Perdum v. Wells Fargo Home Mortgage et al

MOTION to Dismiss Or, in the Alternative MOTION for Summary Judgment with Brief In Support

N.D. Ga.June 23, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION CYNTHIA PERDUM, Plaintiff, v. WELLS FARGO HOME MORTGAGE; et al., Defendants. : : : : : : : : : : CIVIL ACTION NO. 1:17-CV-972-SCJ-JCF MOTION TO DISMISS OR, IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT COMES NOW the United States of America on behalf of its Secretary of Housing and Urban Development, the Federal Housing Administration, and the Government National Mortgage Association (collectively "federal defendants"), by and through counsel, and pursuant to Rules 12(b)(1), (6) and (h)(3) of the Federal Rules of Civil Procedure, moves this Court to dismiss Cynthia Perdum's claims against the federal defendants. In the alternative, the United States moves the Court, pursuant to Fed.R.Civ.P. 56, to grant the United States a summary judgment on all Case 1:17-cv-00972-SCJ-JCF Document 41 Filed 06/23/17 Page 1 of 4 -2- of plaintiff's claims against the federal defendants. The grounds for these alternative motions are more fully set forth in the memorandum of law, statement of material facts, declarations, and exhibits submitted in support of these motions. Respectfully submitted, JOHN A. HORN UNITED STATES ATTORNEY s/ R. David Powell R. David Powell Assistant United States Attorney Georgia Bar No. 586450 600 United States Courthouse 75 Ted Turner Drive, S.W. Atlanta, Georgia 30303 Voice: (404) 581-6000 Facsimile: (404) 581-4667 R.David.Powell@usdoj.gov Case 1:17-cv-00972-SCJ-JCF Document 41 Filed 06/23/17 Page 2 of 4 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION CYNTHIA PERDUM, Plaintiff, v. WELLS FARGO HOME MORTGAGE; et al., Defendants. : : : : : : : : : : CIVIL ACTION NO. 1:17-CV-972-SCJ-JCF CERTIFICATE OF COMPLIANCE I certify that the documents to which this certificate is attached have been prepared with one of the font and point selections approved by the Court in LR 5.1B for documents prepared by computer. s/ R. David Powell R. David Powell Assistant U.S. Attorney Georgia Bar No. 586450 Case 1:17-cv-00972-SCJ-JCF Document 41 Filed 06/23/17 Page 3 of 4 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION CYNTHIA PERDUM, Plaintiff, v. WELLS FARGO HOME MORTGAGE; et al., Defendants. : : : : : : : : : : CIVIL ACTION NO. 1:17-CV-972-SCJ-JCF CERTIFICATE OF SERVICE I hereby certify that I electronically filed the foregoing DOCUMENT TITLE with the Clerk of Court using the CM/ECF system, which will automatically send email notification of such filing to the following lead counsel: Sam L. Levine, Esq. Daniel P. Moore, Esq. Denise Rainwater Griffin, Esq. Jeremy B. Ross, Esq. This 23rd day of June 2017. s/ R. David Powell R. David Powell Assistant U.S. Attorney Georgia Bar No. 586450 Case 1:17-cv-00972-SCJ-JCF Document 41 Filed 06/23/17 Page 4 of 4 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION CYNTHIA PERDUM, Plaintiff, v. WELLS FARGO HOME MORTGAGE; et al., Defendants. : : : : : : : : : : CIVIL ACTION NO. 1:17-CV-972-SCJ-JCF MEMORANDUM IN SUPPORT OF MOTION TO DISMISS OR, IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT The United States of America,1 pursuant to Rules 12(b)(1), (6) and (h)(3) of the Federal Rules of Civil Procedure, moves this Court to dismiss Cynthia Perdum's 1 Perdum originally sued the Department of Housing and Urban Development ("HUD" or "Department"), the Federal Housing Administration ("FHA"), and the Government National Mortgage Association ("Ginnie Mae" or "GNMA"). After the case was removed to district court, she amended her complaint to substitute the United States for the federal defendants. The FHA was created as an independent agency in 1934 by the National Housing Act. Pub.L. 73-479. The Department of Housing and Urban Development Act of 1965, Pub.L. 89-174 (codified at 42 U.S.C. § 3532), created HUD as an executive department headed by a presidentially appointed Secretary. Congress also established seven presidentially appointed Assistant Secretaries within the new Department, 42 U.S.C. § 3533(a), with one Assistant Secretary designated as the Federal Housing Commissioner "who shall head a Federal Housing Administration within the Department…." 42 U.S.C. § 3533(b) (emphasis added). Congress then amended the National Housing Act to provide that all authority of the former Federal Housing Administration was vested in the Secretary of HUD. Pub.L. 90-19. FHA became an operational unit at the Department level of HUD, not an independent agency that may be sued. Thus, a claim against the FHA is a claim against HUD. Ginnie Mae, however, is a federally chartered corporation controlled by HUD that has agency status. Gov't Nat. Mortg. Ass'n v. Terry, 608 F.2d 614, 620 (5th Cir. 1979); 12 U.S.C. §§ 1716b, 1717(a)(2)(B). Within this brief HUD, FHA, or HUD/FHA may be used interchangeably. The terms "federal defendants" and Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 1 of 35 -2- claims against the federal defendants. The United States, in the alternative, moves the Court to grant the United States a summary judgment pursuant to Fed.R.Civ.P. 56 on all of plaintiff's claims against the federal defendants. BACKGROUND FACTS Cynthia Perdum, the plaintiff, filed her Complaint in DeKalb County, Georgia (Doc. 1, ex. 1 "Complaint"2), and named as defendants a federal department (HUD and the FHA), and a federal agency (Ginnie Mae or GNMA). HUD removed the case to the district court on March 16, 2017. (Doc. 1). Perdum subsequently amended the Complaint to substitute the United States for the federal defendants. (Doc. 5). She asserts claims against the federal defendants for relief under O.C.G.A. § 15-6-9(2) (quia timet action to quiet title), (Complaint ¶¶ 7-9); breach of contract, (Complaint ¶¶ 101-118); torts of wrongful attempted foreclosure, (Complaint ¶¶ 119-122), and negligence, (Complaint ¶¶ 124-128); violation of the Truth in Lending Act, (Complaint ¶¶ 129-137); conspiracy in violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601, et seq., (Complaint ¶¶ 138-148); and violation of the Sherman Act and the Clayton Act, (Complaint ¶¶ 149-151). "United States" will be used to reference the United States, whether acting through HUD/FHA or through Ginnie Mae. 2 Documents in the Court's record will be identified by docket/ECF number ("nn") in the form "Doc. nn" or by alternate citation designated in the first reference to a document. For example, Perdum's pleading at docket entry [1-1] is cited as "Doc. 1-1" and the alternate citation "Complaint." Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 2 of 35 -3- On or about September 21, 2000, Perdum purchased real property commonly known as 5100 King Arthur Lane, Ellenwood, Georgia 30294 ("Subject Property"). See Complaint ¶ 10.3 Perdum obtained a loan4 on the Subject Property, which she identifies as a refinance, on or about November 22, 2002. (Complaint ¶ 10). As consideration for the loan (in the amount of $121,439.00), Perdum granted a security deed on the Subject Property to Washington Mutual Bank, FA (WaMu).5 (Complaint ¶ 10 & Ex. A). On or about December 2, 2006, WaMu assigned (the "Assignment") the Security Deed to Wells Fargo Bank, N.A. (Wells Fargo). (Complaint ¶ 16); (Doc. 27-46). The security deed does not name the United States, HUD/FHA, or Ginnie Mae as a grantee of a security interest in the Subject Property. (Complaint ex. A). Nor does the Assignment grant any interest to the United States, HUD/FHA, or Ginnie 3 Implicit in the Complaint, and expressly declared in the referenced security deed at the center of Perdum's claims, is that Perdum holds title to the Subject Property. Her Limited Warranty Deed is referenced, along with recording information, in the quote within Complaint ¶ 10. A copy of the referenced deed conveying title to Perdum is included in the record at (Doc. 27-2). "A district court may take judicial notice of certain facts without converting a motion to dismiss into a motion for summary judgment. See Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1278 (11th Cir.1999). Public records are among the permissible facts that a district court may consider." Universal Express, Inc. v. U.S. S.E.C., 177 F. App'x 52, 53 (11th Cir. 2006). 4 Within this document, "the Perdum Mortgage" will be used to reference Perdum's loan. 5 The security deed is recorded in the DeKalb County, Georgia, records at Deed Book 13931, pp. 454-63. 6 The Assignment is recorded in the DeKalb County, Georgia, records at Deed Book 19478, p. 358. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 3 of 35 -4- Mae in the Subject Property. (Doc. 27-4). Additionally, the Complaint does not identify any document showing that Wells Fargo assigned the security deed to the United States or anyone else. (Complaint, generally). The Complaint also has no allegations identifying any other document granting the United States a lien or other security interest in the Subject Property. Id. Perdum obtained an "audit" of her title, but it too fails to report any evidence that the United States held a lien or other security interest in the Subject Property when Perdum filed her Complaint or any time thereafter. See Complaint ¶¶ 15-21 & ex. A. A. HUD/FHA's role as insurer of the Perdum Mortgage. HUD, through the FHA, a department level operational unit, provides mortgage insurance for single-family mortgages originated by private lenders. (Def. ex. 1 (Declaration of Daniel Rogers, III) ¶¶ 1, 4); 12 U.S.C. § 1709(b). HUD regulations provide a "Direct Endorsement" process to permit lenders (such as Wells Fargo) to originate mortgages insured by HUD without prior approval or involvement by HUD. Id. ¶ 5; 24 C.F.R. § 203.5. Once a Direct Endorsement lender originates a mortgage, it must provide HUD copies of loan documents for technical reviews. Id. HUD records show that WaMu provided Perdum a loan under the Direct Endorsement process on November 22, 2002. (Def. ex. 1 ¶ 6). HUD subsequently Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 4 of 35 -5- received the loan documents and endorsed the Perdum Mortgage for HUD insurance. Id. "When HUD insures a mortgage under the Direct Endorsement program, HUD is not the mortgage lender, HUD does not service the mortgage, HUD does not have a security interest in the property, and HUD is not considered a secured creditor." Id. ¶ 7. "Under certain limited circumstances, a mortgage originated under the Direct Endorsement program may be assigned to HUD and HUD will step into the shoes of the lender as servicer of the mortgage. Id. If a mortgage insured by HUD under this program has not been assigned to HUD, foreclosure proceedings are under the purview of the servicer of the mortgage, pursuant to its terms. (Def. ex. 1 ¶ 8). The servicer does not need HUD's approval and HUD does not provide the servicer directions concerning foreclosure. Id. When WaMu originated the Perdum Mortgage, HUD was not the lender, HUD was not the servicer of the Perdum Mortgage, and HUD did not hold a security interest in the Subject Property. (Def. ex. 1 ¶ 9). Furthermore, the Perdum Mortgage "has never been assigned to HUD. Thus, at no time has HUD served as the lender or servicer of the Mortgage and HUD has never held a security interest in the [Subject] Property." Id. And HUD has never directed Wells Fargo to foreclose on the Subject Property. Id. ¶ 10. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 5 of 35 -6- B. Ginnie Mae's role as guarantor of Mortgage Backed Security. Ginnie Mae operates a mortgage-backed securities ("MBS") program pursuant to 12 U.S.C. § 1721(g). (Def. ex. 2 (Declaration of Paul St. Laurent, III) ¶ 4). An MBS is a financial instrument that uses packaged mortgages (a "pool") as collateral. Id. ¶ 5 & ex. A at 1. The securities are sold to private investors who then receive monthly payments of principal and interest. Id. ¶ 5 & ex. A, art. II. This program authorizes Ginnie Mae to enter into guaranty agreements with an issuer of qualifying mortgage backed securities (MBS), by which Ginnie Mae guarantees that investors in a MBS covered by a guaranty agreement will receive timely payment of principal and interest.7 (Def. ex. 2 ¶ 4). Wells Fargo is an issuer under the program—issuer identification number 3355. Id. Under the MBS program, the issuer may remove a mortgage that is 90 days or more delinquent from the MBS pool, a process commonly known as repurchasing or liquidating. Id. ¶¶ 6-7. The issuer repurchasing a delinquent mortgage from the pool must pay the MBS investors the full amount of the remaining principal and interest due in accordance with the terms of the security. Id. When a mortgage is liquidated from a pool, Ginnie Mae's interest in the liquidated mortgage terminates. Id. The issuer may use a liquidated mortgage as collateral for another pool ("re- pooling") if any delinquency is remediated. Id. ¶ 7 7 Ginnie Mae I and II Guaranty Agreements are located at Def. ex. 2, ex. A. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 6 of 35 -7- Ginnie Mae's records show that the Perdum Mortgage was included in a pool of mortgages serving as collateral for three separate MBS. (Def. ex. 2 ¶¶ 9-12 & exs. B, D, E). In January 2003, WaMu issued an MBS, covered by a guaranty agreement with Ginnie Mae that was secured by mortgage pool no. 603371. Id. ¶ 10 & ex. B. The Perdum Mortgage, among other mortgages, was included in pool no. 603371. Id. Issuer and servicing responsibility for the Mortgage and the pool containing the Mortgage were subsequently transferred to Wells Fargo, and Wells Fargo removed the Mortgage from pool no. 603371 in February 2010, due to delinquency. (Def. ex 2 ¶ 10 & ex. C, rows labeled "la"). After Wells Fargo removed the Perdum Mortgage from pool 603371 due to delinquency, Wells Fargo placed the Perdum Mortgage into a new security. Ginnie Mae and Wells Fargo entered a subsequent guaranty agreement for a new security backed by the Perdum Mortgage contained in pool no. 676338. (Def. ex 2 ¶ 11 & ex. D). This new security was issued in September 2010. Id. In October 2010, Wells Fargo removed the Perdum Mortgage from pool no. 676338 due to delinquency. (Def. ex 2 ¶ 11 & ex. C, rows labeled "lb"). After Wells Fargo removed the Perdum Mortgage from pool 676338 due to delinquency, Wells Fargo placed the Perdum Mortgage into a new security. "Ginnie Mae and Wells Fargo entered a third subsequent guaranty agreement for a new security backed by the Perdum Mortgage and other mortgages contained in pool no. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 7 of 35 -8- 738469." (Def. ex 2 ¶ 12 & ex. E). Thereafter, in September 2011, Wells Fargo liquidated the Perdum Mortgage from pool no. 738469. (Def. ex 2 ¶ 13 & ex. C, rows labeled "lc"). At that point, the Perdum Mortgage was no longer in any pool of mortgages backing securities guaranteed by Ginnie Mae and Ginnie Mae ceased to have any interest in that mortgage. Id. While the Perdum Mortgage was included in pools 603371, 676338, and 738469, WaMu initially, and Wells Fargo subsequently, was the sole party responsible for servicing the Perdum Mortgage and the sole right to collect any mortgage payments inured solely to them. (Def. ex. 2 ¶ 15). Once Wells Fargo liquidated the Perdum Mortgage from pool 738469 in September 2011, Ginnie Mae's interest in the Perdum Mortgage terminated. With no interest in the Perdum Mortgage, Ginnie Mae is not in privity of contract with Plaintiff, and has no authority to release, to direct or influence foreclosure proceedings, or to direct or influence any post-foreclosure proceedings for the Perdum Mortgage. (Def. ex. 2 ¶ 16). Since September 2011, Ginnie Mae has held no interest, legal or equitable, in the Perdum Mortgage. (Def. ex. 2 ¶¶ 13-14, 16). C. FTCA exhaustion compliance. All tort claims filed with HUD, whether filed directly with the Department or with any of HUD's organizational units, are reviewed and processed by HUD's Regional Counsel for the New England Region. (Def. ex. 3 (Declaration of Miniard Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 8 of 35 -9- Culpepper) ¶¶ 1-2). 24 C.F.R. § Part 17, Subpart A. Thus, claims filed with an organizational unit of HUD, such as Ginnie Mae, must be referred to the New England Regional Counsel for processing. A search of that office's files shows that Perdum has not filed an administrative tort claim with HUD. Id. ¶ 3. DISCUSSION AND ARGUMENT Perdum advances multiple claims against the United States. Each of her claims against the United States is subject to dismissal on jurisdictional grounds or for failure to state a claim. Alternatively, the United States is entitled to summary judgment on her claims. A. Applicable Legal Standards. 1. Motions to Dismiss. "If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed.R.Civ.P. 12(h)(3); Fed.R.Civ.P. 12(b)(1). In determining whether subject matter jurisdiction exists, a court is permitted to investigate widely and has authority to look beyond the pleadings and weigh the evidence to satisfy itself as to the existence of its power to hear the case. "In short, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (per curiam). Additionally, "[i]n the face of a factual challenge to subject Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 9 of 35 -10- matter jurisdiction, the burden is on the plaintiff to prove that jurisdiction exists."8 OSI, Inc. v. United States, 285 F.3d 947, 951 (11th Cir. 2002) (citing Thomson v. Gaskill, 315 U.S. 442, 446 (1942)). The Supreme Court set out the standard for review of a complaint challenged by a motion to dismiss under Fed.R.Civ.P. 12(b)(6) in Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937 (2009) (explaining and applying pleading standard of Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Iqbal instructs that to survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 55 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (quoting Twombly, 55 U.S. at 557). Thus, a court considering a motion to dismiss will "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption 8 A court may also resolve factual questions when deciding a motion to dismiss for failure to exhaust nonjudicial remedies, lack of personal jurisdiction, insufficient service of process, or other matters in abatement. Bryant v. Rich, 530 F.3d 1368, 1376 (11th Cir. 2008). Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 10 of 35 -11- of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Ashcroft v. Iqbal, 556 U.S. at 556 U.S. at 679. Well-pleaded factual allegations are accepted as true for purposes of deciding a motion under Rule 12(b)(6), but allegations that are only conclusions "are not entitled to the assumption of truth." Twombly, 550 U.S. at 570. While the court must afford an assumption of truth to a plaintiff's well-pleaded facts when considering a motion to dismiss for failure to state a claim, the facts are not limited to the body of the Complaint. The Eleventh Circuit Court of Appeals has instructed that [a]t the motion-to-dismiss stage, we consider the facts derived from a complaint's exhibits as part of the plaintiff's basic factual averments. See Solis-Ramirez v. U.S. Dep't of Justice, 758 F.2d 1426, 1430 (11th Cir.1985) (per curiam). We even treat specific facts demonstrated by exhibits as overriding more generalized or conclusory statements in the complaint itself. See Griffin Indus., Inc. v. Irvin, 496 F.3d 1189, 1206 (11th Cir.2007) ("[W]hen the exhibits contradict the general and conclusory allegations of the pleading, the exhibits govern." (citing Associated Builders, Inc. v. Ala. Power Co., 505 F.2d 97, 100 (5th Cir.1974))). AbbVie Products, 713 F.3d at 63. "In ruling upon a motion to dismiss, the district court may consider an extrinsic document if it is (1) central to the plaintiff's claim, and (2) its authenticity is not challenged."9 SFM Holdings, Ltd. v. Banc of America 9 As this Court previously explained: a district court can consider exhibits attached to a Rule 12(b)(6) motion to dismiss without converting said motion into a motion for summary judgment when "the plaintiff refers to certain documents [that are subsequently attached as exhibits to a motion to dismiss] in the complaint and those documents are central to the plaintiff's claim." Brooks v. Blue Cross & Blue Shield of Fla., Inc.,116 F.3d 1364,1369 (11th Cir. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 11 of 35 -12- Securities, LLC, 600 F.3d at 1337 (citing Day v. Taylor, 400 F.3d at 1276; Maxcess, Inc. v. Lucent Technologies, Inc., 433 F.3d at 1340 ("a document outside the four corners of the complaint may still be considered if it is central to the plaintiff's claims and is undisputed in terms of authenticity.")). 2. Motions for Summary Judgment. Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Summary judgment will be entered against a party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The moving party bears the initial burden of asserting the basis of the motion, Celotex, 477 U.S. at 323, and that burden is a light one. The moving party is not required to negate the opponent's claim. Id. Rather, the moving party may discharge this burden merely by "'showing' -- that is, pointing out to the district court -- that there is an absence of evidence to support the non-moving party's 1997). Further, a district court may take judicial notice of public records when reviewing a Rule 12(b)(6) motion to dismiss because such records are capable of accurate and ready determination. See Bryant v. Avado Brands, lnc., I87 F.3d,1271,1280 (11th Cir. 1999)("Several courts have employed this rationale and have expressly reviewed matters of public record in ruling on motions to dismiss and have expressly relied on the information contained in those records as a basis for their rulings."). Perdum v. Wells Fargo Bank, N.A., No. 1:13-CV-1889-SCJ 2 n.1 (N.D. Ga. Feb. 6, 2014)(Order granting Motion to Dismiss (Doc. 14)). Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 12 of 35 -13- case." Id. at 325. When this burden is met, the non-moving party is then required to "go beyond the pleadings and . . . designate 'specific facts showing that there is a genuine issue for trial.'" Id. at 324. Mere allegations or denials of the adverse party's pleadings are not enough to prevent summary judgment. The non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts," and instead must come forward with specific facts showing there is a genuine issue for trial. Matsushita Electrical Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). An issue is not genuine if it is created by evidence that is "merely colorable" or conclusory, or is "not significantly probative." Anderson, 477 U.S. at 249-50; Young v. General Foods Corp., 840 F.2d 825, 828 (11th Cir. 1988). Substantive law will identify which facts are material. Anderson, 477 U.S. at 248. Thus, to survive a motion for summary judgment, the non-moving party must come forward with specific evidence of every element essential to her case, so as to create a genuine issue for trial. Celotex, 477 U.S. at 323. The ultimate inquiry is "whether the evidence presents a sufficient disagreement to require submission to a [trier of fact] or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 13 of 35 -14- B. The Complaint fails to state a cognizable quiet title claim. Although not set out as a separate count or claim for relief, Perdum indicates that she seeks to quiet title to land. (Complaint ¶¶ 7-9). She pleads that the superior court has jurisdiction "in cases respecting title to land," under O.C.G.A. § 15-6-9(2) (quia timet action to quiet title), and that "the subject of this complaint is real property and title thereto." (Complaint ¶¶ 7-9). Actions seeking to adjudicate title to real property in which the United States is alleged to hold a security interest are subject to 28 U.S.C. § 2410, which has waived sovereign immunity for an action to quiet title to property on which the United States has or claims a mortgage or other lien. However, the waiver is expressly conditioned upon compliance with the provisions of that section, including the condition that "[t]he complaint or pleading . . . set forth with particularity the nature of the interest or lien of the United States." 