origination and servicing system technology expenses.

*General and administrative* primarily includes occupancy and equipment, marketing and advertising costs, travel and entertainment, legal reserves, and professional services, such as audit and consulting fees.

*Depreciation* includes depreciation of Property and equipment.

*Other expenses* primarily consist of insurance, dues and subscriptions, and other employee-related expenses such as recruitment fees and training expenses.

***Equity-Based Compensation***

Equity-based compensation consists of equity awards and is measured and expensed accordingly under ASC 718, *Compensation—Stock Compensation*.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**Results of Operations – Years Ended December 31, 2022 and 2021**

***Consolidated Results of Operations***

The following presents certain consolidated financial data:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | | |
| | **2022** | **2021** |<br>**$ Change** |<br>**% Change** |
| | **(dollars in thousands)** | **(dollars in thousands)** | | |
| &nbsp;&nbsp;**Revenue:** |  |  |  |  |
| &nbsp;&nbsp;Gain on loans, net | $47105 | $585762 | $(538657) | (92.0)% |
| &nbsp;&nbsp;Loan fee income | 46029 | 150921 | (104892) | (69.5)% |
| &nbsp;&nbsp;&nbsp;Interest income | 91417 | 136477 | (45060) | (33.0)% |
| &nbsp;&nbsp;&nbsp;Interest expense | (112281) | (169390) | 57109 | (33.7)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | (20864) | (32913) | 12049 | (36.6)% |
| &nbsp;&nbsp;Loan servicing fees | 265275 | 331382 | (66107) | (19.9)% |
| &nbsp;&nbsp;Change in fair value of mortgage servicing rights | (97689) | (76831) | (20858) | 27.1% |
| &nbsp;&nbsp;Other income | 15791 | 3195 | 12596 | 394.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue, net | 255647 | 961516 | (705869) | (73.4)% |
| &nbsp;&nbsp;**Expenses:** |  |  |  |  |
| &nbsp;&nbsp;Compensation and benefits | 256856 | 494227 | (237371) | (48.0)% |
| &nbsp;&nbsp;Loan expense | 21865 | 63912 | (42047) | (65.8)% |
| &nbsp;&nbsp;Loan servicing expense | 35382 | 27373 | 8009 | 29.3% |
| &nbsp;&nbsp;Production technology | 16153 | 31866 | (15713) | (49.3)% |
| &nbsp;&nbsp;General and administrative | 60317 | 95476 | (35159) | (36.8)% |
| &nbsp;&nbsp;Depreciation | 10700 | 10127 | 573 | 5.7% |
| &nbsp;&nbsp;Impairment of goodwill | 10789 |  | 10789 | N/A |
| &nbsp;&nbsp;Other expenses | 22675 | 29638 | (6963) | (23.5)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 434737 | 752619 | (317882) | (42.2)% |
| &nbsp;&nbsp;(Loss) income before income tax | (179090) | 208897 | (387987) | (185.7)% |
| &nbsp;&nbsp;Income tax benefit (expense) | 41914 | (57998) | 99912 | (172.3)% |
| &nbsp;&nbsp;(Loss) income from equity method investment | (26278) | 15373 | (41651) | (270.9)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | $(163454) | $166272 | $(329726) | (198.3)% |

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Consolidated results are further analyzed in our segment disclosure below.

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***Origination Segment***

The following presents certain financial data for the Origination segment:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | | |
| | **2022** | **2021** |<br>**$ Change** |<br>**% Change** |
| | **(dollars in thousands)** | **(dollars in thousands)** | | |
| **Revenue:** |  |  |  |  |
| Gain on loans, net | $47105 | $585762 | $(538657) | (92.0)% |
| Loan fee income | 46029 | 150921 | (104892) | (69.5)% |
| Loan servicing fees |  | 8 | (8) | (100.0)% |
| Interest income | 79245 | 133551 | (54306) | (40.7)% |
| Interest expense | (57870) | (119654) | 61784 | (51.6)% |
| &nbsp;&nbsp;&nbsp;Interest income, net | 21375 | 13897 | 7478 | 53.8% |
| Other income | 111 |  | 111 | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total origination revenue, net | 114620 | 750588 | (635968) | (84.7)% |
| **Expenses:** |  |  |  |  |
| Compensation and benefits | 157373 | 373127 | (215754) | (57.8)% |
| Loan expense | 21865 | 62809 | (40944) | (65.2)% |
| Loan servicing expense |  | 32 | (32) | (100.0)% |
| Production technology | 14153 | 29895 | (15742) | (52.7)% |
| General and administrative | 23906 | 39640 | (15734) | (39.7)% |
| Other expenses | 4207 | 8030 | (3823) | (47.6)% |
| &nbsp;&nbsp;&nbsp;Total origination expenses | 221504 | 513533 | (292029) | (56.9)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Origination net (loss) income | $(106884) | $237055 | $(343939) | (145.1)% |

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

***Origination Revenue, Net***

*Gains on loans, net*

The following presents components of Gain on loans, net:

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| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| **<u>FOA Lock Volume by Channel</u>** |  |  |
| Wholesale | $22132356 | $61021701 |
| Correspondent | 3879896 | 18827684 |
| Direct | 592908 | 3295243 |
| &nbsp;&nbsp;FOA Lock Volume | $26605160 | $83144628 |
| **<u>Gain on sale margin by Channel</u>** |  |  |
| Wholesale | $139704 | $557946 |
| Correspondent | 5452 | 47155 |
| Direct | 15271 | 100846 |
| &nbsp;&nbsp;Gain on sale margin attributable to channels | 160427 | 705947 |
| Other (loss) gain on sale<sup>(a)</sup> | (45807) | 44633 |
| &nbsp;&nbsp;Total gain on sale margin<sup>(b)</sup> | $114620 | $750580 |
| **<u>Gain on sale margin by Channel (bps)</u>** |  |  |
| Wholesale | 63 | 91 |
| Correspondent | 14 | 25 |
| Direct | 258 | 306 |
| &nbsp;&nbsp;Gain on sale margin attributable to channels  | 60 | 85 |
| Other (loss) gain on sale<sup>(a)</sup> | (17) | 5 |
| &nbsp;&nbsp;Total gain on sale margin<sup>(b)</sup> | 43 | 90 |

---

(a) Includes loan fee income, interest income (expense), net, realized and unrealized gains (losses) on locks and MLHS, net hedging results, the provision for the representation and warranty reserve, and differences between modeled and actual pull-through.

(b) Gain on sale margin calculated as gain on sale divided by FOA Lock volume. Gain on sale includes gain on loans, net, loan fee income, and interest income (expense), net for the Origination segment.

The following presents details of the characteristics of our mortgage loan production:

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| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Origination volume | $27680284 | $96203394 |
| Originated MSR UPB | $30802034 | $92052349 |
| Gain on sale margin (%) <sup>(a)</sup> | 0.43% | 0.90% |
| Retained servicing (UPB) (%) <sup>(b)</sup> | 97.8% | 96.8% |

---

(a) Includes loan fee income, interest income (expense), net, realized and unrealized gains (losses) on locks and MLHS, net hedging results, the provision for the representation and warranty reserve and differences between modeled and actual pull-through.

(b) Represents the percentage of our loan sales UPBs for which we retained the underlying servicing UPB during the period.

Gain on loans, net decreased by $538.7 million, or 92.0% for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily due to a reduction in origination volume, a decrease of $636.0 million, or 84.7% in gain on sale margin, as well as $56.9 million increase in provision for representation and warranty reserve.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

We experienced a decrease in FOA lock volume and Origination volume across all of our origination channels primarily due to rising interest rates. Additionally, we saw a significant decrease in gain on sale margins due to the competitive environment during the year ended December 31, 2022 compared to the prior year. As mortgage interest rates rise, the origination market contracts, primarily due to a decline in refinance volume, which generally leads to increased competition and lower gain on sale margins. Our origination market share decreased from 2.1% to 1.3%, and our share of the wholesale channel decreased from 9.8% to 6.6% compared to the prior year.

*Loan fee income* 

Loan fee income decreased by $104.9 million, or 69.5% for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was consistent with the decrease in Origination volume.

*Interest income, net*

Interest income, net increased by $7.5 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in interest income, net was driven by $54.3 million decrease in interest income and $61.8 million decrease in interest expense. Interest income decreased due to lower MLHS balance partially offset by the impact of the rising interest rates. Interest expense decreased as a result of a decrease in warehouse borrowing and related fees due to the decrease in Origination volume. The Company continues to strategically rightsize its warehouse lines of credit to minimize associated costs and more efficiently operate in the environment of rising interest rates and increased competition.

***Expenses***

Total expenses decreased by $292.0 million, or 56.9%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by decreases in compensation and benefits expense, loan expense, production technology expense, and general and administrative expenses.

*Compensation and benefits expense* decreased by $215.8 million, or 57.8%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by a decrease of $119.6 million in salary and benefits and $96.2 million decrease in variable compensation due to headcount reductions detailed in *Note 18 - Restructuring,* decrease in Origination volume, and the sale of the Correspondent channel detailed in *Note 26 – Sale of The Correspondent Channel and Home Point Asset Management LLC*. Compensation and benefits expense was 0.6% and 0.4% of Origination volume for the years ended December 31, 2022 and 2021, respectively.

*Loan expense* decreased by $40.9 million, or 65.2%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was consistent with the decrease in Origination volume.

*Production technology expense* decreased by $15.7 million, or 52.7%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by lower variable expenses associated with the Company's origination systems as a result of the decline in Origination volume, combined with the investment the Company made in improving and upgrading the Company's origination technologies in 2021.

*General and administrative expense* decreased $15.7 million, or 39.7%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by decrease in outsourced loan review services due to the decline in origination volume, as well as lower expenses as a result of cost-saving initiatives implemented in the second half of 2021 and continuing during 2022.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

***Servicing Segment***

The following table sets forth certain servicing segment financial data for the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | | |
| | **2022** | **2021** |<br>**$ Change** |<br>**% Change** |
| | **(dollars in thousands)** | **(dollars in thousands)** | | |
| **Revenue:** |  |  |  |  |
| Loan servicing fees | $265275 | $331374 | $(66099) | (19.9)% |
| Change in fair value of mortgage servicing rights | (97689) | (76831) | (20858) | 27.1% |
| &nbsp;&nbsp;Interest income | 12172 | 2926 | 9246 | 316.0% |
| &nbsp;&nbsp;Interest expense |  | (995) | 995 | (100.0)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income, net | 12172 | 1931 | 10241 | 530.3% |
| Other income |  | 227 | (227) | (100.0)% |
| &nbsp;&nbsp;Total servicing revenue, net | 179758 | 256701 | (76943) | (30.0)% |
| **Expenses:** |  |  |  |  |
| &nbsp;&nbsp;Compensation and benefits | 16356 | 30481 | (14125) | (46.3)% |
| &nbsp;&nbsp;Loan expense |  | 1104 | (1104) | (100.0)% |
| &nbsp;&nbsp;Loan servicing expense | 35382 | 27340 | 8042 | 29.4% |
| &nbsp;&nbsp;Production technology | 2000 | 1971 | 29 | 1.5% |
| &nbsp;&nbsp;General and administrative | 4139 | 9417 | (5278) | (56.0)% |
| &nbsp;&nbsp;Other expenses | 116 | 564 | (448) | (79.4)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total servicing expenses | 57993 | 70877 | (12884) | (18.2)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Servicing net income | $121765 | $185824 | $(64059) | (34.5)% |

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***Servicing Revenue, Net***

*Loan servicing fees*

The following presents certain characteristics of our mortgage loan servicing portfolio:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| MSR Servicing Portfolio (UPB) | $88668633 | $128359574 |
| Average MSR Servicing Portfolio (UPB) | $108514104 | $108318412 |
| MSR Servicing Portfolio (Loan Count) | 315478 | 425989 |
| MSRs Fair Value Multiple (x) | 6.0 | 4.6 |
| Delinquency Rates (%) | 1.6% | 0.7% |
| Weighted average credit score | 748 | 757 |
| Weighted average servicing fee, net (bps) | 27 | 26 |

---

Loan servicing fees decreased by $66.1 million, or 19.9%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by $20.0 million lower ancillary servicing income due to lower loan modification fees earned on GNMA loans and gains in 2021 as a result of the Company selling 77% of its GNMA MSR portfolio during the fourth quarter of 2021 and approximately 40% of its MSR servicing portfolio in 2022.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

*Change in fair value of MSRs* 

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| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Realization of cash flows | $(131821) | $(307558) |
| Valuation inputs and assumptions | 358782 | 227401 |
| Economic hedging results | (242487) | (33699) |
| (Loss) gain on MSR sales | (82163) | 37025 |
| &nbsp;&nbsp;Change in fair value of MSRs | $(97689) | $(76831) |

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Change in fair value of MSRs presented losses for both years ended December 31, 2022 and 2021. Fair value losses increased by $20.9 million, or 27.1%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The change was primarily driven by the $82.2 million loss on MSR sales, which was partially offset by changes in valuation inputs and assumptions net of hedge, that were favorably affected by an increase in interest rates during the period, as well as decrease in loss from realization of cash flows resulting from a decrease in prepayments due to higher interest rates and higher scheduled payments collected on loans in our MSR portfolio.

***Expenses***

Total expenses decreased by $12.9 million, or 18.2%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by decreases in compensation and benefits expense and general and administrative expenses, partially offset by the increases in loan servicing expense.

*Compensation and benefits expense* decreased by $14.1 million, or 46.3%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by the salary expense decreases due to employee headcount reductions and efficiencies gained from the transition of subservicing to ServiceMac.

*Loan servicing expense* increased by $8.0 million, or 29.4%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was primarily due to $16.3 million increase in subservicing fee due to outsourcing of the servicing to ServiceMac, partially offset by $6.1 million decrease in recording fees and other reductions in loan servicing expense due to the sale of MSRs and other efficiencies gained from the subservicing to ServiceMac.

*General and administrative expense* decreased $5.3 million, or 56.0%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by a decrease in professional services and consulting fees resulting from the Company's cost savings initiatives.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

***Corporate Segment***

The following presents corporate financial data:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | | |
| | **2022** | **2021** |<br>**$ Change** |<br>**% Change** |
| | **(dollars in thousands)** | **(dollars in thousands)** | | |
| **Revenue:** |  |  |  |  |
| &nbsp;&nbsp;Interest expense | $(54411) | $(48741) | $(5670) | 11.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | (54411) | (48741) | (5670) | 11.6% |
| Other (expense) income | (10598) | 18341 | (28939) | (157.8)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total corporate revenue, net | (65009) | (30400) | (34609) | 113.8% |
| **Expenses:** |  |  |  |  |
| &nbsp;&nbsp;Compensation and benefits | 83127 | 90619 | (7492) | (8.3)% |
| &nbsp;&nbsp;General and administrative | 32272 | 46419 | (14147) | (30.5)% |
| &nbsp;&nbsp;Depreciation and amortization | 10700 | 10127 | 573 | 5.7% |
| &nbsp;&nbsp;Impairment of goodwill | 10789 |  | 10789 | N/A |
| &nbsp;&nbsp;Other expenses | 18352 | 21044 | (2692) | (12.8)% |
| &nbsp;&nbsp;Total corporate expenses | 155240 | 168209 | (12969) | (7.7)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate net loss | $(220249) | $(198609) | $(21640) | 10.9% |

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***Total Corporate Revenue***

*Interest expense, net* increased by $5.7 million, or 11.6%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in expense was driven by an increase in corporate debt interest due to issuance of the Senior Notes in January 2021.

*Other expense* increased by $28.9 million for the year ended December 31, 2022 compared to the Other income for the year ended December 31, 2021. The increase in Other expense was primarily driven by $41.7 million increase in loss from our equity method investment, which included an impairment charge of $8.8 million detailed in *Note 21 - Shareholders' Equity and Equity Method Investment*, partially offset by $9.3 million debt extinguishment gain related to the repurchase and retirement of $50.0 million of outstanding Senior Notes (as defined below) during the year ended December 31, 2022.

***Expenses***

Total expenses decreased by $13.0 million, or 7.7%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by changes in compensation and benefits, impairment of goodwill, general and administrative, and other expenses.

*Compensation and benefits expense* decreased by $7.5 million, or 8.3%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by $11.5 million lower salary expense and $9.4 million lower variable compensation for the year ended December 31, 2022, partially offset by $15.6 million increase in severance expense due to headcount reduction detailed in *Note 18 - Restructuring* resulting from the decrease in Origination volume.

*Impairment of goodwill charge* of $10.8 million *was* recorded for the year ended December 31, 2022 as discussed in *Note 6 - Goodwill*.

*General and administrative expenses* decreased by $14.1 million, or 30.5%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by a decrease in professional services fees of $12.5 million for the year ended December 31, 2022, as a result of higher costs in 2021 associated with the Company's IPO.

*Other expenses* decreased by $2.7 million, or 12.8%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease was primarily driven by $3.4 million decrease in employee related expenses due to the reduction in employee headcount and $1.7 million reduction in other expenses due to the Company's cost saving initiatives. These decreases were partially offset by $2.4 million loss related to asset disposal and $0.4 million loss from the sale of the Correspondent channel.

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***Income Tax Benefit (Expense)***

*Income tax benefit (expense)* is recognized for the entire company rather than on a segment basis. Income tax benefit increased by $99.9 million for the year ended December 31, 2022 compared to the income tax expense for the year ended December 31, 2021. The change is primarily due to the change in (loss) income before income tax. Our overall effective tax rate of 23.4% and 27.8% for the years ended December 31, 2022 and 2021, respectively, differed from the U.S. statutory rate of 21.0% primarily due to the impact of state incomes taxes, the equity investment, sale of its equity interests in HPAM and its wholly owned subsidiary HPMAC detailed in *Note 26 – Sale of The Correspondent Channel and Home Point Asset Management LLC*, goodwill impairment, limitations on the tax deductibility of officers' compensation applicable to a public entity in both periods, equity-based compensation, and non-deductible transaction costs in 2021 associated with the Company's IPO.

**Liquidity and Capital Resources**

***Sources and Uses of Cash***

Historically, our primary sources of liquidity have included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Borrowings, including under our warehouse funding facilities and other secured and unsecured financing facilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cash flow from our operations, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Sale of mortgage loans held for sale,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Loan origination fees,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Servicing fee income,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Interest income on loans held for sale,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Proceeds from sale of mortgage servicing rights, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cash and marketable securities on hand.

Historically, our primary uses of funds have included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Origination of loans,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Payment of interest expense,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Repayment of debt,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Payment of operating expenses, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in margin requirements for derivative contracts.

We are also subject to contingencies which may have a significant impact on the use of our cash.

*Summary of Certain Indebtedness*

To originate and aggregate loans for sale into the secondary market, we use our own working capital and borrow on a short-term basis primarily through committed and uncommitted mortgage warehouse lines of credit that we have established with different large global and regional banks and financial institutions. Our loan funding facilities are primarily in the form of master repurchase agreements and participation agreements. New loan originations that are financed under these facilities are generally financed at approximately 95% to 100% of the principal balance of the loan (although certain types of loans are financed at lower percentages of the principal balance of the loan).

At the time of either the funding or purchase, mortgage loans are pledged as collateral for borrowings on mortgage warehouse lines of credit. In most cases, loans will remain on one of the warehouse lines of credit facilities for only a short time, generally less than one month, until the loans are pooled and sold. During the time the loans are held for sale, we earn interest income from the borrower on the underlying mortgage loan. This income is partially offset by the interest and fees we have to pay under the mortgage warehouse lines of credit.

When we sell a pool of loans in the secondary market, the proceeds received from the sale of the loans are used to pay back the amounts we owe on the mortgage warehouse lines of credit. We rely on the cash generated from the sale of loans to fund future loans and repay borrowings under our mortgage warehouse lines of credit. Delays or failures to sell loans in the secondary market could have an adverse effect on our liquidity position.

We held mortgage warehouse lines of credit arrangements with eight separate financial institutions with a total maximum borrowing capacity of $2.8 billion and an unused borrowing capacity of $2.3 billion as of December 31, 2022, approximately

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$106.0 million of which is available and undrawn. Refer to *Note 10 - Warehouse Lines of Credit* of our consolidated financial statements.

In light of the recent decline in the Origination volumes, the Company continues to strategically rightsize its warehouse lines of credit in order to minimize associated costs and more efficiently operate in the environment of rising interest rates and increased competition.

We maintained a servicing advance financing facility, MSR financing facility and an operating line of credit with total combined unused borrowing capacity of $459.2 million as of December 31, 2022. Refer to *Note 11 – Term Debt and Other Borrowings, net* of our consolidated financial statements.

The amount owed and outstanding on our loan funding facilities fluctuates significantly based on our Origination volume and the amount of time it takes us to sell the loans we originate.

Our debt financing agreements also contain margin call provisions that, upon notice from the applicable lender at its option, require us to transfer cash or, in some instances, additional assets in an amount sufficient to eliminate any margin deficit. A margin deficit generally will result from any decline in the market value (as determined by the applicable lender) of the assets subject to the related financing agreement relative to the available financing and offsetting hedges. Upon notice from the applicable lender, we generally will be required to satisfy the margin call on the day of such notice or the following business day.

The warehouse facilities and other lines of credit require maintenance of certain operating and financial covenants, and the availability of funds under these facilities is subject to, among other conditions, our continued compliance with these covenants. These financial covenants include, but are not limited to, maintaining a certain minimum tangible net worth, minimum liquidity, minimum profitability levels, and ratio of indebtedness to tangible net worth, among others. A breach of these covenants can result in an event of default under these facilities following which the lenders would be able to pursue certain remedies against us. In addition, each of these facilities includes cross-default or cross-acceleration provisions that could result in all facilities terminating if an event of default or acceleration of maturity occurs under any facility.

In January 2021, the Company issued $550.0 million aggregate principal amount of its Senior Notes (the "Senior Notes") in a private placement transaction. The Senior Notes are guaranteed on a senior unsecured basis by each of the Company's wholly owned subsidiaries existing on the date of issuance, other than HPAM and HPMAC. The Senior Notes bear interest at a rate of 5.0% per annum, payable semi-annually in arrears. The Senior Notes will mature on February 1, 2026.

The Indenture governing the Senior Notes (the "Indenture") contains covenants and restrictions that, among other things and subject to certain exceptions, limit the ability of the Company and its restricted subsidiaries to (i) incur certain additional debt or issue certain preferred shares; (ii) incur liens; (iii) make certain distributions, investments, and other restricted payments; (iv) engage in certain transactions with affiliates; and (v) merge or consolidate or sell, transfer, lease, or otherwise dispose of all or substantially all of their assets. The Indenture governing the Senior Notes does not include any financial maintenance covenants. Refer to *Note 11 – Term Debt and Other Borrowings, net* of our consolidated financial statements.

The Company was in compliance with all covenants under the indenture and our warehouse facilities and other lines of credit as of December 31, 2022.

The Company may, at any time and from time to time, seek to retire or purchase the Company's outstanding Senior Notes through cash purchases in the form of open-market purchases, privately negotiated transactions, or otherwise. Such repurchases, if any, will be upon such terms and at such prices as the Company may determine, and will depend on prevailing market conditions, the Company's liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. The Company repurchased and retired $50.0 million of outstanding Senior Notes during the second quarter of 2022.

*Summary of Mortgage Loan Participation Agreement*

In November 2021, we entered into a Mortgage Loan Participation Sale Agreement (the "Gestation Agreement") with JPMorgan Chase Bank, National Association, as purchaser (the "Gestation Purchaser"). Subject to compliance with the terms and conditions of the Gestation Agreement, including the affirmative and negative covenants contained therein, the Gestation Agreement permits the Gestation Purchaser to purchase from us from time to time during the term of the Gestation Agreement participation certificates evidencing a 100% undivided beneficial ownership interest in designated pools of fully amortizing first lien residential mortgage loans that are intended to ultimately be included in mortgage-backed securities ("MBS") issued or guaranteed, as applicable, by Federal National Mortgage Association ("Fannie Mae"), Federal Home Loan Mortgage Corporation ("Freddie Mac"), and Ginnie Mae.

The aggregate purchase price of participation certificates owned by the Gestation Purchaser at any given time for which the Gestation Purchaser has not been paid the purchase price for the related MBS by the applicable takeout investor as specified in the applicable takeout commitment cannot exceed $400 million, which was reduced from $1.5 billion during the third quarter of 2022. On January 31, 2023, HPF terminated the Gestation Agreement. For additional information, refer to *Note 27 – Subsequent Events.*

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The Gestation Agreement and certain ancillary agreements thereto contain various financial and non-financial covenants, including financial covenants relating to the maintenance of tangible net worth, liquidity, and a ratio of total indebtedness to tangible net worth. The Company was in compliance with these covenants as of December 31, 2022.

*Repurchase Obligation Relief*

Certain of the Company's loan sale contracts include provisions requiring the Company to repurchase a loan if a borrower fails to make certain initial loan payments due to the acquirer or if the accompanying mortgage loan fails to meet customary representations and warranties. Historically, the Company received relief of certain repurchase obligations on loans sold to the Federal National Mortgage Association ("FNMA") or Federal Home Loan Mortgage Corporation ("FHLMC") by taking advantage of their repurchase alternative program. This program provided the Company with the ability, in certain instances, to pay a fee to FNMA or FHLMC, in lieu of being obligated to repurchase the loan. During September and October 2022, FNMA and FHMC notified the Company that they will not provide repurchase obligation relief through the repurchase alternative program beginning in the fourth quarter of 2022 until further notice.

***Cash Flows***

The following presents the summary of the Company's cash flows:

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| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Net cash provided by (used for) operating activities | $3654503 | $(2356148) |
| Net cash provided by investing activities | 771766 | 208601 |
| Net cash (used for) provided by financing activities | (4525467) | 2158444 |
| &nbsp;&nbsp;Net (decrease) increase in cash, cash equivalents, and restricted cash | (99198) | 10897 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash, cash equivalents, and restricted cash at end of period | $108592 | $207790 |

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Our Cash and cash equivalents and restricted cash decreased by $99.2 million for the year ended December 31, 2022 compared to the year ended December 31, 2021.

*Operating Activities*

Our Cash flows from operating activities are primarily influenced by changes in the levels of our inventory of MLHS as shown below:

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| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| **Cash flows from:** | **(dollars in thousands)** | **(dollars in thousands)** |
| Mortgage loans held for sale | $3654789 | $(2347241) |
| Gain on loans, net | (47105) | (585762) |
| Decrease in fair value of derivative assets, net | 36148 | 215550 |
| Decrease in fair value of mortgage loans held for sale | 138530 | 41824 |
| Other operating sources | 10671 | 361305 |
| Net cash provided by (used for) operating activities | $3654503 | $(2356148) |

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Cash provided by operating activities increased by $6.0 billion for the year ended December 31, 2022 compared to the cash used for operating activities for the year ended December 31, 2021. The increase provided by operating activities is primarily driven by decrease in the level of inventory of loans held for sale as a result of a decrease in Origination volume for the year ended December 31, 2022 compared to the year ended December 31, 2021. This increase was partially offset by the change in fair value of derivative assets of $179.4 million primarily due to interest rate lock commitment ("IRLC") revenue and margin call assets.

*Investing Activities*

Cash provided by investing activities increased by $563.2 million primarily due to proceeds from sale of MSRs of $757.3 million for the year ended December 31, 2022 compared to $262.0 million for the year ended December 31, 2021.

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*Financing Activities*

Our Cash flows from financing activities are primarily influenced by changes in warehouse borrowings as shown below:

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| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| **Cash flows from:** | **(dollars in thousands)** | **(dollars in thousands)** |
| Warehouse borrowings, net | $(4222177) | $1713242 |
| Distributions to parent, net<sup>1</sup> |  | (294897) |
| Other financing sources | (303290) | 740099 |
| Net cash (used for) provided by financing activities | $(4525467) | 2158444 |

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(1) distributions to Home Point Capital LP, our direct parent prior to the merger consummated in connection with the IPO.

Cash used for financing activities increased for the year ended December 31, 2022 compared to the cash provided by financing activities for the year ended December 31, 2021. The increase in use was primarily driven by decrease in proceeds, net of payments, on warehouse borrowings due to a decrease in Origination volume. As noted above, the Company continues to strategically rightsize its warehouse lines of credit in order to minimize associated costs and more efficiently operate in the environment of rising interest rates and increased competition.

**Contractual Obligations and Other Commitments**

***Cash Requirements from Contractual and Other Obligations***

As of December 31, 2022, our material cash requirements from known contractual and other obligations include interest and principal payments under the Senior Notes, payments under the MSR financing facility (the "MSR Facility"), and payments under our warehouse facilities. Annual cash payments for interest under the Senior Notes totaled approximately $25.6 million for the year ended December 31, 2022 and $500.0 million of the outstanding Senior Notes' principal is due in 2026. Annual cash payments for interest under the MSR Facility totaled approximately $25.1 million for the year ended December 31, 2022 and approximately $300.0 million outstanding under the MSR Facility matures in 2024 and $150.0 million matures in 2025. Approximately $0.5 billion of outstanding borrowings under the warehouse facilities mature in 2023, which are typically repaid using the proceeds from the sale of mortgage loans to investors, usually within 30 days. We do not have material commitments for capital expenditures as of December 31, 2022 given the nature of our business.

The sources of funds needed to satisfy these cash requirements include cash flows from operations and financing activities, including cash flows from sales of MSRs, sale of loans into the secondary market, loan origination fees, servicing fee income, and interest income on mortgage loans. Refer to "*Note 10 - Warehouse Lines of Credit*," "*Note 11 – Term Debt and Other Borrowings, net,*" and "*Note 13 - Commitments and Contingencies"* of the notes to our consolidated financial statements for further discussion of contractual obligations, commercial commitments, and other contingencies, including legal contingencies.

***Dividend Payments and Suspension of Dividend***

During the year ended December 31, 2022, the Company paid quarterly cash dividends of approximately $11.1 million to its common stockholders, representing $0.04 per share of common stock for the fourth quarter of 2021 and first quarter of 2022.

Our board of directors (the "Board") has determined not to declare a dividend on our common stock for the second, third, and fourth quarters of 2022. The Board's determination reflects our desire to maintain a strong liquidity position to support operations in the current macroeconomic environment, including rising interest rates and inflationary pressure, and the potential impact on our results of operations and financial condition.

The Board intends to reassess the payment of cash dividends on a quarterly basis. Future determinations to declare and pay cash dividends, if any, will be made at the discretion of the Board and will depend on a variety of factors, including general macroeconomic, business and financial market conditions; applicable laws; our financial condition, results of operations, contractual restrictions, capital requirements, and business prospects; and other factors the Board may deem relevant at the time.

***Repurchase and Indemnification Obligations***

In the ordinary course of business, we are exposed to liability with respect to certain representations and warranties that we make to the investors who purchase the loans that we originate. Under certain circumstances, we may be required to repurchase mortgage loans, or indemnify the purchaser of such loans for losses incurred, if there has been a breach of these representations and warranties, or in the case of early payment defaults. In addition, in the event of an early payment default, we are contractually obligated to refund certain premiums paid to us by the investors who purchased the related loan.

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***Interest Rate Lock Commitments, Loan Sale and Forward Commitments***

In the normal course of business, we are party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit to borrowers at either fixed or floating interest rates. IRLCs are binding agreements to lend to a borrower at a specified interest rate within a specified period of time as long as there is no violation of conditions established in the contract. Forward commitments generally have fixed expiration dates or other termination clauses which may require payment of a fee. As many of the commitments expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. In addition, we have forward commitments to sell MBS at specified future dates and interest rates.

The following presents a summary of the notional amounts of commitments:

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| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Interest rate lock commitments—fixed rate | $596633 | $5979475 |
| Interest rate lock commitments—variable rate | 2337 | 89288 |
| Forward commitments to sell mortgage-backed securities | 819900 | 7819802 |

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**Critical Accounting Estimates**

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We have identified certain accounting estimates as being critical because they require us to make difficult, subjective or complex judgments about matters that are uncertain. We believe that the judgment, estimates, and assumptions used in the preparation of our consolidated financial statements are appropriate given the factual circumstances at the time. However, actual results could differ, and the use of other assumptions or estimates could result in material differences in our results of operations or financial condition. Our critical accounting policies and estimates are discussed below and relate to fair value measurements, particularly those determined to be Level 2 and Level 3. Refer to "*Note 16 - Fair Value Measurements*" to our consolidated financial statements.

*Mortgage loans held for sale.* We have elected to record MLHS at fair value. The majority of our MLHS at fair value are saleable into the secondary mortgage markets, and their fair values are estimated using observable quoted market or contracted prices or market price equivalents, which would be used by other market participants. These saleable loans are considered Level 2. A smaller portion of our MLHS consist of loans repurchased from the Government-Sponsored Enterprises ("GSEs") and Ginnie Mae that have subsequently been deemed to be non-saleable to GSEs and Ginnie Mae when certain representations and warranties are breached. These repurchased loans are considered Level 3 at collateral value less estimated costs to sell the properties.

Changes in economic or other relevant conditions could cause our assumptions with respect to market prices of securities backed by similar mortgage loans to be different than our estimates. Increases in the market yields of similar mortgage loans result in a lower Mortgage loans held for sale at fair value.

*Derivative financial instruments.* Our derivative financial instruments are accounted for as free-standing derivatives and are included in the consolidated balance sheets at fair value. These derivative financial instruments include, but are not limited to, forward MBS sales and purchase commitments, IRLCs, and other derivative instruments used to economically hedge fluctuations in MSRs' fair value.

*Interest rate lock commitments* The Company estimates the fair value of IRLCs based on the value of the underlying mortgage loan, quoted MBS prices and estimates of the fair value of the MSRs and the probability that the mortgage loan will fund within the terms of the interest rate lock commitment. The Company estimates the fair value of forward sales commitments based on quoted MBS prices. The weighted average pull-through rate for IRLCs was 77.5% and 86.1% for the years ended December 31, 2022 and 2021, respectively. Given the significant and unobservable nature of the pull-through factor, IRLCs are classified as Level 3.

*Mortgage Servicing Rights.* We have elected to record MSRs at fair value. MSRs are recognized as a component of Gain on loans, net when loans are sold, and the associated servicing rights are retained. Subsequent changes in fair value of MSRs due to the collection and realization of cash flows and changes in model inputs and assumptions are recognized in current period earnings and included as a separate line item in the consolidated statements of operations.

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We use a discounted cash flow approach to estimate the fair value of MSRs. This approach consists of projecting servicing cash flows discounted at a rate that management believes market participants would use in their determinations of value.

Changes in economic and other relevant conditions could cause our assumptions, such as with respect to the prepayment speeds, to be different than our estimates. The key assumptions used to estimate the fair value of MSRs are prepayment speeds and the discount rate. Increases in prepayment speeds generally have an adverse effect on the value of MSRs as the underlying loans prepay faster, which causes accelerated MSR amortization. Increases in the discount rate result in a lower MSR value and decreases in the discount rate result in a higher MSR value. Refer to "*Note 4 - Mortgage Servicing Rights*" to our consolidated financial statements.

*Forward sales and purchase commitments.* The Company treats forward mortgage-backed securities purchase and sale commitments that have not settled as derivatives and recognizes them at fair value. These forward commitments will be fulfilled with loans not yet sold or securitized and new originations and purchases. The forward commitments allow the Company to reduce the risk related to market price volatility. The Company estimates the fair value of forward commitments based on quoted MBS prices.

*MSR derivatives: interest rate swap and Treasury futures purchase contracts.* These derivatives represent a combination of derivatives used to offset possible adverse changes in the fair value of MSRs and include options on swap contracts, interest rate swap contracts, and other instruments. Fair value is determined by using quoted prices for similar instruments.

*Representation and warranty reserves* Loans sold to investors which we believe met investor and agency guidelines at the time of sale may be subject to repurchase in the event of default by the borrower or subsequent discovery that guidelines were not satisfied. The Company establishes a reserve for the probable lifetime loss based on borrower performance, repurchase demand behavior, and historical loan defect experience. This reserve considers both the estimate of expected losses on loans sold during the current accounting period as well as adjustments to the Company's previous estimate of expected losses on loans sold.

**New Accounting Pronouncements Not Yet Effective**

Refer to "*Note 2 - Basis of Presentation and Significant Accounting Policies*" to our consolidated financial statements for a discussion of recent accounting developments and the expected effect on the Company.

**Item 7A. Qualitative and Quantitative Disclosure About Market Risk**

As a smaller reporting company, we are not required to provide information for this item.

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**Item 8. Financial Statements and Supplementary Data**

**Index to Consolidated Financial Statements and Supplementary Data**

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| | |
|:---|:---|
| | **Page** |
| <u>[Report of Independent Registered Public Accounting Firm](#i8bd68193849d495d89bf8c04be5f437f_85)</u> (BDO USA, LLP, Philadelphia, PA, PCAOB ID#243) | [64](#i8bd68193849d495d89bf8c04be5f437f_85) |
| <u>[Consolidated Balance Sheets as of December 31, 2022 and 2021](#i8bd68193849d495d89bf8c04be5f437f_88)</u> | [66](#i8bd68193849d495d89bf8c04be5f437f_88) |
| <u>[Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021](#i8bd68193849d495d89bf8c04be5f437f_91)</u> | [67](#i8bd68193849d495d89bf8c04be5f437f_91) |
| <u>[Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2022 and 2021](#i8bd68193849d495d89bf8c04be5f437f_94)</u> | [68](#i8bd68193849d495d89bf8c04be5f437f_94) |
| <u>[Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021](#i8bd68193849d495d89bf8c04be5f437f_97)</u> | [70](#i8bd68193849d495d89bf8c04be5f437f_97) |
| <u>[Notes to Consolidated Financial Statements](#i8bd68193849d495d89bf8c04be5f437f_100)</u> | [72](#i8bd68193849d495d89bf8c04be5f437f_100) |

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**Report of Independent Registered Public Accounting Firm**

Shareholders and Board of Directors

Home Point Capital Inc. & Subsidiaries

Ann Arbor, Michigan

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated balance sheets of Home Point Capital, Inc. (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, shareholders' equity, and cash flows for the years then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for the years ended December 31, 2022**,** in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matter**

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

*Fair Value of Mortgage Servicing Rights*

As described in Notes 2, 4 and 16 to the Company's consolidated financial statements, the Company's balance of mortgage servicing rights ("MSRs") was $1.40 billion as of December 31, 2022. The Company has elected to account for MSRs at fair value and determines the fair value by estimating the fair value of the future servicing cash flows associated with the mortgage loans being serviced. Prepayment speeds and discount rates are both significant unobservable assumptions that are key to the valuation of MSRs. The fair value of MSRs is classified as Level 3 in the valuation hierarchy.

We identified the valuation of MSRs as a critical audit matter because of (i) the significant judgments made by management in determining the prepayment speeds and discount rates assumptions, and (ii) the high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the appropriateness of these significant unobservable valuation assumptions, including specialized skill and knowledge needed.

The primary procedures we performed to address this critical audit matter include:

–Testing the relevance and reliability of loan level data used in determining the MSR valuation by verifying the completeness and accuracy of the data.

–Evaluating the reasonableness of management's MSR valuation methodology and the design of the valuation model used to estimate the fair value of MSRs with the assistance of personnel with specialized skill and knowledge.

–Assessing the reasonableness of the prepayment speed and discount rate assumptions used by management in valuing the MSRs, by (i) comparing the assumptions used by the Company with those used by peer institutions and (ii)

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comparing the assumptions used by the Company to independent market information with the assistance of personnel with specialized skill and knowledge.

–Evaluating the Company's MSR fair value by (i) comparing it with an independently determined estimate of fair value, and (ii) comparing it to values implied by observable transactions with the assistance of personnel with specialized skill and knowledge.

/s/ BDO USA, LLP

We have served as the Company's auditor since 2017.

Philadelphia, Pennsylvania

March 9, 2023

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**HOME POINT CAPITAL INC. & SUBSIDIARIES** 

**CONSOLIDATED BALANCE SHEETS**

**(dollars in thousands, except per share amounts)**

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| **Assets:** |  |  |
| Cash and cash equivalents | $97248 | $170987 |
| Restricted cash | 11344 | 36803 |
| &nbsp;&nbsp;Cash and cash equivalents and Restricted cash | 108592 | 207790 |
| Mortgage loans held for sale (at fair value) | 642993 | 5107161 |
| Mortgage servicing rights (at fair value) | 1402542 | 1525103 |
| Property and equipment, net | 11660 | 21892 |
| Accounts receivable, net | 124691 | 129092 |
| Derivative assets | 25611 | 84385 |
| Goodwill |  | 10789 |
| Government National Mortgage Association loans eligible for repurchase | 85937 | 65237 |
| Assets held for sale |  | 63664 |
| Other assets | 36166 | 43228 |
| &nbsp;&nbsp;Total assets | $2438192 | $7258341 |
| **Liabilities and Shareholders' Equity:** |  |  |
| **Liabilities:** |  |  |
| Warehouse lines of credit | $496481 | $4718658 |
| Term debt and other borrowings, net | 942083 | 1226524 |
| Accounts payable and accrued expenses | 64349 | 138193 |
| Government National Mortgage Association loans eligible for repurchase | 85937 | 65237 |
| Deferred tax liabilities | 183860 | 229752 |
| Derivative liabilities | 4110 | 26736 |
| Other liabilities | 57836 | 76588 |
| &nbsp;&nbsp;Total liabilities | 1834656 | 6481688 |
| Note 13 - Commitments and Contingencies |  |  |
| **Shareholders' Equity:** |  |  |
| Preferred stock (250,000,000 authorized shares, none issued and outstanding, $0.0000000072 par value per share) |  |  |
| Common stock (1,000,000,000 authorized shares, 138,398,707 and 139,326,953 shares issued and outstanding; par value $0.0000000072 per share) |  |  |
| Additional paid-in capital | 513710 | 523811 |
| Retained earnings | 89826 | 252842 |
| &nbsp;&nbsp;Total shareholders' equity | 603536 | 776653 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $2438192 | $7258341 |

---

See accompanying notes to the consolidated financial statements.

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**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(dollars in thousands, except per share amounts)**

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| **Revenue:** |  |  |
| &nbsp;&nbsp;Gain on loans, net | $47105 | $585762 |
| &nbsp;&nbsp;Loan fee income | 46029 | 150921 |
| &nbsp;&nbsp;Interest income | 91417 | 136477 |
| &nbsp;&nbsp;Interest expense | (112281) | (169390) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | (20864) | (32913) |
| &nbsp;&nbsp;Loan servicing fees | 265275 | 331382 |
| &nbsp;&nbsp;Change in fair value of mortgage servicing rights | (97689) | (76831) |
| &nbsp;&nbsp;Other income | 15791 | 3195 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenue, net | 255647 | 961516 |
| **Expenses:** |  |  |
| &nbsp;&nbsp;Compensation and benefits | 256856 | 494227 |
| &nbsp;&nbsp;Loan expense | 21865 | 63912 |
| &nbsp;&nbsp;Loan servicing expense | 35382 | 27373 |
| &nbsp;&nbsp;Production technology | 16153 | 31866 |
| &nbsp;&nbsp;General and administrative | 60317 | 95476 |
| &nbsp;&nbsp;Depreciation | 10700 | 10127 |
| &nbsp;&nbsp;Impairment of goodwill | 10789 |  |
| &nbsp;&nbsp;Other expenses | 22675 | 29638 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 434737 | 752619 |
| (Loss) income before income tax | (179090) | 208897 |
| &nbsp;&nbsp;Income tax benefit (expense) | 41914 | (57998) |
| &nbsp;&nbsp;(Loss) income from equity method investment | (26278) | 15373 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | $(163454) | $166272 |
| **(Loss) earnings per share:** |  |  |
| &nbsp;&nbsp;Basic | $(1.18) | $1.19 |
| &nbsp;&nbsp;Diluted | $(1.18) | $1.19 |

---

See accompanying notes to the consolidated financial statements.

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**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

**(dollars in thousands)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **Additional** <br>**Paid in Capital** | **Treasury Stock** | **Retained** <br>**Earnings**  | **Total** <br>**Shareholders'** <br>**Equity** |
| | **Shares** | **Amount** | **Additional** <br>**Paid in Capital** | **Treasury Stock** | **Retained** <br>**Earnings**  | **Total** <br>**Shareholders'** <br>**Equity** |
| Balance as of January 1, 2021 | 138860103 | $— | $519510 | $— | $407964 | $927474 |
| &nbsp;&nbsp;Contributed capital |  |  |  |  | 192 | 192 |
| &nbsp;&nbsp;Distributions to parent |  |  |  |  | (295089) | (295089) |
| &nbsp;&nbsp;Dividends to shareholders |  |  |  |  | (26497) | (26497) |
| &nbsp;&nbsp;Employee stock purchases (option exercise) | 466850 |  | (2636) |  |  | (2636) |
| &nbsp;&nbsp;Equity-based compensation |  |  | 6937 |  |  | 6937 |
| &nbsp;&nbsp;Net income |  |  |  |  | 166272 | 166272 |
| Balance as of January 1, 2022 | 139326953 | $— | $523811 | $— | $252842 | $776653 |
| &nbsp;&nbsp;Stock repurchase |  |  |  | (3774) |  | (3774) |
| &nbsp;&nbsp;Retirement of treasury stock | (1179796) |  | (15338) | 3774 | 11564 |  |
| &nbsp;&nbsp;Dividends to shareholders |  |  |  |  | (11126) | (11126) |
| &nbsp;&nbsp;Employee stock purchases (option exercise) | 126772 |  | 60 |  |  | 60 |
| &nbsp;&nbsp;Equity-based compensation (restricted stock units vesting) | 124778 |  | 5177 |  |  | 5177 |
| &nbsp;&nbsp;Net loss |  |  |  |  | (163454) | (163454) |
| Balance as of December 31, 2022 | 138398707 | $— | $513710 | $— | $89826 | $603536 |

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See accompanying notes to the consolidated financial statements.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

**(dollars in thousands)**

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| **Operating activities:** |  |  |
| Net (loss) income | $(163454) | $166272 |
| &nbsp;&nbsp;Adjustments to reconcile net (loss) income to cash used in operating activities: |  |  |
| &nbsp;&nbsp;Depreciation | 10700 | 10127 |
| &nbsp;&nbsp;Amortization of debt issuance costs | 4009 | 3271 |
| &nbsp;&nbsp;Impairment of goodwill | 10789 |  |
| &nbsp;&nbsp;Impairment of equity method investment | 8795 |  |
| &nbsp;&nbsp;Gain on loans, net | (47105) | (585762) |
| &nbsp;&nbsp;Provision for representation and warranty reserve, net of charge offs | 2028 | 6497 |
| &nbsp;&nbsp;Equity-based compensation expense | 5177 | 6937 |
| &nbsp;&nbsp;Deferred income tax (benefit) expense | (45165) | 55751 |
| &nbsp;&nbsp;Loss (income) from equity method investment | 17483 | (15373) |
| &nbsp;&nbsp;Gain from sale of subsidiary | (2750) |  |
| &nbsp;&nbsp;Originations and purchases of mortgage loans held for sale | (28622069) | (100217789) |
| &nbsp;&nbsp;Proceeds from sale and payments of mortgage loans held for sale | 32276858 | 97870548 |
| &nbsp;&nbsp;Loss (gain) on sale of mortgage servicing rights | 82163 | (37025) |
| &nbsp;&nbsp;Decrease in fair value of mortgage servicing rights | 15526 | 113856 |
| &nbsp;&nbsp;Decrease in fair value of mortgage loans held for sale | 138530 | 41824 |
| &nbsp;&nbsp;Decrease in fair value of derivative assets, net | 36148 | 215550 |
| &nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease in accounts receivable, net | 20266 | 51958 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease (increase) in other assets | 6824 | (18259) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease in accounts payable and accrued expenses | (78742) | (29856) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Decrease) increase in other liabilities | (21508) | 5325 |
| Net cash provided by (used for) operating activities | 3654503 | (2356148) |

---

See accompanying notes to the consolidated financial statements.

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**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(dollars in thousands)**

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| **Investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | (555) | (10309) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of mortgage servicing rights | (24738) | (43056) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of mortgage servicing rights | 757253 | 261966 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity method investment | (1500) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of equity method investments | 38886 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of subsidiary | 2420 |  |
| Net cash provided by investing activities | 771766 | 208601 |
| **Financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from warehouse borrowings | 30503338 | 104148375 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on warehouse borrowings | (34725515) | (102435133) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from term debt borrowings | 595000 | 1483400 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on term debt borrowings | (880000) | (660000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from other borrowings | 70000 | 111000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on other borrowings | (73250) | (151000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of debt issuance costs | (200) | (14168) |
| &nbsp;&nbsp;&nbsp;&nbsp;Employee stock purchases (option exercise) | 60 | (2636) |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock repurchases | (3774) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Contributed capital from parent |  | 192 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends to shareholders | (11126) | (26497) |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions to parent |  | (295089) |
| Net cash (used for) provided by financing activities | (4525467) | 2158444 |
| Net (decrease) increase in cash, cash equivalents, and restricted cash | (99198) | 10897 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash, cash equivalents, and restricted cash at beginning of period | 207790 | 196893 |
| Cash, cash equivalents, and restricted cash at end of period | $108592 | $207790 |
| Supplemental disclosure: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $114211 | $141819 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash refunded for income taxes | $(2774) | $(41043) |

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See accompanying notes to the consolidated financial statements.

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**HOME POINT CAPITAL INC. & SUBSIDIARIES** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

**Note 1 - Organization and Operations**

<u>Nature of Business</u>

Home Point Capital Inc., a Delaware corporation ("HPC", or the "Company"), through its subsidiaries, is a residential mortgage originator and servicer with a business model focused on growing originations by leveraging a network of partner relationships and its servicing operation. The Company's business operations are organized into the following two segments: (1) Origination and (2) Servicing. Home Point Financial Corporation ("HPF"), a New Jersey corporation and a wholly owned subsidiary of the Company, originates, sells, and services residential real estate mortgage loans throughout the U.S. and owns certain servicing assets. Home Point Corporation Insurance Agency LLC ("HPCIA"), a Michigan limited liability company, is a wholly owned subsidiary of the Company that brokers home owner insurance policies.

On December 2, 2022, HPC completed the previously announced sale of its equity interests in Home Point Asset Management LLC ("HPAM"), and its wholly owned subsidiary, Home Point Mortgage Acceptance Corporation ("HPMAC"). Prior to the sale, HPAM was a wholly owned subsidiary of the Company and managed certain servicing assets. HPMAC, an Alabama Corporation, serviced residential real estate mortgage loans.

HPF is an approved seller and servicer of one-to-four family first mortgages by the Federal National Mortgage Association ("FNMA" or "Fannie Mae") and the Federal Home Loan Mortgage Corporation ("FHLMC" or "Freddie Mac") and is an approved issuer by the Government National Mortgage Association ("GNMA" or "Ginnie Mae") (collectively, the "Agencies"), and as such, HPF must meet certain Agency eligibility requirements.

**Note 2 - Basis of Presentation and Significant Accounting Policies** 

<u>Basis of Presentation</u> 

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the financial statements of HPC and all its wholly owned subsidiaries, including HPF and HPCIA.

All intercompany balances and transactions have been eliminated in consolidation. As noted above, in December 2022 HPC completed the sale of HPAM and HPMAC. The results of operations for HPAM and HPMAC through the date of sale are included in the consolidated financial statements.

<u>Use of Estimates</u>

The preparation of the Company's consolidated financial statements in conformity with U.S. GAAP requires HPC to make estimates and assumptions about future events that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable.

Examples of reported amounts that rely on significant estimates include mortgage loans held for sale ("MLHS"), mortgage servicing rights ("MSRs"), servicing advances reserve, derivative assets, derivative liabilities, reserves for mortgage repurchases and indemnifications, and deferred tax valuation allowance considerations. Significant estimates are also used in determining the recoverability and fair value of property and equipment and goodwill.

<u>Initial Public Offering</u>

On February 2, 2021, the Company completed its initial public offering ("IPO") in which the Company's stockholders sold 7,250,000 shares of its common stock at a public offering price of $13 per share. In conjunction with the IPO, the Company's board of directors (the "Board") also approved a reorganization of the Company through merging Home Point Capital LP ("HPLP") with and into the Company, with the Company as the surviving entity. Prior to the reorganization in connection with the IPO, HPLP was the direct parent of the Company (the "Parent"). As a secondary offering, there were no proceeds to the Company from the sale of the shares being sold by the selling stockholders and all related expenses for the IPO were recorded in General and administrative expenses. Upon the completion of the IPO, investment entities directly or indirectly managed by Stone Point Capital LLC, which are referred to as the Trident Stockholders, beneficially owned approximately 92% of the voting power of the Company's common stock.

<u>Summary of Significant Accounting Policies</u>

*Cash and cash equivalents* are comprised of cash and other highly liquid investments with a maturity of three months or less. Cash equivalents are stated at cost, which approximates market value. The Company maintains its deposits in financial

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**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

institutions that are guaranteed by various programs offered by the Federal Deposit Insurance Corporation ("FDIC"). The Company monitors its positions with, and the credit quality of, the financial institutions with which it does business. The Company has not experienced any losses in such accounts and management believes the Company is not exposed to any significant credit risk.

*Restricted cash* is comprised of borrower escrow funds and cash reserves required by the Company's warehouse lenders.

