Energy Efficient Mortgage Program DOYLE Loan #: Case #:

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1 Date: MAY 28, 2014 U.S. Department of Housing and Urban Development Energy Efficient Mortgage Program Case #: FHA's Energy Efficient Mortgage program (EEM) helps homebuyers or homeowners save money on utility bills by enabling them to finance the cost of adding energy efficiency features to new or existing housing as part of their FHA insured home purchase or refinancing mortgage. Purpose In 1992, Congress mandated a pilot demonstration of Energy Efficient Mortgages (EEMs) in five states. In 1995, the pilot was expanded as a national program. EEMs recognize that reduced utility expenses can permit a homeowner to pay a higher mortgage to cover the cost of the energy improvements on top of the approved mortgage. FHA EEMs provide mortgage insurance for a person to purchase or refinance a principal residence and incorporate the cost of energy efficient improvements into the mortgage. The borrower does not have to qualify for the additional money and does not make a downpayment on it. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, or savings and loan association, and the mortgage is insured by HUD. FHA insures loans. FHA does not provide loans. Eligibility Requirements The borrower is eligible for a maximum FHA insured loan, using standard underwriting procedures. The borrower must make a 3.5 percent downpayment. This 3.5 percent downpayment is based on the sales price or appraised value. Any upfront mortgage insurance premium can be financed as part of the mortgage. Eligible properties are one- to four-unit existing and new construction. EEMs may be added to some other loan types, including streamline refinances. The cost of the energy efficient improvements that may be eligible for financing into the mortgage is the lesser of A or B as follows: A. The dollar amount of cost-effective energy improvements, plus cost of report and inspections, or B. The lesser of 5% of: The value of the property, or 115% of the median area price of a single family dwelling, or 150% of the conforming Freddie Mac limit. To be eligible for inclusion in the mortgage, the energy efficient improvements must be cost effective, meaning that the total cost of the improvements is less than the total present value of the energy saved over the useful life of the energy improvement. The cost of the energy improvements and estimate of the energy savings must be determined by a home energy rating report that is prepared by an energy consultant using a Home Energy Rating System (HERS). The cost of the energy rating report and inspections may be financed as part of the cost effective energy package. The energy improvements are installed after the loan closes. The lender will place the money in an escrow account. The money will be released to the borrower after an inspection verifies that the improvements are installed and the energy savings will be achieved. The maximum mortgage limit for a single family unit depends on its location, and it is adjusted annually. To find FHA maximum mortgage limits for any county in the country, go to The cost of the eligible energy efficient improvements is added to the mortgage amount. The final loan amount can exceed the maximum mortgage limit by the amount of the energy efficient improvements. For More Information Contact your local HUD office. - BORROWER - ALE R - DATE - FHA Energy Efficient Mortgage Program Page 1 of 1

2 INFORMED CONSUMER CHOICE DISCLOSURE NOTICE Date: MAY 28, 2014 In addition to an FHA-insured mortgage, you may also qualify for other mortgage products offered by your lender. To assure that you are aware of the possible choices in financing, your lender has prepared a comparison of the typical costs of alternative conventional mortgage product(s) below, using representative loan amounts and costs (the actual loan amounts and associated costs shown below will vary from your own mortgage loan transaction). You should study the comparison carefully, ask questions, and determine which product is best for you. The information provided below was prepared as of June, Neither your lender nor FHA warrants that you actually qualify for any mortgage loan offered by your lender. This notice is provided to you to identify the key differences between these mortgage products offered by your lender. This disclosure is not a contract and does not constitute loan approval. Actual mortgage approval can only be made following a full underwriting analysis by your mortgage lender. FHA Financing 203 (b) Fixed Rate Conventional Financing 95% with Mortgage Insurance (MI) 1 Sales Price $100,000 $100,000 2 Mortgage Amount $96,500 ($98,188 w/up-front Mortgage $95,000 Insurance Premium) 3 Closing Costs $2000 $ Downpayment Needed $3500 $ Interest Rate and Term of Loan in Years 5.25%/30 Year Loan 5.25%/30 Year Loan 6 Monthly Payment (principal and interest $ $ only) 7 Loan-to-Value 96.5% 95% 8 Monthly Mortgage Insurance Premium $ $74.42 (first year) 9 Maximum Number of years of Monthly 30 Years Approx. 10 Years Insurance Premium Payments 10 Up-front Mortgage Insurance Premium (if applicable) $1,688 2 (Included in Mortgage Amount, line 2) 1 Monthly mortgage insurance premiums are calculated on the average annual principal balance, i.e., as the amount you owe on the loan decreases each year, so does the amount of the monthly premium. 2 Based on an up-front mortgage insurance premium rate of 1.75%. N/A FHA Mortgage Insurance Premium Information: In addition to an upfront mortgage insurance premium (UFMIP), you may also be charged a monthly mortgage insurance premium. You will pay the monthly premium for either: the first 11 years of the mortgage term, or the end of the mortgage term, whichever occurs first, if your mortgage had an original principal obligation (excluding financed UFMIP) with a loan-to-value (LTV) ratio of less than or equal to 90 percent; or the first 30 years of the mortgage term, or the end of the mortgage term, whichever occurs first, for any mortgage involving an original principal obligation (excluding financed UFMIP) with an LTV greater than 90 percent. You are required to make these payments on your FHA-insured loan unless you refinance or the mortgage is otherwise paid in full. If you were not charged an up-front premium you will pay the monthly premium for the life of the mortgage. I/We have received a copy of this disclosure. - BORROWER - ALE R - DATE Page 1 of 1

