FAQ

The Client must meet all eligibility requirements, adhere to all applicable federal, state and other licenses, authorizations, approvals and insurance in order to be in compliance with this Seller Guide and the Seller Agreement. The Client must also meet standard secondary market requirements and remain in compliance with any local, state or federal regulatory Agency requirements.

The Client must meet all capital requirements, adhere to all applicable federal, state and other licenses, authorizations, approvals and insurance (such as Fidelity Bond and Errors and Omissions Insurance) in order to be in compliance with this Guide and the Seller Agreement.

The following are minimum guidelines for the Correspondent Lending program. Exceptions to these guidelines may be approved on a case-by-case basis.
Delegated Program Net Worth Requirement/Liquidity Requirement

• Tangible net worth must be at least $2.5M with 20% liquidity for Delegated-Mandatory status
• Tangible net worth must be at least $1.5M with 20% liquidity for Delegated-Best Efforts status
• Tangible net worth requirement is based on requested max loan amount: 
• • - Less than or equal to $1M loan amount - Net Worth requirement of at least  $2.5M
  • - Greater than $1M loan amount and less than or equal to $2M loan amount - Net Worth requirement of at least $5M
  • - Greater than $2M loan amount and less than or equal to $3M loan amount - Net Worth requirement of at least $10M
• Verification of committed warehouse lines in good standing (if applicable)

Delegated Program Financial Statement Requirments

• Two years audited financial statements plus interim financial statements
• Most recent quarter interim unaudited financial statements

Refer to Section 5.3.1 for Non-Delegated Program Net Worth/Liquidity and Financial Statement Requirements.

Prior to the execution of the Seller Agreement, the Client shall provide a resolution from its board of directors, authorizing the individual signing the Seller Agreement to enter into an agreement on behalf of Seller and authorizing specific individuals who may

• Enter into commitment letters and/or assign and transfer loan documents; or
• Appoint other individuals to enter into commitment letters and/or assign and transfer loan documents.

PHH requires all prospective clients to provide a completed application. Generally, the executed application should contain the following:

• Original signed Seller Agreement
• Articles of incorporation and by-laws (or other organizational documents)
• All state licenses and government approvals, as applicable
• All mortgage banker/broker licenses
• Resumes of key principals and senior managers, including an organizational chart
• Production type and volume breakdown, including origination source (i.e., Retail/TPO) and processing method
• Investors, MI company, and warehouse bank references with any report cards
• Quality Control Plan and if outsourced, fully executed copy of the agreement with the third-party vendor
• Approved appraiser list
• Appraiser Independence Requirements (AIR) plans) and Property Data Collector Independence Requirements (PDCIR) plans 
• Underwriter resumes to evidence two years’ experience with Non-Agency products (Delegated Non-Agency approval only)

At the time of closing, Fidelity Bond and Errors and Omissions (E&O) Insurance in amounts established by PHH is required.
The minimum E&O and Fidelity Bond coverage held by the Client must be consistent with state licensing and Agency guidelines, as applicable.

After the Client receives approval from PHH, Client will be provided a Client ID that will remain as long as the Client is doing business with PHH.

Newly established Clients will be subject to a limited review of files submitted.
After a new Client has successfully sold 10 loans, at PHH’s discretion and approval, the Client may be removed from the more extensive review status. Level of review may be based on the risk of the loan type or eligibility criteria established by PHH.
The Client’s Business Development Manager will be responsible for requesting the change to the Client’s full review status

The following information should be reported to PHH prior to or upon occurrence, as applicable:

• Client’s address or phone number changes
• Material financial changes or changes in management ordered or required by a regulatory authority
• Resignation or termination of any senior management; Client will provide resumes of replacement personnel within 30 days of replacement
• Entry of any judgment or regulatory order where Client is required to pay a claim which may have material adverse effect on financial condition of the Client
• Dissolution of Client’s business
• Notice to the Client of an event of default on any loan sale agreements or arrangements

PHH reserves the right to suspend further business upon notification if time is required to make a determination if a continued relationship is warranted. The Client’s failure to timely notify PHH of any of the above described changes, or any other significant changes, may result in termination.

A Client must be pre-approved in writing by PHH prior to the submission of any Loan originated with an eMortgage to PHH for possible purchase. PHH will accept eNotes and hybrid closings. A Client must obtain approval to deliver eNotes as part of the application and pre-approval process. Notwithstanding anything to the contrary in this Guide, any Loan Purchase Agreement or any other transaction document, PHH reserves the right, in its sole discretion, to approve or deny any Client's application for eMortgage approval.
As part of the application and approval process, the Client must submit to PHH, a completed eMortgage Questionnaire (which form will be provided by PHH upon request), together with any other agreements, documents and information required or requested by PHH. In addition, as part of the application and approval process, PHH may require, among other things, reviews and certifications regarding the Client's eMortgage processes, procedures and systems used to originate, close, store and service eMortgages.
Any review or approval by PHH of a Client's eMortgage processes, procedures or systems is solely for the benefit of PHH, and will not constitute any representation, warranty or confirmation by PHH regarding the adequacy, sufficiency or any other aspect of such processes, procedures or systems (including whether such processes, procedures or systems are in compliance with the requirements of Fannie Mae and/or Freddie Mac). PHH reserves the right, in its sole discretion, to revoke a Client's approval to submit eMortgages for possible purchase by providing at least five days advance written notice of the revocation to the Client.

Refer to Chapter 9 for additional terms and conditions relating to eMortgages.

The Client represents and warrants to PHH that all of the statements regarding the Client (and Guarantor, if applicable) set forth below are true, correct and complete, as of the execution of the Client Agreement, delivery of any Loan to PHH and any Closing Date:

• The Client is duly organized, validly existing, and in good standing under the laws of the state of its organization and has all qualifications, registrations, licenses, and permits necessary to carry on its business in each state in which Client originates or purchases loans. The Client agrees to provide PHH with copies of all applicable licenses, permits, exemptions or approvals upon request. The Client has all requisite power and authority to execute, deliver and perform the Client Agreement. All requisite action has been taken by Client to make the Client Agreement valid and binding upon Client in accordance with its terms.
•  No approval of the transactions contemplated by the Client Agreement from any regulatory authority having jurisdiction over the Client is required, or if required, such approval has been obtained. There is no claim, litigation, investigation or proceeding pending or threatened against the Client that could materially adversely affecting the Client’s business or the performance of its obligations under the Client Agreement and the Client has no knowledge of any circumstances indicating that any such suit, investigation or proceeding is likely.
• With respect to any FHA Loan submitted by the Client, the Client is approved by FHA to participate in its direct endorsement mortgage insurance program or is an FHA-sponsored lender with underwriting performed by PHH. With respect to any VA Loan submitted by the Client, the Client is either approved to originate and submit loans to VA for VA approval, to underwrite Loans with automatic authority, or is a VA-sponsored lender with underwriting performed by PHH. With respect to any USDA Loan submitted by the Client, the Client is either approved to originate and submit loans to USDA for USDA approval, to underwrite Loans with automatic authority, or is a USDA-sponsored lender with underwriting performed by PHH.
• With respect to any Client that is approved as Delegated, prior to submission of a Credit File, such Client (i) is approved by PHH to deliver Delegated Loans for underwriting purchase (which approvals are determined by each product type), (ii) has sufficient staff with active underwriting designations and (iii) has confirmed (and PHH has verified) the employees’ use of those designations. Each Client that is approved as Delegated, makes the foregoing representations and warranties for each product type for which it has received or is seeking approval. Any Client that is seeking approval relating to any other product type/area also represents and warrants that it has staff with active underwriting credentials (DE/VA) relating to such product type/area, and acknowledges that additional review and verification will be required in connection with such approval.
• The Client is not subject to any administrative actions and/or sanctions imposed by FHA, VA, USDA, Ginnie Mae, Fannie Mae, Freddie Mac or USDA and has not been subject to any such actions or sanctions for at least two years prior to the date of the Client Agreement.
• The consummation of the transactions contemplated by the Client Agreement are in the ordinary course of business of the Client and will not result in
  • a breach of any term or provision of the organizational documents of the Client;
  • a breach of any term or provision of, conflict with, or constitute a default under any agreement to which the Client or its property is subject; or
  • a violation of any law, rule, regulation, order, judgment or decree to which the Client or its property is subject.
• No representation, warranty or written statement made by the Client in the Client Agreement, this Guide, any application, documentation, schedule, exhibit, statement, or certificate furnished to PHH by the Client contains any untrue statement of material fact or omits any material fact which could render such statement misleading.
• The Client acknowledges that in the event an automated underwriting system is used to underwrite any loan sold to PHH, the Client is fully trained in the use of such automated system and followed all appropriate procedures when using such system.

After diligent investigation and inquiry, with respect to all loans being sold, as of the related Closing Date, the Client further represents and warrants to PHH that as of delivery of any loan to PHH and the Closing Date, all of the general representations regarding the loans being sold and any of the specialty representations regarding the loans based upon the product type of the loans, all as set forth in this Guide, are true, correct and complete. The Client further represents and warrants to PHH that as of delivery of any Loan to PHH and the related Closing Date:

• The information set forth in the Mortgage Loan Schedule is complete, true and correct in all material respects as of the date specified therein or, if no such date is indicated therein, as of the Closing Date.
• The Client has the authority to sell, transfer, and assign such loan on the terms set forth in the Client Agreement and this Guide and there has been no assignment, sale or pledge thereof by Client, (except any pledge required pursuant to a line of credit agreement between Client and the warehouse lender previously disclosed to PHH). The loan is free and clear of liens, claims, security interests, or encumbrances of any type including, but not limited to any pledge in favor of any warehouse lender.
• All loans purchased by PHH comply with all applicable FHA, VA, Ginnie Mae, Fannie Mae, Freddie Mac, USDA, PHH and other applicable private investor regulations, requirements, standards, guidelines and all representations and warranties required to be made by clients or sponsors therein are made by the Client to PHH.
• All FHA Loans are fully insurable by FHA and a fully transferable mortgage insurance certificate has been or will be issued by FHA. All VA Loans are eligible for guaranty by VA and a fully transferrable loan guaranty certificate has been or will be issued by VA. All USDA Loans are eligible for guaranty by USDA and a fully transferrable loan note guarantee has been or will be issued by USDA. All conventional loans are insurable by private mortgage guaranty insurers, when required, and an appropriate certificate or other evidence of such insurance has been or will be issued by a private mortgage guaranty insurer. There are no defenses, counter claims, administrative offsets, or rights of set-off affecting the validity or enforceability of any private mortgage insurance, FHA insurance, USDA guaranty or VA guaranty with respect to the loan or eligibility of such loan for private mortgage insurance, FHA insurance or guaranty.
• All FHA Loans, USDA Loans and VA Loans are eligible for pooling in securities guaranteed by Ginnie Mae.
• With respect to the mortgagor, the mortgaged property, or the loan, there are no facts or circumstances that exist which could be reasonably expected to cause a private investor to regard the loan as an unacceptable investment, cause the loan to become delinquent, or adversely affect the value or marketability of the loan or related mortgaged property.
• Each loan has been originated in full compliance with all applicable law, including all applicable federal, state, and local laws, rules, ordinances, and regulations, including, but not limited to:
• All Truth In Lending Act (TILA) and Regulation Z requirements, including the ability -to- repay rules
  • All Real Estate Settlement Procedures Act (RESPA) requirements
  • All TILA-RESPA Integrated Disclosure (TRID) rule requirements
  • Equal Credit Opportunity Act (ECOA) and Regulation B
  • Fair Credit Reporting Act
  • Real Estate Settlement Procedures Act of 1974, and Regulation X
  • Flood Disaster Protection Act of 1973 (as if it were a covered entity and regardless of whether the Client is specifically subject to such statute and/or regulations)
  • Fair Housing Act
  • Home Mortgage Disclosure Act
  • Financial Institutions Reform Recovery and Enforcement Act of 1989, as amended, including all regulations issued pursuant thereto
  • Housing and Economic Recovery Act (HERA) of 2008
  • Dodd-Frank Wall Street Reform and Consumer Protection Act and any and all regulations issued in accordance therewith
  • Any and all federal, state and local licensing requirements for mortgage brokers and/or lenders, including, but not limited to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act)
  • Requirements, as applicable to the loans of FHA, VA, Ginnie Mae, Fannie Mae, Freddie Mac, USDA, and PHH. Any and all laws, rules, ordinances, and regulations relating to adjustable rate mortgages, negative amortization, and graduated payment mortgages
• Each Loan complies with the ability-to-repay standards as set forth in TILA.
• Each Loan is a “qualified mortgage” within the meaning assigned to such term of Regulation Z and is not a higher-priced mortgage loan. Each Loan qualifies for the safe harbor provided in Regulation Z and related rules and is entitled to the presumption that the lender satisfied the ability-to-repay requirements provided in Regulation Z and related rules.
• The rules, regulations, and all applicable requirements of FHA, VA, USDA, and private mortgage insurance companies, hazard insurance companies or other insurers have been properly satisfied, including, without limitation, the payment by the Client of all mortgage guaranty and insurance premiums and fees as and when due, and the submission by Client of enforceable insurance binders, as required by PHH. The Client shall make PHH the loss payee of each mortgage guaranty insurance, hazard, and flood insurance policies.
• The proceeds of the loan have been fully disbursed and there is no requirement for future advances and/or disbursements. The unpaid principal balance of the loan is as stated and all costs, fees, taxes and expenses incurred in making and closing the loan and recording the mortgage have been paid.
• The Mortgage Note and the related Mortgage are genuine, and each is a legal, valid and binding obligation of the mortgagor(s), enforceable in accordance with their terms. All parties to the Mortgage Note and the Mortgage had legal capacity to execute the Mortgage Note and the Mortgage and each have been duly and properly executed by the mortgagor(s).
• The Mortgage has not been satisfied, canceled, subordinated or rescinded and no part of the property has been released from the lien of the Mortgage. The terms of the loan have in no way been changed, waived, impaired or modified, except for loan adjustments made in compliance with the Mortgage Note and applicable regulatory requirements. No waiver of any default, breach, violation or event of acceleration has occurred. The loan is current, and in the event the outstanding balance purchased has been credited with payments not yet collected and/or due to the Client, the Client will promptly collect said payment when due and notify PHH of any payments not made within 30 days of the due date.
• Each Credit File or Loan File and all information contained therein is true, complete and accurate. The Client is not aware of any fact not set forth in the Credit File or Loan File which PHH might reasonably consider to be adverse to the approval of the loan, or would make the loan ineligible for sale in the secondary market.
• A title insurance commitment or a title insurance policy including all applicable endorsements has been issued by a title insurer, acceptable to PHH, insuring the Client, its successors and assigns, or PHH as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Note. The Client has not, by act or omission, done anything which would impair the title insurance policy coverage.
• The assignment of the loan from the Client to PHH has been duly authorized and is valid and sufficient, and all consents and approvals to such assignment have been obtained, including in the case of cooperatives, the consent of the cooperative corporation.
• All documents prepared by the Client are genuine, accurate, and complete and meet the requirements and specifications established by FHA, VA, Ginnie Mae, Fannie Mae, Freddie Mac, USDA, PHH’s underwriting guidelines, this Guide, and the Client Agreement, as applicable.
• There is in force such flood insurance policy as is required under the Flood Disaster Protection Act of 1973, as amended, and its implementing regulations, regardless of whether the Client is specifically subject to such statute or regulations.
• There is in force for the loan adequate hazard and casualty insurance coverage with respect to the mortgaged property, insuring against fire or other casualties (and, if required by federal law, flood insurance), in an amount and pursuant to a policy of insurance as required by FHA, VA, Ginnie Mae, Fannie Mae, Freddie Mac, USDA, and PHH’s underwriting guidelines, as applicable. By assignment or endorsement of the Client’s interest, PHH, its successors and assigns, is designated as a mortgagee and additional named insured with regard to such insurance.
• No mortgage brokers or other consultants or finders were consulted or contacted in connection with or in bringing about this loan or this loan sale transaction that would be due a fee from PHH.
• All taxes, governmental assessments, insurance premiums, water, sewer, municipal charges, leasehold payments, ground rents, homeowners association dues and other charges, have been paid and all funds paid or due to be paid have been paid and delivered to PHH in connection with any escrow accounts created concurrent with the funding of the Loan.
• There is no proceeding pending for the total or partial condemnation of the property and the property is undamaged by waste, fire, flood or other casualty.
• The Mortgage Note and the Mortgage are not subject to any right of rescission, setoff, counterclaim or defense, nor has any such right been asserted with respect thereto.
• The actual loan-to-value ratio of each loan does not exceed the maximum amount permitted under the PHH’s underwriting guidelines. The appraisal prepared in connection with each property provides an accurate estimate of the bona fide market value of such property and was prepared by an appraiser who must be, at a minimum, licensed or certified by the state in which the property to be appraised is located, with no direct or indirect interest in the mortgaged property.
• Any late charge provided under the terms of the loan or associated Mortgage Note does not exceed the maximum allowable late charge under applicable law.
• Appropriate escrow amounts for property taxes and insurance have been collected from borrowers in conformity with RESPA and any other applicable laws (unless expressly waived by PHH). There are no payments which are unpaid including, but not limited to taxes, ground rents, water charges, sewer rents, assessments, including any assessments payable in future installments, or other outstanding charges affecting the lien of the mortgage.
• All funds collected from borrowers have been and will be properly segregated and accounted for in accordance with all laws and regulations, and will be used for no other purpose than that for which they have been designated. All funds due FHA, USDA and VA for guarantee and insuring purposes will be promptly submitted in accordance with Agency regulations.
• No Loan is subject to the Home Ownership and Equity Protection Act (HOEPA) of 1994, as amended, or is otherwise a high-cost loan, covered loan, or any other similarly designated loan as defined under any applicable state, local, or federal predatory lending or abusive lending laws.
• All of the representations and warranties shall survive and continue in force for the full remaining life of the loan and are made for the benefit of PHH and its successors and assigns.
• For each Loan submitted to PHH for purchase, including Loans underwritten by PHH, the Client, whether approved as Delegated or Non-Delegated, has (1) provided the borrower with all required written communications (as required by applicable state law); and (2) updated the credit documents before submitting a Loan for purchase. In the event any change has occurred after the underwriting decision and/or credit and collateral approval of the Credit File, the Client has (i) notified the original underwriter of such change, and (ii) ensured that the Loan satisfies approval guidelines and requirements (Delegated) or all terms, conditions, and other requirements set forth in on the final approval letter (Non-Delegated) before the closed Mortgage Loan Package is submitted to PHH for purchase.
• No borrower was a debtor in any state or federal bankruptcy or insolvency proceeding at the time the Loan was closed, and following the closing until the purchase by PHH of the Loan, no borrower with respect to the Loan was a debtor in any state or federal bankruptcy or insolvency proceeding, and the mortgaged property has not been subject to any bankruptcy or foreclosure proceedings.
• The Mortgage and related Mortgage Note contain customary and enforceable provisions such as to render the rights and remedies of the holder thereof sufficient for the realization against the mortgaged property of the benefits of the security provided thereby (such as the right of the mortgagee to foreclosure on the mortgaged property), including but not limited to: (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale; or, (ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a Loan and foreclosure thereon, or trustee’s sale of, the mortgaged property pursuant to proper procedures, the holder of the Loan will be able to obtain good and marketable title to the mortgaged property. There is no homestead or other exemption available to a Mortgagor or any other Person, or restriction on the Mortgagor or any other Person, including without limitation, any federal, state or local, law, ordinance, decree, regulation, guidance, attorney general action, or other pronouncement, whether temporary or permanent in nature, that would interfere with, restrict or delay, either: (a) the ability of PHH, any successor purchaser or any servicer or any successor servicer to sell the related mortgaged property at a trustee’s sale or otherwise; or, (b) the ability of PHH or any servicer or any successor servicer to foreclose on the related Mortgage.
• The Mortgage Note is not and has not been secured by any collateral (other than the mortgaged property), nor has the mortgaged property been pledged to an account or other security except the lien of the corresponding Mortgage and the security interest of any applicable security agreement, and, at closing, such collateral did/does not serve as security for any other obligation.
• 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 mortgagee to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.
• Each Loan is covered by a paid in full, life of loan, tax service contract and a paid in full, life of loan, flood certification contract and each of these contracts is fully assignable to PHH and its assigns.
• The Mortgagor has not notified the Client, and the Client has no knowledge of any relief requested by or allowed to the Mortgagor under the Servicemembers Civil Relief Act or any similar state law or local laws.
• • With respect to Non-Agency Loans, the Client further represents and warrants to PHH that as of delivery of any Non-Agency Loan to PHH and the related Closing Date:
  • All improvements were considered in determining the appraised value of the mortgaged property.
  • The Loan is documented using forms previously approved by PHH.
  • The Mortgage contains an enforceable provision for the acceleration of the payment of the outstanding principal balance of the Loan in the event that the mortgaged property is sold or transferred without the prior written consent of the mortgagee thereunder.
  • The loan documents with respect to each Loan subject to prepayment penalties specifically authorizes such prepayment penalties to be collected. All information in the Credit File, Loan File and any electronic data file delivered to PHH regarding the prepayment penalty is complete and accurate and each prepayment penalty is permissible and enforceable in accordance with the terms of the related loan documents and all Applicable Laws. Any prepayment penalty applicable to any Loan constitutes a “customary prepayment penalty” within the meaning of Treasury Regulations Section 1.860G-1(b)(2).
  • The Client has not made or caused to be made any payment in the nature of an “overage” or “yield spread premium” to a mortgage broker or a like Person which has not been fully disclosed to the Mortgagor. With respect to any broker fees collected and paid on any of the Loans, all such fees have been properly assessed to the Mortgagor and no claims will arise as to such fees that are double charged and for which the Mortgagor would be entitled to reimbursement.
  • For each Loan identified as being an investor property, no such Loan has been offered or extended to a consumer primarily for personal, family or household purposes and all such Loans have been offered or extended for commercial or business purposes, as defined in the Truth in Lending Act and its implementing regulation, Regulation Z; and the Client maintains in the Credit File and/or Loan File a declaration from the Mortgagor that the purpose of the Loan is for commercial or business purposes. The Loan is exempt from coverage under: (1) the Home Ownership and Equity Protection Act (as amended), and any other similar state or local laws; (2) the Truth in Lending Act (as amended), and its implementing regulation, Regulation Z; and (3) the Real Estate Settlement Procedures Act (as amended), and its implementing regulation, Regulation X.
  • With respect to any Client approved as delegated, each such Loan was underwritten and documented in accordance with the Non-Agency Underwriting Standards  in effect on the date of PHH's purchase of such Loan.
  • No mortgaged property is secured by manufactured housing, a manufactured homehome or mobile home nor is a unique property type, including without limitation a condotel, timeshare, agricultural property, log home or geodesic dome. No Loan finances builder inventory.
  • Any loan secured by a Mortgaged Property that is subject to a ground lease must be approved in writing by PHH. 