*Mortgage loans held for sale* are accounted for using the fair value option. Therefore, mortgage loans originated and intended for sale in the secondary market are reflected at fair value. Changes in the fair value are recognized in current period earnings in Gain on loans, net, within the consolidated statements of operations. Refer to "*Note 3 - Mortgage Loans Held for Sale*."

*Mortgage servicing rights* are recognized when loans are sold and the associated servicing rights are retained. The Company maintains one class of MSR asset and has elected the fair value option. The Company determines the fair value of mortgage servicing rights by estimating the fair value of the future cash flows associated with the mortgage loans being serviced. Key economic assumptions used in measuring the fair value of MSRs include, but are not limited to, discount rates and prepayment speeds. Other assumptions such as delinquencies, and cost to service are also considered. The assumptions used in the valuation model are validated on a periodic basis. The Company obtains valuations from an independent third party on a quarterly basis and records an adjustment based on this third-party valuation. Changes in the fair value are recognized in Change in fair value of mortgage servicing rights, net on the Company's consolidated statements of operations. Purchased MSRs are recorded at the fair value at the date of purchase.

*Property and equipment, net* include furniture, equipment, leasehold improvements, and work-in-process, which are stated at cost, net of accumulated depreciation. Depreciation is computed on the straight-line basis over the estimated useful lives of the assets for financial reporting, which range from three to seven years for furniture, computers and office equipment, and the shorter of the related lease term or useful life for leasehold improvements.

*Servicing advances* represent advances paid by the Company on behalf of customers to fund delinquent balances for principal, interest, property taxes, insurance premiums, and other out-of-pocket costs. Advances are made in accordance with the servicing agreements and are recoverable upon collection of future borrower payments or foreclosure of the underlying loans. The Company is exposed to losses only to the extent that the respective servicing guidelines are not followed or in the event there is a shortfall in liquidation proceeds and records a reserve against the advances when it is probable that the servicing advance will be uncollectible. The adequacy of the reserve is evaluated so that the reserve represents management's estimate of current expected losses and is maintained at a level that management considers adequate based upon continuing assessments of collectability, current trends, and historical loss experience. The reserve for uncollectible servicing advances is recorded in Accounts receivable, net in the consolidated balance sheets and the change in the reserve is recorded in Loan servicing expense in the consolidated statements of operations. In certain circumstances, the Company may be required to remit funds on a non-recoverable basis, which are expensed as incurred. Refer to "*Note 9 – Accounts Receivable, net*."

*Derivative financial instruments* are recorded at fair value as either Derivative assets or in Derivative liabilities on the consolidated balance sheets on a gross basis. The Company has accounted for its derivative instruments as non-designated hedge instruments and uses the derivative instruments to economically manage risk. The Company's derivative instruments include, but are not limited to, forward mortgage-backed securities ("MBS") sales commitments, interest rate lock commitments ("IRLCs"), and other derivative instruments used to economically hedge fluctuations in MSRs' fair value. The impact of the Company's Derivative assets and liabilities is reported in Change in fair value of derivative assets, net on the consolidated statements of cash flows. The Company records derivative assets and liabilities and related cash margin on a gross basis, even when a legally enforceable master netting arrangement exists between the Company and the derivative counterparty. Refer to "*Note 5 - Derivative Financial Instruments*."

*Forward mortgage-backed securities* sale commitments that have not settled are considered derivative financial instruments and are recognized at fair value. These forward commitments will be fulfilled with loans not yet sold or securitized, new originations, and purchases. The forward commitments allow the Company to reduce the risk related to market price volatility. These derivatives are not designated as hedging instruments. Gain or loss on derivatives is recorded in Gain on loans, net in the consolidated statements of operations.

*Interest rate lock commitments* represent an agreement to extend credit to a mortgage loan applicant, or an agreement to purchase a loan from a third-party originator, whereby the interest rate on the loan is set prior to funding. The loan commitment binds the Company (subject to the loan approval process) to fund the loan at the specified rate, regardless of whether interest rates have changed between the commitment date and the loan funding date. As such, outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of the commitment through the loan funding date or expiration date. The loan commitments generally range between 30 and 90 days; however, the borrower is not obligated to obtain the loan.

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**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The Company is subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. Historical commitment-to-closing ratios are considered to estimate the quantity of mortgage loans that will fund within the terms of the IRLCs. Change in fair value of IRLC derivatives is recorded in Gain on loans, net in the consolidated statements of operations. Forward MBS sale commitments or whole loan sale commitments and options on forward contracts are used to manage the interest rate and price risk. These derivatives are not designated as hedging instruments.

*Mortgage servicing rights hedges* are accounted for at fair value. MSRs are subject to substantial interest rate risk as the mortgage notes underlying the servicing rights permit the borrowers to prepay the loans. Therefore, the value of MSRs generally tend to diminish in periods of declining interest rates, as prepayments increase and increase in periods of rising interest rates, as prepayments decrease. Although the level of interest rates is a key driver of prepayment activity, there are other factors that influence prepayments, including home prices, underwriting standards, and product characteristics.

The Company manages the impact that the volatility associated with changes in fair value of its MSRs has on its earnings with a variety of derivative instruments. The amount and composition of derivatives used to economically hedge the value of MSRs will depend on the Company's exposure to loss of value on the MSRs, the expected cost of the derivatives, expected liquidity needs, and the expected increase to earnings generated by the origination of new loans resulting from the decline in interest rates. This serves as a business hedge of the MSRs, providing a benefit when increased borrower refinancing activity results in higher production volumes, which would partially offset declines in the value of the MSRs thereby reducing the need to use derivatives. The benefit of this business hedge depends on the decline in interest rates required to create an incentive for borrowers to refinance their mortgage loans and lower their interest rates; however, this benefit may not be realized under certain circumstances regardless of the change in interest rates. The change in fair value of MSR hedges is recorded in Change in fair value of mortgage servicing rights in the consolidated statements of operations.

*Goodwill* represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired net of liabilities assumed. Goodwill is not amortized but rather subject to an annual impairment test at the reporting unit level. Management performs its annual goodwill impairment test on October 1, or more frequently if events or changes in circumstances indicate that the goodwill may be impaired. The Company performed an interim impairment test during the third quarter ended September 30, 2022, which resulted in a write off of the Goodwill balance. For additional information refer to *Note 6 - Goodwill*.**

*GNMA loans eligible for repurchase* are certain loans transferred to GNMA and included in GNMA MBS for which the Company has the right, but not the obligation, to repurchase the loan from the MBS, including loans delinquent more than 90 days. Once the Company has the unilateral right to repurchase the delinquent loan, the Company has effectively regained control over the loan and must re-recognize the loan on the consolidated balance sheets and establish a corresponding finance liability regardless of the Company's intention to repurchase the loan. GNMA loans eligible for repurchase are presented at their outstanding unpaid principal balance.

*Equity method investments* are business entities, which the Company does not have control of, but has the ability to exercise significant influence over operating and financial policies and are accounted for using the equity method. The Company evaluates its equity method investment for impairment whenever an event or change in circumstances occurs that may have a significant adverse impact on the carrying value of the investment. If a loss in value has occurred that is deemed to be other-than-temporary, an impairment loss is recorded. The Company recognizes investments in equity method investment initially at cost and are adjusted for the Company's share of earnings or losses, contributions or distributions. The Company held an equity method investment in Longbridge Financial, LLC ("Longbridge"), which was sold on October 3, 2022. For additional information refer to *Note 21 - Shareholders' Equity and Equity Method Investment*.

*Representation and warranty reserves* are maintained to account for expected losses related to loans the Company may be required to repurchase or the indemnity payments the Company may have to make to purchasers*.* The Company originates and sells residential mortgage loans in the secondary market. When the Company sells mortgage loans, it makes customary representations and warranties to the purchasers about various characteristics of each loan, such as the ownership of the loan, the validity of the lien securing the loan, the nature and extent of underwriting standards applied, and the types of documentation being provided. These representations and warranties are generally enforceable over the life of the loan. If a defect in the origination process is identified, the Company may be required to either repurchase the loan or indemnify the purchaser for losses it sustains on the loan. If there are no such defects, the Company has no liability to the purchaser for losses it may incur on such loans.

The representation and warranty reserve reflects management's best estimate of probable lifetime loss based on borrower performance, repurchase demand behavior, and historical loan defect experience. The reserve considers both the estimate of expected losses on loans sold during the current accounting period as well as adjustments to the Company's previous estimate of

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

expected losses on loans sold. Management monitors the adequacy of the overall reserve and adjusts the level of reserve, as necessary, after consideration of other qualitative factors.

At the time a loan is sold, the representation and warranty reserve is recorded as a decrease in Gain on loans, net, on the consolidated statements of operations and recorded in Other liabilities on the Company's consolidated balance sheets. Changes to the reserve are recorded as an increase or decrease to Gain on loans, net, on the consolidated statements of operations.

*Transfers of financial assets* are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of the right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Gains and losses stemming from transfers reported as sales, if any, are included in Gain on loans, net within the Company's consolidated statements of operations. In instances where a transfer of financial assets does not qualify for sale accounting, the assets remain on the Company's consolidated balance sheets and continue to be reported and accounted for as if the transfer had not occurred.

*Gain on loans, net* includes the realized and unrealized gains and losses on mortgage loans, as well as the changes in fair value of all loan-related derivatives, including but not limited to, forward MBS sales commitments, IRLCs, freestanding loan-related derivative instruments and the representation and warranty reserve.

*Loan fee income* consists of fee income earned on all loan originations, including amounts earned related to application and underwriting fees. Fees associated with the origination and acquisition of mortgage loans are recognized when earned, which is on the date the loan is originated or acquired.

*Interest income* is recognized on loans held for sale for the period from loan funding to sale, which is typically less than 30 days. Loans are placed on non-accrual status and the related accrued interests is reserved when any portion of the principal or interest is 90 days past due or earlier if factors indicate that the ultimate collectability of the principal or interest is not probable. Interest received for loans on non-accrual status is recorded as income when collected. Loans return to accrual status when the principal and interest become current and it is probable that the amounts are fully collectible.

Prior to entering into a subservicing agreement with ServiceMac, the Company had a fiduciary responsibility for servicing accounts related to customer escrow funds and custodial funds. The Company receives certain benefits from these deposits, as allowable under federal and state laws and regulations, or as agreed to under certain subservicing agreements. Interest income is recorded as earned and included in the consolidated statements of operations within Interest income.

*Loan servicing fees* involve the servicing of residential mortgage loans on behalf of an investor. Total Loan servicing fees include servicing and other ancillary servicing revenue earned for servicing mortgage loans owned by investors. Servicing fees received for servicing mortgage loans owned by investors are based on a stipulated percentage of the outstanding monthly principal balance of such loans, or the difference between the weighted-average yield received on the mortgage loans and the amount paid to the investor, less guaranty fees and interest on curtailments (reduction of principal balance). Loan servicing fees are receivable only out of interest collected from mortgagors and are recorded as income when earned, which is generally upon collection. Late charges and other miscellaneous fees collected from mortgagors are also recorded as income when collected.

*Other income* consists of income that is dissimilar in nature to revenues the Company earns from its ongoing central operations.

*Equity-based compensation* consists of stock options, restricted stock units, and performance stock units. Expense is recognized at the fair value of equity awards on the date of grant within Compensation and benefits expense in the Company's consolidated statements of operations on a straight-line basis over the requisite service period. Estimates of future forfeitures are made at the grant date and revised, if necessary, in later periods if subsequent information indicates actual forfeitures will differ from those estimates. Refer to "*Note 19 - Equity-based Compensation*".

*Debt issuance costs* are recorded for the Company's warehouse lines of credit and other debt. Debt issuance costs are amortized on a straight-line basis, which approximates the effective interest method, during the revolving period of the warehouse facilities or during the total term of the term debt agreement. Amortization of debt issuance costs is recorded in the consolidated statements of operations within Interest expense.

*Income taxes* are accounted for under the asset and liability method. Deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences, using the tax rates expected to be in effect when the temporary differences reverse. Temporary differences are the difference between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are also recognized for tax attributes such as net operating loss carryforwards and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The Company recognized tax benefits from uncertain income tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authority based on the technical merits of the position. An uncertain income tax position that meets the "more likely than not" recognition threshold is then measured to determine the amount of the benefit to recognize.

<u>Recently Adopted Accounting Standards</u> 

ASU 2019-12, *Income Taxes (Topic 740), Simplifying the Accounting for Income Taxe*s, eliminates particular exceptions related to the method for intra period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. This amendment is effective for annual periods beginning after December 15, 2021. The Company adopted ASU 2019-12 as of January 1, 2022. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Accounting Standards Update ("ASU") 2020-04, *Reference Rate Reform (Topic 848)*, *Facilitation of the Effects of Reference Rate Reform on Financial Reporting,* subject to meeting certain criteria, provides optional expedients and exceptions related to applying U.S. GAAP to certain contract modifications and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another rate that is expected to be discontinued. This guidance was effective upon issuance and allows application to contract changes as early as January 1, 2020. Subsequently, in 2021, the FASB issued *ASU 2021-01, Reference Rate Reform*, to further clarify and expand certain aspects of Topic 848. The Company adopted ASU 2020-04 and ASU 2021-01 in September 2022. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

<u>Accounting Standards Issued but Not Yet Adopted</u>

As of December 31, 2022, there have been no new accounting pronouncements recently issued but not yet adopted that are reasonably likely to have a material impact on the Company's consolidated financial statements.

**Note 3 - Mortgage Loans Held for Sale**

The Company sells its originated mortgage loans into the secondary market. The Company may retain the right to service some of these loans upon sale through ownership of servicing rights. The following presents MLHS at fair value, by type:

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
| | **Unpaid** <br>**Principal** | **Fair Value** <br>**Adjustment** | **Total** <br>**Fair Value** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| Conventional<sup>(a)</sup> | $425160 | $(31639) | $393521 |
| Government<sup>(b)</sup> | 254800 | (5664) | 249136 |
| Reverse<sup>(c)</sup> | 355 | (19) | 336 |
| &nbsp;&nbsp;Total | $680315 | $(37322) | $642993 |

---

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| | **Unpaid** <br>**Principal** | **Fair Value** <br>**Adjustment** | **Total** <br>**Fair Value** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| Conventional<sup>(a)</sup> | $4206099 | $79389 | $4285488 |
| Government<sup>(b)</sup> | 799579 | 21902 | 821481 |
| Reverse<sup>(c)</sup> | 275 | (83) | 192 |
| &nbsp;&nbsp;Total | $5005953 | $101208 | $5107161 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Conventional includes mortgage loans meeting the eligibility requirements to be sold to FNMA or FHLMC.

(b) Government includes mortgage loans meeting the eligibility requirements to be sold to GNMA (including Federal Housing Administration, Department of Veterans Affairs and United States Department of Agricultural mortgage loans).

(c) Reverse mortgages presented in MLHS on the consolidated balance sheets as a result of a repurchase

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

MLHS on nonaccrual status had $21.8 million and $26.1 million of unpaid principal balances and $16.7 million and $21.6 million estimated fair value as of December 31, 2022 and 2021, respectively.

The Company had $0.6 billion in unpaid principal balance pledged to secure its mortgage warehouse line of credit as of December 31, 2022.

The following presents a reconciliation of the changes in MLHS to the amounts presented on the consolidated statements of cash flows:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Fair value at beginning of period | $5107161 | $3301694 |
| &nbsp;&nbsp;Mortgage loans originated and purchased<sup>(a)</sup> | 28622069 | 100217789 |
| &nbsp;&nbsp;Proceeds from sales and payments received<sup>(a)</sup> | (32276858) | (97870548) |
| &nbsp;&nbsp;Change in fair value | (138530) | (41824) |
| &nbsp;&nbsp;Loss on sale<sup>(a)</sup> | (670849) | (499950) |
| Fair value at end of period | $642993 | $5107161 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This line as presented on the consolidated statements of cash flows excludes originated mortgage servicing rights and MSR hedging.

**Note 4 - Mortgage Servicing Rights**

The Company sells residential mortgage loans in the secondary market and typically retains the right to service the loans sold.

MSRs give the Company the contractual right to receive service fees and other remuneration in exchange for performing loan servicing functions on behalf of investors in mortgage loans and securities. Upon sale of a mortgage loan for which the Company retains the underlying servicing, an MSR asset is capitalized, which represents the current fair value of the future net cash flows that are expected to be realized for performing servicing activities.

The following presents an analysis of the changes in capitalized MSRs:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Balance at beginning of period | $1525103 | $748457 |
| &nbsp;&nbsp;MSRs originated | 475469 | 1052012 |
| &nbsp;&nbsp;MSRs purchased | 24738 | 43056 |
| &nbsp;&nbsp;MSRs sold | (849729) | (238265) |
| &nbsp;&nbsp;Changes in valuation model inputs | 358782 | 227401 |
| &nbsp;&nbsp;Change due to cash payoffs and principal amortization | (131821) | (307558) |
| Balance at end of period | $1402542 | $1525103 |

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The following presents the Company's total capitalized mortgage servicing portfolio (based on the unpaid principal balance ("UPB") of the underlying mortgage loans):

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Ginnie Mae | $4357853 | $5602582 |
| Fannie Mae | 47198689 | 70174987 |
| Freddie Mac | 37082471 | 52547588 |
| Other | 29620 | 34417 |
| &nbsp;&nbsp;Total | $88668633 | $128359574 |

---

The following presents the key weighted average assumptions used in determining the fair value of the Company's MSRs:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| Discount rate | 11.23% | 8.68% |
| Weighted average prepayment speeds | 5.44% | 8.30% |

---

The key assumptions used to estimate the fair value of the MSRs are discount rate and the Conditional Prepayment Rate ("CPR" or "prepayment speeds"). An increase in prepayment speeds generally has an adverse effect on the value of MSRs as the underlying loans prepay faster. In a declining interest rate environment, the fair value of MSRs generally decreases as prepayments increase. A decrease in prepayment speeds generally has a positive effect on the value of the MSRs as the underlying loans prepay less frequently. In a rising interest rate environment, the fair value of MSRs generally increases as prepayments decrease. Increases in the discount rate result in a lower MSR value and decreases in the discount rate result in a higher MSR value. MSR uncertainties are hypothetical and do not always have a direct correlation with each assumption. Changes in one assumption may result in changes to another assumption, which might magnify or counteract the uncertainties.

The following presents the impact on the fair value of the Company's MSR portfolio when applying the following hypothetical data points:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Discount Rate** | **Discount Rate** | **Prepayment Speeds** | **Prepayment Speeds** |
| | **100 BPS <br>Adverse Change** | **200 BPS <br>Adverse Change** | **10% Adverse <br>Change** | **20% Adverse <br>Change** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| December 31, 2022 | $(66658) | $(127263) | $(36353) | $(70814) |
| December 31, 2021 | $(66885) | $(128172) | $(56278) | $(108621) |

---

The following presents information related to loans serviced:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Total unpaid principal balance | $89280085 | $133889085 |
| Loans 30-89 days delinquent | 824348 | 656012 |
| Loans delinquent 90 or more days or in foreclosure | 555293 | 777650 |

---

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The following presents components of Loan servicing fees as reported in the Company's consolidated statements of operations:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Contractual servicing fees | $266050 | $312181 |
| Late fees | 2394 | 5070 |
| Other | (3169) | 14131 |
| &nbsp;&nbsp;Total | $265275 | $331382 |

---

The Company held for its customers $5.1 million and $19.9 million of escrow funds recorded in Other liabilities in the consolidated balance sheets as of December 31, 2022 and 2021, respectively.

The Company reported $82.2 million loss and a $37.0 million gain on MSR sales in the Change in fair value of mortgage servicing rights in the consolidated statement of operations for the year ended December 31, 2022 and 2021, respectively. The Company reclassified $37.0 million gain on MSR sales from Other income to the Change in fair value of mortgage servicing rights on the consolidated statement of operations for the year ended December 31, 2021.

The following presents the components of Change in fair value of MSRs:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Realization of cash flows | $(131821) | $(307558) |
| Valuation inputs and assumptions | 358782 | 227401 |
| Economic hedging results | (242487) | (33699) |
| (Loss) gain on MSR sales | (82163) | 37025 |
| &nbsp;&nbsp;Change in fair value of MSRs | $(97689) | $(76831) |

---

**Note 5 - Derivative Financial Instruments**

The following presents the outstanding notional amounts and fair values of derivative instruments not designated as hedging instruments:

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
| | **Notional <br>Value** | **Derivative <br>Asset** | **Derivative <br>Liability** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| Forward sale contracts | $819900 | $6107 | $1200 |
| Interest rate lock commitments | 598970 | 2231 | 2504 |
| Forward purchase contracts | 61300 |  | 400 |
| Treasury futures purchase contracts | 897500 |  |  |
| Margin |  | 17273 | 6 |
| &nbsp;&nbsp;Total |  | $25611 | $4110 |

---

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| | **Notional** <br>**Value** | **Derivative** <br>**Asset** | **Derivative <br>Liability** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| Forward sale contracts | $7819802 | $6969 | $8242 |
| Interest rate lock commitments | 6068763 | 29887 | 2843 |
| Forward purchase contracts | 1521000 | 3031 | 281 |
| Interest rate swap futures contracts | 1540000 | 111 | 5662 |
| Treasury futures purchase contracts | 4720000 |  |  |
| Margin |  | 44387 | 9708 |
| &nbsp;&nbsp;Total |  | $84385 | $26736 |

---

The following presents the recorded gain/(loss) on derivative financial instruments:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Forward sale contracts | $5956 | $58530 |
| Interest rate lock commitments | (26880) | (235988) |
| Forward purchase contracts | (2926) | (1669) |
| Interest rate swap and Treasury futures purchase contracts | (196453) | (20632) |

---

Counterparty agreements for forward commitments contain master netting agreements. The master netting agreements contain a legal right to offset amounts due to and from the same counterparty. The Company incurred no credit losses due to nonperformance of any of its counterparties for the years ended December 31, 2022 and 2021.

The following presents a summary of derivative assets and liabilities and related netting amounts:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
| | | **Gross Amounts Not Offset in the Statement of Financial Position**<sup>(1)</sup> | **Gross Amounts Not Offset in the Statement of Financial Position**<sup>(1)</sup> | |
| |<br>**Gross Amount of Assets (Liabilities) Recognized** | **Financial Instruments** | **Cash Collateral** |<br>**Net Amount** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| Derivatives subject to master netting agreements: |  |  |  |  |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;Forward sale contracts | $6107 | $(1062) | $(3790) | $1255 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;Forward sale contracts | (1200) | 1062 | 138 |  |
| &nbsp;&nbsp;Forward purchase contracts | (400) |  | 400 |  |
| Derivatives not subject to master netting agreements: |  |  |  |  |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;Interest rate lock commitments | 2231 |  |  | 2231 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;Interest rate lock commitments | (2504) |  |  | (2504) |
| Total derivatives |  |  |  |  |
| &nbsp;&nbsp;Assets | $8338 | $(1062) | $(3790) | $3486 |
| &nbsp;&nbsp;Liabilities | $(4104) | $1062 | $538 | $(2504) |

---

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| | | **Gross Amounts Not Offset in the Statement of Financial Position**<sup>(1)</sup> | **Gross Amounts Not Offset in the Statement of Financial Position**<sup>(1)</sup> | |
| |<br>**Gross Amount of Assets (Liabilities) Recognized** | **Financial Instruments** | **Cash Collateral** |<br>**Net Amount** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| Derivatives subject to master netting agreements: |  |  |  |  |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;Forward sales contracts | $6969 | $(4886) | $(1272) | $811 |
| &nbsp;&nbsp;Forward purchase contracts | 3031 | (258) | (2627) | 146 |
| &nbsp;&nbsp;Interest rate swap futures contracts | 111 | (111) |  |  |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;Forward sale contracts | (8242) | 4886 | 1252 | (2104) |
| &nbsp;&nbsp;Forward purchase contracts | (281) | 258 |  | (23) |
| &nbsp;&nbsp;Interest rate swap futures contracts | (5662) | 111 | 5551 |  |
| Derivatives not subject to master netting agreements: |  |  |  |  |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;Interest rate lock commitments | 29887 |  |  | 29887 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;Interest rate lock commitments | (2843) |  |  | (2843) |
| Total derivatives |  |  |  |  |
| &nbsp;&nbsp;Assets | $39998 | $(5255) | $(3899) | $30844 |
| &nbsp;&nbsp;Liabilities | $(17028) | $5255 | $6803 | $(4970) |

---

(1) Amounts disclosed for collateral received from or posted to the same counterparty includes cash up to and not exceeding the net amount of the derivative asset or liability presented in the balance sheet. The fair value of the total collateral received from or posted to the same counterparty may exceed the amounts presented. The amounts of collateral received from or posted to counterparty are presented as margin and included as a component of either Derivative assets or Other liabilities in the Balance Sheet.

For information on the determination of fair value, refer to *Note 16 - Fair Value Measurements*.

**Note 6 - Goodwill**

The Company performs its annual goodwill impairment analysis as of October 1 or more frequently if events and circumstances indicate that goodwill may be impaired. The Company compares the fair value of each reporting unit with its carrying amount, including goodwill. If the quantitative assessment indicates that the reporting unit's carrying amount exceeds its fair value, the Company recognizes an impairment charge up to this amount but not to exceed the total carrying value of the reporting unit's goodwill.

The Company performed an interim impairment test during the third quarter ended September 30, 2022, due to the impact of rising interest rates on the mortgage industry and the Company's recent stock performance. The Company used the market-based valuation approach to determine fair value of its reporting units and compare against the carrying value of the reporting units, and the fair value was measured using inputs classified as Level 3 in the fair value hierarchy. Based upon the results of this evaluation, the Company recorded $10.8 million goodwill impairment charges in Corporate Impairment of goodwill, driven predominantly by a significant decline in our market capitalization. The Company wrote off the $7.0 million and $3.8 million goodwill asset for the Origination and Servicing segments, respectively, and has no remaining goodwill balance as of December 31, 2022.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

**Note 7 - Other Assets And Other Liabilities**

The following presents the principal categories of Other assets:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Prepaid expenses and other | $15215 | $23418 |
| Right of use lease asset | 8269 | 12039 |
| Foreclosure and real estate owned | 12682 | 7771 |
| &nbsp;&nbsp;Total | $36166 | $43228 |

---

The Company reclassified $14.4 million Servicing sale receivable from Other assets to Accounts receivable, net on the consolidated balance sheet as of December 31, 2021, to conform to the current period presentation.

The following presents the principal categories of Other liabilities:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Escrow liability | $5088 | $19920 |
| Repurchase reserves | 26605 | 24577 |
| Right of use lease liabilities, net | 10600 | 15562 |
| Unclaimed property | 14811 | 15641 |
| Other | 732 | 888 |
| &nbsp;&nbsp;Total | $57836 | $76588 |

---

**Note 8 - Property and Equipment, net**

The following presents the principal categories of Property and equipment, net:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Computer and telephone | $18569 | $31187 |
| Office furniture and equipment | 2281 | 3027 |
| Leasehold improvements | 5464 | 5537 |
| Work-in-process for internal use software | 1772 | 421 |
| &nbsp;&nbsp;Gross property and equipment | 28086 | 40172 |
| Less accumulated depreciation | (16426) | (18280) |
| &nbsp;&nbsp;Total | $11660 | $21892 |

---

Depreciation expense of $10.7 million and $10.1 million was recognized within Depreciation and amortization expense in the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

**Note 9 – Accounts Receivable, net**

The following presents principal categories of Accounts receivable, net:

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Servicing receivable-general | $14943 | $359 |
| Pair off receivable | 619 | 3738 |
| Servicing sale receivable | 29503 | 14364 |
| Servicing advance receivable | 77257 | 71884 |
| Servicing advance reserve | (3355) | (4207) |
| Agency receivable | 595 | 20184 |
| Income tax receivable | 1902 | 11181 |
| Warehouse receivable |  | 1934 |
| Interest on servicing deposits | 302 | 464 |
| Other | 2925 | 9191 |
| &nbsp;&nbsp;Total | $124691 | $129092 |

---

As part of managing the Company's servicing advances, servicing advance reserve is recognized with management's estimate of current expected losses and maintained at a level that management considers adequate based upon continuing assessments of collectability, historical loss experience, current trends, and reasonable and supportable forecasts.

The following presents changes to the servicing advance reserve:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Servicing advance reserve at beginning of period | $(4207) | $(8380) |
| &nbsp;&nbsp;Additions | (2620) | (1975) |
| &nbsp;&nbsp;Charge-offs | 3472 | 6148 |
| Servicing advance reserve at end of period | $(3355) | $(4207) |

---

**Note 10 - Warehouse Lines of Credit**

The Company maintains mortgage warehouse lines of credit arrangements with various financial institutions, primarily to fund the origination of mortgage loans. The Company held mortgage funding arrangements with eight and eleven separate financial institutions with a total maximum borrowing capacity of $2.8 billion and $7.5 billion as of December 31, 2022 and 2021, respectively. These funding arrangements are primarily uncommitted. The Company had $2.3 billion and $2.8 billion of unused capacity under its warehouse lines of credit as of December 31, 2022 and 2021, respectively.

The following presents the amounts outstanding and maturity dates under the Company's various mortgage funding arrangements:

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

---

| | | |
|:---|:---|:---|
| | **Maturity Date** | **December 31, 2022** |
| | | **(dollars in thousands)** |
| $450 million Warehouse Facility<sup>(a)</sup> | August 2023 | $149513 |
| $200 million Warehouse Facility<sup>(b)</sup> | September 2023 | 41309 |
| $200 million Warehouse Facility<sup>(c)</sup> | September 2023 | 32011 |
| $200 million Warehouse Facility<sup>(d)</sup> | March 2023 | 45284 |
| $50 million Warehouse Facility<sup>(e)</sup> | March 2023 | 41928 |
| $1,200 million Warehouse Facility<sup>(f)</sup> | May 2024 | 113136 |
| $88.5 million Warehouse Facility | Evergreen | 8050 |
| $400 million Warehouse Facility<sup>(g)</sup> | Evergreen | 65250 |
| Gestation Warehouse Facility | Evergreen |  |
| &nbsp;&nbsp;Total |  | $496481 |

---

(a) Subsequent to December 31, 2021, the maturity of this Warehouse Facility has been extended from September 2022 to August 2023.

(b) Subsequent to December 31, 2021, the capacity of this Warehouse Facility has been reduced from $500 million to $200 million. The maturity of this Warehouse Facility has been extended from September 2022 to September 2023.

(c) Subsequent to December 31, 2021, the capacity of this Warehouse Facility has been reduced from $500 million to $200 million. The maturity of this Warehouse Facility has been extended from September 2022 to September 2023.

(d) Subsequent to December 31, 2021, the capacity of this Warehouse Facility has been reduced from $500 million to $200 million. The maturity of this Warehouse Facility has been extended from March 2022 to March 2023. In February 2023, the maturity was extended to April 2023. Refer to Note 27 – Subsequent Events

(e) Subsequent to December 31, 2021, the capacity of this Warehouse Facility has been reduced from $500 million to $250 million as of June 30, 2022 and $50 million as of September 30, 2022.

(f) Subsequent to December 31, 2021, the capacity of this Warehouse Facility has been reduced from $1,500 million to $1,200 million. The maturity of this Warehouse Facility has been extended from May 2023 to May 2024.

(g) Subsequent to December 31, 2021, the capacity of this Warehouse Facility has been reduced from $550 million to $400 million.

---

| | | |
|:---|:---|:---|
| | **Maturity Date(h)** | **Balance at December 31, 2021** |
| | | **(dollars in thousands)** |
| $1,200 million Warehouse Facility<sup>(i)</sup> | February 2022 | $604421 |
| $500 million Warehouse Facility<sup>(j)</sup> | March 2022 | 335509 |
| $500 million Warehouse Facility | March 2022 | 381087 |
| $1,000 million Warehouse Facility<sup>(k)</sup> | August 2022 | 716802 |
| $450 million Warehouse Facility | September 2022 | 277060 |
| $500 million Warehouse Facility | September 2022 | 339521 |
| $500 million Warehouse Facility | September 2022 | 375381 |
| $500 million Warehouse Facility | March 2023 | 309898 |
| $1,500 million Warehouse Facility | May 2023 | 731132 |
| $88.5 million Warehouse Facility | Evergreen | 11409 |
| $550 million Warehouse Facility | Evergreen | 363959 |
| Gestation Warehouse Facility | Evergreen | 179360 |
| Early Funding<sup>(l)</sup> |  | 93119 |
| &nbsp;&nbsp;Total |  | $4718658 |

---

(h) Maturity Dates in this table are as of December 31, 2021. The Maturity Dates as of December 31, 2022 are reflected in the table above.

(i) The warehouse facility was terminated on October 7, 2022.

(j) The warehouse facility was terminated on September 23, 2022.

(k) The warehouse facility expired in August 2022.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

(l) In addition to warehouse facilities, the Company is an approved lender for early funding facilities with Fannie Mae through its As Soon As Pooled ("ASAP") program and Freddie Mac through its Early Funding ("EF") program. From time to time, the Company enters into agreements to deliver certified pools of mortgage loans and receive funding in exchange for such pools. All mortgage loans delivered under these programs must adhere to a set of eligibility criteria. Early funding programs with Fannie Mae and Freddie Mac do not have stated expiration dates or maximum capacities.

The Company's warehouse facilities' variable interest rates are calculated using an index rate generally tied to a Secured Overnight Financing Rate ("SOFR"); plus applicable interest rate margins, with varying interest rate floors. The weighted average interest rate for the Company's warehouse facilities was 2.91% and 2.36% for the years ended December 31, 2022 and 2021, respectively. The Company's borrowings are secured by MLHS at fair value.

The Company's warehouse facilities require the maintenance of certain financial covenants relating to net worth, profitability, liquidity, and ratio of indebtedness to net worth among others. The Company's warehouse lines that contain profitability covenants were amended to allow for a net loss for the three months ended December 31, 2022. The Company was in compliance with all warehouse facility covenants as of December 31, 2022.

**Note 11 – Term Debt and Other Borrowings, net** 

The following presents the Company's term debt and other borrowings, net:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | | **December 31,** | **December 31,** |
| | **Maturity Date** | **Collateral** | **2022** | **2021** |
| | | | **(dollars in thousands)** | **(dollars in thousands)** |
| $1.0 billion MSR Facility | May 2025 | MSRs | $450000 | $685000 |
| $550 million Senior Notes<sup>(a)</sup> | February 2026 | Unsecured | 500000 | 550000 |
| $85 million Servicing Advance Facility<sup>(b), (c)</sup> | May 2023 | Servicing advances |  | 3250 |
| $35 million Operating Line of Credit<sup>(c)</sup> | May 2023 | Mortgage loans | 1000 | 1000 |
| &nbsp;&nbsp;Gross |  |  | 951000 | 1239250 |
| Debt issuance costs |  |  | (8917) | (12726) |
| &nbsp;&nbsp;Total |  |  | $942083 | $1226524 |

---

(a) The Company repurchased and retired $50 million of outstanding Senior Notes during the year ended December 31, 2022.

(b) Effective June 9, 2022, the capacity of the Servicing Advance Facility was reduced from $90 million to $85 million.

(c) Subsequent to December 31, 2021, the maturity was extended from May 2022 to May 2023.

The Company maintains a $1.0 billion MSR financing facility (the "MSR Facility"). On April 29, 2022, the Company entered into an amendment to the MSR facility that, among other things, reduced the committed capacity from $650.0 million to $500 million. The amendment also replaced the LIBOR based interest rate with SOFR, plus the applicable interest rate margin, with advance rates generally ranging from 62.5% to 72.5% of the fair value of the underlying MSRs. The MSR Facility is collateralized by the Company's FNMA, FHLMC, and GNMA MSRs. The MSR Facility has a three-year revolving period ending on May 4, 2024 followed by a one-year period during which the balance drawn must be repaid and no further amounts may be drawn down, which ends on May 20, 2025. The MSR Facility requires the maintenance of certain financial covenants relating to net worth, liquidity, and indebtedness of the Company. The Company was in compliance with all covenants under the MSR Facility as of December 31, 2022.

In January 2021, the Company issued $550.0 million aggregate principal amount of its 5.0% Senior Notes due 2026 (the "Senior Notes") in a private placement transaction. The Senior Notes are guaranteed on a senior unsecured basis by each of the Company's wholly owned subsidiaries existing on the date of issuance, other than HPAM and HPMAC. The Senior Notes bear interest at a rate of 5.0% per annum, payable semi-annually in arrears. The Senior Notes will mature on February 1, 2026. The company repurchased and retired $50.0 million of outstanding Senior Notes during the second quarter of 2022.

The Indenture governing the Senior Notes contains covenants and restrictions that, among other things and subject to certain exceptions, limit the ability of the Company and its restricted subsidiaries to (i) incur additional debt or issue certain preferred shares; (ii) incur liens; (iii) make certain distributions, investments, and other restricted payments; (iv) engage in certain transactions with affiliates; and (v) merge or consolidate or sell, transfer, lease or otherwise dispose of all or substantially all of their assets.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The Senior Notes had a carrying value of $500 million and $550 million and an estimated fair value of $343 million and $506 million as of December 31, 2022 and 2021, respectively. The valuation of the Senior Notes was determined based on observable trading information considered Level 2 inputs under the fair value hierarchy. For the Company's other long-term secured borrowings not recorded at fair value, the carrying value approximated fair value due to the variable interest rate on the borrowings and the repricing of collateral.

The Company has a $85.0 million servicing advance facility, which is collateralized by all of the Company's servicing advances. The facility carries an interest rate of Term SOFR plus a margin and an advance rate ranging from 85.0-95.0%. The servicing advance facility requires the maintenance of certain financial covenants relating to net worth, liquidity, and indebtedness of the Company. The Company was in compliance with all covenants under the servicing advance facility as of December 31, 2022.

The Company also has a $35.0 million operating line, with an interest rate based on the Prime Rate.

The Company had total available capacity of $391.8 million and $67.4 million for its MSR Facility and servicing advance facility, respectively as of December 31, 2022. The Company has no available capacity for its operating line of credit as of December 31, 2022,

The following presents the Company's debt maturity schedule for the operating line of credit, MSR Facility and the Senior Notes:

---

| | |
|:---|:---|
| | **(dollars in thousands)** |
| 2023 | $1000 |
| 2024 | 300000 |
| 2025 | 150000 |
| 2026 | 500000 |
| 2027 and thereafter |  |
| &nbsp;&nbsp;Total | $951000 |

---

**Note 12 - Leases**

The Company determines if an arrangement is or contains a lease at contract inception. The Company also considers whether its service arrangements include the right to control the use of the asset. The initial measurement of the Right-of-use ("ROU") asset and liability is based on the present value of future lease payments over the lease term at lease commencement date. To determine the present value of lease payments, the Company uses its incremental borrowing rate based on the estimated rate of interest for a fully collateralized fully amortizing borrowing over a similar term of the lease payments at commencement date, since the leases generally do not have a readily determinable implicit discount rates. The Company applies judgement in assessing factors such as Company-specific credit risk, lease term, nature and quality of the underlying collateral, and the economic environment in determining the lease-specific borrowing rate.

The Company leases office space and equipment under non-cancelable operating leases expiring through 2029, some of which include options to extend for up to ten, by way of two five-year terms, and some of which include options to terminate the leases within one year. However, the Company is not reasonably certain to exercise options to renew or terminate, and therefore renewal and termination options are not considered in the lease term or in the determination of the ROU asset and liability balances. The Company's lease population does not contain any material restrictive covenants. Operating lease costs amounted to $4.5 million and $6.8 million for the years ended December 31, 2022 and 2021, respectively. Operating lease costs are recorded on a straight-line basis over the lease term in General and administrative expense in the consolidated statements of operations. Short-term lease costs were insignificant as of December 31, 2022 and 2021. The Company recorded $1.0 million and $1.5 million sublease income in Other income in the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively.

The Company has leases with variable payments, most commonly in the form of Common Area Maintenance ("CAM") and tax charges which are based on actual costs incurred. These variable payments were excluded from the determination of the ROU asset and lease liability balances since they are not fixed or in-substance fixed payments. Variable payments are expensed as incurred.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The following presents supplemental cash flow information related to leases:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Cash paid for amounts included in measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;Operating cash flows from operating leases | $5790 | $6521 |
| Right-of-use assets obtained in exchange for lease obligations: |  |  |
| &nbsp;&nbsp;Operating leases | $— | $881 |

---

The following presents supplemental balance sheet information related to leases:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Operating leases: |  |  |
| &nbsp;&nbsp;Right-of-use assets | $8269 | $12039 |
| &nbsp;&nbsp;Right-of-use liabilities | $10600 | $15562 |
| Weighted average remaining lease term in years: | 3.95 | 4.21 |
| Weighted average discount rate: | 5.22% | 5.08% |

---

Operating lease ROU assets are recorded within Other assets in the consolidated balance sheet. The operating lease ROU liabilities are recorded within Other liabilities in the consolidated balance sheet.

The following presents maturities of lease liabilities:

---

| | |
|:---|:---|
| | **(dollars in thousands)** |
| 2023 | $3515 |
| 2024 | 3294 |
| 2025 | 2146 |
| 2026 | 781 |
| 2027 | 804 |
| Thereafter | 1251 |
| &nbsp;&nbsp;Total lease payments | 11791 |
| &nbsp;&nbsp;Less: imputed interest | (1191) |
| Total | $10600 |

---

**Note 13 - Commitments and Contingencies**

<u>Commitments to Extend Credit</u> 

The Company's IRLCs expose the Company to market risk if interest rates change and the loan is not economically hedged or committed to an investor. The Company is also exposed to credit loss if the loan is originated and not sold to an investor and the customer does not perform. The collateral upon extension of credit typically consists of a first deed of trust in the mortgagor's residential property. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon. Total commitments to originate loans were $0.6 billion and $6.1 billion as of December 31, 2022 and 2021, respectively.

<u>Litigation</u> 

The Company is subject to various legal proceedings arising out of the ordinary course of business. There were no current or pending claims against the Company which are expected to have a material impact on the Company's consolidated balance sheets, statements of operations, or cash flows.

<u>Regulatory Contingencies</u> 

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The Company is subject to periodic audits and examinations, both formal and informal in nature, from various federal and state agencies, including those made as part of regulatory oversight of the Company's mortgage origination, servicing, and financing activities. Such audits and examinations could result in additional actions, penalties, or fines by state or federal governmental bodies, regulators, or the courts with respect to the Company's mortgage origination, servicing, and financing activities, which may be applicable generally to the mortgage industry or to the Company in particular. The Company did not pay any material penalties or fines during the years ended December 31, 2022 or 2021 and is not currently required to pay any such penalties or fines.

**Note 14 - Regulatory Net Worth Requirements**

The Company is subject to various regulatory capital requirements administered by the Department of Housing and Urban Development ("HUD"), which govern non-supervised, direct endorsement mortgagees. The Company is also subject to regulatory capital requirements administered by Ginnie Mae, Fannie Mae, and Freddie Mac, which govern issuers of Ginnie Mae, Fannie Mae, and Freddie Mac securities. Additionally, the Company is required to maintain minimum net worth requirements for many of the states in which it sells and services loans. Each state has its own minimum net worth requirement; these range from $0 to $1,000, depending on the state.

Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary remedial actions by regulators that, if undertaken, could (i) remove the Company's ability to sell and service loans to, or on behalf of, the Agencies and (ii) have a direct material effect on the Company's consolidated financial statements. In accordance with the regulatory capital guidelines, the Company must meet specific quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Further, changes in regulatory and accounting standards, as well as the impact of future events on the Company's results, may significantly affect the Company's net worth adequacy.

The Company is subject to the following minimum net worth, minimum capital ratio, and minimum liquidity requirements established by the Federal Housing Finance Agency for Fannie Mae and Freddie Mac Seller/Servicers, and Ginnie Mae for single family issuers.

<u>Minimum Net Worth</u>

The minimum net worth requirement for Fannie Mae and Freddie Mac is defined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Base Adjusted/Tangible Net Worth (as defined by HUD) of $2.5 million plus 25 basis points of outstanding UPB for total loans serviced.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted/Tangible Net Worth, as defined by HUD, is comprised of total equity less goodwill, intangible assets, affiliate receivables, deferred tax assets, prepaid expenses, and certain pledged assets.

The minimum net worth requirement for Ginnie Mae is defined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Base Adjusted/Tangible Net Worth (as defined by HUD) of $2.5 million plus 35 basis points of the issuer's total single-family effective outstanding obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted/Tangible Net Worth, as defined by HUD, is comprised of total equity less goodwill, intangible assets, affiliate receivables, deferred tax assets, prepaid expenses, and certain pledged assets.

<u>Minimum Capital Ratio</u>

For Fannie Mae, Freddie Mac and Ginnie Mae, the Company is also required to maintain a ratio of Adjusted/Tangible Net Worth to Total Assets greater than 6.0%.

<u>Minimum Liquidity</u>

The minimum liquidity requirement for Fannie Mae and Freddie Mac is defined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 3.5 basis points of total Agency servicing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Incremental 200 basis points of total nonperforming Agency servicing, measured as 90 plus day delinquencies, in excess of 6.0% of the total Agency servicing UPB.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Allowable assets for liquidity may include: cash and cash equivalents (unrestricted); available for sale or held for trading investment grade securities (e.g., Agency MBS, Obligations of Government-Sponsored Enterprises ("GSEs"), US Treasury Obligations); and unused/available portion of committed servicing advance lines.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The minimum liquidity requirement for Ginnie Mae is defined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maintain liquid assets equal to the greater of $1.0 million or 10 basis points of the Company's outstanding single-family MBS.

The most restrictive of the requirements require the Company to maintain a minimum adjusted net worth balance of $225.7 million and $326.3 million as of December 31, 2022 and 2021, respectively.

The Company is in compliance with all minimum requirements to which it was subject as of December 31, 2022.

**Note 15 - Representation and Warranty Reserve**

The majority of the Company's loan sale contracts include provisions requiring the Company to repurchase a loan if a borrower fails to make certain initial loan payments due to the acquirer or if the accompanying mortgage loan fails to meet customary representations and warranties. Historically, the Company received relief of certain repurchase obligations on loans sold to FNMA or FHLMC by taking advantage of their repurchase alternative program. This program provided the Company with the ability, in certain instances, to pay a fee to FNMA or FHLMC, in lieu of being obligated to repurchase the loan. During September and October 2022, FNMA and FHMC notified the Company that they will not provide repurchase obligation relief through the repurchase alternative program beginning in the fourth quarter of 2022 until further notice.

The Company has included considerations that it may receive relief of certain representations and warranty obligations on loans sold to FNMA or FHLMC on or after January 1, 2013 if FNMA or FHLMC satisfactorily concludes a quality control loan file review or if the borrower meets certain acceptable payment history requirements within 12 or 36 months after the loan is sold to FNMA or FHLMC, respectively. The current UPB of loans sold by the Company represents the maximum potential exposure to repurchases related to representations and warranties. Reserve levels are a function of expected losses based on historical experience and loan volume. While the amount of repurchases is uncertain, the Company considers the liability to be appropriate.

The following presents the activity of the outstanding repurchase reserve:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Repurchase reserve, at beginning of period | $24577 | $18080 |
| Additions | 52799 | 12147 |
| Charge-offs | (50771) | (5650) |
| Repurchase reserves, at end of period | $26605 | $24577 |

---

**Note 16 - Fair Value Measurements**

The Company uses fair value measurements to record certain assets and liabilities at fair value on a recurring basis, such as MSRs, derivatives, MLHS and Early buyout loans ("EBOs"). The Company has elected fair value accounting for MLHS and MSRs to more closely align the Company's accounting with its interest rate risk strategies without having to apply the operational complexities of hedge accounting.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

---

| | |
|:---|:---|
| **Level Input:** | **Input Definition:** |
| Level 1 | Unadjusted, quoted prices in active markets for identical assets or liabilities. |
| Level 2 | Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing an asset or liability and are developed based on market data obtained from sources independent of the Company. These may include quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk and others. |
| Level 3 | Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity), unobservable inputs may be used. Unobservable inputs reflect the Company's own assumptions about the factors that market participants would use in pricing the asset or liability and are based on the best information available in the circumstances. |

---

An asset or liability's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

While the Company believes its valuation methods are appropriate and consistent with those used by other market participants, the use of different methods or assumptions to estimate the fair value of certain financial statement items could result in a different estimate of fair value at the reporting date. Those estimated values may differ significantly from the values that would have been used had a readily available market for such items existed, or had such items been liquidated, and those differences could be material to the financial statements.

<u>Fair Value of Certain Assets and Liabilities</u> 

The following describes the methods used in estimating the fair values of certain assets and liabilities:

*Mortgage loans held for sale.* The majority of the Company's MLHS at fair value are saleable into the secondary mortgage markets and their fair values are estimated using observable quoted market or contracted prices or market price equivalents, which would be used by other market participants. These saleable loans are considered Level 2. A smaller portion of the Company's MLHS consist of loans repurchased from the GSEs that have subsequently been deemed to be non-saleable to GSEs and Ginnie Mae when certain representations and warranties are breached. These loans, however, are saleable to other entities and are classified on the consolidated balance sheets as Mortgage loans held for sale. These repurchased loans are considered Level 3 and are valued based on recent sales prices of similar loans.

*Interest rate lock commitments.* The Company estimates the fair value of IRLCs based on the value of the underlying mortgage loan, quoted MBS prices and estimates of the fair value of the MSRs and the probability that the mortgage loan will fund within the terms of the IRLC. The average pull-through rate for IRLCs was 77.5% and 86.1% as of December 31, 2022 and 2021, respectively. Given the significant and unobservable nature of the pull-through factor, IRLCs are classified as Level 3.

*Forward sales and purchase commitments.* The Company treats forward mortgage-backed securities purchase and sale commitments that have not settled as derivatives and recognizes them at fair value. These forward commitments will be fulfilled with loans not yet sold or securitized and new originations and purchases. The forward commitments allow the Company to reduce the risk related to market price volatility. The Company estimates the fair value of forward commitments based on quoted MBS prices. These derivatives are classified as Level 2.

*Interest rate swap futures contracts.* The Company uses options on swap contracts to offset changes in the fair value of MSRs. The Company estimates the fair value of these MSR-related derivatives using quoted prices for similar instruments. These derivatives are classified as Level 2.

*Treasury futures purchase contracts.* The Company uses Treasury futures contracts to offset changes in the fair value of MSRs. The Company estimates fair value of these MSR-related derivatives using quoted market prices. These derivatives are classified as Level 1.

------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

*Mortgage servicing rights.* The Company uses a discounted cash flow approach to estimate the fair value of MSRs. This approach consists of projecting servicing cash flows discounted at a rate that management believes market participants would use in their determinations of value. The Company obtains valuations from an independent third party on a quarterly basis to support the reasonableness of the fair value estimate. Key assumptions used in measuring the fair value of MSRs include, but are not limited to, discount rates and prepayment speeds. Other assumptions such as delinquencies, and cost to service are also considered resulting in a Level 3 classification.

The following presents the major categories of assets and liabilities measured at fair value on a recurring basis:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
| | **Level 1** | **Level 2** | **Level 3** | **Total** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| **Assets:** | | | | |
| Mortgage loans held for sale | $— | $629108 | $13885 | $642993 |
| Interest rate lock commitments |  |  | 2231 | 2231 |
| Forward sale contracts |  | 6107 |  | 6107 |
| Mortgage servicing rights |  |  | 1402542 | 1402542 |
| &nbsp;&nbsp;Total | $— | $635215 | $1418658 | $2053873 |
| **Liabilities:** |  |  |  |  |
| Interest rate lock commitments | $— | $— | $2504 | $2504 |
| Forward sale contracts |  | 1200 |  | 1200 |
| Forward purchase contracts |  | 400 |  | 400 |
| &nbsp;&nbsp;Total | $— | $1600 | $2504 | $4104 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| | **Level 1** | **Level 2** | **Level 3** | **Total** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| **Assets:** | | | | |
| Mortgage loans held for sale | $— | $5086943 | $20218 | $5107161 |
| Interest rate lock commitments |  |  | 29887 | 29887 |
| Forward sales contracts |  | 6969 |  | 6969 |
| Forward purchase contracts |  | 3031 |  | 3031 |
| Interest rate swap futures contracts |  | 111 |  | 111 |
| Mortgage servicing rights |  |  | 1525103 | 1525103 |
| &nbsp;&nbsp;Total | $— | $5097054 | $1575208 | $6672262 |
| **Liabilities:** |  |  |  |  |
| Interest rate lock commitments | $— | $— | $2843 | $2843 |
| Forward sales contracts |  | 8242 |  | 8242 |
| Forward purchase contracts |  | 281 |  | 281 |
| Interest rate swap futures contracts |  | 5662 |  | 5662 |
| &nbsp;&nbsp;Total | $— | $14185 | $2843 | $17028 |

---

------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The following presents a reconciliation of Level 3 assets measured at fair value on a recurring basis:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
| | **MSRs** | **IRLC-Asset** | **MLHS** | **IRLC-Liability** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| Balance at beginning of period | $1525103 | $29887 | $20218 | $2843 |
| &nbsp;&nbsp;Purchases, sales, issuances, contributions, and settlements | (349522) |  | (5621) |  |
| &nbsp;&nbsp;Change in fair value | 226961 | (27656) | 468 | (339) |
| &nbsp;&nbsp;Transfers out<sup>(a)</sup> |  |  | (1180) |  |
| Balance at end of period | $1402542 | $2231 | $13885 | $2504 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
| | **MSRs** | **IRLC-Asset** | **MLHS** | **IRLC-Liability** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | |
| Balance at beginning of period | $748457 | $257785 | $44374 | $— |
| &nbsp;&nbsp;Purchases, sales, issuances, contributions, and settlements | 856802 |  | (26353) | 2843 |
| &nbsp;&nbsp;Change in fair value | (80156) | (227898) | (633) |  |
| &nbsp;&nbsp;Transfers in<sup>(a)</sup> |  |  | 2830 |  |
| Balance at end of period | $1525103 | $29887 | $20218 | $2843 |

---

(a) Transfers in (out) represents transfers between Levels 2 and 3, and reclassifications to Real estate owned ("REO"), foreclosure or claims.