3 Borrower(s): Seller(s): ALE R AMENDATORY CLAUSE/REAL ESTATE CERTIFICATION Property Address: 6501 N. KENNEDY AVENUE, FRESNO, CA Case #: Date: MAY 28, 2014 AMENDATORY CLAUSE It is expressly agreed that notwithstanding any other provisions of this contract, the purchaser shall not be obligated to complete the purchase of the property described herein or to incur any penalty by forfeiture of earnest money deposits or otherwise, unless the purchaser has been given, in accordance with HUD/FHA or VA requirements, a written statement by the Federal Housing Commissioner, Department of Veterans Affairs, or a Direct Endorsement lender setting forth the appraised value of the property of not less than $175, The purchaser shall have the privilege and option of proceeding with consummation of the contract without regard to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the Department of Housing and Urban Development will insure. HUD does not warrant the value or condition of the property. The purchaser should satisfy himself/herself that the price and condition of the property are acceptable. - BORROWER - ALE R - DATE - - SELLER - - DATE - The actual dollar amount to be inserted in the amendatory clause is the sales price stated in the contract. If the borrower and seller agree to adjust the sales price in response to an appraised value that is less than the sales price, a new amendatory clause is not required. However, the loan application package must include the original sales contract with the same price as shown on the amendatory clause, along with the revised or amended sales contract. REAL ESTATE CERTIFICATION The borrower, seller, and the selling real estate agent or broker involved in the sales transaction certify that the terms and conditions of the sales contract are true, to the best of their knowledge and belief, and that any other agreement entered into by any parties in connection with the real estate transaction is part of, or attached to, the sales agreement. - BORROWER - ALE R - DATE - - SELLER - - DATE - - LISTING AGENT - - DATE - - SELLING AGENT - - DATE - WARNING: It is a Federal Crime punishable by fine, imprisonment, or both to knowingly make any false statement concerning any of the above facts as applicable under the provision of Title 18, United States Code, Sections 1012 and Page 1 of 1

4 U.S. Department of Housing and Urban Development Federal Housing Administration (FHA) OMB Approval No: (exp. 05/31/2014) Why a Buyer Needs a Home Inspection For Your Protection: Get a Home Inspection A home inspection gives the buyer more detailed information about the overall condition of the home prior to purchase. In a home inspection, a qualified inspector takes an in-depth, unbiased look at your potential new home to: Evaluate the physical condition: structure, construction, and mechanical systems; Identify items that need to be repaired or replaced; and Estimate the remaining useful life of the major systems, equipment, structure, and finishes. Appraisals are Different from Home Inspections An appraisal is different from a home inspection. Appraisals are for lenders; home inspections are for buyers. An appraisal is required to: Estimate the market value of a house; Make sure that the house meets FHA minimum property standards/requirements; and Make sure that the property is marketable. FHA Does Not Guarantee the Value or Condition of your Potential New Home If you find problems with your new home after closing, FHA can not give or lend you money for repairs, and FHA can not buy the home back from you. That is why it is so important for you, the buyer, to get an independent home inspection. Ask a qualified home inspector to inspect your potential new home and give you the information you need to make a wise decision. Radon Gas Testing The United States Environmental Protection Agency and the Surgeon General of the United States have recommended that all houses should be tested for radon. For more information on radon testing, call the toll-free National Radon Information Line at SOS-Radon or As with a home inspection, if you decide to test for radon, you may do so before signing your contract, or you may do so after signing the contract as long as your contract states the sale of the home depends on your satisfaction with the results of the radon test. Be an Informed Buyer It is your responsibility to be an informed buyer. Be sure that what you buy is satisfactory in every respect. You have the right to carefully examine your potential new home with a qualified home inspector. You may arrange to do so before signing your contract, or may do so after signing the contract as long as your contract states that the sale of the home depends on the inspection. HUD CN (6/06)