28 U.S.C. § 2410(b). Thus, until the complaining party establishes that the United States has or claims an interest in the subject property, the court in which the action is brought lacks subject matter jurisdiction over the claim for relief against the United States. In this matter, the Complaint does not satisfy those requirements. The facts alleged by Perdum, do not show that the United States has, or had at the time the Complaint was filed, any interest in the property that is the subject of this action, much less show "with particularity the nature of the interest or lien of the United Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 14 of 35 -15- States." 28 U.S.C. § 2410(b). The Complaint, including its exhibits and the documents referenced in the Complaint, establishes the following facts: On or about September 21, 2000, Plaintiff purchased real property commonly known as 5100 King Arthur Lane, Ellenwood, Georgia 30294 ("Subject Property"). See Complaint ¶ 10; (Doc. 27-2). Perdum obtained a loan on the Subject Property on or about November 22, 2002. (Complaint ¶ 10). As consideration for the loan (for $121,439.00), Perdum granted a security deed on the Subject Property to WaMu. (Complaint ¶ 10 & Ex. A). On or about December 2, 2006, WaMu assigned (the "Assignment") the Security Deed to Wells Fargo Bank, N.A. (Wells Fargo). (Complaint ¶ 16); (Doc. 27-4). The security deed does not name the United States, HUD/FHA, Ginnie Mae, or any other federal agency as a grantee of a security interest in the Subject Property. (Complaint ex. A). Nor does the Perdum Mortgage identify the federal government as the lender. (Doc. 27-4). Perdum alleges that she was "told numerous times that GNMA [aka Ginnie Mae] owns the loan." (Complaint at 6 n.3). She further avers that "it has been alleged" that the "owner of the security deed is GNMA." Id. at ¶ 72. However, Perdum has not identified any mortgage documents showing that the United States was the lender for the Subject Property, or that it held a security interest when she Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 15 of 35 -16- filed her Complaint or any time thereafter. Perdum also indicates she paid for an audit of her title, but she does not allege that her audit found evidence that the United States held a lien or other security interest in the Subject Property when she filed her Complaint or any time thereafter. See Complaint ¶¶ 13-21. In sum, Perdum relies on nothing more than her conclusory allegations—that she was told, or it has been alleged, or she believes that the security deed is owned by HUD/FHA or Ginnie Mae10—to support her claims in this case. Given Perdum's inability to present any well-pleaded facts showing that the United States held a secured interest in the Subject Property when she filed her complaint or any time thereafter, as is required to join the United States in an action under 28 U.S.C. § 2410, sovereign immunity bars her quiet title claim against the United States. Even if the merits of Perdum's quiet title claim against this defendant could be reached, her claim must be dismissed because the well-pleaded factual allegations in the Complaint fail to meet the Supreme Court's plausibility standard. Ashcroft v. Iqbal, 129 S. Ct. at 1950. As noted, Perdum's Complaint fails to identify any interest in the Subject Property held by the United States on or after the date she filed her Complaint. Thus, she cannot state a claim against the United States under § 241011 and her quiet title claim must be dismissed. 10 E.g., Complaint at p.6 n.3, ¶¶ I, 72, 105, 131. 11 Under Georgia law, as well, Perdum fails to state a quiet title claim against the United States. Giles v. Swimmer, 290 Ga. 650, 652, (2012) (where bank had no interest in the land at issue at the time it moved for summary judgment, trial court Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 16 of 35 -17- In the event Perdum's allegations in her Complaint supporting her quiet title claim are found sufficient to avoid dismissal for failure to state a claim or lack of jurisdiction, the United States is entitled to summary judgment on this claim. HUD (including the FHA) conducted a records search and determined that the Perdum Mortgage was originated by WaMu under a Direct Endorsement program that authorizes some lenders—including WaMu—to originate HUD-insured mortgages without specific involvement or approval by HUD. (Def. ex. 1 ¶¶ 4-7). Under the Direct Endorsement program, if the mortgage has not been assigned to HUD, "foreclosure proceedings are under the purview of the servicer of the mortgage pursuant to the terms of the mortgage." Id. ¶ 8. The servicer is not required to obtain HUD approval to foreclose and HUD does not direct the servicer to initiate foreclosure. Id. ¶¶ 8, 10. HUD determined that it was neither lender nor servicer of the Perdum Mortgage when it was originated and did not acquire a security interest in the Subject Property, HUD has never served as the lender or servicer of the Perdum Mortgage, the mortgage has never been assigned to HUD, and HUD has never held a security interest in the Subject Property. (Def. ex. 1 ¶ 9). Ginnie Mae also researched its records and determined that it has had no interest in the Perdum Mortgage since September 2011. (Def. ex. 2 at ¶¶ 8-16). Her loan was included in pools of mortgages serving as collateral for mortgage-backed properly granted bank's motion for summary judgment on plaintiff's quiet title claim against it). Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 17 of 35 -18- securities ("MBS"12) on three occasions. (Def. ex. 2 ¶¶ 9-12 & exs. B, D, E). Under the MBS program, the issuer (here WaMu and Wells Fargo) may remove a mortgage from the MBS pool for delinquency for 90 days or more, a process commonly known as repurchasing or liquidating. Id. ¶ 6. The issuer repurchasing a delinquent mortgage from the pool must pay the full amount of the remaining principal and interest due to the MBS investors. Id. When a mortgage is liquidated from a pool, Ginnie Mae's interest terminates. Id. Ginnie Mae's records disclose that each time the Perdum Mortgage was included in a MBS pool, it was subsequently liquidated (repurchased) due to delinquency. (Def. ex. 2 ¶¶ 10, 11, 13 & ex. C). The most recent inclusion of the Perdum Mortgage in a MBS pool was to Pool No. 738469, and Wells Fargo removed the Perdum Mortgage from that pool in September 2011. Id. ¶¶ 12-13 & exs. C, E. At that time, Ginnie Mae's interest in the Perdum Mortgage terminated. Id. ¶ 16. Perdum cannot produce any evidence showing that the United States, through HUD/FHA or Ginnie Mae, has held a security interest in the Subject Property at any time on or after the date she filed her Complaint. Accordingly, the United States is entitled to summary judgment on this claim. 12 MBSs are financial instruments sold to private investors, and for qualified MBSs, such as those relevant here, Ginnie Mae guarantees that investors in MBSs will receive timely payment of principal and interest under a guaranty agreement between Ginnie Mae and the issuer. (Def. ex. 2 at ¶¶ 4-5 & ex. A). Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 18 of 35 -19- C. Breach of contract allegations fail to state a viable claim for relief. In her first enumerated claim, Perdum alleges that the United States has breached a contract with her and that she is entitled to unspecified damages flowing from the alleged breach. (Complaint ¶¶ 101-118 & Wherefore para. "(c)"). She identifies the contract in dispute as the "original Promissory Note and Security Deed." She then alleges that anyone in possession of those documents is in privity of contract with her, and that "the true secured creditor [is the United States.]" (Complaint ¶¶ 101, 103, 105). As previously discussed, Perdum cannot produce any evidence showing that the United States, through HUD/FHA or Ginnie Mae, has held a security interest in the Subject Property at any time after September 2011. Additionally, the United States (including HUD and Ginnie Mae) is not a named party to the contract and plaintiff has not identified any evidence showing that the United States was ever a lender on her contract. Thus, Perdum's pleading and incorporated exhibits fail to meet the plausibility standard of Iqbal, 556 U.S. at 678, and Twombly, 550 U.S. at 570, and the United States is entitled to dismissal of the breach of contract claim. In the event Perdum's allegations in her Complaint supporting her breach of contract claim are found sufficient to avoid dismissal for failure to state a claim, the United States is entitled to summary judgment on this claim. The United States has shown that it has possessed no security interest in the Subject Property since September 2011. HUD determined that it was neither lender nor servicer of the Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 19 of 35 -20- Perdum Mortgage when it was originated and it did not acquire a security interest in the Subject Property, HUD has never served as the lender or servicer of the Perdum Mortgage, the mortgage has never been assigned to HUD, and HUD has never held a security interest in the Subject Property. (Def. ex. 1 ¶ 9). Ginnie Mae also researched its records and determined that it has had no interest in the Perdum Mortgage since September 2011. (Def. ex. 2 at ¶¶ 8-16). Furthermore, Perdum identifies the alleged breaches as actions by Wells Fargo, contending that the Secretary of HUD did not know "what was going on with her loan," and she apparently contends that the United States is liable for Wells Fargo's supposed breaches because she "alleges … the true secured creditor [is] HUD, FHA, and\or GNMA." (Complaint ¶¶ 106-114). However, neither the Complaint's allegations nor its attachments identify any evidence to support Perdum's general allegations of breaches of her mortgage documents or to show that any such breaches are imputed to the United States. Therefore, the United States is entitled to summary judgment on this claim. D. TILA claims against the United States are barred by sovereign immunity and fail to state a claim. Under the doctrine of sovereign or governmental immunity, the United States of America is immune from suit except to the extent that immunity has been expressly waived by statute. Lehman v. Nakshian, 453 U.S. 156, 160 (1981). The United States can be sued only by its permission, and only by procedures set forth Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 20 of 35 -21- by Congress. United States v. Dalm, 494 U.S. 596 (1990); Lehman, 453 U.S. at 160; United States v. Testan, 424 U.S. 392, 399 (1976). Thus, a lawsuit against the United States must be brought in compliance with a specific statute that expressly waives sovereign immunity, Testan, 424 U.S. at 399, and the terms of the United States' consent to be sued in any court define that court's jurisdiction to entertain the suit. United States v. Sherwood, 312 U.S. 584, 586 (1941). Such a waiver of sovereign immunity must be strictly construed in favor of the sovereign and may not be extended beyond the explicit language of the statute. Soriano v. United States, 352 U.S. 270 (1957); Fostvedt v. United States, 978 F.2d 1201, 1202 (10th Cir. 1992), cert. denied, 113 S. Ct. 1589 (1993); see United States Department of Energy v. Ohio, 503 U.S. 607 (1992). Absent an express statutory waiver, a court lacks subject matter jurisdiction to entertain an action against the United States, and the action must be dismissed. United States v. Sherwood, 312 U.S. at 586. Where a plaintiff seeks monetary relief against the United States, the Supreme Court instructs that "we have been particularly alert to require a specific waiver of sovereign immunity before the United States may be held liable for them." U.S. v. Idaho ex rel. Director, Idaho Dept. of Water Resources, 508 U.S. 1, 8-9 (1993). In sum, courts may exercise subject matter jurisdiction over claims against the United States only to the extent sovereign immunity has been waived and the plaintiff has met the conditions of the waiver. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 21 of 35 -22- In Claim Five of the Complaint, Perdum alleges that Wells Fargo and "whoever owns the loan whether HUD, FHA, GNMA, or an unknown entity" violated the Truth in Lending Act (TILA) through Wells Fargo's alleged failure to identify the owner of her loan or provide a payoff statement. (Complaint ¶¶ 129- 132). Although Perdum indicates she does not know who actually owns the loan, id. ¶ 131, she seeks monetary relief against the United States in the form of civil penalties available under the TILA, 15 U.S.C. § 1640. Id. ¶¶ 136 & Wherefore para. "g)." However, she has not identified a waiver of sovereign immunity for her TILA claim against the United States. Section 1640(a) provides a "civil penalty" against a "creditor" for certain TILA violations. Sellers v. Wollman, 510 F.2d 119, 122 (5th Cir. 1975) (citing Mourning v. Family Publications Service, Inc., 411 U.S. 356, 376 (1973); accord Williams v. Public Finance Corp., 609 F.2d 1179, 1183-84 (5th Cir. 1980). Creditor is defined as only "a person who both (1) regularly extends … consumer credit [subject to] more than four installments or … a finance charge …, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness…." 15 U.S.C.A. § 1602. Perdum identifies the person to whom her debt was initially payable as WaMu, not one of the federal defendants. Since none of the federal defendants is a "creditor" for purposes of the TILA, plaintiff fails to state a plausible claim against any federal Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 22 of 35 -23- defendant under 15 U.S.C. § 1640(a), and the United States is entitled to dismissal of the TILA claim. Perdum's TILA claim against the United States is also barred by sovereign immunity. Congress expressly declined to waive sovereign immunity for monetary relief under TILA. Congress instead provided that "[n]o civil . . . penalty provided under this subchapter13 for any violation thereof may be imposed upon the United States or any department or agency thereof . . . ." 15 U.S.C. § 1612(b). Thus, sovereign immunity bars plaintiffs' TILA claim against the federal defendants. Dinsmore-Thomas v. F.D.I.C., 139 F.3d 904 (9th Cir. 1998). Additionally, even if Perdum could seek monetary penalties against any federal defendant under the TILA, her claim is time barred. Claims for civil penalties under the TILA are subject to a one-year statute of limitations. 15 U.S.C. § 1640(e). All TILA claims must be brought "within one year from the date of the occurrence of the violation." 15 U.S.C. § 1640(e). "The violation 'occurs' when the transaction is consummated." Smith v. American Fin. Sys., Inc., 737 F.2d 1549, 1552 (11th Cir. 1984); Dixon v. Countrywide Home Loans, Inc., 710 F. Supp. 2d 1325, 1333 (S.D. Fla. 2010). Perdum filed suit on February 15, 2017. (Complaint). Her Complaint shows that she executed the mortgage documents—promissory note and security deed to the Subject Property—on November 22, 2002. (Complaint. ¶10 & 13 Title 15, Chapter 41, Subchapter I, §§ 1601 - 1667f. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 23 of 35 -24- ex. A). The Complaint against the federal defendants was filed more than one year (more than 14 years) after the consummation of the transaction. Thus, any claim for damages Perdum may have had against the United States is time barred and should be dismissed with prejudice. E. FTCA claims against the United States are barred by sovereign immunity and fail to state a claim. Perdum advances tort claims against the United States for wrongful foreclosure,14 (Complaint ¶¶ 119-122), and negligence, id. ¶¶ 124-128, and she seeks actual damages, punitive/exemplary damages, 15 and attorney's fees, id. at Wherefore paras. "(d)," "f)." Her complaint fails to state a claim for relief against the United States. Additionally, her failure to comply with jurisdictional requirements of the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 2671, et seq., deprives the Court of jurisdiction over her claims against the United States. The FTCA provides a partial waiver of sovereign immunity for tort claims for money damages that allege injury caused by the negligent or wrongful act or omission of an employee of the government, and the FTCA is the exclusive remedy against the United States. 28 U.S.C. § 2679; 28 U.S.C. § 1346(b); Besada v. U.S. Citizenship & Immigration Servs., 645 F. App'x 879, 880 (11th Cir. 2016); Gregory 14 Under Georgia law, wrongful foreclosure is a cause of action sounding in tort. Calhoun first National Bank v. Dickens, 264 Ga. 285, 286 (1994); Tower Financial Services, Inc. v. Smith, 204 Ga.App. 910, 916 (1992). 15 Georgia law provides that "the term 'punitive damages' is synonymous with the terms 'vindictive damages,' 'exemplary damages ….'" O.C.G.A. § 51-12-5.1. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 24 of 35 -25- v. Mitchell, 634 F.2d 199, 203 (5th Cir. 1981). The FTCA authorizes suit for tort claims only against the United States, not its agencies. See 28 U.S.C. § 2679(a). Thus, "if a suit is cognizable under § 1346(b) of the FTCA, the FTCA remedy is exclusive and the federal agency cannot be sued in its own name." F.D.I.C. v. Meyer, 510 U.S. 471, 476 (1994) (internal quotation marks omitted). Additionally, the FTCA expressly limits the courts that are granted subject matter jurisdiction over FTCA claims. The FTCA provides that Subject to the provisions of chapter 171 of this title, the district courts, together with the United States District Court for the District of the Canal Zone and the District Court of the Virgin Islands, shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages, accruing on and after January 1, 1945, for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred. 28 U.S.C.A. § 1346(b)(1) (emphasis added). Thus, Congress has not provided state courts with jurisdiction to hear FTCA claims. See Zelaya v. United States, 781 F.3d 1315, 1322 (11th Cir. 2015) ("Translated, any time the federal government is sued based on the act of an employee performed within the scope of his employment duties, federal district courts will have exclusive jurisdiction of such claims." (emphasis in original)). In this case, the plaintiff sued federal agencies—HUD and Ginnie Mae—for tort claims, and she filed her tort claims in a state court. She did not, and cannot, Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 25 of 35 -26- identify any provision of law granting the state's superior court jurisdiction over a federal agency on a tort claim. The Eleventh Circuit recently reaffirmed that when a tort claim is brought against a federal agency, the district court lacks jurisdiction to consider the claim. Goble v. Ward, 628 Fed. Appx. 692 (11th Cir. 2015). The Goble court explained: The FTCA's waiver applies only to the federal government and not to agencies within the federal government. FDIC v. Craft, 157 F.3d 697, 706 (9th Cir. 1998) ("[A]n agency itself cannot be sued under the FTCA."); Galvin v. Occupational Safety & Health Admin., 860 F.2d 181, 183 (5th Cir. 1988) ("In view of this explicit statutory language, the courts have consistently held that an agency or government employee cannot be sued eo nomine under the Federal Tort Claims Act. Thus, an FTCA claim against a federal agency or employee as opposed to the United States itself must be dismissed for want of jurisdiction." (citation omitted)). Goble, 628 Fed. Appx. at 698 (emphasis added). Plaintiff sued a federal agency, not the United States, and sued in a state court. Therefore, her FTCA claims should be dismissed for want of jurisdiction. This is so even if she had properly named the United States as defendant in the state court pleading, by application of the derivative jurisdiction doctrine. E.g., Lopez v. Sentrillon Corp., 749 F.3d 347, 351 (5th Cir. 2014), as revised (Apr. 28, 2014) (Derivative jurisdiction doctrine applies to removal under federal removal statute. "Sentrillion raised its third-party claims against the United States in state court, but federal sovereign immunity deprived the state court of subject matter jurisdiction. The United States has waived its sovereign immunity to tort liability only under the FTCA, which grants exclusive jurisdiction over such Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 26 of 35 -27- claims to federal courts in 28 U.S.C. 1346(b)(1). . . . [We conclude] that, 'for whatever reasons[,] Congress intended to keep the [derivative jurisdiction] doctrine in place' for removals other than those under § 1441. Thus, we affirm the district court's holding that it was bound by extant Supreme Court precedent to dismiss Sentrillion's claims against the United States under the derivative jurisdiction doctrine."). Since plaintiff filed suit in a state court without jurisdiction of FTCA claims, the derivative jurisdiction doctrine requires dismissal of the FTCA claims. Additionally, a federal court lacks subject matter jurisdiction over an FTCA claim unless, before instituting suit, "the claimant shall have first presented the claim to the appropriate Federal agency and his claim shall have been finally denied by the agency in writing and sent by certified or registered mail," or until at least six months have passed after the claim was presented to the appropriate agency. 28 U.S.C. § 2675(a); McNeil v. United States, 508 U.S. 106, 111-13 (1993); Turner ex rel. Turner v. United States, 514 F.3d 1194, 1200 (11th Cir. 2008). Thus, "[b]ecause '[t]he FTCA bars claimants from bringing suit in federal court until they have exhausted their administrative remedies,' the district court lacks subject matter jurisdiction over prematurely filed suits." Turner ex rel. Turner v. United States, 514 F.3d at 1200 (quoting McNeil v. United States, 508 U.S. 106, 113 (1993)).16 16 The Supreme Court has held that the time limits applicable to FTCA claims are subject to equitable tolling and not jurisdictional. United States v. Wong, --- U.S. ----, 135 S.Ct. 1625, 1638 (2015). However, Wong did not overrule McNeil's holding that "[t]he FTCA bars claimants from bringing suit in federal court until they have exhausted their administrative remedies." McNeil, 508 U.S. at 113. That the time Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 27 of 35 -28- The complaint does not allege that plaintiff met the jurisdictional prerequisite of exhausting FTCA administrative remedies for her claim prior to filing suit. Furthermore, HUD has shown by declaration that FTCA claims against any organizational unit of HUD (including Ginnie Mae) must be referred to HUD's Regional Counsel for the New England Region for processing, and a search of files in that office disclosed that Perdum has not filed an administrative FTCA claim with HUD. (Def. ex. 3 ¶¶ 1-3). The Supreme Court has made clear that "[w]here Congress specifically mandates, exhaustion is required." McCarthy v. Madigan, 503 U.S. 140, 144, 112 S.Ct. 1081, 1088, 117 L.Ed.2d 291 (1992). Thus, due to plaintiff's failure to exhaust her administrative remedies under the FTCA, the district court lacks jurisdiction to hear plaintiff's tort claims against the United States. McNeil, 508 U.S. at 113, Caldwell v. Klinker, 646 F. App'x 842, 846 (11th Cir. 2016); Turner, 514 F.3d at 1200.17 Even if the requirement for presentment and exhaustion of an administrative tort claim before filing suit in district court could be held to be non-jurisdictional, limits for presenting an administrative claim or filing suit under the FTCA may be subject to tolling on equitable grounds does not alter the statutory prohibition against filing suit under the FTCA until the claimant has first exhausted administrative remedies. 