The Client covenants and agrees with PHH that the Client shall provide required notices and reports in a timely fashion and otherwise comply with the provisions of this Guide. The Client shall notify PHH immediately of any material change in its ownership, financial condition, or management; any audit, examination, or review by FHA, VA, Ginnie Mae, Fannie Mae, Freddie Mac, USDA, or any federal or state regulator, which results in or threatens any administrative sanctions imposed upon the Client; any fact or circumstance the Client becomes aware of following the sale of any loan which would have caused the loan to be ineligible for sale to PHH if known prior to such sale. In addition, the following apply:

• PHH may, from time to time, review, at Client’s or PHH’s place of business, Client’s Loan Files, policies, procedures, and records, in order to determine whether Client meets PHH’s quality control standards.
• The Client shall timely deliver to each applicant a completed Regulation Z disclosure statement, including all required TILA, RESPA and TRID disclosures, federally mandated fixed rate, or ARM disclosures and HUD booklets. The Client shall be responsible for compliance with aggregate accounting requirements relating to escrow account statements and escrow accounting procedures mandated by RESPA. The Client shall comply with Regulation Z concerning return of all moneys paid by the applicant to Client should the applicant rescind, and Seller shall not seek reimbursement from PHH for such refund.
• The Client shall deliver evidence, in a form satisfactory to PHH, of compliance with all federal, state and local laws and regulations, including, but not limited to, copies of any notice or disclosure form furnished to an applicant.
• The Client shall utilize only licensed real estate appraisers that meet the requirements set forth in PHH’s underwriting guidelines, and whose approval and appointment is made in compliance with regulations and standards contained in the Financial Institutions Reform Recovery and Enforcement Act or, in the case of FHA Loans, USDA Loans or VA Loans by appraisers approved by FHA, USDA, or VA, respectively.
• At all times during the term of the Client Agreement, the Client shall maintain a complete set of files and records of all business activities and operations conducted by the Client in its capacity as a loan client of PHH. Such files and records shall be maintained in a neat, orderly and organized manner. For a period of not less than 36 months from and after the date of termination or expiration of the Client Agreement, the Client shall continue to maintain all such files and records at a reasonably accessible location. Alternatively, the Client may deliver to PHH all such files and records. At all times during the term of the Client Agreement and at all times during the 36 month period following expiration or termination of the Client Agreement, PHH, its duly authorized agents, representative and employees, any necessary party involved in any public offering (such as Rating Agencies) and federal and state regulatory agencies which supervise PHH shall have a right, upon reasonable notice, to audit, inspect and copy any of the foregoing records, reports, files, and related materials of the Client, and the Client shall cooperate and assist any such audit or inspection.
• The Client shall conduct periodic quality and compliance control reviews of its origination operations and systems that verify, on a regular basis, the existence, methodology and processes for generation, production, delivery and accuracy of the legal documents, credit documents, property appraisals, and underwriting decisions. The Client’s quality and compliance control review program shall include evaluation and monitoring of the overall quality of the Client’s loan production. Upon request of PHH, the Client shall provide copies of its reviews and findings to PHH. PHH shall have the right, in its sole discretion, to review any and all Credit Files or Loan Files relating to the loans and/or servicing rights related to loans to be sold or previously sold to PHH for quality control or other purposes. The Client agrees to make such files available to PHH for inspection upon receipt of five business days prior written notice.
• The fact that PHH or its designee has conducted or has failed to conduct any partial or complete examination of a loan, including review of the Credit File, Loan File, or any appraisal or other valuation data, and whether before or after sale of such loan to PHH, shall not affect PHH’s (or any of its successor’s) rights to demand repurchase, indemnification, substitution or other relief as provided herein. Any appraisal acknowledgement by PHH is only for the purpose of assisting the Client in loan sale determinations, and does not constitute an opinion of value or statement indicating that the appraisal meets any related FHA, HUD or Uniform Standards of Professional Appraisal Practice guidelines, nor does it waive any rights or remedies PHH may have under the Client Agreement with respect to insurability, valuation, indemnification, repurchase or otherwise. The Client shall make PHH the loss payee of each mortgage guaranty insurance policy and hazard, wind and flood insurance policy. Ownership of, and title to, a loan will not be vested in PHH until such loan is accepted by PHH and the related purchase price is remitted to the Seller.
• To the extent the Client services a loan after the related Closing Date, the Client (or its designee, which designee shall be approved in writing by PHH) shall service the loan in conformance with all accepted servicing practices and applicable requirements until such time as the servicing of such loan is transferred to PHH or its designee. The Client shall promptly follow PHH’s instructions regarding transferring any such servicing. If applicable, the Client shall, at its expense, mail the approved form of notification to mortgagors under the loans of the transfer of the servicing rights and instruct the mortgagors to deliver all mortgage and related payments and all tax and insurance notices to PHH after the Closing Date, all in accordance with the applicable requirements and PHH hereby agree to comply with the confidentiality and privacy provisions set forth in this Guide.
• Confidential Information:
  • In General: Neither the Client nor PHH shall make use of, disseminate or in any way disclose any confidential information of the other party or its affiliates, except as necessary to perform its obligations under the Client Agreement or as may be required by applicable requirements or with the express written authorization of the disclosing party or its affiliates, and each shall keep confidential information confidential and will ensure that its affiliates, employees, agents, and representatives who have access to such confidential information comply with this non-disclosure obligation. Each party shall maintain appropriate physical, electronic, technical, and procedural safeguards to receive, store, dispose of (if applicable), and secure all confidential information to protect it from unauthorized access, use, disclosure, alteration, loss, and destruction, and to protect against any anticipated threats or hazards to the security or integrity of such records or information which could result in substantial harm or inconvenience to any customer of a party, including but not limited to any loan applicant or mortgagor. The safeguards used by each party to protect confidential information of the other party shall be no less than those used by such party to protect its own confidential information.
  • Privacy of Customer Information: Except as otherwise agreed by the Client and PHH and permitted by the privacy requirements, each party shall use customer information of the other party only for the express purposes set forth in the Client Agreement and disclose customer information of the other party to third persons only as necessary to implement the provisions hereof in a manner consistent with the privacy requirements. Each party shall maintain at all times a customer information security program. Each party shall assess, manage, and control risks relating to the security and confidentiality of all customer information, and shall implement the standards relating to such risks in the manner set forth in the privacy requirements. Each party shall comply with the privacy requirements applicable to such party. With respect to information that is non-public personal information (as defined in the Gramm-Leach- Bliley Financial Services Modernization Act of 1999, Pub. L. No. 106 -102, 113 Stat. 1338, and the regulations and guidance promulgated thereunder (GLBA)), the Client shall, and covenants to provide evidence thereof at all times during the Client Agreement, maintain processes and procedures to comply with all reuse, re-disclosure, or other customer information handling, processing, security, notification and protection requirements under GLBA, other applicable federal and state consumer privacy laws, rules, and regulations, and the applicable requirements. Further, the Seller shall ensure that it has developed, implemented and maintains effective information security policies and procedures that comply with the Interagency Guidelines Establishing Standards for Safeguarding Customer Information, Final Rule (12 CFR Part 30, Appendix B) and the Federal Trade Commission’s Standards for Safeguarding Customer Information (16 CFR Part 314) (collectively, the "Safeguarding Rules"), the applicable requirements and other applicable laws and regulations, and such policies and procedures include administrative, technical and physical safeguards designed to
    • ensure the security and confidentiality of confidential or proprietary information as may be provided to it by PHH hereunder;
    • protect against anticipated threats or hazards to the security or integrity of such confidential or proprietary information; and
    • protect against unauthorized access or use of such confidential or proprietary information.

The Client shall ensure that Client’s personnel handling such confidential or proprietary information have been appropriately trained in the implementation of such information security policies and procedures, and Client shall conduct regular audits and reviews of its information security policies and procedures to ensure their continued effectiveness and determine whether adjustments are necessary in light of the Safeguarding Rules, the applicable requirements and applicable law.

The Client covenants and agrees that it will not directly or indirectly take any action, or cause any action to be taken by any of its designated third party originators, agents, contractors, employees or affiliates, to solicit the prepayment of or any alteration in payment procedures or terms of any loan sold to PHH under the terms of the Client Agreement. The preceding statement shall not preclude a Client from engaging in general advertising or from servicing the refinance needs of a mortgagor who, without solicitation, contacts the Client in connection with the refinance of such mortgagor’s loan. Regardless of whether solicitation occurred, should any loan sold under the Client Agreement be paid in full within 180 days of purchase, other than a PHH direct refinance, the Client shall promptly return any premium paid for the loan to PHH. The return of the premium will be required whether PHH is the purchaser of the new loan or the owner of the loan that was paid in full.

During the term of the Client Agreement and for a period of 12 months after the termination of the Client Agreement, the Client, on its own behalf or on behalf of any other party, shall not, without PHH’s prior express written consent, directly or indirectly, offer employment, solicit for employment, or cause or attempt to cause the termination of employment of any present or future employees. Nothing herein shall prohibit or restrict the Client from offering employment to any of PHH’s employees who seek employment through job opportunities made available to the general public.

The Client acknowledges that with respect to some or all of the loans purchased by PHH from Client, PHH or an affiliate of PHH may affect either:

• one or more sales of the loans as whole loan transfers (each, a “Whole Loan Transfer”); and/or
• one or more securitization transactions.

