Chase Consent Judgement

8/2/2019 Chase Consent Judgement

1/291

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,et al.,

Plaintiffs,

v.

BANK OF AMERICA CORP. et al.,

Defendants.

)

))

)

)

)

)

)

)

)

)

)

))

)

)

)

Civil Action No. ________

CONSENT JUDGMENT

WHEREAS, Plaintiffs, the United States of America and the States of Alabama, Alaska,

Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii,

Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota,

Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,

New York, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, South

Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming,

the Commonwealths of Kentucky, Massachusetts, Pennsylvania and Virginia, and the District of

Columbia filed their complaint on March 12, 2012, alleging that J.P. Morgan Chase & Company

and J.P. Morgan Chase Bank, N.A. (collectively, Defendant) violated, among other laws, the

Unfair and Deceptive Acts and Practices laws of the Plaintiff States, the False Claims Act, the


2/291

I. JURISDICTION


3/291

II. SERVICING STANDARDS

III. FINANCIAL TERMS

Payment Settlement Amounts.

Payments to Foreclosed Borrowers.


4/291

Consumer Relief.

IV. ENFORCEMENT


5/291

V. RELEASES

VI. SERVICEMEMBERS CIVIL RELIEF ACT


6/291

VII. OTHER TERMS


7/291


8/291


9/291

For the e artment of the Treasury:

~ J v \ ( A - - -O'EORGE W. MADISONGeneral CounselU.S. Department of the Treasury1500 Pennsylvania A venue, NWWashington, D.C. 20220Tel.: 202-622-0283Fax: 202-622-2882For the Federal Trade Commission(as to Exhibit F only):

Amanda BastaAttorneyFederal Trade Commission600 Pennsylvania Ave., NWWashington, DC 20058Tel: 202-326-2340Fax: 202-326-2558

8

For the United States:

THOMAS J. PERRELLIAssociate Attorney GeneralU.S. Department of Justice950 Pennsylvania Ave., N.W.Washington, DC 20530Tel.: 202-514-9500Fax: 202-514-0238For the Department ofHousing andUrbanDevelopment:

HELEN R. KANOVSKYGeneral CounselU.S. Department ofHousing and UrbanDevelopment451 7th Street, S.W.Washington, DC 2041 0Tel.: 202-402-5023Fax: 202-708-3389For the Consumer Financial Protection Bureau(as to Exhibit F only):

Lucy MorrisDeputy Enforcement DirectorConsumer Financial Protection Bureau1500 Pennsylvania A venue, NW(Attn: 1801 L Street)Washington, DC 20220Tel: 202-435-7154


10/291

For the Department of the Treasury:

GEORGE W. MADISONGeneral CounselU.S. Department of the Treasury1500 Pennsylvania A venue, NWWashington, D.C. 20220Tel.: 202-622-0283Fax: 202-622-2882

For the Federal Trade Commission(as to Exhibit F only):


8


THOMAS J. PERRELLIAssociate Attorney GeneralU.S. Department of Justice950 Pennsylvania Ave., N.W.Washington, DC 20530Tel.: 202-514-9500Fax: 202-514-0238For the Department ofHousing andUrbanDev lopment:

General CounselU.S. Department ofHousing and UrbanDevelopment451 7th Street, S.W.Washington, DC 20410Tel.: 202-402-5023Fax: 202-708-3389For the Consumer Financial Protection Bureau(as to Exhibit F only):

Lucy MorrisDeputy Enforcement DirectorConsumer Financial Protection Bureau1500 Pennsylvania A venue, NW(Attn: 1801 L Street)Washington, DC 20220Tel: 202-435-7154


11/291


12/291

For the Department of the Treasury:

GEORGE W. MADISONGeneral CounselU.S. Department of the Treasury1500 Pennsylvania A venue, NWWashington, D.C. 20220Tel.: 202-622-0283Fax: 202-622-2882

For the Federal Trade Commission(as to Exhibit F only):


8


THOMAS J. PERRELLIAssociate Attorney GeneralU.S. Department of Justice950 Pennsylvania Ave., N.W.Washington, DC 20530Tel.: 202-514-9500Fax: 202-514-0238For the Department of Housing and UrbanDevelopment:

HELEN R. KANOVSKYGeneral CounselU.S. Department of Housing and UrbanDevelopment451 ih Street, S.W.Washington, DC 20410Tel.: 202-402-5023Fax: 202-708-3389For the Consumer Financial Protection Bureau(as to Exhibit F only):~ ~ - -Lucy MorrisDeputy Enforcement DirectorConsumer Financial Protection Bureau1500 Pennsylvania Avenue, NW(Attn: 1801 L Street)Washington, DC 20220Tel: 202-435-7154


13/291


14/291


15/291


16/291


17/291


18/291


19/291


20/291


21/291


22/291


23/291


24/291


25/291


26/291


27/291


28/291

For the State of Florida: For the Florida Office ofFinancial Regulation:

PAMELA JO BONDI 1 TOM GRADYAttorney General CommissionerThe Capitol PLO 1 Florida Office of Financial RegulationTallahassee, FL 32399-1050 200 E. Gaines StreetTel: 850-245-0140 The Fletcher Building, Su ite 118Fax: 8504130632 Tallahassee, FL 32399-0370Tel.: 850-410-9601Fax: 850-410-9914

18


29/291

For the State of Georgia and theGeorgiaDepartment of Banking and Finance:

Assistant Attorney GeneralGeorgia Department of Law40 Capitol Square, S.W.Atlanta, Georgia 30334Tel.: 404-656-3337Fa


30/291


31/291


32/291


33/291


34/291


35/291

24

For the State of Iowa:

___________________________

THOMAS J. MILLERAttorney General

1305 E. Walnut St.

Des Moines, IA 50319

Tel: 515-281-5164

Fax: 515- 281-4209

For the Iowa Division of Banking:

___________________________

JAMES M. SCHIPPERSuperintendent of Banking

Iowa Division of Banking

200 E. Grand Ave., Ste. 300

Des Moines, IA 50309-1827

Tel: 515- 242-0350

Fax: 515-281-4862


36/291


37/291


38/291


39/291


40/291


41/291


42/291


43/291


44/291

For The Commonwealth Ofor the Massachusetts Division ofMassachusetts:anks:MARTHA COAKLEYofney Generald k .

AMBER ANDERSON VILLAMass. BBO #647566Assistant Attorney GeneralPublic Protection and Advocacy BureauConsumer Protection DivisionOne Ashburton PlaceBoston, MA 02108Tel: 617-727-2200

( / -DAVID J. COTNEYCommissionerMassachusetts Division of Banks1000 Washington St., 10 t h FloorBoston, MA 02118Tel: 617-956-1510Fax: 617-956-1599

30


45/291


46/291


47/291


48/291


49/291

32

For the State of Minnesota:

Lori Swanson

Attorney General, State of

Minnesota

__________________________

_

NATHAN BRENNAMAN

Deputy Attorney General

Minnesota Attorney Generals

Office

445 Minnesota Street, Suite

1200

St. Paul, MN 55101-2130Tel.: 651-757-1415

Fax: 651-296-7438

For the Minnesota Department of

Commerce:

__________________________

MIKE ROTHMAN

Commissioner

Minnesota Department of Commerce

85 7th

Place East, Suite 500

St. Paul, MN 55101

Tel.: 651-296-6025

Fax: 651-297-1959


50/291


51/291

33

For the State of Mississippi:

___________________________BRIDGETTE W. WIGGINS

Special Assistant Attorney General

Mississippi Attorney Generals

Office

Post Office Box 22947

Jackson, MS 39225-2947

Tel.: 601-359-4279

Fax: 601-359-4231

For the Mississippi Department of

Banking & Consumer Finance:

___________________________

THERESA L. BRADY

Commissioner

Mississippi Department of Banking

& Consumer Finance

901 Woolfolk Building, Suite A

501 North West Street

Jackson, MS 39201

Tel.: 601-359-1031

Fax: 601-359-3557


52/291


53/291

For the State of Montana:

Assistant Attorney GeneralMontana Department of Justice215 N. SandersHelena MT 59624Tel.: 406-444-2026Fax: 406-444-3549

For the Montana Division ofBanking and Financial Institutions:

MELANIE S. GRIGGSCommissionerDivision of Banking and FinancialInsitutitons301 South Park Ave, Suite 316Helena, MT 59620Tel.: 4A6-841-2920Fax: 406-841-2930

ttorney GeneralJAMES P. MOLLOY

35


54/291

35

For the State of Montana:

___________________________

STEVE BULLOCK

Attorney General

JAMES P. MOLLOY

Assistant Attorney General

Montana Department of Justice

215 N. Sanders

Helena MT 59624

Tel.: 406-444-2026

Fax: 406-444-3549

For the Montana Division of

Banking and Financial Institutions:

___________________________

MELANIE S. GRIGGS

Commissioner

Division of Banking and Financial

Institutions

301 South Park Ave, Suite 316

Helena, MT 59620

Tel.: 406-841-2920

Fax: 406-841-2930


55/291


56/291

36

For the State of Nebraska:

___________________________

ABIGAIL M. STEMPSONAssistant Attorney General

Office of the Attorney General

2115 State Capitol

Lincoln, NE 68509-8920

Tel.: 402-471-2811

Fax: 402-471-4725

For the Nebraska Department of

Banking and Finance:

__________________________

JOHN MUNNDirector

Nebraska Department of Banking

and Finance

1230 O Street, Suite 400

PO Box 95006

Lincoln, NE 68509

Tel.: 402-471-2171

Fax: 402-471-3062


57/291


58/291


59/291

For the State ofNEW HAMPSHIRE:

MICHAEL A. DELANAttorney GeneralN.H. Department of Justice33 Capitol StreetConcord, New Hampshire 03301Tel.: 603 271-3658Fax: 603271-2110

For the NEW HAMPSHIRE BANKINGCOMMISSIONER

RONALD WILBURBanking CommissionerNew Hampshire Banking Department53 Regional Drive, Suite 200Concord, New Hampshire 03101Tel.: 603271-3561Fax: 603 271-1090


60/291


61/291

For the State of New Jersey:JEFFREY S. CHIESA

124 Halsey Street - 5th FloorP.O. Box 45029Newark, New Jersey 07101Tel.: 973-877-1280Fax: 973-648-4887

For the New Jersey Deparlment of Banking &Insurance:

l(ENNETH E. KOBYLOWActing CommissionerNew Jersey Department of Banking &InsuranceOffice of Consumer Finance, Division ofBanking20 West State Street - 5tr Floor.P.O. Box 040Trenton, New Jersey 08625-0040Tel.: 609-633-7667Fax: 609-292-3144

INE K.


62/291


63/291


64/291


65/291


66/291


67/291


68/291


69/291


70/291


71/291


72/291


73/291


74/291

48

For the State of South Carolina:

___________________________

ALAN WILSON

Attorney General

JOHN W. MCINTOSHChief Deputy Attorney General

C. HAVIRD JONES, JR.

Assistant Deputy Attorney General

MARY FRANCES JOWERS

Assistant Attorney General

South Carolina Attorney Generals

Office1000 Assembly Street, Room 519

Columbia, SC 29201

Tel.: 803-734-3970

Fax: 803-734-3677

For the South Carolina Department of

Consumer Affairs and South Carolina Board

of Financial Institutions:

___________________________

CARRI GRUBE LYBARKER

Administrator

SC Department of Consumer Affairs

2221 Devine Street, Suite 200

PO Box 5757

Columbia, SC 29250

Tel.: 803-734-4233

Fax: 803-734-4229


75/291

For the State of South Dakota:

___________________________

MARTY J. JACKLEY

Attorney General

1302 E. Highway 14, Suite 1

Pierre, SD 57501

Tel.: 605-773-3215

Fax: 605-773-4106

For the South Dakota Division

of Banking:

_______________________

BRET AFDAHL

Director

South Dakota Division of

Banking

217 West Missouri Ave.

Pierre, SD 57501

Tel.: 605-773-3421

Fax: 605-773-5367


76/291


77/291


78/291


79/291

52

For the State of Utah:

___________________________MARK L. SHURTLEFF

Utah Attorney General

350 North State Street, #230

Salt Lake City, UT 84114-2320

Tel.: 801-538-1191

Fax: 801-538-1121

For the Utah Department of

Financial Institutions:

__________________________G. EDWARD LEARY

Commissioner

Utah Department of Financial

Institutions

PO Box 146800

Salt Lake City, UT 84114-6800

Tel: 801-538-8761

Fax: 801-538-8894


80/291


81/291


82/291


83/291

For the State ofWashington: For the Washington StateDepartment ofFinancialInstitutions:~ , ~ 1 ~ E T M. MCENNAWSBA# 18327 Attorney General 1125 Washington Street SE Olympia, WA 98504-0100 Tel: 360-753-6200DAVIDW.HUEWSBA #31380Assistant Attorney GeneralConsumer Protection DivisionWashington AttorneyGeneral's Office1250 Pacific Avenue,Suite 105 PO Box 2317Tacoma, WA 98402-4411 Tel: (253) 593-5243

SCOTT JARVISDirectorDepartment ofFinancialInstitutionsState ofWashingtonPO Box 41200Olympia, WA 98504-1200Tel: 877-746-4334

55


84/291


85/291


86/291


87/291


88/291


89/291


90/291


91/291


92/291

EXHIBIT A


93/291

Settlement Term Sheet

The provisions outlined below are intended to apply to loans secured by owner-occupiedproperties that serve as the primary residence of the borrower unless otherwise notedherein.

I. FORECLOSURE AND BANKRUPTCY INFORMATION AND DOCUMENTATION.Unless otherwise specified, these provisions shall apply to bankruptcy andforeclosures in all jurisdictions regardless of whether the jurisdiction has ajudicial, non-judicial or quasi-judicial process for foreclosures and regardless ofwhether a statement is submitted during the foreclosure or bankruptcy process inthe form of an affidavit, sworn statement or declarations under penalty of perjury(to the extent stated to be based on personal knowledge) (Declaration).

A. Standards for Documents Used in Foreclosure and BankruptcyProceedings.

1. Servicer shall ensure that factual assertions made in pleadings(complaint, counterclaim, cross-claim, answer or similarpleadings), bankruptcy proofs of claim (including any factsprovided by Servicer or based on information provided by theServicer that are included in any attachment and submitted toestablish the truth of such facts) (POC), Declarations, affidavits,and sworn statements filed by or on behalf of Servicer in judicialforeclosures or bankruptcy proceedings and notices of default,notices of sale and similar notices submitted by or on behalf ofServicer in non-judicial foreclosures are accurate and complete andare supported by competent and reliable evidence. Before a loan is

referred to non-judicial foreclosure, Servicer shall ensure that it hasreviewed competent and reliable evidence to substantiate theborrowers default and the right to foreclose, including theborrowers loan status and loan information.

2. Servicer shall ensure that affidavits, sworn statements, andDeclarations are based on personal knowledge, which may bebased on the affiants review of Servicers books and records, inaccordance with the evidentiary requirements of applicable state orfederal law.

3. Servicer shall ensure that affidavits, sworn statements andDeclarations executed by Servicers affiants are based on theaffiants review and personal knowledge of the accuracy andcompleteness of the assertions in the affidavit, sworn statement orDeclaration, set out facts that Servicer reasonably believes wouldbe admissible in evidence, and show that the affiant is competentto testify on the matters stated. Affiants shall confirm that theyhave reviewed competent and reliable evidence to substantiate the


94/291

A-2

borrowers default and the right to foreclose, including theborrowers loan status and required loan ownership information. Ifan affiant relies on a review of business records for the basis of itsaffidavit, the referenced business record shall be attached ifrequired by applicable state or federal law or court rule. This

provision does not apply to affidavits, sworn statements andDeclarations signed by counsel based solely on counsels personalknowledge (such as affidavits of counsel relating to service ofprocess, extensions of time, or fee petitions) that are not based on areview of Servicers books and records. Separate affidavits, swornstatements or Declarations shall be used when one affiant does nothave requisite personal knowledge of all required information.

4. Servicer shall have standards for qualifications, training andsupervision of employees. Servicer shall train and superviseemployees who regularly prepare or execute affidavits, swornstatements or Declarations. Each such employee shall sign a

certification that he or she has received the training. Servicer shalloversee the training completion to ensure each required employeeproperly and timely completes such training. Servicer shallmaintain written records confirming that each such employee hascompleted the training and the subjects covered by the training.

5. Servicer shall review and approve standardized forms of affidavits,standardized forms of sworn statements, and standardized forms ofDeclarations prepared by or signed by an employee or officer ofServicer, or executed by a third party using a power of attorney onbehalf of Servicer, to ensure compliance with applicable law, rules,court procedure, and the terms of this Agreement (theAgreement).

6. Affidavits, sworn statements and Declarations shall accuratelyidentify the name of the affiant, the entity of which the affiant is anemployee, and the affiants title.

7. Affidavits, sworn statements and Declarations, including theirnotarization, shall fully comply with all applicable state lawrequirements.

