Section 825-RICR-20-00-1.6 - PARTICIPATION BY MORTGAGE LENDERS, SERVICERS AND OTHER THIRD PARTIESA. Application by Mortgage Lender. To request to participate in a Program, a lending institution shall submit an application which may be obtained by writing or telephoning the Corporation at its principal office located at 44 Washington Street, Providence, Rhode Island 02903.B. Qualifications. To qualify as a Mortgage Lender, an institution must make residential mortgage loans in the regular, usual and ordinary course of business and must be an approved FNMA or FHLMC seller/servicer or otherwise be approved by the Corporation as having the capability and experience necessary to originate loans responsibly in furtherance of the purposes of the Program.C. Mortgage Purchase Agreement. If the application is accepted, the Mortgage Lender shall enter into a Mortgage Purchase Agreement in form prescribed by the Corporation which shall set forth the manner and terms of sale of Mortgage Loans. The Mortgage Purchase Agreement shall contain, in addition to such other terms and conditions as the Corporation may establish:1. penalty provisions in the event a Mortgage Lender fails to originate Mortgage Loans in accordance with the rules and regulations of the applicable Program and2. provisions respecting the repurchase of non-qualifying Mortgage Loans by Mortgage Lenders. Mortgage Lenders will be required to carry out the Mortgage Purchase Agreement in accordance with the procedures established by the Corporation.D. Commitments to Borrowers; Extensions. No Mortgage Lender shall give a commitment to a Borrower to make a Qualified Mortgage prior to the date on which the Corporation notifies the Mortgage Lender that a Registration has been confirmed and the Corporation has committed to the Mortgage Lender that it will purchase the Loan. The Corporation may extend the time period in which it will accept Qualified Mortgages from any or all Mortgage Lenders upon such terms and conditions as are set forth in the Mortgage Purchase Agreement; provided, however, that in no event shall the total time period for delivery of Qualified Mortgages for any Mortgage Lender, as extended, exceed thirty-six (36) months from the date of the Mortgage Purchase Agreement or such other person as may be required by the Tax Act. The Corporation may terminate commitment in accordance with the terms of the Mortgage Purchase Agreement.E. Mortgage Lender's Reserve Account. 1. Each Mortgage Lender that retains servicing on Mortgage Loans purchased by the Corporation shall establish a non-interest bearing escrow account in the name of and under the exclusive control of the Corporation which shall be known as the "Mortgage Lender's Reserve Account. Such Mortgage Lender shall be required to deposit therein an amount equal to one and one-half percent (1.5%) of the purchase price (or such other amount as the Corporation may from time to time establish by Program Bulletin) of those Qualified Mortgages purchased by the Corporation from such Mortgage Lender for which such Mortgage Lenders retained servicing rights. The amounts so deposited shall be paid out of the Mortgage Lender's Reserve Account to the Mortgage Lender in accordance with the terms of the Mortgage Purchase Agreement; provided, however, that the Corporation may from time to time withdraw from the Mortgage Lender's Reserve Account, in the event of the foreclosure or other disposition for default thereunder of any Qualified Mortgage purchased from such Mortgage Lender, the amount of the deficiency, if any, of the proceeds of such foreclosure or other disposition received by the Corporation below the amount due the Corporation upon such default.2. Upon payment in full or other disposition of the Qualified Mortgages purchased by the Corporation from a Mortgage Lender, amounts remaining in such Mortgage Lender's Reserve Account shall be paid over to such Mortgage Lender.F. Fee. Each Mortgage Lender shall be permitted to collect a fee upon the Closing of the Mortgage Loan, which fee shall be retained by the Mortgage Lender as an origination fee. The amount of the fee shall be as set forth in the Mortgage Purchase Agreement and as may be modified from time to time by Program Bulletin. No other fees or other remuneration shall be directly or indirectly received by the Mortgage Lender in making any Qualified Mortgage unless specifically approved by the Corporation.G. Servicing. A Mortgage Lender that is an approved FNMA or FHLMC servicer for residential mortgage loans that elects to originate Qualified Mortgages on a servicing retained basis will normally be selected by the Corporation as the approved Servicer for loans originated by it pursuant to the Program; provided, however, that Mortgage Lenders shall, with the written consent of the Corporation, have the right to assign servicing to another approved Servicer; and, provided, further, that in all events the Corporation may either service the loan or may contract with any other FHLMC approved servicer or servicers to service any Mortgage Loan and the Mortgage Lender shall consent to such assignment. Each approved Servicer shall be required to enter into an agreement with the Corporation undertaking to service loans for the Corporation in accordance with the Corporation's established procedures for all approved Servicers. Such agreement shall contain provisions relating to servicing compensation, required hazard and private mortgage insurance, escrows, auditing and rights of termination, among other things.H. Third-Party Participation. Subject to the provisions of applicable law the appraisers, credit reference services, title attorneys and hazard and title insurers employed in the origination of a Mortgage Loan to be purchased by the Corporation pursuant to the Program are to be selected by the Mortgage Lender in accordance with its normal practices in conjunction with loans originated in the State for sale to the FNMA or the FHLMC. In order to provide protection against risks and to enhance the marketability of its obligations, the Corporation may from time to time in its sole discretion contract for bond insurance, including coverage against special hazards The provider(s) of such insurance will be selected by the Corporation on the basis of the nature, extent and cost of the insurance and the degree of operational support provided by the insurer.825 R.I. Code R. 825-RICR-20-00-1.6