The following presents the fair value and UPB of MLHS that have contractual principal amounts and for which the Company has elected the fair value option. The fair value option was elected for MLHS as the Company believes fair value best reflects its expected future economic performance:

---

| | | | |
|:---|:---|:---|:---|
| | **Fair Value** | **Principal** <br>**Amount Due** <br>**Upon Maturity** | **Difference**<sup>(a)</sup> |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| December 31, 2022 | $642993 | $680315 | $(37322) |
| December 31, 2021 | $5107161 | $5005069 | $102092 |

---

(a) Represents the amount of (losses) gains related to changes in fair value of items accounted for using the fair value option included in Gain on loans, net within the consolidated statements of operations.

To evaluate Goodwill, the Company determined fair value of its reporting units using inputs classified as Level 3 in the fair value hierarchy, refer to *Note 6 - Goodwill*. The Company had no other significant assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2022 and 2021, respectively.

The following is a summary of the key unobservable inputs used in the valuation of the Level 3 assets:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
| **Assets:** | **Key Input** | **Range** | **Weighted Average** |
| Mortgage servicing rights | Discount rate | 9.6% - 14.0% | 11.2% |
|  | Prepayment speeds | 4.6% - 8.2% | 5.4% |
| Interest rate lock commitments | Pull-through rate | 21.0% - 100% | 77.5% |
| Mortgage loans held for sale | Investor pricing | 65.0% - 103.6% | 93.3% |

---

------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
| **Asset** | **Key Input** | **Range** | **Weighted Average** |
| Mortgage servicing rights | Discount rate | 8.6% - 12.2% | 8.7% |
|  | Prepayment speeds | 6.9% - 11.6% | 8.3% |
| Interest rate lock commitments | Pull-through rate | 49.8% - 100.0% | 86.1% |
| Mortgage loans held for sale | Investor pricing | 70.0% - 104.1% | 91.3% |

---

<u>Fair Value of Other Financial Instruments</u> 

All financial instruments were either recorded at fair value or the carrying value approximated fair value as of December 31, 2022. For financial instruments that were not recorded at fair value, such as cash and cash equivalents, restricted cash, servicing advances, warehouse and operating lines of credit, and accounts payable, their carrying values approximated fair value due to the short-term nature of such instruments.

**Note 17 - Retirement Benefit Plans** 

The Company maintains a 401(k) profit sharing plans covering substantially all employees. Employees may contribute amounts subject to certain IRS and plan limitations. The Company may make discretionary matching contributions, subject to certain limitations. Matching contribution made by the Company totaled $2.5 million and $3.7 million for the years ended December 31, 2022 and 2021, respectively.

**Note 18 - Restructuring**

Given the current market factors and industry trends, including the rapidly rising interest rates and increased competition in the industry, the Company took restructuring actions to enhance liquidity and align the Company's cost structure with the decrease in the Origination volume.

In August 2022, the Board approved the restructuring actions, which resulted in $14.2 million expense for cash severance and related benefits, retention, and termination costs in Compensation and benefits in the consolidated statements of operations for the year ended December 31, 2022.

The restructuring actions also included charges related to the write-down and write-off of office equipment totaling $2.3 million in Other expenses in the consolidated statement of operations for the year ended December 31, 2022.

The activities associated with the current restructuring actions are complete as of December 31, 2022.

The following is a summary of the Company's restructuring reserve:

---

| | | | |
|:---|:---|:---|:---|
| | **Severance and Employee-Related Costs** | **Office Equipment** | **Total** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| Balance as of January 1, 2022 | $— | $— | $— |
| Restructuring charges | 14182 | 2302 | 16484 |
| Payments | (14182) |  | (14182) |
| Non-cash impairment of office equipment |  | (2302) | (2302) |
| Balance as of December 31, 2022 | $— | $— | $— |

---

------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

**Note 19 - Equity-based Compensation**

In January, 2021, the Company's Board approved the adoption of the Company's 2021 Incentive Plan ("2021 Plan") and designated 6.9 million shares of the Company's authorized common stock available for equity-based awards thereunder. The 2021 Plan allows for the assumption and substitution of outstanding options to purchase common units of HPLP granted under HPLP 2015 Option Plan (the "2015 Option Plan"), which was in place prior to the Company's IPO. The expiration date of the 2021 Plan is the tenth (10th) anniversary of the effective date of the 2021 Plan, which is January 21, 2031. The 2021 Plan contains both time-vesting service criteria, and performance based vesting terms, which are based on the achievement of specified performance criteria outlined in the underlying award agreement.

Prior to the consummation of the merger in connection with the IPO, the 2015 Option Plan governed awards of stock options to key persons conducting business for HPLP and its direct and indirect subsidiaries, including the Company. The 2015 Option Plan allowed awards in the form of options that are exercisable into common units of HPLP. In connection with the IPO, all outstanding options under the 2015 Option Plan were canceled and "substitute options" were granted under the 2021 Plan. The exercise price and number of shares of common stock of the substitute options result in the same (subject to rounding) intrinsic value as the outstanding options granted under the 2015 Option Plan.

<u>Restricted Stock Units</u> 

Restricted stock units ("RSUs") are awards that represent the potential to receive shares of the Company's common stock at the end of the applicable vesting period, subject to the terms and conditions of the 2021 Plan and the applicable award documents. RSUs awarded under the 2021 Plan are fair valued based upon the fair market value of the Company's common stock on the grant date. Any person who holds RSUs has no ownership interest in the shares of the Company's common stock to which such RSUs relate until and unless shares of common stock are delivered to the holder. The RSUs will be credited with dividend equivalent payments, as provided in Section 13(c)(iii) of the 2021 Plan.

The following presents the summary of the Company's RSU activity:

---

| | | |
|:---|:---|:---|
| | **Year ended December 31, 2022** | **Year ended December 31, 2022** |
| | **Units** | **Weighted-Average Grant Date Fair Value** |
| Outstanding at beginning of period | 367991 | $10.18 |
| &nbsp;&nbsp;Granted | 233550 | 3.85 |
| &nbsp;&nbsp;Vested | (209093) | 10.75 |
| Outstanding at end of period | 392448 | $6.12 |

---

The RSUs granted to the Company's management team will vest in equal annual installments over a three-year period subject to the participants' continued employment with the Company. The RSUs granted to the non-management members of the Company's Board who are not affiliated with Stone Point Capital LLC vest at the next annual meeting of stockholders following the grant date. The Company recognized $1.5 million of compensation expense related to RSUs within Compensation and benefits expense on the consolidated statements of operations for both years ended December 31, 2022 and 2021.

<u>Performance Stock Units</u> 

Performance stock units ("PSUs") are fair valued on the date of grant and expensed over the service period using a straight-line method as the awards cliff vest at the end of a three-year performance period. The Company also estimates the number of shares expected to vest, which is based on management's determination of the probable outcome of the Performance Condition (as defined below), which requires considerable judgment. The Company records a cumulative adjustment in periods in which the Company's estimate of the number of shares expected to vest changes. Additionally, the Company ultimately adjusts the expense recognized to reflect the actual vested shares following the resolution of the Performance Condition. The PSUs will become earned based on the level of achievement of the Company's average return on equity over a three-year performance period (the "Performance Condition"). The number of earned PSUs can range from 0% to 150% of the number of PSUs granted, depending on continued service with the Company and the extent to which the Performance Condition has been achieved at the end of the performance period. The PSUs will be credited with dividend equivalent payments, as provided in Section 13(c)(iii) of the 2021 Plan.

The following presents the summary of the Company's PSU activity:

------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

---

| | | |
|:---|:---|:---|
| | **Year ended December 31, 2022** | **Year ended December 31, 2022** |
| | **Units** | **Weighted-Average Grant Date Fair Value** |
| Outstanding at beginning of period | 238347 | $9.44 |
| &nbsp;&nbsp;Granted | 131924 | 3.79 |
| Outstanding at end of period | 370271 | $7.43 |

---

The Company did not recognize any compensation expense related to PSUs for the years ended December 31, 2022 and 2021.

<u>Stock Option Awards</u> 

The Company recognizes compensation expense associated with the stock option grants using the straight-line method over the requisite service period. The Company recognized $3.7 million and $5.4 million of compensation expense related to stock options within Compensation and benefits expense in the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. The unrecognized compensation expense related to outstanding and unvested stock options was $42.1 million as of December 31, 2022, which is expected to vest and get recognized over a weighted-average period of 5.2 years. The number of options vested and exercisable was 2,367,280 and the weighted-average exercise price of the options exercisable was $3.77 as of December 31, 2022.

The following presents the summary of the Company's stock option activity under the 2021 Plan:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year ended December 31, 2022** | **Year ended December 31, 2022** | **Year ended December 31, 2022** | **Year ended December 31, 2022** |
| | **Number of** <br>**Shares** | **Weighted** <br>**Average** <br>**Exercise** <br>**Price** | **Weighted** <br>**Average** <br>**Contractual** <br>**Life (Years)** | **Weighted** <br>**Average** <br>**Grant Date** <br>**Fair Value** |
| Outstanding at beginning of period | 11751031 | $4.45 | 6.87 | $8.38 |
| &nbsp;&nbsp;Granted | 337043 | 1.81 | 4.09 | 9.79 |
| &nbsp;&nbsp;Exercised | (294068) | 1.86 | 1.52 | 9.77 |
| &nbsp;&nbsp;Forfeited | (661130) | 1.85 | 0.14 | 9.73 |
| &nbsp;&nbsp;Expired | (198983) | 1.79 | 1.00 | 9.76 |
| Outstanding at end of period | 10933893 | $4.64 | 4.70 | $8.27 |

---

The following presents the summary of the Company's non-vested activity under the 2021 Plan :

---

| | | |
|:---|:---|:---|
| | **Year ended December 31, 2022** | **Year ended December 31, 2022** |
| | **Number of** <br>**Shares** | **Weighted Average** <br>**Grant Date** <br>**Fair Value** |
| Non-vested at beginning of period | 9627033 | $8.19 |
| Granted | 337043 | 9.79 |
| Vested | (243282) | 9.20 |
| Exercised | (294068) | 9.77 |
| Forfeited | (661130) | 9.73 |
| Expired | (198983) | 9.76 |
| Non-vested at end of period | 8566613 | $8.12 |

---

------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The following presents assumptions used in the Black-Scholes option valuation model to determine the weighted-average fair value per stock option granted:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| Expected life (in years) | 8.3 | 8.2 |
| Risk-free interest rate | 0-3.0% | 0.6%-3.0% |
| Expected volatility | 24.9% | 24.9% |
| Dividend yield |  |  |

---

The expected life of each stock option is estimated based on its vesting and contractual terms. The risk-free interest rate reflected the yield on zero-coupon Treasury securities with a term approximating the expected life of the stock options. The expected volatility was based on an analysis of the historical volatilities of peer companies, adjusted for certain characteristics specific to the Company. The Company applied an estimated forfeiture rate of 0-10.4% both as of December 31, 2022 and 2021.

**Note 20 - Earnings Per Share**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) earnings per share ("EPS") is calculated and presented in the consolidated financial statements for both basic and diluted earnings per share. Basic EPS excludes all dilutive common stock equivalents and is calculated by dividing the net income available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted EPS, as calculated using the treasury stock method, reflects the potential dilution that would occur if the Company's dilutive outstanding stock options and stock awards were issued and exercised.

The following presents the calculation of the basic and diluted (loss) earnings per share:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands, except per share amounts)** | **(dollars in thousands, except per share amounts)** |
| **Net (loss) income** | $(163454) | $166272 |
| **Numerator:** |  |  |
| Net (loss) income attributable to common shareholders | $(163454) | $166272 |
| Net (loss) income attributable to Home Point - diluted | $(163454) | $166272 |
| **Denominator (in thousands):** |  |  |
| Weighted average shares of common stock outstanding - basic | 138638 | 139198 |
| Dilutive effect of common stock equivalents |  | 798 |
| Weighted average shares of common stock outstanding - diluted | 138638 | 139996 |
| (Loss) earnings per share of common stock outstanding - basic | $(1.18) | $1.19 |
| (Loss) earnings per share of common stock outstanding - diluted | $(1.18) | $1.19 |

---

As a result of the net loss from continuing operations for the year ended December 31, 2022, the effect of certain dilutive securities was excluded from the computation of weighted average diluted shares outstanding, as inclusion would have resulted in antidilution.

------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

**Note 21 - Shareholders' Equity and Equity Method Investment**

<u>Common Stock Repurchases</u>

On February 24, 2022, the Company's Board approved the repurchase of shares of the Company's common stock, par value $0.0000000072 per share (the "Common Stock"), in an aggregate amount not to exceed $8.0 million, from time to time through and including December 31, 2022 pursuant to one or more plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Stock Repurchase Program"). The Company repurchased 1,179,796 shares of Common Stock at an aggregate price of $3.8 million, including commissions and fees, through market purchase transactions under the Stock Repurchase Program during the year ended December 31, 2022. Shares repurchased under the program have been subsequently retired.

<u>Equity Method Investment</u>

The Company held an equity method investment in Longbridge through a 49.6% voting ownership interest, which was the only equity method investment held by the Company. The $63.7 million net investment was classified as held for sale as of December 31, 2021 and was adjusted for HPC's 2022 share of Longbridge's earnings or losses, contributions and distributions, and impairment.

The Company entered into a definitive agreement in February of 2022 to sell its investment in Longbridge. An impairment charge of $8.8 million was recognized for the held for sale balance of equity method investment in Loss from equity method investment in the consolidated statement of operations for the year ended December 31, 2022. On October 3, 2022, the Company completed the previously announced sale for a purchase price of approximately $38.9 million in cash.

**Note 22 - Income Taxes**

The following presents the components of Income tax benefit (expense):

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
| | **Federal** | **State** | **Total** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| Current | $(1551) | $(1700) | $(3251) |
| Deferred | 39386 | 5779 | 45165 |
| &nbsp;&nbsp;Total income tax benefit | $37835 | $4079 | $41914 |

---

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
| | **Federal** | **State** | **Total** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| Current | $64 | $(2311) | $(2247) |
| Deferred | (43039) | (12712) | (55751) |
| &nbsp;&nbsp;Total income tax expense | $(42975) | $(15023) | $(57998) |

---

The following presents a reconciliation of the Income tax benefit (expense) recorded on the Company's consolidated statements of operations to the expected statutory federal corporate income tax rates:

------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Loss (income) before income taxes | $(179090) | $208897 |
| Statutory federal income tax (benefit) expense (21%) | (37609) | 43868 |
| State income tax expense, net of federal tax | (6914) | 10116 |
| Impact of equity investments | (5518) | 3679 |
| Impact of tax rate change | 3199 | (494) |
| HPMAC investment write Off | 2318 |  |
| Impairment of goodwill | 1879 |  |
| Change in valuation allowance |  | 1812 |
| Other | 731 | (983) |
| &nbsp;&nbsp;Total income tax (benefit) expense | $(41914) | $57998 |
| Effective tax rate | 23.4% | 27.8% |

---

The following presents the components of the Company's net deferred tax assets (liabilities):

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Deferred tax asset |  |  |
| &nbsp;&nbsp;Federal NOL carryforward | $93151 | $101800 |
| &nbsp;&nbsp;State NOL carryforward | 23603 | 23825 |
| &nbsp;&nbsp;Rep. & Warranty | 6715 | 6120 |
| &nbsp;&nbsp;ROU lease deferred asset | 2775 | 4000 |
| &nbsp;&nbsp;Other | 6249 | 13281 |
| Total deferred tax asset | $132493 | $149026 |
| Deferred tax liability |  |  |
| &nbsp;&nbsp;MSR | (308158) | (348417) |
| &nbsp;&nbsp;Derivatives |  | (6734) |
| &nbsp;&nbsp;Investment in Longbridge |  | (11546) |
| &nbsp;&nbsp;ROU lease deferred liability | (2803) | (3900) |
| &nbsp;&nbsp;Other | (3052) | (5785) |
| Total deferred tax liability | $(314013) | $(376382) |
| &nbsp;&nbsp;Valuation Allowance | (2340) | (2396) |
| Net deferred tax liability | $(183860) | $(229752) |

---

The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income if it is determined, based on all available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company's analysis focuses on identifying significant, objective evidence that it will more likely than not be able to realize its deferred tax assets in the future. The Company considers both positive and negative evidence when evaluating the need for a valuation allowance, which is highly judgmental and requires subjective weighting of such evidence on a jurisdiction-by-jurisdiction basis.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The Company established a valuation allowance of $2.3 million and $2.4 million related to state net operating losses ("NOLs") as of December 31, 2022 and 2021, respectively. As of December 31, 2022, the Company's deferred tax asset includes gross federal and state NOL carryforwards of $443.6 million and $436.6 million, respectively. Certain of these carryforwards expire in 2035 through 2037. The NOLs generated after 2017 carryforward indefinitely and are subject to a limit of 80% of taxable income in taxable years beginning after December 31, 2020. Certain of the Company's NOLs are subject to limitation under IRC §382, limiting the Company's ability to utilize the full NOL in any given period.

Unrecognized tax benefits are recognized related to tax positions included in (i) previously filed income tax returns and (ii) financial results expected to be included in income tax returns to be filed for periods through the date of the consolidated financial statements. The Company recognizes tax benefits from uncertain income tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authority based on the technical merits of the position. An uncertain income tax position that meets the "more likely than not" recognition threshold is then measured to determine the amount of the benefit to recognize. The Company has $0.8 million and $0.7 million uncertain tax positions as of December 31, 2022 and 2021, respectively. The liability is for unrecognized tax benefits related to state income tax matters excluding interest and penalties.

The following presents a reconciliation of the beginning and ending amounts of uncertain tax positions:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Balance at beginning of period | $743 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp; Increases related to positions taken during prior years |  | 743 |
| &nbsp;&nbsp;&nbsp;&nbsp; Increases related to positions taken during the current year | 92 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Decreases related to positions settled with tax authorities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Decreases due to a lapse of applicable statute of limitations |  |  |
| Balance at end of period | $835 | $743 |

---

Total amount of unrecognized tax benefit that would affect the effective tax rate if recognized was $0.5 million and $0.4 million as of December 31, 2022 and 2021, respectively. Less than $20 thousand for interest and penalties was accrued on the liability for unrecognized tax benefits for the year ended December 31, 2022, which, in accordance with company policy, are a part of interest and penalty expense.

The Company's tax years that generally remain subject to examination by the IRS and various state and local jurisdictions are 2019-2021.

On August 16, 2022, Inflation Reduction Act ("IRA") of 2022 was signed into law, which, among other things, imposed a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. The Company is still analyzing the impact of IRA, but do not expect it to be material to the financial statements .

**Note 23 – Segments**

Management has organized the Company into two reportable segments based primarily on its services as follows: (1) Origination and (2) Servicing. Each reportable segment has discrete financial information evaluated regularly by the chief operating decision maker ("CODM") in monitoring performance, allocating capital, and making strategic and operational decisions that align with the Company and its internal operations.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

<u>Origination</u>

In the Origination segment, the Company originates residential real estate mortgage loans in the U.S. through the consumer direct third party originations, and prior to its sale, which was completed on June 1, 2022, the correspondent channel. The Company's origination channels offer a variety of loan programs that support the financial needs of the borrowers. In each of the channels, the Company's primary source of revenue is the difference between the cost of originating or purchasing the loan and the price at which the loan is sold to investors as well as the fair value of originated MSRs and hedging gains and losses. Loan origination fees and interest income earned on loans held for sale or securitization are also included in the revenue for this segment.

<u>Servicing</u>

In the Servicing segment, the Company generates revenue through contractual fees earned by performing daily administrative and management activities for mortgage loans. These activities include collecting loan payments, remitting payments to investors, sending monthly statements, managing escrow accounts, servicing delinquent loan work-outs, and managing and disposing of foreclosed properties. In February 2022, the Company entered into an agreement with ServiceMac, LLC ("ServiceMac"), a wholly owned subsidiary of First American Financial Corporation, pursuant to which ServiceMac subservices all mortgage loans underlying the Company's MSRs. These services include maintaining borrower contact, facilitating borrower advances, generating borrower statements, collecting and processing payments of interest and principal, and facilitating loss-mitigation strategies in an attempt to keep defaulted borrowers in their homes. ServiceMac began subservicing loans for the Company in the second quarter of 2022.

<u>Other Information About the Company's Segments</u>

The Company's CODM evaluates performance, makes operating decisions, and allocates resources based on the Company's contribution margin. Contribution margin is the Company's measure of profitability for its two reportable segments. Contribution margin is defined as revenue from Gain on loans, net, Loan fee income, Loan servicing fees, Change in fair value of MSRs, Interest income, and Other income (which includes Income from equity method investment) adjusted for the change in fair value attributable to valuation assumptions of MSRs and less directly attributable expenses. Directly attributable expenses include salaries, commissions and associate benefits, general and administrative expenses, and other expenses, such as servicing and origination costs. Direct operating expenses driven by the activities of the segments are included in the respective segments.

The Company does not allocate assets to its reportable segments as they are not included in the review performed by the CODM for purposes of assessing segment performance and allocating resources. The balance sheet is managed on a consolidated basis and is not used in the context of segment reporting. Additionally, the Company does not enter into transactions between its reportable segments.

The Company also reports an "All Other" category that includes unallocated corporate expenses, such as IT, finance, and human resources. These operations are neither significant individually or in aggregate and therefore do not constitute a reportable segment.

The following presents the key operating data for the Company's business segments:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
| | **Origination** | **Servicing** | **Segments** <br>**Total** | **All Other** | **Total** | **Reconciliation** <br>**Item**<sup>(a)</sup> | **Total** <br>**Consolidated** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| **Revenue:** | | | | | | | |
| Gain on loans, net | $47105 | $— | $47105 | $— | $47105 |  | $47105 |
| Loan fee income | 46029 |  | 46029 |  | 46029 |  | 46029 |
| Loan servicing fees |  | 265275 | 265275 |  | 265275 |  | 265275 |
| Change in fair value of mortgage servicing rights |  | (97689) | (97689) |  | (97689) |  | (97689) |
| Interest income (expense), net | 21375 | 12172 | 33547 | (54411) | (20864) |  | (20864) |
| Other income (expense) | 111 |  | 111 | (10598) | (10487) | 26278 | 15791 |
| &nbsp;&nbsp;Total | $114620 | $179758 | $294378 | $(65009) | $229369 | $26278 | $255647 |
| Contribution (loss) margin | $(106884) | $121765 | $14881 | $(220249) | $(205368) |  |  |

---

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
| | **Origination** | **Servicing** | **Segments** <br>**Total** | **All Other** | **Total** | **Reconciliation** <br>**Item**<sup>(a)</sup> | **Total** <br>**Consolidated** |
| | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| **Revenue:** | | | | | | | |
| Gain on loans, net | $585762 | $— | $585762 | $— | $585762 | $— | $585762 |
| Loan fee income | 150921 |  | 150921 |  | 150921 |  | 150921 |
| Loan servicing fees | 8 | 331374 | 331382 |  | 331382 |  | 331382 |
| Change in fair value of mortgage servicing rights |  | (76831) | (76831) |  | (76831) |  | (76831) |
| Interest income (expense), net | 13897 | 1931 | 15828 | (48741) | (32913) |  | (32913) |
| Other income |  | 227 | 227 | 18341 | 18568 | (15373) | 3195 |
| &nbsp;&nbsp;Total | $750588 | $256701 | $1007289 | $(30400) | $976889 | $(15373) | $961516 |
| Contribution margin | $237055 | $185824 | $422879 | $(198609) | $224270 |  |  |

---

(a) The Company includes the results from its equity method investment in the All Other. Therefore, the loss (income) is removed to reconcile to Total revenue, net on the consolidated statements of operations.

The following presents a reconciliation of contribution (loss) margin to consolidated U.S. GAAP (Loss) income before income tax:

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| (Loss) income before income tax | $(179090) | $208897 |
| (Loss) income from equity method investment | (26278) | 15373 |
| Contribution (loss) margin | $(205368) | $224270 |

---

**Note 24 – Concentrations of Risk** 

<u>Concentration of Credit Risk</u>

Financial instruments, which potentially subject the Company to credit risk, consist of cash and cash equivalents, derivatives, and mortgage loans held for sale.

Credit risk is reduced by the Company's underwriting standards, monitoring pledged collateral, and other in-house monitoring procedures performed by management. The Company's credit exposure for amounts due from investors is minimized through its policy to sell mortgage loans only to highly reputable and financially sound financial institutions.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

<u>Concentrations</u>

The Company originated or purchased loans in 50 states and the District of Columbia, with significant activity (approximately 5% or greater of total originations) in the following states:

---

| | |
|:---|:---|
| | **Percentage of** <br>**Origination** |
| **2022** |  |
| **State:** |  |
| California | 26.5% |
| Texas | 7.5% |
| Florida | 7.1% |
| **2021** |  |
| **State:** |  |
| California | 31.8% |
| Florida | 7.4% |
| New Jersey | 5.4% |

---

The total unpaid principal balance of the servicing portfolio, including MLHS, was approximately $89.3 billion and $133.9 billion as of December 31, 2022 and 2021, respectively. The unpaid principal balance of loans originated by the Company and sold with servicing retained was $26.8 billion and $92.2 billion for the year-end December 31, 2022 and 2021, respectively.

ServiceMac subservices all mortgage loans underlying the Company's MSRs in 50 states and the District of Columbia, with significant activity (approximately 5% or greater of total servicing) in the following states:

---

| | |
|:---|:---|
| | **Percentage of** <br>**Servicing Unpaid** <br>**Principal Balance** |
| **2022** |  |
| State: |  |
| California | 20.4% |
| Texas | 8.3% |
| Florida | 6.3% |
| **2021** |  |
| **State:** |  |
| California | 29.1% |
| Florida | 5.6% |
| Texas | 7.4% |

---

<u>Significant Customers</u>

Residential mortgage loans are sold through one of the following methods: (i) sales to or pursuant to programs sponsored by Fannie Mae, Freddie Mac and Ginnie Mae, or (ii) sales to private investors. 97.8% and 97.0% of mortgage loans sales were to the Agencies for the years ended December 31, 2022 and 2021, respectively.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

The following presents newly originated loans that the Company sold to investors or transferred into GNMA securitization pools:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2022** | **2021** | **2021** |
| | **(dollars in thousands)** | **Percentage** | **(dollars in thousands)** | **Percentage** |
| GNMA | $7095893 | 22.3% | $13089283 | 13.9% |
| FNMA | 11632784 | 36.5% | 42721394 | 45.3% |
| FHLMC | 11858369 | 37.2% | 35824414 | 38.0% |
| Other | 1300224 | 4.1% | 2667113 | 2.8% |
|  | $31887270 | 100% | $94302204 | 100% |

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**HOME POINT CAPITAL INC. & SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

**Note 25 – Related Parties** 

The Company entered into transactions and agreements to purchase various services and products from certain affiliates of our sponsor, Stone Point Capital LLC. The services include valuation of MSRs, insurance brokerage services, loan review, and tax payment services for certain loan originations.

The following presents principal categories of the related party transactions recorded in the consolidated statements of operations.

---

| | | |
|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** |
| | **2022** | **2021** |
| | **(dollars in thousands)** | **(dollars in thousands)** |
| Loan expense | $9134 | $14590 |
| Loan servicing expense | 1911 | 1014 |
| General and administrative | 9450 | 5268 |
| Other expenses<sup>(a)</sup> | 5793 | 9630 |
| Other | 208 | 10 |
| &nbsp;&nbsp;Total | $26496 | $30512 |

---

(a) Includes amounts paid to related party insurance brokers which are passthrough to third party carriers.

**Note 26 – Sale of The Correspondent Channel and Home Point Asset Management LLC**

On June 1, 2022 (the "Closing Date"), HPF completed the previously announced sale of certain assets of HPF's delegated Correspondent channel to Planet Home Lending, LLC ("Planet"). The sale of the correspondent channel reduces the Company's expenses and enables reallocation of resources to our Wholesale channel.

The purchase price for such assets was $2.5 million in cash, plus an earnout payment based on certain of Planet's correspondent origination volume during the two-year period commencing on the Closing Date. The Company records the earnout payment when the consideration is determined to be realizable. The sale resulted in a $0.4 million loss in Other expenses in the consolidated statements of operations. The loss was more than offset by earnout income of $0.9 million for the year ended December 31, 2022.

On December 2, 2022, HPC completed the previously announced sale of its equity interests in HPAM and its wholly owned subsidiary HPMAC. Prior to the sale, HPAM was a wholly owned subsidiary of the Company and managed certain servicing assets. HPMAC serviced residential real estate mortgage loans.

The purchase price for this transaction was $3.2 million in cash. The sale resulted in a $2.8 million gain in Other income in the consolidated statements of operations.

**Note 27 – Subsequent Events** 

On January 31, 2023, HPF terminated the Mortgage Loan Participation Sale Agreement (the "Gestation Agreement"), dated as of November, 2021, between HPF, as seller and JPMorgan Chase Bank, National Association, as purchaser ("Purchaser"). The Gestation Agreement permitted the Purchaser to purchase from HPF from time to time during the term of the Gestation Agreement participation certificates evidencing a 100% undivided beneficial ownership interest in designated pools of fully amortizing first lien residential mortgage loans that were intended to ultimately be included in residential MBS (the "Agency MBS") issued or guaranteed, as applicable, by Fannie Mae, Freddie Mac, and Ginnie Mae. The aggregate purchase price of participation certificates owned by Purchaser at any given time for which Purchaser had not been paid the purchase price for the related Agency MBS by the applicable takeout investor as specified in the applicable takeout commitment could not exceed $400 million. The parties mutually agreed to terminate the JPM Gestation Agreement prior to its scheduled maturity date of September 29, 2023. HPF did not incur any early termination penalties.

On March 3, 2023, The Company extended the maturity date of its $200 million warehouse facility with Bank of Montreal from March 6, 2023 to April 20, 2023.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**Item 9. Changes in and Disagreements with Accountants**

None.

**Item 9A. Controls and Procedures**

**Management's Evaluation of Disclosure Controls and Procedures** 

Our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the appropriate time periods, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. We, under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective as of December 31, 2022.

**Limitations on Effectiveness of Controls and Procedures**

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

**Management's Report on Internal Control over Financial Reporting** 

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed under the supervision of the Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles in the United States. Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022 using the criteria set forth in the Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of that evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2022.

This Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. As a "smaller reporting company," management's report is not subject to attestation by our registered public accounting firm.

**Changes in Internal Control over Financial Reporting**

There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Item 9B. Other Information**

None.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**

Not applicable.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**Part III.**

**Item 10. Directors, Executive Officers and Corporate Governance** 

The information required by Item 10 will appear in the Company's Proxy Statement for its 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

**Item 11. Executive Compensation** 

The information required by Item 11 will appear in the Company's Proxy Statement for its 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

The information required by Item 12 will appear in the Company's Proxy Statement for its 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

**Item 13. Certain Relationships and Related Party Transactions**

The information required by Item 13 will appear in the Company's Proxy Statement for its 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

**Item 14. Principal Accountant Fees and Services**

The information required by Item 14 will appear in the Company's Proxy Statement for its 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**Part IV**

**Item 15. Exhibit and Financial Statement Schedules.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The following documents are filed as a part of this Report:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Financial Statements — See Part II, Item 8. "<u>[Financial Statements and Supplementary Data](#i8bd68193849d495d89bf8c04be5f437f_79)</u>" of this Report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Financial Statement Schedules — None.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Exhibits — The following is a list of exhibits filed as part of this Report.

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| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 3.1 | <u>[Amended and Restated Certificate of Incorporation of Home Point Capital Inc. (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K on February 3, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121003271/nt10016075x18_ex3-1.htm)</u> |
| 3.2 | <u>[Amended and Restated Bylaws of Home Point Capital Inc. (filed as Exhibit 3.2 to the Company's Current Report on Form 8-K on February 3, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121003271/nt10016075x18_ex3-2.htm)</u> |
| 4.1 | <u>[Registration Rights Agreement, dated as of February 2, 2021, by and among the Company and Trident VI, L.P., Trident VI Parallel Fund, L.P., Trident VI DE Parallel Fund, L.P. and Trident VI Professionals Fund, L.P. (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K on February 3, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121003271/nt10016075x18_ex4-1.htm)</u> |
| 4.2 | <u>[Indenture, dated as of January 19, 2021, by and among Home Point Capital Inc., the guarantors party thereto and U.S. Bank National Association, as trustee, governing the 5.000% Senior Notes due 2026 (including Form of Senior Note) (filed as Exhibit 4.2 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 22, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121001816/nt10016075x9_ex4-2.htm)</u> |
| 4.3 | <u>[Description of Securities (filed as Exhibit 4.3 to the Company's Annual Report on Form 10-K on March 12, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019721000005/exhibit43-descriptionofsec.htm)</u> |
| 10.1+ | <u>[Master Participation Agreement, dated as of May 31, 2017, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.1 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6_ex10-1.htm)</u> |
| 10.1.1+ | <u>[Confirmation and Amendment of Participation Agreement, dated as of May 29, 2020, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.1.1 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-1_1.htm)</u> |
| 10.1.2 | <u>[Confirmation and Amendment of Participation Agreement, dated as of March 1, 2021, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.14 to the Company's Quarterly Report on Form 10-Q on May 13, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019721000040/exhibit1014-confirmationan.htm)</u> |
| 10.1.3 | <u>[Confirmation and Amendment of Participation Agreement, dated as of March 18, 2021, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.16 to the Company's Quarterly Report on Form 10-Q on May 13, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019721000040/exhibit1016-confirmationan.htm)</u> |
| 10.1.4+ | <u>[Confirmation and Amendment of Participation Agreement, dated as of May 27, 2021, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K on June 2, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001830197/000183019721000045/exhibit101-confirmationand.htm)</u> |
| 10.1.5 | <u>[Confirmation and Amendment of Participation Agreement, dated as of July 21, 2021, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q on November 5, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019721000075/exhibit102-confirmationand.htm)</u> |
| 10.1.6 | <u>[Confirmation and Amendment of Participation Agreement, dated as of September 13, 2021, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q on November 5, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019721000075/exhibit104-confirmationand.htm)</u> |
| 10.1.7 | <u>[Confirmation and Amendment of Master Participation Agreement, dated as of October 12, 2021, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.1.7 to the Company's Annual Report on Form 10-K on March 17, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000038/exhibit1017-confirmationan.htm)</u> |
| 10.1.8 | <u>[Confirmation and Amendment of Master Participation Agreement, dated as of October 26, 2021, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.1.8 to the Company's Annual Report on Form 10-K on March 17, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000038/exhibit1018-confirmationan.htm)</u> |
| 10.1.9 | <u>[Confirmation and Amendment of Participation Agreement, dated as of February 15, 2022, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.1.9 to the Company's Annual Report on Form 10-K on March 17, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000038/exhibit1019-confirmationan.htm)</u> |

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

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| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 10.1.10++ | <u>[Confirmation and Amendment of Participation Agreement, dated as of March 8, 2022, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant (filed as Exhibit 10.4.1 to the Company's Quarterly Report on Form 10-Q on May 12, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000055/exhibit1041-confirmationan.htm)</u> |
| 10.1.11+ | <u>[Confirmation and Amendment of Participation Agreement, dated as of August 15, 2022, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K on August 17, 2022, and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036122030087/brhc10040940_ex10-1.htm)</u> |
| 10.1.12+ | <u>[Confirmation and Amendment of Master Participation Agreement dated September 30, 2022, by and between Home Point Financial Corporation as seller, and Merchants Bank of Indiana as participant (filed as Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q on November 14, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000102/exhibit107merchantsbankofi.htm)</u> |
| 10.2+ | <u>[Mortgage Warehouse Agreement, dated as of September 1, 2021, by and between Home Point Financial Corporation, as seller, and Texas Capital Bank, National Association (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K on September 7, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001830197/000183019721000055/exhibit101-tcbrenewal.htm)</u> |
| 10.2.1+ | <u>[Change in Terms Agreement, dated as of March 31, 2022, by and between Home Point Financial Corporation, as Seller, and Texas Capital Bank, formerly known as Texas Capital Bank, National Association (filed as Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q on May 12, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000055/exhibit108-changeintermsag.htm)</u> |
| 10.2.2+ | <u>[Change in Terms Agreement, dated as of May 11, 2022, by and between Home Point Financial Corporation, as Seller, and Texas Capital Bank (filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q on August 11, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000075/exhibit103-changeintermsag.htm)</u> |
| 10.2.3+ | <u>[Change in Terms Agreement, dated as of June 28, 2022, by and between Home Point Financial Corporation, as Seller, and Texas Capital Bank (filed as Exhibit 10.3.1 to the Company's Quarterly Report on Form 10-Q on August 11, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000075/exhibit1031-changeintermsa.htm)</u> |
| 10.2.4+ | <u>[Change of Terms Agreement, dated as of August 23, 2022, by and between Home Point Financial Corporation, as seller, and Texas Capital Bank (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K on August 26, 2022, and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000078/a20220826ex101tcbchangeint.htm)</u> |
| 10.2.5+ | <u>[Change of Terms Agreement, dated as of September 23, 2022, by and between Home Point Financial Corporation, as seller, and Texas Capital Bank, as buyer (filed as Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q on November 14, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000102/exhibit105texascapitalbank.htm)</u> |
| 10.3++ | <u>[Subservicing Agreement, dated as of February 7, 2022, by and between Home Point Financial Corporation, as Owner/Servicer, and ServiceMac, LLC, as Subservicer (filed as Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q on May 12, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000055/exhibit109-subservicingagr.htm)</u> |
| 10.4\*+† | <u>[Waiver and Separation Agreement and General Release of All Claims dated January 18, 2023, by and between Home Point Capital Inc., Home Point Financial Corporation and Phillip M. Miller.](exhibit104-millerseparatio.htm)</u> |
| 10.5+ | <u>[Second Amended and Restated Master Repurchase Agreement dated as of September 16, 2022, by and among Home Point Financial Corporation, as seller and TIAA, FSB, a federal savings association, as buyer (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K on September 22, 2022, and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036122034406/brhc10042174_ex10-1.htm)</u> |
| 10.6+ | <u>[Master Repurchase Agreement, dated as of October 28, 2015, by and between UBS Bank USA, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6_ex10-6.htm)</u> |
| 10.6.1+ | <u>[Amendment No. 1 to Master Repurchase Agreement, dated as of May 4, 2016, by and between UBS Bank USA, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.1 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_1.htm)</u> |
| 10.6.2+ | <u>[Assignment and Amendment No. 2 to Master Repurchase Agreement and Assignment and Amendment No. 8 to Pricing Letter, dated September 15, 2016, by and among Home Point Financial Corporation, as seller, UBS Bank USA, as assignor, and UBS AG, as assignee (filed as Exhibit 10.6.2 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_2.htm)</u> |
| 10.6.3+ | <u>[Amendment No. 3 to Master Repurchase Agreement, dated as of September 28, 2016, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.3 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_3.htm)</u> |
| 10.6.4+ | <u>[Amendment No. 4 to Master Repurchase Agreement, dated as of January 5, 2017, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.4 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_4.htm)</u> |
| 10.6.5 | <u>[Amendment No. 5 to Master Repurchase Agreement, dated as of October 6, 2017, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.5 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_5.htm)</u> |
| 10.6.6 | <u>[Amendment No. 6 to Master Repurchase Agreement, dated as of November 9, 2017, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.6 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_6.htm)</u> |

---

------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

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| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 10.6.7+ | <u>[Amendment No. 7 to Master Repurchase Agreement, dated as of May 7, 2018, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.7 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_7.htm)</u> |
| 10.6.8+ | <u>[Amendment No. 8 to Master Repurchase Agreement, dated as of July 16, 2018, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.8 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_8.htm)</u> |
| 10.6.9+ | <u>[Amendment No. 9 to Master Repurchase Agreement, dated as of October 19, 2018, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.9 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_9.htm)</u> |
| 10.6.10 | <u>[Amendment No. 10 to Master Repurchase Agreement, dated as of February 25, 2019, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.10 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_10.htm)</u> |
| 10.6.11+ | <u>[Amendment No. 11 to Master Repurchase Agreement, dated as of September 20, 2019, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.11 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_11.htm)</u> |
| 10.6.12+ | <u>[Amendment No. 12 to Master Repurchase Agreement, dated as of December 12, 2019, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.12 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_12.htm)</u> |
| 10.6.13+ | <u>[Amendment No. 13 to Master Repurchase Agreement, dated as of July 6, 2020, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.13 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_13.htm)</u> |
| 10.6.14+ | <u>[Amendment No. 14 to Master Repurchase Agreement, dated as of September 18, 2020, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.14 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_14.htm)</u> |
| 10.6.15+ | <u>[Amendment No. 15 to Master Repurchase Agreement, dated as of October 6, 2020, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.15 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_15.htm)</u> |
| 10.6.16 | <u>[Amendment No. 16 to Master Repurchase Agreement, dated as of December 22, 2020, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.16 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6ex10-6_16.htm)</u> |
| 10.6.17 | <u>[Amendment No. 17 to Master Repurchase Agreement, dated as of September 17, 2021, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K on September 21, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001830197/000183019721000067/exhibit101-ubsrenewal.htm)</u> |
| 10.6.18 | <u>[Amendment No. 18 to Master Repurchase Agreement, dated as of February 10, 2022, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.6.18 to the Company's Annual Report on Form 10-K on March 17, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000038/exhibit10618-ubsamdno18.htm)</u> |
| 10.6.19+ | <u>[Amendment No. 19 to Master Repurchase Agreement, dated as of May 1, 2022, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.3.1 to the Company's Quarterly Report on Form 10-Q on May 12, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000055/exhibit1031-ubsamdno19.htm)</u> |
| 10.6.20+ | <u>[Amendment No. 20 to Master Repurchase Agreement, dated as of September 16, 2022, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K on September 20, 2022, and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000086/ubs-homepointamendmentno20.htm)</u> |
| 10.7+ | <u>[Master Repurchase Agreement and Securities Contract, dated as of November 23, 2015, by and between Wells Fargo Bank, N.A., as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.7 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6_ex10-7.htm)</u> |
| 10.7.1 | <u>[Rate Amendment to Master Repurchase Agreement, dated as of May 19, 2022, by and between Wells Fargo Bank, N.A., as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q on August 11, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000075/exhibit105-wellsfargoamend.htm)</u> |
| 10.8+ | <u>[Master Repurchase Agreement, dated as of October 1, 2020, by and between Amherst Pierpont Securities LLC, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.8 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6_ex10-8.htm)</u> |
| 10.9\*+† | <u>[Waiver and Separation Agreement and General Release of All Claims dated February 24, 2023, by and between Home Point Capital Inc., Home Point Financial Corporation and Mark E. Elbaum.](exhibit109-elbaumseparatio.htm)</u> |

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------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

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| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 10.10+ | <u>[Second Amended and Restated Credit Agreement, dated as of May 4, 2021, by and among Home Point Financial Corporation, as borrower, Home Point Capital Inc., as guarantor, Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q on August 11, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019721000053/exhibit101-secondamendedan.htm)</u> |
| 10.10.1+ | <u>[First Amendment to Second Amended and Restated Credit Agreement, dated as of December 22, 2021, by and among Home Point Financial Corporation, as borrower, Home Point Capital Inc., as guarantor, Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto (filed as Exhibit 10.10.1 to the Company's Annual Report on Form 10-K on March 17, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000038/exhibit10101-amd1togsmsrli.htm)</u> |
| 10.10.2+ | <u>[Second Amendment to Second Amended and Restated Credit Agreement, dated as of December 31, 2021, by and among Home Point Financial Corporation, as borrower, Home Point Capital Inc., as guarantor, Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto (filed as Exhibit 10.10.2 to the Company's Annual Report on Form 10-K on March 17, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000038/exhibit10102-amd2togsmsrli.htm)</u> |
| 10.10.3+ | <u>[Third Amendment to Second Amended and Restated Credit Agreement, dated as of April 29, 2022, by and among Home Point Financial Corporation, as borrower, Home Point Capital Inc., as guarantor, Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q on August 11, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000075/exhibit101goldmansachsthir.htm)</u> |
| 10.11 | <u>[Stockholders' Agreement, dated as of February 2, 2021, by and among the Company and Trident VI, L.P., Trident VI Parallel Fund, L.P., Trident VI DE Parallel Fund, L.P. and Trident VI Professionals Fund, L.P. (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K on February 3, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121003271/nt10016075x18_ex10-1.htm)</u> |
| 10.12† | <u>[Employment Agreement, dated March 31, 2015, by and between Home Point Capital Inc. and William A. Newman (filed as Exhibit 10.12 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6_ex10-12.htm)</u> |
| 10.13† | <u>[Home Point Capital LP 2015 Option Plan, dated as of March 31, 2015 (filed as Exhibit 10.13 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6_ex10-13.htm)</u> |
| 10.14† | <u>[Amendment No. 1 to Home Point Capital LP 2015 Option Plan, dated January 31, 2020 (filed as Exhibit 10.14 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 8, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121000649/nt10016075x6_ex10-14.htm)</u> |
| 10.15† | <u>[Home Point Capital Inc. 2021 Incentive Plan (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K on February 3, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001830197/000114036121003271/nt10016075x18_ex10-2.htm)</u> |
| 10.16† | <u>[Form of Substitute Option Agreement under the 2021 Incentive Plan (filed as Exhibit 10.16 to the Company's Annual Report on Form 10-K on March 17, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000038/exhibit1016-hmptformofsubs.htm)</u> |
| 10.17† | <u>[Form of 2021 Employee Stock Purchase Plan (filed as Exhibit 10.3 to the Company's Current Report on Form 8-K on February 3, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121003271/nt10016075x18_ex10-3.htm)</u> |
| 10.18+ | <u>[Master Repurchase Agreement and Securities Contract, dated as of January 8, 2021, by and between Bank of Montreal, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.18 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 22, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121001816/nt10016075x9_ex10-18.htm)</u> |
| 10.18.1+ | <u>[Amendment No. 1 to the Master Repurchase Agreement and Securities Contract, dated as of March 1, 2022, by and between Bank of Montreal, as buyer, and Home Point Financial Corporation, as seller (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K on March 4, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001830197/000183019722000035/exhibit102-bmorenewal.htm)</u> |
| 10.18.2\*+ | <u>[Amendment No. 2 to the Master Repurchase Agreement and Securities Contract, dated as of November 17, 2022, by and between Bank of Montreal, as buyer, and Home Point Financial Corporation, as seller.](exhibit10182-bmoxhomepoint.htm)</u> |
| 10.19+† | <u>[Consulting Agreement, dated January 9, 2021, by and between Home Point Financial Corporation and Andrew Bon Salle (filed as Exhibit 10.19 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 22, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121001816/nt10016075x9_ex10-19.htm)</u> |
| 10.20+† | <u>[Amendment No. 2 to Home Point Capital LP 2015 Option Plan, dated January 6, 2021 (filed as Exhibit 10.20 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 22, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121001816/nt10016075x9_ex10-20.htm)</u> |
| 10.21† | <u>[Form of Non-Employee Director RSU Agreement under the 2021 Incentive Plan (filed as Exhibit 10.21 to the Company's Registration Statement on Form S-1 (Registration No. 333-251963) on January 22, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000114036121001816/nt10016075x9_ex10-21.htm)</u> |
| 10.22† | <u>[Form of Director and Officer Indemnification Agreement (filed as Exhibit 10.22 to the Company's Annual Report on Form 10-K on March 12, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019721000005/exhibit1022-indemnificatio.htm)</u> |
| 10.23+ | <u>[Amended and Restated Master Repurchase Agreement, dated as of June 30, 2021, by and among Goldman Sachs Bank USA, as buyer, HPFC Sub 1 LLC, as seller, and Home Point Financial Corporation, as guarantor (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K on July 2, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001830197/000183019721000050/exhibit102-gsarmasterrepur.htm)</u> |

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**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

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| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 10.23.1+ | <u>[Amendment No. 1 to the Amended and Restated Master Repurchase Agreement, dated as of July 22, 2021, by and among Goldman Sachs Bank USA, as buyer, HPFC Sub 1 LLC, as seller, and Home Point Financial Corporation, as guarantor (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q on November 5, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019721000075/exhibit101-firstgsmraamend.htm)</u> |
| 10.23.2 | <u>[Letter Agreement Regarding Benchmark Rate Replacement with respect to the Amendment and Restated Master Repurchase Agreement, dated as of January 3, 2022, by and among by and among Goldman Sachs Bank USA, as buyer, HPFC Sub 1 LLC, as seller, and Home Point Financial Corporation, as guarantor (filed as Exhibit 10.23.2 to the Company's Annual Report on Form 10-K on March 17, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000038/exhibit10232-gssoframd.htm)</u> |
| 10.23.3+ | <u>[Amendment No. 2 to the Amended and Restated Master Repurchase Agreement, dated as of February 4, 2022, by and among Goldman Sachs Bank USA, as buyer, HPFC Sub 1 LLC, as seller, and Home Point Financial Corporation, as guarantor (filed as Exhibit 10.23.3 to the Company's Annual Report on Form 10-K on March 17, 2022 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1830197/000183019722000038/exhibit10233-secondgsmraam.htm)</u> |
| 10.24 | <u>[Amended and Restated Guaranty and Security Agreement, dated as of June 30, 2021, by Home Point Financial Corporation, as guarantor, in favor of Goldman Sachs Bank USA, as buyer (filed as Exhibit 10.3 to the Company's Current Report on Form 8-K on July 2, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001830197/000183019721000050/exhibit103-arguarantyandse.htm)</u> |
| 10.25† | <u>[Form of Restricted Stock Unit Award Notice and Agreement (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K on May 7, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001830197/000183019721000035/exhibit102-formrsuagreement.htm)</u> |
| 10.26† | <u>[Form of Performance Stock Unit Award Notice and Agreement (filed as Exhibit 10.3 to the Company's Current Report on Form 8-K on May 7, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001830197/000183019721000035/exhibit103-formofpsuagreem.htm)</u> |
| 21.1\* | <u>[Subsidiaries of Home Point Capital Inc.](exhibit211-subsidiariesoft.htm)</u> |
| 23.1\* | <u>[Consent of BDO USA, LLP.](exhibit231consentofbdousal.htm)</u>  |
| 31.1\* | <u>[Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](exhibit311-ceosection302ce.htm)</u> |
| 31.2\* | <u>[Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](exhibit312-cfosection302ce.htm)</u> |
| 32.1\* | <u>[Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](exhibit321-ceoandcfosectio.htm)</u> |
| 101.INS\* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

\*Filed herewith.

†Compensatory arrangements for director(s) and/or executive officer(s).

+&nbsp;&nbsp;&nbsp;&nbsp; Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.

The agreements and other documents filed as exhibits to this Report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

**Item 16. Form 10-K Summary**

None.

------

**<u>[**TABLE OF CONTENTS**](#i8bd68193849d495d89bf8c04be5f437f_7)</u>**

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | HOME POINT CAPITAL INC. | HOME POINT CAPITAL INC. |
| Dated: March 9, 2023 | By: | /s/ William A. Newman |
|  | Name: | William A. Newman |
|  | Title: | President and Chief Executive Officer |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ William A. Newman | President, Chief Executive Officer and Director | March 9, 2023 |
| William A. Newman | (Principal Executive Officer) |  |
| /s/ Mark E. Elbaum | Chief Financial Officer | March 9, 2023 |
| Mark E. Elbaum | (Principal Financial Officer and Principal Accounting Officer) |  |
| /s/ Andrew J. Bon Salle | Chairperson of the Board of Directors | March 9, 2023 |
| Andrew J. Bon Salle |  |  |
| /s/ Laurie S. Goodman | Director | March 9, 2023 |
| Laurie S. Goodman |  |  |
| /s/ Agha S. Khan | Director | March 9, 2023 |
| Agha S. Khan |  |  |
| /s/ Stephen A. Levey | Director | March 9, 2023 |
| Stephen A. Levey |  |  |
| /s/ Timothy R. Morse | Director | March 9, 2023 |
| Timothy R. Morse |  |  |
| /s/ Eric L. Rosenzweig | Director | March 9, 2023 |
| Eric L. Rosenzweig |  |  |
| /s/ Joanna E. Zabriskie | Director | March 9, 2023 |
| Joanna E. Zabriskie |  |  |

---

## Exhibit 10.4

Exhibit 10.4

**CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [\*\*\*] INDICATES THAT INFORMATION HAS BEEN REDACTED.** 

**AMENDED AND RESTATED WAIVER AND SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS**

THIS AMENDED AND RESTATED WAIVER AND SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS ("Agreement") is entered into on **January 18**, **2023** by and between **Phillip M. Miller** ("Employee"), Home Point Financial Corporation ("Home Point Financial" or "Employer"), and Home Point Capital Inc. ("Home Point Capital"). Such parties are herein after referred to collectively as the "Parties".

