ADVISOR/LENDER APPLICANT ASSISTANCE AGREEMENT This ADVISOR/LENDER APPLICANT ASSISTANCE AGREEMENT (the Agreement ) is made this day of, 200_ by and between Oaktree Funding Corporation, a California Corporation with its principal place of business at 312 N. Mountain Ave, Upland, Ca 92786 (the Lender ) and (the Advisor ) and the Lender (collectively, the Parties and sometimes referred to, individually, the Party ). RECITALS This Agreement, including all attachments hereto, is intended to set forth the terms and conditions of the nonexclusive relationship between Lender and Advisor. Therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Advisor agree as follows: A. Advisor assists applicants ( Applicants ), for a fee (the Applicant Assistance Fee ) that Applicants agree to pay to Advisor, in their applications for one- to four-family residential mortgage loans including reverse mortgage loans intended to be insured by the Federal Housing Administration (the FHA ) under its Home Equity Conversion Mortgage ( HECM ) program ( HECM Reverse Mortgage Loans ); B. Lender makes HECM Reverse Mortgage Loans to eligible Applicants; C. Subject to applicable legal and regulatory requirements, Advisor desires to provide advisory services to Applicants in consideration of the Applicant Assistance Fee pursuant to the terms of this Agreement and the Lender's Guide as amended, supplemented or otherwise modified from time to time; and D. Lender is willing to permit the payment of the Applicant Assistance Fee under the terms and conditions described in this Agreement, which terms and conditions are acceptable to Advisor. The Parties hereto hereby agree as follows: ARTICLE I COVENANTS AND ACKNOWLEDGEMENTS 1.1 Advisor agrees to secure from each Applicant a written agreement describing the assistance that Advisor agrees to provide to the Applicant in connection with the application for a HECM Reverse Mortgage Loan and confirming the amount of the Applicant Assistance Fee the Applicant agrees shall be paid to the Advisor for providing such services. Advisor acknowledges that the Applicant Assistance Fee shall be paid by the Applicant through the disbursement of monies at the closing of the loan and will reduce the origination fee that Lender will receive in connection with the HECM Reverse Mortgage Loan. The written agreement shall be in the form of the Applicant Assistance Agreement ( Applicant Assistance Agreement ) attached hereto as Exhibit A, or as may be otherwise provided in the Guide, and in such other form that is acceptable to Lender in its sole discretion. Page 1 of 7
1.2 Advisor agrees to provide a fully executed original Applicant Assistance Agreement to Lender in connection with each loan application as to which Advisor intends to be paid the Applicant Assistance Fee, and Advisor acknowledges and agrees that such Applicant Assistance Agreement may be provided by Lender to the FHA and others. 1.3 Advisor agrees to provide to Applicants advisory services in good faith and to the best of its ability, which shall include, but not be limited to, the following: (i) educate Applicants regarding reverse mortgages generally, and HECM loans in particular including the increase in the loan balance, growth of the HECM line of credit, and the likely decrease in Applicant s equity over time; (ii) provide Applicants information on lenders that offer reverse mortgages in the Applicant s area, including information on reverse mortgage products available from various lenders; (iii) educate Applicants regarding the different types of loan features available with a HECM loan (term vs. tenure; lump sum, monthly payment, or line of credit, etc.) and explain matters such as set-asides, closing costs (including, but not limited to, the maximum HUD permits a mortgagee to charge for specific loan costs, which costs are the same for every lender and which costs may vary from lender to lender) and the necessity of Applicants making on-going payment of taxes and collateral hazard (homeowner s) insurance after the loan s closing; (iv) advise Applicants generally on the amount of benefit for which he/she/they may qualify under a HECM, and the factors affecting such qualification, including the age of the Applicant and the value of the home, as well as benefits under Medicaid programs; (v) advise Applicants regarding how the condition of their home may require repairs as part of the HECM loan; and explain to Applicants the Applicant s obligation to maintain the structural integrity and good repair and condition of the home after the loan s closing; (vi) educate Applicants regarding unique credit problems associated with HECM loans (for example, federal tax liens, and/or prior issues with FHA); (vii) describe the potential financial implications of a HECM loan for the Applicant; (viii) provide Applicants with telephone numbers and web pages for independent resources to obtain more information regarding reverse mortgages generally, including, providing Applicant the address to the AARP website and toll-free phone number concerning reverse mortgages and the HUD HECM website; (ix) advise Applicants with respect to questions raised by Applicants in completing a HECM Reverse Mortgage Loan application and other forms to be submitted to one or more of reverse mortgage lenders; (x) assist Applicants in dealing with Lender as Lender considers, processes and underwrites Applicant s HECM Reverse Mortgage Loan application; and (xi) maintain regular contact with Applicants through closing of the loan to assist Applicants with their questions (collectively referred to herein as the Applicant Assistance Services ). Advisor agrees to provide its certification to Lender certifying that Applicant Assistance Services have been performed. Such certification shall be in form and content acceptable to Lender as provided in the Guide. 