For purposes of this section, “Purchaser” shall mean the purchaser of the loan under the Client Agreement and “Purchasers” shall include the Purchaser and any prior purchasers of the loan under the Client Agreement.
With respect to each Whole Loan Transfer or Securitization Transaction, as the case may be, entered into by PHH or an affiliate of PHH, the Client agrees:

• to cooperate fully with PHH or an affiliate of PHH and any prospective purchaser with respect to any Whole Loan Transfer or Securitization Transaction, including but not limited to, all reasonable requests, due diligence procedures and disclosures, and with respect to the preparation (including, but not limited to, the endorsement, delivery, assignment, and execution) of the documents contained in the Loan File and other related documents;
• to deliver to PHH or an affiliate of PHH, or any prospective purchaser such additional loan information requested and to indemnify PHH, its affiliates or any prospective purchaser for such information at the time of such delivery to the extent such information is not true and correct;
• to execute all Reconstitution Agreements provided that each of the Client and PHH or an affiliate of PHH is given an opportunity to review and reasonably negotiate in good faith the content of such documents not specifically referenced or provided for in this Guide;
• with respect to any Whole Loan Transfer or Securitization Transaction, the Client shall make the representations and warranties regarding the Client and the loans as of the date of such Whole Loan Transfer or Securitization Transaction, as applicable, modified to the extent necessary to accurately reflect the pool statistics of the loans as of the date of such Whole Loan Transfer or Securitization Transaction and supplemented by additional representations and warranties that are not unreasonable under the circumstances as of the date of such Whole Loan Transfer or Securitization Transaction to the extent that any events or circumstances, including changes in applicable law occurring subsequent to the related Closing Date, would render a related loan unmarketable to a material segment of the secondary mortgage or mortgage-backed securities market or make any representations or warranties required by any Rating Agency
• to deliver to PHH or an affiliate of PHH such information, reports, letters and certifications as are required and in the time frame and manner set forth in this section, and to indemnify the PHH and its affiliates as set forth in this section;
• to deliver to PHH or an affiliate of PHH for inclusion in any prospectus or other offering material (including any private offering document) such publicly available information regarding the Client, its financial condition and its Loan delinquency, foreclosure and loss experience and any additional information reasonably requested by PHH or an affiliate of PHH, and to deliver to the PHH or an affiliate of PHH any similar nonpublic, unaudited financial information, in which case the PHH or an affiliate of PHH shall bear the cost of having such information audited by certified public accountants if the PHH or an affiliate of PHH desires such an audit, or as is otherwise reasonably requested by the PHH or an affiliate of PHH and which the Client is capable of providing without unreasonable effort or expense, and to indemnify the PHH and its affiliates for material misstatements or omissions contained (i) in such information and (ii) on the Mortgage Loan Schedule;
• to deliver to PHH, and to any Person designated by PHH, such statements and audit letters of reputable, certified public accountants as are customarily delivered by originators such as Client in connection with a Whole Loan Transfer or Securitization Transaction pertaining to Client’s financial condition as shall be reasonably requested by PHH or an affiliate of PHH;
• to deliver to PHH, and to any person designated by PHH, such legal documents and opinions of counsel (which counsel shall be independent, outside counsel of the Client) as are customarily delivered by originators and reasonably determined by PHH to be necessary in connection with any Whole Loan Transfer or Securitization Transaction, and such outside opinions of counsel for a Securitization Transaction to be in a form reasonably acceptable to PHH, with the cost of any such outside opinions of counsel that may be required, paid by PHH or an affiliate of PHH;
• in connection with each Whole Loan Transfer or Securitization Transaction, to agree to permit any prospective assignees of PHH who have entered into a commitment to purchase any of the loans or any independent third-parties selected by PHH to conduct Pre-Securitization TPR, Post-Securitization TPR (or any other similar pre-securitization or post-securitization review as may be required by any Rating Agency), to assess loan information and review the Client’s servicing and origination operations, upon reasonable prior notice to the Client, the Client shall cooperate with such reviews and underwriting to the extent such prospective assignees or independent third-parties request information and documents (in electronic form or otherwise) that are reasonably available and provided such parties are told the confidential nature of such information. Subject to any applicable law, the Client shall make the servicing files related to the loans held by the Client available at the Seller’s principal operations center for review by any such prospective assignees or independent third-party during normal business hours upon reasonable prior notice to the Seller (in no event fewer than two (2) Business Days’ prior notice);
• to agree and consent that all information provided by the Client to any Rating Agency for the purpose of determining and which is used in connection with the initial rating of a rated securitization including the loans, or for undertaking credit rating surveillance on such securitization, may be posted on a website which complies with the requirements of Rule 17g-5 of the Exchange Act on request of PHH or an affiliate of PHH. Upon request of PHH or an affiliate of PHH, the Client shall provide all such information in electronic form as needed to effect such posting. To the extent any Rating Agency conducts an originator review or other review of the operations of the Client which may be used in connection with the initial rating of a securitization or the surveillance thereof, on request of PHH or an affiliate of PHH, the Seller shall provide to PHH or an affiliate of PHH in electronic form all information that was provided to the Rating Agency in connection with such review;
• to indemnify the Purchaser and its agents, managers and trustees, each affiliate designated by the Purchaser, each person who controls the Purchaser or such affiliate and hold each of them harmless from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and any other costs, fees and expenses that each of them may sustain in any way related to (A) any untrue statement of a material fact contained or alleged to be contained in any information, report, certification, data, accountants’ letter or other material provided by or on behalf of the Client, or provided under the Client Agreement or this Guide by or on behalf of any third-party originator, regarding the Client, the loans or the underwriting standards which is set forth in any offering document prepared in connection with any Securitization Transaction (collectively, the “Company Information”), or (B) the omission or alleged omission to state in the Company Information a material fact required to be stated in the Company Information or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, by way of clarification, that clause (B) of this paragraph shall be construed solely by reference to the Company Information and not to any other information communicated in connection with a sale or purchase of securities, without regard to whether the Company Information or any portion thereof is presented together with or separately from such other information, or (C) the failure by the Client to make any required filings or provide the information needed by Purchaser for any required filings under the Exchange Act or under any other applicable securities law and regulation;
• to indemnify the Purchaser and its agents, managers and trustees, each affiliate designated by the Purchaser, each person who controls the Purchaser or such affiliate and hold each of them harmless from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and any other costs, fees and expenses that each of them may sustain in any way related to (A) any untrue statement of a material fact contained or alleged to be contained in any information, report, certification, data, accountants’ letter or other material provided by or on behalf of the Client (including by the Purchaser), or provided under the Client Agreement or this Guide by or on behalf of any third-party originator, regarding the Client, the loans or the underwriting standards which is provided to any Rating Agency in connection with any initial ratings issued in connection with any securitization or the surveillance of such ratings (collectively, the “Rating Agency Disclosure”) or (B) the omission or alleged omission to state in the Rating Agency Disclosure a material fact required to be stated in the Rating Agency Disclosure or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and
• to (x) represent and warrant to each Rating Agency providing a rating in a separate writing that (i) the Client shall promptly provide to each Rating Agency all information requested by each Rating Agency in accordance with its published ratings criteria, (ii) all information provided to the Rating Agency contains no untrue statement of a material fact and does not omit a material fact necessary in order to make such information, in light of the circumstances in which it was provided, not misleading, and (iii) make any other representations or warranties or provide any other information required by any Rating Agency and (y) indemnify any such Rating Agency that provides a rating and each of its affiliates, directors, officers and employees for any losses, damages, liabilities, judgments, costs, charges and expenses (including without limitation attorneys’ fees) of whatever nature (whether foreseeable or not) arising from or in connection with the breach of any of the representations and warranties set forth in clause (x) herein, including resulting from or relating to the use by the Rating Agency of or reliance by the Rating Agency on information provided to it by the Client.

Notwithstanding anything to the contrary, the Client acknowledges and agrees that the provisions of this section shall apply to all subsequent reconstitutions (including, without limitation, the exercise by any person (including the Purchaser) of any optional purchase rights under the terms of a Securitization Transaction or in the event that any Loan is repurchased pursuant to the terms of any Reconstitution Agreement) that occur after any initial reconstitution. In addition, if, following the occurrence of a reconstitution with respect to any loans, the Purchaser subsequently becomes the owner of such loans again, such loans shall be subject to the terms and conditions of the Client Agreement and this Guide.
In order to facilitate compliance with Regulation AB promulgated under the Securities Act, the Client and PHH agree to comply with the provisions of this Guide. The Client further covenants to provide PHH or an affiliate of PHH on request all information PHH or such affiliate of PHH deems necessary in order to comply with any amendments to Regulation AB and any other securities laws and regulations with respect to information provided in connection with a securitization of the loans and shall enter into any necessary amendments to the Client Agreement required to comply with same.
All loans not sold or transferred pursuant to a Whole Loan Transfer or Securitization Transaction shall be subject to the Client Agreement and this Guide and shall continue to be serviced in accordance with the terms of this Guide and the Client Agreement and this Guide shall remain in full force and effect.

The PHH Third-Party Origination (TPO) Rate Lock Desk works with Clients to ensure timely and accurate registration of individual loan commitments

The Client may register and lock loans with PHH through the following methods:

• Mini Bulk Tapes: Approved Clients can submit bulk tapes to Ratelock@PHHMortgage.com . Clients in return will receive a best ex per each eligible loan. All submissions must be sent to the Rate Lock email address for execution by 4:00pm ET. Any bids sent after 4:00pm ET will be denied and requested to be submitted the following business day for the current price.
• Best Efforts Commitment: Approved Clients can register and lock Loans via PHH Correspondent portal. All registrations and commitments are priced to PHH's posted Correspondent Rate Sheet Daily within PHH Correspondent portal. Pricing will be posted usually by 9:30am ET and remain valid until the earlier of 9:00 p.m ET or an intraday re-price. In the event of a re-price(s) the current active Rate Sheet will remain in effect until 9:00 p.m ET.
• E-Mail: Ratelock@PHHMortgage.com

Client should contact PHH Rate Lock Desk if the commitment confirmation terms appear incorrect. See the Communication Chart for contact information.