The Employee, Employer and Home Point Capital entered into a Waiver and Separation Agreement and General Release of All Claims dated December 15, 2022 (the "Original Separation Agreement"). The parties desire to amend and restate the Original Separation Agreement in its entirety, as set forth herein.

IN CONSIDERATION of the mutual promises contained herein and other good and valuable consideration described below, the parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Separation/Transition from Employment</u>**: Employee has agreed to voluntarily separate from his employment with Employer, including its predecessors, direct and indirect parents and subsidiaries, affiliates, and related entities, and permanently end his employment relationship effective **February 15, 2023** (the "Separation Date"). Employee represents and freely acknowledges that he has not been coerced, forced, or otherwise required to resign from employment, and instead has done so of his own free will and deed. Employee further agrees that the period of his employment from January 1, 2023, to his Separation Date will be a "Transition Period" during which he will continue to perform work on the terms and conditions set forth below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Consideration</u>**: In exchange for the agreements and obligations of Employee set forth in this Agreement, Employer shall provide Employee with the following consideration, the sufficiency of which is hereby acknowledged:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)During the Transition Period, Employee will no longer hold the title of Chief Operating Officer. During the Transition Period, Employee will continue to be paid an annual base salary of **[\*\*\*]**, payable bi-weekly, less applicable taxes and deductions. Employee shall continue to be entitled to receive his currently elected benefits coverage through the Separation Date. Work related expenses incurred prior to the Separation Date necessary to perform duties requested by Employer shall be reimbursed to Employee consistent with Employer's existing Travel and Expense Policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Employee shall remain eligible to receive a cash bonus for the 2022 calendar year pursuant to Home Point Financial's annual corporate bonus plan. The exact bonus amount will be determined based on Home Point Financial's 2022 achieved results and Home Point Financial's bonus pool funding in accordance with the plan. Employee's Bonus will be paid at the same time other bonuses for the 2022 calendar year are paid company-wide, which will occur no later than March 15, 2023. Employee agrees that he is not otherwise entitled to this payment under any contract, agreement, practice, bonus plan, or custom of Home Point Financial, and understands that it is paid by Home Point Financial solely in light of business considerations and the desire to amicably resolve and release all claims.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)The terms of Employee's Substitute Option Agreement (the "Substitute Option Agreement") entered into by the Employee pursuant to the Home Point Capital Inc. 2021 Incentive Plan (the "Plan"), shall be modified, such that as of the Separation Date, Employee shall hold **[\*\*\*]**unvested Performance-Based Substitute Options (as defined in the Substitute Option Agreement) and the time period for vesting eligibility of such Performance-Based Substitute Options shall be extended until the respective expiration date of the applicable Option Period (as defined in the Plan) for such Performance-Based Substitute Options; provided that, for the avoidance of doubt, such Performance-Based Substitute Options shall otherwise maintain all terms, conditions, and restrictions applicable to such Performance-Based Substitute Options under the Substitute Option Agreement.

ClarkHill\49458\183091\223633547.v1-3/19/20

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Solely upon the vesting of Employee's Performance-Based Substitute Options in accordance with the terms set forth in the Substitute Option Agreement, Employee will be entitled to receive a special bonus payment in an aggregate amount equal to the sum of (i) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated October 1, 2020, between Employee and Home Point Capital LP, (ii) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated January 15, 2021, between Employee and Home Point Capital LP, (iii) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated August 27, 2021, between Employee and Home Point Capital Inc., (iv) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated November 19, 2021, between Employee and Home Point Capital Inc., (v) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated March 18, 2022, between Employee and Home Point Capital Inc., and (vi) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated June 10, 2022, between Employee and Home Point Capital Inc., subject in each case to applicable withholding obligations.

Employee agrees and acknowledges that, except for any payments provided for herein, he has been paid or has received all wages, salary, unused accrued paid time off, bonuses, expenses, commissions, and fringe benefits that are or will be due to him through and following the Separation Date. Employee further certifies that he has received written notice that all fringe benefits will cease on the Separation Date unless otherwise provided by the applicable plan documents.

Employee agrees and acknowledges that the United States securities laws prohibit any person who has material non-public information about a company from purchasing or selling securities of such company, or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.**<u>Release of All Claims</u>**: In exchange for the consideration contained in Paragraph 2 of this Agreement, Employee agrees for himself, him heirs, executors, administrators, successors and assigns to release and discharge forever Employer and its successors, predecessors, direct and indirect parents (including, for the avoidance of doubt, Home Point Capital), subsidiaries, affiliates, related entities, past and current officers, directors, members, board members, employees, direct and indirect equity holders, partners, agents, attorneys, and assigns in their official and individual capacities from any and all claims, debts, promises, agreements, demands, causes of action, losses, and expenses of every nature whatsoever, known or unknown, suspected or unsuspected, filed or unfiled, arising prior to the Effective Date of this Agreement, or arising out of or in connection with his voluntary departure from employment with Employer and any of its predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities. This total release applies to all claims, demands, actions and causes of action of any kind or nature whatsoever, in law, in equity, or in administrative proceedings, based on anything that has previously occurred including, by way of illustration and not of any limitation; any claim of discrimination or harassment of any kind; retaliation of any kind; breach of an express or implied contract; public policy discharge; Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Americans With Disabilities Act; the Employee Retirement Income Security Act of 1974; the Family and Medical Leave Act of 1993; the Equal Pay Act; the Age Discrimination in Employment Act; the Worker Adjustment and Retraining Notification Act; the Michigan Elliott-Larsen Civil Rights Act; the Michigan Persons With Disabilities Act; the Michigan Whistleblowers' Protection Act; the Michigan Wage and Hour laws; the Michigan Wage and Fringe Benefit Act; the Bullard-Plawecki Employee Right to Know Act, the Michigan Workforce Opportunity Wage Act, the Michigan Occupational Safety and Health Act (MIOSHA), the Michigan Social Security Number Privacy Act, the Michigan Internet Privacy Protection Act; violation of any state, federal or local laws, ordinances, statutes, regulations or constitutional provisions; violation of any civil rights, employment and/or labor laws or statutes in the state in which you are employed; fraud, deceit or misrepresentation; breach of any fiduciary duty; intentional infliction of emotional distress; libel, slander and defamation; breach of any implied covenant of good faith or fair dealing; constructive, forced or coerced discharge; promissory estoppel; intentional interference with an advantageous contractual or business relationship or expectancy; invasion of privacy; wrongful or retaliatory discharge; and all other claims of tortious conduct, statutory or constitutional violations or breach of contract.

This release and waiver applies to all past, existing and accrued claims, known or unknown, asserted or unasserted, against Employer and its successors, predecessors, direct and indirect parents (including, for the avoidance of doubt, Home Point Capital), subsidiaries, affiliates, related entities, past and current officers, directors, members, board members, employees, direct and indirect equity holders, partners, agents, attorneys, and assigns in their official and individual capacities arising out of any relationship with

------

Employee including, but not limited to, the employment relationship and in all matters of employment and terms and conditions of employment, including, by way of illustration and not of limitation, all claims relative to recruitment, hiring, medical leaves, training, education, promotions, travel, vacations, testing, evaluations, pensions, reassignments, relocations, re-hirings, resignations, job assignments, conferences, time off, scheduling, discharge, discipline, references, back pay or future wage loss, bonuses, benefits, compensation, lay off, equity compensation including the granting or vesting of stock options, and all other terms and conditions of employment.

Without limiting the scope of Employee's release of claims, Employee acknowledges that any right or claim which he may have arising under the Age Discrimination in Employment Act ("ADEA") or under the Michigan Elliott-Larsen Civil Rights Act, whether known or unknown, arising out of Employee's hire, employment with, or separation from Employer and any of its predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities up to and including the Effective Date is hereby released and forever waived. Employee further specifically acknowledges that he waives and releases any claim of constructive discharge or similar claim which challenges the voluntary nature of him resignation from employment with Employer and any of its predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities.

**Nothing in this Agreement, including but not limited to the release of claims, confidential information, confidentiality, and non-disparagement provisions, (i) limits or affects Employee's right to challenge the validity of this Agreement under the ADEA or the Older Worker Benefit Protection Act, ("OWBPA")**, (ii) prevents Employee from communicating with, filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission ("EEOC"), National Labor Relations Board ("NLRB"), the Securities and Exchange Commission ("SEC"), or any other any federal, state or local agency charged with the enforcement of any laws, including providing documents or any other information, or (iii) limits Employee from exercising rights under Section 7 of the National Labor Relations Act to engage in protected, concerted activity with other employees. Although, by signing this Agreement, Employee is waiving rights to individual relief (including back pay, front pay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by Employee or on Employee's behalf by any third party, except for any right Employee may have to receive a payment or award from a government agency (and not Employer) for information provided to the government agency or otherwise where prohibited.

Similarly, nothing in this Agreement prohibits Employee from reporting an event that Employee reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the SEC, EEOC, or DOL), from testifying truthfully under oath in any court, arbitration or administrative agency proceeding, from providing truthful information in the course of a government investigation or from cooperating in an investigation conducted by such a government agency. This may include disclosure of trade secret or confidential information within the limitations permitted by the 2016 Defend Trade Secrets Act (DTSA). Employee is hereby provided notice that under the DTSA, (1) no individual will be held criminally or civilly liable under federal or state trade secret law for the disclosure of a trade secret (as defined in the Economic Espionage Act) that (A) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.

Employee understands that this release does not apply to any claim or entitlement that Employee has to (i) workers' compensation benefits; (ii) government-provided unemployment benefits; (iii) any vested rights or benefits under any benefit plan; (iv) the consideration provided in Paragraph 2 of this Agreement; or (v) any other rights or claims under applicable federal, state or local law that cannot be waived or released by private agreement.

Furthermore, in exchange for the consideration contained in Paragraph 2 of this Agreement, Employee agrees for himself, his heirs, executors, administrators, successors and assigns to release and discharge forever Employer and its successors, predecessors, direct and indirect parents, subsidiaries, affiliates and related entities (including, for the avoidance of doubt, Home Point Capital), past and current officers, directors, members, board members, employees, direct and indirect equity holders, partners, agents, attorneys, and assigns in their official and individual capacities from any and all claims, debts, promises, agreements, demands, causes of action, losses, and expenses of every nature whatsoever, known or

------

unknown, suspected or unsuspected, filed or unfiled, arising out of or in connection with the Substitute Option Agreement or the Plan, including any predecessor agreements and plans.

Finally, in exchange for the consideration contained in Paragraph 2 of this Agreement, Employee agrees that any shares of Home Point Capital common stock held by Employee, including any shares received in connection with the exercise of Performance-Based Substitute Options, will be held in book-entry form and Employee will not request certificated or physical shares from Employer or Home Point Capital or any assistance therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.**<u>Covenant Not To Sue</u>**: Employee, for himself, his heirs, executors, administrators, successors and assigns agrees not to bring, file, charge, claim, sue or cause, assist, or permit to be brought, filed, charged, or claimed any action, cause of action or proceeding regarding or in any way related to any of the claims released by his under Paragraph 3 hereof, and further agrees that this Agreement is, will constitute and may be pleaded as, a bar to any such claim, action, cause of action or proceeding; provided, however, that Employee's agreement not to sue and release of claims under Paragraph 3 hereof do not apply to those actions or proceedings that are not waivable by law, nor shall it interfere with a protected right, if any, to file a charge with a federal administrative agency or to participate in an investigation or proceeding conducted by such agency. Employee understands and agrees, however, that he has waived any right to recover any damages arising under such a charge as set forth in Paragraph 3 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.**<u>No Right to Re-employment</u>**: Employee acknowledges and agrees that his employment will permanently end as of the Separation Date; that his employment relationship and all obligations of Employer and any of its predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities under the employment relationship will cease as of said date; and that he has no rights to re-employment, rehire or recall with Employer or its predecessors, successors, direct or indirect parents, subsidiaries, affiliates, or related entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.**<u>Return of Property</u>**: Except for the Microsoft Surface laptop that the Employer provided to the Employee in connection with his employment, Employee agrees to return to Employer all company sponsored credit cards, laptops, documents, reports, files, memoranda, records, keys, identification cards, computer access codes, software, computer files, company vehicles, cell phones, and/or any other physical or personal property he received or prepared or helped to prepare in connection with his employment ("Company Property") by no later than the Separation Date. By signing this Agreement, Employee represents that he will return all Company Property and will not retain any copies, duplicates, reproductions, or excerpts of the Company Property. In the event Employee has lost, damaged, or otherwise failed to return any Company Property, Employee agrees to pay Employer the replacement cost of such Company Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.**<u>Non-Disclosure; Confidentiality</u>**: Employee agrees that he will keep the terms and amounts set forth in this Agreement completely confidential and will not disclose any information concerning these matters to any person or entity not a party hereto, except: (a) his attorneys, accountant, tax advisor, or to immediate family who agree to abide by this confidentiality provision; (b) to the extent necessary to report income to appropriate taxing authorities as expressly required by law; or (c) in response to a specific court order, subpoena, or legal process signed by a judge with competent jurisdiction which orders the disclosure of the nature, content, substance, conditions, or specific terms of the Agreement. Furthermore, Employee will not, without written permission of Employer, disclose any confidential information or trade secrets of Employer, Home Point Capital, or any of their predecessors, direct or indirect parents or subsidiaries, affiliates, or related entities to anyone outside Employer or Home Point Capital, unless required by subpoena. Confidential information and trade secrets include, but are not limited to, operations, results, products, business plans, strategies, methodologies, customer lists, product development information, marketing and sales plans, pricing information, operating policies and manuals, and/or other confidential information related to the Employer, Home Point Capital, or any of their predecessors, direct or indirect parents or subsidiaries, affiliates, or related entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.**<u>Non-Solicitation</u>**: Employee agrees that up until the Separation Date and continuing for **[\*\*\*]**following that date, he will not, without prior written approval from Employer's Chief Executive Officer: (a) directly or indirectly solicit or encourage any person who is an employee of Employer, Home Point Capital, or any of their successors, direct or indirect parents or subsidiaries, affiliates, or related entities to terminate his or her employment relationship with, or accept any other employment outside of, such entity; (b) directly hire, or recommend or cause to be hired by an entity for which the Employee works, any person who is, or was within one year before or after the Separation Date, an employee of Employer, Home Point Capital, or any of their predecessors, direct or indirect parents or subsidiaries, affiliates, or related entities; (c) provide any non-public information regarding an employee of Employer, Home Point Capital, or any of their predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities to any

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external person in connection with employment outside such entities, including, but not limited to, recruiters and prospective employers; or (d) directly or indirectly attempt to solicit the trade of any person or entity that is a customer of Employer or Home Point Capital or which Employer or Home Point Capital has been undertaking reasonable steps to procure as a customer during the **[\*\*\*]**months preceding the Separation Date, for avoidance of doubt, a customer includes a broker; provided that the limitation in this clause (d) will only apply to products or services in competition with a product or service of the Employer or Home Point Capital, and to customers with whom or which Employee had contact during employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.**<u>Non-Disparagement:</u>** Employee agrees that he shall not at any time make, publish, or communicate to any person or entity or in any public forum any defamatory, maliciously false, or disparaging remarks, comments, or statements concerning Home Point Financial, its affiliates, employees, officers, or directors and its existing and prospective customers, investors, and or associated third parties, now or in the future. This Section does not in any way restrict or impede the Employee from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. Employee shall promptly provide written notice of any such order to Home Point Financial at [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j.**<u>Other Litigation</u>**: Employee agrees that he will not act in any manner that would damage the business or reputation of Employer and/or any of its related companies, successors, assigns, directors, employees, and officers. Employee shall not encourage, counsel, or assist any attorneys, their clients or other individuals in the presentation or prosecution of any disputes, differences, grievances, claims, changes or complaints against Employer and/or any of its related companies, successors, assigns, directors, employees, officers, or shareholders. Employee agrees that he will not discuss or comment, or give or prepare any writing involving any issue arising out of any litigation, administrative proceeding or arbitration in which Employer is or shall become involved without having been so authorized by Employer's President and CEO, in writing, or by virtue of an order issued by a court of competent jurisdiction. If served with an order or valid subpoena, Employee agrees to immediately inform Employer's General Counsel in writing; provided however, that Employee may participate in any judgment or settlement payable by Employer pursuant to any class action litigation where Employee is legitimately a member of such certified class and where such claims and/or causes of action arise from events following execution of this Agreement. Violation of this provision by Employee shall constitute a material and actionable breach of this Agreement.

Employee agrees to cooperate and participate with the Employer, its attorneys, and agents in the prosecution and defense of all lawsuits, claims, or administrative proceedings or arbitrations against or involving Employer or Home Point Capital in which Employee is named as a party (other than a claim by Employer against Employee), or of which Employee has knowledge, or with which Employee had involvement during his employment. Employee agrees that with respect to such cooperation and participation after the Separation Date, he shall make himself available for reasonable amounts of time, as necessary, to assist the Employer, its attorneys, and agents, in the prosecution and defense of all such lawsuits, claims, proceedings or arbitrations. Employer agrees to provide Employee with a reasonable fee (i.e. not less than Employee's per diem rate of pay at the time of his Separation Date) and to reimburse Employee for reasonable travel and lodging expenses he may incur as a result of such cooperation and participation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k.**<u>No Admission of Liability/Complete Defense</u>**: Nothing contained in this Agreement shall be construed as an admission by either party of any wrongdoing or liability of any kind to the other, such liability being expressly denied. Employee fully understands and agrees that this Agreement may be used by Employer and Home Point Capital as a complete defense to any claim which hereafter may be asserted by Employee or other persons or agencies on behalf of Employee in any suit or claim against Employer or Home Point Capital for or on account of any matter or thing whatsoever arising out of an employment or other relationship between Employee and Employer and any of its predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l.**<u>Effective Date of This Agreement</u>**: This Agreement was presented to Employee for his review and consideration on **January 18, 2023** ("Review Date"). Employee is entitled to review and consider this Agreement for twenty-one (21) calendar days following the Review Date before signing and returning this Agreement to Employer. Employee may voluntarily and knowingly sign and return this Agreement before the end of the twenty-one (21) day period. Employee acknowledges that Employer has made no promises, inducements, representations, or threats to cause Employee to sign this Agreement before the end of the twenty-one (21) day period. The date the Employee signs this Agreement shall be the "Effective Date" of this Agreement. For seven (7) calendar days following execution by Employee of this Agreement, Employee may

------

unilaterally revoke this Agreement. Employee may revoke this Agreement only by giving Employer formal written notice of her revocation of this Agreement, to be received by Employer no later than the end of the seventh day following her execution of this Agreement. This Agreement shall not become effective in any respect until the revocation period has expired without timely notice of revocation. In the absence of Employee's timely revocation of this Agreement, the eighth day after the revocation election period of this Agreement shall be the "Effective Date" of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m.**<u>Performance of This Agreement</u>**: Each of the parties signing this Agreement warrants and represents that he/it shall execute and deliver any and all instruments, agreements, documents, or other writings and shall perform all other acts deemed necessary to effect the terms and purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n.**<u>Waiver</u>**: A waiver by Employer of a breach of any provision of this Agreement by Employee shall not operate or be construed as a waiver or estoppel of any subsequent breach by Employee. No waiver shall be valid unless in writing and signed by an authorized officer of Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o.**<u>Entire Agreement</u>**: This Agreement sets forth the entire agreement between the parties with respect to termination of the Employee's employment and supersedes all other agreements, understandings, and representations, oral or written, which heretofore may have been made with respect to Employee's employment or the termination of Employee's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p.**<u>Modification</u>**: No cancellation, modification, amendment, deletion, addition, or other changes in this Agreement or any provision hereof or waiver of any right herein provided shall be effective for any purpose unless specifically set forth in writing and signed by both Employee and an authorized representative of each of Employer and Home Point Capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;q.**<u>Severability</u>**: If any provision of this Agreement shall be found by a court to be invalid or unenforceable, in whole or in part, then such provision shall be construed and/or modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision had not been originally incorporated herein, as the case may be. Upon a finding by a court, administrative agency, or other tribunal of competent jurisdiction that any release, waiver, or covenant contained in this Agreement is void, illegal, or unenforceable, the Employee agrees to promptly execute a release, waiver, or covenant that is legal and enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;r.**<u>Not Evidence</u>**: The parties agree that this Agreement is in settlement of any claims and may not be used as evidence in any action, except an action to enforce this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;s.**<u>No Assignment</u>**: Employee specifically represents that he has not assigned or purported to assign or transfer to any third party any claim, known or unknown, past or present, against the other party or any portion of or any interest in any such claim, nor will he do so in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;t.**<u>Successors and Assigns</u>**: This Agreement shall be binding upon and shall inure to the benefit of Employee, his heirs, executors, administrators and beneficiaries, and shall be binding upon and inure to the benefit of Employer and Home Point Capital and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;u.**<u>Attorneys' Fees</u>**. If any party commences an action against the other party in order to enforce any provision of this Agreement or to recover damages from the alleged breach of any provision of this Agreement, the prevailing party in such action shall be entitled to recover from the non-prevailing party all reasonable costs incurred in connection with the action, including reasonable attorneys' fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v.**<u>Acknowledgement</u>**: Employee warrants and represents to Employer and Home Point Capital as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)He has had ample time to review all of the provisions of this Agreement and fully understands it and the choices with respect to the advisability of making the waiver and release contained herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)He has been advised in writing by Employer to review all of the provisions of this Agreement with independent legal counsel or other advisors and has had the opportunity to pursue such a review.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)He acknowledges that he has entered into this Agreement by his free will and choice without any compulsion, duress, or undue influence from anyone.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)He does not have any actions pending against Employer, Home Point Capital, or any of their predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities that address claims that are released under the terms of this Agreement, and no such claim will be filed during the revocation period of this Agreement without the formal notification of Employee's revocation of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e)He has been properly paid for all hours worked for the Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f)He has not made any claims or allegations to the Employer, Home Point Capital, or any of their predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities related to sexual harassment or sexual abuse, and that none of the payments set forth in this Agreement are related to sexual harassment or abuse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g)He has not engaged in and is not aware of any unlawful conduct relating to the business of the Employer, Home Point Capital, or any of their predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;w.**<u>Notices</u>:** All notices under this Agreement must be given in writing to:

Home Point Financial Corporation

Attn: **[\*\*\*]**

2211 Old Earhart Road, Suite 250

Ann Arbor, Michigan 48105

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;x.**<u>Governing Law</u>**: This Agreement shall be construed and interpreted in accordance with the laws of the State of Michigan.

The undersigned further state that they have carefully read this Agreement including the general release of claims, know and understand its contents, and that they execute it as their own free act and deed.

---

| | |
|:---|:---|
| Home Point Financial Corporation<br>By: /s/ William A. Newman<br>Title: President and CEO<br>Date: January 25, 2023<br>Home Point Capital Inc.<br>By: /s/ William A. Newman<br>Title: President and CEO<br>Date: January 25, 2023____ | Employee<br>/s/ Phillip M. Miller <br>Phillip M. Miller<br>Signed and printed employee name<br>Date: January 18, 2023 |

---

## Exhibit 10.9

Exhibit 10.9_

**WAIVER AND SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS**

**CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [\*\*\*] INDICATES THAT INFORMATION HAS BEEN REDACTED.** 

THIS WAIVER AND SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS ("Agreement") is entered into on **February 24**, **2023** by and between **Mark E. Elbaum** ("Employee"), Home Point Financial Corporation ("Home Point Financial" or "Employer"), and Home Point Capital Inc. ("Home Point Capital"). Such parties are herein after referred to collectively as the "Parties".

IN CONSIDERATION of the mutual promises contained herein and other good and valuable consideration described below, the parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Separation/Transition from Employment</u>**: Employee has agreed to voluntarily separate from his employment with Employer, including its predecessors, direct and indirect parents and subsidiaries, affiliates, and related entities, and permanently end his employment relationship effective **April 3, 2023** (the "Separation Date"). Employee represents and freely acknowledges that he has not been coerced, forced, or otherwise required to resign from employment, and instead has done so of his own free will and deed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Consideration</u>**: In exchange for the agreements and obligations of Employee set forth in this Agreement, Employer shall provide Employee with the following consideration, the sufficiency of which is hereby acknowledged:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Employer shall pay the cost of Employee's COBRA premiums (medical, dental and vision only) through [\*\*\*]; provided that (i) Employee makes his COBRA elections through The Taben Group to initiate the continued premium subsidy; and, (ii) Employee notifies The Taben Group in writing if Employee becomes covered under an alternative group health plan (such as through a new employer plan or by a spouse's employer) or eligible for Medicare, as COBRA coverage will terminate upon notification to The Taben Group. Employee's entitlement to continue group health plan coverage under Home Point Financial's benefit plans will be determined in accordance with COBRA. Employee shall receive separate notification of his rights to COBRA coverage and, to the extent that Employee elects COBRA coverage, Employee shall be solely responsible for timely making such election.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the terms of Employee's Restricted Stock Unit Agreement (the "2021 RSU Agreement") entered into by the Employee pursuant to the Home Point Capital Inc. 2021 Incentive Plan (the "Plan") on May 4, 2021, shall be modified, such that as of the Separation Date, the vesting of **[\*\*\*]** restricted stock units (the "2021 Restricted Stock Units") will be accelerated such that vesting will occur on the Separation Date; (ii) The terms of Employee's Restricted Stock Unit Agreement (the "2022 RSU Agreement", together with the 2021 RSU Agreement, the "RSU Agreements") entered into by the Employee pursuant to the Home Point Capital Inc. 2021 Incentive Plan (the "Plan") on February 10, 2022, shall be modified, such that as of the Separation Date, the vesting of **[\*\*\*]**restricted stock units (the "2022 Restricted Stock Units", together with the 2021 Restricted Stock Units, the "Restricted Stock Units") will be accelerated such that vesting will occur on the Separation Date; provided that, for the avoidance of doubt, the Restricted Stock Units shall otherwise maintain all terms, conditions, and restrictions applicable to such Restricted Stock Units under the RSU Agreements. Other than the Restricted Stock Units, following the Separation Date, any remaining stock units shall be forfeited immediately following the Separation Date.

ClarkHill\49458\183091\223633547.v1-3/19/20

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)The terms of Employee's Substitute Option Agreement (the "Substitute Option Agreement") entered into by the Employee pursuant to the Home Point Capital Inc. 2021 Incentive Plan (the "Plan"), shall be modified, such that as of the Separation Date, Employee shall hold **[\*\*\*]** unvested Performance-Based Substitute Options (as defined in the Substitute Option Agreement) and the time period for vesting eligibility of such Performance-Based Substitute Options shall be extended until the respective expiration date of the applicable Option Period (as defined in the Plan) for such Performance-Based Substitute Options; provided that, for the avoidance of doubt, such Performance-Based Substitute Options shall otherwise maintain all terms, conditions, and restrictions applicable to such Performance-Based Substitute Options under the Substitute Option Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Solely upon the vesting of Employee's Performance-Based Substitute Options in accordance with the terms set forth in the Substitute Option Agreement, Employee will be entitled to receive a special bonus payment in an aggregate amount equal to the sum of (i) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated January 15, 2021, between Employee and Home Point Capital LP, (ii) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated August 27, 2021, between Employee and Home Point Capital Inc., (iii) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated November 19, 2021, between Employee and Home Point Capital Inc., (iv) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated March 18, 2022, between Employee and Home Point Capital Inc., and (v) the "Performance-Vesting Bonus" amount set forth in Section 1(a)(iii) of Employee's Bonus Agreement, dated June 10, 2022, between Employee and Home Point Capital Inc., subject in each case to applicable withholding obligations.

Employee agrees and acknowledges that, except for any payments provided for herein, he has been paid or has received all wages, salary, unused accrued paid time off, bonuses, expenses, commissions, and fringe benefits that are or will be due to him through and following the Separation Date. Employee further certifies that he has received written notice that all fringe benefits will cease on the Separation Date unless otherwise provided by the applicable plan documents.

Employee agrees and acknowledges that the United States securities laws prohibit any person who has material non-public information about a company from purchasing or selling securities of such company, or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.**<u>Release of All Claims</u>**: In exchange for the consideration contained in Paragraph 2 of this Agreement, Employee agrees for himself, him heirs, executors, administrators, successors and assigns to release and discharge forever Employer and its successors, predecessors, direct and indirect parents (including, for the avoidance of doubt, Home Point Capital), subsidiaries, affiliates, related entities, past and current officers, directors, members, board members, employees, direct and indirect equity holders, partners, agents, attorneys, and assigns in their official and individual capacities from any and all claims, debts, promises, agreements, demands, causes of action, losses, and expenses of every nature whatsoever, known or unknown, suspected or unsuspected, filed or unfiled, arising prior to the Effective Date of this Agreement, or arising out of or in connection with his voluntary departure from employment with Employer and any of its predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities. This total release applies to all claims, demands, actions and causes of action of any kind or nature whatsoever, in law, in equity, or in administrative proceedings, based on anything that has previously occurred including, by way of illustration and not of any limitation; any claim of discrimination or harassment of any kind; retaliation of any kind; breach of an express or implied

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contract; public policy discharge; Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Americans With Disabilities Act; the Employee Retirement Income Security Act of 1974; the Family and Medical Leave Act of 1993; the Equal Pay Act; the Age Discrimination in Employment Act; the Worker Adjustment and Retraining Notification Act; the Michigan Elliott-Larsen Civil Rights Act; the Michigan Persons With Disabilities Act; the Michigan Whistleblowers' Protection Act; the Michigan Wage and Hour laws; the Michigan Wage and Fringe Benefit Act; the Bullard-Plawecki Employee Right to Know Act, the Michigan Workforce Opportunity Wage Act, the Michigan Occupational Safety and Health Act (MIOSHA), the Michigan Social Security Number Privacy Act, the Michigan Internet Privacy Protection Act; violation of any state, federal or local laws, ordinances, statutes, regulations or constitutional provisions; violation of any civil rights, employment and/or labor laws or statutes in the state in which you are employed; fraud, deceit or misrepresentation; breach of any fiduciary duty; intentional infliction of emotional distress; libel, slander and defamation; breach of any implied covenant of good faith or fair dealing; constructive, forced or coerced discharge; promissory estoppel; intentional interference with an advantageous contractual or business relationship or expectancy; invasion of privacy; wrongful or retaliatory discharge; and all other claims of tortious conduct, statutory or constitutional violations or breach of contract.

This release and waiver applies to all past, existing and accrued claims, known or unknown, asserted or unasserted, against Employer and its successors, predecessors, direct and indirect parents (including, for the avoidance of doubt, Home Point Capital), subsidiaries, affiliates, related entities, past and current officers, directors, members, board members, employees, direct and indirect equity holders, partners, agents, attorneys, and assigns in their official and individual capacities arising out of any relationship with Employee including, but not limited to, the employment relationship and in all matters of employment and terms and conditions of employment, including, by way of illustration and not of limitation, all claims relative to recruitment, hiring, medical leaves, training, education, promotions, travel, vacations, testing, evaluations, pensions, reassignments, relocations, re-hirings, resignations, job assignments, conferences, time off, scheduling, discharge, discipline, references, back pay or future wage loss, bonuses, benefits, compensation, lay off, equity compensation including the granting or vesting of stock options, and all other terms and conditions of employment.

Without limiting the scope of Employee's release of claims, Employee acknowledges that any right or claim which he may have arising under the Age Discrimination in Employment Act ("ADEA") or under the Michigan Elliott-Larsen Civil Rights Act, whether known or unknown, arising out of Employee's hire, employment with, or separation from Employer and any of its predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities up to and including the Effective Date is hereby released and forever waived. Employee further specifically acknowledges that he waives and releases any claim of constructive discharge or similar claim which challenges the voluntary nature of him resignation from employment with Employer and any of its predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities.

**Nothing in this Agreement, including but not limited to the release of claims, confidential information, confidentiality, and non-disparagement provisions, (i) limits or affects Employee's right to challenge the validity of this Agreement under the ADEA or the Older Worker Benefit Protection Act, ("OWBPA")**, (ii) prevents Employee from communicating with, filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission ("EEOC"), National Labor Relations Board ("NLRB"), the Securities and Exchange Commission ("SEC"), or any other any federal, state or local agency charged with the enforcement of any laws, including providing documents or any other information, or (iii) limits Employee from exercising rights under Section 7 of the National Labor Relations Act to engage in protected, concerted activity with other employees. Although, by signing this Agreement, Employee is waiving rights to individual relief (including back pay, front pay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by Employee or on Employee's behalf by any third party, except for any right Employee may have to receive a payment or award from a

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government agency (and not Employer) for information provided to the government agency or otherwise where prohibited.

Similarly, nothing in this Agreement prohibits Employee from reporting an event that Employee reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the SEC, EEOC, or DOL), from testifying truthfully under oath in any court, arbitration or administrative agency proceeding, from providing truthful information in the course of a government investigation or from cooperating in an investigation conducted by such a government agency. This may include disclosure of trade secret or confidential information within the limitations permitted by the 2016 Defend Trade Secrets Act (DTSA). Employee is hereby provided notice that under the DTSA, (1) no individual will be held criminally or civilly liable under federal or state trade secret law for the disclosure of a trade secret (as defined in the Economic Espionage Act) that (A) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.

Employee understands that this release does not apply to any claim or entitlement that Employee has to (i) workers' compensation benefits; (ii) government-provided unemployment benefits; (iii) any vested rights or benefits under any benefit plan; (iv) the consideration provided in Paragraph 2 of this Agreement; or (v) any other rights or claims under applicable federal, state or local law that cannot be waived or released by private agreement.

Furthermore, in exchange for the consideration contained in Paragraph 2 of this Agreement, Employee agrees for himself, his heirs, executors, administrators, successors and assigns to release and discharge forever Employer and its successors, predecessors, direct and indirect parents, subsidiaries, affiliates and related entities (including, for the avoidance of doubt, Home Point Capital), past and current officers, directors, members, board members, employees, direct and indirect equity holders, partners, agents, attorneys, and assigns in their official and individual capacities from any and all claims, debts, promises, agreements, demands, causes of action, losses, and expenses of every nature whatsoever, known or unknown, suspected or unsuspected, filed or unfiled, arising out of or in connection with the Substitute Option Agreement or the Plan, including any predecessor agreements and plans.

Finally, in exchange for the consideration contained in Paragraph 2 of this Agreement, Employee agrees that any shares of Home Point Capital common stock held by Employee, including any shares received in connection with the exercise of Performance-Based Substitute Options, will be held in book-entry form and Employee will not request certificated or physical shares from Employer or Home Point Capital or any assistance therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.**<u>Covenant Not To Sue</u>**: Employee, for himself, his heirs, executors, administrators, successors and assigns agrees not to bring, file, charge, claim, sue or cause, assist, or permit to be brought, filed, charged, or claimed any action, cause of action or proceeding regarding or in any way related to any of the claims released by his under Paragraph 3 hereof, and further agrees that this Agreement is, will constitute and may be pleaded as, a bar to any such claim, action, cause of action or proceeding; provided, however, that Employee's agreement not to sue and release of claims under Paragraph 3 hereof do not apply to those actions or proceedings that are not waivable by law, nor shall it interfere with a protected right, if any, to file a charge with a federal administrative agency or to participate in an investigation or proceeding conducted by such agency. Employee understands and agrees, however, that he has waived any right to recover any damages arising under such a charge as set forth in Paragraph 3 hereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.**<u>No Right to Re-employment</u>**: Employee acknowledges and agrees that his employment will permanently end as of the Separation Date; that his employment relationship and all obligations of Employer and any of its predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities under the employment relationship will cease as of said date; and that he has no rights to re-employment, rehire or recall with Employer or its predecessors, successors, direct or indirect parents, subsidiaries, affiliates, or related entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.**<u>Return of Property</u>**: Except for the Microsoft Surface laptop that the Employer provided to the Employee in connection with his employment, Employee agrees to return to Employer all company sponsored credit cards, laptops, documents, reports, files, memoranda, records, keys, identification cards, computer access codes, software, computer files, company vehicles, cell phones, and/or any other physical or personal property he received or prepared or helped to prepare in connection with his employment ("Company Property") by no later than the Separation Date. By signing this Agreement, Employee represents that he will return all Company Property and will not retain any copies, duplicates, reproductions, or excerpts of the Company Property. In the event Employee has lost, damaged, or otherwise failed to return any Company Property, Employee agrees to pay Employer the replacement cost of such Company Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.**<u>Non-Disclosure; Confidentiality</u>**: Employee agrees that he will keep the terms and amounts set forth in this Agreement completely confidential and will not disclose any information concerning these matters to any person or entity not a party hereto, except: (a) his attorneys, accountant, tax advisor, or to immediate family who agree to abide by this confidentiality provision; (b) to the extent necessary to report income to appropriate taxing authorities as expressly required by law; or (c) in response to a specific court order, subpoena, or legal process signed by a judge with competent jurisdiction which orders the disclosure of the nature, content, substance, conditions, or specific terms of the Agreement. Furthermore, Employee will not, without written permission of Employer, disclose any confidential information or trade secrets of Employer, Home Point Capital, or any of their predecessors, direct or indirect parents or subsidiaries, affiliates, or related entities to anyone outside Employer or Home Point Capital, unless required by subpoena. Confidential information and trade secrets include, but are not limited to, operations, results, products, business plans, strategies, methodologies, customer lists, product development information, marketing and sales plans, pricing information, operating policies and manuals, and/or other confidential information related to the Employer, Home Point Capital, or any of their predecessors, direct or indirect parents or subsidiaries, affiliates, or related entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.**<u>Non-Solicitation</u>**: Employee agrees that up until the Separation Date and continuing for **[\*\*\*]**months following that date, he will not, without prior written approval from Employer's Chief Executive Officer: (a) directly or indirectly solicit or encourage any person who is an employee of Employer, Home Point Capital, or any of their successors, direct or indirect parents or subsidiaries, affiliates, or related entities to terminate his employment relationship with, or accept any other employment outside of, such entity; (b) directly hire, or recommend or cause to be hired by an entity for which the Employee works, any person who is, or was within one year before or after the Separation Date, an employee of Employer, Home Point Capital, or any of their predecessors, direct or indirect parents or subsidiaries, affiliates, or related entities; (c) provide any non-public information regarding an employee of Employer, Home Point Capital, or any of their predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities to any external person in connection with employment outside such entities, including, but not limited to, recruiters and prospective employers; or (d) directly or indirectly attempt to solicit the trade of any person or entity that is a customer of Employer or Home Point Capital or which Employer or Home Point Capital has been undertaking reasonable steps to procure as a customer during the six (6) months preceding the Separation Date, for avoidance of doubt, a customer includes a broker; provided that the limitation in this clause (d) will only apply to products or services in competition with a product or service of the Employer or Home Point Capital, and to customers with whom or which Employee had contact during employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.**<u>Non-Disparagement:</u>** Employee agrees that he shall not at any time make, publish, or communicate to any person or entity or in any public forum any defamatory, maliciously false, or

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disparaging remarks, comments, or statements concerning Home Point Financial, its affiliates, employees, officers, or directors and its existing and prospective customers, investors, and or associated third parties, now or in the future. This Section does not in any way restrict or impede the Employee from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. Employee shall promptly provide written notice of any such order to Home Point Financial at **[\*\*\*]**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j.**<u>Other Litigation</u>**: Employee agrees that he will not act in any manner that would damage the business or reputation of Employer and/or any of its related companies, successors, assigns, directors, employees, and officers. Employee shall not encourage, counsel, or assist any attorneys, their clients or other individuals in the presentation or prosecution of any disputes, differences, grievances, claims, changes or complaints against Employer and/or any of its related companies, successors, assigns, directors, employees, officers, or shareholders. Employee agrees that he will not discuss or comment, or give or prepare any writing involving any issue arising out of any litigation, administrative proceeding or arbitration in which Employer is or shall become involved without having been so authorized by Employer's President and CEO, in writing, or by virtue of an order issued by a court of competent jurisdiction. If served with an order or valid subpoena, Employee agrees to immediately inform Employer's General Counsel in writing; provided however, that Employee may participate in any judgment or settlement payable by Employer pursuant to any class action litigation where Employee is legitimately a member of such certified class and where such claims and/or causes of action arise from events following execution of this Agreement. Violation of this provision by Employee shall constitute a material and actionable breach of this Agreement.

Employee agrees to cooperate and participate with the Employer, its attorneys, and agents in the prosecution and defense of all lawsuits, claims, or administrative proceedings or arbitrations against or involving Employer or Home Point Capital in which Employee is named as a party (other than a claim by Employer against Employee), or of which Employee has knowledge, or with which Employee had involvement during his employment. Employee agrees that with respect to such cooperation and participation after the Separation Date, he shall make himself available for reasonable amounts of time, as necessary, to assist the Employer, its attorneys, and agents, in the prosecution and defense of all such lawsuits, claims, proceedings or arbitrations. Employer agrees to provide Employee with a reasonable fee (i.e. not less than Employee's per diem rate of pay at the time of his Separation Date) and to reimburse Employee for reasonable travel and lodging expenses he may incur as a result of such cooperation and participation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k.**<u>No Admission of Liability/Complete Defense</u>**: Nothing contained in this Agreement shall be construed as an admission by either party of any wrongdoing or liability of any kind to the other, such liability being expressly denied. Employee fully understands and agrees that this Agreement may be used by Employer and Home Point Capital as a complete defense to any claim which hereafter may be asserted by Employee or other persons or agencies on behalf of Employee in any suit or claim against Employer or Home Point Capital for or on account of any matter or thing whatsoever arising out of an employment or other relationship between Employee and Employer and any of its predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l.**<u>Effective Date of This Agreement</u>**: This Agreement was presented to Employee for his review and consideration on **February 24, 2023** ("Review Date"). Employee is entitled to review and consider this Agreement for twenty-one (21) calendar days following the Review Date before signing and returning this Agreement to Employer. Employee may voluntarily and knowingly sign and return this Agreement before the end of the twenty-one (21) day period. Employee acknowledges that Employer has made no promises, inducements, representations, or threats to cause Employee to sign this Agreement before the end of the twenty-one (21) day period. The date the Employee signs this Agreement shall be the "Effective Date" of this Agreement. For seven (7) calendar days following execution by Employee of this Agreement, Employee may

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unilaterally revoke this Agreement. Employee may revoke this Agreement only by giving Employer formal written notice of his revocation of this Agreement, to be received by Employer no later than the end of the seventh day following his execution of this Agreement. This Agreement shall not become effective in any respect until the revocation period has expired without timely notice of revocation. In the absence of Employee's timely revocation of this Agreement, the eighth day after the revocation election period of this Agreement shall be the "Effective Date" of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m.**<u>Performance of This Agreement</u>**: Each of the parties signing this Agreement warrants and represents that he/it shall execute and deliver any and all instruments, agreements, documents, or other writings and shall perform all other acts deemed necessary to effect the terms and purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n.**<u>Waiver</u>**: A waiver by Employer of a breach of any provision of this Agreement by Employee shall not operate or be construed as a waiver or estoppel of any subsequent breach by Employee. No waiver shall be valid unless in writing and signed by an authorized officer of Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o.**<u>Entire Agreement</u>**: This Agreement sets forth the entire agreement between the parties with respect to termination of the Employee's employment and supersedes all other agreements, understandings, and representations, oral or written, which heretofore may have been made with respect to Employee's employment or the termination of Employee's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p.**<u>Modification</u>**: No cancellation, modification, amendment, deletion, addition, or other changes in this Agreement or any provision hereof or waiver of any right herein provided shall be effective for any purpose unless specifically set forth in writing and signed by both Employee and an authorized representative of each of Employer and Home Point Capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;q.**<u>Severability</u>**: If any provision of this Agreement shall be found by a court to be invalid or unenforceable, in whole or in part, then such provision shall be construed and/or modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision had not been originally incorporated herein, as the case may be. Upon a finding by a court, administrative agency, or other tribunal of competent jurisdiction that any release, waiver, or covenant contained in this Agreement is void, illegal, or unenforceable, the Employee agrees to promptly execute a release, waiver, or covenant that is legal and enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;r.**<u>Not Evidence</u>**: The parties agree that this Agreement is in settlement of any claims and may not be used as evidence in any action, except an action to enforce this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;s.**<u>No Assignment</u>**: Employee specifically represents that he has not assigned or purported to assign or transfer to any third party any claim, known or unknown, past or present, against the other party or any portion of or any interest in any such claim, nor will he do so in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;t.**<u>Successors and Assigns</u>**: This Agreement shall be binding upon and shall inure to the benefit of Employee, his heirs, executors, administrators and beneficiaries, and shall be binding upon and inure to the benefit of Employer and Home Point Capital and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;u.**<u>Attorneys' Fees</u>**. If any party commences an action against the other party in order to enforce any provision of this Agreement or to recover damages from the alleged breach of any provision of this Agreement, the prevailing party in such action shall be entitled to recover from the non-prevailing party all reasonable costs incurred in connection with the action, including reasonable attorneys' fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v.**<u>Acknowledgement</u>**: Employee warrants and represents to Employer and Home Point Capital as follows:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)He has had ample time to review all of the provisions of this Agreement and fully understands it and the choices with respect to the advisability of making the waiver and release contained herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)He has been advised in writing by Employer to review all of the provisions of this Agreement with independent legal counsel or other advisors and has had the opportunity to pursue such a review.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)He acknowledges that he has entered into this Agreement by his free will and choice without any compulsion, duress, or undue influence from anyone.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)He does not have any actions pending against Employer, Home Point Capital, or any of their predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities that address claims that are released under the terms of this Agreement, and no such claim will be filed during the revocation period of this Agreement without the formal notification of Employee's revocation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e)He has been properly paid for all hours worked for the Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f)He has not made any claims or allegations to the Employer, Home Point Capital, or any of their predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities related to sexual harassment or sexual abuse, and that none of the payments set forth in this Agreement are related to sexual harassment or abuse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g)He has not engaged in and is not aware of any unlawful conduct relating to the business of the Employer, Home Point Capital, or any of their predecessors, successors, direct or indirect parents or subsidiaries, affiliates, or related entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;w.**<u>Notices</u>:** All notices under this Agreement must be given in writing to:

Home Point Financial Corporation

Attn: **[\*\*\*]**

2211 Old Earhart Road, Suite 250

Ann Arbor, Michigan 48105

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;x.**<u>Governing Law</u>**: This Agreement shall be construed and interpreted in accordance with the laws of the State of Michigan.

The undersigned further state that they have carefully read this Agreement including the general release of claims, know and understand its contents, and that they execute it as their own free act and deed.

---

| | |
|:---|:---|
| Home Point Financial Corporation<br>By: /s/ William A. Newman<br>Title: President and CEO<br>Date: March 6, 2023 <br>Home Point Capital Inc.<br>By: /s/ William A. Newman<br>Title: President and CEO<br>Date: March 6, 2023_____________________ | Employee<br>_/s /Mark E. Elbaum <br>Mark E. Elbaum<br>Signed and printed employee name<br>Date: February 24, 2023 |

---

## Exhibit 10.18

Exhibit 10.18.2

**CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [\*\*\*] INDICATES THAT INFORMATION HAS BEEN REDACTED.**

![image_0.jpg](image_0.jpg)**AMENDMENT NUMBER 2 TO MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT**

THIS AMENDMENT NUMBER 2 TO MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT, dated as of November 17, 2022 (this "<u>Amendment</u>"), is by and between HOME POINT FINANCIAL CORPORATION, a New Jersey corporation ("<u>Seller</u>"), and BANK OF MONTREAL, a Canadian Chartered bank acting through its Chicago Branch ("<u>Buyer</u>"). Unless otherwise defined herein, capitalized terms used in this Amendment have the meanings assigned to such terms in the Master Repurchase Agreement and Securities Contract, dated as of January 8, 2021 (as amended, restated, supplemented or otherwise modified to the date hereof and by this Amendment, the "<u>Repurchase Agreement</u>"), between the Seller and the Buyer.

<u>RECITALS</u>

WHEREAS, the Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Repurchase Agreement be amended to reflect certain agreed upon changes;

NOW, THEREFORE, in consideration of the mutual covenants made herein, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1.&nbsp;&nbsp;&nbsp;&nbsp;<u>Amendments to Repurchase Agreement</u>. Effective as of the date hereof, the Repurchase Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: <u>double-underlined text</u>) as set forth in <u>Exhibit A</u> hereto.

SECTION 2.&nbsp;&nbsp;&nbsp;&nbsp;<u>Agreement in Full Force and Effect as Amended</u>. As specifically amended hereby, the Repurchase Agreement and each of the other Facility Documents remains in full force and effect. All references to the Repurchase Agreement or any other Facility Document shall be deemed to mean the Repurchase Agreement or such Facility Document as supplemented and amended pursuant to this Amendment. This Amendment shall not constitute a novation of the Repurchase Agreement or any other Facility Document, but is a supplement thereto. The parties hereto agree to be bound by the terms and conditions of the Repurchase Agreement and Facility Documents, each as amended or supplemented by this Amendment, to the same effect as if such terms and conditions were set forth herein *verbatim*.

SECTION 3.&nbsp;&nbsp;&nbsp;&nbsp;<u>Conditions to Effectiveness of this Amendment</u>. This Amendment shall become effective on the day when the Buyer has received a copy of this Amendment, duly executed by each of the parties hereto.

SECTION 4.&nbsp;&nbsp;&nbsp;&nbsp;<u>Miscellaneous</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;This Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. The parties agree that this Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. Counterparts may be delivered electronically. The parties agree that this Amendment or any other document necessary for the consummation of the transaction contemplated by this Amendment may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer's identity and evidence of the signer's agreement to conduct the transaction electronically and of the signer's execution of each electronic signature.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;This Amendment may not be amended or otherwise modified other than by an agreement in writing signed by each of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;THIS AMENDMENT AND ANY CLAIM, DISPUTE OR CONTROVERSY ARISING UNDER OR RELATED TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN.