5 NOTICE TO HOMEOWNER Assumption of HUD/FHA-Insured Mortgages Release of Personal Liability You are legally obligated to make the monthly payments required by your mortgage (deed of trust) and promissory note. The Department of Housing and Urban Development (HUD) has acted to keep investors and non-creditworthy purchasers from acquiring one-to-four family residential properties covered by certain FHA-insured mortgages. There are minor exceptions to the restriction on investors: loans to public agencies and some non-profit organizations, Indian tribes or service persons; and loans under special mortgage insurance programs for property sold by HUD, rehabilitation loans or refinancing of insured mortgages. Your lender can advise you if you are included in one of these exceptions. HUD will therefore direct the lender to accelerate this FHA-insured mortgage loan if all or part of the property is sold or transferred to a purchaser or recipient (1) who will not occupy the property as his or her principal residence, or (2) who does occupy the property but whose credit has not been approved in accordance with HUD requirements. This policy will apply except for certain sales or transfers where acceleration is prohibited by law. When a loan is accelerated, the entire balance is declared "immediately due and payable." Since HUD will not approve the sale of the property covered by this mortgage to an investor or to a person whose credit has not been approved, you, the original homeowner, would remain liable for the mortgage debt even though the title to the property might have been transferred to the new buyer. Even if you sell your home by letting an approved purchaser (that is, a creditworthy owner-occupant) assume your mortgage, you are still liable for the mortgage debt unless you obtain a release from liability from your mortgage lender. FHA-approved lenders have been instructed by HUD to prepare such a release when an original homeowner sells his or her property to a creditworthy purchaser who executes an agreement to assume and pay the mortgage debt and thereby agrees to become the substitute mortgagor. The release is contained in Form HUD , ("Approval of Purchaser and Release of Seller"). You should ask for it if the mortgage lender does not provide it to you automatically when you sell your home to a creditworthy owner-occupant purchaser who executes an agreement to assume personal liability for the debt. When this form is executed, you are no longer liable for the mortgage debt. By signing below, you acknowledge that you understand the above certifications and have received a copy of this document for your records. MAY 28, 2014 Date - BORROWER - ALE R - DATE - Instruction to Lender: For Mortgages subject to the 1989 Act and security instruments containing a new assumption provision, the Notice to Homeowners must be issued (a) to all applicants for FHA-insured mortgages prior to settlement of the transaction, and (b) upon any inquiry by a seller or purchaser for information on HUD's creditworthiness review criteria, or on assumption or release from personal liability procedures generally Page 1 of 1