17 Accord George v. E. Orange Hous. Auth., No. 16-4269, 2017 WL 1437200, at *2 (3d Cir. 2017); Baker v. McHugh, No. 15-41439, 2016 WL 7046615, at *4 (5th Cir. 2016), cert. denied sub nom. Baker v. Speer, —- U.S. ——, 137 S. Ct. 1353 (2017); Lopez v. United States, 823 F.3d 970, 976 (10th Cir. 2016). Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 28 of 35 -29- the statutory language still makes exhaustion of administrative remedies a precondition to filing suit. 28 U.S.C. § 2675(a). Therefore, even if failure to exhaust administrative remedies provided by the HUD is not a jurisdictional bar, Perdum's complaint nonetheless fails to state a claim for which relief may be granted due to her failure to exhaust administrative tort remedies and her FTCA claims should be dismissed under Fed.R.Civ.P. 12(b)(6).18 Finally, the FTCA "exempts from the waiver of sovereign immunity certain types of recovery, such as prejudgment interest and punitive damages." United States v. Kwai Fun Wong, —-U.S. ——, 135 S. Ct. 1625, 1639, 191 L. Ed. 2d 533 (2015) (citing 28 U.S.C. § 2674). Section 2674 provides in relevant part that "[t]he United States . . . shall not be liable for . . . punitive damages." 28 U.S.C. § 2674. Thus, as Perdum may not recover punitive damages against the federal defendants in this action, even if her FTCA claims are not dismissed, her claim for an award of punitive damages must be dismissed. 18 Additionally, as Wells Fargo shows at pages 13 - 14 of its brief in support of its motion to dismiss, (Doc. 27-1), plaintiff's wrongful attempted foreclosure claim fails to state a claim on its merits. The United States adopts Wells Fargo's arguments by reference, as further grounds to dismiss Perdum's wrongful attempted foreclosure claim under Fed.R.Civ.P. 12(b)(6). As Wells Fargo argues, to plead a claim for wrongful attempted foreclosure, Perdum must establish that the United States made "a knowing and intentional publication of untrue and derogatory information concerning [her] financial condition, and that damages were sustained as a direct result of this publication." Aetna Finance Co. v. Culpepper, 171 Ga. App. 315, 319 (1984); see also Sale City Peanut & Milling Co. v. Planters & Citizens Bank, 107 Ga. App. 463, (1963). Perdum has not, and cannot, identify any publication by the United States of untrue and derogatory information about her financial condition. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 29 of 35 -30- F. RESPA claim against the United States fails to state a claim. In her sixth claim, Perdum advances a claim under the RESPA for violation of 12 U.S.C. § 2605(k), (Complaint ¶¶ 138-148), which lists acts that a servicer is prohibited to take. The heading for this claim indicates it is against Wells Fargo, HUD/FHA, and Ginnie Mae. However, Perdum only cites acts she attributes to Wells Fargo as violations of § 2605(k), and nowhere in the Complaint does she show or allege that any of the federal defendants ever served as the servicer of the Perdum Mortgage. In the event Perdum is suing the United States for alleged loan servicer violations related to the Perdum Mortgage, her claims must be dismissed. "The term 'servicer' means the person responsible for servicing19 of a loan (including the person who makes or holds a loan if such person also services the loan)." 12 U.S.C. § 2605(i)(2) (emphasis added). Thus, the "holder" of a loan may be the servicer, but only when the holder actually services the loan. 12 U.S.C. § 2605(i)(2). Perdum contends within the Complaint that Wells Fargo was the loan servicer. (Complaint ¶¶ 46, 141, 143). She further contends that the United States is merely the holder, or owner, of the loan serviced by Wells Fargo. (Complaint ¶¶ 72, 141, 143). Thus, even if Perdum could show that a federal defendant held her 19 Section 2605 defines servicing as follows: The term "servicing" means receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan, including amounts for escrow accounts described in section 2609 of this title, and making the payments of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the terms of the loan. 12 U.S.C. § 2605(i)(3). Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 30 of 35 -31- loan, because her Complaint contains no factual allegations showing that such federal defendant also serviced her loan, she fails to state a plausible claim against the United States under the RESPA and this claim must be dismissed. Thomas v. US Bank Nat'l Ass'n, No. 15-14427, 2017 WL 117121, at *6 (11th Cir. 2017); see Clark v. HSBC Bank USA, N.A., 664 F. App'x 810, 813 (11th Cir. 2016) (dismissal of RESPA claim against HSBC proper where Nationstar acted as mortgage servicer for HSBC, who merely owned the security deed). Additionally, claims for violation of 12 U.S.C. § 2605 are subject to a three- year statute of limitations. 12 U.S.C. § 2614. The United States showed above that HUD has never held an interest in plaintiff's loan and that any interest Ginnie Mae may have had in her loan ended in September 2011. Thus, even if plaintiff could show that an entity of the federal government was the owner and servicer of her debt in or before September 2011, her complaint was not filed prior to the expiration of RESPA’s three-year statute of limitations. Perdum did not file her Complaint until February 13, 2017, more than five years after the time any federal defendant held any interest in the Perdum Mortgage. Therefore, her RESPA claim against the United States is time barred and should also be dismissed on this ground. See McCarley v. KPMG Int'l, 293 F. App'x 719, 723 (11th Cir. 2008). Alternatively, if consideration of the federal defendants' evidence showing lack of any interest in the Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 31 of 35 -32- Perdum Mortgage after September 2011, cannot be considered under Fed.R.Civ.P. 12(b)(6), the United States is entitled to summary judgment on this claim. G. Antitrust claim against the United States fails to state a claim. Perdum asserts a claim against the United States for alleged antitrust violations identified as a "Short-Sale Conspiracy" that allegedly violates the Sherman Act20 and Clayton Act.21 (Complaint ¶¶ 73-100, 149-151). "Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, prohibit contracts, combinations, or conspiracies in restraint of trade or commerce and monopolization or attempts or conspiracies to monopolize trade or commerce by any 'persons'" and provides criminal penalties for violations by covered "persons." Sea-Land Serv., Inc. v. Alaska R. R., 659 F.2d 243, 245 (D.C. Cir. 1981). The Sherman Act expressly defines "person" or "persons" who may be sued to include corporations and associations existing under or authorized by state or federal law. 5 U.S.C. § 7. The Clayton Act identifies additional prohibited acts by "persons" and includes a similar definition of "persons" subject to its provisions. 15 U.S.C. § 12(a). The Clayton Act also provides a private right of action by any person injured by "anything forbidden in the antitrust laws," including the Sherman Act. 15 U.S.C. § 15(a). 20 15 U.S.C. §§ 1-7. 21 15 U.S.C. §§ 12-27. Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 32 of 35 -33- Perdum describes the alleged antitrust violation as follows: The primary, unlawful activity of WFHM, which activity is known by HUD, FHA, and\or GNMA and co-conspirators deny to homeowner- mortgagors of 1-4 unit residential properties the opportunity to purchase their homes (directly or through others) in a short sale when the mortgaged property is being offered and sold through a short sale with the consent of the lender or its servicer, and not offering a defaulted note and mortgage to the homeowner-mortgagor when the note and mortgage are being offered for sale to other banks, servicers, venture capital funds, vulture funds, or other third persons. (Complaint ¶ 74). She then alleges that "[t]hese activities are a violation of the Sherman Antitrust Act (15 U.S.C.A. §§ 1-2)." (Complaint ¶ 80). The United States and its agencies are not "persons" subject to suit under the Sherman Act. Sea-Land Serv., Inc., 659 F.2d at 245-46; accord Lawline v. Am. Bar Ass'n, 738 F. Supp. 288, 293 (N.D. Ill. 1990), aff'd, 956 F.2d 1378 (7th Cir. 1992) ("The United States and its agencies or instrumentalities are not 'person[s]' within the meaning of the Sherman Act.") (citing Rex Systems, Inc. v. Holiday, 814 F.2d 994, 997 (4th Cir. 1987); North Jersey Secretarial School, Inc. v. McKiernan, 713 F.Supp. 577, 584 (S.D.N.Y. 1989) ("Antitrust lawsuits brought against United States agencies and their officials cannot be maintained.")). It is beyond dispute that HUD/FHA and Ginnie Mae are agencies or instrumentalities of the United States. Therefore, they cannot be sued under the Sherman Act and Clayton Act. Additionally, Perdum does not identify any short sale of the Perdum Mortgage by the United States and the date of such a sale, and she does not show that she both sought to participate in such a short sale and was ready, willing, and able to pay the Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 33 of 35 -34- offering price of such hypothetical short sale. This pleading deficiency alone is grounds to dismiss her antitrust claim against the United States for failure to plead a plausible claim. Furthermore, the United States has also shown that HUD/FHA has never held an interest in the Perdum Mortgage and Ginnie Mae has held no interest since September 2011. Thus any "short sale" by the United States necessarily would have occurred no later than September 2011. Claims under 15 U.S.C. § 15, such as Perdum's antitrust claim against the United States, "shall be forever barred unless commenced within four years after the cause of action accrued." Perdum's Complaint was filed more than five years after any interest the United States held in the mortgage terminated and her antitrust claim is time barred. For all of the foregoing reasons, plaintiff's antitrust violation claim against the United States must be dismissed. Alternatively, the United States is entitled to a summary judgment in its favor on this claim. CONCLUSION For the foregoing reasons, the United States respectfully requests that this Court grant this motion and dismiss all of Perdum's claims against the United States. Alternatively, in the event that consideration of extrinsic documents would preclude the dismissal of any claim against the United States for failure to state a claim, the Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 34 of 35 -35- United States requests the Court grant it a summary judgment on all such claims against it. Respectfully submitted, JOHN A. HORN UNITED STATES ATTORNEY s/ R. David Powell R. David Powell Assistant United States Attorney Georgia Bar No. 586450 600 United States Courthouse 75 Ted Turner Drive, S.W. Atlanta, Georgia 30303 Voice: (404) 581-6000 Facsimile: (404) 581-4667 R.David.Powell@usdoj.gov Case 1:17-cv-00972-SCJ-JCF Document 41-1 Filed 06/23/17 Page 35 of 35 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION CYNTHIA PERDUM, Plaintiff, v. WELLS FARGO HOME MORTGAGE; et al., Defendants. : : : : : : : : : : CIVIL ACTION NO. 1:17-CV-0972-SCJ-JCF DEFENDANT'S STATEMENT OF MATERIAL FACTS ABOUT WHICH THERE IS NO GENUINE DISPUTE Pursuant to Local Rule 56.1(B)(1), N.D. Ga., the United States of America respectfully submits the following statement of material facts about which there is no dispute in support of its motion for summary judgment. 1. Cynthia Perdum, the plaintiff, initiated this civil action by a Complaint filed in the Superior Court of DeKalb County, Georgia (Doc. 1, ex. 1 "Complaint"1). 2. She named six defendants, including a federal department (HUD and the FHA2), and a federal agency (Ginnie Mae or GNMA). 1 Documents in the Court's record will be identified by docket/ECF number ("nn") in the form "Doc. nn" or by alternate citation designated in the first reference to a document. For example, Perdum's pleading found at docket entry [1-1] is cited as "Doc. 1-1" and by the alternate citation "Complaint." 2 Within this Statement of Facts, HUD, FHA, or HUD/FHA may be used interchangeably. Case 1:17-cv-00972-SCJ-JCF Document 41-2 Filed 06/23/17 Page 1 of 10 -2- 3. HUD removed the case to the district court on March 16, 2017. (Doc. 1). 4. Perdum subsequently amended her Complaint to substitute the United States for HUD/FHA and Ginnie Mae.3 (Doc. 5). 5. The Complaint advances a quiet title claim and an additional nine enumerated claims. (Complaint ¶¶ 7-9 & First Claim through Ninth Claim (at pp. 33- 48)). 6. Perdum asserts the following claims against the federal defendants: (a) demand for relief under O.C.G.A. § 15-6-9(2) (quia timet action to quiet title), (Complaint ¶¶ 7-9); (b) breach of contract, (Complaint ¶¶ 101-118); (c) torts of wrongful attempted foreclosure, (Complaint ¶¶ 119-122), and negligence, (Complaint ¶¶ 124-128); (d) violation of the Truth in Lending Act, (Complaint ¶¶ 129-137); (e) conspiracy in violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601, et seq., (Complaint ¶¶ 138-148); and (f) violation of the Sherman Act and the Clayton Act, (Complaint ¶¶ 149-151). A. Information concerning Perdum's real property. 7. On or about September 21, 2000, Perdum received title to real property located in DeKalb County, Georgia, commonly known as 5100 King Arthur Lane, 3 Within this document, the terms "federal defendants" and "United States" may be used to reference the United States, whether acting through HUD/FHA or through Ginnie Mae. Case 1:17-cv-00972-SCJ-JCF Document 41-2 Filed 06/23/17 Page 2 of 10 -3- Ellenwood, Georgia 30294 ("Subject Property"). See Complaint ¶ 10. Implicit in the Complaint, and expressly declared in the referenced security deed at the center of Perdum's claims, is that Perdum holds title to the Subject Property. Her Limited Warranty Deed is referenced, along with recording information, in the quote within Complaint ¶ 10. A copy of the referenced deed conveying title to Perdum is included in the record at Doc. [27-2]. 8. Perdum obtained a loan secured by the Subject Property from Washington Mutual Bank, FA (WaMu) on or about November 22, 2002.4 (Complaint ¶ 10). As consideration for the loan (in the amount of $121,439.00), Perdum granted a security deed on the Subject Property to WaMu. (Complaint ¶ 10 & Ex. A). The security deed to WaMu is recorded in the DeKalb County, Georgia, records at Deed Book 13931, pp. 454-63. 9. On or about December 2, 2006, WaMu assigned (the "Assignment") the Security Deed to Wells Fargo Bank, N.A. (Wells Fargo). (Complaint ¶ 16); (Doc. 27- 4). The Assignment is recorded in the DeKalb County, Georgia, records at Deed Book 19478, p. 358. 4 Within this document, "the Perdum Mortgage" will be used to reference Perdum's loan. Case 1:17-cv-00972-SCJ-JCF Document 41-2 Filed 06/23/17 Page 3 of 10 -4- 10. The security deed does not name the United States, HUD/FHA, or Ginnie Mae as a grantee of a security interest in the Subject Property. (Complaint ex. A). 11. The Assignment does not grant the United States, HUD/FHA, or Ginnie Mae any interest in the Subject Property. (Doc. 27-4). 12. The security deed does not name the United States, HUD/FHA, or Ginnie Mae as the lender. (Complaint ex. A). 13. Perdum has not identified any other documents showing that the United States was the lender for the Subject Property, or that it held a security interest when she filed her Complaint or any time thereafter. (Complaint, generally). 14. Perdum obtained an "audit" of her title. Her audit does not report any evidence that the United States held a lien or other security interest in the Subject Property when Perdum filed her Complaint or any time thereafter. See Complaint ¶¶ 15-21 & ex. A. B. HUD/FHA's role as insurer of Perdum's mortgage. 15. HUD, through the FHA, a department level operational unit, provides mortgage insurance for single-family mortgages originated by private lenders. (Def. ex. 1 (Declaration of Daniel Rogers, III) ¶¶ 1, 4); 12 U.S.C. § 1709(b). Case 1:17-cv-00972-SCJ-JCF Document 41-2 Filed 06/23/17 Page 4 of 10 -5- 16. HUD regulations provide a "Direct Endorsement" process to permit lenders (such as Wells Fargo) to originate mortgages insured by HUD without prior approval or involvement by HUD. Id. ¶ 5; 24 C.F.R. § 203.5. 17. Once a Direct Endorsement lender originates a mortgage, it must provide HUD copies of loan documents for technical reviews. Id. 18. HUD records show that WaMu provided Perdum a loan under the Direct Endorsement process on November 22, 2002. (Def. ex. 1 ¶ 6). 19. HUD subsequently received the loan documents and endorsed the mortgage for HUD insurance. Id. 20. "When HUD insures a mortgage under the Direct Endorsement program, HUD is not the mortgage lender, HUD does not service the mortgage, HUD does not have a security interest in the property, and HUD is not considered a secured creditor." Id. ¶ 7. 21. "Under certain limited circumstances, a mortgage originated under the Direct Endorsement program may be assigned to HUD and HUD will step into the shoes of the lender as servicer of the mortgage. Id. 22. If a mortgage insured by HUD under this program has not been assigned to HUD, foreclosure proceedings are under the purview of the servicer of the mortgage, Case 1:17-cv-00972-SCJ-JCF Document 41-2 Filed 06/23/17 Page 5 of 10 -6- pursuant to its terms. (Def. ex. 1 ¶ 8). The servicer does not need HUD's approval and HUD does not provide the servicer directions concerning foreclosure. Id. 23. When WaMu originated Perdum's mortgage, HUD was not the lender, HUD was not the servicer of her mortgage, and HUD did not receive a security interest in the Subject Property. (Def. ex. 1 ¶ 9). 24. Furthermore, Perdum's mortgage has never been assigned to HUD. Id. 25. "Thus, at no time has HUD served as the lender or servicer of the Mortgage and HUD has never held a security interest in the Property." Id. 26. HUD has never directed Wells Fargo to foreclose on the Subject Property. Id. ¶ 10. B. Ginnie Mae's role as guarantor of Mortgage Backed Security. 27. Ginnie Mae operates a mortgage-backed securities ("MBS") program pursuant to 12 U.S.C. § 1721(g). (Def. ex. 2 (Declaration of Paul St. Laurent, III) ¶ 4). 28. An MBS is a financial instrument that uses packaged mortgages (a "pool") as collateral. Id. ¶ 5 & ex. A at 1. 29. The securities are sold to private investors who then receive monthly payments of principal and interest. Id. ¶ 5 & ex. A, art. II. 30. This program authorizes Ginnie Mae to enter into a guaranty agreement with the issuer of a qualifying MBS, by which Ginnie Mae guarantees that investors in Case 1:17-cv-00972-SCJ-JCF Document 41-2 Filed 06/23/17 Page 6 of 10 -7- the MBS will receive timely payment of principal and interest. (Def. ex. 2 ¶ 4). Ginnie Mae I and II Guaranty Agreements are located at Def. ex. 2, ex. A. 31. Wells Fargo is an issuer under the program—issuer identification number 3355. Id. 32. Under the MBS program, the issuer may remove a mortgage loan that is 90 days or more delinquent from the MBS pool, a process commonly known as repurchasing or liquidating. Id. ¶¶ 6-7. 33. The issuer repurchasing a delinquent mortgage from the pool must pay the MBS investors the full amount of the remaining principal and interest due in accordance with the terms of the security. Id. 34. When a mortgage is liquidated from a pool, Ginnie Mae's interest in the liquidated mortgage terminates. Id. 35. The issuer may use a liquidated mortgage as collateral for another pool ("re-pooling") if the delinquency is remediated. Id. ¶ 7 36. Ginnie Mae's records show that the Perdum Mortgage was included in a pool of mortgages serving as collateral for three separate MBS. (Def. ex. 2 ¶¶ 9-12 & exs. B, D, E). Case 1:17-cv-00972-SCJ-JCF Document 41-2 Filed 06/23/17 Page 7 of 10 -8- 37. First, in January 2003, WaMu issued a MBS covered by a guaranty agreement with Ginnie Mae, that was secured by mortgage pool no. 603371. Id. ¶ 10 & ex. B. 38. The Perdum Mortgage, among other mortgages, was included in pool no. 603371. Id. 39. WaMu transferred Issuer and servicing responsibility for the Perdum Mortgage and the pool containing the Perdum Mortgage to Wells Fargo. Wells Fargo removed the Perdum Mortgage from pool no. 603371 in February 2010, due to delinquency. (Def. ex. 2 ¶ 10 & ex. C, rows labeled "la). 40. After Wells Fargo removed the Perdum Mortgage from pool 603371 due to delinquency, Wells Fargo placed the Perdum Mortgage into a new security. (Def. ex. 2 ¶ 11 & ex. D). Ginnie Mae and Wells Fargo entered a subsequent guaranty agreement for a new security backed by the Perdum Mortgage contained in pool no. 676338. Id. This new security was issued in September 2010. Id. 41. In October 2010, Wells Fargo removed the Perdum Mortgage from pool no. 676338 due to delinquency. (Def. ex. 2 ¶ 11 & ex. C, rows labeled "lb"). 42. After Wells Fargo removed the Perdum Mortgage from pool 676338 due to delinquency, Wells Fargo placed the Perdum Mortgage into a new security. Ginnie Mae and Wells Fargo entered a third subsequent guaranty agreement for a new security Case 1:17-cv-00972-SCJ-JCF Document 41-2 Filed 06/23/17 Page 8 of 10 -9- backed by the Perdum Mortgage, and other mortgages contained in pool no. 738469. (Def. ex. 2 ¶ 12 & ex. E). 43. Thereafter, in September 2011, Wells Fargo liquidated Perdum's mortgage from pool no. 738469. (Def. ex. 2 ¶ 13 & ex. C, rows labeled "lc"). 44. At that point—September 2011—the Perdum Mortgage was no longer in any pool of mortgages backing securities guaranteed by Ginnie Mae and Ginnie Mae ceased to have any interest in the mortgage. Id. 45. While the Perdum Mortgage was included in pools 603371, 676338, and 738469, WaMu initially, and Wells Fargo subsequently, was the sole party responsible for servicing the Perdum Mortgage and had the sole right to collect any mortgage payments. (Def. ex. 2 ¶ 15). 46. Once Wells Fargo liquidated Perdum's mortgage from pool 738469 in September 2011, Ginnie Mae's interest in her mortgage terminated. 47. With no interest in the Perdum Mortgage, Ginnie Mae is not in privity of contract with Plaintiff, and it has no authority to release, to direct or influence foreclosure proceedings, or to direct or influence any post-foreclosure proceedings for Perdum's mortgage. (Def. ex. 2 ¶ 16). 48. Since September 2011, Ginnie Mae has no interest, legal or equitable, in the mortgage. (Def. ex. 2 ¶¶ 13-14, 16). Case 1:17-cv-00972-SCJ-JCF Document 41-2 Filed 06/23/17 Page 9 of 10 -10- C. FTCA exhaustion compliance. 49. All tort claims filed with HUD, whether filed directly with the Department or with any of HUD's organizational units, are reviewed and processed by HUD's Regional Counsel for the New England Region. (Def. ex. 3 (Declaration of Miniard Culpepper) ¶¶ 1-2). 