1.4. Advisor agrees to accept, as full payment for the Applicant Assistance Services, the Applicant Assistance Fee, and Advisor agrees that it will not accept or receive, directly or indirectly, any other payment, compensation or thing of value from the Applicant for the provision of the Applicant Assistance Services or otherwise related to the HECM Reverse Mortgage Loan. Advisor agrees and acknowledges that it will not be paid by Lender, but that the Applicant Assistance Fee is the obligation of the Applicant and that the Applicant Assistance Fee may be disbursed as part of the closing of the HECM Reverse Mortgage Loans on which Advisor provides Applicant Assistance Services. 1.5 Lender agrees to retain or collect from the proceeds of each HECM Reverse Mortgage Loan made by Lender to an Applicant an origination fee, denominated as such, in an amount at least equal to the amount of the Applicant Assistance Fee described in the Applicant Assistance Agreement provided to Lender by Advisor. 1.6 As long as doing so is consistent with the applicable requirements of the FHA and the HECM Reverse Mortgage Loan investor and with the Applicable Requirements as defined below, Lender agrees to Page 2 of 7
arrange for the remittance to Advisor of the Applicant Assistance Fee, upon the settlement, closing and funding of each HECM Reverse Mortgage Loan as to which such fee is due and payable to Advisor under the terms of the Applicant Assistance Agreement and this Agreement; provided, however, that, unless otherwise agreed in writing by Lender, in no event (and notwithstanding any provision to the contrary in any Applicant Assistance Agreement) shall the amount of the Applicant Assistance Fee that will be so remitted to the Advisor by the Lender be in excess of the product of: (a) twenty-five percent (25%); and (b) the origination fee for such loan as FHA regulations define that term (the Maximum Lender-Permitted Fee Amount ), for each HECM Reverse Mortgage Loan originated by Lender in connection with which Advisor provides the Applicant Assistance Services to the Applicant (an Advisor-Assisted HECM Loan ). For example, if the origination fee were $3,000, the Maximum Lender-Permitted fee would be 25% of that amount, or $750, if the origination fee were $7,000the Maximum Lender Permitted fee would be 25% of that amount, or $1,750.00. The Parties acknowledge that the Maximum Lender-Permitted Fee Amount describes the maximum amount that Lender agrees that it will remit to Advisor for providing the Applicant Assistance Services in connection with a HECM Reverse Mortgage Loan originated by Lender; that neither the Applicant nor the Advisor is obligated to agree, in the Applicant Assistance Agreement, to the payment to the Advisor of such Maximum Lender-Permitted Fee Amount; and that it is only the fee in the amount agreed to by Applicant in the Applicant Assistance Agreement that will be remitted by Lender to Advisor for providing the Applicant Assistance Services. 1.7 Advisor acknowledges and agrees that Lender shall disclose to Applicants and others the amount and payee of the Applicant Assistance Fee, on the disclosure statements required by law to be provided to the Applicant in connection with Advisor-Assisted HECM Loans, and that Advisor similarly shall make all such disclosures that may similarly be required of it. 1.8 Advisor acknowledges and agrees that the Advisor-Assisted HECM Loan shall be originated by the Lender, and not by the Advisor: that Lender, and not Advisor, shall take the application from the Applicant; and that Advisor shall provide only the Applicant Assistance Services in connection with the origination of such loans. 1.9 Advisor agrees and acknowledges that it shall be engaged independently by the Applicants to whom it agrees in the Applicant Assistance Agreement to provide the Applicant Assistance Services. 1.10 Advisor shall obtain and maintain in full force and effect, and satisfy at all times related eligibility criteria in order to maintain in full force and effect, without material impairment, suspension or revocation, the Advisor s Licenses and Exemptions described in Section 2.1 below or as otherwise described in the Guide. 1.11 Advisor shall comply with all applicable regulatory requirements with respect to the performance of its obligations under this Agreement, including, without limitation, federal and state laws and regulations. Any disclosures required by law or regulation to be made by Advisor shall be made by Advisor. 1.12 Advisor acknowledges that it has read the Guide prior to entering this Agreement and has the ability to perform the activities set forth in this Agreement and the activities set forth in the Guide with respect to the HECM Advisor Program. Advisor hereby agrees to perform all of the obligations of an advisor, and to comply with the terms, conditions, procedures and requirements set forth in the Guide with respect to the HECM Advisor Program, all of the terms and conditions of which are incorporated herein by reference and made a part of this Agreement. 1.13 Advisor agrees that if Applicant rescinds the HECM Reverse Mortgage Loan and Lender refunds the Applicant Assistance Fee to Applicant, Advisor will reimburse Lender the Applicant Assistance Fee within thirty (30) days from the date of the refund. Page 3 of 7