The following data fields are required to register a loan:

• Borrower SSN (and/or Co-Borrower)
• Borrower Last Name (and/or Co-Borrower)
• Borrower First Name (and/or Co-Borrower)
• Property Street Address
• Property State
•  Zip Code
• Product Code (ID) – If product code includes designation to specific Agency, AUS provided in Closed Loan File must match Agency identified in product code (i.e., FNMA – DU Findings or FHLMC – LP Findings).
• Note Rate
• Loan Amount
• Loan Term (10-30 year terms in increments of 12 months)
• FICO (optional for some products, but recommended for all)
• Loan Purpose
• Occupancy
• Doc Type (Processing Style)
• Property Type (may require additional info such as Condo, # Units, etc.)
• # of Units
• One of the following: Sales Price, Appraised Value, or LTV
• Escrows – Yes or No

Credit Scores
If credit scores are not available at time of registration, pricing may be denied or the loan may be placed in a pending status if a lock is required. Please note: Delegated loans must be locked prior to submission for review.
Property Address
A full and complete property address is required at the time of a rate lock request. Any lock requests with incomplete or incorrect addresses will be classified as invalid and subject to worst-case pricing.
Escrow/Impounds
The Client is responsible for complying with all applicable federal, state, and local laws and regulations relating to the creation of, transfer of and maintenance of escrow/impound accounts.
If an escrow account is established, the Client should include a two month cushion unless otherwise prohibited by applicable law. For conventional Loans requiring mortgage insurance, a cushion is not required for the mortgage insurance impounds. USDA Loans require a two month cushion of mortgage insurance impounds be collected at closing.
In certain states and counties, certain borrowers may not be required to pay property taxes. If the borrower is exempt from paying property taxes, the Client must provide evidence showing the borrower is not required to pay property taxes. If such evidence of borrower's exempt status cannot be provided, taxes must be escrowed and may be reanalyzed after exemption status is confirmed. 
The Client may waive the escrow/impound account (except for mortgage insurance and flood insurance) specification with respect to Conventional Loans only, if the loan-to-value (LTV) is 80% or less (90% or less in California), all program eligibility guidelines and qualifications are met, and the Client’s internal escrow waiver policy is met. The Client must provide evidence that all requirements have been met. The standard escrow provision must remain in the Loan documents.
Escrow waivers may be subject to all applicable price adjustments for non-escrowed loans.
The Client’s waiver of the right to collect escrow/impound funds must not weaken the right of PHH to subsequently enforce the escrow provision contained in the Loan documents in the event that the borrower fails to act responsibly.
Note: Regardless of LTV, an escrow account will be required for a primary residence loan that is made in compliance with the Regulation Z requirements for higher priced mortgage loans (HPML Section 35) or if flood insurance is required, per federal requirements.

PHH will not accept loans in states where Clients are not properly licensed to conduct business. In the event that PHH does not have a Client’s current license or exemption on record, PHH cannot accept loan lock requests. If any Client license issues are under review, the Client’s loans will be placed in a pending status. To remove the loans from pending status, the Client must take the following steps:

• The Client must update all state licensing information by emailing state licensing and exemption information directly to counterpartyreview@phhmortgage.com .
• After this information is received and the system has been updated to reflect the appropriate approval, the Client must contact the Rate Lock Desk to complete the registration.
• Rates effective on the original request date will not be honored.

The Rate Lock Desk will determine if a request to change loan information requires that a Loan be re-priced. Changes to loan information prior to submission for review may be requested through the TPOC portal (Best Efforts only) or sent to Ratelock via email. The Rate Lock Desk may require additional information to facilitate the change. PHH routinely runs audit checks against the changed fields to guard against fraud and to comply with certain banking and regulatory requirements. 

Regardless of loan status, the following fields cannot be changed via TPOC:
•    Rate Lock Date/Time
•    Lock Days
•    Channel (e.g. Delegated to Non-Delegated)
•    Subject Property Address
•    Borrower Name 
•    Borrower Social Security Number 

Circumstances necessitating a change to the property address will require additional documentation for review and may result in worse case pricing.
Any incorrect borrower information, such as borrower name or Social Security number, will require additional documentation and may result in worse case repricing.
Changes made to a locked commitment will be repriced based on the original days locked rate sheet, eligibility, and LLPA’s unless listed in the worse case pricing example list below:
The following list includes examples of changes that are subject to worse case repricing and may be completed in the TPOC portal:
•    Relock with a lock expiration less than 30 days.

The following list includes examples of changes that are subject to worse case repricing and must be requested by emailing Ratelock:
•    Relock of previously cancelled loan.
•    Commitment cancelled/denied and new commitment requested
•    Address changes
•    Some loan program changes (e.g. Conventional to Non Agency)
•    Change in loan channel 

Note: All loan program changes completed without re-price are at the sole and absolute discretion of the Rate Lock Desk and may be approved or denied based upon any number of factors, including without limitations, existing market conditions.

 

The Rate Lock Desk may attempt to register and/or lock a loan, but cannot complete the registration, due to one or more of the following issues:

• Missing/incomplete/incorrect Social Security numbers
• Missing/incomplete/incorrect property address
• Missing/incomplete/incorrect borrowers names
• No credit score is provided, but product requires it
• No DTI is provided, but product requires it
• Loan does not fit product guidelines
• Product code not provided
• Rate is not selected
• Rate Lock Window or Delivery Type is not selected
• Requested rate is not available
• Client is not licensed in the state where property is located

In these cases, the loan will be placed into pending status. Placing a loan in pending status will save some of the loan information; however, the loan cannot be locked until all outstanding information has been received.
It is the Client’s responsibility to contact the Rate Lock Desk to rectify any outstanding issues. After the correction is received and reviewed by PHH, the Client may submit an updated lock request based on the prevailing loan rates at the time the lock request is submitted.
PHH will not assume responsibility for unlocked or unregistered loans that have been sent without all required information, on improper forms, or contain incorrect information.

Due to the volatile nature of the secondary market and market conditions, PHH pricing is subject to change at any time and without notice.

PHH will not be held responsible for incorrect registrations and/or loan lock errors. Errors, omissions, or mistakes that are reported to the Rate Lock Desk within 24 hours after the incident occurs will be considered on a case-by-case basis for correction without penalty. It is the Client’s responsibility to contact the PHH Rate Lock Desk to report registration or lock-in issues or missing lock-in requests within 24 hours of the initial request. Any correction of errors or supplemental information for omissions after the 24-hour period will require that the loan be re-priced based on prevailing rates.

In order to sell loans to PHH, the Client must obtain a rate lock commitment. A variety of pricing options are available to meet the needs of our Clients.

A rate lock commitment is an agreement whereby Client commits to deliver a loan, as described in the commitment confirmation. Client must enter into a commitment for each loan prior to delivering it to PHH.
Depending on approval authorization, Clients may enter into a Flow commitment under a Mandatory Commitment/mini bulk or Best Efforts Commitment.
Client may not simultaneously utilize bulk Mandatory Commitment and Best Efforts Commitment for the same Loan. Loans previously locked in a Best Efforts Commitment may not be allocated or delivered into a Mandatory Commitment unless such commitment was locked greater than sixty (60) calendar days after the earlier of the Best Efforts cancellation date or most recent commitment expiration date.

Under a Mandatory Commitment, the Client commits to deliver a loan to PHH that is eligible for purchase and that conforms to the terms described in the commitment prior to the end of the commitment period. PHH will charge a pair-off fee to Client if the committed amount is not delivered by the specified date.
Prior to entering into a Mandatory Commitment, the Client must be approved and set up for this delivery option, must be closing in their own name and utilizing an approved warehouse line or their own funds.
PHH offers the following Mandatory Commitment options:

• Flow Mandatory: Not Available
• Forward Mandatory Trades: Not Available
• Mini Bulk: Minimum of $1,000,000 in unpaid principal balance (UPB) required. The Client will submit an approved bulk tape to Ratelock@PHHMortgage.com for live market pricing. All loans submitted must be Agency approved and comply with PHH guidelines.

Bulk Assignment of Trade (AOT): PHH may accept a Bulk AOT that satisfies the following eligibility criteria: 
•    Minimum AOT amount of $250, 000 per trade / $50,000 increments only
•    Trades assigned cannot exceed $500,000 over the committed loan amount
•    Trades must be with acceptable Assignment of Trade counterparties set forth below or otherwise approved in writing by PHH in its sole discretion
•    Trades must directly link to underlying note-rates to appropriate coupon
•    Trades in the same delivery month(s) that are indicated on the applicable SendBid.
•    Eligible Loan Programs for trades include FNMA, FHLMC, and GNMA fixed rate programs including High Balance.  Arms/ Non QM are not eligible. 
•    In all cases when an AOT is not an exact match/equal to the loans awarded (single loan trade), an AOT weighted security price will be used in calculating loan pricing. The weighted average base price of the weighted security price will be calculated using the AOT strike price and amount assigned verses total amount awarded using current market price. 
•    48 Hour SLA from investor dealer to trade signoff.
•    Substitutions may be available at PHH's sole discretion provided that (i) the loan size tolerance between the loan in the original trade and the loan in the proposed substitute trade is 2% [or less] and (ii) the loan in the original trade and the loan in the proposed substitute trade are the same loan product and have the same coupon.  
•    Each loan removed from an original AOT will be paired out based on the individual loan details and market conditions

Acceptable Assignment of Trade Counterparties:


The following additional rules are applicable to Mandatory Commitments:

• In the event that a duplicate lock is created, the loan will become subject to worst-case pricing.
• Only Clients with select authorization authority will be permitted to lock into Mandatory Commitments.
• Client may not assign or transfer a Mandatory Commitment, in whole or in part, without the prior express written consent of PHH.

Note: The term commitment is not to be confused with other agreements or terminology that may be in effect between Client and PHH.

Under a Best Efforts Commitment, the Client can take a Best Efforts Commitment via PHH Correspondent portal. A Client can access PHH Pricing by utilizing PHH's Get Pricing Scenario tool via PHH Correspondent portal. Due to potential market volatility, PHH reserves the right to re-price at any time. In the event of a Rate Sheet re-price, PHH may suspend pricing until a new Rate Sheet is posted to PHH Correspondent portal. If, at any time, a Client is actively locking during a re-price, PHH will honor pricing from the current Rate Sheet timestamp. A Best Efforts Commitment that is not submitted and withdrawn will be cancelled without penalty provided the Loan did not close with the Client. All Non-Delegated Loans will be locked under a Best Efforts Commitments.

The following additional rules apply to Best Efforts Commitments:

• In the event that a duplicate lock is created, the Loan will become subject to worst-case pricing.
• Only Clients with the designated authority will be permitted to lock using Best Efforts.
• Client may not assign or transfer a Best Efforts Commitment, in whole or in part, without the prior written consent of PHH.

Although the Client is not required to deliver the Loan if the Loan closes with the Client under a Best Efforts Commitment, PHH considers a Best Effort lock to be a mandatory commitment when the loan closes with the Client and reserves the right to pair-off the commitment in the event a locked Best Effort loan that closes with the Client is not purchased by PHH. PHH will track the percentage of the Client's commitments that are not delivered for purchase or delivered for purchase and subsequently cancelled, withdrawn, denied or rejected (referred to as “fallout rate”). An above-target fallout rate may result in the suspension or loss of approval to sell Loans to PHH or an adjustment to pricing on future commitments.