(*The remainder of this page is intentionally blank.*)

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

<u>SELLER</u>:

![image_1.jpg](image_1.jpg) **&nbsp;&nbsp;&nbsp;&nbsp;HOME POINT FINANCIAL CORPORATION** 

By: /<u>s/ Joseph Ruhlin&nbsp;&nbsp;&nbsp;&nbsp;</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Name: Joseph Ruhlin

Title: Senior Managing Director - Treasurer

ACKNOWLEDGED AND AGREED TO:

<u>BUYER</u>:

**BANK OF MONTREAL**

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Ari Lash</u> 

Name: Ari Lash

Title: Managing Director

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<u>EXHIBIT A</u>

[see attached]

------

**EXECUTION<u>CONFORMED</u> VERSION <u>through:</u>**

**<u>Amendment No. 1, dated March 1, 2022; and</u>**

**<u>Amendment No. 2, dated November 17, 2022</u>**

**MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT**

between

**BANK OF MONTREAL,** 

as Buyer

and

**HOME POINT FINANCIAL CORPORATION,**

as Seller

Dated as of January 8, 2021

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**TABLE OF CONTENTS**

**Page(s)**

Section 1.&nbsp;&nbsp;&nbsp;&nbsp;Applicability; Transaction Overview&nbsp;&nbsp;&nbsp;&nbsp;1

Section 2.&nbsp;&nbsp;&nbsp;&nbsp;Definitions&nbsp;&nbsp;&nbsp;&nbsp;1

Section 3.&nbsp;&nbsp;&nbsp;&nbsp;No Commitment; Initiation; Termination.&nbsp;&nbsp;&nbsp;&nbsp;24

Section 4.&nbsp;&nbsp;&nbsp;&nbsp;Repurchases.&nbsp;&nbsp;&nbsp;&nbsp;30

Section 5.&nbsp;&nbsp;&nbsp;&nbsp;Income Payments; Price Differential.&nbsp;&nbsp;&nbsp;&nbsp;32

Section 6.&nbsp;&nbsp;&nbsp;&nbsp;Requirements Of Law.&nbsp;&nbsp;&nbsp;&nbsp;33

Section 7.&nbsp;&nbsp;&nbsp;&nbsp;Margin Maintenance.&nbsp;&nbsp;&nbsp;&nbsp;34

Section 8.&nbsp;&nbsp;&nbsp;&nbsp;Taxes.&nbsp;&nbsp;&nbsp;&nbsp;35

Section 9.&nbsp;&nbsp;&nbsp;&nbsp;Security Interest; Buyer's Appointment as Attorney-in-Fact.&nbsp;&nbsp;&nbsp;&nbsp;39

Section 10.&nbsp;&nbsp;&nbsp;&nbsp;Payment, Transfer and Remittance.&nbsp;&nbsp;&nbsp;&nbsp;41

Section 11.&nbsp;&nbsp;&nbsp;&nbsp;Hypothecation or Pledge of Purchased Mortgage Loans&nbsp;&nbsp;&nbsp;&nbsp;42

Section 12.&nbsp;&nbsp;&nbsp;&nbsp;[Reserved].&nbsp;&nbsp;&nbsp;&nbsp;42

Section 13.&nbsp;&nbsp;&nbsp;&nbsp;Representations&nbsp;&nbsp;&nbsp;&nbsp;42

Section 14.&nbsp;&nbsp;&nbsp;&nbsp;Covenants Of Seller&nbsp;&nbsp;&nbsp;&nbsp;48

Section 15.&nbsp;&nbsp;&nbsp;&nbsp;Events Of Default&nbsp;&nbsp;&nbsp;&nbsp;56

Section 16.&nbsp;&nbsp;&nbsp;&nbsp;Remedies.&nbsp;&nbsp;&nbsp;&nbsp;58

Section 17.&nbsp;&nbsp;&nbsp;&nbsp;Indemnification and Expenses.&nbsp;&nbsp;&nbsp;&nbsp;61

Section 18.&nbsp;&nbsp;&nbsp;&nbsp;Servicing&nbsp;&nbsp;&nbsp;&nbsp;63

Section 19.&nbsp;&nbsp;&nbsp;&nbsp;Recording of Communications&nbsp;&nbsp;&nbsp;&nbsp;64

Section 20.&nbsp;&nbsp;&nbsp;&nbsp;Due Diligence&nbsp;&nbsp;&nbsp;&nbsp;64

Section 21.&nbsp;&nbsp;&nbsp;&nbsp;Assignability.&nbsp;&nbsp;&nbsp;&nbsp;65

Section 22.&nbsp;&nbsp;&nbsp;&nbsp;Transfer and Maintenance of Register.&nbsp;&nbsp;&nbsp;&nbsp;66

Section 23.&nbsp;&nbsp;&nbsp;&nbsp;Tax Treatment&nbsp;&nbsp;&nbsp;&nbsp;66

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Section 24.&nbsp;&nbsp;&nbsp;&nbsp;Set-Off.&nbsp;&nbsp;&nbsp;&nbsp;66

Section 25.&nbsp;&nbsp;&nbsp;&nbsp;Terminability&nbsp;&nbsp;&nbsp;&nbsp;67

Section 26.&nbsp;&nbsp;&nbsp;&nbsp;Notices And Other Communications&nbsp;&nbsp;&nbsp;&nbsp;67

Section 27.&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement; Severability; Single Agreement.&nbsp;&nbsp;&nbsp;&nbsp;67

Section 28.&nbsp;&nbsp;&nbsp;&nbsp;GOVERNING LAW&nbsp;&nbsp;&nbsp;&nbsp;68

Section 29.&nbsp;&nbsp;&nbsp;&nbsp;SUBMISSION TO JURISDICTION; WAIVERS&nbsp;&nbsp;&nbsp;&nbsp;68

Section 30.&nbsp;&nbsp;&nbsp;&nbsp;No Waivers, etc&nbsp;&nbsp;&nbsp;&nbsp;69

Section 31.&nbsp;&nbsp;&nbsp;&nbsp;Netting&nbsp;&nbsp;&nbsp;&nbsp;69

Section 32.&nbsp;&nbsp;&nbsp;&nbsp;Confidentiality.&nbsp;&nbsp;&nbsp;&nbsp;69

Section 33.&nbsp;&nbsp;&nbsp;&nbsp;Intent.&nbsp;&nbsp;&nbsp;&nbsp;71

Section 34.&nbsp;&nbsp;&nbsp;&nbsp;Conflicts&nbsp;&nbsp;&nbsp;&nbsp;72

Section 35.&nbsp;&nbsp;&nbsp;&nbsp;Authorizations&nbsp;&nbsp;&nbsp;&nbsp;72

Section 36.&nbsp;&nbsp;&nbsp;&nbsp;Miscellaneous.&nbsp;&nbsp;&nbsp;&nbsp;72

Section 37.&nbsp;&nbsp;&nbsp;&nbsp;Recognition of the U.S. Special Resolution Regimes&nbsp;&nbsp;&nbsp;&nbsp;73

Section 38.&nbsp;&nbsp;&nbsp;&nbsp;Effect of Benchmark Transition Event.&nbsp;&nbsp;&nbsp;&nbsp;73

Section 39.&nbsp;&nbsp;&nbsp;&nbsp;General Interpretive Principles&nbsp;&nbsp;&nbsp;&nbsp;74

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SCHEDULE 1-A&nbsp;&nbsp;&nbsp;&nbsp;REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS

SCHEDULE 1-B&nbsp;&nbsp;&nbsp;&nbsp;REPRESENTATIONS AND WARRANTIES RE: POOLED MORTGAGE LOANS

SCHEDULE 2&nbsp;&nbsp;&nbsp;&nbsp;AUTHORIZED REPRESENTATIVES

SCHEDULE 3&nbsp;&nbsp;&nbsp;&nbsp;INDEBTEDNESS OF SELLER

EXHIBIT A&nbsp;&nbsp;&nbsp;&nbsp;[RESERVED]

EXHIBIT B&nbsp;&nbsp;&nbsp;&nbsp;[RESERVED]

EXHIBIT C&nbsp;&nbsp;&nbsp;&nbsp;EVIDENCE OF BUYER LISTED AS LOSS PAYEE OF FIDELITY INSURANCE POLICY, ERRORS AND OMISSIONS INSURANCE POLICY, AND PROFESSIONAL LIABILITY INSURANCE POLICY

EXHIBIT D&nbsp;&nbsp;&nbsp;&nbsp;FORM OF SECTION 8 CERTIFICATE

EXHIBIT E&nbsp;&nbsp;&nbsp;&nbsp;ASSET SCHEDULE FIELDS

EXHIBIT F&nbsp;&nbsp;&nbsp;&nbsp;FORM OF POWER OF ATTORNEY

EXHIBIT G&nbsp;&nbsp;&nbsp;&nbsp;FORM OF OFFICER'S COMPLIANCE CERTIFICATE

**MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT**

This is a MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT, dated as of January 8, 2021, between Home Point Financial Corporation, a New Jersey corporation ("<u>Seller</u>"), and BANK OF MONTREAL, a Canadian Chartered bank acting through its Chicago Branch ("<u>Buyer</u>").

<u>Section 1.&nbsp;&nbsp;&nbsp;&nbsp;Applicability; Transaction Overview</u>. From time to time, upon the terms and conditions set forth herein, the parties hereto may enter into transactions, on an uncommitted basis, in which Seller agrees to transfer to Buyer certain Mortgage Loans and all right, title and interest (including the Servicing Rights (as hereinafter defined)) in and to the Mortgage Loans against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Mortgage Loans against the transfer of funds by Seller. Each such transaction involving the transfer of Mortgage Loans shall be referred to herein as a "Transaction" and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder. **This Agreement is not a commitment by Buyer to engage in the Transactions, but sets forth the requirements under which Buyer would consider entering into Transactions set forth herein.**

<u>Section 2.&nbsp;&nbsp;&nbsp;&nbsp;Definitions</u>. As used herein, the following terms shall have the following meanings.

"<u>Accelerated Repurchase Date</u>" shall have the meaning set forth in <u>Section 16(a)(i)</u> hereof.

"<u>Acceptable State</u>" shall mean any state acceptable pursuant to the Underwriting Guidelines in which Seller is licensed to originate Mortgage Loans.

"<u>Accepted Servicing Practices</u>" shall mean, with respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions which service mortgage loans (a) of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, (b) serviced in accordance with Fannie Mae, Freddie Mac, or Government Agency servicing practices and procedures, as applicable, (c) in accordance with the terms of the related Mortgage Note and Mortgage, and (d) in accordance with applicable law and regulations, including the servicing standards promulgated by the Consumer Financial Protection Bureau.

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"<u>Adjusted Tangible Net Worth</u>" shall mean, for any Person, Net Worth of such Person plus Subordinated Debt (if approved for purposes of this calculation by Buyer in its sole discretion), minus all intangible assets, goodwill, patents, tradenames, trademarks, copyrights, franchises, any organizational expenses, receivables from shareholders, Affiliates or employees, any other asset as shown as an intangible asset on the balance sheet of such Person on a consolidated basis as determined at a particular date in accordance with GAAP.

"<u>Affiliate</u>" shall mean with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person; provided that other than the Seller and its Subsidiaries, no other portfolio company of Stone Point Capital LLC or its affiliates shall be deemed an Affiliate of Seller. For the purposes of this definition, "control" means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms "controlling," "controlled by" and "under common control with" have meanings correlative to the meaning of "control."

"<u>Agency</u>" means Freddie Mac, Fannie Mae or Ginnie Mae, as applicable.

"<u>Agency Approvals</u>" shall have the meaning set forth in <u>Section 13(ff)</u> hereof.

"<u>Agency Eligible Mortgage Loan</u>" means a Mortgage Loan that is in compliance with the eligibility requirements for swap or purchase by an Agency, under the applicable Agency guidelines and/or Agency Program.

"<u>Agency Program</u>" means the specific mortgage backed securities swap program under the applicable Agency guidelines or as otherwise approved by an Agency pursuant to which the Agency Security is to be issued.

"<u>Agency Security</u>" means a mortgage-backed security issued by an Agency.

"<u>Aggregate Facility Purchase Price</u>" shall mean, as of any date of determination, the sum of the Purchase Prices (as of such date of determination) of all Purchased Mortgage Loans then subject to a Transaction.

"<u>Agreement</u>" shall mean this Master Repurchase Agreement and Securities Contract between Buyer and Seller, dated as of the date hereof as the same may be amended, restated, supplemented or otherwise modified in accordance with the terms hereof.

"<u>Anti-Corruption Laws</u>" shall have the meaning set forth in <u>Section 13(cc)</u> hereof.

"<u>Anti-Money Laundering Laws</u>" shall have the meaning set forth in <u>Section 13(aa)</u> hereof.

"<u>Appraised Value</u>" shall mean the value set forth in an appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property.

"<u>Asset Schedule</u>" shall mean with respect to any Transaction as of any date, an asset schedule in the form of a computer tape or other electronic medium (including an Excel spreadsheet) generated by Seller and delivered to Buyer and the Custodian, which provides information (including, without limitation, the information set forth on <u>Exhibit E</u> attached hereto) relating to the Purchased Mortgage Loans in a format reasonably acceptable to Buyer.

"<u>Asset Value</u>" means with respect to any Purchased Mortgage Loan that is a Government Mortgage Loan **<u>or a Jumbo Mortgage Loan</u>**, as of any date of determination, an amount equal

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to the product of (i) the Purchase Price Percentage for the applicable Purchased Mortgage Loan and (ii) the lesser of (a) the outstanding principal balance of such Purchased Mortgage Loan or (b) the Market Value of such Purchased Mortgage Loan. Without limiting the generality of the foregoing, Seller acknowledges that the Asset Value of a Purchased Mortgage Loan may be reduced to zero by Buyer if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;a Purchased Mortgage Loan Issue has occurred and such Purchased Mortgage Loan has not been repurchased by Seller;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;the related Mortgage File has been released from the possession of the Custodian under the Custodial and Disbursement Agreement for a period in excess of the time permitted therefor under the Custodial and Disbursement Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;such Purchased Mortgage Loan has been subject to a Transaction hereunder for a period of greater than the Maximum Transaction Duration identified on the Pricing Side Letter for such Purchased Mortgage Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Buyer has determined in its good faith discretion that such Purchased Mortgage Loan is not eligible for whole loan sale or securitization in a transaction consistent with the prevailing sale and securitization industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;such Purchased Mortgage Loan is a Wet-Ink Mortgage Loan for which the Mortgage File has not been delivered to the Custodian on or prior to the Wet-Ink Mortgage Loan Document Receipt Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;when the Purchase Price for such Purchased Mortgage Loan is added to the Purchase Price for all Purchased Mortgage Loans, the aggregate Purchase Price of all Wet-Ink Mortgage Loans**<u>any loan type</u>** exceeds the Wet-Ink Mortgage Loan**<u>applicable Concentration</u>** Limit; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;when the Purchase Price of such Purchased Mortgage Loan is added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Purchased Mortgage Loans exceeds the Maximum Aggregate Purchase Price.

"<u>Assignment and Acceptance</u>" shall have the meaning set forth in <u>Section 21</u> hereof.

"<u>Assignment of Mortgage</u>" shall mean an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the sale of the Mortgage.

"<u>Authorized Representative</u>" shall mean, for the purposes of this Agreement only, an agent or Responsible Officer of Seller and Buyer listed on <u>Schedule 2</u> hereto, as such <u>Schedule 2</u> may be amended from time to time.

"<u>Bailee Letter</u>" shall mean a bailee letter substantially in the form prescribed by the Custodial and Disbursement Agreement or otherwise approved in writing by Buyer in its sole discretion.

"<u>Bankruptcy Code</u>" shall mean the United States Bankruptcy Code of 1978, as amended from time to time.

"<u>Benchmark Replacement</u>" shall mean the sum of: (a) the alternate benchmark rate (which may include Term SOFR) that has been selected by Buyer giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a

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rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the LIBOR Rate**<u>Term SOFR</u>** for U.S. dollar-denominated syndicated or bilateral credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.

"<u>Benchmark Replacement Adjustment</u>" shall mean, with respect to any replacement of the LIBOR Rate**<u>Term SOFR</u>** with an Unadjusted Benchmark Replacement for each applicable Price Differential Collection Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Buyer giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBOR Rate**<u>Term SOFR</u>** with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBOR Rate**<u>Term SOFR</u>** with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral credit facilities at such time.

"<u>Benchmark Replacement Conforming Changes</u>" shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to timing and frequency of determining rates and making payments of Price Differential, prepayment provisions, and other administrative matters) that Buyer decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Buyer in a manner substantially consistent with market practice (or, if Buyer decides that adoption of any portion of such market practice is not administratively feasible or if Buyer determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as Buyer decides is reasonably necessary in connection with the administration of this Agreement).

"<u>Benchmark Replacement Date</u>" shall mean the earlier to occur of the following events with respect to the LIBOR Rate**<u>Term SOFR</u>**:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;in the case of clause (1) or (2) of the definition of "Benchmark Transition Event," the later of the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of the LIBOR Rate**<u>Term SOFR Administrator</u>** permanently or indefinitely ceases to provide the LIBOR Rate**<u>Term SOFR</u>**; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;in the case of clause (3) of the definition of "Benchmark Transition Event," the date of the public statement or publication of information referenced therein.

"<u>Benchmark Transition Event</u>" shall mean the occurrence of one or more of the following events with respect to LIBOR**<u>Term SOFR</u>**:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;a public statement or publication of information by or on behalf of the administrator of the LIBOR Rate**<u>Term SOFR Administrator</u>** announcing that such administrator has ceased or will cease to provide the LIBOR Rate**<u>Term SOFR</u>**, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBOR Rate**<u>Term SOFR</u>**;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;a public statement or publication of information by the regulatory supervisor for the administrator of the LIBOR Rate**<u>Term SOFR Administrator</u>**, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR**<u>Term SOFR</u>**

------

**<u>Administrator</u>**, a resolution authority with jurisdiction over the administrator for the LIBOR Rate**<u>Term SOFR Administrator</u>** or a court or an entity with similar insolvency or resolution authority over the administrator for the LIBOR Rate**<u>Term SOFR Administrator</u>**, which states that the administrator of the LIBOR Rate**<u>Term SOFR Administrator</u>** has ceased or will cease to provide the LIBOR Rate**<u>Term SOFR</u>** permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBOR Rate**<u>Term SOFR</u>**; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;a public statement or publication of information by the regulatory supervisor for the administrator of the LIBOR Rate**<u>Term SOFR Administrator</u>** announcing that the LIBOR Rate**<u>Term SOFR</u>** is no longer representative.

"<u>Benchmark Transition Start Date</u>" shall mean (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the [\*\*\*] day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than [\*\*\*] days after such statement or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified by notice to a Responsible Officer of Seller.

"<u>Benchmark Unavailability Period</u>" shall mean, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to LIBOR**<u>Term SOFR</u>** and solely to the extent that LIBOR**<u>Term SOFR</u>** has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced LIBOR**<u>Term SOFR</u>** for all purposes hereunder in accordance with this Agreement and (y) ending at the time that a Benchmark Replacement has replaced LIBOR**<u>Term SOFR</u>** for all purposes hereunder pursuant to this Agreement.

"<u>Business Day</u>" shall mean any day other than (i) a Saturday or Sunday, (ii) a day upon which the Federal Reserve Bank of New York is closed or banking and savings and loan institutions in the States of New York, Minnesota, Michigan, Texas, California, Illinois or the City of New York are closed, or (iii) with respect to any day on which the parties hereto have obligations to Custodian or on which Custodian has obligations to any party hereto, a day upon which Custodian's offices are closed.

"<u>Buyer</u>" shall mean Bank of Montreal, its successors in interest and permitted assigns, and with respect to <u>Section 8</u>, its participants.

"<u>Capital Lease</u>" shall mean, with respect to any Person, any lease of, or other arrangement conveying the right to use, any Property by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.

"<u>Capital Lease Obligations</u>" shall mean, at any time, with respect to any Capital Lease, any lease entered into as part of any sale leaseback transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.

"<u>Cash Equivalents</u>" shall mean (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guaranteed or insured by the United States federal government or (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-

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marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least "A-1" from S&P or at least "P-1" from Moody's, (c) any commercial paper rated at least "A-1" by S&P or "P-1" by Moody's and issued by any Person organized under the laws of any state of the United States, (d) any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or bankers' acceptance issued or accepted by (i) Buyer or (ii) any commercial bank that is (A) organized under the laws of the United States, any state thereof or the District of Columbia, (B) "adequately capitalized" (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of [\*\*\*] and (e) shares of any United States money market fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clause (a), (b), (c) or (d) above with maturities as set forth in the proviso below, (ii) has net assets in excess of [\*\*\*] and (iii) has obtained from either S&P or Moody's the highest rating obtainable for money market funds in the United States; provided, however, that the maturities of all obligations specified in any of clauses (a), (b), (c) or (d) above shall not exceed [\*\*\*].

"<u>Change in Control</u>" shall mean with respect to Seller, (a) Home Point Capital Inc. ceasing to own directly or indirectly more than [\*\*\*] of the Equity Interests in and to Seller or (b) the sale, transfer, or other disposition (each, a "Disposition") of all or substantially all of Seller's assets (other than any Disposition permitted under this Agreement). For purposes of this definition, "Equity Interests" means, with respect to the Seller, all shares, interests, participations or other equivalents in the equity of the Seller, including common stock, preferred stock, warrants, membership interests, partnership interests, limited partnership interests, convertible debentures, other debt securities which include voting rights in the Seller referred to, and any and all agreements, instruments and documents convertible, in whole or in part, into any one or more of the foregoing.

"<u>Closing Agent</u>" shall mean, with respect to any Wet-Ink Transaction, an entity deemed satisfactory to Buyer (which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the related Wet-Ink Mortgage Loan is being originated) to which the proceeds of such Wet-Ink Transaction are to be wired pursuant to the instructions of Seller. Unless Buyer notifies Seller (electronically or in writing) that a Closing Agent is unsatisfactory, each Closing Agent utilized by Seller shall be deemed satisfactory.

"<u>Closing Date</u>" shall mean January 8, 2021.

"<u>Code</u>" shall mean the Internal Revenue Code of 1986, as amended from time to time.

"<u>Committed Mortgage Loan</u>" means a Purchased Mortgage Loan which is the subject of a Take-out Commitment with a Take-out Investor.

**<u>"Concentration Limit</u>**<u>" shall have the meaning set forth in the</u> **<u>Pricing Side Letter.</u>**

"<u>Confidential Information</u>" shall have the meaning set forth in <u>Section 32(a)</u> hereof.

"<u>Contractual Obligations</u>" shall mean, as to any Person, any provision of any security (whether in the nature of stock or other equity interests, or otherwise) issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement (other than a Facility Document) to which such Person is a party or by which it or any of its Property is bound or to which any of its Property is subject.

"<u>Correspondent Mortgage Loan</u>" means a Mortgage Loan which is (i) originated by a Correspondent Seller and underwritten in accordance with the Underwriting Guidelines and (ii)

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acquired by the Seller from a Correspondent Seller in the ordinary course of business, for sale to the Buyer pursuant to this Agreement.

"<u>Correspondent Seller</u>" means a mortgage loan originator that sells Mortgage Loans originated by it to Seller as a "correspondent" client.

"<u>Costs</u>" shall have the meaning set forth in <u>Section 17(a)</u> hereof.

"<u>Custodial and Disbursement Agreement</u>" shall mean, that certain Custodial and Disbursement Agreement dated as of the date hereof, among Seller, Buyer and Custodian, as may be amended from time to time.

"<u>Custodian</u>" shall mean U.S. Bank National Association and any successor thereto under the Custodial and Disbursement Agreement, or, prior to the occurrence and continuance of an Event of Default, such other entity as mutually agreed upon by Seller and Buyer; <u>provided</u>, however, that following the occurrence and continuance of an Event of Default, such other entity as may be determined by Buyer in its sole discretion.

"<u>Cut-off Date</u>" means, with respect to Pooled Mortgage Loans, the first calendar day of the month in which the related Settlement Date is to occur.

"<u>Cut-off Date Principal Balance</u>" means, with respect to Pooled Mortgage Loans, the outstanding principal balance of such Pooled Mortgage Loans on the Cut-off Date after giving effect to payments of principal and interest due on or prior to the Cut-off Date whether or not such payments are received.

"<u>DE Compare Ratio</u>" means the Two Year FHA Direct Endorsement Lender Compare Ratio, excluding streamline FHA refinancings, as made publicly available by HUD.

"<u>Default</u>" shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.

"<u>Default Right</u>" shall have the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

"<u>Defaulting Party</u>" shall have the meaning set forth in <u>Section 31(b)</u> hereof.

"<u>Disbursement Account</u>" shall have the meaning set forth in the Custodial and Disbursement Agreement.

"<u>Disbursement Agent</u>" shall mean**<u>, initially,</u>** U.S. Bank National Association, and any successor thereto under the Custodial and Disbursement Agreement, or, prior to the occurrence and continuance of an Event of Default, such other entity as mutually agreed upon by Seller and Buyer; <u>provided</u>, however, that following the occurrence and continuance of an Event of Default, such other entity as may be determined by Buyer in its sole discretion. **<u>Following the delivery of a Disbursement Agent Termination Notice (as defined in the</u>** <u>Custodial and Disbursement Agreement</u>**<u>), the Disbursement Agent shall be</u>** <u>BMO Harris Bank</u>**<u>,</u>** <u>N.A.</u> **<u>or any agent thereof.</u>**

"<u>Dollars</u>" and "<u>$</u>" shall mean lawful money of the United States of America.

"<u>DU Refi Plus</u>" shall mean the Fannie Mae DU Refi Plus program.

"<u>Due Date</u>" shall mean the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.

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"<u>Due Diligence Documents</u>" shall have the meaning set forth in <u>Section 20</u> hereof.

"<u>Early Opt-in Election</u>" shall mean the occurrence of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;a determination by Buyer that at least [\*\*\*] currently outstanding U.S. dollar-denominated syndicated or bilateral credit facilities at such time contain (as a result of amendment or as originally executed) as a benchmark interest rate **<u>(excluding,</u>** <u>for the</u> **<u>avoidance of doubt,</u>** <u>the LIBOR Rate</u>**<u>)</u>**, in lieu of the LIBOR Rate**<u>Term SOFR</u>**, a new benchmark interest rate to replace the LIBOR Rate**<u>Term SOFR</u>**, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;the election by Buyer to declare that an Early Opt-in Election has occurred and the provision by Buyer of written notice of such election to Seller;

Provided, that in either case Buyer is making a similar early opt-in election with respect to similarly situated counterparties with similar U.S. dollar-denominated bilateral repurchase facilities secured by residential mortgage loan collateral similar to that in connection with this Agreement.

"<u>Effective Date</u>" shall mean the date upon which the conditions precedent set forth in <u>Section 3(a)</u> shall have been satisfied.

"<u>Electronic Tracking Agreement</u>" shall mean an Electronic Tracking Agreement that is entered into among Buyer, Seller, MERS and MERSCORP Holdings, Inc., to the extent applicable as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>Eligible Mortgage Loan</u>" shall mean a Mortgage Loan which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;has been approved by Buyer in its sole and absolute discretion on the related Purchase Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;complies with the representations and warranties set forth on <u>Schedule 1-A</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;with respect to each Pooled Mortgage Loan, complies with the representations and warranties set forth on <u>Schedule 1-B</u>.

"<u>Environmental Issue</u>" shall mean any environmental issue with respect to any Mortgaged Property, as determined by Buyer in its sole discretion, including without limitation, the violation of any Environmental Laws.

"<u>Environmental Laws</u>" shall mean all Requirements of Law and Permits imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the workplace, the environment and natural resources, and including public notification requirements and environmental transfer of ownership, notification or approval statutes.

"<u>ERISA</u>" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and rulings issued thereunder.

"<u>ERISA Affiliate</u>" shall mean any Person, whether or not incorporated, that is a member of any group of organizations described in Section 414(b), (c), (m) or (o) of the Code of which the Seller is a member.

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"<u>Errors and Omissions Insurance Policy</u>" means an errors and omissions insurance policy to be maintained by the Seller.

**<u>"E-Sign" shall mean the federal Electronic Signatures in Global and National Commerce Act, as amended from time to time.</u>**

"<u>Escrow Payments</u>" shall mean, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

"<u>Event of Default</u>" shall have the meaning set forth in <u>Section 15</u> hereof.

"<u>Event of ERISA Termination</u>" shall mean (i) with respect to any Plan, a Reportable Event, or (ii) the withdrawal of Seller or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or (iii) the failure by Seller or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment under Section 430(j) of the Code or Section 303(j) of ERISA, or (iv) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by Seller or any ERISA Affiliate thereof to terminate any Plan, or (v) the determination that any Plan is or is expected to be in "at-risk" status, within the meaning of Section 430 of the Code or Section 303 of ERISA or (vi) the failure to meet the requirements of Section 436 of the Code resulting in the loss of qualified status under Section 401(a)(29) of the Code, or (vii) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (viii) the receipt by Seller or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (vii) has been taken by the PBGC with respect to such Multiemployer Plan, or a determination that a Multiemployer Plan is, or is expected to be "insolvent" (within the meaning of Section 4245 of ERISA) or in "endangered" or "critical status" (within the meaning of Section 432 of the Code or Section 305 of ERISA); or (ix) the imposition of any Lien in favor of the PBGC or a Plan shall arise on the assets of Seller or any ERISA Affiliate thereof or (x) any event or circumstance exists which may reasonably be expected to constitute grounds for Seller to incur liability under Title IV of ERISA or under Sections 412(b) or 430 (k) of the Code with respect to any Plan.

"<u>Exception Report</u>" shall have the meaning set forth in the Custodial and Disbursement Agreement.

"<u>Excluded Taxes</u>" shall have the meaning set forth in <u>Section 8(a)</u> hereof.

"<u>Executive Order</u>" shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (66 Fed. Reg. 49079).

"<u>Facility Documents</u>" shall mean this Agreement, the Pricing Side Letter, the Custodial and Disbursement Agreement, any Electronic Tracking Agreement, the Reserve Account Control Agreement, the Joint Securities Account Control Agreement, the Intercreditor Agreement, each Power of Attorney and any and all other documents and agreements executed and delivered by Seller in connection with this Agreement or any Transactions hereunder, as the same may be amended, restated or otherwise modified from time to time.

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"<u>Fannie Mae</u>" shall mean the Federal National Mortgage Association or any successor thereto.

"<u>Federal Reserve Bank of New York's Website</u>" shall mean the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

"<u>FHA</u>" means the Federal Housing Administration, an agency within the United States Department of Housing and Urban Development, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.

"<u>FHA Approved Mortgagee</u>" means a corporation or institution approved as a mortgagee by the FHA under the National Housing Act, as amended from time to time, and applicable FHA Regulations, and eligible to own and service mortgage loans such as the FHA Loans.

"<u>FHA Loan</u>" means a Mortgage Loan which is the subject of an FHA Mortgage Insurance Contract.

"<u>FHA Mortgage Insurance</u>" means, mortgage insurance authorized under the National Housing Act, as amended from time to time, and provided by the FHA.

"<u>FHA Mortgage Insurance Contract</u>" means the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.

"<u>FHA Regulations</u>" means the regulations promulgated by the Department of Housing and Urban Development under the National Housing Act, as amended from time to time and codified in 24 Code of Federal Regulations, and other Department of Housing and Urban Development issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters.

"<u>FICO</u>" shall mean Fair Isaac & Co., or any successor thereto.

"<u>Fidelity Insurance Policy</u>" shall mean insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud.

"<u>Freddie Mac</u>" shall mean the Federal Home Loan Mortgage Corporation or any successor thereto.

"<u>GAAP</u>" shall mean generally accepted accounting principles in the United States of America, applied on a consistent basis and applied to both classification of items and amounts, and shall include, without limitation, the official interpretations thereof by the Financial Accounting Standards Board, its predecessors and successors.

"<u>Ginnie Mae</u>" means the Government National Mortgage Association and any successor thereto.

"<u>GLB Act</u>" shall have the meaning set forth in <u>Section 32(b)</u> hereof.

"<u>Government Agency</u>" shall mean Ginnie Mae, Fannie Mae, Freddie Mac, USDA, FHA, VA or other Governmental Authority governing such Government Mortgage Loan.

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"<u>Government Mortgage Loan</u>" means a first lien Mortgage Loan originated in accordance with the criteria of Ginnie Mae, Fannie Mae, Freddie Mac, USDA, FHA, VA or other Government Agency for purchase of Mortgage Loans.

"<u>Governmental Authority</u>" shall mean any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).

"<u>Gross Margin</u>" shall mean, with respect to each adjustable rate Mortgage Loan, the fixed percentage amount set forth in the related Mortgage Note.

"<u>Guarantee</u>" shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); <u>provided</u> that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms "<u>Guarantee</u>" and "<u>Guaranteed</u>" used as verbs shall have correlative meanings.

**<u>"Haircut Amount" shall mean</u>**<u>, with respect to</u> **<u>an Eligible Mortgage Loan proposed for a Transaction hereunder, the difference, if any, between (a) with respect to (i) a</u>** <u>Wet-Ink Mortgage Loan</u>**<u>, the amount required to be sent to the Closing Agent and (ii) a Mortgage Loan other than a</u>** <u>Wet-Ink Mortgage</u> **<u>Loan, the amount required by the related warehouse lender to release its security interest therein less (b) the related Purchase Price.</u>**

"<u>High Cost Mortgage Loan</u>" shall mean a mortgage loan classified as (a) a "high cost" loan under the Home Ownership and Equity Protection Act of 1994; or (b) a "high cost," "threshold," "covered," or "predatory" loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees).

"<u>HUD</u>" shall mean the United States Department of Housing and Urban Development.

"<u>Income</u>" shall mean, with respect to any Purchased Mortgage Loan, without duplication, all principal and income or dividends or distributions or other amounts received with respect to such Purchased Mortgage Loan, including any insurance proceeds or interest payable thereon or any fees or payments of any kind, or other amounts received, but excluding any Escrow Payments and any and all fees, reimbursement and income entitled to be retained by a Servicer pursuant to the related Servicing Agreement.

"<u>Indebtedness</u>" shall mean, with respect to any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade

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accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within [\*\*\*] days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (g) Indebtedness of others Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; and (i) Indebtedness of general partnerships (if applicable) of which such Person is a general partner; provided, however, that the foregoing shall exclude non-recourse debt.

"<u>Indemnified Party</u>" shall have the meaning set forth in <u>Section 17(a)</u> hereof.

"<u>Index</u>" means, with respect to any adjustable rate Mortgage Loan, the index identified on the Asset Schedule and set forth in the related Mortgage Note for the purpose of calculating the applicable Mortgage Interest Rate.

"<u>Insolvency Event</u>" shall mean, for any Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;that such Person shall discontinue or abandon operation of its business; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;that such Person shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of such Person in an involuntary case under any applicable bankruptcy, insolvency, liquidation, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or for the winding-up or liquidation of its affairs, and any such proceeding is not dismissed within [\*\*\*] of filing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;the commencement by such Person of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or such Person's consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or any general assignment for the benefit of creditors; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;that such Person shall become insolvent; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;such Person, or any of its Subsidiaries, shall take any corporate action in furtherance of, or the action of which would result in any of the actions set forth in the preceding clauses (a), (b), (c), (d) or (e).

"<u>Intellectual Property</u>" shall mean all rights, title and interests in or relating to intellectual property and industrial property arising under any Requirement of Law.

"<u>Intercreditor Agreement</u>" means that certain Amended and Restated Intercreditor Agreement, dated as of February 27, 2015, by and among Seller, Buyer and the other parties

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thereto, as may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

"<u>Interest Rate Adjustment Date</u>" shall mean the date on which an adjustment to the Mortgage Interest Rate with respect to each Mortgage Loan becomes effective.

"<u>Interest Rate Protection Agreement</u>" means, with respect to any or all of the Purchased Mortgage Loans, any short sale of a US Treasury Security, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement, or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by Seller.

"<u>Investment Company Act</u>" shall mean the Investment Company Act of 1940, as amended from time to time.

"<u>Joint Securities Account Control Agreement</u>" means that certain Amended and Restated Joint Securities Account Control Agreement, dated as of February 27, 2015, by and among Seller, Buyer and the other parties thereto, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

"<u>LIBOR Rate</u>" shall mean, the rate determined by Buyer on each Business Day a Transaction is outstanding equal to the higher of ([\*\*\*] per annum, and (b) the offered rate per annum for one-month deposits of Dollars that appears on Bloomberg Screen US0001M Page, as of [\*\*\*] (New York time) on such date. If no such offered rate exists, such rate will be the rate of interest per annum, as determined by Buyer in its sole discretion at which deposits of Dollars in immediately available funds are offered at [\*\*\*]. (New York time) on such date by major financial institutions reasonably satisfactory to Buyer in the London interbank market for a period of one month and in an amount comparable to the amount of the Aggregate Facility Purchase Price on such date of determination.

**<u>"Jumbo Mortgage Loan</u>**<u>" shall mean a</u> **<u>Mortgage Loan where the original outstanding principal amount of such Mortgage Loan exceeds the eligibility limits for purchases by Freddie Mac or Fannie Mae.</u>**

 **<u>"</u>**<u>LIBOR Rate</u>**<u>" shall mean the offered rate per annum for one-month deposits of Dollars that appears on Bloomberg Screen US0001M Page, as of 11:00 A.M. (New York time) on any date of determination.</u>**

"<u>Lien</u>" shall mean any lien, claim, charge, restriction, pledge, security interest, mortgage, deed of trust or other encumbrance.

"<u>Loan Program Authority</u>" shall mean, with respect to Government Mortgage Loans, the applicable Government Agency**<u>, and with respect to Jumbo Mortgage Loans, the applicable Take-out Investor</u>**.

"<u>Manufactured Home</u>" shall mean any dwelling unit built on a permanent chassis and attached to a permanent foundation system.

"<u>Margin Call</u>" shall have the meaning assigned thereto in <u>Section 7(a)</u> hereof.

"<u>Margin Deficit</u>" shall have the meaning assigned thereto in <u>Section 7(a)</u> hereof.

"<u>Margin Payment</u>" shall have the meaning assigned thereto in <u>Section 7(a)</u> hereof.

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"<u>Market Value</u>" shall mean, as of any date of determination, for each Purchased Mortgage Loan, the whole-loan servicing released fair market value of such Purchased Mortgage Loan as may be reasonably determined by Buyer (or an Affiliate thereof) (which determination may be performed on a daily basis, at Buyer's reasonable discretion and may take into account such factors as Buyer deems appropriate); provided, however, that the methodology for such determination is consistent with Buyer's determination with respect to those similar mortgage loans it has purchased from unaffiliated sellers pursuant to similar warehousing facilities.

"<u>Material Adverse Effect</u>" means (a) a material adverse change in, or a material adverse effect upon, when taken as a whole, the Property, business or financial operations of Seller, (b) a material impairment of the ability of Seller to perform its obligations under any of the Facility Documents to which it is a party and to avoid any Event of Default or (c) a material adverse effect upon the validity or enforceability of any of the Facility Documents.

"<u>Maximum Aggregate Purchase Price</u>" shall have the meaning assigned thereto in the Pricing Side Letter.

"<u>Maximum Transaction Duration</u>" means the number of days that a Purchased Mortgage Loan can be subject to a Transaction as set forth on <u>Exhibit A</u> to the Pricing Side Letter.

"<u>MERS</u>" shall mean Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.

"<u>MERS Designated Mortgage Loan</u>" shall mean any Mortgage Loan registered with MERS on the MERS System.

"<u>MERS System</u>" shall mean the system of recording transfers of mortgages electronically maintained by MERS.

**<u>"Minimum Account Balance</u>** <u>Threshold" shall have the meaning set forth in the Pricing Side Letter.</u>

"<u>Minimum Margin Threshold</u>" shall mean [\*\*\*].

"<u>MOM Mortgage Loan</u>" shall mean any Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee for the originator of such Mortgage Loan and its successors and assigns.

"<u>Monthly Payment</u>" shall mean the scheduled monthly payment of principal and interest on a Mortgage Loan.

"<u>Moody's</u>" shall mean Moody's Investors Service, Inc. or any successors thereto.

"<u>Mortgage</u>" shall mean each mortgage, or deed of trust, security agreement and fixture filing, deed to secure debt, or similar instrument creating and evidencing a first Lien on real property and other property and rights incidental thereto.

"<u>Mortgage File</u>" shall have the meaning set forth in the Custodial and Disbursement Agreement.

"<u>Mortgage Interest Rate</u>" shall mean the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.

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"<u>Mortgage Interest Rate Cap</u>" shall mean, with respect to an adjustable rate Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the related Mortgage Note.

"<u>Mortgage Loan</u>" shall mean any Government Mortgage Loan **<u>or Jumbo Mortgage Loan</u>**, which is a fixed or floating-rate, one-to-four-family residential loan evidenced by a Mortgage Note and secured by a Mortgage.

"<u>Mortgage Note</u>" shall mean the promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.

"<u>Mortgaged Property</u>" shall mean the real property securing repayment of the debt evidenced by a Mortgage Note.

"<u>Mortgagor</u>" shall mean the obligor or obligors on a Mortgage Note, including any Person who has assumed or guaranteed the obligations of the obligor thereunder.

"<u>Multiemployer Plan</u>" shall mean a "multiemployer plan" as defined in Section 3(37) of ERISA as to which Seller or any ERISA Affiliate thereof has made contributions during the current year or the immediately preceding five (5) years or is required to make contributions or has any actual liability.

"<u>Negative Amortization</u>" shall mean the portion of interest accrued at the Mortgage Interest Rate in any month which exceeds the Monthly Payment on the related Mortgage Loan for such month and which, pursuant to the terms of the Mortgage Note, is added to the principal balance of the Mortgage Loan.

"<u>Net Income</u>" shall mean, for any period and any Person, the net income of such Person for such period determined in accordance with GAAP, but excluding extraordinary gains.

"<u>Net Operating Income</u>" shall mean, with respect to any Person, such Person's Net Income before tax plus depreciation.

"<u>Net Worth</u>" shall mean, with respect to any Person, an amount equal to, on a consolidated basis, such Person's owner equity (determined in accordance with GAAP).

"<u>Nondefaulting Party</u>" shall have the meaning set forth in <u>Section 31(b)</u> hereof.

"<u>Non-Excluded Taxes</u>" shall have the meaning set forth in <u>Section 8(a)</u> hereof.

"<u>Non-Exempt Buyer</u>" shall have the meaning set forth in <u>Section 8(e)</u> hereof.

"<u>Obligations</u>" shall mean any amounts due and payable by Seller to Buyer in connection with any or all Transactions hereunder, together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar proceeding) and all other fees or expenses which are due and payable to Buyer hereunder or under any of the Facility Documents.

"<u>OFAC</u>" shall have the meaning set forth in <u>Section 13(bb)</u> hereof.

"<u>Officer's Compliance Certificate</u>" shall mean a certificate of a Responsible Officer of Seller in the form of <u>Exhibit G</u> hereto.

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**<u>"Operating Account</u>**<u>" shall mean</u> **<u>the account established pursuant to Section 10(c) hereof.</u>**

"<u>Other Taxes</u>" shall have the meaning set forth in <u>Section 8(b)</u> hereof.

"<u>PBGC</u>" shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

"<u>Permits</u>" shall mean, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

"<u>Person</u>" shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof.)

"<u>Plan</u>" shall mean an employee benefit plan as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) that is subject to the provisions of Title IV of ERISA or Section 412 of the Code that is or was at any time during the current year or immediately preceding five (5) years established, maintained or contributed to by Seller or any ERISA Affiliate thereof or with respect to which Seller or any ERISA Affiliate thereof has any actual liability.

"<u>Pooled Mortgage Loan</u>" means any Mortgage Loan that is subject to a Transaction hereunder and is part of a pool of Mortgage Loans certified by the Custodian to an Agency for the purpose of being swapped for an Agency Security backed by such pool, in each case, in accordance with the terms of guidelines issued by such Agency.

"<u>Post-Default Rate</u>" shall have the meaning assigned thereto in the Pricing Side Letter.

"<u>Power of Attorney</u>" shall mean a power of attorney in the form of <u>Exhibit F</u> hereto delivered by Seller.

"<u>Price Differential</u>" shall mean, with respect to any Purchased Mortgage Loan as of any date, the aggregate amount obtained by daily application of the applicable Pricing Rate (or, during the continuation of an Event of Default, by daily application of the Post-Default Rate) for the related Purchased Mortgage Loan to the Purchase Price for such Purchased Mortgage Loan on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Purchased Mortgage Loan and ending on (but excluding) the Repurchase Date for such Purchased Mortgage Loan.

"<u>Price Differential Collection Period</u>" shall mean, with respect to each Purchased Mortgage Loan and Price Differential Payment Date (except for the initial Price Differential Payment Date for such Purchased Mortgage Loan), the period that commences on the first (1st) day of the preceding month and ends on the last day of such month. The Price Differential Collection Period with respect to the initial Price Differential Payment Date for a Purchased Mortgage Loan shall be the period that commences on the applicable Purchase Date and ends on the last day of such month.

"<u>Price Differential Payment Date</u>" shall mean (i) the fifth (5<sup>th</sup>) calendar day of the month, or the next succeeding Business Day, if such calendar day shall not be a Business Day and (ii) the Termination Date.

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"<u>Pricing Rate</u>" shall have the meaning assigned thereto in the Pricing Side Letter.

"<u>Pricing Side Letter</u>" shall mean that certain letter agreement between Buyer and Seller, dated as of the date hereof, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>Professional Liability Insurance Policy</u>" shall mean a professional liability insurance policy to be maintained by the Seller.

"<u>Property</u>" shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

"<u>Purchase Date</u>" shall mean the date on which Purchased Mortgage Loans are transferred by Seller to Buyer or its designee.

"<u>Purchase Price</u>" means, with respect to each Purchased Mortgage Loan, the price at which such Purchased Mortgage Loan is transferred by Seller to Buyer, which shall equal:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) on the Purchase Date, the Asset Value of such Purchased Mortgage Loan as of the Purchase Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) on any day after the related Purchase Date, the amount determined under the immediately preceding clause (a) decreased by the amount of any cash previously transferred by the Seller to Buyer and applied to reduce the Purchase Price of such Purchased Mortgage Loan.

"<u>Purchase Price Percentage</u>" shall have the meaning assigned thereto in the Pricing Side Letter.

"<u>Purchased Mortgage Loan Issue</u>" shall mean, with respect to any Purchased Mortgage Loan as determined in Buyer's good faith discretion, (i) the related Mortgage Note, Mortgage or related guarantee, if any, are determined to be unenforceable; (ii) there has occurred and is continuing a Representation Issue; (iii) the underlying Mortgaged Property is found to have an Environmental Issue, for which Seller or the related Mortgagor does not promptly set up an escrowed reserve in an amount acceptable to Buyer; (iv) federal, state or local law enforcement agencies have seized the underlying Mortgaged Property or (v) such Purchased Mortgage Loan is either in active forbearance or has been more than thirty (30) days contractually past due.

"<u>Purchased Mortgage Loans</u>" shall mean the collective reference to the Eligible Mortgage Loans that are purchased by Buyer and listed on the Asset Schedule attached to the related Transaction Notice (as Appendix I or otherwise), including the related Mortgage Files for which the Custodian has been instructed to hold pursuant to the Custodial and Disbursement Agreement, to the extent such Mortgage Loans have not been repurchased in accordance with the terms of this Agreement.

"<u>Qualified Originator</u>" shall mean an originator of Mortgage Loans which is acceptable under the Underwriting Guidelines.

"<u>Rating Agency</u>" shall mean, each of Fitch, Inc., Moody's and S&P, as applicable.

"<u>Records</u>" shall mean all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by Seller or any other Person or entity with respect to a Mortgage Loan. Records shall include the Mortgage Notes, any Mortgages, the Mortgage Files, the credit files related to the Mortgage Loan and any other instruments necessary to document or service a Mortgage Loan.

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"<u>Register</u>" shall have the meaning set forth in <u>Section 22(b)</u> hereof.

"<u>Regulations T, U and X</u>" shall mean Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.

"<u>Relevant Governmental Body</u>" shall mean the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

"<u>Reportable Event</u>" shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under PBGC Reg. § 4043.

"<u>Reporting Period</u>" means the thirtieth (30<sup>th</sup>) calendar day after the end of each calendar month.

"<u>Representation Issue</u>" shall mean Buyer's determination that there is a breach of a representation and warranty with respect to a Purchased Mortgage Loan (including a breach of any representation set forth on <u>Schedule 1-A</u> or <u>Schedule 1-B</u> hereof, as applicable), which breach adversely affects the value of such Mortgage Loan or Buyer's interest therein, as determined by Buyer in its sole discretion.

"<u>Repurchase Assets</u>" shall have the meaning provided in <u>Section 9(a)</u> hereof.

"<u>Repurchase Date</u>" shall mean the earliest of (x) the Termination Date, (y) any date determined by application of the respective Maximum Transaction Duration, (z) the date on which Seller is to repurchase the Purchased Mortgage Loans subject to a Transaction from Buyer on a date requested pursuant to <u>Section 4</u> hereof, including any date determined by application of the provisions of <u>Sections 3</u> or <u>4</u> or <u>15</u> hereof.

"<u>Repurchase Notice</u>" shall have the meaning provided in <u>Section 4(c)</u> hereof.

"<u>Repurchase Price</u>" shall mean, with respect to any Purchased Mortgage Loan as of any date of determination, an amount equal to the applicable Purchase Price <u>minus</u> (A) any payments made by or on behalf of Seller in reduction of the outstanding Repurchase Price in each case before or as of such determination date with respect to such Purchased Mortgage Loan, <u>plus</u> (B) the sum of (i) any accrued and unpaid Price Differential, (ii) any increased costs, indemnification amounts, taxes and breakage fees allocable to the repurchase of such Purchased Mortgage Loan, and (iii) any other amounts due and payable under this Agreement with respect to such Purchased Mortgage Loan, pursuant to the Pricing Side Letter.

"<u>Required Insurance Policy</u>" shall mean any Fidelity Insurance Policy, Errors and Omissions Insurance Policy or Professional Liability Insurance Policy.

"<u>Requirement of Law</u>" shall mean with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

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"<u>Reserve</u> <u>Account</u>" shall mean a segregated account established at the Reserve Account Bank, in the name of Seller and subject to a Reserve Account Control Agreement with Buyer which shall at all times contain a balance in an amount equal or greater than the Reserve Account Threshold, as such amount may be subject to set off by Buyer, following the occurrence and continuance of an Event of Default, with respect to any Obligations.

"<u>Reserve Account Bank</u>" shall mean [\*\*\*]., and any successor thereto under the Reserve Account Control Agreement.

"<u>Reserve Account Control Agreement</u>" shall mean a blocked account control agreement providing the Buyer with control at all times over the Reserve Account.

"<u>Reserve Account</u> <u>Threshold</u>" shall have the meaning set forth in the Pricing Side Letter.

"<u>Responsible Officer</u>" shall mean (i) as to any Person, the Chief Executive Officer or, with respect to financial matters, the Chief Financial Officer or Chief Accounting Officer or any other officer of such Person whose responsibilities are substantially consistent with those of any of the foregoing or are tasked with acting on behalf of any of the foregoing and (ii) as to Seller, President, Chief Administrative Officer, Treasurer, Senior Managing Counsel or any other executive managing member.

"<u>S&P</u>" shall mean Standard & Poor's Ratings Services, or any successor thereto.

"<u>Sanctioned Country</u>" shall have the meaning set forth in <u>Section 13(bb)</u> hereof.

"<u>Sanctions</u>" shall have the meaning set forth in <u>Section 13(bb)</u> hereof.

"<u>SDN List</u>" shall have the meaning set forth in <u>Section 13(bb)</u> hereof.

"<u>Section 4402</u>" shall have the meaning set forth in <u>Section 31</u> hereof.

"<u>Section 8 Certificate</u>" shall have the meaning set forth in <u>Section 8(e)(ii)</u> hereof.

"<u>Securities Issuance Failure</u>" the failure of a pool of Pooled Mortgage Loans to back the issuance of an Agency Security.

"<u>Seller</u>" shall mean Home Point Financial Corporation.

"<u>Seller Employees</u>" shall have the meaning set forth in <u>Section 14(m)</u> hereof.

"<u>Servicer</u>" shall mean any servicer or subservicer appointed by Seller and approved by Buyer in its good faith discretion, which may be Seller.

"<u>Servicer Side Letter</u>" shall have the meaning set forth in <u>Section 18(c)</u> hereof.

"<u>Servicer Termination Event</u>" shall mean (i) an Event of Default hereunder or (ii) with respect to any Servicer (1) an event of default under the related Servicing Agreement, (2) such Servicer shall become the subject of an Insolvency Event, (3) such Servicer shall admit its inability to, or its intention not to, perform any of its obligations under the Facility Documents, or (4) the failure of such Servicer to perform its obligations under any of the Facility Documents to which it is a party or the related Servicing Agreement, including, without limitation, the failure of such Servicer to (A) remit funds in accordance with <u>Section 5(a)(i)</u> hereof, or (B) deliver reports to Seller when required.

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"<u>Servicing Agreement</u>" shall mean any servicing agreement entered into between Seller and a third party servicer, which form and substance has been approved by Buyer, as the same may be amended from time to time of which Buyer shall be an intended third party beneficiary.

"<u>Servicing Rights</u>" shall mean rights of Seller or any other Person to administer, manage, service or subservice, the Purchased Mortgage Loans or to possess related Records.

**<u>"Settlement</u>** <u>Account" shall mean</u> **<u>the following account:</u>**

**<u>Name of Bank:</u>** [\*\*\*]

**<u>Bank ABA Number:</u>** [\*\*\*]

**<u>Bank SWIFT</u>** [\*\*\*]

**<u>Account Number:</u>** [\*\*\*]

**<u>Account Name:</u>** [\*\*\*]

**<u>Account Type:</u>** [\*\*\*]

**<u>Bank City and State:</u>** [\*\*\*]

**<u>Reference:</u>** [\*\*\*]

"<u>Settlement Date</u>" means, with respect to Pooled Mortgage Loans subject to a Transaction, that date specified as the contractual delivery and settlement date in the related Take-out Commitment pursuant to which Buyer or its designee under the Joint Securities Account Control Agreement has the right to deliver Agency Securities to the Take-out Investor.

"<u>SOFR</u>" shall mean, with respect to any day, the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York's Website.

"<u>Subordinated Debt</u>" means, for any Person, Indebtedness of such Person which is (a) unsecured, (b) no part of the principal of such Indebtedness is required to be paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory prepayment or otherwise) prior to the date which is one year following the Termination Date and (c) the payment of the principal of and interest on such Indebtedness and other obligations of such Person in respect of such Indebtedness are subordinated to the prior payment in full of the principal of and interest (including post-petition obligations) on the Transactions and all other obligations and liabilities of such Person to Buyer hereunder, in each case, on terms and conditions approved in writing by Buyer and all other terms and conditions of which are satisfactory in form and substance to Buyer.

"<u>Subsidiary</u>" shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

"<u>Take-out Commitment</u>" shall mean a commitment of Seller to sell one or more Purchased Mortgage Loans to a Take-out Investor in an arms-length, all cash transaction, and the corresponding Take-out Investor's commitment back to Seller to effectuate the foregoing.

"<u>Take-out Investor</u>" shall mean any Person (other than an Affiliate of Seller) that has entered into a Take-out Commitment; <u>provided</u> that to the extent Purchased Mortgage Loans are

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sent pursuant to a Bailee Letter with a third party bailee that is not a nationally known bank prior to purchase, such third party bailee must be approved by Buyer in its good faith discretion.

"<u>Taxes</u>" shall have the meaning set forth in <u>Section 8(a)</u> hereof.

**<u>"</u>**<u>Term SOFR</u>**<u>" shall mean, with respect to any Transaction for any day, the Term SOFR Reference Rate for a one month tenor, as such rate is published by the Term SOFR Administrator for such day at</u>** [\*\*\*]**<u>. (New York City time); provided, however, that if as of</u>** [\*\*\*] **<u>(New York City time) the Term SOFR Reference Rate for the foregoing tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to Term SOFR has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the</u>** [\*\*\*] **<u>U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator.</u>**

**<u>"Term SOFR Administrator" shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by Buyer in its sole discretion).</u>**

**<u>"Term SOFR Reference Rate" shall mean the forward-looking term rate based on SOFR.</u>**

"<u>Term SOFR</u>" shall mean the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

"<u>Termination Date</u>" shall have the meaning assigned thereto in the Pricing Side Letter.

"<u>Transaction</u>" shall have the meaning set forth in <u>Section 1</u> hereof.

