MERS Residential Marketing Kit New

Process loans, not paperwork™

MERS® Residential

MERS AS ORIGINAL MORTGAGEE (MOM)

MOM saves lenders time and money, and reduces paper-work, by eliminating the need to prepare and record as-signments when trading loans. Borrowers name Mortgage Electronic Registration Systems, Inc. (MERS) as mortgagee and nominee for the lender on deeds of trust and mort-gages that are recorded in the county land records. Lenders then register the loans on the MERS® System and electroni-cally track changes in servicing and beneficial ownership rights over the life of the loan.

MOM MAKES IT WORK

Fannie Mae, Freddie Mac, VA, FHA, Ginnie Mae, the Federal Home Loan Bank MPF®, many state housing authorities and all major Wall Street rating agencies have approved lan-guage designating “MERS as Original Mortgagee” (MOM) on the security instruments. Loans registered in the MERS® System are immunized against future assignments because MERS remains the mortgagee of record no matter how often servicing is traded between MERS members. Thanks to “MOM,” there is no break in the chain of title.

THE MERS® SYSTEM AND RESIDENTIAL LOANS

About two-thirds of all newly originated residential loans in the United States are registered on the MERS® System.

WHAT IS MERS® RESIDENTIAL?

Fannie Mae and Freddie Mac have authorized the following sample MOM language for incorporation into security instruments:

“MERS is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint, MI 48501-2026.”

Please consult your Fannie Mae or Freddie Mac seller/servicer guide, or your document provider, for state-specific language.

Are your vendors MERS® Ready? Look for this sign when you do

business. Lenders and vendors that use this logo can handle your MOM loans today.

HOW MERS WORKS FOR YOUStep 1: Submit your membership application. To apply for membership, complete a MERS® Sys-tem Residential Membership Application by either downloading it from www.mersinc.org or calling our corporate office at 800-646-6377. When we have processed your application, you’ll be assigned to work with an integrator to help you get up and running. This process typically takes between two to three weeks, depending on the applicant’s respon-siveness.

Step 2: Include the “MERS as original mortgag-ee” (MOM) language on the mortgage or deed of trust for each loan.

Step 3: Create a Mortgage Identification Number (MIN). The MIN is a unique, 18-digit number that lenders must generate and affix onto each loan before they can register it on the MERS System. Lenders can gener-ate this number using their in-house systems, such as a loan origination system.

Step 4: Register the loan on the MERS® System. After the loan closes, members register the loan on the MERS® System. The loan can be registered by a MERS® Ready trading partner, or by the lender us-ing one of our easy-access connections:

• MERS® OnLine: gives lenders the power to per-form all MERS® System transactions securely over the Internet.

• Batch transactions: use a computer-to-computer interface that lets lender systems connect with the MERS® System.

MOM SAVES TIME AND MONEY

BY USING MOM, LENDERS CAN:

• Save $35 on average* on each loan• Sell loans faster• Reduce shipping time and expenses• Cut documentation errors• Eliminate “suspense” items• Streamline and simplify the loan closing process

BY USING MOM, SERVICERS CAN:

• Speed up the lien release process• Eliminate chain of title issues• Streamline bulk acquisitions and mergers

1. Apply for membership. Visit our website, www.mersinc.org, to download the MERS® System mem-bership application. You may also call us at 800-646-MERS (6377) and ask to speak with your regional representative.

2. Designate an internal project manager within your company. After submitting your application, assign the task of integrating MERS into your com-pany to a specific person. This person would typi-cally be an operations, closing, shipping or funding manager who has received full support of senior management.

3. Contact Investors. Notify your investors of your intention to become MERS® Ready. If they are also MERS® Ready, request their MERS delivery require-

ments. If not, inquire if they will accept assignments from MERS. Obtain new delivery instructions (if any) for the first time you deliver MOM loans to them.

4. Contact your loan origination system (LOS) provider. Find out what MERS functionality is built into your LOS. Is MIN generation available? Can your system perform batch file registrations?

5. Contact your document provider and ask if they can provide MOM language security instruments.

6. Contact your warehouse lenders and see if they have signed an electronic tracking agreement (ETA) with MERS. If not, find out if they will accept an assignment from MERS.

WHAT IS THE MERS® SYSTEM MEMBERSHIP PROCESS?