24 C.F.R. § Part 17, Subpart A. 50. Claims filed with an organizational unit of HUD, such as Ginnie Mae, must be referred to the New England Regional Counsel for processing. Id. 51. A search of that office's files shows that Perdum has not filed an administrative tort claim with HUD. Id. ¶ 3. Respectfully submitted, JOHN A. HORN UNITED STATES ATTORNEY s/ R. David Powell R. David Powell Assistant United States Attorney Georgia Bar No. 586450 600 United States Courthouse 75 Ted Turner Drive, S.W. Atlanta, Georgia 30303 Voice: (404) 581-6000 Facsimile: (404) 581-4667 R.David.Powell@usdoj.gov Case 1:17-cv-00972-SCJ-JCF Document 41-2 Filed 06/23/17 Page 10 of 10 1 Case 1:17-cv-00972-SCJ-JCF Document 41-3 Filed 06/23/17 Page 1 of 4 Case 1:17-cv-00972-SCJ-JCF Document 41-3 Filed 06/23/17 Page 2 of 4 Case 1:17-cv-00972-SCJ-JCF Document 41-3 Filed 06/23/17 Page 3 of 4 Case 1:17-cv-00972-SCJ-JCF Document 41-3 Filed 06/23/17 Page 4 of 4 2 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 1 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 2 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 3 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 4 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 5 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 6 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 1 Appendix III-15 APPENDIX III-15 GUARANTY AGREEMENT GINNIE MAE I SINGLE-FAMILY (LEVEL PAYMENT) MORTGAGE-BACKED SECURITIES THE GUARANTY AGREEMENT (“Agreement”) is composed of (i) the terms and conditions contained herein; (ii) a duly executed Schedule of Subscribers and Ginnie Mae Guaranty Agreement (the “Schedule”) incorporating this entire document by reference; and (iii) a Schedule of Pooled Mortgages. This Agreement is made by and between the Government National Mortgage Association, a corporate body organized and existing under the laws of the United States within the Department of Housing and Urban Development (“Ginnie Mae”) and the financial entity identified in the Schedule and approved by Ginnie Mae to issue the securities provided for in this Agreement (“Issuer”); WHEREAS: Under section 306(g) and other related provisions of the National Housing Act, Ginnie Mae is duly authorized to guaranty the timely payment of principal of and interest on securities based on and backed by a pool composed of mortgages which are insured or guaranteed under the National Housing Act, Title V of the Housing Act of 1949, the Servicemen’s Readjustment Act of 1944, Chapter 37 of Title 38, United States Code or section 184 of the Housing and Community Development Act of 1992, and the full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any such guaranty by Ginnie Mae; WHEREAS: The Schedule incorporates by reference both the terms and conditions contained herein and the Schedule of Pooled Mortgages; is executed by the Issuer and Ginnie Mae for each pool of mortgages securitized by the Issuer and guaranteed by Ginnie Mae; and sets forth a list of the initial Security Holders. The Schedule of Pooled Mortgages details the mortgages that make up the pool of mortgages to be securitized by the Issuer and guaranteed by Ginnie Mae; WHEREAS: The Issuer has originated or otherwise acquired, and is the owner and holder of, all of the mortgages identified and described in a Schedule of Pooled Mortgages, which shall be appended to the Schedule and provided to Ginnie Mae in connection with the issuance of securities under this Agreement (the “Securities”); WHEREAS: The Issuer has duly authorized the creation of a pool composed of all the aforesaid mortgages, and the issuance of the Securities to be based on and backed by such pool of mortgages and guaranteed by Ginnie Mae under section 306(g); WHEREAS: Each of the parties to this Agreement is duly authorized to enter into and has duly authorized the execution of this Agreement, and all other acts have been performed to make the creation of the pool of mortgages effective and to make the Securities the valid, binding, and legal obligations and undertakings of the Issuer and of Ginnie Mae, in their respective capacities as provided in this Agreement; NOW THEREFORE: The parties to this Agreement mutually agree as follows: EXHIBIT A Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 7 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 2 Appendix III-15 ARTICLE I. GENERAL Section 1.01 The transaction and arrangements provided for herein are identified in the records of the Issuer and Ginnie Mae by the mortgage-pool number submitted to Ginnie Mae on the Schedule executed by the parties. This Agreement is entered into for purposes of the issuance by the Issuer of the Securities and the guaranty thereof by Ginnie Mae, such issuance and guaranty being pursuant to the aforesaid section 306(g). Section 1.02 Neither Ginnie Mae’s entry into this Agreement nor its operation of the mortgage-backed securities (“MBS”) program is intended to create any right of action on the part of any borrower-mortgagor or any other person or entity, except as expressly provided herein or in any other instrument duly executed by Ginnie Mae. Ginnie Mae assumes no liability to any person or entity on account of any act or omission of the Issuer or Ginnie Mae, except as expressly provided herein. Section 1.03 The effective date of this Agreement and the aforesaid mortgage pool (“Effective Date”) shall be that date specified in the Schedule as the “Issue Date.” Ginnie Mae’s guaranty shall become effective on the date the ownership of the Securities is registered in the name of the Depository by Ginnie Mae’s transfer agent on the central registry of Security Holders maintained by the transfer agent. Section 1.04 The Issuer shall pay a monthly guaranty fee to Ginnie Mae in the amount provided for in the Schedule. Section 1.05 The terms defined in this section shall have the respective meanings stated for all purposes of this Agreement, and, unless the context indicates otherwise, references to any article, section or subsection shall mean a reference to an article, section or subsection of this Agreement: (a) Advance: The use of the Issuer’s own corporate funds, or funds specifically borrowed pursuant to a Ginnie Mae approved Pool Advance Agreement, to make a payment to Security Holders or to pay tax obligations, insurance premiums or other amounts due under the Mortgages when the funds on deposit in the Central P&I Custodial Account, the Principal and Interest Custodial Account, the Escrow Custodial Account or any other accounts related to the pooled Mortgages are insufficient to make the required payments. (b) Central P&I Custodial Account: A single principal and interest custodial account that the Issuer designates and maintains, in accordance with the Guide, as the principal and interest custodial account that the Depository, as Security Holder of book-entry Securities, is to debit each month for payments of principal and interest on such Securities and that Ginnie Mae’s central paying and transfer agent is to debit each month for the purpose of paying the guaranty fee to Ginnie Mae in connection with all of the Ginnie Mae I pools for which the Issuer is responsible. The Issuer may designate either the Principal and Interest Custodial Account or a separate principal and interest custodial account as the Central P&I Custodial Account. (c) Custodial Funds: All principal and interest collected on account of the Mortgages and/or the property securing the Mortgages and any other funds due to the Security Holder; any tax, insurance or other non-principal and interest funds collected for the benefit of the Mortgages or the property; and any unscheduled recoveries of principal. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 8 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 3 Appendix III-15 (d) Defective Mortgage: A Mortgage (i) that cannot be insured or guaranteed by an agency of the Federal Government under a statute described in the first Whereas clause of this Agreement, (ii) that has been refused by the insuring or guaranteeing agency, (iii) for which such insurance or guaranty has been withdrawn, or (iv) that does not comply with the terms of the Securities. (e) Depository: The registered holder for book-entry Ginnie Mae I MBS, which shall be the Federal Reserve Bank of New York. (f) Escrow Custodial Account: An account that the Issuer maintains with a financial institution for the deposit of escrowed funds to be used to pay taxes, insurance premiums, and any other amounts due under the Mortgages. (g) Excess Funds: With respect to a monthly payment date for the Securities, any amount on deposit for a particular pool in a Principal and Interest Custodial Account that is in excess of the sum of the scheduled interest and recoveries of principal due in that month and unscheduled recoveries of principal, as defined in section 6.04(a), required to be passed through to Security Holders in that month. (h) Ginnie Mae Transferee: Any person or entity to whom Ginnie Mae transfers or assigns a Mortgage or any rights or benefits related to the Mortgage. (i) Guide: Ginnie Mae Mortgage-Backed Securities Guide, Ginnie Mae 5500.3, Rev. 1, as hereafter amended. (j) Mortgage: Any mortgage identified and described in the Schedule of Pooled Mortgages, whether submitted in hard copy or electronically. As used in this Agreement, the term “Mortgage” shall be construed to include a security instrument, together with the obligation secured thereby, the title evidence, and all other documents, instruments, and other papers pertaining thereto, and the transaction(s) to which they relate, and all claims, funds, payments, proceeds, recoveries, property, monies or assets related in any way thereto, including but not limited to any and all mortgage insurance or loan guaranty claim proceeds, hazard insurance proceeds, payments by borrowers, refunds, rents, foreclosures or sales proceeds, and escrowed items. (k) Principal and Interest Custodial Account: The non-interest bearing account that the Issuer maintains with a financial institution for the deposit of principal (including scheduled and unscheduled) and interest collected from mortgagors, or in connection with the related property, to be paid to Security Holders. (l) Reporting Cutoff Date: With respect to a monthly payment date for the Securities, a day, established by the Issuer or Ginnie Mae, between the 25th day of the prior month and the first day of the month of payment, inclusive. (m) Reporting Month: The interval between the prior month’s Reporting Cutoff Date and the current month’s Reporting Cutoff Date. (n) Security Holder: Any registered holder of Securities outstanding under this Agreement. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 9 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 4 Appendix III-15 Section 1.06 The Issuer hereby agrees to comply with all terms and conditions of the Guide. If any provisions of the Guide conflict with this Agreement, the provisions of this Agreement shall control. Section 1.07 The Issuer hereby covenants and warrants that: (a) the Issuer is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation; that the issuance of the securities, the performance by the Issuer of all provisions hereof and the consummation of the transactions contemplated hereby have been duly and validly authorized; that this Agreement evidences the valid, binding, and enforceable obligation of the Issuer; and that all requisite corporate action has been taken by the Issuer to make the provisions of this Agreement valid and binding upon the Issuer in accordance with its terms; (b) there are no actions, suits or proceedings pending (or, to the knowledge of the Issuer, threatened) against or affecting the Issuer or any Mortgage, which action, suit or proceeding if adversely determined, individually or in the aggregate, would affect adversely the Issuer’s ability to perform its obligations hereunder; and (c) the consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Issuer and will not result in the breach of any term or provision of the charter or by-laws of the Issuer or result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under, any agreement or other instrument to which the Issuer or its property is subject, or result in the violation of any law, rule, regulation, order, judgment, or decree to which the Issuer or its property is subject. Section 1.08 Ginnie Mae and its authorized representatives shall have the right, under this Agreement, in Ginnie Mae’s discretion, to examine, review and audit, during business hours or at such other times as might be reasonable under applicable circumstances, any and all of the books, records, or other information of the Issuer, any mortgage servicer, trustee, agent or other person bearing on the Issuer’s compliance with the requirements of the MBS program, including, without limitation, all Mortgage documents, Mortgage servicing records, Mortgage records and banking records for funds directly or indirectly related to the Mortgages or the Securities. ARTICLE II. SECURITIES Section 2.01 The Securities shall be in the aggregate original principal or face amount, shall bear the annual rate of interest, and shall have the final maturity date specified in the Schedule. Section 2.02 The aggregate principal amount of Securities, together with interest thereon, shall be payable to the Security Holders in monthly installments. The installments shall commence by the 15th day of the month and year designated as the First Payment Date in the Schedule and shall continue on the 15th day of each month until payment in full of the aggregate principal amount and all interest accruing thereon at the rate of interest on the Securities; provided, however, that payments by electronic transfer shall be made in the manner and at the times provided in Section 6.01. Section 2.03 Interest due on Securities each month shall be computed as one-twelfth of the annual rate of interest payable on the Securities multiplied by the unpaid principal balance of the Securities at the end of the prior month. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 10 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 5 Appendix III-15 Section 2.04 The Issuer represents that it has furnished to Ginnie Mae information required to prepare the Securities, in accordance with any applicable instructions and directions issued by Ginnie Mae. Ginnie Mae shall cause the preparation and release of all the Securities issued under this Agreement, whether issued to original subscribers or with respect to reissues, transfers, exchanges, or otherwise. Section 2.05 Each Security shall be issued, registered, delivered, transferred, and exchanged in accordance with the requirements of the Guide. Section 2.06 The original principal or face amount of the Securities, and reissues and exchanges thereof, shall be in denominations of not less than twenty-five thousand dollars ($25,000) and, if larger, in denominations divisible by one dollar ($1.00). ARTICLE III. MORTGAGES Section 3.01 The Issuer does hereby transfer, assign, set over, and otherwise convey to Ginnie Mae all the right, title, and interest of the Issuer in and to the Mortgages identified and described in the Schedule of Pooled Mortgages for the subject pool. Such transfer and assignment shall be effective as of the date and time of delivery (release) of the Securities by Ginnie Mae or its agent, and shall include all interest, principal and other payments made on or with respect to, or related in any way to, such Mortgages. This includes, but is not limited to, payments due on the Mortgages after the Issue Date of the Securities and all unscheduled recoveries of principal received on the Mortgages after the close of business on the day on which the original principal balance of the pool was determined. Section 3.02 This Agreement may be recorded, at Ginnie Mae’s direction, in all appropriate public offices for real property records in all the counties or other comparable jurisdictions in which any and all of the properties covered by the aforesaid Mortgages are situated, and in any other appropriate public recording offices or elsewhere. Ginnie Mae at its option may direct that such recordation is to be effected by and at the expense of the Issuer. Section 3.03 The Issuer hereby covenants and warrants that each of the Mortgages is eligible under section 306(g) of the National Housing Act and the Guide to back the Securities. The Issuer further covenants and warrants that it will take all actions necessary to ensure continued eligibility of the Mortgages. Section 3.04 The Issuer hereby covenants and warrants that, as of the Effective Date: (a) all of the Mortgages are lien-free and, if obtained from other originators, have been paid for in full; (b) the aggregate outstanding principal balance owed on all the Mortgages is at least equal to the aggregate original principal amount of all the Securities; (c) the required payments of principal and interest due on all the Mortgages shall be sufficient and adequate for the timely payment of the principal and interest on all the Securities, all guaranty fees due to Ginnie Mae and all servicing fees due to the Issuer, as specified in the Guide; and (d) the final maturity date of all the Securities is sufficiently subsequent to the latest final maturity date scheduled under the terms and provisions of the Mortgages to allow timely payment of all such Securities. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 11 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 6 Appendix III-15 Section 3.05 The Issuer hereby covenants and warrants that it has delivered or will deliver and deposit with an eligible custodian institution appropriate documents evidencing and relating to the pooled Mortgages within the time frame required by the Guide. Such documents and such custodial requirements shall be those set forth in a custodial agreement in the form prescribed by Ginnie Mae. Such custodial agreement has been provided to Ginnie Mae, and its terms and conditions as they relate to Ginnie Mae and the Issuer are incorporated into and made a part of this Agreement by reference. The Schedule identifies the institution selected by the Issuer to serve as custodian for the documents relating to the Mortgage pool that is the subject of this Agreement. Section 3.06 The Issuer hereby covenants and warrants that it shall replace any Defective Mortgage, within four (4) months after the Effective Date. If, after that time, any Defective Mortgages exist, then: (a) if such Defective Mortgages can be corrected or cured such that they no longer would be defective, the Issuer shall effect such correction or cure; or (b) if such Defective Mortgages cannot be so corrected or cured, the Issuer shall notify Ginnie Mae immediately, and if Ginnie Mae approves, the Issuer shall repurchase the Mortgages at one hundred percent (100%) of the outstanding balance (“Par”). Such correction or repurchase shall occur either 30 days from discovery or the final certification due date, as set forth in the Guide, whichever is earlier. Any delinquency or any default by the borrower occurring before or after the Effective Date in the payment of any Mortgage shall not be deemed a defect for purposes of this section. Section 3.07 The Issuer hereby covenants and warrants that it has in its possession for each Mortgage evidence of a valid and enforceable, standard policy of insurance for fire and extended coverage, or comparable insurance coverage, in an amount equal to the greater of the unpaid balance of the Mortgage and the amount required by the insuring or guaranteeing agency, with loss-payable endorsements designating Issuer and its successors and assigns as payee, and that Issuer shall maintain such insurance in full force and effect for as long as the Mortgage remains in effect. ARTICLE IV. SERVICING Section 4.01 The Issuer shall: (a) timely foreclose or otherwise convert the ownership of properties securing the Mortgages that come into and continue in default, taking into account any loss mitigation requirements imposed by the agencies that are insuring or guaranteeing the Mortgages, or otherwise dispose of such Mortgages, with the purpose of liquidating such properties and Mortgages; (b) timely file, process, and receive the proceeds of mortgage insurance or guarantee claims under the laws of the United States, in conformance with and subject to all applicable rules, regulations, and comparable promulgations and issuances of the insuring or guaranteeing agency or instrumentality; (c) make all determinations and do and complete all transactions, matters, or things necessary, appropriate, incidental, or otherwise relating to any of the foregoing or to the ownership of the Mortgages; and (d) conform with the servicing standards, procedures, methods, and practices required by the applicable mortgage insurer or guarantor, and any applicable requirements contained in the Guide, and shall establish and maintain books, files, and accounting records in accordance with all of the foregoing. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 12 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 7 Appendix III-15 Section 4.02 The Issuer shall have the option to purchase at Par any Mortgage which has been in default for a continuous period of ninety (90) days or more. The Issuer must purchase at Par each Mortgage for which it receives a final claim settlement from the insuring or guarantying agency. These settlement funds must be paid to the Security Holders in accordance with section 6.04. Section 4.03 Except as otherwise provided in this Agreement or in the Guide, the Issuer is hereby authorized and empowered to foreclose on any collateral securing the Mortgages, execute and deliver in its own name, or in the name of its nominee, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge and all other comparable instruments, with respect to all the Mortgages and with respect to the properties covered by all such Mortgages. Any such instrument shall be executed and delivered only in conformance with and subject to all applicable rules, regulations, and comparable promulgations and issuances of the applicable insuring or guaranteeing agency. The foregoing authority and power of the Issuer shall terminate and expire, and the Issuer shall discontinue the execution and delivery of all such instruments, on notification by Ginnie Mae to the effect that it is extinguishing all right, title, or other interest of the Issuer in the Mortgages pursuant to article X. Section 4.04 The Issuer shall maintain, during the life of this Agreement, insurance, errors and omissions, fidelity bond and other coverage in the amount and form as required by and acceptable to Ginnie Mae. Section 4.05 The Issuer shall be permitted to arrange for another entity to carry out any of the mortgage servicing and pool administration functions required by this Agreement only to the extent such subservicing is specifically authorized by the Guide and approved by Ginnie Mae. Section 4.06 The Issuer may service the Ginnie Mae mortgage pools, mortgages and securities for which it has Issuer responsibility, as identified on the records of Ginnie Mae, only so long as the Issuer retains its status as an approved Ginnie Mae Issuer, as defined in the Guide. Once an Issuer is declared in default and its rights are extinguished by Ginnie Mae, that Issuer may no longer service any Ginnie Mae mortgage pools, mortgages or securities. Section 4.07 In the event the Issuer determines that funds provided by a mortgagor and available in the Escrow Custodial Account are insufficient to meet a payment due for that mortgagor’s taxes, assessments, ground rents, hazard and mortgage insurance premiums, payments for rehabilitation or improvement expenses, the buydown portion of the Mortgage payment, or comparable items, the Issuer shall advance its own corporate funds for the purpose of making such payment. Section 4.08 The Issuer shall establish and maintain accounting records, which shall be in accordance with the Guide and any applicable instructions and directions issued by Ginnie Mae, with respect to all Advances paid under sections 4.07 and/or 6.02, such records to be adequate to reflect: all such Advances made by the Issuer into the Central P&I Custodial Account, the Principal and Interest Custodial Account or any Escrow Custodial Account, payment directly to a taxing authority or insurance company or for any other payments required under the Mortgages; the use made of Advances for payments required on the Securities, including their allocation as between interest and principal on such Securities; the Mortgages with respect to which Advances are made; and the amount (including the allocation as between principal and interest) advanced on each such Mortgage, and recoveries and losses of Advances made, with respect to each Mortgage, including their allocation as between interest and principal owed on each Mortgage. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 13 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 8 Appendix III-15 ARTICLE V. BANK ACCOUNTS Section 5.01 The Issuer shall establish and maintain a Central P&I Custodial Account with a commercial bank, a mutual savings bank, a savings and loan association, or a credit union, the deposits at which are insured by the Federal Government, and which meets any and all other requirements of Ginnie Mae. The Central P&I Custodial Account must be used exclusively for funds relating to Ginnie Mae MBS program mortgage pools and may be drawn on only by the Depository, the Issuer, Ginnie Mae and Ginnie Mae’s central paying and transfer agent. The Central P&I Custodial Account must be subject to a master agreement in the form prescribed by Ginnie Mae. In accordance with Section 6.01, the Issuer must make available in the Central P&I Custodial Account funds sufficient to enable the Depository to withdraw on a timely basis monthly payments of principal and interest payable to it as Security Holder of all book-entry Securities. The Issuer shall make withdrawals from the Central P&I Custodial Account only in accordance with Section 5.03. All of the foregoing shall be otherwise in accordance with the Guide and any applicable instructions and directions issued in writing by Ginnie Mae. Section 5.02 With respect to all the Mortgages, the Issuer shall establish and maintain a Principal and Interest Custodial Account with a commercial bank, a mutual savings bank, a savings and loan association, or a credit union, the deposits at which are insured by the Federal Government, and which meets any and all other requirements of Ginnie Mae. The Principal and Interest Custodial Account must be used exclusively for funds relating to Ginnie Mae MBS program mortgage pools and may be drawn on only by the Issuer and/or by Ginnie Mae. The Principal and Interest Custodial Account must be subject to a master agreement in the form prescribed by Ginnie Mae. All principal and interest collected on account of the Mortgages and/or the property securing the Mortgages and any other funds due to the Security Holders at any time must be deposited and retained in the Principal and Interest Custodial Account until paid to Security Holders, transferred to the Central P&I Custodial Account or placed in a disbursement account in accordance with section 5.06. These items include, but are not limited to: monthly Mortgage payments; prepayments; mortgage or title insurance and guaranty claim settlement proceeds; hazard insurance or any condemnation proceeds not used to repair the collateral (if such funds are to be used to repair the collateral, they first must be deposited in the Escrow Custodial Account and may not be deposited in the Issuer’s corporate accounts); proceeds from foreclosure or repossession sales, and any payments received in lieu of foreclosure or repossession sales; proceeds from any sale, resale or transfer of Mortgages which are required hereunder or by the Guide to be passed through to the Security Holders; repayments of Excess Funds; Advances; and other unscheduled recoveries of principal as set forth in section 6.04. The Issuer shall make withdrawals only in accordance with section 5.03 below. All the foregoing shall be otherwise in accordance with the Guide and any applicable instructions and directions issued in writing by Ginnie Mae. Section 5.03 (a) If the Central P&I Custodial Account and the Principal and Interest Custodial Account are separate accounts, then the Issuer may make withdrawals from the Central P&I Custodial Account only to remove any amounts that were not required to be deposited therein under this Agreement or the Guide. (b) If a single account is used as the Central P&I Custodial Account and the Principal and Interest Custodial Account, then in addition to withdrawals to effect timely payment on the Securities, the Issuer may make withdrawals from the Principal and Interest Custodial Account but only to: (1) remit to Ginnie Mae the monthly guaranty fee; (2) reimburse itself for its previous Advances that were made in accordance with section 6.02, but only if: (i) all Excess Funds used to make Security Holder payments have been Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 14 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 9 Appendix III-15 fully restored; (ii) the Issuer has maintained records showing the amount of each Advance attributed to a particular Mortgage; (iii) the funds used to reimburse the Issuer come from the payment related to the particular Mortgage on which Issuer made the Advance; (iv) all amounts due and payable to Security Holders have been paid to them (or made available for payment); and (v) the Issuer’s records properly demonstrate all of the foregoing. (3) utilize Excess Funds in accordance with section 6.02 hereof; (4) remove any amounts that were not required to be deposited therein under this Agreement or the Guide; or (5) pay itself the permitted servicing fee. Section 5.04 In addition to the Central P&I Custodial Account and the Principal and Interest Custodial Account, the Issuer shall establish and maintain Escrow Custodial Account(s) with a commercial bank, a mutual savings bank, a savings and loan association, or a credit union the deposits at which are insured by the Federal Government, and which meets any and all other requirements of Ginnie Mae. Each Escrow Custodial Account must be used exclusively for funds relating to Ginnie Mae MBS program mortgage pools and may be drawn on only by the Issuer, the approved subservicer and/or by Ginnie Mae. Each Escrow Custodial Account must be subject to a master agreement in the form prescribed by Ginnie Mae. All collections of payments for taxes, assessments, ground rents, hazard and mortgage insurance premiums, payments for rehabilitation or improvement expenses, the buydown portion of the Mortgage payment and all comparable items must be deposited and retained in the Escrow Custodial Account on account of the Mortgages except as otherwise required by the appropriate insuring or guaranteeing agency. Section 5.05 Withdrawals from the Escrow Custodial Account(s) may be made only to: (a) effect timely payment of the following items related to the Mortgages pooled under this Agreement: mortgagors’ taxes, assessments, ground rents, hazard and mortgage insurance premiums, payments for expenses related to the property covered by the Mortgages, such as improvement, protection or repair, the buydown portion of the Mortgage payment, or comparable items; and (b) reimburse itself for its previous Advances, but only if: (i) all Excess Funds used to make Security Holder payments have been fully restored; (ii) the Issuer has maintained records showing the amount of each Advance attributed to a particular Mortgage; (iii) the funds used to reimburse the Issuer come from the payment related to the particular Mortgage on which Issuer made the Advance; and (iv) the Issuer’s records properly demonstrate all of the foregoing. Section 5.06 The use of separate “collection accounts” or “disbursement accounts” for the receipt and payment of funds is permitted. Collection accounts must be cleared daily, unless the Issuer uses ACH transfer, in which case the accounts must be cleared every 48 hours. In any event, immediately upon being cleared or removed from the collection account, all funds covered by this article V must be deposited into the Principal and Interest Custodial Account or an Escrow Custodial Account, as appropriate, pursuant to sections 5.02 or 5.04. Disbursement accounts must be subject to master agreements in the form prescribed by Ginnie Mae. The disbursement account for principal and interest funds must be used exclusively for funds relating to Ginnie Mae MBS program securities. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 15 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 10 Appendix III-15 ARTICLE VI. PAYMENT TO SECURITY HOLDERS Section 6.01 The Issuer shall remit to the Security Holders of certificated Securities and deposit to the Central P&I Custodial Account funds sufficient to pay the Depository, as Security Holder of all book-entry Securities, all payments required to be made under the terms and conditions of all Securities issued and outstanding under this Agreement and all payments required under this Agreement and the Guide. All such payments must be made in a timely manner such that, with respect to the payment for any given month, the Security Holders of certificated Securities will receive payment by the 15th day of each month, with final payment to be only on receipt of each certificated Security by the Issuer. Funds in an amount equal to the monthly payments of principal and interest due on all book-entry Securities must be deposited or made available in the Central P&I Custodial Account prior to 7:00 a.m. Eastern Time on the 15th day of each month or, if the 15th day of the month is not a business day, prior to 7:00 a.m. Eastern Time on the first business day following the 15th day of the month. Section 6.02 (a) The Issuer shall establish and maintain such controls and procedures to enable it to accurately project in advance whether or not it will have available sufficient funds to make payments required under the Securities in a timely manner. (b) If the Issuer does not have available sufficient funds to make a required monthly payment due to the Security Holders in a timely manner, the Issuer either shall make Advances or may utilize Excess Funds to meet such payment. If the Issuer is not able to make the full payment by these means, it shall submit a timely notice to Ginnie Mae, before payment to the Security Holder is due, requesting Ginnie Mae to advance funds sufficient to make the full monthly payment to Security Holders. Any such notice shall be a basis for default under section 10.01(a)(2). Section 6.03 Each monthly payment on the Securities shall be comprised of (a) the interest due pursuant to section 2.03, (b) scheduled payments of principal due on the Mortgages on the first day of the month, or in the case of Securities backed by internal reserve pools on the first day of the month immediately preceding the month, in which the payment on the Securities is due, and (c) unscheduled recoveries of principal of the Mortgages as defined in section 6.04. Section 6.04 (a) With respect to a monthly payment on the Securities, unscheduled recoveries of principal are payments received by the Issuer in the Reporting Month preceding the monthly payment on the Securities, and are any and all proceeds received or due in connection with the Mortgages, or the property securing the Mortgages, other than scheduled payments of interest and recoveries of principal and miscellaneous collections (defined in (c), below). Unscheduled recoveries of principal include, but are not limited to, the following items in their entirety: (1) prepayments (excluding scheduled recoveries of principal paid in advance of their due dates, which must be passed through to the Securities Holders on their scheduled due dates); (2) mortgage or title insurance and guaranty claim settlement proceeds; (3) hazard insurance and condemnation proceeds, to the extent not used to repair the collateral; (4) proceeds from foreclosure sales or, if applicable, repossession sales and any payments received in lieu of foreclosure or repossession of the collateral; Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 16 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 11 Appendix III-15 (5) proceeds from any sale, resale, transfer or disposal of a Mortgage or any interest in a Mortgage (this does not include the authorized transfers of Issuer responsibility or the pledging of servicing, if those transactions comply with requirements in the Guide); (6) any principal amount of a Mortgage finally discharged by a bankruptcy court; (7) payment from the Issuer’s own funds as required under this section 6.04; and (8) all other payments or proceeds that include any amounts reflecting the recovery of principal due on a Mortgage. (b) Unscheduled recoveries of principal, including but not limited to all of the items in section 6.04(a), must be passed through to the Security Holders in their entirety, as set forth above, so long as there is an outstanding principal balance on the Securities. Advances or other payments due or authorized under the Mortgages previously made by the Issuer may not be deducted or recovered from these funds until the Security Holders have been paid in full. Any deduction from an unscheduled recovery of principal made by third parties must be replaced in its entirety by the Issuer prior to payment to the Security Holders. (c) Miscellaneous collections shall include, to the extent that they are paid pursuant to a Mortgage, only: (1) mortgage insurance premiums; (2) taxes; (3) hazard insurance premium payments; (4) special charges related to servicing; (5) late charges; (6) ground rents; (7) special assessments; (8) water rents; (9) 203(k) funds; (10) buydown funds; (11) attorney’s fees; and (12) any funds to repay the Issuer’s expenditures under the terms of the Mortgage to complete construction, pay for security services or prevent waste. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 17 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 12 Appendix III-15 (d) To the extent that the remaining principal balance of a Mortgage has not been recovered by the Issuer at the earliest of: (1) final payment of the mortgage insurance or guaranty claim proceeds, or other final disposition of the claim by the insuring or guarantying Federal agency; (2) the withdrawal of a Defective Mortgage from the pool; (3) any other liquidation or disposition of the Mortgage or the property secured thereby; or (4) any other act or transaction that has the effect of causing the Mortgage or payments or recoveries related to the principal of the Mortgage to no longer be available as backing for the Securities related to that Mortgage, the monthly payment following the earliest month in which an action described in (1), (2), (3) and (4) is taken shall include an amount, to be paid from the Issuer’s own funds, which will reduce the Mortgage to a zero balance and which will reduce to zero the portion of the outstanding principal balance of the Securities attributable to that Mortgage. ARTICLE VII. REPORTS Section 7.01 The Issuer shall furnish to Ginnie Mae, during the life of this Agreement, such periodic, special, or other reports or information, whether or not provided for herein, as Ginnie Mae in its discretion requires. All such reports or information shall be as provided by and in accordance with applicable instructions and directions issued by Ginnie Mae. Section 7.02 Without limitation, the Issuer shall furnish to Ginnie Mae, in the manner prescribed by Ginnie Mae, the following reports or other information: (a) Reports such as shall be required in accordance with applicable instructions and directions issued by Ginnie Mae with respect to any or all of the Mortgages, whether or not still subject hereto, or with respect to any or all of the mortgagors or their successors in interest; (b) Copies of the annual audited financial statements of the Issuer, and other financial reports as may be requested by Ginnie Mae. Such audited financial statements are to be received by Ginnie Mae no later than 90 days after the end of the Issuer’s fiscal year; and (c) Notice in advance of: (1) any contemplated changes affecting the business status of the Issuer, including, but not limited to any merger, consolidation, sale or other transfer of any part or all of its business, change in name, or sanctions by any government regulator or government sponsored enterprise; (2) any change in ownership or control of the Issuer; and (3) any voluntary or involuntary action or proceeding under the Federal bankruptcy statutes or any comparable Federal or State law, whether for purposes of bankruptcy, reorganization, winding up the affairs of the Issuer, or otherwise, or for appointment of a receiver, liquidator, trustee, or other such assignee of transferee, for any of such purposes. Section 7.03 The Issuer shall give Ginnie Mae notice of any impending or actual default by the Issuer, under the terms and provisions of article X, and, in such notice, shall identify the event or events of default and set forth such corrective, curative, or other action as the Issuer shall contemplate and plan with the agreement of Ginnie Mae, or shall state that no such action is planned. ARTICLE VIII. GUARANTY Section 8.01 By and as set forth in its guaranty appearing on or included in the terms of each of the Securities, Ginnie Mae, pursuant to section 306(g) of the National Housing Act, guarantees the Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 18 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 13 Appendix III-15 timely payment of principal of and interest on the Securities, subject only to the terms and conditions of such Securities, and the full faith and credit of the United States is pledged to the payment of all amounts required to be paid under each such guaranty. Section 8.02 Ginnie Mae covenants and warrants that in any legal action or proceeding, it shall not contest or defend against the timely payment of any amount provided for in, and unpaid on, any Security duly and validly issued under this Agreement, provided that, such payment is sought and claimed by or on behalf of a bona fide purchaser and registered owner of such Security, without actual notice at the time of purchase of any basis or grounds for contest or defense by Ginnie Mae against such payment. Section 8.03 Ginnie Mae covenants and warrants that under section 306(d) of the National Housing Act, it has full power and authority to borrow from the Secretary of the Treasury, and the Secretary of the Treasury is therein authorized to lend to Ginnie Mae, any amounts necessary and required to enable Ginnie Mae to meet and comply with the terms and provisions of its guaranty of the Securities, and that it shall so borrow, and the Secretary of the Treasury has agreed to so lend, any amounts necessary and required. Section 8.04 This article VIII shall inure to the benefit and advantage of all the Security Holders, subject to and in accordance with the terms and provisions set forth herein, provided that nothing herein shall derogate or detract from the rights of such Security Holders as set forth in or provided for in connection with such Securities. Section 8.05 If Ginnie Mae makes any payment to Security Holders under its guaranty, it shall be subrogated fully to the rights satisfied by such payment. ARTICLE IX. LOSSES Section 9.01 The Securities shall not constitute any liability of nor evidence any recourse against the Issuer or any of its assets, except with respect to or as against the Mortgages on which they are based and backed, including all interest, principal, and other payments or recoveries due or made on such Mortgages on and after the date of this Agreement; provided, however, that the Issuer shall be liable to Ginnie Mae for: (a) restitution, from the Issuer’s own funds, for the Issuer’s use of any funds in violation of this Agreement, including but not limited to any “unscheduled recoveries of principal” that the Issuer fails to handle, apply and remit in accordance with this Agreement, any Excess Funds withdrawn and not replaced from the pool Principal and Interest Custodial Account(s), or any other funds that the Issuer improperly handles, fails to place in, or removes from, the Principal and Interest Custodial Account, the Escrow Custodial Account, or any other escrow account maintained or required to be maintained with respect to the Mortgages; and (b) all loss, damage, cost, expense, and liability suffered by Ginnie Mae as a result of the Issuer’s breach of, failure to carry out, or default under, this Agreement. Section 9.02 The Issuer’s liability to Ginnie Mae shall survive any expiration or termination of this Agreement. ARTICLE X. DEFAULT Section 10.01 (a) Immediate Default. An event of default by the Issuer occurs if Ginnie Mae, in its sole discretion, determines that any of the following acts or conditions have occurred or exist: (1) Any failure by the Issuer to remit to the Security Holders of certificated Securities, or to deposit in the Central P&I Custodial Account with respect to all book-entry Securities funds sufficient to make, any payment required to be made under the terms and Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 19 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 14 Appendix III-15 conditions of this Agreement, the Guide or the Securities issued and outstanding under this Agreement, as of the due date of such payment; (2) Any notice by the Issuer to Ginnie Mae for an advance of funds in order to make (or to make available in the Central P&I Custodial Account) Security Holder payments, or the subsequent making of any part or all of such advance by Ginnie Mae; (3) Any other act or omission by an Issuer that causes the required payment to the Security Holders not to be made timely; (4) Any notification to Ginnie Mae by the Issuer that it will not meet, or is unlikely to meet, its payment obligations in a timely manner; (5) Any impending or actual insolvency of the Issuer; (6) Any change with respect to the business status of the Issuer, whether or not subject to the reporting requirements of section 7.02, which materially adversely affects Ginnie Mae under this Agreement, or which materially adversely affects the ability of the Issuer to carry out its obligations hereunder; (7) Any unauthorized use of Custodial Funds; (8) Any withdrawal or suspension of the Issuer’s Federal Housing Administration approved status or of Federal National Mortgage Association or Federal Home Loan Mortgage Corporation approved seller/servicer status; and (9) Any submission of false reports, statements or data or any act of dishonesty or breach of fiduciary duty to Ginnie Mae related to the MBS program. (b) Thirty-day Default. Any failure of the Issuer to observe or comply with any of the terms and provisions of this Agreement or the Guide, or any breach of any warranty set forth in this Agreement, other than an event of default under section 10.01(a), shall constitute an event of default if it has not been remedied or corrected to Ginnie Mae’s satisfaction within thirty (30) days of notification by Ginnie Mae to the Issuer. Ginnie Mae reserves the right in its discretion to declare an immediate default if the Issuer receives three or more notices of failure to comply under this subsection (b). Section 10.02 An event of default under this Agreement shall constitute an event of default under each and every other Guaranty Agreement between the Issuer and Ginnie Mae. An event of default under any other Guaranty Agreement between the Issuer and Ginnie Mae shall constitute an event of default under this Agreement. Section 10.03 On the occurrence or development of any event of default, Ginnie Mae may, in its sole discretion, but is not required to, confer and negotiate with the Issuer with respect to remedying and correcting the default. Any such arrangements mutually agreed upon shall be placed in written contractual form, and shall be supplementary to this Agreement. Section 10.04 On the occurrence or development of any event of default, unless arrangements under section 10.03 above are mutually agreed upon by and between Ginnie Mae and the Issuer and placed in written contractual form duly executed by Ginnie Mae, Ginnie Mae may, by letter directed to the Issuer, pursuant to section 306(g) of the National Housing Act, automatically effect and complete the extinguishment of any redemption, equitable, legal, or other right, title, or interest of the Issuer in the Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 20 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 15 Appendix III-15 Mortgages. The Mortgages, together with all accounts, books and all other hard copy or electronic records related to the Mortgages or the Securities, automatically shall become the absolute property of Ginnie Mae, subject only to unsatisfied rights of the Security Holders. Upon such extinguishment, the Issuer automatically forfeits, waives and releases any and all rights to seek recovery of or reimbursement for any property or monies related in any way to the Mortgages (including but not limited to