"<u>Transaction Notice</u>" shall mean a request from Seller to Buyer, which may be by electronic means (including e-mail), to enter into a Transaction.

"<u>Trust Receipt</u>" shall have the meaning set forth in the Custodial and Disbursement Agreement.

**<u>"UETA" shall mean the Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999.</u>**

"<u>Unadjusted Benchmark Replacement</u>" shall mean the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

"<u>Underwriting Guidelines</u>" means the standards, procedures and guidelines of Seller for underwriting and acquiring Mortgage Loans, which are set forth in the written policies and procedures of Seller, which have previously been provided and such other guidelines as are identified and provided to Buyer.

"<u>Underwriting Package</u>" shall mean with respect to any proposed Purchased Mortgage Loan, the Asset Schedule listing such proposed Purchased Mortgage Loan and such other computer readable file or other information requested by Buyer during the course of its due diligence and delivered prior to the date of a Transaction for such proposed Purchased Mortgage Loan containing, with respect to the related proposed Purchased Mortgage Loan, information in form and substance acceptable to Buyer in its reasonable discretion, together with a certification

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that Seller has no actual knowledge of any information concerning such proposed Purchased Mortgage Loan which is not reflected in such file or otherwise disclosed to Buyer in writing.

"<u>Uniform Commercial Code</u>" or "<u>UCC</u>" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; <u>provided</u> that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any Repurchase Assets or the continuation, renewal or enforcement thereof is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, "Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.

**<u>"U.S. Government Securities Business Day" shall mean any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.</u>**

"<u>U.S. Special Resolution Regime</u>" shall mean each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

"<u>USA Patriot Act</u>" shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended.

"<u>USDA</u>" means the United States Department of Agriculture.

"<u>USDA Mortgage Loan</u>" means a first lien Mortgage Loan originated in accordance with the criteria established by and guaranteed by the USDA.

"<u>VA</u>" shall mean the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs.

"<u>VA Approved Lender</u>" means a lender which is approved by the VA to act as a lender in connection with the origination of VA Loans.

"<u>VA Loan</u>" shall mean a Mortgage Loan which is subject of a VA Loan Guaranty Agreement as evidenced by a loan guaranty certificate.

"<u>VA Loan Guaranty Agreement</u>" shall mean the obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a maximum amount) upon default of the Mortgagor pursuant to the Servicemen's Readjustment Act, as amended.

"<u>Wet-Ink Mortgage Loan Document Receipt Date</u>" shall mean the [\*\*\*] Business Day following the applicable Purchase Date.

"<u>Wet-Ink Mortgage Loan</u>" shall mean a Mortgage Loan originated by Seller in a transaction table-funded by Buyer, which origination or table funding is financed in part or in whole with proceeds of Transactions and as to which the Custodian has not yet received the related Mortgage File. A Mortgage Loan shall cease to be a Wet-Ink Mortgage Loan on the date on which Buyer has received a Trust Receipt and Exception Report from the Custodian with respect to such Mortgage Loan confirming that the Custodian has physical possession of the related Mortgage File (as defined in the Custodial and Disbursement Agreement) and that there are no Exceptions (as defined in the Custodial and Disbursement Agreement) with respect to such Mortgage Loan.

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"<u>Wet-Ink Transaction</u>" shall mean a Transaction in which a Wet-Ink Mortgage Loan is the Purchased Mortgage Loan. A Wet-Ink Transaction shall cease to be a Wet-Ink Transaction on the date that the underlying Wet-Ink Mortgage Loan ceases to be a Wet-Ink Mortgage Loan (in accordance with the definition thereof).

<u>Section 3.&nbsp;&nbsp;&nbsp;&nbsp;No Commitment; Initiation; Termination</u>.

Prior to the occurrence and continuation of an Event of Default and subject to the terms and conditions set forth herein, Buyer agrees that it may, in its sole discretion, enter into Transactions with Seller from time to time in an aggregate principal amount that will not result in the Aggregate Facility Purchase Price for all Purchased Mortgage Loans subject to then outstanding Transactions under this Agreement, together with any Eligible Mortgage Loans that are being offered by Seller for purchase under such Transaction to exceed, as of any date determination, the Maximum Aggregate Purchase Price. Within the foregoing limits and subject to the terms and conditions set forth herein, Seller and Buyer may enter into Transactions. ***This Agreement is not a commitment by Buyer to enter into Transactions with Seller but sets forth the requirements under which Buyer would consider entering into Transactions as set forth herein. For the sake of clarity, Seller hereby acknowledges that Buyer is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement*.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Conditions Precedent to Initial Transaction</u>. Buyer's agreement (if any) to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the condition precedent that Buyer shall have received from Seller any fees and expenses due and payable hereunder, and all of the following documents, each of which shall be satisfactory to Buyer and its counsel in form and substance:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Facility Documents</u>. The Facility Documents, duly executed by the parties thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;<u>Opinions of Counsel</u>. (A) A security interest creation and perfection, general corporate, Investment Company Act and enforceability opinion or opinions of counsel to Seller and (B) a Bankruptcy Code opinion of outside counsel to Seller with respect to matters outlined in <u>Section 33</u>, each of which shall be in a form acceptable to Buyer in its reasonable discretion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;<u>Organizational Documents</u>. A certified copy of the articles of incorporation of Seller from the jurisdiction of organization of Seller delivered to Buyer prior to the Effective Date and copies of the organizational documents of Seller and evidence of all corporate or other authority for Seller with respect to the execution, delivery and performance of the Facility Documents to which it is a party and each other document to be delivered by Seller from time to time in connection herewith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;<u>Good Standing Certificates</u>. A certified copy of a good standing certificate from the jurisdiction of organization of Seller, dated as of no earlier than the date that is fifteen (15) Business Days prior to the date hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;<u>Incumbency Certificates</u>. An incumbency certificate of the manager, member, director or other similar officer of Seller certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Facility Documents to which it is a party;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;<u>Security Interest</u>. Evidence that all other actions necessary to perfect and protect the sale, transfer, conveyance and assignment by Seller to Buyer or its designee, subject to the terms of this Agreement, of all of Seller's right, title and interest it may have in and to the Purchased Mortgage Loans, the Repurchase Assets, and other items pledged under <u>Section 9(a)</u> together with all right, title and interest in and to the proceeds of any related Repurchase Assets have been taken, including in each case performing UCC searches and duly authorized and filing Uniform Commercial Code financing statements on Form UCC-1;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;<u>Insurance</u>. Evidence that the Seller has added Buyer as an additional loss payee under the Seller's Fidelity Insurance Policy and as a direct loss payee with right of action under the Errors and Omissions Insurance Policy or Professional Liability Insurance Policy, copies of which are attached hereto as <u>Exhibit C</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved]</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;&nbsp;&nbsp;<u>Reserve</u>**<u>Operating</u>** <u>Account</u>. Evidence that the Reserve**<u>Operating</u>** Account has been established, per the terms of this Agreement, and contains at least the Reserve**<u>Minimum</u>** Account **<u>Balance</u>** Threshold; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;<u>Other Documents</u>. Such other documents as Buyer may request, in form and substance acceptable to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Conditions Precedent to all Transactions</u>. Upon satisfaction of the conditions set forth in <u>Section 3(a)</u> hereof, and subject to the limitations set forth in the first paragraph of <u>Section 3</u>, Buyer may, in its sole discretion, enter into a Transaction with Seller. Buyer's entering into each Transaction (including the initial Transaction) is subject to the satisfaction of the following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect thereto to the intended use thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Due Diligence Review</u>. Without limiting the generality of <u>Section 20</u> hereof, Buyer shall have completed, to its satisfaction, its due diligence review of the related Mortgage Loans and Seller;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Default</u>. No Default or Event of Default shall have occurred and be continuing under the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;<u>Representations and Warranties; Eligible Mortgage Loans</u>. Both immediately prior to the Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in <u>Section 13</u> hereof and on <u>Schedule 1-A</u> and <u>Schedule 1-B</u> hereto, as applicable, in respect of the related Purchased Mortgage Loan, shall be true, correct and complete on and as of such Purchase Date in all respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;<u>Maximum Purchase Price</u>. After giving effect to the requested Transaction, the Aggregate Facility Purchase Price subject to then outstanding Transactions under this Agreement shall not exceed the Maximum Aggregate Purchase Price;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Purchased Mortgage Loan Issue; No Margin Deficit</u>. As of the related Purchase Date, (A) Seller shall not have failed to repurchase any Purchased Mortgage Loan pursuant to a repurchase request by Buyer pursuant to <u>Section 4</u> hereof following the occurrence of a Purchased Mortgage Loan Issue with respect to such Purchased Mortgage Loan, and (B) no Margin Deficit shall have occurred and be continuing with respect to any Purchased Mortgage Loans. Additionally, after giving effect to the requested Transaction, no Purchased Mortgage Loan Issue or Margin Deficit shall have occurred or be continuing with respect to the related Purchased Mortgage Loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;<u>Transaction Notice</u>. Seller shall have delivered to Buyer (a) a Transaction Notice and (b) an Asset Schedule;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;<u>Delivery of Mortgage File</u>. Seller shall have delivered to the Custodian the Mortgage File with respect to each Mortgage Loan that is not a Wet-Ink Mortgage Loan and that is subject to the proposed Transaction, and the Custodian shall have issued a Trust Receipt showing no exceptions with respect to each such Mortgage Loan to Buyer as of the related Purchase Date all subject to and in accordance with the Custodial and Disbursement Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;&nbsp;&nbsp;<u>Approval of Servicing Agreement</u>. To the extent not previously delivered and approved, Buyer shall have, in its sole reasonable discretion, approved each Servicing Agreement pursuant to which any Mortgage Loan that is subject to such Transaction is to be serviced during the term of such Transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;<u>Servicer Side Letter</u>. To the extent the related Purchased Mortgage Loans are to be serviced or sub-serviced by a Servicer other than Seller, Buyer shall have received (a) a Servicer Side Letter with respect to Purchased Mortgage Loans serviced by each Servicer and (b) if Buyer so requests in its sole reasonable discretion, an opinion of Seller's counsel as to the enforceability of such Servicer Side Letter, in form and substance acceptable to Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved.]</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)&nbsp;&nbsp;&nbsp;&nbsp;<u>Requirements of Law</u>. Buyer shall not have determined in good faith that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions hereunder, and Buyer shall have made a similar determination with respect to similarly situated counterparties with similar collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Material Adverse Change</u>. None of the following shall have occurred and/or be continuing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;&nbsp;&nbsp;an event or events shall have occurred in the good faith determination of Buyer resulting in the effective absence of a "repo market" or comparable "lending market" for financing debt obligations secured by securities or an event or events shall have occurred resulting in Buyer not being able to finance Mortgage Loans through the "repo market" or "lending market" with traditional counterparties at rates which

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would have been reasonable prior to the occurrence of such event or events; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;an event or events shall have occurred resulting in the effective absence of a "securities market" for securities backed by Mortgage Loans or an event or events shall have occurred resulting in Buyer not being able to sell securities backed by Mortgage Loans at prices which would have been reasonable prior to such event or events; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;&nbsp;&nbsp;there shall have occurred a material adverse change in the financial condition of Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of Buyer to fund its obligations under this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;&nbsp;&nbsp;there shall have occurred (i) a material change in financial markets, a material outbreak or escalation of hostilities or a material change in national or international political, financial or economic conditions; (ii) a general suspension of trading on major stock exchanges; or (iii) a disruption in or moratorium on commercial banking activities or securities settlement services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv)&nbsp;&nbsp;&nbsp;&nbsp;<u>Certification</u>. Each Transaction Notice delivered by Seller hereunder shall constitute a certification by Seller that all the conditions set forth in this <u>Section 3(b)</u> have been, or will be on the related Purchase Date, satisfied (both as of the date of such notice or request and as of Purchase Date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv)&nbsp;&nbsp;&nbsp;&nbsp;<u>Repurchase Date</u>. The Repurchase Date for each Transaction shall not be later than the then current Termination Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi)&nbsp;&nbsp;&nbsp;&nbsp;<u>Reserve</u>**<u>Operating</u>** <u>Account</u>. Evidence that the Reserve**<u>Operating</u>** Account contains at least the Reserve**<u>Minimum</u>** Account Threshold**<u>BalanceThreshold</u>**;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii)&nbsp;&nbsp;&nbsp;&nbsp;<u>Correspondent Seller</u>. With respect to each Correspondent Mortgage Loan, Seller shall not have received notice from Buyer that the related Correspondent Seller is not approved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix)&nbsp;&nbsp;&nbsp;&nbsp;<u>Pooled Mortgage Loans</u>. Prior to giving effect to any Transaction with respect to any Pooled Mortgage Loan, Buyer shall be added as a party to (i) the Intercreditor Agreement and (ii) the Joint Securities Account Control Agreement, in each case, duly executed and delivered by the parties thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx)&nbsp;&nbsp;&nbsp;&nbsp;<u>Other Documents</u>. Such other documents as Buyer may request, consistent with market practices, in form and substance reasonably acceptable to Buyer; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi)&nbsp;&nbsp;&nbsp;&nbsp;<u>Security Release Certification</u>. With respect to each Purchased Mortgage Loan that is subject to a security interest (including any precautionary security interest) immediately prior to the Purchase Date, Seller shall have received adequate documentation necessary to release the related secured party's security interest in such Purchased Mortgage Loan and upon request shall provide such documentation to Buyer. If necessary, such secured party shall have filed

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UCC termination statements in respect of any UCC filings made in respect of such Purchased Mortgage Loan, and each such release and UCC termination statement has been delivered to Buyer prior to each Transaction and to the Custodian as part of the Mortgage File.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Initiation (Transactions other than Wet-Ink Transactions)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise agreed, Seller may request that Buyer enter into a Transaction with respect to any Eligible Mortgage Loans on any Business Day during the period from the Effective Date to and excluding the Termination Date, by delivering to Buyer, with a copy to the Custodian, a (i) Transaction Notice, which must be received no later than [\*\*\*] (New York City time) on the Business Day prior to the requested Purchase Date, and (ii) an Asset Schedule, which must be received no later than [\*\*\*]. (New York City time) on the requested Purchase Date. The delivery of such Transaction Notice shall be deemed a representation and warranty that Seller has no actual knowledge of any material information concerning such Eligible Mortgage Loan which is not reflected in such Asset Schedule or Transaction Notice or other information or otherwise disclosed to Buyer in writing. Buyer shall have the right to review the information set forth on the Transaction Notice and accompanying Asset Schedule, the Underwriting Package and the Eligible Mortgage Loans proposed to be subject to a Transaction as Buyer determines during normal business hours. In the event the Asset Schedule provided by Seller contains erroneous computer data, is not formatted properly or the computer fields are otherwise improperly aligned, Buyer shall provide written or electronic notice to a Responsible Officer of Seller describing such error and Seller may either (a) give Buyer written or electronic authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields or (b) correct the computer data, reformat or properly align the computer fields itself and resubmit the Asset Schedule as required herein. In the event that Seller gives Buyer authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields, Seller shall hold Buyer harmless for such correction, reformatting or realigning, as applicable, except as otherwise expressly provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Upon Seller's request to enter into a Transaction pursuant to <u>Section 3(c)(i)</u> and assuming all conditions precedent set forth in this <u>Section 3</u> and have been met **<u>and provided that no Default or Event of Default shall have occurred and be continuing</u>**, on the requested Purchase Date, Buyer may, in its sole discretion purchase the Eligible Mortgage Loans included in the related Transaction Notice pursuant to the terms of this Agreement. **<u>In connection with entering into such Transaction, the Seller shall remit to Buyer or its designated agent the applicable Haircut Amount and Buyer shall send, or cause to be sent, the Purchase Price and Haircut Amount to the applicable warehouse lender as directed by Seller.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;Each Transaction Notice together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Subject to the terms and conditions of this Agreement, during such period Seller may sell to, repurchase from and resell to Buyer Eligible Mortgage Loans hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall deliver to the Custodian, in accordance with the terms of the Custodial and Disbursement Agreement, the Mortgage File pertaining to

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each Mortgage Loan to be sold to Buyer hereunder on the requested Purchase Date. Upon Buyer's receipt of the Trust Receipt in accordance with the Custodial and Disbursement Agreement and subject to the provisions of this <u>Section 3</u>, to the extent that Buyer agrees in its sole discretion to fund the related Purchase Price on the Purchase Date, such aggregate Purchase Price for the related Transaction shall then be made available to Seller by Buyer transferring, via wire transfer, in the aggregate amount of such Purchase Prices in funds immediately available in accordance with <u>Section 10(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Initiation (Wet-Ink Transactions)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Seller may request a Wet-Ink Transaction hereunder, on any Business Day during the period from the Effective Date to and excluding the Termination Date, by delivering to Buyer, with a copy to the Custodian, a transmission or transmissions which shall attach (i) a Transaction Notice with respect to the related Mortgage Loans, which shall be received no later than [\*\*\*] (New York City time) on the Business Day prior to the requested Purchase Date and (ii) an Asset Schedule with respect to the related Mortgage Loans, the latest transmission of which must be received by the Buyer and Custodian no later than [\*\*\*] (New York City time) on such Purchase Date. Such Transaction Notice shall specify the requested Purchase Date. In the event the Asset Schedule provided by Seller contains erroneous computer data, is not formatted properly or the computer fields are otherwise improperly aligned, Buyer shall provide written or electronic notice to a Responsible Officer of Seller describing such error and Seller may either (a) give Buyer written or electronic authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields or (b) correct the computer data, reformat or properly align the computer fields itself and resubmit the Asset Schedule as required herein. In the event that Seller gives Buyer authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields, Seller shall hold Buyer harmless for such correction, reformatting or realigning, as applicable, except as otherwise expressly provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall deliver (or cause to be delivered) and release to the Custodian the Mortgage File pertaining to such Wet-Ink Mortgage Loans no later than the Wet-Ink Mortgage Loan Document Receipt Date in accordance with the terms and conditions of the Custodial and Disbursement Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;Upon the Seller's request for a Transaction pursuant to <u>Section 3(d)(i)</u>, the Buyer may, upon satisfaction of all conditions precedent set forth in <u>Sections 3(a)</u> and <u>3(b)</u> hereof, and provided that no Default or Event of Default shall have occurred and be continuing, enter into a Transaction with Seller on the requested Purchase Date, in the amount so requested. **<u>In connection with entering into such Transaction, the Seller shall remit to Buyer or its designated agent the applicable Haircut Amount and Buyer shall send, or cause to be sent, the Purchase Price and Haircut Amount to the Closing Agent as directed by Seller.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Upon notice from the Closing Agent to Seller that a Wet-Ink Mortgage Loan was not originated, such Wet-Ink Mortgage Loan shall be removed from the list of Eligible Mortgage Loans. The Seller shall notify Buyer in writing if a Wet-Ink Mortgage Loan was not originated and has been removed from the list of Eligible Mortgage Loans.

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<u>Section 4.&nbsp;&nbsp;&nbsp;&nbsp;Repurchases</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall repurchase the related Purchased Mortgage Loans from Buyer without penalty or premium on each related Repurchase Date. On the Repurchase Date for any Transaction, termination of such Transaction will be effected by reassignment to Seller or its designee of the Purchased Mortgage Loans subject to such Transaction against the simultaneous transfer of the Repurchase Price (excluding the amounts identified in clause (B) of the definition of Repurchase Price, which, for the avoidance of doubt, shall be paid on the next succeeding Price Differential Payment Date) to the account of the Buyer that is referenced in <u>Section 10(a)</u> of this Agreement. Buyer shall instruct the Custodian to release the Mortgage Files with respect to each repurchased Purchased Mortgage Loan to Seller or its designee at Seller's expense on the related Repurchase Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;So long as no Default or Event of Default has occurred or is continuing, Seller may effect a repurchase in connection with the sale or disposition of Purchased Mortgage Loans to a Take-out Investor or other applicable buyer; <u>provided</u>, that Seller shall be permitted to effect such a repurchase if a Default has occurred and is continuing only if such repurchase would cure such Default; <u>provided</u>, <u>further,</u> that Seller shall not be permitted to repurchase any Purchased Mortgage Loan if the release of such Purchased Mortgage Loans would result in a Margin Deficit unless such Margin Deficit is simultaneously cured by Seller in connection with such repurchase by payment by Seller. If Seller intends to make such a repurchase, by no later than [\*\*\*] (New York City time) on the desired Repurchase Date, Seller shall or shall cause the Take-out Investor or other applicable buyer to (i) provide Buyer with a purchase advice notice identifying the Purchased Mortgage Loan(s) being repurchased and the related take-out price(s), and (ii) make payment directly to the account of the Buyer that is referenced in <u>Section 10(a)</u> of this Agreement in an amount equal to the aggregate net proceeds to be received by Seller in connection with the related sale. Buyer shall, on the same Business Day of receipt of such funds, apply such funds to the Repurchase Price of the related Mortgage Loans and shall, on the same Business Day of receipt of such funds, remit any excess to Seller; provided, that Buyer shall have no obligation to apply payments in the event that it is unable to identify the Purchased Mortgage Loans to which such payments correspond. Upon repurchase of the related Purchased Assets, Buyer will be deemed to have released its interests hereunder in such Purchased Assets, and Buyer shall represent to Seller, to the extent that good title was transferred and assigned by Seller to Buyer hereunder on the related Purchase Date, that Buyer is the sole owner of such Purchased Asset, free and clear of any other interests or liens caused by the Buyer's actions or inactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Without limiting Buyer's rights and remedies under Section 7 hereof or otherwise, if at any time there has occurred a Purchased Mortgage Loan Issue with respect to any Purchased Mortgage Loan, Buyer may, at its option, by notice to a Responsible Officer of Seller (as such notice is more particularly set forth below, a "<u>Repurchase Notice</u>"), require Seller or its designee to repurchase such Purchased Mortgage Loan by remitting the related Repurchase Price (excluding the amounts identified in clause (B) of the definition of Repurchase Price, which, for the avoidance of doubt, shall be paid on the next succeeding Price Differential Payment Date) to the Disbursement**<u>Settlement</u>** Account of Buyer as soon as is practicable but, in any case, not more than [\*\*\*] after Buyer has delivered such Repurchase Notice to a Responsible Officer of Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Buyer's election, in its sole and absolute discretion, not to send a Repurchase Notice at any time a Purchased Mortgage Loan is no longer an Eligible

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Mortgage Loan shall not in any way limit or impair its right to send a Repurchase Notice at a later time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;The fact that Buyer has conducted or has failed to conduct any partial or complete due diligence investigation in connection with its purchase of any Purchased Mortgage Loan shall not affect Buyer's right to demand repurchase or any other remedy as permitted under this Agreement.

<u>Section 5.&nbsp;&nbsp;&nbsp;&nbsp;Income Payments; Price Differential</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Income Payments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;If Income is paid in respect of any Purchased Mortgage Loans during the term of a Transaction, such Income shall be the property of Buyer. Upon the occurrence and during the continuance of an Event of Default, within two (2) Business Days of receipt and identification thereof, Seller shall, and shall cause Servicer to, deposit all Income into the account set forth in Section 10(a) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any provision to the contrary in this Section 5, within three (3) Business Days of receipt by Seller or Servicer of any prepayment of principal in full, with respect to a Purchased Mortgage Loan, Seller shall or shall cause Servicer to remit such amount directly to the Disbursement**<u>Settlement</u>** Account of Buyer and Buyer shall immediately apply any such amount received to reduce the amount of the Repurchase Price due upon termination of the related Transaction and shall promptly remit any excess to Seller; <u>provided</u>, that Buyer shall have no obligation to apply payments in the event that it is unable to identify the Purchased Mortgage Loans to which such payments correspond.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the preceding provisions, if an Event of Default has occurred and is continuing, all funds received by Buyer pursuant to this Section 5 shall be applied to reduce the Obligations as determined by Buyer in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Price Differential.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;On each Business Day that a Transaction is outstanding, the Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid Price Differential for each Price Differential Collection Period shall be settled in cash on the following Price Differential Payment Date. Two (2) Business Days prior to the Price Differential Payment Date, Buyer shall give Seller written or electronic notice of the amount of the Price Differential due on such Price Differential Payment Date. On the Price Differential Payment Date, Seller shall pay to Buyer the Price Differential for such Price Differential Payment Date (along with any other amounts due from Seller under this Agreement or any other Facility Document), by wire transfer in immediately available funds **<u>to the account set forth in Section 10(a) hereof</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;If Seller fails to pay all or part of the Price Differential by [\*\*\*] (New York City time) on the related Price Differential Payment Date, with respect to any Purchased Mortgage Loans, Seller shall be obligated to pay to Buyer (in addition to, and together with, the amount of such Price Differential) interest on the unpaid Repurchase Price at a rate per annum equal to the Post-Default Rate until the Price Differential is received in full by Buyer. For the avoidance of

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doubt, Seller's obligation to pay any Price Differential to Buyer shall not be deemed to be satisfied (and such Price Differential shall not deemed to be paid to Buyer) until the amount of such Price Differential is actually received by Buyer in the account of Buyer that is referenced in <u>Section 10(a)</u> of this Agreement (and not the Disbursement**<u>Settlement</u>** Account or any other account).

<u>Section 6.&nbsp;&nbsp;&nbsp;&nbsp;Requirements Of Law</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;If any Requirement of Law or any change in the interpretation or application thereof or compliance by Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;shall subject Buyer to any Tax or increased Tax of any kind whatsoever (other than Excluded Taxes) with respect to this Agreement or any Transaction or change the basis of taxation of payments to Buyer in respect thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of Buyer which is not otherwise included in the determination of the LIBOR Rate**<u>Term SOFR</u>** hereunder; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;shall impose on Buyer any other material condition;

and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, then, in any such case, (A) Buyer shall give Seller prompt notice thereof and (B) Seller shall, at its option, either (1) promptly repurchase all Purchased Mortgage Loans then subject to a Transaction or (2) promptly pay Buyer such additional amount or amounts as calculated by Buyer in good faith as will compensate Buyer for such increased cost or reduced amount receivable; <u>provided</u> that in making a determination of increased cost pursuant to this <u>Section 6(a)</u>, Buyer shall treat Seller in substantially the same manner Buyer treats similarly situated counterparties for similar collateral; <u>provided</u>, <u>further</u>, that Seller shall not be responsible for any amounts under this <u>Section 6(a)</u> if such increased costs or reduced amount receivables are incurred by Buyer prior to the date that is ninety (90) days prior to Buyer's notice to a Responsible Officer of Seller of such costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;If Buyer shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on Buyer's or such corporation's capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer's or such corporation's policies with respect to capital adequacy) by an amount deemed by Buyer to be material, then from time to time, Seller shall, at its option, either (1) promptly repurchase all Purchased Mortgage Loans then subject to a Transaction or (2) promptly pay Buyer such additional amount or amounts as calculated by Buyer in good faith as will compensate Buyer for such increased cost or reduced amount receivable; <u>provided</u> that in making a determination of increased cost pursuant to this

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<u>Section 6(b)</u>, Buyer shall treat Seller in substantially the same manner Buyer treats similarly situated counterparties for similar collateral; <u>provided</u>, <u>further</u>, that Seller shall not be responsible for any amounts under this <u>Section 6(b)</u> if such increased costs or reduced amount receivables are incurred by Buyer prior to the date that is ninety (90) days prior to Buyer's notice to a Responsible Officer of Seller of such costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;If Buyer becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly notify Seller of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this Section submitted by Buyer to Seller shall be conclusive in the absence of manifest error.

<u>Section 7.&nbsp;&nbsp;&nbsp;&nbsp;Margin Maintenance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;If at any time the aggregate outstanding Purchase Price of all Purchased Mortgage Loans subject to Transactions is greater than the aggregate Asset Value of such Purchased Mortgage Loans subject to Transactions (a "<u>Margin Deficit</u>"), and such Margin Deficit is greater than the Minimum Margin Threshold, then Buyer may by notice to a Responsible Officer of Seller (as such notice is more particularly set forth below, a "<u>Margin Call</u>"), require Seller to transfer to Buyer cash in an amount at least equal to the Margin Deficit (such amount, a "<u>Margin Payment</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;If Buyer delivers a Margin Call to Seller on or prior to [\*\*\*] (New York City time) on any Business Day, then Seller shall transfer the Margin Payment to Buyer or its designee no later than [\*\*\*] (New York City time) on such Business Day. In the event Buyer delivers a Margin Call to Seller after [\*\*\*] (New York City time) on any Business Day, Seller shall be required to transfer the Margin Payment no later than [\*\*\*] (New York City time) on the following Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall transfer any Margin Payment to the account of Buyer that is referenced in Section 10(a) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;In the event that a Margin Deficit exists with respect to any Purchased Mortgage Loans, Buyer may retain any funds received by it to which the Seller would otherwise be entitled hereunder, which funds (i) shall be held by Buyer against the related Margin Deficit and (ii) may be applied by Buyer against the Repurchase Price of any Purchased Mortgage Loan for which the related Margin Deficit remains otherwise unsatisfied. Notwithstanding the foregoing, Buyer retains the right, in its sole discretion, to make a Margin Call in accordance with the provisions of this Section 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;The failure of Buyer, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions of this Agreement or limit the right of Buyer to do so at a later date. Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer's rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.

<u>Section 8.&nbsp;&nbsp;&nbsp;&nbsp;Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Any and all payments by Seller under or in respect of this Agreement or any other Facility Documents to which Seller is a party shall be made free and clear of, and without deduction or withholding for or on account of, any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other

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Governmental Authority (collectively, "<u>Taxes</u>"), unless required by law. If Seller shall be required under any applicable Requirement of Law to deduct or withhold any Taxes from or in respect of any sum payable under or in respect of this Agreement or any of the other Facility Documents to Buyer, (i) Seller shall make all such deductions and withholdings in respect of Taxes, (ii) Seller shall pay the full amount deducted or withheld in respect of Taxes to the relevant taxation authority or other Governmental Authority in accordance with any applicable Requirement of Law, and (iii) the sum payable by Seller shall be increased as may be necessary so that after Seller has made all required deductions and withholdings (including deductions and withholdings applicable to additional amounts payable under this <u>Section 8</u>) Buyer receives an amount equal to the sum it would have received had no such deductions or withholdings been made in respect of Non-Excluded Taxes. For purposes of this Agreement the term "<u>Non-Excluded Taxes</u>" are Taxes other than, in the case of Buyer (including for avoidance of doubt any assignee, successor or participant), (i) Taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the jurisdiction under the laws of which Buyer is organized or of its applicable lending office, or any political subdivision thereof, (ii) any other Taxes imposed as a result of a present or former connection (other than a connection arising from Buyer or Buyer's assignor having executed, delivered, or performed its obligations or received payments under, or enforced, this Agreement or any other Facility Documents) between Buyer or Buyer-transferor, as applicable, and the jurisdiction imposing the Tax, (iii) Taxes as a result of Buyer or Buyer-transferor, as applicable, changing its lending office after the Effective Date, (iv) Taxes attributable to Buyer or Buyer-transferor, as applicable, failing to comply with <u>Section 8(e)</u>, and (v) any withholding Taxes imposed under FATCA (such Taxes that are expressly excluded from Non-Excluded Taxes, "<u>Excluded Taxes</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;In addition, Seller hereby agrees to pay any present or future stamp, recording, documentary, excise, property or value-added taxes, or similar taxes, charges or levies that arise from any payment made under or in respect of this Agreement or any other Facility Document or from the execution, delivery or registration of, any performance under, or otherwise with respect to, this Agreement or any other Facility Document, except any Taxes imposed as a result of a present or former connection between the Buyer and the jurisdiction imposing the Tax (collectively, "<u>Other Taxes</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Seller hereby agrees to indemnify Buyer for, and to hold it harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and the full amount of Non-Excluded Taxes or Other Taxes imposed on amounts payable by Seller under this <u>Section 8</u> imposed on or paid by Buyer and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto. The indemnity by Seller provided for in this <u>Section 8(c)</u> shall apply and be made whether or not the Non-Excluded Taxes or Other Taxes for which indemnification hereunder is sought have been correctly or legally imposed or asserted. Amounts payable by Seller under the indemnity set forth in this <u>Section 8(c)</u> shall be paid within ten (10) days from the date on which Buyer makes written demand therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Within thirty (30) days after the date of any payment of Taxes, Seller (or any Person making such payment on behalf of Seller) shall furnish to Buyer for its own account a certified copy of the original official receipt evidencing payment thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;For purposes of subsection (e) of this <u>Section 8</u>, the terms "United States" and "United States person" shall have the meanings specified in section 7701 of the Code. Each Buyer (including for avoidance of doubt any assignee, successor or participant) that either (i) is not incorporated under the laws of the United States, any State thereof, or the District of Columbia or (ii) whose name does not include

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"Incorporated," "Inc.," "Corporation," "Corp.," "P.C.," "N.A.," "National Association," "insurance company," or "assurance company" (a "<u>Non-Exempt Buyer</u>") shall deliver or cause to be delivered to Seller the following properly completed and duly executed documents:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;in the case of a Non-Exempt Buyer that is not a United States person, or is a foreign disregarded entity for U.S. federal income tax purposes that is entitled to provide such form, a complete and executed (x) U.S. Internal Revenue Form W-8BEN or U.S. Internal Revenue Form W-8BEN-E in which Buyer claims the benefits of a tax treaty with the United States, if applicable, providing for a zero or reduced rate of withholding (or any successor forms thereto), including all appropriate attachments or (y) a U.S. Internal Revenue Service Form W-8ECI (or any successor forms thereto); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;in the case of an individual, (x) a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and, if applicable, a certificate substantially in the form of <u>Exhibit D</u> (a "<u>Section 8 Certificate</u>") or (y) a complete and executed U.S. Internal Revenue Service Form W-9 (or any successor forms thereto); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;in the case of a Non-Exempt Buyer that is organized under the laws of the United States, any State thereof, or the District of Columbia, a complete and executed U.S. Internal Revenue Service Form W-9 (or any successor forms thereto), including all appropriate attachments; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;in the case of a Non-Exempt Buyer that (x) is not organized under the laws of the United States, any State thereof, or the District of Columbia and (y) is treated as a corporation for U.S. federal income tax purposes, a complete and executed U.S. Internal Revenue Service Form W-8BEN-E (or any successor forms thereto) and, if applicable, a Section 8 Certificate; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;in the case of a Non-Exempt Buyer that (A) is treated as a partnership or other non-corporate entity, and (B) is not organized under the laws of the United States, any State thereof, or the District of Columbia, (x)(i) a complete and executed U.S. Internal Revenue Service Form W-8IMY (or any successor forms thereto) (including all required documents and attachments) and (ii) if applicable, a Section 8 Certificate, and (y) without duplication, with respect to each of its beneficial owners and the beneficial owners of such beneficial owners looking through chains of owners to individuals or entities that are treated as corporations for U.S. federal income tax purposes (all such owners, "<u>beneficial owners</u>"), the documents that would be provided by each such beneficial owner pursuant to this Section if such beneficial owner were Buyer; <u>provided</u>, <u>however</u>, that no such documents will be required with respect to a beneficial owner to the extent the actual Buyer is determined to be in compliance with the requirements for certification on behalf of its beneficial owner as may be provided in applicable U.S. Treasury regulations, or the requirements of this clause (v) are otherwise determined to be unnecessary; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;in the case of a Non-Exempt Buyer that is disregarded for U.S. federal income tax purposes, the document that would be provided by its beneficial owner pursuant to this Section if such beneficial owner were Buyer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;in the case of a Non-Exempt Buyer that (A) is not a United States person and (B) is acting in the capacity as an "intermediary" (as defined in U.S.

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Treasury Regulations), (x)(i) a U.S. Internal Revenue Service Form W-8IMY (or any successor form thereto) (including all required documents and attachments) and (ii) if applicable, a Section 8 Certificate, and (y) if the intermediary is a "non-qualified intermediary" (as defined in U.S. Treasury Regulations), from each person upon whose behalf the "non-qualified intermediary" is acting the documents that would be provided by each such person pursuant to this Section if each such person were Buyer.

Buyer agrees that if any form provided pursuant to clause (e)(i)-(vii) above it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Seller in writing of its legal inability to do so. If Buyer has provided a form pursuant to clause (e)(i)-(vii) above and the form provided by Buyer either at the time Buyer first becomes a party to this Agreement or, with respect to a grant of a participation, at the effective date of such participation, indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be treated as Excluded Taxes and shall not cease to be Excluded Taxes, and qualify as Non-Excluded Taxes, unless and until Buyer provides the appropriate form, if any as required by <u>Section 8(e)</u>, certifying that a lesser rate applies, whereupon withholding tax at such lesser rate shall be considered Excluded Taxes solely for the periods governed by such form. If, however, on the date (after the Effective Date) a Person becomes an assignee, successor or participant to this Agreement, Buyer-transferor was entitled to indemnification or additional amounts under this <u>Section 8</u>, then Buyer assignee, successor or participant shall be entitled to indemnification or additional amounts to the extent (and only to the extent), that Buyer transferor was entitled to such indemnification or additional amounts for Non-Excluded Taxes, and Buyer assignee, successor or participant shall be entitled to additional indemnification or additional amounts for any other or additional Non-Excluded Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;For any period with respect to which Buyer has failed to provide Seller with the appropriate form, certificate or other document described in subsection (e) of this <u>Section 8</u>, Buyer shall not be entitled to indemnification or additional amounts under subsection (a) or (c) of this <u>Section 8</u> with respect to Non-Excluded Taxes imposed by the United States by reason of such failure; <u>provided</u>, <u>however</u>, that should a Buyer become subject to Non-Excluded Taxes because of its failure to deliver a form, certificate or other document required hereunder, Seller shall take such steps at Buyer's expense as Buyer shall reasonably request, to assist Buyer in recovering such Non-Excluded Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this subsection (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the

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indemnification payments or additional amounts with respect to such Tax had never been paid. This subsection shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;Without prejudice to the survival of any other agreement of Seller hereunder, the agreements and obligations of Seller contained in this <u>Section 8</u> shall survive the termination of this Agreement. Nothing contained in this <u>Section 8</u> shall require Buyer to make available any of its tax returns or any other information that it deems to be confidential or proprietary.

<u>Section 9.&nbsp;&nbsp;&nbsp;&nbsp;Security Interest; Buyer's Appointment as Attorney-in-Fact</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Security Interest</u>. On each Purchase Date, Seller hereby sells, assigns and conveys to Buyer all right, title and interest in the Purchased Mortgage Loans listed on the related Asset Schedule to the extent of its rights therein, although the parties intend that all Transactions hereunder be sales and purchases and not loans (in each case, other than for accounting and tax purposes), in the event any such Transactions are deemed to be loans, and in any event, Seller, to the extent of its rights therein, hereby pledges to Buyer as security for the performance of the Obligations and hereby grants, assigns and pledges to Buyer a first priority security interest in Seller's rights, title and interest in:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the Purchased Mortgage Loans, the Records related to the Purchased Mortgage Loans, all Servicing Rights related to the Purchased Mortgage Loans, all Agency Securities related to Pooled Mortgage Loans that are Purchased Mortgage Loans or right to receive any such Agency Security when issued to the extent backed by any of the Purchased Mortgage Loans, the Facility Documents (to the extent such Facility Documents and Seller's rights thereunder relate to the Purchased Mortgage Loans), any related Take-out Commitments related to such Purchased Mortgage Loans, any Property relating to any Purchased Mortgage Loan or the related Mortgaged Property, all insurance policies and insurance proceeds relating to any Purchased Mortgage Loan or any related Mortgaged Property, including but not limited to any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts (if any) and VA Loan Guaranty Agreements (if any), any Income relating to any Purchased Mortgage Loan, Interest Rate Protection Agreements related to such Purchased Mortgage Loans, the Reserve**<u>Operating</u>** Account, and any other accounts (including any interest of Seller in escrow accounts) and any other payments, rights to payment (including payments of interest or finance charges) and general intangibles to the extent that the foregoing relates solely to any Purchased Mortgage Loans and any other assets to the extent relating solely to the Purchased Mortgage Loans (including, without limitation, any other accounts) or any interest in the Purchased Mortgage Loans and any proceeds and distributions and any other property, rights, title or interests as are specified on a Trust Receipt and Exception Report with respect to any of the foregoing, in all instances, whether now owned or hereafter acquired, now existing or hereafter created in each case excluding any Take-out Commitments, insurance policies and Interest Rate Protection Agreements to the extent Seller may not, pursuant to the provisions thereof, assign or transfer, or pledge or grant a security interest in, such Take-out Commitments, insurance policies or Interest Rate Protection Agreements without the consent of, or without violating its obligations to, the related Take-out Investor, insurance provider or counterparty to such Interest Rate Protection Agreement, to such but only to the extent such provisions are not rendered ineffective against the Buyer under Article

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9, Part 4 of the Uniform Commercial Code (collectively, the "<u>Repurchase Assets</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;The foregoing paragraph (i) is intended to constitute a security agreement or other arrangement or other credit enhancement related to the Agreement and transactions hereunder as defined under Section 101(47)(v) and 741(7)(xi) of the Bankruptcy Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Servicing Rights</u>. Without limiting the generality of the foregoing and in the event that Seller is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, Seller grants, assigns and pledges to Buyer a first priority security interest in the Servicing Rights and proceeds related thereto and all of its contractual rights under the Servicing Agreement in respect of the servicing thereunder and in all instances, whether now owned or hereafter acquired, now existing or hereafter created, including all of Servicing Rights related to the Purchased Mortgage Loans, exclusive of any Purchased Mortgage Loan or contractual rights for the Purchased Mortgage Loan that, in either case, is repurchased in full by Seller in accordance with the provisions of this Agreement and therefore is no longer subject to a Transaction. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Financing Statements</u>. Seller hereby authorizes Buyer to file such financing statement or statements relating to the Repurchase Assets as Buyer, at its option, may deem reasonable and appropriate to protect Buyer's interest therein. Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this <u>Section 9</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Buyer's Appointment as Attorney in Fact</u>. Seller hereby irrevocably constitutes and appoints Buyer and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Buyer's discretion, for the purpose, following the occurrence and continuation of an Event of Default, of carrying out the terms of this Agreement and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, in each case, subject to the terms of this Agreement. Without limiting the generality of the foregoing, Seller hereby gives Buyer the power and right, on behalf of Seller without assent by, Seller if an Event of Default shall have occurred and be continuing, to do the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;in the name of Seller or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any Repurchase Assets and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Buyer for the purpose of collecting any and all such moneys due with respect to any Repurchase Assets whenever payable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;to pay or discharge taxes and Liens levied or placed on or threatened in writing against the Repurchase Assets; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;(A) to direct any party liable for any payment under any Repurchase Assets to make payment of any and all moneys due or to become due

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thereunder directly to Buyer or as Buyer shall direct, including, without limitation, any payment agent with respect to any Repurchase Asset; (B) to send "goodbye" letters on behalf of Seller and Servicer and Section 404 Notices; (C) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Repurchase Assets; (D) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Repurchase Assets; (E) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Repurchase Assets or any proceeds thereof and to enforce any other right in respect of any Repurchase Assets; (F) to defend any suit, action or proceeding brought against Seller with respect to any Repurchase Assets; (G) to settle, compromise or adjust any suit, action or proceeding described in clause (F) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate and (H) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Repurchase Assets as fully and completely as though Buyer were the absolute owner thereof for all purposes, and to do, at Buyer's option and Seller's expense, at any time, and from time to time, all acts and things which Buyer deems necessary to protect, preserve or realize upon the Repurchase Assets and Buyer's Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do.

Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable. In addition to the foregoing, Seller agrees to execute a Power of Attorney, the form of <u>Exhibit F</u> hereto, to be delivered on the date hereof. Seller and Buyer acknowledge that the Power of Attorney shall terminate on the Termination Date and satisfaction in full of the Obligations.

Seller also authorizes Buyer, if an Event of Default shall have occurred, from time to time, to execute, in connection with any sale provided for in <u>Section 16</u> hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Repurchase Assets.

The powers conferred on Buyer hereunder are solely to protect Buyer's interests in the Repurchase Assets and shall not impose any duty upon it to exercise any such powers. Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.

<u>Section 10.&nbsp;&nbsp;&nbsp;&nbsp;Payment, Transfer and Remittance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Payments and Transfers of Funds</u>. Unless otherwise mutually agreed in writing, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at the following account maintained by Buyer: [\*\*\*], not later than [\*\*\*] New York City time, on the date on which such payment shall become due (and each such payment made after such time shall be deemed to have been made on the next succeeding Business Day). Seller acknowledges that it has no rights of withdrawal from the foregoing account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Remittance of Purchase Price</u>. On the Purchase Date for each Transaction, ownership of the Purchased Mortgage Loans shall be transferred to Buyer or its designee against the simultaneous transfer of the Purchase Price to the account (or accounts)

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designated by Seller to Buyer simultaneously with the delivery to Buyer of the Purchased Mortgage Loans relating to such Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>(c)&nbsp;&nbsp;&nbsp;&nbsp;Operating Account. From time to time, Seller may provide funds to Buyer for deposit to a non-interest bearing account (the "Operating Account"). The Buyer shall have non-exclusive withdrawal rights from the Operating Account. Seller acknowledges that Buyer acts as Seller's agent for the limited purpose of placing funds with the Buyer, and that funds held by Buyer as Seller's agent are not a deposit account or other liability of Buyer. Buyer shall maintain records of Seller's interest in the funds maintained in the Operating Account. Withdrawals may be paid by wire transfer or any other means chosen by Buyer from time to time in its sole discretion.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>(d)&nbsp;&nbsp;&nbsp;&nbsp;Settlement Account. Disbursement Agent on behalf of Buyer has established the Settlement Account. Seller acknowledges that Buyer acts as Seller's agent</u>** <u>for the</u> **<u>limited purpose of placing funds with the Disbursement Agent, and that funds held by Buyer as Seller's agent are not a deposit account or other liability of Buyer. Buyer shall maintain records of Seller's interest in the funds maintained in the Settlement Account.</u>**

<u>Section 11.&nbsp;&nbsp;&nbsp;&nbsp;Hypothecation or Pledge of Purchased Mortgage Loans</u>. Title to all Purchased Mortgage Loans and Repurchase Assets shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Mortgage Loans and Repurchase Assets, subject to the terms of this Agreement. Buyer may engage in repurchase transactions with the Purchased Mortgage Loans or Repurchase Assets or otherwise engage in pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Mortgage Loans or Repurchase Assets. Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Mortgage Loans or Repurchase Assets delivered to Buyer by Seller.

<u>Section 12.&nbsp;&nbsp;&nbsp;&nbsp;[Reserved]</u>.

<u>Section 13.&nbsp;&nbsp;&nbsp;&nbsp;Representations</u>. Seller represents and warrants to Buyer that as of the Purchase Date of any Purchased Mortgage Loans by Buyer from Seller and as of the date of this Agreement and any Transaction hereunder and at all times while this Agreement and any Transaction hereunder is in full force and effect:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Acting as Principal</u>. Seller will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as agent for a disclosed principal).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Intellectual Property</u>. Seller and its Subsidiaries owns, or is licensed to use, all Intellectual Property necessary to conduct its business as currently conducted except for such Intellectual Property the failure of which to own or license would not be expected to have, either individually or in the aggregate, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Solvency</u>. Neither the Facility Documents nor any Transaction thereunder are entered into in contemplation of insolvency or with intent to hinder, delay or defraud any of Seller's creditors. The transfer of the Purchased Mortgage Loans subject hereto is not undertaken with the intent to hinder, delay or defraud any of Seller's creditors. Seller is not insolvent within the meaning of 11 U.S.C. Section 101(32) and the transfer and sale of the Purchased Mortgage Loans pursuant hereto (i) will not cause Seller to become insolvent, (ii) will not result in any property remaining with Seller to be unreasonably small capital with which to engage in its business, and (iii) will not result in debts that would be beyond Seller's ability to pay as same mature. Seller received reasonably

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equivalent value in exchange for the transfer and sale of the Purchased Mortgage Loans subject hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Broker</u>. Seller has not dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation in connection with the sale of Purchased Mortgage Loans pursuant to this Agreement or such other Person who has received such commission or compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Ability to Perform</u>. Seller has the ability to perform each and every covenant contained in the Facility Documents to which it is a party on its part to be performed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Existence</u>. Seller and each of its Subsidiaries: (a) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable; (b) has the power and authority and all governmental licenses, authorizations, permits, consents and approvals to (i) own its assets and carry on its business as now being or as proposed to be conducted and (ii) execute, deliver, and perform its obligations under the Facility Documents to which it is a party; (c) is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction in which the nature of the business conducted by it makes such qualification necessary; and (d) is in compliance with all Requirements of Law, in each case of clauses (a)-(d), except as would not be reasonably likely to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>Environmental Matters</u>. Seller and each of its Subsidiaries is and has been in compliance with all applicable Environmental Laws, including obtaining and maintaining all Permits required by any applicable Environmental Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Breach</u>. Neither (a) the execution and delivery of the Facility Documents nor (b) the consummation of the transactions therein contemplated to be entered into by Seller in compliance with the terms and provisions thereof will conflict with or result in (i) a breach of the organizational documents of Seller, or (ii) a breach of any applicable law, rule or regulation, or (iii) a breach of any order, writ, injunction or decree of any Governmental Authority, or (iv) a breach of or default under other agreement or instrument to which Seller is a party or by which Seller or any of its Property is bound or to which Seller is subject, or (v) the creation or imposition of any Lien (except for the Liens created pursuant to the Facility Documents) upon any Property of Seller pursuant to the terms of any such agreement or instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Action</u>. Seller has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Facility Documents to which it is a party; the execution, delivery and performance by Seller of each of the Facility Documents to which it is a party have been duly authorized by all necessary corporate or other action on its part; and each Facility Document to which it is a party has been duly and validly executed and delivered by Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;<u>Approvals</u>. Except for those that have previously been obtained, no authorizations, approvals, exemptions or consents of, and no filings or registrations with, any Governmental Authority or any securities exchange are necessary for the execution, delivery or performance by Seller of the Facility Documents to which it is a party or for the legality, validity or enforceability thereof, except for filings and recordings in respect of the Liens created pursuant to the Facility Documents.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;<u>Enforceability</u>. This Agreement and all of the other Facility Documents executed and delivered by Seller, as applicable, in connection herewith are legal, valid and binding obligations of Seller, as applicable, are enforceable against Seller, as applicable, in accordance with their terms except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and (ii) general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;<u>Indebtedness</u>. As of the date of this Agreement, Seller's Indebtedness is as set forth on <u>Schedule 3</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;<u>Labor Relations</u>. There are no strikes, work stoppages, slowdowns or lockouts existing, pending (or, to the knowledge of Seller or its Subsidiaries, threatened in writing) against or involving Seller or its Subsidiaries, except for those that would not, in the aggregate, be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Event of Default</u>. No Event of Default has occurred and is continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;<u>Litigation</u>. There are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or threatened in writing) or other legal or arbitrable proceedings affecting the Seller or any of its Subsidiaries or affecting any of the Property of any of them before any federal or state court or before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Facility Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) relates to any violation of the Home Ownership and Equity Protection Act or any state, city or district high cost home mortgage or predatory lending law, which, with respect to subsection (ii), individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect or constitute an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;<u>Margin Regulations</u>. The use of all funds acquired by Seller under this Agreement will not conflict with or contravene any of Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;<u>Taxes</u>. Seller has timely filed all tax returns that are required to be filed by it and has timely paid all Taxes, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided or to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect. There are no material Liens for Taxes, except for statutory Liens for Taxes not yet due and payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;<u>Investment Company Act</u>. Neither Seller nor any of its Subsidiaries is an "investment company", or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;<u>Purchased Mortgage Loans</u>. The provisions of this Agreement are effective to either constitute a sale of the Repurchase Assets owned by Seller to Buyer or to create in favor of Buyer a valid security interest in all right, title and interest of Seller in, to and under any Repurchase Assets owned by Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;<u>Chief Executive Office/Jurisdiction of Organization</u>. On the Effective Date, Seller's chief executive office, is, and has been located at 2211 Old Earheart Road, Suite 250, Ann Arbor, Michigan 48105. On the Effective Date, Seller's jurisdiction of organization is New Jersey.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;<u>Location of Books and Records</u>. The location where Seller keeps its books and records, including all computer tapes and records related to the Repurchase Assets is its chief executive office.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;<u>True and Complete Disclosure</u>. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of Seller to Buyer in connection with the negotiation, preparation or delivery of this Agreement and the other Facility Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of fact or omit to state any fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by or on behalf of Seller to Buyer in connection with this Agreement and the other Facility Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to a Responsible Officer of Seller, after due inquiry, that would reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Facility Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to Buyer for use in connection with the transactions contemplated hereby or thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;&nbsp;&nbsp;&nbsp;<u>ERISA</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Other than as would not reasonably be expected to have a Material Adverse Effect, during the immediately preceding [\*\*\*] period, Seller and any ERISA Affiliate thereof has complied in all material respects with the applicable provisions of the Code and ERISA with respect to each Plan, Seller and any ERISA Affiliate thereof has complied with the minimum funding requirements with respect to each Plan and Multiemployer Plan, and no Event of ERISA Termination has occurred resulting in any liability to Seller or any ERISA Affiliate thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Seller is not currently or reasonably expects to be subject to any liability for a complete or partial withdrawal from a Multiemployer Plan, other than as would not reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;Seller provides medical or health benefits to former employees as required by the Consolidated Omnibus Budget Reconciliation Act, as amended, or similar state or local law (collectively, "<u>COBRA</u>") at no material cost to the employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;None of Seller or any Subsidiaries or any ERISA Affiliate thereof has incurred a tax liability under Chapter 43 of the Code or a penalty under Section 502(i) of ERISA which has not been paid in full, except where the incurrence of such tax or penalty would not result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Reliance</u>. Seller has made its own independent decisions to enter into the Facility Documents and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. Seller is not relying upon any advice from Buyer as to any aspect of the

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Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;&nbsp;&nbsp;&nbsp;<u>Plan Assets</u>. Seller is not an employee benefit plan as defined in Section 3(3) of Title I of ERISA that is subject to Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code, or an entity deemed to hold "plan assets" within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA, and Seller is not acting on behalf of any of the foregoing. Seller is not subject to any state or local statute that regulates investments of, or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA, that is similar to Section 406 of ERISA or Section 4975 of the Code and that would be violated by the transactions contemplated by this Agreement. The Purchased Mortgage Loans are not "plan assets" within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA in the hands of Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa)&nbsp;&nbsp;&nbsp;&nbsp;<u>Anti-Money Laundering Laws</u>. Seller and each Subsidiary of Seller is in compliance with all U.S. laws related to terrorism or money laundering ("<u>Anti-Money Laundering Laws</u>") including: (i) all applicable requirements of the Currency and Foreign Transactions Reporting Act of 1970 (31 U.S.C. 5311 et. seq., (the Bank Secrecy Act)), as amended by Title III of the USA Patriot Act, (ii) the Trading with the Enemy Act, (iii) Executive Order, any other enabling legislation, executive order or regulations issued pursuant or relating thereto and (iv) other applicable federal or state laws relating to "know your customer" or anti-money laundering rules and regulations, in each case, except as could reasonably be expected to have a Material Adverse Effect. No action, suit or proceeding by or before any court or Governmental Authority with respect to compliance with such Anti-Money Laundering Laws is pending or threatened in writing to the knowledge of Seller and each Subsidiary of Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb)&nbsp;&nbsp;&nbsp;&nbsp;<u>Sanctions</u>. Seller and each Subsidiary of Seller is in compliance in all respects with all U.S. economic sanctions laws, the Executive Order, any other executive orders and implementing regulations ("<u>Sanctions</u>") as administered by the U.S. Treasury Department's Office of Foreign Assets Control ("<u>OFAC</u>") and the U.S. State Department, except as could reasonably be expected to have a Material Adverse Effect. None of Seller nor any Subsidiary of Seller (i) is a Person on the list of the Specially Designated Nationals and Blocked Persons (the "<u>SDN List</u>"), (ii) is a person who is otherwise the target of U.S. economic sanctions laws such that a U.S. person cannot deal or otherwise engage in business transactions with such person, (iii) is a Person organized or resident in a country or territory subject to comprehensive Sanctions (a "<u>Sanctioned Country</u>"), or (iv) is owned or controlled by (including by virtue of such Person owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person on the SDN List or a government of a Sanctioned Country such that the entry into, or performance under, this Agreement or any other Facility Document would be prohibited by U.S. law. Seller and each Subsidiary of Seller has instituted and will continue to maintain policies and procedures designed to promote compliance by Seller, its Subsidiaries and their respective directors, officers, employees and agents with Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc)&nbsp;&nbsp;&nbsp;&nbsp;Seller, and each Subsidiary of Seller is in compliance in all respects with all applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act of 1977 ("<u>FCPA</u>"), ("<u>Anti-Corruption Laws</u>"), except as could reasonably be expected to have a Material Adverse Effect. None of Seller nor any Subsidiary of Seller, nor to the knowledge of Seller, any director, officer, agent, employee, or other person acting on behalf of Seller or any Subsidiary of Seller, has taken any action, directly or indirectly, that would result in a violation of applicable Anti-Corruption Laws.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd)&nbsp;&nbsp;&nbsp;&nbsp;<u>Brokers' Fees; Transaction Fees</u>. Except for fees payable to Buyer, neither Seller nor any of its Subsidiaries has any obligation to any Person in respect of any finder's, broker's or investment banker's fee in connection with the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff)&nbsp;&nbsp;&nbsp;&nbsp;<u>Agency Approvals</u>. To the extent required by applicable law and/or necessary to issue an Agency Security, Seller and Servicer is (i) an FHA Approved Mortgagee, (ii) a VA Approved Lender and approved by Ginnie Mae as an approved issuer, (iii) approved by Fannie Mae as an approved lender, (iv) approved by Freddie Mac as an approved seller/servicer, and (v) to the extent necessary, approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act (collectively, the "<u>Agency Approvals</u>"). In each such case, Seller is in good standing.

