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EXHIBIT 10.53
FLOOD COMPLIANCE SERVICE AGREEMENT
THIS AGREEMENT is entered into effective March 1, 1997, by and between SMS
Geotrac, a Delaware Corporation located at 3900 Laylin Road, Norwalk, Ohio
("Company") and CitFed Mortgage Corporation of Antlered One Clemens Federal
Centre,America Dayton, Ohio ( "Client")
WHEREAS, Client desires a Flood Compliance program for compliance with
regulations passed pursuant to the 1973 Flood Disaster Protection Act as amended
to determine whether improved real estate securing a loan from Client to a
borrower is or Is not in a FEMA defined Special Flood Hazard Area ("Flood
Area"), and other National Flood Insurance Program (NFIP) information, and
whereas Company is in the business of supplying such information.
WHEREAS, Client wishes to retain Company upon the terms and conditions contained
in this Agreement;
NOW THEREFORE, for mutual consideration, the parties do hereby agree as follows:
A. GEOTRAC NFIP COMPLIANCE PACKET
In consideration of Company's attached fee schedule and pursuant to the terms of
this Agreement, Client will submit mortgage or trust deed loan origination
applications to Company for the purpose of making Flood Determinations and
certain other NFIP Compliance work commencing March 1, 1997. Company will
provide to Client on each application a Geotrac NFIP Compliance Packet
containing the following information:
1. Current-In-Force NFIP Community Status Information
Company will supply Current-In-Force NFIP Community Status Information
consisting of NFIP Community Number, Program or Suspension/Sanction Date, and
NFIP Program Status (Emergency, Regular, Non-Participating,
Suspended/Sanctioned).
2. Detailed FEMA Flood Zone Code
Company will supply the Detailed FEMA Flood Zone Code of the location of the
structure(s) securing the loan. Company will use Client supplied location
information and location information it derives to locate structures. In those
cases where neither Client nor Company has sufficient information to locate the
structure, Company will gather information on-site at its expense. While the
Company assumes no responsibility for incorrect or incomplete location
information supplied by Client, Company will make its best effort to assure
location information is correct and complete.
3. Current-In-Force NFIP Flood Map Panel
Company will identify the Current-In-Force NFIP Flood Map Panel consisting of
the full eleven digit FEMA map number and panel date.
4. Requirement for and Availability of NFIP Flood Insurance
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Company will indicate the requirement for and the availability of NFIP Hood
Insurance.
5. Secondary Market/Government Program Loan Restrictions
Company will designate loans which do not qualify for secondary market resale or
Government program lending based on NFIP Community Status and NFIP Flood Zone
problems.
6. Borrower Notification Forms
On each Geotrac NFIP Compliance Packet Company All supply to Client a borrower
notification form which complies with all federal statutory and regulatory
requirements.
B. FLOOD RISK ASSESSMENT IN NON-PARTICIPATING NON-MAPPED COMMUNITIES
Company Frill prepare an appendix attached to the standard Geotrac NFIP
Compliance Packet containing a flood risk assessment~in NFIP non-participating
non-mapped communities.
C. HMDA DATA ELEMENT
Company win supply HONDA State Code and County Code on all loans, and MSA Code
and 1990 Census Tract on each loan where: a) 1990 Tracts are published, and b)
the Federal Reserve indicates that Tract reporting is requited. All HMDA data
elements will be edited against government supplied information (i.e. Census
Bureau's file of 1990 Census Tract and the Federal Reserve's list of State,
County and MSA designations). In the event of an error Company's obligation
shall be limited to correction of the error.
D. GEOLIFE-OF-LOAN(R)
For mortgage or trust deed loans Company win track both NFIP Community Status
and FEMA Flood Map changes on a daily basis for the lifetime of the loan on
Client's servicing system. Lists (hard copy or electronic) of loans affected win
be generated monthly. From the supplied lists Client win inform Company of loans
still active and Company win generate new Flood Determinations or other reports
as needed. If NFIP Community Status changes affect the required flood insurance
amount of a loan, Company win notify Client of the need to require changed
amounts.
GeoLife-of-Loan(R) service is available for transfer at no additional charge
should Client sell or transfer the loan or servicing. Client is obligated to
inform Company of the sale or transfer and if GeoLife-of-Loan(R) service is to
transfer with the loan(s). In addition, Client shall supply Company a listing of
affected loans, identified by loan number or another mutually agreeable item, in
machine readable form in a mutually agreeable format on a media acceptable to
both parties.