8. Affidavits, sworn statements and Declarations shall not containinformation that is false or unsubstantiated. This requirement shall

not preclude Declarations based on information and belief whereso stated.

9. Servicer shall assess and ensure that it has an adequate number ofemployees and that employees have reasonable time to prepare,verify, and execute pleadings, POCs, motions for relief from stay(MRS), affidavits, sworn statements and Declarations.


95/291

A-3

10. Servicer shall not pay volume-based or other incentives toemployees or third-party providers or trustees that encourageundue haste or lack of due diligence over quality.

11. Affiants shall be individuals, not entities, and affidavits, swornstatements and Declarations shall be signed by hand signature of

the affiant (except for permitted electronic filings). For suchdocuments, except for permitted electronic filings, signaturestamps and any other means of electronic or mechanical signatureare prohibited.

12. At the time of execution, all information required by a formaffidavit, sworn statement or Declaration shall be complete.

13. Affiants shall date their signatures on affidavits, sworn statementsor Declarations.

14. Servicer shall maintain records that identify all notarizations ofServicer documents executed by each notary employed by

Servicer.

15. Servicer shall not file a POC in a bankruptcy proceeding which,when filed, contained materially inaccurate information. In casesin which such a POC may have been filed, Servicer shall not relyon such POC and shall (a) in active cases, at Servicers expense,take appropriate action, consistent with state and federal law andcourt procedure, to substitute such POC with an amended POC aspromptly as reasonably practicable (and, in any event, not morethan 30 days) after acquiring actual knowledge of such materialinaccuracy and provide appropriate written notice to the borrower

or borrowers counsel; and (b) in other cases, at Servicersexpense, take appropriate action after acquiring actual knowledgeof such material inaccuracy.

16. Servicer shall not rely on an affidavit of indebtedness or similaraffidavit, sworn statement or Declaration filed in a pending pre-judgment judicial foreclosure or bankruptcy proceeding which (a)was required to be based on the affiants review and personalknowledge of its accuracy but was not, (b) was not, when sorequired, properly notarized, or (c) contained materially inaccurateinformation in order to obtain a judgment of foreclosure, order ofsale, relief from the automatic stay or other relief in bankruptcy. In

pending cases in which such affidavits, sworn statements orDeclarations may have been filed, Servicer shall, at Servicersexpense, take appropriate action, consistent with state and federallaw and court procedure, to substitute such affidavits with newaffidavits and provide appropriate written notice to the borrower orborrowers counsel.


96/291

A-4

17. In pending post-judgment, pre-sale cases in judicial foreclosureproceedings in which an affidavit or sworn statement was filedwhich was required to be based on the affiants review andpersonal knowledge of its accuracy but may not have been, or thatmay not have, when so required, been properly notarized, and such

affidavit or sworn statement has not been re-filed, Servicer, unlessprohibited by state or local law or court rule, will provide writtennotice to borrower at borrowers address of record or borrowerscounsel prior to proceeding with a foreclosure sale or evictionproceeding.

18. In all states, Servicer shall send borrowers a statement setting forthfacts supporting Servicers or holders right to foreclose andcontaining the information required in paragraphs I.B.6 (itemsavailable upon borrower request), I.B.10 (account statement), I.C.2and I.C.3 (ownership statement), and IV.B.13 (loss mitigationstatement) herein. Servicer shall send this statement to the

borrower in one or more communications no later than 14 daysprior to referral to foreclosure attorney or foreclosure trustee.Servicer shall provide the Monitoring Committee with copies ofproposed form statements for review before implementation.

B. Requirements for Accuracy and Verification of Borrowers AccountInformation.

1. Servicer shall maintain procedures to ensure accuracy and timelyupdating of borrowers account information, including posting ofpayments and imposition of fees. Servicer shall also maintainadequate documentation of borrower account information, which

may be in either electronic or paper format.2. For any loan on which interest is calculated based on a daily

accrual or daily interest method and as to which any obligor is nota debtor in a bankruptcy proceeding without reaffirmation,Servicer shall promptly accept and apply all borrower payments,including cure payments (where authorized by law or contract),trial modification payments, as well as non-conforming payments,unless such application conflicts with contract provisions orprevailing law. Servicer shall ensure that properly identifiedpayments shall be posted no more than two business days afterreceipt at the address specified by Servicer and credited as of the

date received to borrowers account. Each monthly payment shallbe applied in the order specified in the loan documents.

3. For any loan on which interest is not calculated based on a dailyaccrual or daily interest method and as to which any obligor is nota debtor in a bankruptcy proceeding without reaffirmation,Servicer shall promptly accept and apply all borrower conforming


97/291

A-5

payments, including cure payments (where authorized by law orcontract), unless such application conflicts with contract provisionsor prevailing law. Servicer shall continue to accept trialmodification payments consistent with existing paymentapplication practices. Servicer shall ensure that properly identified

payments shall be posted no more than two business days afterreceipt at the address specified by Servicer. Each monthlypayment shall be applied in the order specified in the loandocuments.

a. Servicer shall accept and apply at least two non-conformingpayments from the borrower, in accordance with thissubparagraph, when the payment, whether on its own orwhen combined with a payment made by another source,comes within $50.00 of the scheduled payment, includingprincipal and interest and, where applicable, taxes andinsurance.

b. Except for payments described in paragraph I.B.3.a,Servicer may post partial payments to a suspense orunapplied funds account, provided that Servicer (1)discloses to the borrower the existence of and any activityin the suspense or unapplied funds account; (2) credits theborrowers account with a full payment as of the date thatthe funds in the suspense or unapplied funds account aresufficient to cover such full payment; and (3) appliespayments as required by the terms of the loan documents.Servicer shall not take funds from suspense or unappliedfunds accounts to pay fees until all unpaid contractualinterest, principal, and escrow amounts are paid andbrought current or other final disposition of the loan.

4. Notwithstanding the provisions above, Servicer shall not berequired to accept payments which are insufficient to pay the fullbalance due after the borrower has been provided written noticethat the contract has been declared in default and the remainingpayments due under the contract have been accelerated.

5. Servicer shall provide to borrowers (other than borrowers inbankruptcy or borrowers who have been referred to or are goingthrough foreclosure) adequate information on monthly billing or

other account statements to show in clear and conspicuouslanguage:

a. total amount due;b. allocation of payments, including a notation if any payment

has been posted to a suspense or unapplied fundsaccount;


98/291

A-6

c. unpaid principal;d. fees and charges for the relevant time period;e. current escrow balance; andf. reasons for any payment changes, including an interest rate

or escrow account adjustment, no later than 21 days beforethe new amount is due (except in the case of loans as towhich interest accrues daily or the rate changes morefrequently than once every 30 days);

Statements as described above are not required to be delivered withrespect to any fixed rate residential mortgage loan as to which theborrower is provided a coupon book.

6. In the statements described in paragraphs I.A.18 and III.B.1.a,Servicer shall notify borrowers that they may receive, upon writtenrequest:

a. A copy of the borrowers payment history since theborrower was last less than 60 days past due;

b. A copy of the borrowers note;c. If Servicer has commenced foreclosure or filed a POC,

copies of any assignments of mortgage or deed of trustrequired to demonstrate the right to foreclose on theborrowers note under applicable state law; and

d. The name of the investor that holds the borrowers loan.7. Servicer shall adopt enhanced billing dispute procedures, including

for disputes regarding fees. These procedures will include:a. Establishing readily available methods for customers to

lodge complaints and pose questions, such as by providingtoll-free numbers and accepting disputes by email;

b. Assessing and ensuring adequate and competent staff toanswer and respond to consumer disputes promptly;

c. Establishing a process for dispute escalation;d. Tracking the resolution of complaints; ande. Providing a toll-free number on monthly billing statements.

8. Servicer shall take appropriate action to promptly remediate anyinaccuracies in borrowers account information, including:

a. Correcting the account information;b. Providing cash refunds or account credits; andc. Correcting inaccurate reports to consumer credit reporting


99/291

A-7

agencies.

9. Servicers systems to record account information shall beperiodically independently reviewed for accuracy andcompleteness by an independent reviewer.

10. As indicated in paragraph I.A.18, Servicer shall send the borroweran itemized plain language account summary setting forth each ofthe following items, to the extent applicable:

a. The total amount needed to reinstate or bring the accountcurrent, and the amount of the principal obligation underthe mortgage;

b. The date through which the borrowers obligation is paid;c. The date of the last full payment;d. The current interest rate in effect for the loan (if the rate is

effective for at least 30 days);

e. The date on which the interest rate may next reset or adjust(unless the rate changes more frequently than once every30 days);

f. The amount of any prepayment fee to be charged, if any;g. A description of any late payment fees;h. A telephone number or electronic mail address that may be

used by the obligor to obtain information regarding themortgage; and

i. The names, addresses, telephone numbers, and Internetaddresses of one or more counseling agencies or programsapproved by HUD(http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm).