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS OF ADVISOR Advisor represents and warrants to Lender as follows (it being acknowledged that each such representation and warranty is made to Lender as of the date of execution hereof, the date Advisor provides each Applicant Assistance Agreement to Lender, and the date each Advisor-Assisted HECM Loan is closed, funded and settled): 2.1 Advisor is and shall continue to be duly organized, validly existing and in good standing under the laws of its state of incorporation. Advisor has and shall continue to maintain in full force and effect all necessary licenses, approvals, registrations and certifications or is duly exempt there from in all appropriate jurisdictions to conduct all its activities as described in this Agreement and the Applicant Assistance Agreement (collectively, Advisor s Licenses and Exemptions ). 2.2 Advisor has all requisite corporate power, authority and capacity to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement, and any related agreements or instruments and the consummation of the transactions contemplated hereby and thereby, each has been duly and validly authorized by all necessary corporate action. This Agreement and any related agreements or instruments each constitute a valid and legally binding agreement of Advisor enforceable in accordance with its terms. 2.3 The execution, delivery and performance of this Agreement, and any related agreements or instruments by Advisor, its compliance with the terms hereof and thereof, and consummation of the transactions contemplated hereby and thereby, will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by, or require any additional approval under its articles of incorporation, bylaws, or any instrument or agreement to which it is a party or by which it is bound or any state or federal law, rule, or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it. 2.4 No representation, warranty or written statement made by Advisor in this Agreement or in the Applicant Assistance Agreement is inaccurate, untrue, incomplete, or misleading in any material respect. 2.5 Advisor is neither owned nor controlled by Lender, and there is no financial interest between Advisor and Lender except as described in this Agreement. 2.6 Advisor is generally knowledgeable about the HECM Reverse Mortgage Loan programs offered by lenders other than Lender in the area in which it intends to provide the Applicant Assistance Services (if any), which it also recommends to Applicants in appropriate circumstances. ARTICLE III REPRESENTATIONS AND WARRANTIES OF LENDER Lender represents and warrants to Advisor as follows (it being acknowledged that each such representation and warranty is made to Advisor as of the date of execution hereof, the date Advisor provides each Applicant Assistance Agreement to Lender, and the date each Advisor-Assisted HECM Loan is closed, funded and settled): 3.1 Lender is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Lender is approved and/or qualified to transact business in each jurisdiction in which such qualification is deemed necessary, or is exempt from such approval and/or qualification requirements. Page 4 of 7
3.2 Lender has all requisite corporate power, authority and capacity to enter into this Agreement and to perform the obligations required of it hereunder. The execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby, each have been duly and validly authorized by all necessary corporate action. This Agreement constitutes a valid and legally binding agreement of Lender enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, or other laws or equitable principles affecting the enforcement of creditor s rights generally. 3.3 The execution, delivery and performance of this Agreement by Lender, its compliance with the terms hereof and the consummation of the transactions contemplated hereby, will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by, or require any additional approval under its certificate of incorporation, bylaws, or any instrument or agreement to which it is a party or by which it is bound. ARTICLE IV TERMINATION 4.1 This Agreement may be terminated at any time (i) by mutual written consent of the Parties, or (ii) by either Party, for any or no cause, upon thirty (30) calendar days written notice to the other party. 4.2 In the event of the termination of this Agreement in accordance with Section 4.1, Lender shall remit any Applicant Assistance Fee that Lender committed to remit to Advisor prior to such termination, and thereafter this Agreement shall be void and Lender shall not be required to remit any further Applicant Assistance Fees to Advisor. 4.3 No termination of this Agreement shall release any party from liability for its own misrepresentation or for any breach by it prior to such termination of any covenant, agreement, representation or warranty contained herein. ARTICLE V MISCELLANEOUS 5.1 The representations, warranties, covenants and agreements contained herein shall survive the execution of this Agreement, and shall not terminate, notwithstanding the termination of this Agreement. 5.2 This Agreement may not be amended except by an instrument in writing signed by each of the Parties hereto. Such a written amendment must expressly reference this Agreement. However, by its terms, the Guide may be amended or supplemented by Lender from time to time. Advisor agrees to comply with such amendments and/or supplements to the Guide, effective upon the later of (a) receipt of written notice of such amendment(s) or supplement(s), or (b) the effective date specified therein. 5.3 This Agreement shall be governed by, construed and enforced in accordance with federal law and the laws of the State of California, without reference to the choice of law principles thereof. Advisor agrees that any court action arising out of this Agreement shall be brought within the State of California. ADVISOR AND LENDER EACH VOLUNTARILY AND KNOWINGLY WAIVE ANY RIGHT IT HAS TO A JURY TRIAL PURSUANT TO ANY COURT ACTION BROUGHT BY ANY PARTY TO THIS AGREEMENT. 5.4 This Agreement shall be binding upon the Parties hereto and their respective successors and assigns and shall inure to the benefit of the Parties hereto and their respective permitted successors and assigns. Page 5 of 7