Geotrac NFIP Compliance Packets will be produced free of charge on Client
recaptured refinances where the original loan is covered by GeoLife-of-Loan(R)
service. It is Client's obligation to inform Company that a refinance is covered
by GeoLife-of-Loan(R) service
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and to supply either a copy of the original Geotrac NFIP Compliance Packet or
its identifying number (GeoNumber).
E. Transmissions of Information
Client will transmit requests to Company EDI, fax or via Geotrac's PC based
on-line system GeoCompass(SM) one or more times a day. It is Client's obligation
to supply, at a minimum: loan/application identification number, borrower name;
location-State, County, City/Place, full street address, and 5 digit zip code.
Client shall provide a valid street address. Valid street addresses are defined
as those found in the quarterly update of the USPS Zip +4 data base, and do not
include P.O. Box or Rural Route and box. In those instances where Client does
not supply a valid address, Company will place the order on hold, and inform
Client's ordering location of the invalid address. It is Client's obligation to
supply to Company, as soon as possible, the completed or corrected address
information. Orders placed on hold will be reactivated the day valid address
information is supplied. All turn time and other parameters will be calculated
based on the date valid address information is supplied.
Company will transmit key data elements back to Client EDI or Fax. The full
Geotrac NFIP Compliance Packet can be faxed to Client. Average turn around shall
be two business days. Both parties recognize that it is not in Client's best
interest to emphasize speed of turn around over accuracy of flood
certifications. Each party agrees to work in good faith to meet the data and
turn around needs of the other.
F. PORTFOLIO AUDIT
Client would supply Company with a computer tape in a mutually agreeable format
of its existing mortgage portfolio. It would be Client's obligation to supply,
at a minimum loan/application identification number; date of origination;
borrower none; location State, County, City/Place, full street address, and 5
digit zip code. In addition, Client would supply site surveys, legal
descriptions and other location information when requested by Company and where
Client has this information. Company will perform a Risk-Based Cluster Analysis
audit. This audit process will achieve a statistical risk study of Client's
existing portfolio.
After receiving Risk-Based Cluster Analysis(R), the Client and Company may
exercise the option to proceed with researching those higher risk loans.
Mutually agreed upon higher risk loans would be researched through Company's
loan origination process over a period of time to be determined by Company and
Client at the cost set forth in Section Z. Under title "Audit Loans".
Other customized portfolio audit options, if selected, are documented on
Addendums attached. The Freddie Mac audit procedure will be shown as Addendum
"A" and the Fanny Mae audit procedure will be shown as Addendum "B."
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G. Client Service
It is recognized that it is Clients' obligation to service its customers needs.
However, Company will assist Client by providing the following services:
1. National 800 service for use by Client or Client's customers.
2. Letter of Map Amendment (LOMA/Letter of Map Revision (LOMR) assistance
to Client or Client's customers. Company will supply the necessary
forms and directions and assist the borrower in filing the application.
3. Company will assist Client's customers in finding an agent to write
flood insurance.
4. Advise the Client's customers or Client on ways to lower the flood
premium within the context of investor/lender parameters and regulator
requirements.
5. Company will supply free re-checks on disputed determinations.
6. Company will provide Client with educational seminars on NFIP
Compliance and will answer Client's NFIP Compliance questions.
7. Company will assist Client's customers in procuring elevation
certificates.
8. Company will in general, replace the lender's flood determination
customer service function.
H. USE OF SERVICES
Client agrees that during the term hereof it will use the services of Company
for the purpose of providing Flood Compliance and Flood Determinations for
mortgage or trust deed loan origination applications.
Company understands and agrees that in the event that loans are originated by
the client for which the clients servicing rights are sold to the investor, the
client may be required by the investor to use another flood determination
company. Company agrees that this will not violate the terms of the agreement.
I. COST OF SERVICES
Services to be provided by Company and the cost for services hereunder are
described in Section Z.
J. TERM
This Agreement shall have an initial term of three (3) years, commencing on the
date of this Agreement. The term shall be automatically renewed thereafter for
successive one (l) year periods, unless either patty shall provide to the other
no less than thirty (30) days written notice of the intention to terminate this
Agreement as of the end of the said initial or extended term.
K. TERMINATION
Either party may terminate this Agreement for non-performance or upon voluntary
or involuntary bankruptcy proceedings by the other party. In the event of the
failure of performance by either party hereunder, the non-performing party shall
have a period of
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thirty (30) days from the date of receiving written notice from the other party
to cure any such breach. If such breach is not cured within 30 days the other
party may terminate this contract with 10 days written notice to the
non-performing company.