6 Date: MAY 28, 2014 Borrower's Certification & Authorization Certification In this document, "I," "me," and other first person pronouns refer to the borrower(s), whether singularly or collectively, who applied for the loan referenced above. I, the undersigned, hereby certify the following: 1. I have applied for a mortgage loan from WESTERN BANCORP. In applying for the loan, I have completed a loan application containing various information on the purpose of the loan, the amount and source of the down payment, employment and income information, and assets and liabilities. I certify that all of the information is true and complete. I made no misrepresentations in the loan application or other documents, nor did I omit any pertinent information. 2. I understand and agree that WESTERN BANCORP reserves the right to change the mortgage loan review process to a full documentation program. This may include verifying the information provided on the application with any employer and/or any financial institution. 3. I fully understand that it is a Federal crime punishable by fine or imprisonment, or both, to knowingly make any false statements when applying for a mortgage, as applicable under the provisions of 18 USCA I provided a verbal and/or written authorization to order a consumer credit report and verify other credit related information in connection with my loan application, including but not limited to any mortgage or landlord reference and any other source of credit as determined by WESTERN BANCORP. 5. I further authorize WESTERN BANCORP to order a consumer credit report and verify other credit related information in connection with my loan application, including but not limited to any mortgage or landlord reference and any other source of credit as determined by WESTERN BANCORP. I understand that the purpose for this order is for WESTERN BANCORP to determine my eligibility and creditworthiness for the loan being applied for, as well as for other legitimate purposes associated with my account. Authorization to Release Information To Whom It May Concern: 1. I have applied for a mortgage loan from WESTERN BANCORP. As part of the application process, WESTERN BANCORP and the mortgage guaranty insurer (if any), may verify information contained in my loan application and in other documents required in connection with the loan, including accessing a new credit report, either before the loan is closed or as part of its quality control program. 2. I authorize you to provide to WESTERN BANCORP, and to any investor to whom WESTERN BANCORP may sell my mortgage, and to the mortgage guaranty insurer (if any), any and all information and documentation that they request. Such information includes, but is not limited to, employment history and income; bank, money market, and similar account balances; credit history; and copies of income tax returns. 3. WESTERN BANCORP or any investor that purchases the mortgage, or the mortgage guaranty insurer (if any), may address this authorization to any party named in the loan application. 4. A copy of this authorization may be accepted as an original. 5. Your prompt reply to WESTERN BANCORP, the investor that purchased the mortgage, or the mortgage guaranty insurer (if any) is appreciated. 6. Mortgage guaranty insurer (if any): N/A Authorization to Release Information to Government Agency 1. I, having read the explanation of my rights as set forth below, hereby authorize WESTERN BANCORP to disclose my loan application and other documents required in connection with processing and making my loan including, but not limited to, copies of paystubs, credit reports, tax returns, and financial account (such as a savings or money market account) statements to the Department of Housing and Urban Development/Federal Housing Agency, to any investors to whom WESTERN BANCORP may sell my loan, and to a mortgage guaranty insurer (if any) of the loan for the following purposes: a. Verification that the information contained in the loan application and other documents are correct; b. Conducting any reasonable originating, processing, underwriting, or closing mortgage lending practice executed pursuant to making the loan; and/or c. To use as part of a quality control program. 2. I understand that this particular authorization to release information to a government agency may be revoked by me in writing at any time before my records, as described above, are disclosed and that this particular authorization is valid for no more than three months from the date of my signature. Statement of Customer Rights Under the Right to Financial Privacy Act of 1978 Federal law protects the privacy of your financial records. Before banks, savings and loan associations, credit unions, credit card issuers, or Page 1 of 2

7 other financial institutions may give financial information about you to a Federal Agency, certain procedures must be followed. Authorization To Access Financial Records You may be asked to authorize the financial institution to make your financial records available to the Government. You may withhold your authorization, and your authorization is not required as a condition of doing business with any financial institution. However, in order to be considered for approval by a Federal Agency for the particular type of loan you are applying for, you will need to authorize the release of your financial records to this Federal Agency. If you choose not to, you may still be eligible to obtain a conventional loan through the same financial institution. If you provide authorization, it can be revoked in writing at any time before your records are disclosed. Furthermore, any authorization you provide is effective for only three months, and your financial institution must keep a record of the instances in which it discloses your financial information. Generally, a Federal Agency that obtains your financial records is prohibited from transferring them to another Federal Agency unless it certifies in writing that the transfer is proper and sends a notice to you that your records have been sent to another Agency. Without Your Authorization Without your authorization, a Federal Agency that wants to see your financial records may do so ordinarily only by means of a lawful administrative subpoena or summons, search warrant, judicial subpoena, or formal written request for that purpose. Generally, the Federal Agency must give you advance notice of its request for your records explaining why the information is being sought and telling you how to object in court. The Federal Agency must also send you copies of court documents to be prepared by you with instructions for filling them out. While these procedures will be kept as simple as possible, you may want to consult an attorney before making a challenge to a Federal Agency's request. Exceptions and Penalties In some circumstances, a Federal Agency may obtain financial information about you without advance notice or your authorization. In most of these cases, the Federal Agency will be required to go to court for permission to obtain your records without giving you notice beforehand. In these instances, the court will make the Government show that its investigation and request for your records are proper. When the reason for the delay of notice no longer exists, you will be notified that your records were obtained. If the Federal Agency or financial institution violates the Right to Financial Privacy Act, you may sue for damages or seek compliance with the law. If you win, you may be repaid your attorney's fee and costs. Additional Information If you have any questions about your rights under this law, please contact your lender. Execution By signing below, I hereby certify and authorize (as applicable) the foregoing items of information. - BORROWER - ALE R - DATE - SSN: BORROWER - - DATE - SSN: - BORROWER - - DATE - SSN: - BORROWER - - DATE - SSN: Page 2 of 2