All loans must be closed and disbursed by the Client’s lock expiration date.
The commitment/lock expiration is the expiration of PHH’s commitment to honor a locked loan at a particular interest rate. Any extension requests must be made on or before the rate lock commitment expiration date, and requests received after this date would be subject to re-lock at worst-case pricing.
The delivery expiration date is the deadline within which Clients must deliver closed loans with all required documents including complete credit and closing package to PHH. If a Client fails to deliver by the delivery expiration, PHH will re-price the loan subject to worst-case pricing upon receipt of the credit and closing files.
The delivery expiration, when applicable, will display on the lock confirmation. PHH encourages all Clients to monitor rate lock commitment expiration dates very carefully. Failure to extend locks prior to the commitment

If the initial commitment expiration on a loan would fall on a weekend or PHH observed holiday, PHH will automatically roll the commitment expiration date to the next business day. Any subsequent extensions or relocks, however, may cause the loan to expire on a weekend or PHH holiday. In that case, the expiration date will NOT roll to the next business day.
In all cases, the loan must be closed and disbursed by the Client’s lock expiration date.
If the delivery expiration date falls on a weekend or PHH observed holiday, the Client must ensure the complete credit and closing files are received on or before the delivery expiration date of the rate lock commitment. To ensure the loan is received without any issue, PHH strongly encourages Clients to deliver the full file prior to the delivery expiration date.

If a relock on an individual commitment is requested within 30 days of the rate commitment expiration date, the loan will be relocked subject to worst-case pricing comparison and the applicable relock fee as identified in Relock Fees. If the loan is canceled prior to the commitment expiration, and then reestablished as a new loan, the same relock fee structure noted below will be applied based on cancellation date rather than commitment expiration.

• If the relock is requested more than 30 days after the commitment’s expiration or cancellation, whichever applies, the loan will be priced at current market. However, the loan will continue to be assessed any previously purchased lock extensions or other fees unless the loan has been expired or canceled for more than 120 consecutive days.
• PHH may deny the relock request at the original locked rate on an expired lock due to market illiquidity.
• Rates not listed on the current rate sheet are illiquid rates and Client may not be able to relock them.
• Loans that are relocked must meet all current product eligibility guidelines.
• Loans that have expired and have been relocked more than once may be subject to additional fees or may become ineligible for relock.
• If a loan has been expired or cancelled for more than 120 consecutive days, the loan can be relocked at current market pricing with no market comparison and is no longer subject to the cost of previous extensions. In most cases, a new loan number will be assigned, and the old expired loan number will be withdrawn.

If a Client requests to relock an individual Mandatory or Best Efforts Commitment loan that is expired or canceled for less than 30 days, the relock will be subject to the following conditions:

• PHH will relock loans up to a maximum of four times for no greater than a total of 60 days, never to exceed the original lock window.
• All relocks are subject to current PHH product eligibility guidelines. Loans not meeting current product guidelines will not be eligible for relock.
• Relock windows for Mandatory Commitments can only be taken in increments of 5, 10, 15 or 30 days, but may not be longer than the original lock window.

Relocks for Best Efforts Commitments can only be taken in increments of 15,30, 45, 60 & 75 days, but may not be longer than the original lock window.

• Relocks are calculated on a worst-case pricing basis.

Once the requested relock period is established, comparisons for the same product and interest rate will be made between the most recent lock base price versus original lock base price.
If the Client requests to relock an undelivered loan that has been expired or canceled for more than 30 days, the loan will be eligible to be relocked at current market without worst-case pricing comparison or relock fee.
Example #1
A loan is locked for 30 days at a base price of 101.00. The current comparable 30-day price is 101.50. The commitment expires and a relock is requested for additional 30 days at the original price since the current market price is higher.
Example #2
A loan is locked for 30 days at a base price of 101.00. The commitment expires and a 30-day relock is requested on the day after the original lock expiration. The current comparable 30-day price is 99.50. Since the current price is worse and more than a 31 -day extension, the loan is relocked for 30 days at current market.

Mandatory Bulks and Best Efforts:
All commitments delivered after lock expiration will accrue a late delivery fee as stated below:

PHH does not purchase Loans if the Mortgage Note date is over 90 days old at the time of Loan purchase. If the Mortgage Note date is 90 or more days old, the Client must contact the PHH Rate Lock Desk for next steps.

PHH requires loans to be delivered on or before 45 days and/or funded on or before 90 days from the original Note date.  Loans aged greater than 45 days at delivery may be consider by PHH, in its sole discretion, for an aged policy exception subject to a comprehensive explanation of circumstances surrounding the seasoning. Any loans for which an aged note policy exception is requested will undergo a full review, which could extend the purchase timeline and incur additional fees. In addition, loans aged greater than 45 days at delivery are subject to at a minimum, pricing adjustments in accordance with the below schedule, and additional price adjustments may be required by PHH, in its sole discretion,  on a case-by-case basis.

PHH will not accept loans that have been rejected by any other investors, regardless of the seasoning. Exceptions may be considered on a case-by-case by PHH, in its sole discretion, if PHH determines the loan complies with all PHH policies and guidelines. In such cases, PHH will require, among other things, evidence of the prior rejection and documentation of the noted conditions and attempted resolutions. All loans for which an exception is requested will undergo a comprehensive review, which could extend the purchase timeline and incur additional fees.

Any contingency, issue, process, or scenario not covered in this Guide should be considered outside of PHH policy and, therefore, subject to review by the Rate Lock Desk. Clients are encouraged to call the Rate Lock Desk when they have questions or pricing issues with a loan. An agent will make every effort to resolve the issue, but if the issue cannot be resolved, the matter may be escalated to the Manager of the Rate Lock Desk.

Participation in a Mandatory or Best Efforts Commitment is permitted at PHH’s discretion. PHH reserves the right to limit the outstanding undelivered commitment amount available to the Client. The Client must be approved by PHH’s Credit Risk Group prior to taking out Mandatory or Best Effort Commitments. PHH may restrict or suspend the Client’s future participation in a Mandatory or Best Effort Commitment at any time.
Unless otherwise stated by the Rate Lock Desk, the Client must deliver eligible loans under the requested delivery commitment, conforming to the applicable loan program described in the commitment, with a loan amount that is within 2% (plus or minus) of the original committed amount.
To the extent the Client’s delivery of eligible loans under a Mandatory Commitment has an aggregate outstanding principal balance (subject to the allowances stated above) less than the commitment amount, PHH may, at its discretion, charge the Client a pair-off fee. It is the Client’s responsibility to notify PHH if the Client cannot deliver a loan under a Mandatory Commitment on time. PHH may, at its discretion, assess a fee in accordance with the Client Agreement.

A Client may request PHH to cancel or withdraw a loan. Once cancelled or withdrawn for any reason, the loan immediately ceases to be price or guideline protected. There can be no reinstatement of that specific loan number. Should the Client request a loan reinstatement, and should PHH reinstate the loan, it will be re-registered and re-priced according to worst-case pricing policies. All extension fees remain with the loan. Cancellation may take place through the PHH Correspondent Lending website or through the Rate Lock Desk. All pair off fees will be applied to all loans closed that have been delivered to PHH for review-. See section 4.7.5 for calculation of fees.
If a delivered loan is cancelled before commitment expiration, PHH may allow for a substitution. Any substitution must be within the applicable tolerance ranges shown in the Table below. If the substitution is not possible, PHH will apply the pair off fee to the individual commitment.
 
The Client is responsible for monitoring and ensuring that only authorized personnel make requests for cancellation. PHH will automatically withdraw and inactivate loans that have been expired for greater than 45 days.

If any of the first four payments due on a Loan following the date of purchase and sale from the Client by PHH becomes 90 days or more delinquent, the Client shall, at PHH’s option, either repurchase such Loan at the repurchase price or indemnify PHH and its successors or assigns for any loss, expenses or costs (including attorneys’ fees) related to such EPD. For purposes of this policy, a Loan is considered 30 days delinquent if the payment has not been received and applied by the end of the day immediately preceding the loan’s next due date. Receipt of payments originally due prior to the date on which PHH purchases the Loan will not satisfy EPD requirements. If indemnification is allowed by PHH, the Client will be required to make payment according to the following schedule:

Fannie Mae and Freddie Mac Loans: $1,500 + (150 bps * UPB at the time of purchase) 
FHA/VA/USDA Loans: $3,000 + (200 bps * UPB at the time of purchase)
All other Loans: $1,500 +  (100 bps * UPB at the time of purchase)
In the event these payments do not cover all losses, expenses and costs (including attorneys' fees) related to such EPD, the Client will be invoiced for the deficiency and shall promptly remit payment to PHH.

Indemnification is not an option for uninsured government loans or Conventional Loans for which the investor has demanded repurchase.

For Non-Agency products, a Loan is considered an Early Payment Default if any of the first four payments due on such Loan following the date of purchase and sale by the Client PHH becomes 30 days or more delinquent.  With respect to each Delegated Client, such Client will be required to repurchase the applicable Loan if there is an Early Payment Default.   

For Non-Delegated Loans that become an EPD, based on specific program requirement PHH may perform a QC review to determine the source of the default. If the default relates to any misrepresentation or omission in connection with the Credit File submitted to PHH for underwriting or any change occurring after PHH has made an underwriting decision and/or credit and collateral approval of the Credit File, each as determined by PHH in its sole discretion, the EPD policy in this Section shall be applicable. 

If a loan sold by the Client to PHH is paid in full within 180 days (excluding the Purchase Date including the day of payoff) following the date of purchase by PHH, the Client will be charged a penalty fee in accordance with the following schedule:

• For Agency Loans paid in full within 90 days of purchase: repayment of the greater of (i) the premium price above par, or (ii) the applicable value in accordance with the SRP Product Grid set forth below.
• For Agency Loans paid in full off after 90 days and within 180 days of purchase: repayment of the applicable value in accordance with the SRP Product Grid below.
• For Non-Agency loans paid in full after 90 days and within 180 days of purchase: repayment of the greater of (i) the premium price above par or (ii) the applicable value in accordance with the SRP Product Grid set forth below. 

SRP Product Grid (fees are assessed as a percentage of the unpaid principal balance of the Loan at the time of acquisition by PHH).

• Fannie Mae and Freddie Mac Loans: 150 bps
• FHA/VA/USDA Loans: 200 bps
• All other Loans: 100 bps

Pursuant to Fannie Mae Announcement SEL-2012-13 and Freddie Mac Bulletin 2012-11, for loans repurchased by the Client, PHH reserves the right to require reimbursement by the Client for any premium or buy up fee paid in connection with the purchase of the related repurchased Loan without regard to the 180 day limitation. PHH may exercise the right to terminate the Client if the Client is found to have an unacceptable number of loans that payoff within 365 days of purchase by PHH determined at PHH’s sole discretion.