L. CONFIDENTIAL INFORMATION
Company acknowledges that it may gain access to certain information regarding
Borrowers of Client. Company agrees that this information shall not be disclosed
or made available to any third person or entity, except that in the instance of
loan applications where the applicant(s) is also the owner(s) of the real
property that will secure the loan, the Company may disclose to a third party
the name of a mortgage loan applicant(s) for the sole purpose of obtaining
information necessary to determine the location of buildings located upon the
property that will secure the loan without the specific authorization of Client.
Company agrees that when information is disclosed to a third party, Company will
notify Client of this disclosure.
In like manner Client acknowledges that it may gain access to certain
information regarding business practices, technology and pacing of Company.
Client agrees that this information shall not be disclosed or made available to
any third person or entity, except as necessary for Client to perform its
obligations under this Agreement or for auditing or regulatory purposes without
the specific authorization of Company.
M. USE OF INFORMATION
Information supplied by Company to Client is to be used by Client for Client's
compliance with the Flood Disaster Protection Act of 1973 as amended within the
context of the NFIP and/or for HMDA/CRA compliance and for no other purposes.
N. SYSTEMS USED IN SERVICES
Client has been advised that the computer software used or employed by Company
in making and/or printing Geotrac NFIP Compliance Packets hereunder, and in
tracking the loan portfolio of Client for the Life of Loan service referred to
above if included within this Agreement (collectively referred to as the
"Systems") are and shall remain at all times the sole property of Company and
constitute material and confidential trade secrets of Company. This includes,
without limitation, its source codes, screens, documentation and any
improvements or modifications of the Systems. Client agrees for itself and its
employees to protect the confidentiality of the Systems.
O. INDEMNIFICATION
Flood Zone Determinations made by Company represent a good faith interpretation
of Federal Flood Insurance Rate Maps, or Federal Flood Hazard Boundary Maps, and
information from government and private sources along with the lender. Although
Company does not guarantee the accuracy of these outside information sources, it
does assume responsibility for the completeness and timeliness of this
information.
Company shall hold Client safe and harmless from and against any and all loss or
expense arising from claims or actions by any customer of Client based upon the
negligence of
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Company in interpreting the above referenced Federal Flood Maps and hence
failing to correctly identify and report to Client that a particular insurable
structure securing a loan by Client is within (false flood negative) or outside
(false flood positive) a Federally defined NFIP Special Flood Hazard Area;
provided however, that such liability shall in no event exceed the actual loss
and expenses to client less any insurance or recovery from another source. This
indemnification provision is only applicable to claims made by Client or
customer's of Client against Client, resulting from damage to Client or
customers improved real property caused by flooding as defined by the NFIP
(false flood negative) or customer or Client's payment of unnecessary NFIP flood
insurance premiums (false flood positive), provided Client supplies verbal
notice as soon as is practicable and written notice within 30 days of Client's
fast becoming aware of such claims, and further provided the Company has full
and fair opportunity to participate in any adjusting, settlement negotiation and
litigation.
P. ARBITRATION
Any controversy or claim arising out of or related to this Agreement or the
breach thereof, shall be settled in Ohio by binding arbitration in accordance
with the Arbitration Rules of the American Arbitration Association then
prevailing, and judgment upon the award rendered by the arbitration arbitrators
may be entered in any court having jurisdiction thereof.
Q. INDEPENDENT CONTRACTOR
Company shall perform services under this Agreement as an independent contractor
and not as the agent of Client. Company shall not be authorized to act on behalf
of Client except as provided herein or as otherwise specifically directed by
Client.
R. ENTIRE AGREEMENT
This Agreement constitutes the entire understanding between the parties with
respect to the subject matter of this Agreement. This Agreement may only be
modified by a written document executed by both parties.
S. SEVERABILITY
If any term or provision of this agreement is held by a court of competent
jurisdiction to be unenforceable or void, such term or provision shall be
severed from the remaining provisions and such remaining provisions shall remain
in full force and effect
T. NOTICES
Any notice or other communication to be given under the terms of this Agreement,
shall be in writing and shall be delivered in person, or mailed by certified
mail, return receipt requested, postage prepaid, addressed as follows:
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If to Company: Geotrac
3900 Laylin Rd.
Norwalk, OH 44857
Attention: Daniel J. White
If to Client: CitFed Mortgage Corporation of America
One Citizens Federal Centre
Dayton, OH 45402
Attention: Harry Ness
U. WAIVER
Waiver by one party of the performance of any covenant, condition or obligation
of another party shall not invalidate this Agreement, nor shall such waiver be
considered to be a waiver by such park of any other covenant, condition or
obligation contained in this Agreement.
V. ATTORNEY'S FEES
Removed.