11. In active chapter 13 cases, Servicer shall ensure that:a. prompt and proper application of payments is made on

account of (a) pre-petition arrearage amounts and (b) post-petition payment amounts and posting thereof as of thesuccessful consummation of the effective confirmed plan;

b. the debtor is treated as being current so long as the debtor ismaking payments in accordance with the terms of the then-effective confirmed plan and any later effective paymentchange notices; and

c. as of the date of dismissal of a debtors bankruptcy case,entry of an order granting Servicer relief from the stay, orentry of an order granting the debtor a discharge, there is areconciliation of payments received with respect to the
http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfmhttp://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm


100/291

A-8

debtors obligations during the case and appropriatelyupdate the Servicers systems of record. In connection withsuch reconciliation, Servicer shall reflect the waiver of anyfee, expense or charge pursuant to paragraphs III.B.1.c.i orIII.B.1.d.

C. Documentation of Note, Holder Status and Chain of Assignment.1. Servicer shall implement processes to ensure that Servicer or the

foreclosing entity has a documented enforceable interest in thepromissory note and mortgage (or deed of trust) under applicablestate law, or is otherwise a proper party to the foreclosure action.

2. Servicer shall include a statement in a pleading, affidavit ofindebtedness or similar affidavits in court foreclosure proceedingssetting forth the basis for asserting that the foreclosing party hasthe right to foreclose.

3. Servicer shall set forth the information establishing the partysright to foreclose as set forth in I.C.2 in a communication to besent to the borrower as indicated in I.A.18.

4. If the original note is lost or otherwise unavailable, Servicer shallcomply with applicable law in an attempt to establish ownership ofthe note and the right to enforcement. Servicer shall ensure goodfaith efforts to obtain or locate a note lost while in the possessionof Servicer or Servicers agent and shall ensure that Servicer andServicers agents who are expected to have possession of notes orassignments of mortgage on behalf of Servicer adopt proceduresthat are designed to provide assurance that the Servicer or

Servicers agent would locate a note or assignment of mortgage ifit is in the possession or control of the Servicer or Servicers agent,as the case may be. In the event that Servicer prepares or causes tobe prepared a lost note or lost assignment affidavit with respect toan original note or assignment lost while in Servicers control,Servicer shall use good faith efforts to obtain or locate the note orassignment in accordance with its procedures. In the affidavit,sworn statement or other filing documenting the lost note orassignment, Servicer shall recite that Servicer has made a goodfaith effort in accordance with its procedures for locating the lostnote or assignment.

5. Servicer shall not intentionally destroy or dispose of original notesthat are still in force.

6. Servicer shall ensure that mortgage assignments executed by or onbehalf of Servicer are executed with appropriate legal authority,accurately reflective of the completed transaction and properlyacknowledged.


101/291

A-9

D. Bankruptcy Documents.1. Proofs of Claim (POC). Servicer shall ensure that POCs filed

on behalf of Servicer are documented in accordance with theUnited States Bankruptcy Code, the Federal Rules of BankruptcyProcedure, and any applicable local rule or order (bankruptcy

law). Unless not permitted by statute or rule, Servicer shallensure that each POC is documented by attaching:

a. The original or a duplicate of the note, including allindorsements; a copy of any mortgage or deed of trustsecuring the notes (including, if applicable, evidence ofrecordation in the applicable land records); and copies ofany assignments of mortgage or deed of trust required todemonstrate the right to foreclose on the borrowers noteunder applicable state law (collectively, LoanDocuments). If the note has been lost or destroyed, a lostnote affidavit shall be submitted.

b. If, in addition to its principal amount, a claim includesinterest, fees, expenses, or other charges incurred before thepetition was filed, an itemized statement of the interest,fees, expenses, or charges shall be filed with the proof ofclaim (including any expenses or charges based on anescrow analysis as of the date of filing) at least in the detailspecified in the current draft of Official Form B 10(effective December 2011) (Official Form B 10)Attachment A.

c. A statement of the amount necessary to cure any default asof the date of the petition shall be filed with the proof ofclaim.

d. If a security interest is claimed in property that is thedebtors principal residence, the attachment prescribed bythe appropriate Official Form shall be filed with the proofof claim.

e. Servicer shall include a statement in a POC setting forth thebasis for asserting that the applicable party has the right toforeclose.

f. The POC shall be signed (either by hand or by appropriateelectronic signature) by the responsible person underpenalty of perjury after reasonable investigation, statingthat the information set forth in the POC is true and correctto the best of such responsible persons knowledge,information, and reasonable belief, and clearly identify theresponsible persons employer and position or title with the


102/291

A-10

employer.

2. Motions for Relief from Stay (MRS). Unless not permitted bybankruptcy law, Servicer shall ensure that each MRS in a chapter13 proceeding is documented by attaching:

a. To the extent not previously submitted with a POC, a copyof the Loan Documents; if such documents were previouslysubmitted with a POC, a statement to that effect. If thepromissory note has been lost or destroyed, a lost noteaffidavit shall be submitted;

b. To the extent not previously submitted with a POC,Servicer shall include a statement in an MRS setting forththe basis for asserting that the applicable party has the rightto foreclose.

c. An affidavit, sworn statement or Declaration made byServicer or based on information provided by Servicer

(MRS affidavit (which term includes, without limitation,any facts provided by Servicer that are included in anyattachment and submitted to establish the truth of suchfacts) setting forth:

i. whether there has been a default in paying pre-petition arrearage or post-petition amounts (anMRS delinquency);

ii. if there has been such a default, (a) the unpaidprincipal balance, (b) a description of any defaultwith respect to the pre-petition arrearage, (c) a

description of any default with respect to the post-petition amount (including, if applicable, anyescrow shortage), (d) the amount of the pre-petitionarrearage (if applicable), (e) the post-petitionpayment amount , (f) for the period since the date ofthe first post-petition or pre-petition default that iscontinuing and has not been cured, the date andamount of each payment made (including escrowpayments) and the application of each suchpayment, and (g) the amount, date and descriptionof each fee or charge applied to such pre-petition

amount or post-petition amount since the later of thedate of the petition or the preceding statementpursuant to paragraph III.B.1.a; and

iii. all amounts claimed, including a statement of theamount necessary to cure any default on or aboutthe date of the MRS.


103/291

A-11

d. All other attachments prescribed by statute, rule, or law.e. Servicer shall ensure that any MRS discloses the terms of

any trial period or permanent loan modification planpending at the time of filing of a MRS or whether thedebtor is being evaluated for a loss mitigation option.

E. Quality Assurance Systems Review.1. Servicer shall conduct regular reviews, not less than quarterly, of a

statistically valid sample of affidavits, sworn statements,Declarations filed by or on behalf of Servicer in judicialforeclosures or bankruptcy proceedings and notices of default,notices of sale and similar notices submitted in non-judicialforeclosures to ensure that the documents are accurate and complywith prevailing law and this Agreement.

a. The reviews shall also verify the accuracy of the statementsin affidavits, sworn statements, Declarations and

documents used to foreclose in non-judicial foreclosures,the account summary described in paragraph I.B.10, theownership statement described in paragraph I.C.2, and theloss mitigation statement described in paragraph IV.B.13by reviewing the underlying information. Servicer shalltake appropriate remedial steps if deficiencies areidentified, including appropriate remediation in individualcases.

b. The reviews shall also verify the accuracy of the statementsin affidavits, sworn statements and Declarations submitted

in bankruptcy proceedings. Servicer shall take appropriateremedial steps if deficiencies are identified, includingappropriate remediation in individual cases.

2. The quality assurance steps set forth above shall be conducted byServicer employees who are separate and independent ofemployees who prepare foreclosure or bankruptcy affidavits,sworn statements, or other foreclosure or bankruptcy documents.

3. Servicer shall conduct regular pre-filing reviews of a statisticallyvalid sample of POCs to ensure that the POCs are accurate andcomply with prevailing law and this Agreement. The reviews shallalso verify the accuracy of the statements in POCs. Servicer shalltake appropriate remedial steps if deficiencies are identified,including appropriate remediation in individual cases. The pre-filing review shall be conducted by Servicer employees who areseparate and independent of the persons who prepared theapplicable POCs.


104/291

A-12

4. Servicer shall regularly review and assess the adequacy of itsinternal controls and procedures with respect to its obligationsunder this Agreement, and implement appropriate procedures toaddress deficiencies.