undisbursed Mortgage proceeds or Advances that the Issuer made or makes) that the Issuer might otherwise have recovered from any person or entity. Section 10.05 Immediately upon the issuance by Ginnie Mae of a letter of extinguishment to the Issuer, all authority and power of the Issuer under this Agreement, with respect to the Securities, the Mortgages and otherwise, shall automatically terminate and expire. Upon such extinguishment, the Issuer shall have no further right to service the Mortgages, pools and Securities, shall have no right to any income related to the Mortgages, pools or the Securities and shall have no right to share in the proceeds of any sale or transfer of rights or interests related to them. Section 10.06 Immediately upon the issuance by Ginnie Mae of a letter of extinguishment to the Issuer, the Issuer shall automatically give up and forfeit, and hereby releases to Ginnie Mae, all of its right, title, and interest in and to funds then or thereafter placed in the Central P&I Custodial Account, the Principal and Interest Custodial Accounts, all Escrow Custodial Accounts, and any other accounts related to the Mortgages, and any other claims funds, proceeds, recoveries, property, monies or assets related in any way to the Mortgages, including but not limited to any and all mortgage insurance or loan guaranty claim proceeds, hazard insurance proceeds, payments by borrowers, refunds, rents, foreclosure or sales proceeds, and escrowed items; FURTHER, the authority of the Issuer to make withdrawals against the Central P&I Custodial Account, the Principal and Interest Custodial Account, all Escrow Custodial Accounts, and any other accounts related to the Mortgages or in which any funds pertaining to the Mortgages are kept shall be deemed to have terminated and expired; AND FURTHER, the Issuer shall be deemed to have forfeited and waived any and all rights to recovery or reimbursement, from any source whatsoever, for any Advances (under section 5.03(b) or otherwise), profits, or expenditures related to the Securities or the Mortgages. Section 10.07 On and after the time Ginnie Mae issues a letter of extinguishment to the Issuer, the Issuer shall continue to render Ginnie Mae the fullest assistance practicable in furtherance of the orderly and due removal of the Mortgage from the Issuer. Such assistance may include, at Ginnie Mae’s sole discretion, use of the Issuer’s physical facilities, Issuer’s computers and servicing platform and any other facilities that Ginnie Mae, in its sole discretion, determines necessary to the orderly transfer of the Mortgages backing Ginnie Mae securities. Ginnie Mae will reimburse the Issuer reasonable operating costs, as determined by Ginnie Mae, for the use of the Issuer’s facilities and equipment during the transfer process. Issuer shall not object to its employees cooperating with Ginnie Mae or its subservicer. Issuer shall execute, at Ginnie Mae’s direction, powers of attorney to facilitate the orderly transfer of the portfolio, and the continuation otherwise of this Agreement and the transactions and arrangements set forth and provided herein. This obligation of the Issuer shall survive any termination of this Agreement. Section 10.08 Immediately upon the issuance by Ginnie Mae of a letter of extinguishment to the Issuer, all authority and power of the Issuer under this Agreement, with respect to the Securities, the Mortgages or otherwise, shall pass to and be vested in Ginnie Mae, and Ginnie Mae shall succeed to all the rights and benefits of the Issuer in its capacity under this Agreement and the transaction and arrangement set forth or provided herein. Ginnie Mae is hereby authorized and empowered to execute and deliver, on behalf of the Issuer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things, necessary or appropriate to effect the Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 21 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 16 Appendix III-15 purposes of the letter of extinguishment, whether to complete the transfer and endorsement or assignment of the Mortgages, to service the outstanding Securities and the underlying Mortgages, or otherwise. Section 10.09 Notwithstanding Ginnie Mae’s guaranty obligations to Security Holders as set forth in article VIII or a provision in the Mortgage or in any other instrument, and notwithstanding any assignment or transfer to Ginnie Mae or any Ginnie Mae Transferee of the Mortgage or any rights and benefits of the Issuer, or Ginnie Mae’s or any Ginnie Mae Transferee’s succession to such matters, under no circumstances shall Ginnie Mae or any Ginnie Mae Transferee be deemed to assume any liability whatsoever for any breach, act or omission committed by the Issuer. The Issuer shall remain liable for all such breaches, acts or omissions. The obligations of the Issuer set forth in this section shall survive any expiration or termination of this Agreement. Section 10.10 Notwithstanding the issuance of a letter of extinguishment to the Issuer, the custodial agreement identified in section 3.05, and any other comparable contract by and between the Issuer and any third party with respect to this Agreement, shall continue in full force and effect, unless and until terminated by Ginnie Mae in its sole discretion, modified only by the removal of the Issuer and substitution of Ginnie Mae as provided for in this article. Ginnie Mae shall have full discretion in determining whether and when, upon issuance of a letter of extinguishment, such contracts with any third parties are to be terminated. ARTICLE XI. MISCELLANEOUS Section 11.01 This Agreement shall remain in effect until all terms and conditions contained herein are satisfied. Section 11.02 Any notice, demand, notification, letter, letter of extinguishment, approval, authorization, directive or request arising under this Agreement, or required by the terms and provisions hereof or pursuant to any requirements of law, shall be in writing and may be served in person, by wire or facsimile transmission, by overnight courier service for next day delivery or by mail by depositing the same in any post office, substation, or letter box, enclosed in an envelope, postage prepaid, addressed to the party to whom such notice, demand, notification, letter, letter of extinguishment, approval, authorization, directive or request is directed, at the last known address of such party. Section 11.03 Subject to the provisions of article X above, this Agreement may not be voluntarily assigned or otherwise transferred, in whole or in part, by either of the parties hereto without the written consent of the other, except by or on behalf of Ginnie Mae to any other agency or instrumentality within the Executive Branch of the Government of the United States assuming all the responsibilities, duties, and liabilities of Ginnie Mae hereunder. If and when assigned or otherwise transferred in accordance with this section, this Agreement and all its terms and provisions shall inure to the benefit of and shall be binding upon the Issuer and its successors and assigns, and the assignees or transferees of Ginnie Mae. Section 11.04 This Agreement may be amended from time to time by the Issuer and Ginnie Mae, by mutual agreement and consent, in order to facilitate the observance and fulfillment of the purposes of section 306(g) of the National Housing Act and of this Agreement, provided that, no such amendment shall adversely affect the rights of the Security Holders, such amendments to include, without limitation, any to effect and complete the succession of successors in the capacities of the parties hereto, any to add new terms and provisions for the advantage, benefit, or protection of the Security Holders, or any to remedy and correct any ambiguity or vagueness in the terms and provisions hereof. To be effective, any such amendment must be in writing and be signed by the Issuer and Ginnie Mae. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 22 of 58 GINNIE MAE 5500.3, REV. 1 Date: 01/01/06 17 Appendix III-15 Section 11.05 Ginnie Mae reserves the right to waive any of the requirements contained in this Agreement. Any such waiver must be in writing. Section 11.06 The parties covenant and warrant that, should the Issuer receive FHA debentures in settlement of any default on a Mortgage pursuant to the terms of the FHA insurance commitment, the Issuer shall immediately tender such debentures to Ginnie Mae and Ginnie Mae shall immediately purchase such debentures from the Issuer for cash at Par. Section 11.07 The Issuer shall comply with any applicable rules, regulations, and orders of general applicability issued under Title VI of the Civil Rights Act of 1964; with Executive Order 11063, Equal Opportunity in Housing, issued by the President of the United States on November 20, 1962; and with the Fair Housing Law of 1968, in accordance with applicable rules and regulations of the Federal Housing Administration. Moreover, this section incorporates by reference section 202 of Executive Order 11246, Equal Employment Opportunity, issued by the President of the United States on September 24, 1965, and amended on October 13, 1967. The Issuer is required to comply with the implementing rules and regulations of the Department of Labor (41 C.F.R. Part 60-1) and the Department of Housing and Urban Development (24 C.F.R. Part 130). For purposes of the Executive Order 11246, this Agreement is a Government contract. Section 11.08 Except as expressly provided in article VIII, Ginnie Mae assumes no liability to any person or entity for any act or omission of the Issuer. Section 11.09 The rule of construction that agreements are to be construed against the drafter shall not be applied in construing this Agreement. Section 11.10 Whenever in this Agreement Ginnie Mae may or can take or refrain from taking an action, such decision to act or refrain from acting shall be in Ginnie Mae’s sole discretion. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 23 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 1 Appendix III-23 APPENDIX III-23 GUARANTY AGREEMENT GINNIE MAE II SINGLE-FAMILY (LEVEL PAYMENT) MORTGAGE-BACKED SECURITIES THE GUARANTY AGREEMENT (“Agreement”) is composed of (i) the terms and conditions contained herein; (ii) a duly executed Schedule of Subscribers and Ginnie Mae Guaranty Agreement (the “Schedule”) incorporating this entire document by reference; and (iii) a Schedule of Pooled Mortgages. This Agreement is made by and between the Government National Mortgage Association, a corporate body organized and existing under the laws of the United States within the Department of Housing and Urban Development (“Ginnie Mae”) and the financial entity identified in the Schedule and approved by Ginnie Mae to issue the securities provided for in this Agreement (“Issuer”); WHEREAS: Under section 306(g) and other related provisions of the National Housing Act, Ginnie Mae is duly authorized to guaranty the timely payment of principal of and interest on securities based on and backed by a pool composed of mortgages which are insured or guaranteed under the National Housing Act, Title V of the Housing Act of 1949, the Servicemen’s Readjustment Act of 1944, Chapter 37 of Title 38, United States Code or section 184 of the Housing and Community Development Act of 1992, and the full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any such guaranty by Ginnie Mae; WHEREAS: The Schedule incorporates by reference both the terms and conditions contained herein and the Schedule of Pooled Mortgages; is executed by the Issuer and Ginnie Mae for each pool or loan package of mortgages securitized by the Issuer and guaranteed by Ginnie Mae; and sets forth a list of the initial Security Holders. The Schedule of Pooled Mortgages details the mortgages that make up the pool or loan package of mortgages to be securitized by the Issuer and guaranteed by Ginnie Mae; WHEREAS: The Issuer has originated or otherwise acquired, and is the owner and holder of, all of the mortgages identified and described in a Schedule of Pooled Mortgages, which shall be appended to the Schedule and provided to Ginnie Mae in connection with the issuance of securities under this Agreement (the “Securities”); WHEREAS: The Issuer has duly authorized the creation of a pool or loan package composed of all the aforesaid mortgages, and the issuance of the Securities to be based on and backed by such pool or loan package of mortgages and guaranteed by Ginnie Mae under section 306(g); WHEREAS: Each of the parties to this Agreement is duly authorized to enter into and has duly authorized the execution of this Agreement, and all other acts have been performed to make the creation of the pool or loan package of mortgages effective and to make the Securities the valid, binding, and legal obligations and undertakings of the Issuer and of Ginnie Mae, in their respective capacities as provided in this Agreement; NOW THEREFORE: The parties to this Agreement mutually agree as follows: EXHIBIT A Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 24 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 2 Appendix III-23 ARTICLE I. GENERAL Section 1.01. The transaction and arrangements provided for herein are identified in the records of the Issuer and Ginnie Mae by the mortgage-pool or loan package number submitted to Ginnie Mae on the Schedule executed by the parties. This Agreement is entered into for purposes of the issuance by the Issuer of the Securities and the guaranty thereof by Ginnie Mae, such issuance and guaranty being pursuant to the aforesaid section 306(g). Section 1.02. Neither Ginnie Mae’s entry into this Agreement nor its operation of the mortgage-backed securities (“MBS”) program is intended to create any right of action on the part of any borrower-mortgagor or any other person or entity, except as expressly provided herein or in any other instrument duly executed by Ginnie Mae. Ginnie Mae assumes no liability to any person or entity on account of any act or omission of the Issuer or Ginnie Mae, except as expressly provided herein. Section 1.03. The effective date of this Agreement and the aforesaid mortgage pool or loan package (“Effective Date”) shall be that date specified in the Schedule as the “Issue Date.” Ginnie Mae’s guaranty shall become effective on the date the ownership of the Securities is registered in the name of the Depository by Ginnie Mae’s transfer agent on the central registry of Security Holders maintained by the transfer agent. Section 1.04. The Issuer shall pay a monthly guaranty fee to Ginnie Mae in the amount provided for in the Schedule. Section 1.05. The terms defined in this section shall have the respective meanings stated for all purposes of this Agreement, and, unless the context indicates otherwise, references to any article, section or subsection shall mean a reference to an article, section or subsection of this Agreement: (a) Advance: The use of the Issuer’s own corporate funds, or funds specifically borrowed pursuant to a Ginnie Mae approved Pool Advance Agreement, to enable the CPTA to make a payment to Security Holders or to pay tax obligations, insurance premiums or other amounts due under the Mortgages when the funds on deposit in the Central P&I Custodial Account, the Principal and Interest Custodial Account, the Escrow Custodial Account or any other accounts related to the pooled Mortgages are insufficient to make the required payments. (b) Central P&I Custodial Account: A single principal and interest custodial account that the Issuer designates and maintains as the principal and interest custodial account that the CPTA is to debit each month for the purpose of paying principal and interest to Security Holders and the guaranty fee to Ginnie Mae in connection with all of the Ginnie Mae II pools and loan packages for which the Issuer is responsible. The Issuer may designate either the Principal and Interest Custodial Account or a separate principal and interest custodial account as the Central P&I Custodial Account. (c) CPTA: The institution that Ginnie Mae employs to act on its behalf to debit Issuer’s Central P&I Custodial Account, to pay Ginnie Mae II Security Holders, to collect Ginnie Mae guaranty fees, and to perform other duties with respect to Ginnie Mae MBS. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 25 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 3 Appendix III-23 (d) Custodial Funds: All principal and interest collected on account of the Mortgages and/or the property securing the Mortgages and any other funds due to the Security Holder; any tax, insurance or other non-principal and interest funds collected for the benefit of the Mortgages or the property; and any unscheduled recoveries of principal. (e) Defective Mortgage: A Mortgage (i) that cannot be insured or guaranteed by an agency of the Federal Government under a statute described in the first Whereas clause of this Agreement, (ii) that has been refused by the insuring or guaranteeing agency, (iii) for which such insurance or guaranty has been withdrawn, (iv) for which, in the case of a Mortgage insured or to be insured under Section 257 of the National Housing Act, FHA is prohibited from paying insurance benefits, whether or not the mortgage is insured, or (v) that does not comply with the terms of the Securities. (f) Escrow Custodial Account: An account that the Issuer maintains with a financial institution for the deposit of escrowed funds to be used to pay taxes, insurance premiums, and any other amounts due under the Mortgages. (g) Excess Funds: With respect to a monthly payment date for the Securities, any amount on deposit for a particular pool or loan package in a Principal and Interest Custodial Account that is in excess of the sum of the scheduled interest and recoveries of principal due in that month and unscheduled recoveries of principal, as defined in section 6.04(a), required to be passed through to Security Holders in that month. (h) Ginnie Mae Transferee: Any person or entity to whom Ginnie Mae transfers or assigns a Mortgage or any rights or benefits related to the Mortgage. (i) Guide: Ginnie Mae Mortgage-Backed Securities Guide, Ginnie Mae 5500.3, Rev. 1, as hereafter amended. (j) Mortgage: Any mortgage identified and described in the Schedule of Pooled Mortgages, whether submitted in hard copy or electronically. As used in this Agreement, the term “Mortgage” shall be construed to include a security instrument, together with the obligation secured thereby, the title evidence, and all other documents, instruments, and other papers pertaining thereto, and the transaction(s) to which they relate, and all claims, funds, payments, proceeds, recoveries, property, monies or assets related in any way thereto, including but not limited to any and all mortgage insurance or loan guaranty claim proceeds, hazard insurance proceeds, payments by borrowers, refunds, rents, foreclosures or sales proceeds, and escrowed items. (k) Principal and Interest Custodial Account: The non-interest bearing account that the Issuer maintains with a financial institution for the deposit of principal (including scheduled and unscheduled) and interest collected from mortgagors, or in connection with the related property, to be made available to the CPTA for payment to Security Holders. (l) Reporting Cutoff Date: With respect to a monthly payment date for the Securities, a day, established by the Issuer or Ginnie Mae, between the 25th day of the prior month and the first day of the month of payment, inclusive. (m) Reporting Month: The interval between the prior month’s Reporting Cutoff Date and the current month’s Reporting Cutoff Date. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 26 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 4 Appendix III-23 (n) Security Holder: Any registered holder of Securities outstanding under this Agreement. Section 1.06. The Issuer hereby agrees to comply with all terms and conditions of the Guide. If any provisions of the Guide conflict with this Agreement, the provisions of this Agreement shall control. Section 1.07. The Issuer hereby covenants and warrants that: (a) the Issuer is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation; that the issuance of the securities, the performance by the Issuer of all provisions hereof and the consummation of the transactions contemplated hereby have been duly and validly authorized; that this Agreement evidences the valid, binding, and enforceable obligation of the Issuer; and that all requisite corporate action has been taken by the Issuer to make the provisions of this Agreement valid and binding upon the Issuer in accordance with its terms; (b) there are no actions, suits or proceedings pending (or, to the knowledge of the Issuer, threatened) against or affecting the Issuer or any Mortgage, which action, suit or proceeding if adversely determined, individually or in the aggregate, would affect adversely the Issuer’s ability to perform its obligations hereunder; and (c) the consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Issuer and will not result in the breach of any term or provision of the charter or by-laws of the Issuer or result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under, any agreement or other instrument to which the Issuer or its property is subject, or result in the violation of any law, rule, regulation, order, judgment, or decree to which the Issuer or its property is subject. Section 1.08. Ginnie Mae and its authorized representatives shall have the right, under this Agreement, in Ginnie Mae’s discretion, to examine, review and audit, during business hours or at such other times as might be reasonable under applicable circumstances, any and all of the books, records, or other information of the Issuer, any mortgage servicer, trustee, agent or other person bearing on the Issuer’s compliance with the requirements of the MBS program, including, without limitation, all Mortgage documents, Mortgage servicing records, Mortgage records and banking records for funds directly or indirectly related to the Mortgages or the Securities. ARTICLE II. SECURITIES Section 2.01. The Securities shall be in the aggregate original principal or face amount, shall bear the annual rate of interest, and shall have the final maturity date specified in the Schedule. Section 2.02. The aggregate principal amount of Securities, together with interest thereon, shall be payable to the Security Holders in monthly installments. The installments shall commence by the 20th day of the month and year designated as the First Payment Date in the Schedule and shall continue on the 20th day of each month until payment in full of the aggregate principal amount and all interest accruing thereon at the rate of interest provided for in the Securities; provided, however, that, in the case of book-entry Securities, payment shall be made on the business day next following the 20th day of a month if such 20th day is not a business day. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 27 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 5 Appendix III-23 Section 2.03. Interest due on Securities each month shall be computed as one-twelfth of the annual rate of interest payable on the Securities multiplied by the unpaid principal balance of the Securities at the end of the prior month. Section 2.04. The Issuer represents that it has furnished to Ginnie Mae information required to prepare the Securities, in accordance with any applicable instructions and directions issued by Ginnie Mae. Ginnie Mae shall cause the preparation and release of all the Securities issued under this Agreement, whether issued to original subscribers or with respect to reissues, transfers, exchanges, or otherwise. Section 2.05. Each Security shall be issued, registered, delivered, transferred, and exchanged in accordance with the requirements of the Guide. Section 2.06. The original principal or face amount of the Securities, and reissues and exchanges thereof, shall be in denominations of not less than twenty-five thousand dollars ($25,000) and, if larger, in denominations divisible by one dollar ($1.00). ARTICLE III. MORTGAGES Section 3.01. The Issuer does hereby transfer, assign, set over, and otherwise convey to Ginnie Mae all the right, title, and interest of the Issuer in and to the Mortgages identified and described in the Schedule of Pooled Mortgages for the subject pool or loan package. Such transfer and assignment shall be effective as of the date and time of delivery (release) of the Securities by Ginnie Mae or its agent, and shall include all interest, principal and other payments made on or with respect to, or related in any way to, such Mortgages. This includes, but is not limited to, payments due on the Mortgages after the Issue Date of the Securities and all unscheduled recoveries of principal received on the Mortgages after the close of business on the day on which the original principal balance of the pool or loan package was determined. Section 3.02. This Agreement may be recorded, at Ginnie Mae’s direction, in all appropriate public offices for real property records in all the counties or other comparable jurisdictions in which any and all of the properties covered by the aforesaid Mortgages are situated, and in any other appropriate public recording offices or elsewhere. Ginnie Mae at its option may direct that such recordation is to be effected by and at the expense of the Issuer. Section 3.03. The Issuer hereby covenants and warrants that each of the Mortgages is eligible under section 306(g) of the National Housing Act and the Guide to back the Securities. The Issuer further covenants and warrants that it will take all actions necessary to ensure continued eligibility of the Mortgages. Section 3.04. The Issuer hereby covenants and warrants that, as of the Effective Date: (a) all of the Mortgages are lien-free and, if obtained from other originators, have been paid for in full; (b) the aggregate outstanding principal balance owed on all the Mortgages is at least equal to the aggregate original principal amount of all the Securities; (c) the required payments of principal and interest due on all the Mortgages shall be sufficient and adequate for the timely payment of the principal and interest on all the Securities, all guaranty fees due to Ginnie Mae and all servicing fees due to the Issuer, as specified in the Guide; and Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 28 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 6 Appendix III-23 (d) the final maturity date of all the Securities is sufficiently subsequent to the latest final maturity date scheduled under the terms and provisions of the Mortgages to allow timely payment of all such Securities. Section 3.05. The Issuer hereby covenants and warrants that it has delivered or will deliver and deposit with an eligible custodian institution appropriate documents evidencing and relating to the pooled Mortgages within the time frame required by the Guide. Such documents and such custodial requirements shall be those set forth in a custodial agreement in the form prescribed by Ginnie Mae. Such custodial agreement has been provided to Ginnie Mae, and its terms and conditions as they relate to Ginnie Mae and the Issuer are incorporated into and made a part of this Agreement by reference. The Schedule identifies the institution selected by the Issuer to serve as custodian for the documents relating to the Mortgage pool or loan package that is the subject of this Agreement. Section 3.06. The Issuer hereby covenants and warrants that it shall replace any Defective Mortgage, within four (4) months after the Effective Date. If, after that time, any Defective Mortgages exist, then: (a) if such Defective Mortgages can be corrected or cured such that they no longer would be defective, the Issuer shall effect such correction or cure; or (b) if such Defective Mortgages cannot be so corrected or cured, the Issuer shall notify Ginnie Mae immediately, and if Ginnie Mae approves, the Issuer shall repurchase the Mortgages at one hundred percent (100%) of the outstanding balance (“Par”). Such correction or repurchase shall occur either 30 days from discovery or the final certification due date, as set forth in the Guide, whichever is earlier. Any delinquency or any default by the borrower occurring before or after the Effective Date in the payment of any Mortgage shall not be deemed a defect for purposes of this section unless, as a consequence of such delinquency or default on a Mortgage insured or to be insured under Section 257 of the National Housing Act, FHA is prohibited from paying insurance benefits. Section 3.07. The Issuer hereby covenants and warrants that it has in its possession for each Mortgage evidence of a valid and enforceable, standard policy of insurance for fire and extended coverage, or comparable insurance coverage, in an amount equal to the greater of the unpaid balance of the Mortgage and the amount required by the insuring or guaranteeing agency, with loss-payable endorsements designating Issuer and its successors and assigns as payee, and that Issuer shall maintain such insurance in full force and effect for as long as the Mortgage remains in effect. ARTICLE IV. SERVICING Section 4.01. The Issuer shall: (a) timely foreclose or otherwise convert the ownership of properties securing the Mortgages that come into and continue in default, taking into account any loss mitigation requirements imposed by the agencies that are insuring or guaranteeing the Mortgages, or otherwise dispose of such Mortgages, with the purpose of liquidating such properties and Mortgages; (b) timely file, process, and receive the proceeds of mortgage insurance or guarantee claims under the laws of the United States, in conformance with and subject to all applicable rules, regulations, and comparable promulgations and issuances of the insuring or guaranteeing agency or instrumentality; (c) make all determinations and do and complete all transactions, matters, or things necessary, appropriate, incidental, or otherwise relating to any of the foregoing or to the ownership of the Mortgages; and Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 29 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 7 Appendix III-23 (d) conform with the servicing standards, procedures, methods, and practices required by the applicable mortgage insurer or guarantor, and any applicable requirements contained in the Guide, and shall establish and maintain books, files, and accounting records in accordance with all of the foregoing. Section 4.02. The Issuer shall have the option to purchase at Par any Mortgage which has been in default for a continuous period of ninety (90) days or more. The Issuer must purchase at Par each Mortgage for which it receives a final claim settlement from the insuring or guarantying agency. These settlement funds must be paid to the Security Holders in accordance with section 6.04. Section 4.03. Except as otherwise provided in this Agreement or in the Guide, the Issuer is hereby authorized and empowered to foreclose on any collateral securing the Mortgages, execute and deliver in its own name, or in the name of its nominee, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge and all other comparable instruments, with respect to all the Mortgages and with respect to the properties covered by all such Mortgages. Any such instrument shall be executed and delivered only in conformance with and subject to all applicable rules, regulations, and comparable promulgations and issuances of the applicable insuring or guaranteeing agency. The foregoing authority and power of the Issuer shall terminate and expire, and the Issuer shall discontinue the execution and delivery of all such instruments, on notification by Ginnie Mae to the effect that it is extinguishing all right, title, or other interest of the Issuer in the Mortgages pursuant to article X. Section 4.04. The Issuer shall maintain, during the life of this Agreement, insurance, errors and omissions, fidelity bond and other coverage in the amount and form as required by and acceptable to Ginnie Mae. Section 4.05. The Issuer shall be permitted to arrange for another entity to carry out any of the mortgage servicing and pool or loan package administration functions required by this Agreement only to the extent such subservicing is specifically authorized by the Guide and approved by Ginnie Mae. Section 4.06. The Issuer may service the Ginnie Mae mortgage pools or loan packages, mortgages and securities for which it has Issuer responsibility, as identified on the records of Ginnie Mae, only so long as the Issuer retains status as an approved Ginnie Mae Issuer, as defined in the Guide. Once an Issuer is declared in default and its rights are extinguished by Ginnie Mae, that Issuer may no longer service any Ginnie Mae mortgage pools or loan packages, mortgages or securities. Section 4.07. In the event the Issuer determines that funds provided by a mortgagor and available in the Escrow Custodial Account are insufficient to meet a payment due for that mortgagor’s taxes, assessments, ground rents, hazard and mortgage insurance premiums, payments for rehabilitation or improvement expenses, the buydown portion of the Mortgage payment, or comparable items, the Issuer shall advance its own corporate funds for the purpose of making such payment. Section 4.08. The Issuer shall establish and maintain accounting records, which shall be in accordance with the Guide and any applicable instructions and directions issued by Ginnie Mae, with respect to all Advances paid under sections 4.07 and/or 6.02, such records to be adequate to reflect: all such Advances made by the Issuer into the Central P&I Custodial Account, the Principal and Interest Custodial Account or any Escrow Custodial Account, payment directly to a taxing authority or insurance company or for any other payments required under the Mortgages; the use made of Advances to enable the CPTA to make payments required on the Securities, including their allocation as between interest and principal on such Securities; the Mortgages with respect to which Advances are made; and the amount (including the allocation as between principal and interest) advanced on each such Mortgage, and Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 30 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 8 Appendix III-23 recoveries and losses of Advances made, with respect to each Mortgage, including their allocation as between interest and principal owed on each Mortgage. ARTICLE V. BANK ACCOUNTS Section 5.01. With respect to all the Mortgages, the Issuer shall establish and maintain a Central P&I Custodial Account with a commercial bank, a mutual savings bank, a savings and loan association, or a credit union, the deposits at which are insured by the Federal Government, and which meets any and all other requirements of Ginnie Mae. The Central P&I Custodial Account must be used exclusively for funds relating to Ginnie Mae MBS program mortgage pools and may be drawn on only by the CPTA, by the Issuer, and/or by Ginnie Mae. The Central P&I Custodial Account must be subject to a master agreement in the form prescribed by Ginnie Mae. The Issuer must make available in accordance with section 6.01 in the Central P&I Custodial Account funds sufficient to enable the CPTA to make timely monthly payments of principal and interest to the Security Holders of record as prescribed in the Securities, this Agreement and the Guide. The Issuer shall make withdrawals from the Central P&I Custodial Account only in accordance with section 5.03 below. All the foregoing shall be otherwise in accordance with the Guide and any applicable instructions and directions issued in writing by Ginnie Mae. Section 5.02. With respect to all the Mortgages, the Issuer shall establish and maintain a Principal and Interest Custodial Account with a commercial bank, a mutual savings bank, a savings and loan association, or a credit union, the deposits at which are insured by the Federal Government, and which meets any and all other requirements of Ginnie Mae. The Principal and Interest Custodial Account must be used exclusively for funds relating to Ginnie Mae MBS program mortgage pools and loan packages and may be drawn on only by the Issuer and/or by Ginnie Mae. The Principal and Interest Custodial Account must be subject to a master agreement in the form prescribed by Ginnie Mae. All principal and interest collected on account of the Mortgages and/or the property securing the Mortgages and any other funds due to the Security Holders at any time must be deposited and retained in the Principal and Interest Custodial Account until made available to the CPTA for payment to Security Holders or placed in a disbursement account in accordance with section 5.06. These items include, but are not limited to: monthly Mortgage payments; prepayments; mortgage or title insurance and guaranty claim settlement proceeds; hazard insurance or any condemnation proceeds not used to repair the collateral (if such funds are to be used to repair the collateral, they first must be deposited in the Escrow Custodial Account and may not be deposited in the Issuer’s corporate accounts); proceeds from foreclosure or repossession sales, and any payments received in lieu of foreclosure or repossession sales; proceeds from any sale, resale or transfer of Mortgages which are required hereunder or by the Guide to be passed through to the Security Holders; repayments of Excess Funds; Advances; and other unscheduled recoveries of principal as set forth in section 6.04. The Issuer shall make withdrawals only in accordance with section 5.03 below. All the foregoing shall be otherwise in accordance with the Guide and any applicable instructions and directions issued in writing by Ginnie Mae. Section 5.03. (a) If the Central P&I Custodial Account and the Principal and Interest Custodial Account are separate accounts, the Issuer may make withdrawals from the Central P&I Custodial Account only to remove any amounts that were not required to be deposited therein under this Agreement or the Guide. (b) If a single account is used as the Central P&I Custodial Account and the Principal and Interest Custodial Account, then in addition to withdrawals to effect timely payment on the Securities, the Issuer may make withdrawals from such account but only to: 1. remit to Ginnie Mae the monthly guaranty fee; Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 31 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 9 Appendix III-23 2. reimburse itself for its previous Advances that were made in accordance with section 6.02, but only if: (i) all Excess Funds used to make Security Holder payments have been fully restored; (ii) the Issuer has maintained records showing the amount of each Advance attributed to a particular Mortgage; (iii) the funds used to reimburse the Issuer come from the payment related to the particular Mortgage on which Issuer made the Advance; (iv) all amounts due and payable to Security Holders have been made available to the CPTA for payment to them; and (v) the Issuer’s records properly demonstrate all of the foregoing. 3. utilize Excess Funds in accordance with section 6.02 hereof; 4. remove any amounts that were not required to be deposited therein under this Agreement or the Guide; or 5. pay itself the permitted servicing fee. Section 5.04. In addition to the Central P&I Custodial Account and the Principal and Interest Custodial Account, the Issuer shall establish and maintain Escrow Custodial Account(s) with a commercial bank, a mutual savings bank, a savings and loan association, or a credit union the deposits at which are insured by the Federal Government, and which meets any and all other requirements of Ginnie Mae. Each Escrow Custodial Account must be used exclusively for funds relating to Ginnie Mae MBS program mortgage pools and loan packages and may be drawn on only by the Issuer, the approved subservicer and/or by Ginnie Mae. Each Escrow Custodial Account must be subject to a master agreement in the form prescribed by Ginnie Mae. All collections of payments for taxes, assessments, ground rents, hazard and mortgage insurance premiums, payments for rehabilitation or improvement expenses, the buydown portion of the Mortgage payment and all comparable items must be deposited and retained in the Escrow Custodial Account on account of the Mortgages except as otherwise required by the appropriate insuring or guaranteeing agency. Section 5.05. Withdrawals from the Escrow Custodial Account(s) may be made only to: (a) effect timely payment of the following items related to the Mortgages pooled under this Agreement: mortgagors’ taxes, assessments, ground rents, hazard and mortgage insurance premiums, payments for expenses related to the property covered by the Mortgages, such as improvement, protection or repair, the buydown portion of the Mortgage payment, or comparable items; and (b) reimburse itself for its previous Advances, but only if: (i) all Excess Funds used to make Security Holder payments have been fully restored; (ii) the Issuer has maintained records showing the amount of each Advance attributed to a particular Mortgage; (iii) the funds used to reimburse the Issuer come from the payment related to the particular Mortgage on which Issuer made the Advance; and (iv) the Issuer’s records properly demonstrate all of the foregoing. Section 5.06. The use of separate “collection accounts” or “disbursement accounts” for the receipt and payment of funds is permitted. Collection accounts must be cleared daily, unless the Issuer uses ACH transfer, in which case the accounts must be cleared every 48 hours. In any event, immediately upon being cleared or removed from the collection account, all funds covered by this article V must be deposited into the Principal and Interest Custodial Account or an Escrow Custodial Account, as appropriate, pursuant to sections 5.02 or 5.04. Disbursement accounts must be subject to master Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 32 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 10 Appendix III-23 agreements in the form prescribed by Ginnie Mae. The disbursement account for principal and interest funds must be used exclusively for funds relating to Ginnie Mae MBS program securities. ARTICLE VI. PAYMENT TO SECURITY HOLDERS Section 6.01. The Issuer shall deposit to the Central P&I Custodial Account funds sufficient to enable the CPTA to make (a) all payments to Security Holders required to be made under the terms and conditions of all Securities issued and outstanding under this Agreement and (b) all other payments required under this Agreement and the Guide (the “Other Payments”). All such deposits must be made in a timely manner on (i) in the case of payments required to be made to Holders of certificated Securities and all Other Payments, the 19th calendar day of the month or, if the 19th calendar day is not a business day, on the business day immediately preceding the 19th calendar day and (ii) in the case of payments required to be made to Securities in book-entry form, the 20th calendar day of the month or the next business day if the 20th calendar day is not a business day. Section 6.02. (a) The Issuer shall establish and maintain such controls and procedures to enable it to accurately project in advance whether or not it will have available sufficient funds to make deposits required under section 6.01 in a timely manner. (b) If the Issuer does not have available sufficient funds to make a required monthly deposit in a timely manner, the Issuer either shall make Advances or may utilize Excess Funds to meet such deposit. If the Issuer is not able to make the full deposit by these means, it shall submit a timely notice to Ginnie Mae, before the deposit is due, requesting Ginnie Mae to advance funds sufficient to make the full monthly deposit. Any such notice shall be a basis for default under section 10.01(a)(2). Section 6.03. The portion of each monthly deposit that is made to enable the CPTA to make payment on the Securities shall be comprised of (a) the interest due pursuant to section 2.03, (b) scheduled payments of principal due on the Mortgages on the first day of the month, or in the case of Securities backed by internal reserve pools on the first day of the month immediately preceding the month, in which the payment on the Securities is due, and (c) unscheduled recoveries of principal of the Mortgages as defined in section 6.04. Section 6.04. (a) With respect to the portion of a monthly deposit that is made to enable the CPTA to make payment on the Securities, unscheduled recoveries of principal are payments received by the Issuer in the Reporting Month preceding the monthly payment on the Securities, and are any and all proceeds received or due in connection with the Mortgages, or the property securing the Mortgages, other than scheduled payments of interest and recoveries of principal and miscellaneous collections (defined in (c), below). Unscheduled recoveries of principal include, but are not limited to, the following items in their entirety: (1) prepayments (excluding scheduled recoveries of principal paid in advance of their due dates, which must be passed through to the Securities Holders on their scheduled due dates); (2) mortgage or title insurance and guaranty claim settlement proceeds; (3) hazard insurance and condemnation proceeds, to the extent not used to repair the collateral; (4) proceeds from foreclosure sales or, if applicable, repossession sales and any payments received in lieu of foreclosure or repossession of the collateral; Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 33 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 11 Appendix III-23 (5) proceeds from any sale, resale, transfer or disposal of a Mortgage or any interest in a Mortgage (this does not include the authorized transfers of Issuer responsibility or the pledging of servicing, if those transactions comply with requirements in the Guide); (6) any principal amount of a Mortgage finally discharged by a bankruptcy court; (7) payment from the Issuer’s own funds as required under this section 6.04; and (8) all other payments or proceeds that include any amounts reflecting the recovery of principal due on a Mortgage. (b) Unscheduled recoveries of principal, including but not limited to all of the items described in section 6.04(a), must be made available to the CPTA for payment to the Security Holders in their entirety, as set forth above, so long as there is an outstanding principal balance on the Securities. Advances or other payments due or authorized under the Mortgages previously made by the Issuer may not be deducted or recovered from these funds until amounts due the Security Holders have been made available to the CPTA in full. Any deduction from an unscheduled recovery of principal made by third parties must be replaced in its entirety by the Issuer prior to making a deposit required to enable the CPTA to make payment to the Security Holders. (c) Miscellaneous collections shall include, to the extent that they are paid pursuant to a Mortgage, only: (1) mortgage insurance premiums; (2) taxes; (3) hazard insurance premium payments; (4) special charges related to servicing; (5) late charges; (6) ground rents; (7) special assessments; (8) water rents; (9) 203(k) funds; (10) buydown funds; (11) attorney’s fees; and (12) any funds to repay the Issuer’s expenditures under the terms of the Mortgage to complete construction, pay for security services or prevent waste. (d) To the extent that the remaining principal balance of a Mortgage has not been recovered by the Issuer at the earliest of: (1) final payment of the mortgage insurance or guaranty claim proceeds, or other final disposition of the claim by the insuring or guarantying Federal agency; (2) the withdrawal of a Defective Mortgage from the pool or loan package; (3) any other liquidation or disposition of the Mortgage or the property secured thereby; or (4) any