* Data provided by Ernst Publishing and based on a national average

ELIMINATE THE NEED TO PREPARE AND RECORD ASSIGNMENTS – FOREVER

3RD PARTY LOANORIGINATOR

DUAL ASSIGNMENT TRANSACTION (correspondent registers loan)

CORRESPONDENTLENDER

INVESTOR

YOU SAVE $64.05 PER LOAN

with MERS

with MERS

MERS REgiStRation FEE

REcoRdEd aSSignMEnt without MERS


coStS without MERS

$38*

$38*

$38*

$38*

$76

$0

$0

$0

$11.95

SINGLE ASSIGNMENT TRANSACTION (correspondent registers loan)

CORRESPONDENTLENDER

INVESTOR

YOU SAVE $26.05 PER LOAN

with MERS

MERS REgiStRation FEE


coStS without MERS$11.95

MERSCORP Holdings, Inc.

Tel. 800.646.MERS (6377)

Fax. 703.748.0183

www.mersinc.org

SUPPORTA variety of sources are available to help you seamlessly integrate the MERS® System into your organization:

Regional Sales Directors are available nationwide for site visits for you and your clients.

Business Integration Managers will guide you through the implementation process.

www.mersinc.org is a convenient online resource filled with technical manuals, forms, and other instructional materials.

Conferences provide specialized education sessions for new and experienced members throughout the year.

Training via the Internet, phone, and on site are available.

Help Desk staff provide active members with personal assistance on everything from system and technical questions to procedural issues.

If you have any other questions

or to request more information,

please contact the MERSCORP

Holdings Customer Division at

800-646-MERS (6377).

OTHER MERS PRODUCTS

MERS® CommercialAdaptation of the MERS® Residential process for the commercial mortgage-backed securities and multifamily markets

The MERS® eRegistryThe system of record to identify the current Controller and Location of the Authorita-tive Copy of the electronic note.

MERS® ServicerIDA fast and free tool to identify the servicer of any loan registered on the MERS® System.

MERS MEMBERSHIP

MEMBERSHIP LEVELSGeneral Membership. For lenders that typically service loans. General memberships are available in four different tiers based on annual volume of loan originations or servicing (whichever is greater).Lite Membership. For lenders that originate and sell loan servicing rights on a flow basis within 30 days.Patron Membership. For vendors and other organizations (e.g., warehouse lenders, investors, trustees, etc.) that work with MERS loans but do not typically register them.Third-Party Originator (TPO) Membership. For lenders that originate loans where Mortgage Electronic Registration Systems, Inc. (MERS) is the original mortgagee but where the investor/lender will perform the trans actions on the MERS® System.

REGISTRATION FEESMERS® System fees consist of an annual membership fee, certain types of transaction fees, and other charges as applicable. Member-ship fees vary according to a company’s size, annual production, or transaction and servicing volumes. Initial membership fees are billed following the receipt of a signed membership application, and annual renewals are billed based on the anniversary date of membership.

FEE SCHEDULE: RESIDENTIAL PRICING

MERS® System fees consist of an annual membership fee, certain types of transaction fees, and other charges as applicable. Membership fees vary according to a company’s size, annual production, or transaction and servicing volumes. Initial membership fees are billed following the receipt of a signed membership application, and annual renewals are billed based on the anniversary date of membership.

MEMBERSHIP FEES

MEMBERSHIP TYPE Th

e Greater Of

ANNUAL PRODUCTION VOLUME

OR

SIZE OF SERVICING PORTFOLIO

=

ANNUAL MEMBERSHIP

FEE

General Member: Tier 1 Less than $250 million Under $2 billion $500

General Member: Tier 2 $250 million to $1 billion $2 billion to $10 billion

$2,000

General Member: Tier 3 $1 billion to $10 billion

$10 billion to $50 billion

$5,500

General Member: Tier 4 More than $10 billion

More than $50 billion

$7,500

Lite Member N/A N/A $264

Patron Member N/A N/A $1,000

Third‐Party Originator (TPO) Member

N/A N/A $150

MEMBERSHIP TYPES MEMBERSHIP TYPE DEFINITION

General Membership For lenders that typically service loans. General memberships are available in four different tiers based on annual volume of loan originations or servicing (whichever is greater; see table above)

Lite Membership For lenders that originate and sell loan servicing rights on a flow basis within 30 days

Patron Membership For companies who support MERS® System‐registered loans but do not typically register them.