II. THIRD-PARTY PROVIDER OVERSIGHT.A. Oversight Duties Applicable to All Third-Party Providers.

Servicer shall adopt policies and processes to oversee and manageforeclosure firms, law firms, foreclosure trustees, subservicers and otheragents, independent contractors, entities and third parties (includingsubsidiaries and affiliates) retained by or on behalf of Servicer thatprovide foreclosure, bankruptcy or mortgage servicing activities(including loss mitigation) (collectively, such activities are ServicingActivities and such providers are Third-Party Providers), including:

1. Servicer shall perform appropriate due diligence of Third-PartyProviders qualifications, expertise, capacity, reputation,

complaints, information security, document custody practices,business continuity, and financial viability.

2. Servicer shall amend agreements, engagement letters, or oversightpolicies, or enter into new agreements or engagement letters, withThird-Party Providers to require them to comply with Servicersapplicable policies and procedures (which will incorporate anyapplicable aspects of this Agreement) and applicable state andfederal laws and rules.

3. Servicer shall ensure that agreements, contracts or oversightpolicies provide for adequate oversight, including measures to

enforce Third-Party Provider contractual obligations, and to ensuretimely action with respect to Third-Party Provider performancefailures.

4. Servicer shall ensure that foreclosure and bankruptcy counsel andforeclosure trustees have appropriate access to information fromServicers books and records necessary to perform their duties inpreparing pleadings and other documents submitted in foreclosureand bankruptcy proceedings.

5. Servicer shall ensure that all information provided by or on behalfof Servicer to Third-Party Providers in connection with providing

Servicing Activities is accurate and complete.6. Servicer shall conduct periodic reviews of Third-Party Providers.

These reviews shall include:

a. A review of a sample of the foreclosure and bankruptcydocuments prepared by the Third-Party Provider, to providefor compliance with applicable state and federal law and


105/291

A-13

this Agreement in connection with the preparation of thedocuments, and the accuracy of the facts contained therein;

b. A review of the fees and costs assessed by the Third-PartyProvider to provide that only fees and costs that are lawful,reasonable and actually incurred are charged to borrowers

and that no portion of any fees or charges incurred by anyThird-Party Provider for technology usage, connectivity, orelectronic invoice submission is charged as a cost to theborrower;

c. A review of the Third-Party Providers processes to providefor compliance with the Servicers policies and proceduresconcerning Servicing Activities;

d. A review of the security of original loan documentsmaintained by the Third-Party Provider;

e. A requirement that the Third-Party Provider disclose to theServicer any imposition of sanctions or professionaldisciplinary action taken against them for misconductrelated to performance of Servicing Activities; and

f. An assessment of whether bankruptcy attorneys complywith the best practice of determining whether a borrowerhas made a payment curing any MRS delinquency withintwo business days of the scheduled hearing date of therelated MRS.

The quality assurance steps set forth above shall be conducted by Serviceremployees who are separate and independent of employees who prepare

foreclosure or bankruptcy affidavits, sworn documents, Declarations orother foreclosure or bankruptcy documents.

7. Servicer shall take appropriate remedial steps if problems areidentified through this review or otherwise, including, whenappropriate, terminating its relationship with the Third-PartyProvider.

8. Servicer shall adopt processes for reviewing and appropriatelyaddressing customer complaints it receives about Third-PartyProvider services.

9. Servicer shall regularly review and assess the adequacy of itsinternal controls and procedures with respect to its obligationsunder this Section, and take appropriate remedial steps ifdeficiencies are identified, including appropriate remediation inindividual cases.


106/291

A-14

B. Additional Oversight of Activities by Third-Party Providers.1. Servicer shall require a certification process for law firms (and

recertification of existing law firm providers) that provideresidential mortgage foreclosure and bankruptcy services forServicer, on a periodic basis, as qualified to serve as a Third-Party

Provider to Servicer, including that attorneys have the experienceand competence necessary to perform the services requested.

2. Servicer shall ensure that attorneys are licensed to practice in therelevant jurisdiction, have the experience and competencenecessary to perform the services requested, and that their servicescomply with applicable rules, regulations and applicable law(including state law prohibitions on fee splitting).

3. Servicer shall ensure that foreclosure and bankruptcy counsel andforeclosure trustees have an appropriate Servicer contact to assistin legal proceedings and to facilitate loss mitigation questions on

behalf of the borrower.4. Servicer shall adopt policies requiring Third-Party Providers to

maintain records that identify all notarizations of Servicerdocuments executed by each notary employed by the Third-PartyProvider.

III. BANKRUPTCY.A. General.

1. The provisions, conditions and obligations imposed herein areintended to be interpreted in accordance with applicable federal,

state and local laws, rules and regulations. Nothing herein shallrequire a Servicer to do anything inconsistent with applicable stateor federal law, including the applicable bankruptcy law or a courtorder in a bankruptcy case.

2. Servicer shall ensure that employees who are regularly engaged inservicing mortgage loans as to which the borrower or mortgagor isin bankruptcy receive training specifically addressing bankruptcyissues.

B. Chapter 13 Cases.1. In any chapter 13 case, Servicer shall ensure that:

a. So long as the debtor is in a chapter 13 case, within 180days after the date on which the fees, expenses, or chargesare incurred, file and serve on the debtor, debtors counsel,and the trustee a notice in a form consistent with OfficialForm B10 (Supplement 2) itemizing fees, expenses, orcharges (1) that were incurred in connection with the claim


107/291

A-15

after the bankruptcy case was filed, (2) that the holderasserts are recoverable against the debtor or against thedebtors principal residence, and (3) that the holder intendsto collect from the debtor.

b. Servicer replies within time periods established underbankruptcy law to any notice that the debtor has completedall payments under the plan or otherwise paid in full theamount required to cure any pre-petition default.

c. If the Servicer fails to provide information as required byparagraph III.B.1.a with respect to a fee, expense or chargewithin 180 days of the incurrence of such fee, expense, orcharge, then,

i. Except for independent charges (Independentcharge) paid by the Servicer that is either (A)specifically authorized by the borrower or (B)

consists of amounts advanced by Servicer in respectof taxes, homeowners association fees, liens orinsurance, such fee, expense or charge shall bedeemed waived and may not be collected from theborrower.

ii. In the case of an Independent charge, the court may,after notice and hearing, take either or both of thefollowing actions:

(a) preclude the holder from presenting theomitted information, in any form, as

evidence in any contested matter oradversary proceeding in the case, unless thecourt determines that the failure wassubstantially justified or is harmless; or

(b) award other appropriate relief, includingreasonable expenses and attorneys feescaused by the failure.

d. If the Servicer fails to provide information as required byparagraphs III.B.1.a or III.B.1.b and bankruptcy law withrespect to a fee, expense or charge (other than anIndependent Charge) incurred more than 45 days before thedate of the reply referred to in paragraph III.B.1.b, thensuch fee, expense or charge shall be deemed waived andmay not be collected from the borrower.

e. Servicer shall file and serve on the debtor, debtors counsel,and the trustee a notice in a form consistent with the currentdraft of Official Form B10 (Supplement 1) (effective


108/291

A-16

December 2011) of any change in the payment amount,including any change that results from an interest rate orescrow account adjustment, no later than 21 days before apayment in the new amount is due. Servicer shall waiveand not collect any late charge or other fees imposed solely

as a result of the failure of the borrower timely to make apayment attributable to the failure of Servicer to give suchnotice timely.

IV. LOSS MITIGATION.These requirements are intended to apply to both government-sponsored andproprietary loss mitigation programs and shall apply to subservicers performingloss mitigation services on Servicers behalf.

A. Loss Mitigation Requirements.1. Servicer shall be required to notify potentially eligible borrowers

of currently available loss mitigation options prior to foreclosure

referral. Upon the timely receipt of a complete loan modificationapplication, Servicer shall evaluate borrowers for all available loanmodification options for which they are eligible prior to referring aborrower to foreclosure and shall facilitate the submission andreview of loss mitigation applications. The foregoingnotwithstanding, Servicer shall have no obligation to solicitborrowers who are in bankruptcy.

2. Servicer shall offer and facilitate loan modifications for borrowersrather than initiate foreclosure when such loan modifications forwhich they are eligible are net present value (NPV) positive and

meet other investor, guarantor, insurer and program requirements.3. Servicer shall allow borrowers enrolled in a trial period plan under

prior HAMP guidelines (where borrowers were not pre-qualified)and who made all required trial period payments, but were laterdenied a permanent modification, the opportunity to reapply for aHAMP or proprietary loan modification using current financialinformation.