Advisor shall not assign this Agreement nor any rights hereunder, including, without limitation, the right to receive compensation or money due hereunder, without the prior express written consent of Lender. Advisor shall not delegate any duty hereunder without the prior express written consent of Lender. 5.5 Advisor is not, and shall not represent to Applicants or third parties that it is acting as an agent for and on behalf of Lender. At all times, Advisor shall act as an independent contracting party. 5.6 Nothing in this Agreement is intended to confer any right, remedy, obligation or liability upon any person other than the Parties hereto and their respective successors and permitted assigns. 5.7 Advisor and Lender each agree to comply with all applicable federal, state and local statutes and regulations respecting the privacy of consumer information including the privacy provisions of the Gramm- Leach-Bliley Act (15 U.S.C. Section 6801, et seq.) and any similar state laws. Each Party acknowledges and agrees that it is required to comply with the information security standards required by the Gramm-Leach-Bliley Act (15 U.S.C. 6801, 6805(b)(1)) and the regulations issued there under (12 C.F.R. Part 40) and with other statutory, legal and regulatory requirements as well as its internal information security program for information protection. Before Advisor provides Lender with non-public personal information concerning Advisor s consumers and customers, Advisor shall obtain authorization from such consumers and customers to forward such information and further permit Lender to share such information with unspecified third parties solely in furtherance of the request by such consumers and customers for financial services. Unless such consumer or customer provides Lender with separate authorization or becomes a consumer or customer of Lender pursuant to applicable law, Lender will not: (a) use the non-public personal information provided by Advisor for any purpose other than to evaluate the consumer s credit inquiry on the terms and conditions selected by Advisor; (b) share any non-public personal information provided by Advisor except (i) to evaluate the consumer s credit inquiry on the terms and conditions selected by Advisor, (ii) pursuant to the exceptions set forth in 15 U.S.C. Section 6802(e) and accompanying regulations, (iii) as required by law, or (iv) in connection with requests or demands by bank examiners. Advisor acknowledges that pursuant to this Agreement it may receive non-public personal information concerning Lender s consumers and customers. With respect to such information, Advisor agrees that it shall not: (a) use the non-public personal information provided by Lender for any purpose other than in connection with the enforcement of its rights or the performance of its duties under this Agreement; and (b) share any non-public personal information provided by Lender other than in connection with (i) the enforcement of its rights or the performance of its duties under this Agreement (ii) pursuant to the exceptions set forth in 15 U.S.C. Section 6802(e) and accompanying regulations, (iii) as required by law, or (iv) in connection with requests or demands by bank examiners. 5.8 In this paragraph, unless otherwise provided, Indemnitor means the party providing the indemnity and Indemnitee means the person or entity receiving the indemnity. In addition to the Parties rights and remedies under applicable law (whether arising at law or in equity), each Party shall indemnify and hold the other party, its successors and assigns, and their respective officers, directors, employees, shareholders, members, agents, contractors, affiliates and subsidiaries harmless from and against, and shall reimburse Indemnitee with respect to, any and all claims, demands, losses, damages, interest, penalties, fines, forfeitures, judgments and expenses (including, without limitation, reasonable fees and disbursements of counsel, and court costs) (any of the foregoing hereinafter referred to as a Claim ), resulting from, relating to or arising out of, whether the result of negligent or intentional conduct or otherwise: (i) any breach of any representation or warranty made by Indemnitor in connection with this Agreement (or in the case of an indemnity running to Lender, the Guide); or, (ii) any breach or failure to perform any covenant or obligation of Indemnitor in connection with this Agreement (or in the case of an indemnity running to Lender, the Guide). In the event Lender discovers through its own investigation or a HUD audit that fees have been charged in excess of those Page 6 of 7
allowed by this Agreement or the FHA, Advisor shall refund such excess fees directly to the Applicant. Advisor shall indemnify Lender for any damages related to any excess charges. 5.9 All notices, requests, demands or other communications that are to be given under this Agreement shall be in writing, addressed to the appropriate Parties and either sent by certified mail, return receipt requested, postage prepaid to the addresses below, or by facsimile to the facsimile numbers below. Any such notice, request, demand or other communication shall be deemed effective upon receipt. If to Lender: Oaktree Funding Corporation 312 N. Mountain Ave Upland, Ca 91786 If to Advisor, notice must be sent to: 5.10 This Agreement may be executed in one or more counterparts, each of which shall constitute an original and all of which shall constitute the same Agreement. Each of the undersigned Parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written. ADVISOR By: Name: Title: LENDER (must be signed by Broker) By: Name: Title: Page 7 of 7