If a Loan sold by the Client to PHH is paid down (including, without limitation, pursuant to a recast in accordance with Section 11.5) in excess of 30% of the unpaid principal balance (UPB) at the time of purchase, within 180 days (excluding the Purchase Date but including the day the Loan exceeds 30% of original UPB at time of purchase), the Client will be charged a fee in accordance with the following schedule:

• Fannie Mae and Freddie Mac Loans: 150 bps * cumulative principal paydown amount  
• FHA/VA/USDA Loans: 200 bps * cumulative principal paydown amount
• All other Loans: 100 bps * cumulative principal paydown amount

 
 

For all commitment types, PHH will assess a pair off fee based on the below calculations.

Upon the occurrence of any of the following events, the Client shall immediately repurchase the related loan at the repurchase price and shall indemnify, save and hold harmless PHH and its officers, directors, agents, successors and assigns, from and against any and all resulting losses, damages, costs or expenses, including attorneys’ fees:

• The Client breaches any representation, warranty, covenant or agreement regarding a loan.
• The Client fails to provide all of the documentation required by PHH and/or fails to satisfy all other requirements of the Client Agreement within 60 days following the Closing Date. Such date shall be extended to a date 90 days following the Closing Date for documents timely sent out for recording, but not yet returned due to delays solely within the applicable recording office.
• With regard to FHA Loans, VA Loans, or USDA Loans, the Client fails to submit for FHA Mortgage Insurance Certificate (MIC) or VA Loan Guaranty Certificate (LGC) or USDA Loan Note Guarantee (LNG) within 60 days following the date of the Mortgage Note.
• With regard to FHA Loans, USDA Loans or VA loans, in the reasonable judgment of PHH, the related MIC, LNG or LGC cannot be obtained, or any required private mortgage insurance or guaranty, lapses, is rescinded, or a claim thereon is denied or not paid unless directly caused by the negligence of PHH.
• PHH repurchases any loan previously conveyed, transferred, or assigned by PHH to any third party due to defects which existed prior to, or arose as a result of an occurrence on or before the Closing Date, or any third-party investor refuses to purchase a loan due to defects which existed prior to or arose as a result of an occurrence on or before the Closing Date.
• The Loan File or Credit File contains any fraudulent document, or any misstatement or omission of material fact, regardless of whether such loan is delinquent.
• Any mortgagor under a loan is in default of any obligation to pay taxes and/or insurance in accordance with the applicable provisions of the underlying mortgage and such default occurs within 90 days of the related Closing Date.
• Any mortgagor under a loan files for protection, as a debtor, in any state or federal bankruptcy or insolvency proceeding within 90 days of the related Closing Date.
• For any loan incapable of being repurchased due to inclusion in a Ginnie Mae pool, the Client agrees to comply with all Ginnie Mae requirements and procedures to remedy or address all issues related to such loan, including any required repurchase of such loan in accordance with Ginnie Mae requirements.
• Notwithstanding any applicable cure period or extension of time with respect to a deficiency in such Loan, if PHH is unable to sell such Loan into the secondary mortgage market that it wishes to sell because of any breach of the Client Agreement by the Client or fraud or misrepresentation in connection with any loan documentation, or any misleading, false or erroneous statements or information that is contained in any document submitted with or included as part of the loan documentation.
• Client’s noncompliance with the requirements under this Guide or the Client Agreement adversely affects the value of such Loan or PHH’s interest in such Loan.
• The Client will be required to indemnify [(with may include a repurchase demand under Section 4.9.2 below)]  PHH for any losses, claims, damages, fees, penalties, costs, expenses, or other amounts, including attorneys’ fees, arising out of, in connection with or in any way related to any indemnification requirement or similar demand of FHA, HUD, USDA, VA or other investor to PHH relating to any payment or outlay made by, loss incurred by or claim against FHA, USDA or VA under the applicable insurance or guarantee program after the Closing Date.

Upon discovery of one or more deficiencies relating to a Loan, PHH will send an initial demand to the Client via email setting forth such deficiency and indicating that a Loan requires repurchase. Client will have 15 calendar days to cure the deficiencies relating to such Loan that are capable of cure within such 15 calendar day period; provided, however, that PHH may, in its sole discretion exercised in good faith, identify a shorter or longer period of time to cure based on the circumstances and any investor demand at the time. Prior to the expiration of the applicable cure period, the Client may submit a letter requesting formal appeal relating to such Loan deficiencies. If the formal appeal is rejected by PHH, in its sole discretion exercised in good faith, the Client may submit a letter requesting a second appeal within 10 calendar days of the rejection date of the first appeal request.

In the event that (1) the deficiencies are not cured or are not capable of cure within the applicable cure period set forth above or (2) if applicable, the second appeal is denied, the Client shall pay the Repurchase Price, as set forth in an invoice provided to the Client, within 10 calendar days of the invoice date. In the event the Client does not pay the Repurchase Price within such 10 calendar day period, PHH may, at its option, exercise any of its set-off rights as set forth in this Guide, the Client Agreement or otherwise until the Repurchase Price is received in full by PHH.

Loans which have been previously repurchased from or require indemnification of Fannie Mae, Freddie Mac, Ginnie Mae, FHA, USDA, or VA are ineligible for purchase by PHH. If the Client seeks to cure a deficiency by refinancing a Loan in lieu of repurchasing the Loan, such refinanced Loan may be ineligible for purchase by PHH, in PHH’s sole discretion exercised in good faith.

The Repurchase Price for a Loan subject to a Repurchase by the Client shall be calculated in accordance with and include the following:

1. The Purchase Price, Premium and SRP: The Purchase Price, including the SRP [or the greater of any premium paid in excess of par or 100 basis points of the purchased Loan amount if the Loan is not eligible for sale to an Agency] paid to the Client at the time of purchase, applied to the outstanding principal balance due and owing on the Loan as of the date of Repurchase; plus
2. Modified Mortgage Loan Amount: To the extent PHH, as part of its loss mitigation efforts, enters into an agreement modifying the terms of the Loan (a “Modification Agreement”) with a Mortgagor suffering an involuntary inability to pay its Mortgage under the original terms of the Mortgage Note, the Repurchase Price will be calculated based on the outstanding principal balance based on the modified Loan amount, which may increase the amount of the unpaid principal balance due to capitalization of interest, escrow amounts and/or other advance amounts; plus
3. Escrow and Advances: Any servicing or escrow advances made by PHH with regard to such Loan that remain unreimbursed as of the date of Repurchase; plus
4. Expenses: Any and all documentary stamp taxes, recording fees, transfer taxes, and all other expenses payable in connection with any such Repurchase, including, without limitation, any loss relating to the Loan, all costs, expenses and liabilities incurred by PHH in connection with the repurchase of such Loan from any third party, reasonable attorneys' fees, costs and expenses incurred by PHH, and any other loss or expense in connection with property preservation, costs of property inspections, and costs of broker price opinions; plus
5. Interest, Penalties, and Fees: All accrued but unpaid interest from the last date through which interest has been paid through and including the last day of the month in which the Client repurchases the Loan and the Repurchase Price is received in full by PHH together with; plus any and all penalties and fees charged to PHH by any subservicer of such Loan, including, but not limited to, late fees and restoration fees; plus, any late fees that PHH may charge, in its sole discretion, in connection with PHH’s costs to carry the Loan on its books as a result of the failure of the Client to timely pay the Repurchase Price.

PHH will purchase conventional loans within conforming loan balances that receive DU Approve/Eligible or LPA Accept recommendation and have been underwritten and approved by specific prior approved delegated underwriters.
PHH will purchase government loans within conforming loan balances that receive AUS Accept/Eligible recommendations or Refer/Eligible approved by a DE or SAR underwriter.
PHH will purchase USDA loans within conforming loan balances that are GUS approved (not manually underwritten).

Loans must be meet all Agency guidelines, federal, state and local regulatory requirements, any applicable PHH overlays or limitations, and have an AUS approval from the applicable Agency. For FHA-NTC (non-traditional credit), PHH may accept manually underwritten FHA Loans subject to satisfaction of the following criteria:

• Client must provide an AUS result with a decision to "Refer due to credit" and;
• Client must satisfy all applicable Agency requirements relating to non-traditional credit.

FHA/VA Loans: The Client is responsible for complying with all insurance and fee payment requirements, including, without limitations, remitting the upfront MIP/VAFF/ Loan Guarantee fee and insuring and providing evidence of insurance and payment at time of submission for purchase. Any Client unable to satisfy the insuring process must contact its Regional Sales Executive immediately to discuss possible alternatives.

Credit exception requests may be submitted to

AgencyScenarioDesk@phhmortgage.com for credit exceptions prior to Loan submission for underwriting. Each request must include the completed exception form and all applicable supporting documentation. The exception form can be located on TPO Connect or the PHH Correspondent portal.

PHH will respond to an exception request in writing. The exception form must be uploaded with the Credit File at the time of submission to PHH for underwriting.

PHH reserves the right to rescind any exception approval if PHH determines, in its sole discretion, at the time of submission of the Loan for underwriting or purchase that the Loan or Credit File does not match exception details set forth in the exception form.

All Loans submitted to PHH for purchase must be transferred into a FINAL status in FNMA desktop originator (DO) or in a FINAL ASSIGNMENT status in FHLMC Loan Prospector Advisor (LPA).

DO sponsorship is available to approved Clients. Lenders need to request approval via FNMA Desktop Originator Portal. A Client will be removed from sponsorship upon deactivation from approved status. Upon delivery, the final findings must match-final loan terms and details reflected on the Closing Disclosure.

All Loans submitted to PHH for possible purchase must meet all PHH and Agency guidelines and comply with all applicable local, state and federal laws and regulations. Clients are responsible to ensure all Loans are in compliance with Chapter 13 of this Guide. The following rules apply to Loans submitted to PHH for purchase:

All Loans must be registered in accordance with this Guide with PHH prior to submission.

All Loans must have a Universal Loan Identifier "ULI" at time of submission.

Closed Loan Files submitted to PHH for review may be uploaded via the PHH Correspondent portal.

All Loans must include an acceptable compliance report such as a Mavent or Compliance Ease or other such report PHH deems acceptable. Copies of loan document audit do not constitute a compliance report. Please see Chapter 13 for Compliance Requirements.

The Client is responsible for adhering to PHH's disaster area policy including providing a disaster inspection prior to Loan submission to PHH for purchase as set forth in Section 8.38 of this Guide.

For the list of required documents and the instructions on how to upload and transmit a Close Loan file for underwriting review, please access the PHH Portal Guide.

Every condo loan/condo project must meet general eligibility standards of each applicable Agency and any PHH guidelines regardless of the review method. Clients must submit condo project approval documentation within the closed Loan File to match the required approval as identified on the AUS finding.