Third‐Party Originator (TPO) Membership

For lenders that originate loans where Mortgage Electronic Registration Systems, Inc. (MERS) is the original mortgagee but your investor/lender will perform the transactions on the MERS® System

TRANSACTION FEES MOM & Non‐MOM Loans

Amount (per loan)

MERS® iRegistrations Amount (per loan)

Registration Fee $11.95 Registration Fee $0.97

Pre‐Closing Registration Fee 0.97 Pre‐Closing Registration Fee 0.97

Post‐Closing (after paying pre‐closing registration fee of $0.97)

10.98 Conversion of iRegistration to Non‐MOM Fee

10.98

MERS® 1‐2‐3 Registration Fee 12.95 Seasoned Servicing Transfer Fee 0.97

Seasoned Servicing Transfer Fee 11.95 Intracompany Transfer Fee 0.97

Intracompany Transfer Fee 2.50 Transfer to Non‐MERS Status Fee 0.97

Transfer to Non‐MERS Status Fee 1.00

Transactions Authorized by Member Certificate 10.00

KL2012/02

OTHER CHARGES

MERS CORPORATE SEALS: $25.00 each (plus shipping).

EXCESS MAIL FEE: $12.00 charged for each document as defined in Rule 5, Section 4 of the MERS Rules of Membership.

EXTERNAL RESEARCH FEE: $95.00 charged for each loan requiring additional research because the MERS® System does not reflect the correct information.

TRAINING: Training via conference call is available to all MERS members without charge. Training at a member’s site is also available for $750 (plus airfare, hotel and other reasonable expenses). Other training arrangements can be made depending upon a member’s needs. Members who choose to travel to the MERS corporate office for training will not be charged a fee.

VALUE‐ADDED SERVICES: Any value‐added services are priced, disclosed and agreed to with members prior to the service being rendered.

PHYSICAL DELIVERY FEE: Members who request physical delivery of service of process documents in addition to receiving them electronically will incur a $2.00 per document charge.

DEFINITION OF TERMS

CONVERSION OF iREGISTRATION TO NON‐MOM: charged to the MERS member who initiates a Conversion transaction to change an iRegistration loan to Non‐MOM when the loan is assigned to MERS.

INTRACOMPANY TRANSFER FEE: charged for transfers of loans between one or more Organization IDs assigned to the same member or between members in a parent/child relationship.

MERS® 1‐2‐3 REGISTRATION: registration of loans onto the MERS System by a MERS 1‐2‐3 participant when a preliminary registration file was previously generated.

MERS® iREGISTRATION: loan registered on the MERS® System for informational purposes only where MERS is not the mortgagee or assignee.

REGISTRATION: registration of loans onto the MERS System.

SEASONED SERVICING TRANSFER FEE: charged to the MERS member who initiates a seasoned servicing transfer transaction to another member. Seasoned Servicing Transfers are defined by the particular Purchase and Sale Agreement between a buyer and a seller that identifies a predefined portfolio of servicing to be sold on a specific sale date and transferred on a specific transfer date. Seasoned Servicing Transfers typically occur independent of the sale of the beneficial rights of the loans in a portfolio.

NOTE: Currently, there are no additional transaction fees for transfers of beneficial rights. There is also no fee for Flow Transfers of Servicing. A Flow Transfer of Servicing is defined by a Purchase and Sale Agreement that identifies a commitment to deliver a specified dollar volume (unpaid principal balance) of servicing on a specific delivery

schedule associated with the sale of beneficial rights. The MERS System will not permit a Flow Transfer of Servicing if the transfer date is greater than 270 days from the note date on that loan. In this case, the Seasoned Servicing Transfer Fee applies.

TRANSACTIONS AUTHORIZED BY MEMBER CERTIFICATE: charged to member authorizing MERS to initiate a transaction to reflect the correct servicer on the MERS® System. This fee is charged in addition to the applicable Intracompany or Seasoned Servicing Transfer fee.

TRANSFER TO NON‐MERS STATUS: members who transfer servicing to a non‐MERS Member record an assignment out of MERS, or stop tracking an active iRegistration loan on the MERS® System, are charged a nominal deactivation fee. For MOM and Non‐MOM loans, members are also responsible for preparing and recording an assignment from MERS to the buyer.

MERS®

System

Residential Membership Application

for Lite, General or Patron Categories

Instructions:

Thank you for your interest in becoming a member of the MERS® System. To ensure that your application will

be reviewed as quickly as possible, please use the following checklist.