4. Servicer shall promptly send a final modification agreement toborrowers who have enrolled in a trial period plan under currentHAMP guidelines (or fully underwritten proprietary modificationprograms with a trial payment period) and who have made therequired number of timely trial period payments, where themodification is underwritten prior to the trial period and hasreceived any necessary investor, guarantor or insurer approvals.The borrower shall then be converted by Servicer to a permanentmodification upon execution of the final modification documents,


109/291

A-17

consistent with applicable program guidelines, absent evidence offraud.

B. Dual Track Restricted.1. If a borrower has not already been referred to foreclosure, Servicer

shall not refer an eligible borrowers account to foreclosure whilethe borrowers complete application for any loan modificationprogram is pending if Servicer received (a) a complete loanmodification application no later than day 120 of delinquency, or(b) a substantially complete loan modification application (missingonly any required documentation of hardship) no later than day120 of delinquency and Servicer receives any required hardshipdocumentation no later than day 130 of delinquency. Servicershall not make a referral to foreclosure of an eligible borrower whoso provided an application until:

a. Servicer determines (after the automatic review inparagraph IV.G.1) that the borrower is not eligible for aloan modification, or

b. If borrower does not accept an offered foreclosureprevention alternative within 14 days of the evaluationnotice, the earlier of (i) such 14 days, and (ii) borrowersdecline of the foreclosure prevention offer.

2. If borrower accepts the loan modification resulting from Servicersevaluation of the complete loan modification application referredto in paragraph IV.B.1 (verbally, in writing (including e-mailresponses) or by submitting the first trial modification payment)

within 14 days of Servicers offer of a loan modification, then theServicer shall delay referral to foreclosure until (a) if the Servicerfails timely to receive the first trial period payment, the last day fortimely receiving the first trial period payment, and (b) if theServicer timely receives the first trial period payment, after theborrower breaches the trial plan.

3. If the loan modification requested by a borrower as described inparagraph IV.B.1 is denied, except when otherwise required byfederal or state law or investor directives, if borrower is entitled toan appeal under paragraph IV.G.3, Servicer will not proceed to aforeclosure sale until the later of (if applicable):

a. expiration of the 30-day appeal period; andb. if the borrower appeals the denial, until the later of (if

applicable) (i) if Servicer denies borrowers appeal, 15 daysafter the letter denying the appeal, (ii) if the Servicer sendsborrower a letter granting his or her appeal and offering aloan modification, 14 days after the date of such offer, (iii)


110/291

A-18

if the borrower timely accepts the loan modification offer(verbally, in writing (including e-mail responses), or bymaking the first trial period payment), after the Servicerfails timely to receive the first trial period payment, and(iv) if the Servicer timely receives the first trial period

payment, after the borrower breaches the trial plan.4. If, after an eligible borrower has been referred to foreclosure, the

Servicer receives a complete application from the borrower within30 days after the Post Referral to Foreclosure Solicitation Letter,then while such loan modification application is pending, Servicershall not move for foreclosure judgment or order of sale (or, if amotion has already been filed, shall take reasonable steps to avoida ruling on such motion), or seek a foreclosure sale. If Serviceroffers the borrower a loan modification, Servicer shall not movefor judgment or order of sale, (or, if a motion has already beenfiled, shall take reasonable steps to avoid a ruling on such motion),

or seek a foreclosure sale until the earlier of (a) 14 days after thedate of the related offer of a loan modification, and (b) the date theborrower declines the loan modification offer. If the borroweraccepts the loan modification offer (verbally, in writing (includinge-mail responses) or by submitting the first trial modificationpayment) within 14 days after the date of the related offer of loanmodification, Servicer shall continue this delay until the later of (ifapplicable) (A) the failure by the Servicer timely to receive thefirst trial period payment, and (B) if the Servicer timely receivesthe first trial period payment, after the borrower breaches the trialplan.

5. If the loan modification requested by a borrower described inparagraph IV.B.4 is denied, then, except when otherwise requiredby federal or state law or investor directives, if borrower is entitledto an appeal under paragraph IV.G.3, Servicer will not proceed to aforeclosure sale until the later of (if applicable):


applicable) (i) if Servicer denies borrowers appeal, 15 daysafter the letter denying the appeal, (ii) if the Servicer sendsborrower a letter granting his or her appeal and offering a

loan modification, 14 days after the date of such offer, (iii)if the borrower timely accepts the loan modification offer(verbally, in writing (including e-mail responses), or bymaking the first trial period payment), after the failure ofthe Servicer timely to receive the first trial period payment,and (iv) if the Servicer timely receives the first trial period


111/291

A-19

payment, after the borrower breaches the trial plan.

6. If, after an eligible borrower has been referred to foreclosure,Servicer receives a complete loan modification application morethan 30 days after the Post Referral to Foreclosure SolicitationLetter, but more than 37 days before a foreclosure sale is

scheduled, then while such loan modification application ispending, Servicer shall not proceed with the foreclosure sale. IfServicer offers a loan modification, then Servicer shall delay theforeclosure sale until the earlier of (i) 14 days after the date of therelated offer of loan modification, and (ii) the date the borrowerdeclines the loan modification offer. If the borrower accepts theloan modification offer (verbally, in writing (including e-mailresponses) or by submitting the first trial modification payment)within 14 days, Servicer shall delay the foreclosure sale until thelater of (if applicable) (A) the failure by the Servicer timely toreceive the first trial period payment, and (B) if the Servicer timely

receives the first trial period payment, after the borrower breachesthe trial plan.

7. If the loan modification requested by a borrower described inparagraph IV.B.6 is denied and it is reasonable to believe that morethan 90 days remains until a scheduled foreclosure date or the firstdate on which a sale could reasonably be expected to be scheduledand occur, then, except when otherwise required by federal or statelaw or investor directives, if borrower is entitled to an appeal underparagraph IV.G.3.a, Servicer will not proceed to a foreclosure saleuntil the later of (if applicable):


applicable) (i) if Servicer denies borrowers appeal, 15 daysafter the letter denying the appeal, (ii) if the Servicer sendsborrower a letter granting his or her appeal and offering aloan modification, 14 days after the date of such offer, (iii)if the borrower timely accepts the loan modification offer(verbally, in writing (including e-mail responses), or bymaking the first trial period payment), after the Servicerfails timely to receive the first trial period payment, and(iv) if the Servicer timely receives the first trial period

payment, after the borrower breaches the trial plan.

8. If, after an eligible borrower has been referred to foreclosure,Servicer receives a complete loan modification application morethan 30 days after the Post Referral to Foreclosure SolicitationLetter, but within 37 to 15 days before a foreclosure sale isscheduled, then Servicer shall conduct an expedited review of the


112/291

A-20

borrower and, if the borrower is extended a loan modificationoffer, Servicer shall postpone any foreclosure sale until the earlierof (a) 14 days after the date of the related evaluation notice, and (b)the date the borrower declines the loan modification offer. If theborrower timely accepts the loan modification offer (either in

writing or by submitting the first trial modification payment),Servicer shall delay the foreclosure sale until the later of (ifapplicable) (A) the failure by the Servicer timely to receive thefirst trial period payment, and (B) if the Servicer timely receivesthe first trial period payment, after the borrower breaches the trialplan.

9. If, after an eligible borrower has been referred to foreclosure, theServicer receives a complete loan modification application morethan 30 days after the Post Referral to Foreclosure SolicitationLetter and less than 15 days before a scheduled foreclosure sale,Servicer must notify the borrower before the foreclosure sale date

as to Servicers determination (if its review was completed) orinability to complete its review of the loan modificationapplication. If Servicer makes a loan modification offer to theborrower, then Servicer shall postpone any sale until the earlier of(a) 14 days after the date of the related evaluation notice, and (b)the date the borrower declines the loan modification offer. If theborrower timely accepts a loan modification offer (either in writingor by submitting the first trial modification payment), Servicershall delay the foreclosure sale until the later of (if applicable) (A)the failure by the Servicer timely to receive the first trial periodpayment, and (B) if the Servicer timely receives the first trial

period payment, after the borrower breaches the trial plan.10. For purposes of this section IV.B, Servicer shall not be responsible

for failing to obtain a delay in a ruling on a judgment or failing todelay a foreclosure sale if Servicer made a request for such delay,pursuant to any state or local law, court rule or customary practice,and such request was not approved.

11. Servicer shall not move to judgment or order of sale or proceedwith a foreclosure sale under any of the following circumstances:

a. The borrower is in compliance with the terms of a trial loanmodification, forbearance, or repayment plan; or

b. A short sale or deed-in-lieu of foreclosure has beenapproved by all parties (including, for example, first lieninvestor, junior lien holder and mortgage insurer, asapplicable), and proof of funds or financing has beenprovided to Servicer.