<u>Section 14.&nbsp;&nbsp;&nbsp;&nbsp;Covenants Of Seller</u>. On and as of the date of this Agreement and each Purchase Date and on each day until this Agreement is no longer in force, Seller covenants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Preservation of Existence; Compliance with Law</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall preserve and maintain its legal existence;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall (A) comply with all Requirements of Law (including, without limitation, all Environmental Laws) and (B) shall not engage in any conduct or activity that could subject its assets to forfeiture or seizure, in each case, except as would not be reasonably likely to have a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall maintain in effect and enforce policies and procedures designed to ensure compliance by Seller, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall not permit any of its Subsidiaries to fail to comply with the laws, regulations and executive orders referred to in <u>Section 13(bb)</u>. None of Seller nor any Subsidiary of Seller, nor to the knowledge of Seller, any director, officer, agent, employee, or other person acting on behalf of Seller or any Subsidiary of Seller, will request or use the proceeds of Transaction, directly or indirectly, (A) for any payments to any Person, including any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, or otherwise take any action, directly or indirectly, that would result in a violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Person on the SDN List or a government of a Sanctioned Country, to the extent such activities, business or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto. Furthermore, Seller will not, directly or indirectly, use the proceeds of the any Transaction, or lend, contribute or otherwise make available such proceeds to any Subsidiary, Affiliate, joint venture partner or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the time of

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such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person participating in the transaction of any Sanctions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall preserve and maintain all rights, privileges, licenses, franchises, permits or other approvals necessary for Seller to conduct its business and to perform its obligations under the Facility Documents and shall conduct its business in accordance with applicable law, except as would not be reasonably likely to have a Material Adverse Effect.; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Taxes</u>. Seller shall timely file all tax returns that are required to be filed by it and shall timely pay all Taxes, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided or to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Notice of Proceedings or Adverse Change</u>. Except to the extent otherwise prohibited by any Government Agency, Governmental Authority or Requirement of Law, Seller shall give prompt notice (or notice within the timeframe as otherwise specified below) to Buyer after a Responsible Officer of Seller has any knowledge of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the occurrence of any Default or Event of Default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;[Reserved];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;[Reserved];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;as soon as reasonably possible, notice of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;&nbsp;&nbsp;a material modification or termination in the insurance coverage of Seller as required to be maintained pursuant to Section 14(m) hereunder, with a copy of evidence of same attached;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;any material change in accounting policies or financial reporting practices of Seller;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;&nbsp;&nbsp;should Seller, for any reason, cease to possess all such applicable Agency Approvals as required herein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;&nbsp;&nbsp;promptly upon receipt of notice or knowledge of any Lien or security interest (other than security interests created hereby or under any other Facility Document) on, or claim asserted against, any of the Repurchase Assets; <u>provided</u>, however, that a breach of this <u>Section 14(c)(iv)(D)</u> with respect to any Purchased Mortgage Loan shall only result in Seller's obligation to repurchase such Purchased Mortgage Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)&nbsp;&nbsp;&nbsp;&nbsp;as soon as practicable, but, in any case, no more than two (2) Business Days, after Seller has obtained knowledge of any fact that could reasonably be the basis of any Purchased Mortgage Loan Issue with respect to a Purchased Mortgage Loan, notice identifying the related Purchased Mortgage Loan with respect to which such Purchased Mortgage

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Loan Issue exists and detailing the cause of such potential Purchased Mortgage Loan Issue <u>provided</u>, however, that a breach of this <u>Section 14(c)(iv)(E)</u> with respect to any Purchased Mortgage Loan shall only result in Seller's obligation to repurchase such Purchased Mortgage Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)&nbsp;&nbsp;&nbsp;&nbsp;[Reserved];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G)&nbsp;&nbsp;&nbsp;&nbsp;any other event, circumstance or condition that has resulted or would reasonably be expected to result in a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;promptly, but no later than [\*\*\*] after Seller receives notice of, or has knowledge of, any actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are, to the best of Seller's knowledge, pending or threatened in writing) or other legal or arbitrable proceedings, the existence of which is not required by law or regulation to remain confidential, affecting Seller or any of its Subsidiaries or affecting any of the Property of any of them before any federal or state court or before any Governmental Authority that (A) questions or challenges the validity or enforceability of any of the Facility Documents or any action to be taken in connection with the transactions contemplated hereby, or (B) relates to any violation of the Home Ownership and Equity Protection Act or any state, city or district high cost home mortgage or predatory lending law, which, with respect to clause (B), individually or in the aggregate, would have a Material Adverse Effect or constitute an Event of Default; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;promptly, but no later than [\*\*\*] after Seller receives notice of the same, any Purchased Mortgage Loan agreed to be the subject of a Take-out Commitment and delivered to a Take-out Investor (whole loan or securitization) under a Bailee Letter, and which was rejected for purchase by such Take-out Investor; <u>provided</u>, that upon written request from Buyer, Seller shall provide an explanation as to why such Purchased Mortgage Loan was rejected for purchase by such Take-out Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Reporting</u>. Seller shall furnish to Buyer the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;within thirty (30) days after the end of each calendar month, other than the last calendar month of each fiscal quarter, the unaudited balance sheets of Seller as at the end of such calendar month, the related unaudited consolidated statements of income for the Seller, for such month and the portion of the fiscal year through the end of such month, accompanied by the Officer's Compliance Certificate (including all specified schedules), executed by a Responsible Officer of Seller, which certificate shall state that said financial statements and schedules fairly present in all material respects the financial condition and results of operations of Seller, in accordance with GAAP, consistently applied, as at the end of, and for, such month (subject to normal year-end adjustments);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;within forty-five (45) days after the end of the last calendar month of each fiscal quarter, the unaudited balance sheets of Seller as at the end of such calendar month, the related unaudited consolidated statements of income for such month and the portion of the fiscal year through the end of such month, the related unaudited consolidated statements of cash flows for the Seller, for such quarter and the portion of the fiscal year through the end of such quarter, accompanied by the Officer's Compliance Certificate (including all specified Schedules), executed by a Responsible Officer of Seller, which certificate shall state that said financial

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statements and schedules fairly present in all material respects the financial condition and results of operations of Seller, in accordance with GAAP, consistently applied, as at the end of, and for, such month (subject to normal year-end adjustments);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;as soon as available and in any event within one hundred twenty (120) days after the end of the Seller's fiscal year, the audited balance sheets and the related statements of income for the Seller as at the end of such fiscal year, prepared by a certified public accountant in accordance with GAAP, setting forth in each case in comparative form the figures for the previous year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall have no "going concern" qualification and shall state that said financial statements fairly present the financial condition and results of operations of Seller, if applicable, as at the end of, and for, such fiscal year in accordance with GAAP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;within [\*\*\*] after any material amendment, modification or supplement has been entered into with respect to any Servicing Agreement affecting any Purchased Mortgage Loan, a fully executed copy thereof, certified by Seller to be true, correct and complete;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;within [\*\*\*] following written request of Buyer, a monthly servicing and remittance report of each Servicer with respect to the Purchased Mortgage Loans, in form and substance acceptable to Buyer; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;except to the extent prohibited by any Government Agency, Governmental Authority or Requirement of Law, copies of relevant portions of all final written Fannie Mae, Freddie Mac, FHA, VA, Governmental Authority and investor audits, examinations, evaluations, monitoring reviews and reports of its operations (including those prepared on a contract basis) which provide for or relate to (A) corrective action required, (B) sanctions proposed, imposed or required, including, without limitation, notices of defaults, notices of termination of approved status, notices of imposition of supervisory agreements or interim servicing agreements, and notices of probation, suspension, or non-renewal, or (C) "report cards", "grades", or other classifications of the quality of Seller's operations that in the case of any of clauses (A) through (C) would be expected to have a Material Adverse Effect on such operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Visitation and Inspection Rights</u>. Subject to <u>Section 32</u> herein and to the extent not prohibited by a Government Agency, a Governmental Authority or Requirement of Law, Seller shall permit Buyer to inspect, and to discuss with Seller's officers, the affairs, finances, and accounts of Seller, the Repurchase Assets, OFAC sanctions scanning policies and procedures, including information relating to the method and frequency of scanning and the results of specific scans conducted on borrowers, anti-money laundering policies and procedures, and Seller's books and records, and to make abstracts or reproductions thereof and, to the extent not prohibited by Requirements of Law, to duplicate, reduce to hard copy or otherwise use any and all computer or electronically stored information or data, in each case, (i) during normal business hours, (ii) upon reasonable notice (provided, that upon the occurrence and continuation of an Event of Default, no notice shall be required), and (iii) at the expense of Seller to discuss with Seller's officers, its affairs, finances, and accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Reimbursement of Expenses</u>. Subject to <u>Sections 17</u> and <u>20</u>, on the date of execution of this Agreement, Seller shall reimburse Buyer for all expenses (including

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legal fees) incurred by Buyer on or prior to such date. From and after such date, Seller shall promptly reimburse Buyer for all expenses as the same are incurred by Buyer upon receipt of invoices therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved.</u>]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>Further Assurances</u>. Seller shall execute and deliver to Buyer all further documents, financing statements, agreements and instruments, and take all further reasonable action that may be required under applicable law, or that Buyer may reasonably request, in order to effectuate the transactions contemplated by this Agreement and the Facility Documents or, without limiting any of the foregoing, to grant, preserve, protect and perfect the validity and first- priority of the security interests created or intended to be created hereby. Seller shall do all things reasonably necessary to preserve the Repurchase Assets so that they remain subject to the first priority perfected security interest hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>True and Correct Information</u>. All information, reports, exhibits, schedules, financial statements or certificates of Seller or any of its Affiliates thereof or any of their officers furnished to Buyer hereunder and during Buyer's diligence of Seller are true and complete in all material respects and will not omit to disclose any facts necessary to make the statements therein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered by Seller to Buyer pursuant to this Agreement shall be prepared in accordance with GAAP, or in connection with Securities and Exchange Commission filings, if any, the appropriate Securities and Exchange Commission accounting requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;<u>ERISA Events</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Promptly upon becoming aware of the occurrence of any Event of ERISA Termination which together with all other Events of ERISA Termination occurring within the prior twelve (12) months involve a payment of money by or a potential aggregate liability of Seller or any ERISA Affiliate thereof or any combination of such entities in excess of [\*\*\*], Seller shall give Buyer a written notice specifying the nature thereof, what action Seller or any ERISA Affiliate thereof has taken and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Promptly upon receipt thereof, Seller shall furnish to Buyer copies of (i) all notices received by Seller or any ERISA Affiliate thereof of the PBGC's intent to terminate any Plan or to have a trustee appointed to administer any Plan; (ii) all notices received by Seller or any ERISA Affiliate thereof from the sponsor of a Multiemployer Plan pursuant to Section 4202 of ERISA involving a withdrawal liability in excess of [\*\*\*]; and (iii) all funding waiver requests filed by Seller or any ERISA Affiliate thereof with the Internal Revenue Service with respect to any Plan for which the amount of waived funding deficiency is reasonably expected to be more than [\*\*\*], and all communications received by Seller or any ERISA Affiliate thereof from the Internal Revenue Service with respect to any such funding waiver request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;<u>Financial Covenants</u>. Seller shall comply with the financial covenants set forth in <u>Section 3</u> of the Pricing Side Letter.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;<u>Investment Company Act</u>. Neither Seller nor any of its Subsidiaries shall be an "investment company", or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;<u>Insurance</u>. Seller shall obtain and maintain insurance with responsible companies in such amounts and against such risks as are customarily carried by business entities engaged in similar businesses similarly situated, including without limitation, the insurance required to be obtained and maintained by each Agency pursuant to the applicable Agency guidelines, and will furnish Buyer upon request full information as to all such insurance, and provide within [\*\*\*] after receipt of such request the certificates or other documents evidencing renewal of each such policy. Seller shall continue to maintain coverage, for itself and its Subsidiaries, that encompasses employee dishonesty, forgery or alteration, theft, disappearance and destruction, robbery and safe burglary, Property (other than money and securities), and computer fraud in an aggregate amount of at least such amount as is required by each Agency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;<u>Books and Records</u>. Seller shall, to the extent practicable, maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing the Repurchase Assets in the event of the destruction of the originals thereof), and keep and maintain or obtain, as and when required, all documents, books, records and other information reasonably necessary for the collection of all Repurchase Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;<u>Material Change in Business</u>. Seller shall not make any material change in the nature of its business as carried on at the date hereof, it being understood that Seller may engage in business lines and transactions related to the mortgage banking and/or lending business or businesses ancillary to the mortgage banking and/or lending business and/or the servicing of Mortgage Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;<u>Limitation on Dividends and Distributions</u>. Following the occurrence and during the continuation of an Event of Default or if an Event of Default would result therefrom, Seller shall not, without the prior written consent of Buyer, make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Seller, whether now or hereafter outstanding, or make any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Seller, either directly or indirectly, whether in cash or property or in obligations of Seller or any of Seller's consolidated Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;<u>Disposition of Assets; Liens</u>. Seller shall not (i) cause any of the Repurchase Assets to be sold, pledged, assigned or transferred except in compliance with the applicable Facility Documents or (ii) create, incur, assume or suffer to exist any mortgage, pledge, Lien, charge or other encumbrance of any nature whatsoever on any of the Repurchase Assets, whether real, personal or mixed, now or hereafter owned, other than Liens in favor of Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;<u>Limitation on Accounting Changes</u>. Seller shall not make any material change in the accounting policies or financial reporting practices of Seller or its Subsidiaries, except to the extent such change is required by GAAP, consistently applied, which would reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;<u>ERISA Matters</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall not permit any event or condition which is described in any of clauses (i) through (x) of the definition of "Event of ERISA Termination" to occur or exist with respect to any Plan or Multiemployer Plan if such event or condition, together with all other events or conditions described in the definition of Event of ERISA Termination occurring within the prior twelve (12) months, involves the payment of money by or an incurrence of liability of Seller or any ERISA Affiliate thereof, or any combination of such entities in an amount in excess of [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall not be an employee benefit plan as defined in Section 3(3) of Title I of ERISA that is subject to Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code or an entity deemed to hold "plan assets" within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA. Seller shall not use "plan assets" within the meaning of 29 CFR Section 2510.3-101, as modified by Section 3(42) of ERISA, to engage in this Agreement or the Transactions hereunder. The Transactions contemplated by this Agreement will not violate any state or local statute, applicable to Seller, that regulates investments of, or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA and that are similar to Section 406 of ERISA or Section 4975 of the Code**.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved];</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;<u>Facility Documents</u>. Seller shall not permit the amendment or modification of, the waiver of any event of default under, or the termination of any Facility Document without Buyer's prior written consent. Seller shall not waive (or direct the waiver of) the performance by any party to any Facility Document of any action, if the failure to perform such action would adversely affect Seller or any Purchased Mortgage Loans in any respect, or waive (or direct the waiver of) any default resulting from any action or inaction by any party thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;<u>Illegal Activities</u>. Seller shall not engage in any conduct or activity that would be reasonably likely to subject its assets to forfeiture or seizure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;&nbsp;&nbsp;&nbsp;<u>Transactions with Affiliates</u>. Seller shall not enter into any new transaction, including, without limitation, the purchase, sale, lease or exchange of property or assets or the rendering or accepting of any service with any Affiliate, unless such transaction is (a) not otherwise prohibited in this Agreement, (b) in the ordinary course of Seller's business, and (c) upon fair and reasonable terms no less favorable to Seller, as the case may be, than it would obtain in a comparable arm's length transaction with a Person which is not an Affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;&nbsp;&nbsp;&nbsp;<u>Reserve Account</u>. The Reserve Account Threshold shall be maintained at all times and Seller shall grant to Buyer any online access Seller has to the Reserve Account**<u>[Reserved]</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;&nbsp;&nbsp;&nbsp;<u>Hedging</u>. Seller has entered into Interest Rate Protection Agreements or other arrangements, having terms with respect to protection against fluctuations in interest rates consistent with the terms of Seller's hedging program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved.]</u>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved.]</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved.]</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd)&nbsp;&nbsp;&nbsp;&nbsp;<u>Agency Approvals; Servicing</u>. Seller shall maintain its status with Fannie Mae and Freddie Mac as an approved seller/servicer, in each case in good standing. Seller shall take all commercially reasonable actions to maintain all of its applicable Agency Approvals at all times during the term of this Agreement and each outstanding Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee)&nbsp;&nbsp;&nbsp;&nbsp;<u>Additional Agreements</u>. At all times during the term of this Agreement, Seller shall maintain at least one repurchase agreement, warehouse facility, guaranty or similar credit facility with an aggregate facility amount greater than or equal to the Aggregate Facility Purchase Price, with any Person covering similar assets in addition to this Agreement.

<u>Section 15.&nbsp;&nbsp;&nbsp;&nbsp;Events Of Default</u>. If any of the following events (each an "<u>Event of Default</u>") occur, Seller and Buyer shall have the rights set forth in <u>Section 16</u>, as applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Payment Default</u>. (i) Seller fails to make any payment of (A) Repurchase Price when due (other than Price Differential), whether by acceleration, mandatory repurchase (including following the occurrence of a Purchased Mortgage Loan Issue) or otherwise or (B) Price Differential or to cure any Margin Deficit when due, under the terms of the Facility Documents, or (ii) Seller fails to make any payment of any sum (other than Repurchase Price, Price Differential or Margin Deficit) when due under the terms of the Facility Documents within [\*\*\*] of Seller's receipt of notice; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Immediate Representation and Warranty Default</u>. Any representation, warranty or certification made or deemed to be made by Seller contained in any of <u>Sections</u> <u>13(c)</u> (<u>Solvency</u>); (f)(a) (<u>Existence</u>); (h) (<u>No Breach</u>); (i) (<u>Action</u>); (k) (<u>Enforceability</u>); (p) (<u>Margin Regulations</u>); (r) (<u>Investment Company Act</u>); (v) (<u>True and Complete Disclosure</u>); (w) (<u>ERISA</u>); (y) (<u>No Reliance</u>); (z) (<u>Plan Assets</u>); (bb) (<u>Sanctions</u>); or (<u>ff</u>) (<u>Agency Approvals</u>), in each case, of this Agreement shall be determined by Buyer to have been untrue or misleading in any respect as of the time made or furnished; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Additional Representation and Warranty Defaults</u>. Any representation or warranty made or deemed made herein or in any other Facility Document (and not identified in clause (b) of <u>Section 15</u>) by Seller shall be determined by Buyer to have been untrue or misleading in any respect as of the time made or furnished (other than the representations and warranties set forth in <u>Schedule 1-A</u> and <u>Schedule 1-B</u>; unless (A) Seller shall have made any such representations and warranties with actual knowledge of a Responsible Officer of Seller that they were materially false or misleading at the time made or (B) any such representations and warranties have been determined in good faith by Buyer in its sole reasonable discretion to be materially false or misleading on a regular basis), and if such default shall be capable of being remedied, such failure shall continue unremedied for more than [\*\*\*]; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Immediate Covenant Default</u>. The failure of Seller to perform, comply with or observe any term, covenant or agreement applicable to Seller contained in any of <u>Sections</u> <u>14(a)(i)</u> and (<u>ii</u>) (<u>Preservation of Existence; Compliance with Law</u>); (i) (<u>True and Correct Information</u>); (k) (<u>Financial Covenants</u>); (o) (<u>Material Change in Business</u>); (p) (<u>Limitation on Dividends and Distributions</u>); (s)(ii) (<u>ERISA Matters</u>); (v) (<u>Illegal</u> 

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<u>Activities</u>); (w) (<u>Transactions with Affiliates</u>); or (<u>dd</u>) (<u>Agency Approvals; Servicing</u>); in each case, of this Agreement; or 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Additional Covenant Defaults</u>. The failure of Seller to observe or perform any other covenant or agreement contained in the Facility Documents (and not identified in clause (d) of this <u>Section 15</u>), and if such default shall be capable of being remedied, such failure to observe or perform continues unremedied for more than [\*\*\*]; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Judgments</u>. A judgment or judgments for the payment of money in excess of [\*\*\*] in the aggregate is rendered against Seller, in each case by one or more courts, administrative tribunals or other bodies having jurisdiction and the same is not satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof is not procured, within [\*\*\*] from the date of entry thereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>Cross-Default</u>. Seller is in default beyond any applicable grace period (A) under any Indebtedness in excess of [\*\*\*], which default involves the failure to pay a matured obligation or permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness; or (B) in making any payment when due under, or performing any other material obligation under any Indebtedness or any other contract, between Seller, as applicable, on the one hand, and Buyer or any of its Affiliates on the other; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>Insolvency Event</u>. An Insolvency Event occurs with respect to Seller or any of its Subsidiaries; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Enforceability</u>. For any reason (i) Seller (or an Affiliate thereof) contests the validity, enforceability, perfection or priority of any Lien granted pursuant to the Facility Documents, (ii) any Person (other than Buyer) contests the validity, enforceability, perfection or priority of any Lien granted pursuant thereto, (iii) Seller, or any Affiliate seeks to disaffirm, terminate, limit, repudiate or reduce its obligations under any Facility Document or (iv) any Facility Document at any time fails to be in full force and effect in all material respects in accordance with its terms or shall not be enforceable in all material respects in accordance with its terms; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved.]</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved.]</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;<u>Change in Control</u>. A Change in Control occurs without the prior written consent of Buyer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;<u>Inability to Perform</u>. Seller admits its inability to, or its intention not to, perform any of its obligations under the Facility Documents; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;<u>Failure to Transfer</u>. Seller fails to transfer the Purchased Mortgage Loans to Buyer on or prior to the applicable Purchase Date (provided that Buyer has tendered the related Purchase Price); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;<u>Government Action</u>. Any Governmental Authority or any person, agency or entity acting or purporting to act under Governmental Authority takes any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of Seller, or takes any action to displace the management of Seller or to curtail its authority in the conduct of the business of Seller, or takes any action in the nature of enforcement to remove or materially limit or restrict the approval of Seller as an

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issuer, buyer or a seller of Mortgage Loans or securities backed thereby, and such action shall not have been discontinued or stayed within [\*\*\*]; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;<u>Assignment</u>. Any assignment by Seller of this Agreement or any other Facility Document or any rights hereunder or thereunder without first obtaining the specific written consent of Buyer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved</u>.]; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;<u>Financial Statements</u>. Seller's audited annual financial statements or the notes thereto or other opinions or conclusions stated therein are qualified or limited by reference to the status of Seller as a "going concern" or a reference of similar import; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;<u>Servicer Default</u>. A Servicer Termination Event occurs with respect to a Servicer and Seller fails to transfer the servicing of the Purchased Mortgage Loans to a successor servicer that is acceptable to Buyer within [\*\*\*] of such Servicer Termination Event; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;<u>Failure to Repurchase</u>. Seller fails to repurchase a Purchased Mortgage Loan that is no longer an Eligible Mortgage Loan within [\*\*\*] of notice from Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;(I) Seller engages in any nonexempt "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code), (II) the occurrence of an Event of ERISA Termination or (III) any other event or condition occurs or exists with respect to a Plan or a Multiemployer Plan; and, such event or condition, together with all other such events or conditions, if any, would reasonably be expected to have a Material Adverse Effect

<u>Section 16.&nbsp;&nbsp;&nbsp;&nbsp;Remedies</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;If an Event of Default occurs and is continuing, the following rights and remedies are available to Buyer; provided, that an Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing and shall be deemed to be not continuing once so waived:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;At the option of Buyer, exercised by written notice to a Responsible Officer of Seller (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of an Insolvency Event of Seller), the Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed immediately to occur (the date on which such option is exercised or deemed to have been exercised being referred to hereinafter as the "<u>Accelerated Repurchase Date</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;If Buyer exercises or is deemed to have exercised the option referred to in subsection (a)(i) of this Section,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;&nbsp;&nbsp;Seller's obligations in such Transactions to repurchase all Purchased Mortgage Loans, at the Repurchase Price therefor on the Repurchase Date determined in accordance with subsection (a)(i) of this Section, (1) shall thereupon become immediately due and payable, (2) all Income paid after such exercise or deemed exercise shall be retained by Buyer and applied to the aggregate unpaid Repurchase Price and any other amounts owed by Seller hereunder, and (3) Seller shall immediately deliver to Buyer any Purchased Mortgage Loans subject to such

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Transactions then in Seller's or Servicer's possession or control, including Purchased Mortgage Loans; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;to the extent permitted by applicable law, the Repurchase Price with respect to each such Transaction (determined as of the Accelerated Repurchase Date) shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the date of the exercise or deemed exercise of such option to but excluding the date of payment of the Repurchase Price as so increased, (x) the Post-Default Rate in effect following an Event of Default to (y) the Repurchase Price for such Transaction as of the Repurchase Date as determined pursuant to subsection (a)(i) of this Section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;Upon the occurrence and during the continuance of one or more Events of Default, Buyer shall have the right to obtain physical possession of all files of Seller relating to the Purchased Mortgage Loans and the Repurchase Assets and all documents relating to the Purchased Mortgage Loans which are then or may thereafter come in to the possession of Seller or any third party acting for Seller and Seller shall deliver to Buyer such assignments as Buyer shall request. Buyer shall be entitled to specific performance of all agreements of Seller contained in Facility Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Upon the occurrence and during the continuance of an Event of Default, Buyer, or Buyer through its Affiliates or designees, may (A) immediately sell, without demand or further notice of any kind, at a public or private sale at such price or prices as Buyer may deem satisfactory any or all of the Purchased Mortgage Loans and Repurchase Assets or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Mortgage Loans and Repurchase Assets, to retain such Purchased Mortgage Loans and Repurchase Assets, and give Seller credit for such Purchased Mortgage Loans in an amount equal to the market value of the related Mortgage Loans (as determined and adjusted by Buyer in its sole discretion, giving such weight to the Market Value or outstanding principal balance of such Mortgage Loan as Buyer deems appropriate) against the aggregate unpaid Repurchase Price for such Purchased Mortgage Loans and Repurchase Assets and any other amounts due and owing by Seller under the Facility Documents. The proceeds of any disposition of Purchased Mortgage Loans and Repurchase Assets effected pursuant to the foregoing shall be applied as determined by Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall be liable to Buyer for (A) the amount of all reasonable and documented out-of-pocket expenses, including reasonable and documented legal fees and expenses, actually incurred by Buyer in connection with or as a consequence of an Event of Default, (B) all reasonable and documented out-of-pocket costs incurred in connection with covering transactions or hedging transactions, and (C) any other reasonable and documented out-of-pocket loss, damage, cost or expense arising or resulting from the occurrence and continuation of an Event of Default. In addition, Buyer shall have the right to satisfy any Obligations with funds remaining in the Reserve**<u>Operating</u>** Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;Buyer shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Seller acknowledges and agrees that (A) in the absence of a generally recognized source for prices or bid or offer quotations for any Purchased Mortgage Loans and Repurchase Assets, Buyer may establish the source therefor in its sole discretion and (B) all prices, bids and offers shall be determined together with accrued Income. Seller recognizes that it may not be possible to purchase or sell all of the Purchased Mortgage Loans and Repurchase Assets on a particular Business Day, or in a transaction with the same purchaser, or in the same manner because the market for such Purchased Mortgage Loans and Repurchase Assets may not be liquid at such time. In view of the nature of the Purchased Mortgage Loans and Repurchase Assets, Seller agrees that liquidation of a Transaction or the Purchased Mortgage Loans and Repurchase Assets does not require a public purchase or sale and that a good faith private purchase or sale shall be deemed to have been made. Accordingly, Buyer may elect, in its sole discretion, the time and manner of liquidating any Purchased Mortgage Loans and Repurchase Assets, and nothing contained herein shall (A) obligate Buyer to liquidate any Purchased Mortgage Loans or Repurchase Assets on the occurrence and continuation of an Event of Default or to liquidate all of the Purchased Mortgage Loans or Repurchase Assets in the same manner or on the same Business Day or (B) constitute a waiver of any right or remedy of Buyer. Buyer may exercise one or more of the remedies available hereunder immediately upon the occurrence and during the continuation of an Event of Default and at any time thereafter without notice to a Responsible Officer of Seller. All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may have.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives any defenses Seller might otherwise have to require Buyer to enforce its rights by judicial process. Seller also waives any defense (other than a defense of payment or performance) it might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. Seller recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm's length.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Without limiting the rights of Buyer hereto to pursue all other legal and equitable rights available to Buyer for Seller's failure to perform its obligations under this Agreement, Seller acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and Buyer shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure. The availability of these remedies shall not prohibit Buyer from pursuing any other remedies for such breach, including the recovery of monetary damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Buyer shall have, in addition to its rights and remedies under the Facility Documents, all of the rights and remedies provided by applicable federal, state, foreign, and local laws (including, without limitation, if the Transactions are recharacterized as secured financings, the rights and remedies of a secured party under the UCC of the State of New York, to the extent that the UCC is applicable, and the right to offset any mutual debt and claim), in equity, and under any other agreement between Buyer and Seller. Without limiting the generality of the foregoing, Buyer shall be entitled to set off the proceeds of the liquidation of the Purchased Mortgage Loans and Repurchase Assets against all of Seller's Obligations to Buyer, whether or not such Obligations are then due, without prejudice to Buyer's right to recover any deficiency.

<u>Section 17.&nbsp;&nbsp;&nbsp;&nbsp;Indemnification and Expenses</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Except as expressly set forth herein to the contrary, Seller agrees to hold Buyer, and its Affiliates and their officers, directors, employees, agents and advisors (each an "<u>Indemnified Party</u>") harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind (including fees of counsel) which may be imposed on, incurred by or asserted against such Indemnified Party (collectively, "<u>Costs</u>"), relating to or arising out of this Agreement, any other Facility Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Facility Document or any transaction contemplated hereby or thereby (including without limitation any such liabilities, losses, damages, judgments, costs and expenses arising from any acts or omissions of a Servicer), that, in each case, results from anything other than the Indemnified Party's gross negligence or willful misconduct (which gross negligence or willful misconduct is determined by a court of competent jurisdiction pursuant to a final judgment). Without limiting the generality of the foregoing, Seller agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with respect to all Purchased Mortgage Loans, that, in each case, results from anything other than the Indemnified Party's gross negligence or willful misconduct (which gross negligence or willful misconduct is determined by a court of competent jurisdiction pursuant to a final judgment). In any suit, proceeding or action brought by an Indemnified Party in connection with any Purchased Mortgage Loans for any sum owing thereunder, or to enforce any provisions of any Purchased Mortgage Loans, Seller will save, indemnify and hold such Indemnified Party harmless from and against all expense, loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from Seller. Seller also agrees to reimburse an Indemnified Party within thirty (30) days following a receipt of an invoice therefor from such Indemnified Party for all the Indemnified Party's costs and expenses incurred in connection with the enforcement or the preservation of Buyer's rights under this Agreement, any other Facility Document or any transaction contemplated hereby or thereby, including without limitation the fees and disbursements of its counsel. Seller's agreements in this <u>Section 17</u> shall survive the payment in full of the Repurchase Price and the expiration or termination of this Agreement. Seller hereby acknowledges that its obligations hereunder are recourse obligations of Seller and are not limited to recoveries each Indemnified Party may have with respect to the Purchased Mortgage Loans. Seller also agrees not to assert any claim against Buyer or any of its Affiliates, or any of their respective officers, directors, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the facility established hereunder, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby. This <u>Section 17(a)</u> shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Seller agrees to pay within thirty (30) days following a receipt of an invoice therefor from Buyer all of the reasonable and documented out-of-pocket costs and expenses incurred by Buyer in connection with (i) the development, preparation and execution of this Agreement, any other Facility Document or any other documents prepared in connection herewith or therewith and (ii), any amendment, supplement or modification to or the enforcement of, this Agreement, any other Facility Document or

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any other documents prepared in connection herewith or therewith. Seller agrees to pay within thirty (30) days following a receipt of an invoice therefor from Buyer all of the costs and expenses incurred in connection with the consummation and administration of the transactions contemplated hereby and thereby including without limitation filing fees and all the fees, disbursements and expenses of counsel to Buyer which amount may be deducted from the Purchase Price paid for the first Transaction hereunder. Subject to the limitations set forth in <u>Sections 20</u> and <u>31</u> hereof, Seller agrees to pay Buyer all the reasonable and documented out-of-pocket due diligence, inspection, testing and review costs and expenses incurred by Buyer with respect to Mortgage Loans submitted by Seller for purchase under this Agreement, including, but not limited to, those reasonable and documented out-of-pocket costs and expenses incurred by Buyer pursuant to <u>Sections 16(b)</u> and <u>20</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The obligations of Seller from time to time to pay the Repurchase Price, the Price Differential, and all other amounts due under this Agreement shall be full recourse obligations of Seller.

<u>Section 18.&nbsp;&nbsp;&nbsp;&nbsp;Servicing</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Seller, on Buyer's behalf, shall service or contract with a Servicer to interim service the Purchased Mortgage Loans consistent with the degree of skill and care that such Servicer customarily requires with respect to similar Mortgage Loans owned or managed by such Servicer and in accordance with Accepted Servicing Practices. The Servicer shall (i) comply with all applicable Requirements of Law, and (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities under the Servicing Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall cause the Servicer to hold or cause to be held all escrow funds collected by Seller with respect to any Purchased Mortgage Loans in trust accounts and shall apply the same for the purposes for which such funds were collected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall, or shall cause the Servicer and any interim servicer to, deposit all collections received by Seller or Servicer on account of the Purchased Mortgage Loans in accordance with the provisions of <u>Section 5(a)</u>.

If any Mortgage Loan that is proposed to be sold on a Purchase Date is serviced or subserviced by a servicer other than a currently approved Servicer, or if the servicing of any Purchased Mortgage Loan is to be transferred from a currently approved Servicer to another servicer, Seller shall, prior to such Purchase Date or servicing transfer date, as applicable, (i) provide Buyer with the related Servicing Agreement pursuant to which such servicer shall service such Mortgage Loans, which Servicing Agreement shall be acceptable to Buyer in all respects, (ii) obtain Buyer's prior written consent to the use of such servicer in the performance of such servicing duties and obligations, which consent may be withheld in Buyer's sole discretion and (iii) provide Buyer with a fully executed servicer notice or letter agreement, executed by Buyer, Seller and such Servicer (each, a "<u>Servicer Side Letter</u>"), in form and substance acceptable to Buyer with respect to such Servicer. In no event shall Seller's use of a Servicer relieve Seller of its obligations hereunder, and Seller shall remain liable under this Agreement as if Seller were servicing such Mortgage Loans directly. Seller hereby agrees and acknowledges, and shall cause any Servicer to agree and acknowledge, that Buyer or its designees shall have the right to conduct examinations and audits of the Servicer with respect to the servicing of the Purchased Mortgage Loans. Buyer shall also have the right to obtain copies of all Records relating to the Purchased Mortgage Loans, including all documents relating to the Purchased Mortgage Loans and the servicing thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Upon the occurrence and continuation of an Event of Default hereunder or a Servicer Termination Event, Buyer shall have the right to immediately terminate the Servicer's right to service the Purchased Mortgage Loans under the Servicing Agreement (subject to the related servicing transfer period) without payment of any penalty or termination fee. Seller and the Servicer shall cooperate in transferring the servicing and all Records of the Purchased Mortgage Loans to a successor servicer appointed by Buyer in its discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;If Seller should discover that, for any reason whatsoever, Seller or any entity responsible by contract to Seller for managing or servicing any such Purchased Mortgage Loan has failed to perform fully Seller's obligations under the Facility Documents or any of the obligations of such entities with respect to the Purchased Mortgage Loans, Seller shall promptly notify Buyer and promptly remedy any non-compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;The Servicer's rights and obligations to interim service the Purchased Mortgage Loans shall terminate on the twentieth (20<sup>th</sup>) day of each calendar month (and if such day is not a Business Day, the next succeeding Business Day), unless otherwise directed in writing by the Buyer prior to such date. For purposes of this provision, notice provided by electronic mail shall constitute written notice. For the avoidance of doubt, this <u>Subsection 18(f)</u> shall no longer apply to any Purchased Mortgage Loan that is repurchased in full by Seller in accordance with the provisions of this Agreement and therefore is no longer subject to a Transaction. Upon termination in accordance with the first sentence of this <u>Subsection 18(f)</u>, the Servicer shall transfer servicing, including, without limitation, delivery of all servicing files in Servicer's possession to the designee of the Buyer. The Servicer's delivery of servicing files shall be in accordance with Accepted Servicing Practices. The Seller and Servicer shall have no right to select a subservicer or successor servicer. After the servicing terminates and until the date the servicing is transferred, the Servicer shall service the Purchased Mortgage Loans in accordance with the terms of this Agreement and for the benefit of the Buyer.

<u>Section 19.&nbsp;&nbsp;&nbsp;&nbsp;Recording of Communications</u>. Buyer and Seller shall have the right (but not the obligation) from time to time to make or cause to be made tape recordings of communications between its employees and those of the other party with respect to Transactions upon notice to the other party of such recording.

<u>Section 20.&nbsp;&nbsp;&nbsp;&nbsp;Due Diligence</u>. Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Mortgage Loans and Seller, including, without limitation, financial information, organization documents, business plans, purchase agreements and underwriting purchase models for each pool of Purchased Mortgage Loans, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, to review the servicing of the Purchased Mortgage Loans, or otherwise, and Seller agrees that upon reasonable prior written notice to a Responsible Officer of Seller, unless an Event of Default shall have occurred, in which case no notice is required, Buyer or its Authorized Representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of the Mortgage Files and any and all documents, records, agreements, instruments or information relating to such Purchased Mortgage Loans (the "<u>Due Diligence Documents</u>") in the possession or under the control of Seller and/or the Custodian. Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Mortgage Files and the Purchased Mortgage Loans. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may purchase Purchased Mortgage Loans from Seller and enter into additional Transactions with respect to the Purchased Mortgage Loans based solely upon the information provided by Seller to Buyer in the Asset Schedule and the representations, warranties and covenants contained

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herein and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on a reasonable portion of the Purchased Mortgage Loans purchased in a Transaction, including, without limitation, ordering new credit reports and new appraisals on the related Mortgaged Properties with respect to the Mortgage Loans and otherwise re-generating the information used to originate such Mortgage Loan, which information may be used by Buyer to calculate Market Value. Buyer may underwrite such Purchased Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Seller agrees to cooperate with Buyer or any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer with access to any documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession, or under the control, of Seller. Seller further agrees that Seller shall pay all out-of-pocket costs and expenses incurred by Buyer in connection with Buyer's due diligence activities pursuant to this Section 20, in an amount not to exceed [\*\*\*] per calendar year.

<u>Section 21.&nbsp;&nbsp;&nbsp;&nbsp;Assignability</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by Seller without the prior written consent of Buyer. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. Nothing in this Agreement express or implied, shall give to any Person, other than the parties to this Agreement and their successors hereunder, any benefit of any legal or equitable right, power, remedy or claim under this Agreement. Prior to the occurrence and continuation of an Event of Default, Buyer may from time to time assign all or a portion of its rights and obligations under this Agreement and the Facility Documents to any Person pursuant to an executed assignment and acceptance by Buyer and assignee ("<u>Assignment and Acceptance</u>"), specifying the percentage or portion of such rights and obligations assigned upon at least five (5) Business Days' notice to a Responsible Officer of Seller and with the prior written consent of Seller (such consent not to be unreasonably withheld); <u>provided</u>, that with respect to any assignment to an Affiliate of Buyer or any assignment by Buyer during the continuation of an Event of Default, no such notice to or consent from Seller shall be required. Upon such assignment, (a) such assignee shall be a party hereto and to each Facility Document to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Buyer hereunder, and (b) Buyer shall, to the extent that such rights and obligations have been so assigned by it be released from its obligations hereunder and under the Facility Documents. Unless otherwise stated in the Assignment and Acceptance, Seller shall continue to take directions solely from Buyer unless otherwise notified by Buyer in writing. Buyer may distribute to any prospective assignee any document or other information delivered to Buyer by Seller solely to the extent such prospective assignee is subject to an agreement with Buyer similar in substance to what is set forth in Section 32.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Buyer, upon at least five (5) Business Days' notice to a Responsible Officer of Seller (<u>provided</u> that the failure to give such notice shall not affect the validity of such sale), may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Agreement to any Person; <u>provided</u>, <u>however</u>, that (i) Buyer's obligations under this Agreement shall remain unchanged, (ii) Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) Seller shall continue to deal solely and directly with Buyer in connection with Buyer's rights and obligations under this Agreement and the other Facility Documents except as provided in <u>Section 8</u>; <u>provided</u> that no such restrictions shall apply with respect to any sale to any Affiliate of Buyer or if an Event of Default has occurred and is continuing; and <u>provided</u> further that Buyer shall act as agent for all

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purchasers, assignees and point of contact for Seller pursuant to agency provisions to be agreed upon by Buyer, its intended purchasers and/or assignees and Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Buyer may, in connection with any assignment or participation or proposed assignment or participation pursuant to this <u>Section 21</u>, disclose to the assignee or participant or proposed assignee or participant, as the case may be, any information relating to Seller or any of its Subsidiaries or to any aspect of the Transactions that has been furnished to Buyer by or on behalf of Seller or any of its Subsidiaries.

<u>Section 22.&nbsp;&nbsp;&nbsp;&nbsp;Transfer and Maintenance of Register</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Subject to acceptance and recording thereof pursuant to paragraph (b) of this <u>Section 22</u>, from and after the effective date specified in each Assignment and Acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of Buyer under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Seller shall maintain a register (the "<u>Register</u>") on which it shall record Buyer's rights hereunder, and each Assignment and Acceptance and participation. The Register shall include the names and addresses of Buyer (including all assignees, successors and participants) and the percentage or portion of such rights and obligations assigned or participated. The entries in the Register shall be conclusive absent manifest error, and the parties shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Buyer hereunder for all purposes of this Agreement. Failure to make any such recordation, or any error in such recordation shall not affect Seller's obligations in respect of such rights. If Buyer sells a participation in its rights hereunder, it shall provide Seller, or maintain as agent of Seller, the information described in this paragraph and permit Seller to review such information as reasonably needed for Seller to comply with its obligations under this Agreement or under any applicable Requirement of Law.

<u>Section 23.&nbsp;&nbsp;&nbsp;&nbsp;Tax Treatment</u>. Each party to this Agreement acknowledges that notwithstanding anything in this Agreement to the contrary, it is its intent for purposes of U.S. federal taxes and all relevant state and local income and franchise taxes, to treat each Transaction as indebtedness of Seller that is secured by the Purchased Mortgage Loans and that the Purchased Mortgage Loans are owned by Seller in the absence of a Default by Seller. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by law.

<u>Section 24.&nbsp;&nbsp;&nbsp;&nbsp;Set-Off</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;In addition to any rights and remedies of Buyer hereunder and by law, Buyer shall have the right during the continuation of an Event of Default, without prior notice to a Responsible Officer of Seller, any such notice being expressly waived by Seller to the extent permitted by applicable law to set-off and appropriate and apply against any obligation from Seller to Buyer or any Affiliate thereof any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to return excess margin), credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from Buyer or any Affiliate thereof to or for the credit or the account of Seller. Buyer agrees promptly to notify Seller after any such set-off and application made by Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Buyer shall at any time have the right, in each case until such time as Buyer determines otherwise, to retain, to suspend payment or performance of, or to decline to remit, any amounts or deliver any property that Buyer would otherwise be obligated to pay, remit or deliver to Seller hereunder if an Event of Default has occurred and is continuing. For avoidance of doubt and not as a limitation, Buyer may set-off any amounts in the Reserve**<u>Operating</u>** Account against any outstanding Obligations provided an Event of Default has occurred and is continuing, but may not set-off, transfer or withdraw any amounts from the Reserve**<u>Operating</u>** Account unless an Event of Default has occurred and is continuing.

<u>Section 25.&nbsp;&nbsp;&nbsp;&nbsp;Terminability</u>. Each representation and warranty made or deemed to be made by entering into a Transaction, herein or pursuant hereto shall survive the making of such representation and warranty, and Buyer shall not be deemed to have waived any Default that may arise because any such representation or warranty shall have proved to be false or misleading, notwithstanding that Buyer may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time the Transaction was made. The obligations of Seller under <u>Section 17</u> hereof shall survive the termination of this Agreement.

<u>Section 26.&nbsp;&nbsp;&nbsp;&nbsp;Notices And Other Communications</u>. Except as otherwise expressly permitted by this Agreement, all notices, requests and other communications provided for herein (including without limitation any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including without limitation by email or facsimile) delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof or thereof); or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. Except as otherwise provided in this Agreement and except for notices given under <u>Sections 3</u> and <u>4</u> (which shall be effective only on receipt), all such communications shall be deemed to have been duly given when transmitted by facsimile or electronic mail or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. In all cases, to the extent that the related individual set forth in the respective "Attention" line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person.

<u>Section 27.&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement; Severability; Single Agreement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;This Agreement and the Facility Documents collectively constitute the entire understanding between Buyer and Seller with respect to the subject matter they cover and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased Mortgage Loans. By acceptance of this Agreement, Buyer and Seller acknowledge that they have not made, and are not relying upon, any statements, representations, promises or undertakings not contained in this Agreement. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that

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payments, deliveries, and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries, and other transfers may be applied against each other and netted and (iii) to promptly provide notice to the other after any such set off or application.

<u>Section 28.&nbsp;&nbsp;&nbsp;&nbsp;GOVERNING LAW</u>. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF, OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN.

<u>Section 29.&nbsp;&nbsp;&nbsp;&nbsp;SUBMISSION TO JURISDICTION; WAIVERS</u>. BUYER AND SELLER EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;**SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER FACILITY DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;**CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;**AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;**AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;**BUYER AND SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER FACILITY DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.**

<u>Section 30.&nbsp;&nbsp;&nbsp;&nbsp;No Waivers, etc</u>. No failure on the part of Buyer to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any

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Facility Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Facility Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. An Event of Default hereunder shall be deemed to be not continuing once waived by the Buyer.

<u>Section 31.&nbsp;&nbsp;&nbsp;&nbsp;Netting</u>. If Buyer and Seller are "financial institutions" as now or hereinafter defined in Section 4402 of Title 12 of the United States Code ("<u>Section 4402</u>") and any rules or regulations promulgated thereunder,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;All amounts to be paid or advanced by one party to or on behalf of the other under this Agreement or any Transaction hereunder shall be deemed to be "payment obligations" and all amounts to be received by or on behalf of one party from the other under this Agreement or any Transaction hereunder shall be deemed to be "payment entitlements" within the meaning of Section 4402, and this Agreement shall be deemed to be a "netting contract" as defined in Section 4402.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The payment obligations and the payment entitlements of the parties hereto pursuant to this Agreement and any Transaction hereunder shall be netted as follows. In the event that either party shall fail to honor any payment obligation under this Agreement or any Transaction hereunder (the "<u>Defaulting Party</u>"), the other party (the "<u>Nondefaulting Party</u>") shall be entitled to reduce the amount of any payment to be made by the Nondefaulting Party to the Defaulting Party by the amount of the payment obligation that the Defaulting Party failed to honor.

<u>Section 32.&nbsp;&nbsp;&nbsp;&nbsp;Confidentiality</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Buyer and Seller each hereby acknowledges and agrees that all written or computer-readable information provided by one party to any other regarding the terms set forth in any of the Facility Documents or the Transactions contemplated thereby or pursuant to the terms thereof, including, but not limited to, the name of, or identifying information with respect to Buyer or Seller, any pricing terms, or other nonpublic business or financial information (including, without limitation, any sub-limits, financial covenants, financial statements and performance data), the existence of this Agreement and the Transactions with Buyer (the "<u>Confidential Information</u>") shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except to the extent that (i) it is necessary to disclose to its Affiliates and its and their employees, directors, officers, advisors (including legal counsel, accountants, taxing authorities, equity holders, representatives, investors, lenders, agents or auditors), representatives and servicers, (ii) it is requested or required by governmental agencies, regulatory bodies or other legal, governmental or regulatory process, in which case the disclosing party shall provide prior written notice to the other party hereto to the extent not prohibited by any Government Agency, Governmental Authority or Applicable Law or regulation; <u>provided</u>, however, that Buyer and Seller shall not be required to provide each other with prior written notice of disclosure of Confidential Information in connection with routine examinations by accountants or regulatory authorities, (iii) any of the Confidential Information is in the public domain other than due to a breach of this covenant, (iv) disclosure to any approved hedge counterparty to the extent necessary to obtain any Interest Rate Protection Agreement or, (v) an Event of Default has occurred and is continuing and Buyer reasonably determines in good faith such information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased Mortgage Loans or otherwise to enforce or exercise Buyer's rights hereunder. Seller and Buyer shall be responsible for any breach of the terms of this <u>Section 32(a)</u> by any Person that it discloses Confidential Information to pursuant to clause (i) above.