HAVE YOU:

Completed ALL required company contacts (page 1)?

Listed all memberships or subscriptions to other MERS® products (page 2)?

Provided two written industry references less than six months old with the contact information of the

issuer?

Attached a copy of your lender’s license or certificate of incorporation (required for company name

verification)?

FOR PRIVATELY HELD COMPANIES ONLY, have you:

Attached a copy of an E & O Insurance or Surety Bond?

Attached the resume of two senior principals, e.g., executive sponsor, CEO, production manager?

Please include the National Mortgage Licensing System (NMLS) ID numbers for each individual.

NOTE ON PAYMENT OF MEMBERSHIP FEES: You will be billed as stated in the MERS® System Fee Schedule.

Please do not send payment with this application.

If you have any questions, please contact the MERSCORP Holdings, Inc. corporate office (number below) for your

regional director or the membership manager.

Email, fax or mail your completed and signed application to:

MERSCORP Holdings, Inc.

Attn: Membership Manager

1818 Library Street, Suite 300, Reston, Va. 20190

Tel: (800) 646-6377

Fax: (703) 748-0183

Email: [email protected]

MEMBERSHIP APPLICATION for Lite, General and Patron members

ORG ID# (do not complete)

(MERS® SYSTEM USE ONLY)

Company Information (PLEASE TYPE OR PRINT)

Legal Company Name: State of Incorporation:

d.b.a., If Applicable:

Street Address:

City: State: Zip:

Main Phone: Main Fax:

Toll-Free Number: Corp. Web Site: www.

Company Contacts

Name Title Phone Email

MERS Project Mgr

(To be interviewed)

Person to receive all

MERS® System

Communication

The following contacts are required for activation on the MERS® System. Once activated, you are responsible for keeping them current.

Accounts Billing

Customer Service

Executive Sponsor

Legal Contact

MERS Operations

MERS® System

Administrator

Quality Assurance Officer

Technical STOP! Have you completed all the fields above? If not, please complete them before proceeding with the rest of the application.

The following contacts are not required but please supply if available:

Compliance Officer

Finance

General Counsel

Information Technology

Loan Production

Loan Servicing

Office of the CEO

Operations

Secondary

MERS® System Membership Application Page 2 of 4 Residential 02/2012

Please check the boxes that reflect your volumes for the most recent 12-month period:

Annual Production Volume Size of Servicing Portfolio

Under $250 Million Under $2 Billion

$250 Million - $1 Billion $2 Billion - $10 Billion

> $1 Billion - $10 Billion > $10 Billion - $50 Billion

> $10 Billion > $50 Billion

N/A N/A

Do you have additional active memberships or subscriptions to other MERS® products (e.g., MERS® Link, TPO Member)?

Yes No Type

Please list the name and OrgID of

other MERS® System members your

company may have affiliations with.

NOTE: you may be eligible to

execute a Parent/Child Agreement.

Name Org ID

100

100

100

Please Check All That Apply To Your Organization:

Broker Mortgage Insurer Lender (See note below):

Conduit Servicer Retail %

Custodian Subservicer Wholesale %

FHLB Tax Service Correspondent %

Federal Reserve Bank Title Company NOTE: Please indicate above the

percentage that applies to your

origination activity. Flood Insurer Trustee

Hazard Insurer Vendor/Servicer Provider

Housing Agency Describe:

Interim Funder / Warehouse Lender Consultant / Other:

Investor Describe:

Origination Activity

Volume: # Units Closed Monthly (Notes: )

On Average, days from the note date the loan is sold: Within 10 Days Hold for first payment

Interim Servicing

(collect 2+ payments) Other (Please specify):

Wholesale: Do you close loans in the broker’s name? Yes No TPO? Yes No


Trading Partners: Primary Investors You Sell To (If more room is needed, please use an additional sheet)

Company Name Main Contact Phone E-Mail % Sold/MO

Servicing Released? Yes No

Are you selling directly to Fannie Mae, Freddie Mac and/or Ginnie Mae? Yes No

List housing agencies if applicable: Servicing released? Yes No

Warehouse lender(s): Do they accept MERS loans? Yes No

If servicing, what is your system?

If sub-servicing, who do you use?