other act or transaction that has the effect of causing Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 34 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 12 Appendix III-23 the Mortgage or payments or recoveries related to the principal of the Mortgage to no longer be available as backing for the Securities related to that Mortgage, the monthly payment following the earliest month in which an action described in (1), (2), (3) and (4) is taken shall include an amount, to be paid from the Issuer’s own funds, which will reduce the Mortgage to a zero balance and which will reduce to zero the portion of the outstanding principal balance of the Securities attributable to that Mortgage. ARTICLE VII. REPORTS Section 7.01. The Issuer shall furnish to Ginnie Mae, during the life of this Agreement, such periodic, special, or other reports or information, whether or not provided for herein, as Ginnie Mae in its discretion requires. All such reports or information shall be as provided by and in accordance with applicable instructions and directions issued by Ginnie Mae. Section 7.02. Without limitation, the Issuer shall furnish to Ginnie Mae, in the manner prescribed by Ginnie Mae, the following reports or other information: (a) Reports such as shall be required in accordance with applicable instructions and directions issued by Ginnie Mae with respect to any or all of the Mortgages, whether or not still subject hereto, or with respect to any or all of the mortgagors or their successors in interest; (b) Copies of the annual audited financial statements of the Issuer, and other financial reports as may be requested by Ginnie Mae. Such audited financial statements are to be received by Ginnie Mae no later than 90 days after the end of the Issuer’s fiscal year; and (c) Notice in advance of: (1) any contemplated changes affecting the business status of the Issuer, including, but not limited to any merger, consolidation, sale or other transfer of any part or all of its business, change in name, or sanctions by any government regulator or government sponsored enterprise; (2) any change in ownership or control of the Issuer; and (3) any voluntary or involuntary action or proceeding under the Federal bankruptcy statutes or any comparable Federal or State law, whether for purposes of bankruptcy, reorganization, winding up the affairs of the Issuer, or otherwise, or for appointment of a receiver, liquidator, trustee, or other such assignee of transferee, for any of such purposes. Section 7.03. The Issuer shall give Ginnie Mae notice of any impending or actual default by the Issuer, under the terms and provisions of article X, and, in such notice, shall identify the event or events of default and set forth such corrective, curative, or other action as the Issuer shall contemplate and plan with the agreement of Ginnie Mae, or shall state that no such action is planned. ARTICLE VIII. GUARANTY Section 8.01. By and as set forth in its guaranty appearing on or included in the terms of each of the Securities, Ginnie Mae, pursuant to section 306(g) of the National Housing Act, guarantees the timely payment of principal of and interest on the Securities, subject only to the terms and conditions of such Securities, and the full faith and credit of the United States is pledged to the payment of all amounts required to be paid under each such guaranty. Section 8.02. Ginnie Mae covenants and warrants that in any legal action or proceeding, it shall not contest or defend against the timely payment of any amount provided for in, and unpaid on, any Security duly and validly issued under this Agreement, provided that, such payment is sought and claimed Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 35 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 13 Appendix III-23 by or on behalf of a bona fide purchaser and registered owner of such Security, without actual notice at the time of purchase of any basis or grounds for contest or defense by Ginnie Mae against such payment. Section 8.03. Ginnie Mae covenants and warrants that under section 306(d) of the National Housing Act, it has full power and authority to borrow from the Secretary of the Treasury, and the Secretary of the Treasury is therein authorized to lend to Ginnie Mae, any amounts necessary and required to enable Ginnie Mae to meet and comply with the terms and provisions of its guaranty of the Securities, and that it shall so borrow, and the Secretary of the Treasury has agreed to so lend, any amounts necessary and required. Section 8.04. This article VIII shall inure to the benefit and advantage of all the Security Holders, subject to and in accordance with the terms and provisions set forth herein, provided that nothing herein shall derogate or detract from the rights of such Security Holders as set forth in or provided for in connection with such Securities. Section 8.05. If Ginnie Mae makes any payment to Security Holders under its guaranty, it shall be subrogated fully to the rights satisfied by such payment. ARTICLE IX. LOSSES Section 9.01. The Securities shall not constitute any liability of nor evidence any recourse against the Issuer or any of its assets, except with respect to or as against the Mortgages on which they are based and backed, including all interest, principal, and other payments or recoveries due or made on such Mortgages on and after the date of this Agreement; provided, however, that the Issuer shall be liable to Ginnie Mae for: (a) restitution, from the Issuer’s own funds, for the Issuer’s use of any funds in violation of this Agreement, including but not limited to any “unscheduled recoveries of principal” that the Issuer fails to handle, apply and remit in accordance with this Agreement, any Excess Funds withdrawn and not replaced from the pool or loan package Principal and Interest Custodial Account(s), or any other funds that the Issuer improperly handles, fails to place in, or removes from, the Principal and Interest Custodial Account, the Escrow Custodial Account, or any other escrow account maintained or required to be maintained with respect to the Mortgages; and (b) all loss, damage, cost, expense, and liability suffered by Ginnie Mae as a result of the Issuer’s breach of, failure to carry out, or default under, this Agreement. Section 9.02. The Issuer’s liability to Ginnie Mae shall survive any expiration or termination of this Agreement. ARTICLE X. DEFAULT Section 10.01. (a) Immediate Default. An event of default by the Issuer occurs if Ginnie Mae, in its sole discretion, determines that any of the following acts or conditions have occurred or exist: (1) Any failure by the Issuer to deposit in the Central P&I Custodial Account the amount necessary to enable the CPTA to remit to the Security Holders any payment required to be made under the terms and conditions of this Agreement, the Guide or the Securities issued and outstanding under this Agreement, as of the due date of such payment; (2) Any notice by the Issuer to Ginnie Mae for an advance of funds in order to make a deposit necessary to enable the CPTA to make Security Holder payments, or the subsequent making of any part or all of such advance by Ginnie Mae; (3) Any other act or omission by an Issuer that causes the required payment to the Security Holders not to be made timely; Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 36 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 14 Appendix III-23 (4) Any notification to Ginnie Mae by the Issuer that it will not meet, or is unlikely to meet, its payment obligations in a timely manner; (5) Any impending or actual insolvency of the Issuer; (6) Any change with respect to the business status of the Issuer, whether or not subject to the reporting requirements of section 7.02, which materially adversely affects Ginnie Mae under this Agreement, or which materially adversely affects the ability of the Issuer to carry out its obligations hereunder; (7) Any unauthorized use of Custodial Funds; (8) Any withdrawal or suspension of the Issuer’s Federal Housing Administration approved status or of Federal National Mortgage Association or Federal Home Loan Mortgage Corporation approved seller/servicer status; and (9) Any submission of false reports, statements or data or any act of dishonesty or breach of fiduciary duty to Ginnie Mae related to the MBS program. (b) Thirty-day Default. Any failure of the Issuer to observe or comply with any of the terms and provisions of this Agreement or the Guide, or any breach of any warranty set forth in this Agreement, other than an event of default under section 10.01(a), shall constitute an event of default if it has not been remedied or corrected to Ginnie Mae’s satisfaction within thirty (30) days of notification by Ginnie Mae to the Issuer. Ginnie Mae reserves the right in its discretion to declare an immediate default if the Issuer receives three or more notices of failure to comply under this subsection (b). Section 10.02. An event of default under this Agreement shall constitute an event of default under each and every other Guaranty Agreement between the Issuer and Ginnie Mae. An event of default under any other Guaranty Agreement between the Issuer and Ginnie Mae shall constitute an event of default under this Agreement. Section 10.03. On the occurrence or development of any event of default, Ginnie Mae may, in its sole discretion, but is not required to, confer and negotiate with the Issuer with respect to remedying and correcting the default. Any such arrangements mutually agreed upon shall be placed in written contractual form, and shall be supplementary to this Agreement. Section 10.04. On the occurrence or development of any event of default, unless arrangements under section 10.03 above are mutually agreed upon by and between Ginnie Mae and the Issuer and placed in written contractual form duly executed by Ginnie Mae, Ginnie Mae may, by letter directed to the Issuer, pursuant to section 306(g) of the National Housing Act, automatically effect and complete the extinguishment of any redemption, equitable, legal, or other right, title, or interest of the Issuer in the Mortgages. The Mortgages, together with all accounts, books and all other hard copy or electronic records related to the Mortgages or the Securities, automatically shall become the absolute property of Ginnie Mae, subject only to unsatisfied rights of the Security Holders. Upon such extinguishment, the Issuer automatically forfeits, waives and releases any and all rights to seek recovery of or reimbursement for any property or monies related in any way to the Mortgages (including but not limited to undisbursed Mortgage proceeds or Advances that the Issuer made or makes) that the Issuer might otherwise have recovered from any person or entity. Section 10.05. Immediately upon the issuance by Ginnie Mae of a letter of extinguishment to the Issuer, all authority and power of the Issuer under this Agreement, with respect to the Securities, the Mortgages and otherwise, shall automatically terminate and expire. Upon such extinguishment, the Issuer Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 37 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 15 Appendix III-23 shall have no further right to service the Mortgages, pools and loan packages and Securities, shall have no right to any income related to the Mortgages, pools, loan packages, or the Securities and shall have no right to share in the proceeds of any sale or transfer of rights or interests related to them. Section 10.06. Immediately upon the issuance by Ginnie Mae of a letter of extinguishment to the Issuer, the Issuer shall automatically give up and forfeit, and hereby releases to Ginnie Mae, all of its right, title, and interest in and to funds then or thereafter placed in the Central P&I Custodial Account, the Principal and Interest Custodial Accounts, all Escrow Custodial Accounts, and any other accounts related to the Mortgages, and any other claims funds, proceeds, recoveries, property, monies or assets related in any way to the Mortgages, including but not limited to any and all mortgage insurance or loan guaranty claim proceeds, hazard insurance proceeds, payments by borrowers, refunds, rents, foreclosure or sales proceeds, and escrowed items; FURTHER, the authority of the Issuer to make withdrawals against the Central P&I Custodial Account, the Principal and Interest Custodial Account, all Escrow Custodial Accounts, and any other accounts related to the Mortgages or in which any funds pertaining to the Mortgages are kept shall be deemed to have terminated and expired; AND FURTHER, the Issuer shall be deemed to have forfeited and waived any and all rights to recovery or reimbursement, from any source whatsoever, for any Advances (under section 5.03(b) or otherwise), profits, or expenditures related to the Securities or the Mortgages. Section 10.07. On and after the time Ginnie Mae issues a letter of extinguishment to the Issuer, the Issuer shall continue to render Ginnie Mae the fullest assistance practicable in furtherance of the orderly and due removal of the Mortgage from the Issuer. Such assistance may include, at Ginnie Mae’s sole discretion, use of the Issuer’s physical facilities, Issuer’s computers and servicing platform and any other facilities that Ginnie Mae, in its sole discretion, determines necessary to the orderly transfer of the Mortgages backing Ginnie Mae securities. Ginnie Mae will reimburse the Issuer reasonable operating costs, as determined by Ginnie Mae, for the use of Issuer’s facilities and equipment during the transfer process. Issuer shall not object to its employees cooperating with Ginnie Mae or its Subservicer. Issuer shall execute, at Ginnie Mae’s direction, powers of attorney to facilitate the orderly transfer of the portfolio, and the continuation otherwise of this Agreement and the transactions and arrangements set forth and provided for herein. This obligation of the Issuer shall survive any termination of this Agreement. Section 10.08. Immediately upon the issuance by Ginnie Mae of a letter of extinguishment to the Issuer, all authority and power of the Issuer under this Agreement, with respect to the Securities, the Mortgages or otherwise, shall pass to and be vested in Ginnie Mae, and Ginnie Mae shall succeed to all the rights and benefits of the Issuer in its capacity under this Agreement and the transaction and arrangement set forth or provided herein. Ginnie Mae is hereby authorized and empowered to execute and deliver, on behalf of the Issuer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things, necessary or appropriate to effect the purposes of the letter of extinguishment, whether to complete the transfer and endorsement or assignment of the Mortgages, to service the outstanding Securities and the underlying Mortgages, or otherwise. Section 10.09. Notwithstanding Ginnie Mae’s guaranty obligations to Security Holders as set forth in article VIII or a provision in the Mortgage or in any other instrument, and notwithstanding any assignment or transfer to Ginnie Mae or any Ginnie Mae Transferee of the Mortgage or any rights and benefits of the Issuer, or Ginnie Mae’s or any Ginnie Mae Transferee’s succession to such matters, under no circumstances shall Ginnie Mae or any Ginnie Mae Transferee be deemed to assume any liability whatsoever for any breach, act or omission committed by the Issuer. The Issuer shall remain liable for all such breaches, acts or omissions. The obligations of the Issuer set forth in this section shall survive any expiration or termination of this Agreement. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 38 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 16 Appendix III-23 Section 10.10. Notwithstanding the issuance of a letter of extinguishment to the Issuer, the custodial agreement identified in section 3.05, and any other comparable contract by and between the Issuer and any third party with respect to this Agreement, shall continue in full force and effect, unless and until terminated by Ginnie Mae in its sole discretion, modified only by the removal of the Issuer and substitution of Ginnie Mae as provided for in this article. Ginnie Mae shall have full discretion in determining whether and when, upon issuance of a letter of extinguishment, such contracts with any third parties are to be terminated. ARTICLE XI. MISCELLANEOUS Section 11.01. This Agreement shall remain in effect until all terms and conditions contained herein are satisfied. Section 11.02. Any notice, demand, notification, letter, letter of extinguishment, approval, authorization, directive or request arising under this Agreement, or required by the terms and provisions hereof or pursuant to any requirements of law, shall be in writing and may be served in person, by wire or facsimile transmission, by overnight courier service for next day delivery or by mail by depositing the same in any post office, substation, or letter box, enclosed in an envelope, postage prepaid, addressed to the party to whom such notice, demand, notification, letter, letter of extinguishment, approval, authorization, directive or request is directed, at the last known address of such party. Section 11.03. Subject to the provisions of article X above, this Agreement may not be voluntarily assigned or otherwise transferred, in whole or in part, by either of the parties hereto without the written consent of the other, except by or on behalf of Ginnie Mae to any other agency or instrumentality within the Executive Branch of the Government of the United States assuming all the responsibilities, duties, and liabilities of Ginnie Mae hereunder. If and when assigned or otherwise transferred in accordance with this section, this Agreement and all its terms and provisions shall inure to the benefit of and shall be binding upon the Issuer and its successors and assigns, and the assignees or transferees of Ginnie Mae. Section 11.04. This Agreement may be amended from time to time by the Issuer and Ginnie Mae, by mutual agreement and consent, in order to facilitate the observance and fulfillment of the purposes of section 306(g) of the National Housing Act and of this Agreement, provided that, no such amendment shall adversely affect the rights of the Security Holders, such amendments to include, without limitation, any to effect and complete the succession of successors in the capacities of the parties hereto, any to add new terms and provisions for the advantage, benefit, or protection of the Security Holders, or any to remedy and correct any ambiguity or vagueness in the terms and provisions hereof. To be effective, any such amendment must be in writing and be signed by the Issuer and Ginnie Mae. Section 11.05. Ginnie Mae reserves the right to waive any of the requirements contained in this Agreement. Any such waiver must be in writing. Section 11.06. The parties covenant and warrant that, should the Issuer receive FHA debentures in settlement of any default on a Mortgage pursuant to the terms of the FHA insurance commitment, the Issuer shall immediately tender such debentures to Ginnie Mae and Ginnie Mae shall immediately purchase such debentures from the Issuer for cash at Par. Section 11.07. The Issuer shall comply with any applicable rules, regulations, and orders of general applicability issued under Title VI of the Civil Rights Act of 1964; with Executive Order 11063, Equal Opportunity in Housing, issued by the President of the United States on November 20, 1962; and with the Fair Housing Law of 1968, in accordance with applicable rules and regulations of the Federal Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 39 of 58 GINNIE MAE 5500.3, REV. 1 Date: 11/01/2008 17 Appendix III-23 Housing Administration. Moreover, this section incorporates by reference section 202 of Executive Order 11246, Equal Employment Opportunity, issued by the President of the United States on September 24, 1965, and amended on October 13, 1967. The Issuer is required to comply with the implementing rules and regulations of the Department of Labor (41 C.F.R. Part 60-1) and the Department of Housing and Urban Development (24 C.F.R. Part 130). For purposes of the Executive Order 11246, this Agreement is a Government contract. Section 11.08. Except as expressly provided in article VIII, Ginnie Mae assumes no liability to any person or entity for any act or omission of the Issuer. Section 11.09. The rule of construction that agreements are to be construed against the drafter shall not be applied in construing this Agreement. Section 11.10. Whenever in this Agreement Ginnie Mae may or can take or refrain from taking an action, such decision to act or refrain from acting shall be in Ginnie Mae’s sole discretion. Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 40 of 58 EXHIBIT B Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 41 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 42 of 58 [Pages 2-3 intentionally omitted] Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 43 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 44 of 58 [Pages 5-46 intentionally omitted] Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 45 of 58 [Page 48 intentionally omitted] Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 46 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 47 of 58 Lo an L ev el R ec or d Fo r G in ni e M ae L oa n Se ar ch LO AN L EV EL R EC O RD S O F LO AN (S ) F O U N D LO AN LE VE L BO RR O W ER BO RR O W ER PO O L BO RR O W ER S LA ST M O N TH LA ST FI RS T LE N DE R IS SU E FI RS T IS SU ER LO AN PO O L CA SE FH A LO AN M O RT GA GE PA YM EN T M AT CH FO U N D N AM E N AM E N U M BE R DA TE PA YM EN T N U M BE R TY PE TY PE N U M BE R N U M BE R ST RE ET CI TY ST AT E ZI P RA TE FI C O PB RP B DA TE KE Y (Y YY YM M ) (Y YY YM M ) (Y YY YM M ) (Y YY YM M ) 1a 20 10 01 PE RD U M CY N TH IA 60 33 71 20 03 01 20 03 01 33 55 F SF 10 50 91 04 07 25 48 29 25 2 51 00 K IN G AR TH U R EL LE N W O O D GA 30 29 4 6. 00 0 $ 12 1, 43 9. 00 $ $ 20 08 11 M A 1b 20 10 09 PE RD U M CY N TH IA 67 63 38 20 10 06 20 03 01 33 55 F SF 10 50 91 04 07 25 48 29 25 2 51 00 K IN G AR TH U R LN El le nw oo d GA 30 29 4 5. 25 0 $ 12 1, 43 9. 00 $ $ 20 10 07 M A 1c 20 11 08 PE RD U M CY N TH IA 73 84 69 20 11 06 20 03 01 33 55 F SF 10 50 91 04 07 25 48 29 25 2 51 00 K IN G AR TH U R EL LE N W O O D GA 30 29 4 4. 37 5 $ 12 1, 43 9. 00 $ $ 20 11 06 M A Lo an S ea rc h fo r G in ni e M ae R eq ue st : L iq ui da tio n De ta il( s) F ou nd DO CU M EN T PA YM EN T LI Q U ID AT ED LI Q U ID AT IO N PO O L IS SU ER LO AN CA SE RE LE AS E DU E DA TE M O RT GA GE LI Q U ID AT ED IN TE RE ST PR IN CI PA L SE CU RI TY DA TE N U M BE R N U M BE R TY PE N U M BE R DA TE RA TE FI C PR IN CI PA L DU E DU E DU E (Y YY YM M ) (Y YY YM M DD ) (M M DD YY YY ) 1a 20 10 02 2= Re pu rc ha se 60 33 71 33 55 F 10 50 91 04 07 20 10 02 26 12 /1 /2 00 8 6. 00 0 $ $ $ $ $ 1b 20 10 10 2= Re pu rc ha se 67 63 38 33 55 F 10 50 91 04 07 20 10 10 29 7/ 1/ 20 10 5. 25 0 $ $ $ $ $ 1c 20 11 09 2= Re pu rc ha se 73 84 69 33 55 F 10 50 91 04 07 20 11 09 30 6/ 1/ 20 11 4. 37 5 $ $ $ $ $ RE AS O N F O R LI Q U ID AT IO N EX H IB IT C Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 48 of 58 EXHIBIT D Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 49 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 50 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 51 of 58 [Pages 3-23 intentionally omitted] Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 52 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 53 of 58 EXHIBIT E Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 54 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 55 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 56 of 58 [Pages 3 - 48 intentionally omitted] Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 57 of 58 Case 1:17-cv-00972-SCJ-JCF Document 41-4 Filed 06/23/17 Page 58 of 58 3 Case 1:17-cv-00972-SCJ-JCF Document 41-5 Filed 06/23/17 Page 1 of 2 Case 1:17-cv-00972-SCJ-JCF Document 41-5 Filed 06/23/17 Page 2 of 2