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Each party hereto agrees that it shall not, without the written consent of each other party hereto, make any communication, press release, public announcement or statement in any way connected to the existence or terms of this Agreement or the other Facility Documents or the Transactions contemplated hereby or thereby, except where such communication or announcement is required by law or regulation, in which event the disclosing party will consult and cooperate with each other party hereto with respect to the wording of any such announcement. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Facility Document, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment or tax structure of the Transactions, any fact relevant to understanding the federal, state and local tax treatment or tax structure of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment or tax structure; <u>provided</u> that the "tax treatment or "tax structure" shall be limited to any facts relevant to the U.S. federal, state or local tax treatment of any Transaction contemplated hereunder and specifically does not include any information relating to the identity of Buyer, Seller or any pricing terms hereunder. The provisions set forth in this <u>Section 32(a)</u> shall survive the termination of this Agreement for two years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything in this Agreement to the contrary, Seller and Buyer understand that Confidential Information disclosed hereunder may contain "nonpublic personal information", as that term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the "<u>GLB Act</u>"), and each Party agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the GLB Act and other applicable local, state and federal laws relating to privacy and data protection. Seller and Buyer shall implement administrative, technical and physical safeguards and other security measures to (a) ensure the security and confidentiality of the "nonpublic personal information" of the Mortgagors, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Upon request, Seller will provide evidence reasonably satisfactory to allow Buyer to confirm that Seller has satisfied its obligations as required under this <u>Section 32(b</u>). Without limitation, this may include Buyer's review of audits, summaries of test results, and other equivalent evaluations of Seller. Each Party shall notify the other Party immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the Mortgagors. Such notice shall be provided by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual. The provisions set forth in this <u>Section 32(b)</u> shall survive the termination of this Agreement for as long as each Party retains any "nonpublic personal information" disclosed hereunder.

<u>Section 33.&nbsp;&nbsp;&nbsp;&nbsp;Intent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The parties intend and recognize that this Agreement and each Transaction hereunder is a "repurchase agreement" as that term is defined in Section 101 of the Bankruptcy Code, a "securities contract" as that term is defined in Section 741 of the Bankruptcy Code, and a "master netting agreement" as that term is defined in Section 101(38A)(A) of the Bankruptcy Code, that all payments hereunder are deemed "margin payments" or "settlement payments" as defined in the Bankruptcy Code, that each Purchased Mortgage Loan constitutes either a "mortgage loan" or an "interest in a mortgage" as such terms are used in the Bankruptcy Code and that the pledge of the Repurchase Assets in Section 9 of this Agreement constitutes "a security agreement or other arrangement or other credit enhancement" that is "related to" the Agreement and

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Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code. Seller and Buyer further recognize and intend that this Agreement is an agreement to provide financial accommodations and is not subject to assumption pursuant to Bankruptcy Code Section 365(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The parties further intend and recognize that (i)(1) for so long as Buyer is a "financial institution," "financial participant" or another entity listed in Sections 555, 559, 561, 362(b)(6), 362(b)(7) or 362(b)(27) of the Bankruptcy Code, Buyer shall be entitled to, without limitation, the liquidation, termination, acceleration, netting, set-off, and non-avoidability rights afforded to parties such as Buyer to "repurchase agreements" pursuant to Sections 559, 362(b)(7) and 546(f) of the Bankruptcy Code, "securities contracts" pursuant to Sections 555, 362(b)(6) and 546(e) of the Bankruptcy Code and "master netting agreements" pursuant to Sections 561, 362(b)(27) and 546(j) of the Bankruptcy Code, and (2) Buyer's right to liquidate the Purchased Mortgage Loans and other Repurchase Assets delivered to it in connection with the Transactions hereunder or to accelerate or terminate this Agreement or otherwise exercise any other remedies pursuant to <u>Section 16</u> hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code Sections 555, 559 and 561; (ii) Buyer's right to set-off claims and appropriate and apply any and all deposits of money or property or any other indebtedness at any time held or owing by Buyer to or for the credit of the account of any Affiliate against and on account of the obligations and liabilities of Seller pursuant to <u>Section 24</u> hereof is a contractual right as described in Bankruptcy Code Section 561; and (iii) any payments or transfers of property made with respect to this Agreement or any Transaction to satisfy a Margin Deficit shall be considered a "margin payment" or "settlement payment" as such terms are defined in Bankruptcy Code Sections 741(5) and 741(8).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;[<u>Reserved</u>].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Each party agrees that this Agreement is intended to create mutuality of obligations among the parties, and as such, the Agreement constitutes a contract which (i) is between all of the parties and (ii) places each party in the same right and capacity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Each party agrees that it shall not challenge, and hereby waives to the fullest extent available under applicable law its right to challenge, the characterization of this Agreement or any Transaction as a repurchase agreement, securities contract and master netting agreement under the Bankruptcy Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Each party agrees that this Agreement and the Facility Documents and the Transactions entered into hereunder are part of an integrated, simultaneously-closing suite of financial contracts.

<u>Section 34.&nbsp;&nbsp;&nbsp;&nbsp;Conflicts</u>. In the event of any conflict between the terms of this Agreement, any other Facility Document, the documents shall control in the following order of priority the terms of this Agreement shall prevail.

<u>Section 35.&nbsp;&nbsp;&nbsp;&nbsp;Authorizations</u>. Any of the persons whose signatures and titles appear on <u>Schedule 2</u> are authorized, acting singly, to act for Seller or Buyer under this Agreement.

<u>Section 36.&nbsp;&nbsp;&nbsp;&nbsp;Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Counterparts</u>. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such

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counterpart. Counterparts may be delivered electronically. **<u>The parties agree that this Agreement, any addendum or amendment hereto or any other document necessary for the consummation of the transaction contemplated by this Agreement may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer's identity and evidence of the signer's agreement to conduct the transaction electronically and of the signer's execution of each electronic signature.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Captions</u>. The captions and headings appearing herein are for included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Acknowledgment</u>. Seller hereby acknowledges that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Buyer has no fiduciary relationship to Seller in connection with the Facility Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;no joint venture exists between Buyer and Seller as a result of the Facility Documents; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;it has made its own independent decisions to enter into the Facility Documents and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary and Seller is not relying upon any advice from Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Documents Mutually Drafted</u>. Seller and Buyer agree that this Agreement and each other Facility Document prepared in connection with the Transactions set forth herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.

<u>Section 37.&nbsp;&nbsp;&nbsp;&nbsp;Recognition of the U.S. Special Resolution Regimes</u>. In the event that Buyer becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from Buyer of this Agreement and/or the Facility Documents, and any interest and obligation in or under this Agreement and/or the Facility Documents, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement and/or the Facility Documents, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

<u>Section 38.&nbsp;&nbsp;&nbsp;&nbsp;Effect of Benchmark Transition Event</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Benchmark Replacement</u>. Notwithstanding anything to the contrary herein or in any other Facility Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, Buyer may amend this Agreement to replace the LIBOR Rate**<u>Term SOFR</u>** with a Benchmark Replacement. Any such amendment will become effective at [\*\*\*] on the [\*\*\*] after Buyer has provided such amendment to Seller without any further action or consent of Seller. No replacement of the LIBOR Rate**<u>Term SOFR</u>** with a Benchmark Replacement pursuant to this Section 38 will occur prior to the applicable Benchmark Transition Start Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Benchmark Replacement Conforming Changes</u>. In connection with a Benchmark Replacement, Buyer will have the right to make Benchmark Replacement Conforming Changes from time to time upon prior written notice to Seller and, notwithstanding anything to the contrary herein or in any other Repurchase Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Notices; Standards for Decisions and Determinations</u>. Buyer will promptly notify Seller of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes and (iv) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by Buyer pursuant to this Section 38 including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in Buyer's sole discretion and without consent from Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Benchmark Unavailability Period</u>. Upon Seller's receipt of notice of the commencement of a Benchmark Unavailability Period, Seller may revoke any request for a proposed Transaction to be entered into during any Benchmark Unavailability Period.

<u>Section 39.&nbsp;&nbsp;&nbsp;&nbsp;General Interpretive Principles</u>. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;references herein to "Articles", "Sections", "Subsections", "Paragraphs", and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;the words "herein", "hereof", "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular provision;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;the term "include" or "including" shall mean without limitation by reason of enumeration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;all times specified herein or in any other Facility Document (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;all references herein or in any Facility Document to "good faith" means good faith as defined in Section 5-102(7) of the UCC as in effect in the State of New York.

[THIS SPACE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date set forth above.

BUYER:

**BANK OF MONTREAL**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

<u>Address for Notices</u>:

Bank of Montreal

c/o BMO Capital Markets Corp.

3 Times Square

**<u>151 West 42nd Street</u>**

New York, New York 10036

Attn: [\*\*\*]

Telephone: [\*\*\*]

Email: [\*\*\*]

With a copy to:

Bank of Montreal

c/o BMO Capital Markets Corp.

3 Times Square

**<u>151 West 42nd Street</u>**

New York, New York 10036

Attn: [\*\*\*]

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SELLER:

**HOME POINT FINANCIAL CORPORATION**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

<u>Address for Notices</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Home Point Financial Corporation

2211 Old Earhart Road, Suite 250

Ann Arbor, MI 48105

Attention: [\*\*\*]

Telephone: [\*\*\*]

E-mail: [\*\*\*]

With copies to:

Home Point Financial Corporation

2211 Old Earhart Road, Suite 250

Ann Arbor, MI 48105

Attention: [\*\*\*]

E-mail: [\*\*\*]

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**SCHEDULE 1-A**

**REPRESENTATIONS AND WARRANTIES WITH RESPECT TO <br>MORTGAGE LOANS**

Seller makes the following representations and warranties to Buyer with respect to each Mortgage Loan, as of the Purchase Date for such Mortgage Loan and at all times while such Mortgage Loan is subject to a Transaction hereunder. Notwithstanding any qualifications herein as to Seller's knowledge at the time a representation or warranty is made, Seller shall be required to repurchase any Mortgage Loan that Buyer has determined breaches a representation or warranty in this <u>Schedule 1-A</u> regardless of whether Seller had knowledge of such breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Payments Current</u>. All payments required to be made up to the Purchase Date for the Mortgage Loan under the terms of the Mortgage Note have been made and credited. No payment required under the Mortgage Loan is delinquent nor has any payment under the Mortgage Loan been delinquent at any time since the origination of the Mortgage Loan. The first Monthly Payment shall be made, or shall have been made, with respect to the Mortgage Loan on its Due Date or within thirty (30) days thereof, all in accordance with the terms of the related Mortgage Note. No payment required under the Mortgage Loan is or has ever been subject to forbearance for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Outstanding Charges</u>. All taxes and governmental assessments or other similar charges, levies or assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. Neither Seller nor the Qualified Originator from which Seller acquired the Mortgage Loan has advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the proceeds of the Mortgage Loan, whichever is earlier, to the day which precedes by one (1) month the Due Date of the first installment of principal and/or interest thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Original Terms Unmodified</u>. The terms of the Mortgage Note and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination; except by a written instrument which has been recorded, if necessary to protect the interests of Buyer, and which has been delivered to the Custodian and the terms of which are reflected in the Asset Schedule. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required, and its terms are reflected on the Asset Schedule. No Mortgagor in respect of the Mortgage Loan has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer, to the extent required by such policy, and which assumption agreement is part of the Mortgage File delivered to the Custodian and the terms of which are reflected in the Asset Schedule. The related Mortgage, Mortgage Note and each other document in the Mortgage File contain the entire agreement of the parties and all of the obligations of the Seller under the Purchased Mortgage Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Defenses</u>. The Mortgage Loan is not subject to any right of rescission, set-off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and no Mortgagor in respect of the Mortgage Loan was a debtor in any state or Federal

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bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated. To the knowledge of Seller and its Subsidiaries, the Mortgagor in respect of the Mortgage Loan is not currently a debtor in any state or federal bankruptcy or insolvency proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Hazard Insurance</u>. The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a qualified insurer as defined by the applicable Loan Program Authority, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Seller as of the date of origination consistent with the applicable Loan Program Authority's requirements, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount that would have been required as of the date of origination in accordance with the applicable Loan Program Authority's requirements. If any portion of the Mortgaged Property is in an area identified by any federal Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current guidelines of the Federal Emergency Management Agency is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (1) the outstanding principal balance of the Mortgage Loan, (2) the full insurable value of the Mortgaged Property, and (3) the maximum amount of insurance available under the National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1974. All such insurance policies (collectively, the "hazard insurance policy") contain a standard mortgagee clause naming Seller, its successors and assigns (including, without limitation, subsequent owners of the Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled without thirty (30) days' prior written notice to the mortgagee. No such notice has been received by Seller. All premiums on such insurance policy have been paid. The related Mortgage obligates the Mortgagor to maintain all such insurance and, at such Mortgagor's failure to do so, authorizes the mortgagee to maintain such insurance at the Mortgagor's cost and expense and to seek reimbursement therefor from such Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a "master" or "blanket" hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer and is in full force and effect. Seller has not engaged in, and has no knowledge of the Mortgagor's having engaged in any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Compliance with Applicable Laws</u>. Any requirements of any federal, state or local law or regulation including, without limitation, usury, truth-in-lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations, and Seller shall maintain or shall cause its agent to maintain in its possession, available for the inspection of Buyer, and shall deliver to Buyer, upon demand, evidence of compliance with all such requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Satisfaction of Mortgage</u>. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would affect any such release, cancellation, subordination or rescission. Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor's failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>Location and Type of Mortgaged Property</u>. The Mortgaged Property is located in an Acceptable State and consists of a single parcel of real property with a dwelling which is acceptable to the applicable Loan Program Authority pursuant to the applicable Loan Program Authority's requirements. No residence or dwelling is a mobile home or manufactured housing unit (other than a Manufactured Home) not secured by real property.. No portion of the Mortgaged Property is used for commercial purposes; <u>provided</u>, <u>that</u>, Mortgaged Properties which contain a home office shall not be considered as being used for commercial purposes as long as the Mortgaged Property has not been altered for commercial purposes and is not storing any chemicals or raw materials other than those commonly used for homeowner repair, maintenance and/or household purposes, and provided further, that, the Mortgaged Property may be a mixed use property if such Mortgaged Property conforms to Underwriting Guidelines acceptable to Buyer in its discretion. With respect to each Manufactured Home, such unit is acceptable to the applicable Loan Program Authority pursuant to the applicable Loan Program Authority's requirements.

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

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

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

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

Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting and enforceable first lien and first priority security interest on the property described therein and Seller has full right to pledge and assign the same to Buyer. The Mortgaged Property was not, as of the date of origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of the Mortgage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;<u>Validity of Mortgage Documents; Fraud</u>. The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All parties to the Mortgage Note, the Mortgage and any other such related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any other such related agreement have been duly and properly executed by such related parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken

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place on the part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan. Seller has reviewed all of the documents constituting the Mortgage File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. Except as disclosed to Buyer in writing, all tax identifications and property descriptions are legally sufficient; and tax segregation, where required, has been completed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;<u>Full Disbursement of Proceeds</u>. Other than with respect to escrow holdback amounts for weather-related or seasonal improvement costs, fees or expenses, there is no further requirement for future advances under the Mortgage Loan, and any requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;<u>Ownership</u>. Seller has full right to sell the Mortgage Loan to Buyer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to sell each Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage Loan, Buyer will own such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest except any such security interest created pursuant to the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;<u>Doing Business</u>. All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (i) in compliance with any applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, (C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (D) not doing business in such state.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;<u>Title Insurance</u>. The Mortgage Loan is covered by either (i) an irrevocable title commitment, or an attorney's opinion of title and abstract of title, each of which must be in form and substance acceptable to prudent mortgage lending institutions making mortgage loans in the area wherein the Mortgaged Property is located or (ii) an ALTA lender's title insurance policy or other generally acceptable form of policy or insurance acceptable to the applicable Loan Program Authority and each such title insurance policy is issued by a title insurer acceptable to the applicable Loan Program Authority and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring Seller, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan, subject only to the exceptions contained in clauses (1), (2) and (3) of paragraph (i) of this Schedule 1-A, and in the case of adjustable rate Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender's title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. Seller, its successors and assigns, are the sole insureds of such lender's title insurance policy, and such lender's title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender's title insurance policy, and no prior holder or servicer

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of the related Mortgage, including Seller, has done, by act or omission, anything which would impair the coverage of such lender's title insurance policy, including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Defaults</u>. Other than Mortgage Loans which are no more than thirty (30) days past due, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller nor its predecessors have waived any default, breach, violation or event of acceleration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Mechanics' Liens</u>. There are no mechanics' or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;<u>Location of Improvements; No Encroachments</u>. All improvements which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning and building law, ordinance or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;<u>Payment Terms</u>. Principal and/or interest payments on the Mortgage Loan commenced or will commence no more than [\*\*\*] after funds were disbursed in connection with the Mortgage Loan. With respect to adjustable rate Mortgage Loans, the Mortgage Interest Rate is adjusted on each Interest Rate Adjustment Date to equal [\*\*\*]. The Mortgage Note is payable on the [\*\*\*] of each month in equal monthly installments of principal and/or interest, which installments of interest with respect to adjustable rate Mortgage Loans are subject to change on the Interest Rate Adjustment Date due to adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date. Interest is calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than [\*\*\*] from commencement of amortization. The Mortgage Note does not permit Negative Amortization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;<u>Customary Provisions</u>. The Mortgage Note has a stated maturity. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and marketable title to the Mortgaged Property. There is no homestead or other exemption available to a Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage. The Mortgage Note and Mortgage are on forms acceptable to the applicable Loan Program Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;<u>Occupancy of the Mortgaged Property</u>. As of the Purchase Date the Mortgaged Property is lawfully permitted to be occupied under applicable law. All inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or

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obtained from the appropriate authorities. Seller has not received notification from any Governmental Authority that the Mortgaged Property is in material non-compliance with such laws or regulations, is being used, operated or occupied unlawfully or has failed to have or obtain such inspection, licenses or certificates, as the case may be. Seller has not received notice of any violation or failure to conform with any such law, ordinance, regulation, standard, license or certificate. With respect to any Mortgage Loan originated with an "owner-occupied" Mortgaged Property, the Mortgagor represented at the time of origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor's primary residence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Additional Collateral</u>. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (i) above. No Mortgage Loan is cross-collateralized or is subject to a cross-default provision with any mortgage loan that is not a Purchased Mortgage Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;<u>Deeds of Trust</u>. In the event the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Custodian or Buyer to the trustee under the deed of trust, except in connection with a trustee's sale after default by the Mortgagor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;&nbsp;&nbsp;&nbsp;<u>Transfer of Mortgage Loans</u>. Except with respect to Mortgage Loans registered with MERS, the Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located. With respect to each MOM Mortgage Loan, the related Assignment of Mortgage to MERS, if applicable, has been duly and properly recorded, or has been delivered for recording to the applicable recording office.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;<u>Due-On-Sale</u>. Except as permitted by the applicable Loan Program Authority, the Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the mortgagee thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Buydown Provisions; No Graduated Payments or Contingent Interests</u>. The Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a "buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;&nbsp;&nbsp;&nbsp;<u>Consolidation of Future Advances</u>. Any future advances made to the Mortgagor prior to the Purchase Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. The lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority by a title insurance policy, an endorsement to the policy insuring the mortgagee's consolidated interest or by other title evidence acceptable to the applicable Loan Program Authority. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa)&nbsp;&nbsp;&nbsp;&nbsp;<u>Mortgaged Property Undamaged</u>. The related Mortgaged Property is free of damage and waste that would adversely affect the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended. There have not been any total or partial condemnation proceedings with respect to the Mortgage Property and, to the

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knowledge of the Seller, there is no proceeding pending for the total or partial condemnation of such Mortgaged Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb)&nbsp;&nbsp;&nbsp;&nbsp;<u>Origination; Collection Practices; Escrow Deposits; Interest Rate Adjustments</u>. The Mortgage Loan was originated by Seller or a Correspondent Seller. The origination and collection practices used by the originator, each servicer of the Mortgage Loan and Seller with respect to the Mortgage Loan have been in all respects in compliance with Accepted Servicing Practices, applicable laws and regulations, and have been in all respects legal and proper. With respect to escrow deposits and Escrow Payments, all such payments are in the possession of, or under the control of, Seller or Servicer and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All Escrow Payments have been collected in full compliance with state and federal law. An escrow of funds is not prohibited by applicable law and if an escrow deposit has been established, it has been established in an amount sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable. No escrow deposits or Escrow Payments or other charges or payments due Seller have been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc)&nbsp;&nbsp;&nbsp;&nbsp;<u>Conversion to Fixed Interest Rate</u>. Except as allowed by the applicable Loan Program Authority or otherwise as expressly approved in writing by Buyer, with respect to adjustable rate Mortgage Loans, the Mortgage Loan is not convertible to a fixed interest rate Mortgage Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd)&nbsp;&nbsp;&nbsp;&nbsp;<u>Other Insurance Policies</u>. No action, inaction or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable special hazard insurance policy, private mortgage insurance policy or bankruptcy bond, irrespective of the cause of such failure of coverage. In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by Seller or by any officer, director, or employee of Seller or any designee of Seller or any corporation in which Seller or any officer, director, or employee had a financial interest at the time of placement of such insurance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee)&nbsp;&nbsp;&nbsp;&nbsp;<u>Servicemembers Civil Relief Act</u>. The Mortgagor has not notified Seller, and Seller has no knowledge, of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff)&nbsp;&nbsp;&nbsp;&nbsp;<u>Appraisal</u>. The Mortgage File with respect to such Mortgage Loan contains either an evaluation or appraisal of the related Mortgaged Property meeting the requirements set forth by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, unless such evaluation is not required by the applicable Loan Program Authority, or applicable regulatory or licensing body. Such evaluation or appraisal must have been made and signed, prior to the approval of the application for such Mortgage Loan, by a qualified appraiser (a) who, at the time of such appraisal, met the minimum qualifications of the applicable Loan Program Authority, and the requirements of the Seller's appraisal policy and (b) who satisfied (and which appraisal was conducted in accordance with) all of the applicable requirements of the Uniform Standards of Professional Appraisal Practice and all applicable federal and state laws and regulations in effect at the time of such appraisal and procedures. Such appraiser had no interest, direct or indirect, in such Mortgaged Property or in any loan made on the security thereof, and such appraiser's compensation was not affected by the approval or disapproval of such Mortgage Loan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg)&nbsp;&nbsp;&nbsp;&nbsp;<u>Disclosure Materials</u>. The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans, and Seller maintains such statement in the Mortgage File.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh)&nbsp;&nbsp;&nbsp;&nbsp;<u>Construction or Rehabilitation of Mortgaged Property</u>. No Mortgage Loan was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Defense to Insurance Coverage</u>. No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to Seller on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any private mortgage insurance (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of Seller, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer's breach of such insurance policy or such insurer's financial inability to pay.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj)&nbsp;&nbsp;&nbsp;&nbsp;<u>Capitalization of Interest</u>. The Mortgage Note does not by its terms provide for the capitalization or forbearance of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kk)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Equity Participation</u>. No document relating to the Mortgage Loan provides for any contingent or additional interest in the form of participation in the cash flow of the Mortgaged Property or a sharing in the appreciation of the value of the Mortgaged Property. The indebtedness evidenced by the Mortgage Note is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and Seller has not financed nor does Seller own directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ll)&nbsp;&nbsp;&nbsp;&nbsp;<u>Proceeds of Mortgage Loan</u>. The proceeds of the Mortgage Loan have not been and shall not be used to satisfy, in whole or in part, any debt owed or owing by the Mortgagor to Seller or any Affiliate or correspondent of Seller, except in connection with a refinanced Mortgage Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mm)&nbsp;&nbsp;&nbsp;&nbsp;<u>Origination Date</u>. The origination date of the Mortgage Loan is no earlier than ninety (90) days prior to the related Purchase Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nn)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Exception</u>. The Custodian has not noted any material exceptions on an Asset Schedule with respect to the Mortgage Loan which would materially adversely affect the Mortgage Loan or Buyer's interest in the Mortgage Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(oo)&nbsp;&nbsp;&nbsp;&nbsp;<u>Mortgage Submitted for Recordation</u>. The Mortgage either has been or will promptly be submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(pp)&nbsp;&nbsp;&nbsp;&nbsp;<u>Documents Genuine</u>. Such Purchased Mortgage Loan and all accompanying collateral documents are complete and authentic and all signatures thereon are genuine.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qq)&nbsp;&nbsp;&nbsp;&nbsp;<u>Bona Fide Loan</u>. Such Purchased Mortgage Loan arose from a bona fide loan, complying with all applicable State and Federal laws and regulations, to persons having legal capacity to contract and is not subject to any defense, set-off or counterclaim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(rr)&nbsp;&nbsp;&nbsp;&nbsp;<u>Committed Mortgage Loans</u>. Each Committed Mortgage Loan is covered by a Take-out Commitment, does not exceed the availability under such Take-out Commitment (taking into consideration mortgage loans which have been purchased by the respective Take-out Investor under the Take-out Commitment and mortgage loan which Seller has identified to Buyer as covered by such Take-out Commitment) and conforms to the requirements and the specifications set forth in such Take-out Commitment and the related regulations, rules, requirements and/or handbooks of the applicable Take-out Investor and is eligible for sale to and insurance or guaranty by, respectively the applicable Take-out Investor and applicable insurer. Each Take-out Commitment is a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ss)&nbsp;&nbsp;&nbsp;&nbsp;<u>Credit Score and Reporting</u>. As of the Purchase Date, the Mortgagor's credit score as listed on the Asset Schedule is no more than one hundred twenty (120) days old, or as otherwise permitted by the applicable Loan Program Authority. Full, complete and accurate information with respect to the Mortgagor's credit file was furnished to Equifax, Experian and Trans Union Credit Information in accordance with the Fair Credit Reporting Act and its implementing regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(tt)&nbsp;&nbsp;&nbsp;&nbsp;<u>Other Encumbrances</u>. Any property subject to any security interest given in connection with such Purchased Mortgage Loan is not subject to any other encumbrances other than a stated first mortgage, if applicable, and encumbrances which may be allowed under the Underwriting Guidelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(uu)&nbsp;&nbsp;&nbsp;&nbsp;<u>Description</u>. Each Purchased Mortgage Loan conforms to the description thereof as set forth on the related Asset Schedule delivered to the Custodian and Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vv)&nbsp;&nbsp;&nbsp;&nbsp;<u>Located in U.S.</u> No collateral (including, without limitation, the related real property and the dwellings thereon and otherwise) relating to a Purchased Mortgage Loan is located in any jurisdiction other than in one of the fifty (50) states of the United States of America or the District of Columbia.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ww)&nbsp;&nbsp;&nbsp;&nbsp;<u>Underwriting Guidelines</u>. Each Purchased Mortgage Loan has been originated in accordance with the Underwriting Guidelines (including all supplements or amendments thereto) in effect as of the date of the Transaction is entered into and as previously provided to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx)&nbsp;&nbsp;&nbsp;&nbsp;<u>Primary Mortgage Guaranty Insurance</u>. If required by the applicable Loan Program Authority, after the funding of the Purchased Mortgage Loan and payment of any premium thereafter, each Mortgage Loan is insured as to payment defaults by a policy of primary mortgage guaranty insurance in the amount required where applicable, and by an insurer approved, by the applicable Take-out Investor, if applicable, and all provisions of such primary mortgage guaranty insurance have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid. Each Mortgage Loan which is represented to Buyer to have, or to be eligible for, FHA insurance is insured, or eligible to be insured, pursuant to the National Housing Act. Each Mortgage Loan which is represented by Seller to be guaranteed, or to be eligible for guaranty, by the VA is guaranteed, or eligible to be guaranteed, under the provisions of Chapter 37 of Title 38 of the United States Code. As to each FHA insurance certificate or each VA guaranty certificate, Seller has complied with applicable

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provisions of the insurance for guaranty contract and federal statutes and regulations, all premiums or other charges due in connection with such insurance or guarantee have been paid, there has been no act or omission which would or may invalidate any such insurance or guaranty, and the insurance or guaranty is, or when issued, will be, in full force and effect with respect to each Mortgage Loan. There are no defenses, counterclaims, or rights of setoff affecting the Mortgage Loans or affecting the validity or enforceability of any private mortgage insurance or FHA insurance applicable to the Mortgage Loans or any VA guaranty with respect to the Mortgage Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(yy)&nbsp;&nbsp;&nbsp;&nbsp;<u>Predatory Lending Regulations; High Cost Loans</u>. None of the Mortgage Loans are classified as High Cost Mortgage Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(zz)&nbsp;&nbsp;&nbsp;&nbsp;<u>FHA Mortgage Insurance; VA Loan Guaranty; USDA Mortgage Loan Guaranty</u>. With respect to each Mortgage Loan to be insured or guaranteed by the FHA, the VA or the USDA, (i) all insurance or guaranty premiums or payments payable to the applicable Loan Program Authority in connection with such Mortgage Loan were paid within the timeframe required by such agency to avoid the imposition of any late fees or penalty fees, (ii) Seller has submitted all documents required by and in accordance with the timeframes established by the applicable Loan Program Authority to insure such Mortgage Loan (regardless of whether such documents are required to be contained in the related servicing file) (iii) there has been no notice, indication of ineligibility or rejection of the Mortgage Loan and there exists no impairment to full recovery without indemnity from the related Loan Program Authority, and (iv) the related insurance contract, guaranty agreement and each similar agreement, as applicable, (x) is in full force and effect, all necessary steps have been taken to keep such guaranty or insurance valid, binding and enforceable and each of such is the binding, valid and enforceable obligation of the related Loan Program Authority to the full extent thereof, without surcharge, set-off or defense, or, (y) is not yet in full force and effect, all required documentation has been successfully submitted to the appropriate agency within the time frame set forth in <u>clause (ii)</u> above and Seller has provided Buyer any evidence or information requested by Buyer necessary for Buyer to verify compliance with (ii) above and that the related insurance or guaranty premiums or payments have been made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aaa)&nbsp;&nbsp;&nbsp;&nbsp;<u>LTV; CLTV</u>. The LTV and CLTV, as applicable, of any Purchased Mortgage Loan at origination was in accordance with the applicable Loan Program Authority's guidelines, or such other percentage approved by the Buyer in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bbb)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Adverse Selection</u>. Such Mortgage Loan was not intentionally selected by the Seller in a manner intended to adversely affect the interest of the Buyer. The Seller used no selection procedures that identified such Mortgage Loan as being less desirable or valuable than other comparable Mortgage Loans originated by the Seller. Such Mortgage Loans, collectively with the other Mortgage Loans included on such Asset Schedule, is representative of the Seller's portfolio of Mortgage Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ccc)&nbsp;&nbsp;&nbsp;&nbsp;<u>Single Original Mortgage Note</u>. There is only one originally executed Mortgage Note; <u>provided</u>, <u>however</u>, that if there is more than one signed note, then each page of such additional note will have "Duplicate," "Copy" or similar language clearly stamped on it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ddd)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(eee)&nbsp;&nbsp;&nbsp;&nbsp;<u>Environmental Matters</u>. To the knowledge of Seller, the Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal environmental law, rule or regulation. To the knowledge of Seller with respect to each of the following clauses, there is no pending action or proceeding directly involving any Mortgaged Property in which compliance with any environmental law, rule or

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regulation is an issue; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation existing as a prerequisite to use and enjoyment of said property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(fff)&nbsp;&nbsp;&nbsp;&nbsp;<u>Regarding the Mortgagor</u>. The Mortgagor is one or more natural persons or a trustee under a "living trust" and such "living trust" is in compliance with the applicable Take-out Investor guidelines for such trusts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ggg)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hhh)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved</u>].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;<u>Prepayment Fee</u>. With respect to each Mortgage Loan that has a prepayment fee feature, each such prepayment fee is enforceable and was originated in compliance with all applicable federal, state and local laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jjj)&nbsp;&nbsp;&nbsp;&nbsp;<u>Flood Certification Contract</u>. Seller shall have obtained a life of loan, transferable flood certification contract for each Mortgage Loan and such contract is assignable to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kkk)&nbsp;&nbsp;&nbsp;&nbsp;<u>Endorsements</u>. Each Mortgage Note has been endorsed by a duly authorized representative of Seller for its own account and not as a fiduciary, trustee, trustor or beneficiary under a trust agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(lll)&nbsp;&nbsp;&nbsp;&nbsp;<u>Accuracy of Information</u>. All information provided to Buyer by Seller with respect to the Mortgage Loans, including but not limited to, any information contained in the Mortgage File, is accurate in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mmm)&nbsp;&nbsp;&nbsp;&nbsp;<u>Single Premium Credit Insurance</u>. No Mortgagor is offered or required to purchase single premium credit insurance in connection with the origination of the related Mortgage Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nnn)&nbsp;&nbsp;&nbsp;&nbsp;<u>Patriot Act</u>. Seller has complied with all applicable anti money laundering laws and regulations, including, without limitation, the Patriot Act. To the knowledge of the Seller, no Mortgage Loan is subject to nullification pursuant to the Executive Order or the regulations promulgated by OFAC (the "<u>OFAC Regulations</u>") or in violation of the Executive Order or the OFAC Regulations, and, to the knowledge of the Seller, no Mortgagor is subject to the provisions of such Executive Order or the OFAC Regulations nor listed as a "blocked person" for purposes of the OFAC Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ooo)&nbsp;&nbsp;&nbsp;&nbsp;<u>MERS Designated Mortgage Loans</u>. With respect to each MERS Designated Mortgage Loans, a mortgage identification number has been assigned by MERS and such mortgage identification number is accurately provided on the Asset Schedule. The related Assignment of Mortgage to MERS has been duly and properly recorded. With respect to each MERS Designated Mortgage Loan, Seller has not received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ppp)&nbsp;&nbsp;&nbsp;&nbsp;<u>MOM Mortgage Loans</u>. With respect to each MOM Mortgage Loan, Seller has not received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qqq)&nbsp;&nbsp;&nbsp;&nbsp;<u>Authorized Funds Recipient</u>. Any related settlement or closing agent has fully disbursed all proceeds received from Buyer in accordance with the related HUD-1 form or closing disclosure, as applicable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(rrr)&nbsp;&nbsp;&nbsp;&nbsp;<u>Ability to Repay</u>. Before originating the Mortgage Loan, the originator made a reasonable and good faith determination that the borrower would have a reasonable ability to repay the loan according to its terms, in accordance with the "ability to repay" standards of the federal Truth in Lending Act, 15 U.S.C. 1639c(a), and Regulation Z, 12 C.F.R. 1026.43, as may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(sss)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ttt)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved</u>].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(uuu)&nbsp;&nbsp;&nbsp;&nbsp;<u>FICO Floor</u>. With respect to Mortgage Loans (other than those originated in connection with any "streamline refinance" FHA or VA program) which are FHA Loans, VA Loans, or USDA Mortgage Loans, the applicable Mortgagor's FICO score at the time of origination was in accordance with the applicable Loan Program Authority's requirements. **<u>To the extent the Purchased Mortgage Loan is a Jumbo Mortgage Loan, the FICO score of such Purchased Mortgage Loan meets or exceeds the greater of (x)</u>** [\*\*\*] **<u>or (y) such other FICO score allowable pursuant to the Underwriting Guidelines in effect as of the date of origination of such Mortgage Loan; provided, however, a Purchased Mortgage Loan may have a FICO score lower than as otherwise required pursuant to this paragraph (uuu), if such Mortgage Loan is approved in writing by Buyer in its sole discretion.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vvv)&nbsp;&nbsp;&nbsp;&nbsp;<u>TRID Compliance</u>. With respect to each Mortgage Loan where the Mortgagor's loan application for the Mortgage Loan was taken on or after October 3, 2015, such Mortgage Loan was originated in compliance with the TILA-RESPA Integrated Disclosure Rule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(www)&nbsp;&nbsp;&nbsp;&nbsp;<u>Closing Protection Letter</u>. With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan (other than any such Mortgage Loan originated in the State of New York), Seller has obtained an ALTA closing protection letter which provides indemnification for Buyer for losses arising from the related Closing Agent's fraud, theft, dishonesty, negligence or failure to follow written closing instructions, in form and substance acceptable to Buyer. If such closing protection letter is not addressed to Buyer, such closing protection letter shall provide that Buyer and any assignee of Buyer are protected by such letter as if it were addressed directly to them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxx)&nbsp;&nbsp;&nbsp;&nbsp;<u>Wet-Ink Mortgage Loans</u>. With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan, the Closing Agent has been instructed in writing by Seller to hold the related Mortgage File as agent and bailee for Buyer and to promptly forward such Mortgage File in accordance with the provisions of the Custodial and Disbursement Agreement and the escrow instruction letter, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(yyy)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Encumbrances; Good Title</u>. Seller has not assigned, pledged, or otherwise conveyed or encumbered any Mortgage Loan to any Person other than Buyer. Immediately prior to the sale of a Mortgage Loan to Buyer, Seller was the sole owner of such Mortgage Loan and had good and marketable title thereto, free and clear of all Liens, in each case except for Liens to be released simultaneously with the sale to Buyer hereunder.

**SCHEDULE 1-B**

**REPRESENTATIONS AND WARRANTIES WITH RESPECT TO <br>POOLED MORTGAGE LOANS**

Seller makes the following representations and warranties to Buyer, to the best of Seller's knowledge, with respect to each Pooled Mortgage Loan, as of the Purchase Date for such Pooled

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Mortgage Loan and at all times while such Pooled Mortgage Loan is subject to a Transaction hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Agency Approvals</u>. To the extent required by applicable law or necessary to issue and/or service, as applicable, an Agency Security, the Seller and Servicer possess all Agency Approvals and is in good standing with each Agency. No event has occurred, and neither Seller nor Servicer has any reason whatsoever to believe or suspect an event may occur, prior to the issuance of the Agency Security (including a change in insurance coverage), which would either make Seller or Servicer, as applicable, unable to comply with the eligibility requirements for maintaining all such Agency Approvals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Agency Eligibility</u>. Each Pooled Mortgage Loan is an Agency Eligible Mortgage Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Aggregate Principal Balance</u>. The Cut-off Date Principal Balance respecting each Pooled Mortgage Loan shall be at least equal to the original unpaid principal balance of the Agency Security for the Pooled Mortgage Loans designated to be issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Committed Mortgage Loans</u>. The Agency Security to be issued on account of the Pooled Mortgage Loans is covered by a Take-out Commitment, does not exceed the availability under such Take-out Commitment. Each Take-out Commitment is a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Certification</u>. With respect to Pooled Mortgage Loans being placed in an Agency Security, the Custodian has certified such Pooled Mortgage Loans to the applicable Agency for the purpose of being swapped for an Agency Security backed by such pool, in each case, in accordance with the terms of the applicable Agency guidelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>Sole Subscriber</u>. As to the Agency Security being issued with respect to Pooled Mortgage Loans, Buyer or the agent under the Joint Securities Account Control Agreement has been listed as the sole subscriber thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Securities Issuance Failure</u>. With respect to each Pooled Mortgage Loan being placed in an Agency Security, no Securities Issuance Failure shall have occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Agency Securities</u>. With respect to any Pooled Mortgage Loans, Seller has only designated Buyer or the agent under the Joint Securities Account Control Agreement as the party authorized to receive the related Agency Security and shall designate Buyer or the agent under the Joint Securities Account Control Agreement accordingly on the applicable Form HUD 11705 (Schedule of Subscribers).

**SCHEDULE 2**

------

**AUTHORIZED REPRESENTATIVES**

**<u>SELLER</u>**

Home Point Financial Corporation

2211 Old Earhart Road, Suite 250

Ann Arbor, MI 48105

Attention: [\*\*\*]

Telephone: [\*\*\*]

E-mail: [\*\*\*]

With copies to:

Home Point Financial Corporation

2211 Old Earhart Road, Suite 250

Ann Arbor, MI 48105

Attention: [\*\*\*]

E-mail: [\*\*\*]

**<u>SELLER</u>**

See Authorized Representatives of Seller attached.

------

**<u>BUYER NOTICES</u>**

Bank of Montreal

c/o BMO Capital Markets Corp.

3 Times Square

**<u>151 West 42nd Street</u>**

New York, New York 10036

Attn: [\*\*\*]

Telephone: [\*\*\*]

Email: [\*\*\*]

With a copy to:

Bank of Montreal

c/o BMO Capital Markets Corp.

3 Times Square

**<u>151 West 42nd Street</u>**

New York, New York 10036

Attn: [\*\*\*]

**<u>BUYER AUTHORIZATIONS</u>**

Any of the persons whose signatures and titles appear below, including any other authorized officers, are authorized, acting singly, to act for Buyer under this Agreement:

---

| | | |
|:---|:---|:---|
| Name | Title | Signature |
| [\*\*\*] | [\*\*\*] | |
| [\*\*\*] | [\*\*\*] | |
| [\*\*\*] | [\*\*\*] | |
| [\*\*\*] | [\*\*\*] | |

---

**SCHEDULE 3**

**INDEBTEDNESS OF SELLER**

------

---

| | | |
|:---|:---|:---|
| **Lender** | **Type of Facility** | **Facility Amount** |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] |

---

**EXHIBIT A**

**[RESERVED]**

**EXHIBIT B**

**[RESERVED]**

**EXHIBIT C**

**EVIDENCE OF BUYER LISTED AS LOSS PAYEE <br>OF SELLER'S FIDELITY INSURANCE POLICY, ERRORS AND OMISSIONS INSURANCE POLICY, AND PROFESSIONAL LIABILITY INSURANCE POLICY**

(Attached)

**EXHIBIT D**

**FORM OF SECTION 8 CERTIFICATE**

Reference is hereby made to the Master Repurchase Agreement and Securities Contract dated as of January 8, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the "<u>Agreement</u>"), between Home Point Financial Corporation (the "<u>Seller</u>") and

------

Bank of Montreal (the "<u>Buyer</u>"). Pursuant to the provisions of <u>Section 8</u> of the Agreement, the undersigned hereby certifies that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;It is __ a natural individual person, treated as a corporation for U.S. federal income tax purposes, disregarded for federal income tax purposes (in which case a copy of this Section 8 Certificate is attached in respect of its sole beneficial owner), or treated as a partnership for U.S. federal income tax purposes (one must be checked).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;It is the beneficial owner of amounts received pursuant to the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;It is not a bank, as such term is used in section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the "Code"), or the Agreement is not, with respect to the undersigned, a loan agreement entered into in the ordinary course of its trade or business, within the meaning of such section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;It is not a 10-percent shareholder of Seller within the meaning of section 871(h)(3) or 881(c)(3)(B) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;It is not a controlled foreign corporation that is related to Seller within the meaning of section 881(c)(3)(C) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;Amounts paid to it under the Facility Documents are not effectively connected with its conduct of a trade or business in the United States.

[NAME OF UNDERSIGNED]

By:<u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

**EXHIBIT E**

**ASSET SCHEDULE FIELDS**

**[\*\*\*]**

**EXHIBIT F**

**FORM OF POWER OF ATTORNEY**

KNOW ALL MEN BY THESE PRESENTS, that Home Point Financial Corporation ("<u>Seller</u>") hereby irrevocably constitutes and appoints Bank of Montreal ("<u>Buyer</u>") and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Buyer's discretion:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;in the name of Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any assets purchased by Buyer under the Master Repurchase Agreement and Securities Contract (as amended, restated or modified) dated as of January 8, 2021 (the "<u>Assets</u>"), and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Buyer for the purpose of collecting any and all such moneys due with respect to any other assets whenever payable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;to pay or discharge taxes and liens levied or placed on or threatened against the Assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;(i) to direct any party liable for any payment under any Assets to make payment of any and all moneys due or to become due thereunder directly to Buyer or as Buyer shall direct; (ii) to send "goodbye" letters on behalf of Seller and Servicer; (iii) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Assets; (iv) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (v) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Assets or any proceeds thereof and to enforce any other right in respect of any Assets; (vi) to defend any suit, action or proceeding brought against Seller with respect to any Assets; (vii) to settle, compromise or adjust any suit, action or proceeding described in clause (vi) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate; and (viii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Assets as fully and completely as though Buyer were the absolute owner thereof for all purposes, and to do, at Buyer's option and Seller's expense, at any time, and from time to time, all acts and things which Buyer deems necessary to protect, preserve or realize upon the Assets and Buyer's Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;for the purpose of carrying out the transfer of servicing with respect to the Assets from Seller to a successor servicer appointed by Buyer in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the generality of the foregoing, Seller hereby gives Buyer the power and right, on behalf of Seller, without assent by Seller, to, in the name of Seller or its own name, or otherwise, prepare and send or cause to be sent "good-bye" letters to all mortgagors under the Assets, transferring the servicing of the Assets to a successor servicer appointed by Buyer in its sole discretion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;for the purpose of delivering any notices of sale to mortgagors or other third parties, including without limitation, those required by law.

Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.

Seller also authorizes Buyer, from time to time, to execute, in connection with any sale, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Assets.

The powers conferred on Buyer hereunder are solely to protect Buyer's interests in the Assets and shall not impose any duty upon it to exercise any such powers. Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.

------

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND BUYER ON ITS OWN BEHALF AND ON BEHALF OF BUYER'S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURES FOLLOW.]

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IN WITNESS WHEREOF Seller has caused this power of attorney to be executed this ___ day of __________, 2021.

HOME POINT FINANCIAL CORPORATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Seller)

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

------

Acknowledgment of Execution by Seller

(Principal):

STATE OF <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>)

&nbsp;&nbsp;&nbsp;&nbsp;)&nbsp;&nbsp;&nbsp;&nbsp;ss.:

COUNTY OF <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>)

On the ____ day of _________, 2021, before me, the undersigned, a Notary Public in and for said State, personally appeared ____________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity as ____________________ for Home Point Financial Corporation and that by his signature on the instrument, the person upon behalf of which the individual acted, executed the instrument.

IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and year in this certificate first above written.

<u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Notary Public

My Commission expires <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

**EXHIBIT G**

**FORM OF OFFICER'S COMPLIANCE CERTIFICATE**

I, ___________________, do hereby certify that I am the [duly elected, qualified and authorized] [CFO/TREASURER/FINANCIAL OFFICER] of HOME POINT FINANCIAL CORPORATION ("Seller"). This certificate ("<u>Certificate</u>") is delivered to you in connection with <u>Section 14(d)</u> of the Master Repurchase Agreement and Securities Contract, dated as of January 8, 2021 (as may be amended, restated, supplemented or otherwise modified from time to time, the "<u>Agreement</u>"), by and between Seller and Bank of Montreal ("<u>Buyer</u>"). Capitalized terms shall have the meaning set forth in the Agreement. I hereby certify that, as of the date of the financial statements attached hereto and as of the date hereof, Seller is and has been in compliance with all the terms of the Agreement and, without limiting the generality of the foregoing, I certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Material Adverse Effect</u>. Seller has promptly given to Buyer notice of any event, circumstance or condition that has resulted or would reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Financial Covenants</u>. Seller has complied with all the financial covenants set forth in <u>Section 3</u> of the Pricing Side Letter. A detailed summary of the calculation of Adjusted Tangible Net Worth, liquidity, Indebtedness to Adjusted Tangible Net Worth ratio, and maintenance of profitability is provided in <u>Schedule 1</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Insurance</u>. Seller has maintained, for Seller and its Subsidiaries, with responsible companies, at its own expense, insurance policies in accordance with its obligations under Section 14(m) the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Financial Statements</u>. The financial statements and schedules attached hereto fairly present in all material respects the financial condition and results of operations of Seller, in accordance with GAAP, consistently applied, as of the date(s) thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Documentation</u>. Seller has performed the documentation procedures required by its operational guidelines with respect to endorsements and assignments, including

------

the recordation of assignments, or has verified that such documentation procedures have been performed by a prior holder of such Purchased Mortgage Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Compliance</u>. Seller has observed, performed or satisfied in all material respects all of its covenants, other agreements and conditions contained in the Agreement and the other Facility Documents to be observed, performed and satisfied by it. *[If a covenant or other agreement or condition has not been complied with, Seller shall describe such lack of compliance and provide the date of any related waiver thereof.]*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>Regulatory Action</u>. Seller has promptly provided Buyer with written notice of any actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are, to the best of Seller's knowledge, pending or threatened in writing) or other legal or arbitrable proceedings, the existence of which is not required by law or regulation to remain confidential, affecting Seller or any of its Subsidiaries or affecting any of the Property of any of them before any federal or state court or before any Governmental Authority that (A) questions or challenges the validity or enforceability of any of the Facility Documents or any action to be taken in connection with the transactions contemplated hereby, or (B) relates to any violation of the Home Ownership and Equity Protection Act or any state, city or district high cost home mortgage or predatory lending law, which, with respect to clause (B), individually or in the aggregate, if not cured and if adversely determined, would have a Material Adverse Effect or constitute an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>No Default</u>. No Default or Event of Default has occurred and is continuing. *[If any Default or Event of Default has occurred and is continuing, Seller shall describe the same in reasonable detail and describe the action Seller has taken or proposes to take with respect thereto, and if such Default or Event of Default has been expressly waived by Buyer in writing, Seller shall describe the Default or Event of Default and provide the date of the related waiver.]*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Warehouse Lines</u>. All warehouse lines of Seller (other than the warehouse line evidenced by the Agreement) of Seller existing on the date hereof are listed on <u>Schedule 2</u> hereto, including related lender, facility size, total line amount, outstanding amount, and maturity or termination date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;<u>Distributions</u>. Except as permitted by Buyer in writing, Seller has not made any distributions prohibited by the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;<u>Originations</u>. Attached hereto as <u>Schedule 3</u> is a true and correct summary of all Mortgage Loans originated by Seller for the calendar month ending [DATE] and for the year to date ending [DATE], stratified by loan category, loan purpose, and production channel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;<u>Repurchases and Early Payment Default Requests</u>. Attached hereto as <u>Schedule 4</u> is a true and correct summary of repurchases due to fraud, early payment defaults, or investor guidelines issues summarized on the basis of (i) pending repurchase demands and (ii) satisfied repurchase demands.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;<u>MSR Valuation</u>. A detailed summary of the market value analysis for Seller's valuation of its mortgage servicing rights as determined by a Third Party Evaluator as of the calendar month ending [DATE] is provided in <u>Schedule 5</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;<u>DE Compare Ratio</u>. Seller's most recent DE Compare Ratio is listed on <u>Schedule 6</u> hereto.

[Signature Page Follows]

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IN WITNESS WHEREOF, I have set my hand this _____ day of ________, ________.

By:<u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:<u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title:<u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

------

<u>Schedule 1 [to Exhibit G]</u>

<u>Calculation of Financial Covenants</u>

[ATTACHED]

------

<u>Schedule 2 [to Exhibit G]</u>

<u>Warehouse Lines of Seller</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Lender** | **Facility Size** | **Total Line Amount** | **Outstanding Amount** | **Maturity/Termination Date** |

---

------

<u>Schedule 3 [to Exhibit G]</u>

<u>Originations</u>

[ATTACHED]

<u>Schedule 4 [to Exhibit G]</u>

------

---

| | | | |
|:---|:---|:---|:---|
| **HPFC - EOM October 2020** | | | |
| **Repurchases** | **Repurchases** | **YTD UPB** | **YTD Count** |
| [\*\*\*] | [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] | [\*\*\*] | [\*\*\*] |
| **Indemnifications** | **Total # of Loans** | **Indemnifications ($)** |  |
| [\*\*\*] | [\*\*\*] | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [\*\*\*] |  |

---

<u>Schedule 5 [to Exhibit G]</u>

<u>MSR Valuation</u>

[ATTACHED]

<u>Schedule 6 [to Exhibit G]</u>

<u>DE Compare Ratio</u>

[Seller to provide]

## Exhibit 21.1

**Exhibit 21.1**

**Subsidiaries**

---

| | |
|:---|:---|
| **Entity Name** | **Jurisdiction of Incorporation or Organization** |
| HPC Insurance Agency, LLC | Michigan |
| Home Point Financial Corporation | New Jersey |
| HPFC Sub 1 LLC | Delaware |

---

## Exhibit 23.1

<u>Consent of Independent Registered Public Accounting Firm</u>

Home Point Capital Inc. & Subsidiaries

Ann Arbor, Michigan

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-252532) of Home Point Capital Inc. of our report dated March 9, 2023, relating to the consolidated financial statements, which appears in this Form 10-K.

BDO USA, LLP

Philadelphia, Pennsylvania

March 9, 2023

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

BDO is the brand name for the BDO network and for each of the BDO Member Firms.

R-221 (11/20)

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, William A. Newman, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Annual Report on Form 10-K of Home Point Capital Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Dated: March 9, 2023 | /s/ William A. Newman |
| | William A. Newman |
| | Director, President and Chief Executive Officer<br>(Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Mark E. Elbaum, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Annual Report on Form 10-K of Home Point Capital Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Dated: March 9, 2023 | /s/ Mark E. Elbaum |
| | Mark E. Elbaum |
| | Chief Financial Officer<br>(Principal Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER**

**PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report on Form 10-K of Home Point Capital Inc. (the "Company") for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

---

| | |
|:---|:---|
| Dated: March 9, 2023 | |
| | /s/ William A. Newman |
| | William A. Newman |
| | Director, President and Chief Executive Officer<br>(Principal Executive Officer) |
| | /s/ Mark E. Elbaum |
| | Mark E. Elbaum |
| | Chief Financial Officer<br>(Principal Financial Officer) |

---

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

<br>