Type of condo loan reviews:

• Full Review: Client must submit Form 1076 full form along with condo project documentation (including: covenants, conditions and restrictions; bylaws; articles of incorporation, financial statements, budget documents, insurance declaration page, HO-6 condo insurance policy, and a recent condo reserve study).
• Limited Review: Client must submit Form 1076 and all required documentation per AUS approval including Master Insurance Policy and HO-6 condo insurance policy currently in effect.
• Waived Review (Fannie Mae Only): Client must submit Master Insurance Policy and HO-6 condo insurance policy currently in effect.
• Fannie Mae PERS Approval: Client must provide approval information printout from Fannie Mae if the condo project has been approved by Fannie Mae.

Project types not eligible for purchase:

• Coop Projects
• New or newly converted Condo projects
• Manufactured Home Condo projects
• If a Client becomes aware of any information or data that could impact the eligibility status reflected in Fannie Mae's CPM™ (including, without limitation, significant deferred maintenance or major litigation), the Client must promptly provide written notification to Fannie Mae's CPM™ Management team and PHH with all applicable data and information. Such notification must occur as soon as practicable but in no event later than five business days after Client has obtained notice or knowledge of such information or data. Before selling a loan secured by a unit in such a condo project, the Client shall confirm with Fannie Mae that the condo project retains its approved status. 

PHH offers prior approval underwriting through its Non-Delegated program. Clients must be specifically approved to participate as a Non-Delegated Client.

Non-Delegated Program Net Worth / Liquidity Requirements:

• Tangible net worth must be at least $250k with at least 20% liquidity for non-delegated status
• Net worth requirements may vary based on type of Client approval
• Verification of existing warehouse lines in good standing (if applicable)

Non-Delegated Non-Agency Program Net Worth/Liquidity Requirements

• Tangible net worth must be at least $1.5M with at least 20% liquidity for Non-Delegated, Non-Agency status.

Non-Delegated Program Financial Statement Requirements:

• Two years audited financial statements, if available, plus interim financial statements
• Most recent quarter interim unaudited financial statements

Refer to Section 2.9.1 for the Representations and, Warranties Regarding Loans and Section 2.9.2 for the Covenants of Client. All representations, warranties and covenants are applicable to Non-Delegated Loans and Non-Delegated Clients unless otherwise noted. 

 

Client is solely responsible to:
(a)  provide all required federal, state and local disclosures to each Loan applicant, including anti-steering disclosures, [other than PHH’s HMDA reporting requirements as set forth in Section 5.3.4 below];
(b) submit complete Credit Files sufficient for PHH to complete its underwriting review in accordance with this Guide and any applicable PHH and Agency guidelines;
(c) communicate with each Loan applicant in connection with its Loan application;
(d) manage rate lock commitment expiration dates to ensure PHH has sufficient time to complete its underwriting review;
(e) ensure that all prior-to-close and post-closing items satisfy the requirements set forth in this Guide within the applicable deadlines;
(f) close the Loan in accordance with Applicable Law and this Guide;
(g) verify employment prior to closing in a timely manner in accordance with this Guide and the guidelines and criteria of PHH, the applicable Agency and/or investor;
(h) provide all adverse action notices required by the FCRA and ECOA and provide evidence, satisfactory to PHH, that either (i) such notices were delivered to the Loan applicant(s) or (ii) no such notice was not required;
(i) ensure that each Loan is originated, processed, and closed in compliance with all Applicable Law and this Guide;
(j) perform all required Qualified Mortgage testing and curing any and all violations in compliance all Applicable Law and in accordance with PHH's requirements;
(k) ensure that the Loan File contains (i) evidence of compliance with the USA Patriot Act and the Fair and Accurate Credit Transactions Act, (ii) verification that no Loan applicant is listed on the Specially Designated Nationals and Blocked Persons List, and (iii) any other documents required by PHH;
(l) order all flood, hazard, and other insurance required in connection with the Loan, including mortgage insurance if required, unless upon Client's request PHH expressly agrees to order such required insurance;
(m) monitor and detect for fraud;
(n) fund and close each Loan in the Client’s name;
(o) if a Loan applicant does not satisfy the requirements for the Loan identified in the Credit File, evaluate whether such applicant qualifies for any other suitable Loan product;
(p) satisfy prior to closing all stipulations or conditions precedent to PHH's underwriting approval; and
(q) satisfy all of PHH's purchase and delivery requirements with respect to the applicable Loan.
 

 As part of its underwriting review, PHH is responsible to:
(a) review income documentation (including, without limitation, paystubs, tax returns, and W-2s) to determine the Loan applicant’s ability to repay the Loan;
(b) review assets documentation (including, without limitation, bank and other account statements and verification of deposits) to confirm that the Loan applicant complies with applicable down payment or reserve requirements and to determine the Loan applicant’s ability to repay the Loan;
(c) review documentation in the Credit File to determine the Loan applicant’s ability to repay the Loan and analyze the applicant's credit profile via review of credit report, bankruptcy, judgments, foreclosure, divorce decree, verification of rent, child support and alimony paid documents, as applicable;
(d) review the appraisal, if applicable, to confirm such appraisal supports the value of the Mortgaged Property, and that the Mortgaged Property satisfies this Guide, any applicable Agency and/or investor’s eligibility requirements;
(e) review AUS results, if applicable;
(f) review the title commitment or preliminary title report and other public information for potential issues or encumbrances on the Mortgaged Property;
(g) review the residential property purchase and sale agreement related to the Mortgaged Property to confirm, among other things, that the Loan applicant is the only purchaser of the Mortgaged Property;
(h) evaluate ratios applicable to the Loan applicant and/or the Mortgaged Property, such as debt-to-income, loan-to-value, combined loan-to-value;
(i) complete any required underwriting worksheets and income calculations, if applicable;
(j) complete determinations and documentation necessary to satisfy the underwriting review criteria in this Guide, any applicable Agency and/or investor and communicate such determinations and documentation to Client;
(k) satisfy HMDA reporting requirements with respect to PHH making the credit decision related to the applicable Loan;  
(l) confirm Client's compliance with and satisfaction of all stipulations or conditions precedent to PHH's underwriting approval; and
(m) if PHH determines that a Loan applicant does not satisfy the requirements for the Loan identified in the Credit File, communicate the principal reason(s) to Client in the event that Client determines to take adverse action based on such reason(s) and delivers an adverse action notice to such applicant. 
 

Loans must be meet all Agency guidelines, federal, state and local regulatory requirements, any applicable PHH overlays or limitations, and have an AUS approval from the applicable Agency. For FHA-NTC (Non-Traditional Credit), PHH may accept manually underwritten FHA Loans subject to satisfaction of the following criteria:

• Client must provide an AUS result with a decision to "Refer due to credit" and;
• Client must satisfy all applicable Agency requirements relating to non-traditional credit.

FHA Loans: Principal and Authorized Agent sponsorship is available to approved Clients. Clients must request an Authorized Agent sponsorship from PHH at time of approval.

VA Loans: VA Non-Supervised Sponsored Agent sponsorship is available to approved Clients. Clients must request a Non-Supervised Sponsored Agent sponsorship from PHH at time of approval.

PHH offers Non-Delegated Clients access to the Scenario Help Desk (SHD) to review underwriting scenarios prior to a Client submitting a Credit File to PHH for underwriting. SHD will review parameters of a Loan, but the final underwriting decision will be based on all aspects of the Loan and the Credit File.

To submit an underwriting scenario, a Client may email the appropriate Scenario email box based on product, Agency vs. Non-Agency. SHD makes every effort respond to the request via email within 72-96 hours during business days, subject to request volume and complexity of the request.

SHD recommendations are not underwriting approval. Any changes to the Loan or Credit File prior to submission to PHH for underwriting will be reviewed by the PHH underwriter and could result in an underwriting decision that differs from the SHD recommendation previously provided.

Once a Loan is submitted to PHH for underwriting, a Client should contact its designated Correspondent Specialist with any questions or notification of any changes to the Loan or Credit File.

All Loans submitted to PHH for underwriting must be transferred into a FINAL status in FNMA desktop originator (DO) or in a FINAL ASSIGNMENT status in FHLMC Loan Prospector Advisor (LPA).

DO sponsorship is available to approved Clients. Lenders need to request approval via FNMA Desktop Originator Portal. A Client will be removed from sponsorship upon deactivation from approved status. Upon delivery, the final findings must match PHH approval. If any changes occur, the Client is required to submit such changes to PHH underwriting prior to closing.

All Loans submitted to PHH for underwriting review must meet all PHH and Agency guidelines and comply with all applicable local, state and federal laws and regulations. Clients are responsible to ensure all Loans are in compliance with Chapter 13 of this Guide. The following rules apply to Loans submitted to PHH for underwriting review:

• All Loans must be registered in accordance with this Guide with PHH prior to submission.
• All Loans must have a Universal Loan Identifier "ULI" at time of submission.
• Credit Files submitted to PHH for underwriting review may be uploaded via the PHH Correspondent portal.
• All Loans must include an acceptable compliance report such as a Mavent or Compliance Ease or other such report PHH deems acceptable. Copies of loan document audit do not constitute a compliance report. Please see Chapter 13 for Compliance Requirements.
• All closing conditions must be submitted and cleared prior to closing of the Loan. Loans submitted for purchase by PHH without clearing all closing conditions may be rejected for purchase.
• Loan changes required to be made pursuant to the PHH final approval must be reflected on the final application signed by the borrower at closing.
• Loans closed that do not comply with the terms, conditions, and requirements listed on the PHH final approval will be re-evaluated by the PHH underwriter prior to purchase by PHH. Loans submitted for purchase may be rejected if updated approval cannot be provided.
• The Client is responsible for adhering to PHH's disaster area policy including providing a disaster inspection prior to Loan submission to PHH for purchase as set forth in Section 8.38 of this Guide. For the list of required documents and the instructions on how to upload and transmit a Credit File for underwriting review, please access the PHH Portal Guide.

Any Loan secured by a condominium in a condo project must be approved by PHH and/or FHA. Credit Files for condo loans submitted for PHH underwriting review must contain all applicable condo project documentation. PHH will review eligible condo projects for Non-Delegated Clients. Every condo loan/condo project must meet general eligibility standards of each applicable Agency and any PHH guidelines regardless of the review method.

Type of condo loan reviews:

• Full Review: Client must submit 5-page full form along with condo project documentation (including: covenants, conditions and restrictions; bylaws; articles of incorporation, financial statements, budget documents, insurance declaration page, HO‐6 condo insurance policy, and a recent condo reserve study).
• Limited Review: Client must 4-page short form questionnaire and all required documentation per AUS approval including Master Insurance Policy and HO-6 condo insurance policy currently in effect.
• Waived Review (Fannie Mae Only): Client must submit Master Insurance Policy and HO-6 condo insurance policy currently in effect.
• Fannie Mae PERS Approval: Client must provide approval information printout from Fannie Mae if the condo project has been approved by Fannie Mae.

Project types not eligible for review:

• Coop Projects
• New or newly converted Condo projects  (that are not approved by the applicable agency)
• Manufactured Home Condo projects