W. TIME IS OF THE ESSENCE
Time is of the essence in performance under this Agent.
X. GOVERNING LAW
This Agreement is made pursuant to and shall be construed and governed by the
laws of the State of Ohio.
Y. HEADINGS
The subject headings of this Agreement are included for the purposes of
convenience only and shall not effect the construction or interpretation of any
of the provisions of this Agreement.
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Z. PRICING
ORIGINATION SERVICES
Geotrac NFIP Compliance Packet $15.00/ea.
GeoLife-of-Loan(R) $ 4.50/additional ea.
HMDA/CRA $ .50/additional ea.
PORTFOLIO SERVICE
Audit Loans $ 8.00/ea.
Life of Loan Lite (reprocessing) $ 8.00/ea.
Freddie Mac Review $ 8.00/ea. per loan or $500.00
which ever is less
Fannie Mae Review $ 8.00/ea. per loan or $500.00
which ever is less
OPTIONAL SERVICES ORDERED ON INDIVIDUAL DETERMINATIONS
Priority Rush Service (Same day service) $ 5.00/additional ea.
If during the term of this contract company contracts with a similar account
(volume blend of business, etc.) at lower prices Company will adjust clients
pricing to match.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Company: Geotrac
By /s/ John Marion
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Title Asst to the President
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Date 4/2/97
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Client: CitFed Mortgage Corporation of America
By /s/ Harry A. Ness
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Title Vice President
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Date 4-22-97
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Addendum "A" Freddie Mac Audit
Company will use Freddie Mac Flood Bulletins 94-18 and 95-3 to establish the
required flood audit requirements from October 1993 forward. Client will furnish
a readable tape with valid address information, in a mutually agreeable format
to Company. Company will process the Client furnished information Through a
process to identify loans affected by FEMA Map Changes and NFIP Community Status
changes since October 2993. It is agreed that any given address determined to be
unreadable or invalid by Company will be returned to Client for further work
before resubmitting such loans. Invalid addresses will not be the Company
responsibility to audit.
Any loans furnished by Client provided information that are within the establish
audit requirements of Bulletins 94-18 and 95-3 will receive a full Flood
Compliance audit from Company. After completion of the Compliance audit, any
such loan will carry a full Flood Compliance guarantee with GeoLife-of-Loan(R).
The cost incurred by Client for the full Flood Compliance review will be $8.00
per loan or a flat cap of $500.00 which ever is less.
Any loans furnished by Client provided information that are outside the
established audit requirements of Bulletins 94-18 and 95-3 will be placed under
GeoLife-of-Loan Lite(R) tracking service and will be subject to a future
reprocessing fee at such time there is a FEMA Map Change or NFIP Community
Status change that affects the loans. No loading fee will be required for this
service at this time.
Any future acquisition of Freddie Mac loans by Client need to be discussed on an
individual basis to establish an agreeable auditing cost. Company would
recommend discussion of future pacing take place prior to final bid for
acquisition.
Attest /s/ Harry A. Ness Date 4-22-97
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Addendum "B" Fannie Mae Audit
Company will use the Fannie Mae Flood Guidelines released on June 8, 1995 to
establish the required flood audit procedures. The June 8, 1995 Guideline does
not require a portfolio audit but does require a full Flood Compliance review
with Life-of-Loan service going forward from June 8, 1995. Client will furnish a
readable tape with valid address information, in a mutually agreeable format to
Company. Company will pass the Client furnished information through a process to
identify loans affected by FEMA Map Changes and NFIP Community Status Changes
since June 8, 1995. It is agreed that any given address determined to be
unreadable or invalid by Company will be returned to Client for further work
before resubmitting such loan. Invalid addresses will not be the Company
responsibility to audit.
Any loans furnished by Client provided information that are within the
established audit requirements of Announcement 95-10 will receive a full Flood
Compliance audit from Company. After completion of the Compliance audit, any
such loan will carry a full Flood Compliance guarantee with GeoLife-of-Loan(R).
The cost incurred by Client for the full Flood Compliance review will be $8.00
per loan or a flat cap of $500,00 which ever is less.
All loans not affected by this compliance audit will be placed under the
GeoLife-of-Loan Lite(R) tracking service and will be subject to a future
reprocessing fee at such time there a FEMA Map Change or NFIP Community Status
Change that affects the loans. No loading fee will be required for this service
at this time.
Any future acquisition of Fannie Mae loans by Client need to be discussed on an
individual basis to establish an agreeable auditing cost. Company would
recommend discussion of future pricing take place prior to final bid for
acquisition.
Attest /s/ Harry A. Ness Date 4-22-97
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