113/291

A-21

12. If a foreclosure or trustees sale is continued (rather than cancelled)to provide time to evaluate loss mitigation options, Servicer shallpromptly notify borrower in writing of the new date of sale(without delaying any related foreclosure sale).

13. As indicated in paragraph I.A.18, Servicer shall send a statement tothe borrower outlining loss mitigation efforts undertaken withrespect to the borrower prior to foreclosure referral. If no lossmitigation efforts were offered or undertaken, Servicer shall statewhether it contacted or attempted to contact the borrower and, ifapplicable, why the borrower was ineligible for a loan modificationor other loss mitigation options.

14. Servicer shall ensure timely and accurate communication of oraccess to relevant loss mitigation status and changes in status to itsforeclosure attorneys, bankruptcy attorneys and foreclosuretrustees and, where applicable, to court-mandated mediators.

C. Single Point of Contact.1. Servicer shall establish an easily accessible and reliable single

point of contact (SPOC) for each potentially-eligible first lienmortgage borrower so that the borrower has access to an employeeof Servicer to obtain information throughout the loss mitigation,loan modification and foreclosure processes.

2. Servicer shall initially identify the SPOC to the borrower promptlyafter a potentially-eligible borrower requests loss mitigationassistance. Servicer shall provide one or more direct means ofcommunication with the SPOC on loss mitigation-related

correspondence with the borrower. Servicer shall promptlyprovide updated contact information to the borrower if thedesignated SPOC is reassigned, no longer employed by Servicer,or otherwise not able to act as the primary point of contact.

a. Servicer shall ensure that debtors in bankruptcy areassigned to a SPOC specially trained in bankruptcy issues.

3. The SPOC shall have primary responsibility for:a. Communicating the options available to the borrower, the

actions the borrower must take to be considered for theseoptions and the status of Servicers evaluation of the

borrower for these options;b. Coordinating receipt of all documents associated with loan

modification or loss mitigation activities;

c. Being knowledgeable about the borrowers situation andcurrent status in the delinquency/imminent defaultresolution process; and


114/291

A-22

d. Ensuring that a borrower who is not eligible for MHAprograms is considered for proprietary or other investorloss mitigation options.

4. The SPOC shall, at a minimum, provide the following services toborrowers:

a. Contact borrower and introduce himself/herself as theborrowers SPOC;

b. Explain programs for which the borrower is eligible;c. Explain the requirements of the programs for which the

borrower is eligible;

d. Explain program documentation requirements;e. Provide basic information about the status of borrowers

account, including pending loan modification applications,other loss mitigation alternatives, and foreclosure activity;

f. Notify borrower of missing documents and provide anaddress or electronic means for submission of documentsby borrower in order to complete the loan modificationapplication;

g. Communicate Servicers decision regarding loanmodification applications and other loss mitigationalternatives to borrower in writing;

h. Assist the borrower in pursuing alternative non-foreclosureoptions upon denial of a loan modification;

i. If a loan modification is approved, call borrower to explainthe program;j. Provide information regarding credit counseling where

necessary;

k. Help to clear for borrower any internal processingrequirements; and

l. Have access to individuals with the ability to stopforeclosure proceedings when necessary to comply with theMHA Program or this Agreement.

5. The SPOC shall remain assigned to borrowers account andavailable to borrower until such time as Servicer determines ingood faith that all loss mitigation options have been exhausted,borrowers account becomes current or, in the case of a borrowerin bankruptcy, the borrower has exhausted all loss mitigationoptions for which the borrower is potentially eligible and hasapplied.


115/291

A-23

6. Servicer shall ensure that a SPOC can refer and transfer a borrowerto an appropriate supervisor upon request of the borrower.

7. Servicer shall ensure that relevant records relating to borrowersaccount are promptly available to the borrowers SPOC, so that theSPOC can timely, adequately and accurately inform the borrower

of the current status of loss mitigation, loan modification, andforeclosure activities.

8. Servicer shall designate one or more management level employeesto be the primary contact for the Attorneys General, state financialregulators, the Executive Office of U.S. Trustee, each regionaloffice of the U.S. Trustee, and federal regulators forcommunication regarding complaints and inquiries from individualborrowers who are in default and/or have applied for loanmodifications. Servicer shall provide a written acknowledgment toall such inquiries within 10 business days. Servicer shall provide asubstantive written response to all such inquiries within 30 days.Servicer shall provide relevant loan information to borrower and toAttorneys General, state financial regulators, federal regulators, theExecutive Office of the U.S. Trustee, and each U.S. Trustee uponwritten request and if properly authorized. A written complaintfiled by a borrower and forwarded by a state attorney general orfinancial regulatory agency to Servicer shall be deemed to haveproper authorization.

9. Servicer shall establish and make available to Chapter 13 trustees atoll-free number staffed by persons trained in bankruptcy torespond to inquiries from Chapter 13 trustees.

D. Loss Mitigation Communications with Borrowers.1. Servicer shall commence outreach efforts to communicate loss

mitigation options for first lien mortgage loans to all potentiallyeligible delinquent borrowers (other than those in bankruptcy)beginning on timelines that are in accordance with HAMPborrower solicitation guidelines set forth in the MHA Handbookversion 3.2, Chapter II, Section 2.2, regardless of whether theborrower is eligible for a HAMP modification. Servicer shallprovide borrowers with notices that include contact information fornational or state foreclosure assistance hotlines and state housing

counseling resources, as appropriate. The use by Servicer ofnothing more than prerecorded automatic messages in lossmitigation communications with borrowers shall not be sufficientin those instances in which it fails to result in contact between theborrower and one of Servicers loss mitigation specialists.Servicer shall conduct affirmative outreach efforts to informdelinquent second lien borrowers (other than those in bankruptcy)


116/291

A-24

about the availability of payment reduction options. The foregoingnotwithstanding, Servicer shall have no obligation to solicitborrowers who are in bankruptcy.

2. Servicer shall disclose and provide accurate information toborrowers relating to the qualification process and eligibility

factors for loss mitigation programs.

3. Servicer shall communicate, at the written request of the borrower,with the borrowers authorized representatives, including housingcounselors. Servicer shall communicate with representatives fromstate attorneys general and financial regulatory agencies actingupon a written complaint filed by the borrower and forwarded bythe state attorney general or financial regulatory agency toServicer. When responding to the borrower regarding suchcomplaint, Servicer shall include the applicable state attorneygeneral on all correspondence with the borrower regarding suchcomplaint.

4. Servicer shall cease all collection efforts while the borrower (i) ismaking timely payments under a trial loan modification or (ii) hassubmitted a complete loan modification application, and amodification decision is pending. Notwithstanding the above,Servicer reserves the right to contact a borrower to gather requiredloss mitigation documentation or to assist a borrower withperformance under a trial loan modification plan.

5. Servicer shall consider partnering with third parties, includingnational chain retailers, and shall consider the use of select bankbranches affiliated with Servicer, to set up programs to allow

borrowers to copy, fax, scan, transmit by overnight delivery, ormail or email documents to Servicer free of charge.

6. Within five business days after referral to foreclosure, the Servicer(including any attorney (or trustee) conducting foreclosureproceedings at the direction of the Servicer) shall send a writtencommunication (Post Referral to Foreclosure Solicitation Letter)to the borrower that includes clear language that:

a. The Servicer may have sent to the borrower one or moreborrower solicitation communications;

b. The borrower can still be evaluated for alternatives toforeclosure even if he or she had previously shown nointerest;

c. The borrower should contact the Servicer to obtain a lossmitigation application package;

d. The borrower must submit a loan modification application


117/291

A-25

to the Servicer to request consideration for availableforeclosure prevention alternatives;

e. Provides the Servicers contact information for submittinga complete loan modification application, including theServicers toll-free number; and

f. Unless the form of letter is otherwise specified by investordirective or state law or the borrower is not eligible for anappeal under paragraph IV.G.3.a, states that if the borroweris contemplating or has pending an appeal of an earlierdenial of a loan modification application, that he or shemay submit a loan modification application in lieu of his orher appeal within 30 days after the Post Referral toForeclosure Solicitation Letter.

E. Development of Loan Portals.1. Servicer shall develop or contract with a third-party vendor to

develop an online portal linked to Servicers primary servicingsystem where borrowers can check, at no cost, the status of theirfirst lien loan modifications.

2. Servicer shall design portals that may, among other things:a. Enable borrowers to submit documents electronically;b. Provide an electronic receipt for any documents submitted;c. Provide information and eligibility factors for proprietary

loan modification and other loss mitigation programs; and

d. Permit Servicer to communicate with borrowers to satisfyany written communications required to be provided byServicer, if borrowers submit documents electronically.

3. Servicer shall participate in the development and implementationof a neutral, nationwide loan portal system linked to Servicersprimary servicing system, such as Hope LoanPort to enhancecommunications with housing counselors, including using thetechnology used for the Borrower Portal, and containing similarfeatures to the Borrower Portal.

4. Servicer shall update the status of each pending loan modificationon these portals at least every 10 business days and ensure that

each portal is updated on such a schedule as to maintainconsistency.

F. Loan Modification Timelines.1. Servicer shall provide written acknowledgement of the receipt of

documentation submitted by the borrower in connection with afirst lien loan modification application within 3 business days. In


118/291

A-26

its initial acknowledgment, Servicer shall briefly describe the loanmodification process and identify deadlines and expiration datesfor submitted documents.

2. Servicer shall notify borrower of any known deficiency inborrowers initial submission of information, no later than 5

business days after receipt, including any missing information ordocumentation required for the loan modification to be consideredcomplete.

3. Subject to section IV.B, Servicer shall afford borrower 30 daysfrom the date of Servicers notification of any missing informationor documentation to supplement borrowers submission ofinformation prior to making a determination on whether or not togrant an initial loan modification.

4. Servicer shall review the complete first lien loan modificationapplication submitted by borrower and shall determine the

disposition of borrowers trial or preliminary loan modificationrequest no later than 30 days after receipt of the complete loanmodification application, absent compelling circumstances beyondServicers control.

5. Servicer shall implement processes to ensure that second lien loanmodification requests are evaluated on a timely basis. When aborrower qualifies for a second lien loan modification after a firstlien loan modification in accordance with Section 2.c.i of theGeneral Framework for Consumer Relief Provisions, the Servicerof the second lien loan shall (absent compelling circumstancesbeyond Servicers control) send loan modification documents to

borrower no later than 45 days after the Servicer receives officialnotification of the successful completion of the related first lienloan modification and the essential terms.

6. For all proprietary first lien loan modification programs, Servicershall allow properly submitted borrower financials to be used for90 days from the date the documents are received, unless Servicerlearns that there has been a material change in circumstances orunless investor requirements mandate a shorter time frame.

7. Servicer shall notify borrowers of the final denial of any first lienloan modification request within 10 business days of the denial

decision. The notification shall be in the form of the non-approvalnotice required in paragraph IV.G.1 below.

G. Independent Evaluation of First Lien Loan Modification Denials.1. Except when evaluated as provided in paragraphs IV.B.8 or

IV.B.9, Servicers initial denial of an eligible borrowers requestfor first lien loan modification following the submission of a


119/291

A-27

complete loan modification application shall be subject to anindependent evaluation. Such evaluation shall be performed by anindependent entity or a different employee who has not beeninvolved with the particular loan modification.

2. Denial Notice.a. When a first lien loan modification is denied after

independent review, Servicer shall send a written non-approval notice to the borrower identifying the reasons fordenial and the factual information considered. The noticeshall inform the borrower that he or she has 30 days fromthe date of the denial letter declination to provide evidencethat the eligibility determination was in error.

b. If the first lien modification is denied because disallowedby investor, Servicer shall disclose in the written non-approval notice the name of the investor and summarize the

reasons for investor denial.c. For those cases where a first lien loan modification denial

is the result of an NPV calculation, Servicer shall providein the written non-approval notice the monthly grossincome and property value used in the calculation.

3. Appeal Process.a. After the automatic review in paragraph IV.G.1 has been

completed and Servicer has issued the written non-approvalnotice, in the circumstances described in the first sentencesof paragraphs IV.B.3, IV.B.5 or IV.B.7,except when

otherwise required by federal or state law or investordirectives, borrowers shall have 30 days to request anappeal and obtain an independent review of the first lienloan modification denial in accordance with the terms ofthis Agreement. Servicer shall ensure that the borrower has30 days from the date of the written non-approval notice toprovide information as to why Servicers determination ofeligibility for a loan modification was in error, unless thereason for non-approval is (1) ineligible mortgage, (2)ineligible property, (3) offer not accepted by borrower orrequest withdrawn, or (4) the loan was previously modified.

b. For those cases in which the first lien loan modificationdenial is the result of an NPV calculation, if a borrowerdisagrees with the property value used by Servicer in theNPV test, the borrower can request that a full appraisal beconducted of the property by an independent licensedappraiser (at borrower expense) consistent with HAMP


120/291

A-28

directive 10-15. Servicer shall comply with the process setforth in HAMP directive 10-15, including using such valuein the NPV calculation.

c. Servicer shall review the information submitted byborrower and use its best efforts to communicate the

disposition of borrowers appeal to borrower no later than30 days after receipt of the information.

d. If Servicer denies borrowers appeal, Servicers appealdenial letter shall include a description of other availableloss mitigation, including short sales and deeds in lieu offoreclosure.

H. General Loss Mitigation Requirements.1. Servicer shall maintain adequate staffing and systems for tracking

borrower documents and information that are relevant toforeclosure, loss mitigation, and other Servicer operations.

Servicer shall make periodic assessments to ensure that its staffingand systems are adequate.

2. Servicer shall maintain adequate staffing and caseload limits forSPOCs and employees responsible for handling foreclosure, lossmitigation and related communications with borrowers andhousing counselors. Servicer shall make periodic assessments toensure that its staffing and systems are adequate.

3. Servicer shall establish reasonable minimum experience,educational and training requirements for loss mitigation staff.

4.

Servicer shall document electronically key actions taken on aforeclosure, loan modification, bankruptcy, or other servicing file,including communications with the borrower.

5. Servicer shall not adopt compensation arrangements for itsemployees that encourage foreclosure over loss mitigationalternatives.

6. Servicer shall not make inaccurate payment delinquency reports tocredit reporting agencies when the borrower is making timelyreduced payments pursuant to a trial or other loan modificationagreement. Servicer shall provide the borrower, prior to enteringinto a trial loan modification, with clear and conspicuous writteninformation that adverse credit reporting consequences may resultfrom the borrower making reduced payments during the trialperiod.

7. Where Servicer grants a loan modification, Servicer shall provideborrower with a copy of the fully executed loan modificationagreement within 45 days of receipt of the executed copy from the


121/291

A-29

borrower. If the modification is not in writing, Servicer shallprovide the borrower with a written summary of its terms, aspromptly as possible, within 45 days of the approval of themodification.

8. Servicer shall not instruct, advise or recommend that borrowers gointo default in order to qualify for loss mitigation relief.

9. Servicer shall not discourage borrowers from working orcommunicating with legitimate non-profit housing counselingservices.

10. Servicer shall not, in the ordinary course, require a borrower towaive or release claims and defenses as a condition of approval fora loan modification program or other loss mitigation relief.However, nothing herein shall preclude Servicer from requiring awaiver or release of claims and defenses with respect to a loanmodification offered in connection with the resolution of a

contested claim, when the borrower would not otherwise bequalified for the loan modification under existing Servicerprograms.

11. Servicer shall not charge borrower an application fee in connectionwith a request for a loan modification. Servicer shall provideborrower with a pre-paid overnight envelope or pre-paid addresslabel for return of a loan modification application.

12. Notwithstanding any other provision of this Agreement, and tominimize the risk of borrowers submitting multiple loss mitigationrequests for the purpose of delay, Servicer shall not be obligated to

evaluate requests for loss mitigation options from (a) borrowerswho have already been evaluated or afforded a fair opportunity tobe evaluated consistent with the requirements of HAMP orproprietary modification programs, or (b) borrowers who wereevaluated after the date of implementation of this Agreement,consistent with this Agreement, unless there has been a materialchange in the borrowers financial circumstances that isdocumented by borrower and submitted to Servicer.

I. Proprietary First Lien Loan Modifications.1. Servicer shall make publicly available information on its

qualification processes, all required documentation andinformation necessary for a complete first lien loan modificationapplication, and key eligibility factors for all proprietary loanmodifications.

2. Servicer shall design proprietary first lien loan modificationprograms that are intended to produce sustainable modificationsaccording to investor guidelines and previous results. Servicer


122/291

A-30

shall design these programs with the intent of providing affordablepayments for borrowers needing longer term or permanentassistance.

3. Servicer shall track outcomes and maintain records regardingcharacteristics and performance of proprietary first lien loan

modifications. Servicer shall provide a description of modificationwaterfalls, eligibility criteria, and modification terms, on apublicly-available website.

4. Servicer shall not charge any application or processing fees forproprietary first lien loan modifications.

J. Proprietary Second Lien Loan Modif