Origination and Doc Prep System

LOS System Used: Version #:

LOS functionality (check all that apply): MIN Generation MIN to DOCS

Registration to MERS® System

Doc Prep System(s) Used: Does it support MERS documents? Yes No

Are documents controlled centrally? Yes No If no, explain:

Other relationships: please list as applicable

Your FHA Mortgagee ID Number:

Your VA Approval Number:

Your Fannie Mae Seller / Servicer ID Number:

Name of your Fannie Mae Contact and Phone:

Your Freddie Mac Seller / Servicer ID Number:

Name of your Freddie Mae Contact and Phone:

Your Ginnie Mae Issuer Number:

Name of your Ginnie Mae Contact and Phone:

Your NMLS Lender ID Number:


Please answer the following questions (REQUIRED; applications with blank answers will be returned):

1. What is the number and issuing state of your company’s

primary lending license?

Number: Issuing State:

2. What is the number and issuing state of the primary lending

license of the principal of your company?

Number: Issuing State:

3. Has your company’s lending license(s) ever been subject to censure, or been suspended/revoked?

(Please check one) Yes No

4. Has the license of any principal of the company ever been subject to censure, or been

suspended/revoked? (Please check one) Yes No

5. Has any principal of the company been convicted of a felony/fraud of any kind? (Please check one) Yes No

If you answered YES to questions 3-5 above, please attach a statement of explanation to this application.

PLEASE SIGN BELOW

By completing, signing, and submitting this application, the Applicant is agreeing to be a MERS® System Member. The Applicant hereby agrees to pay all fees and

expenses set forth in the MERS® System Fee Schedule, which may change from time to time; abide by all existing MERS® System Rules and Procedures, which are

incorporated herein by reference and may be amended from time to time; and comply with the Terms and Conditions set forth in the attached addendum entitled

“Terms and Conditions.”

Go here for the Rules of Membership, Terms and Conditions and pricing sheet.

Date: Email address:

Signature of Officer:**

(Please print this form, sign, date and fax back to 703-748-0183 or attach a digitized signature and send via e-mail)

**The Applicant agrees that by attaching or inserting the Applicant’s authorized representative’s electronic signature, his/her electronic

signature is intended to bind the Applicant and the Applicant acknowledges that the electronic signature shall have full force and effect

as to the Applicant agreeing to the terms of this Application.

California Deed of Trust-Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT MERS Modified Form 3005 01/01 —THE COMPLIANCE SOURCE, INC.— Page 1 of 4 14301CA 008/00 www.compliancesource.com © 2000, The Compliance Source, Inc.

Recording Requested By: [Company Name] And When Recorded Mail To: [Company Name] [Name of Natural Person] [Street Address] [City, State Zip Code] _____________________________________ [Space Above This Line For Recording Data] _______________________________________

(SAMPLE) DEED OF TRUST

DEFINITIONS Words used in multiple sections of this document are defined below and other words are defined in Sections 3, 11, 13, 18, 20 and 21. Certain rules regarding the usage of words used in this document are also provided in Section 16. (A) “Security Instrument” means this document, which is dated , together with all Riders to this document. (B) “Borrower” is . Borrower is the trustor under this Security Instrument. (C) “Lender” is . Lender is a organized and existing under the laws of

. Lender's address is . (D) “Trustee” is .

MIN:

Initials _________


(E) “MERS” is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns. MERS is the beneficiary under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint, MI 48501-2026, tel. (888) 679-MERS. (F) “Note” means the promissory note signed by Borrower and dated . The Note states that Borrower owes Lender Dollars (U.S. $ ) plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than . (G) “Property” means the property that is described below under the heading “Transfer of Rights in the Property.” (H) “Loan” means the debt evidenced by the Note, plus interest, any prepayment charges and late charges due under the Note, and all sums due under this Security Instrument, plus interest. (I) “Riders” means all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower [check box as applicable]:

Adjustable Rate Rider Condominium Rider Second Home Rider Balloon Rider Planned Unit Development Rider Biweekly Payment Rider 1-4 Family Rider Revocable Trust Rider Other(s) [specify]

(J) “Applicable Law” means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders (that have the effect of law) as well as all applicable final, non-appealable judicial opinions. (K) “Community Association Dues, Fees, and Assessments” means all dues, fees, assessments and other charges that are imposed on Borrower or the Property by a condominium association, homeowners association or similar organization. (L) “Electronic Funds Transfer” means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated clearinghouse transfers. (M) “Escrow Items” means those items that are described in Section 3. (N) “Miscellaneous Proceeds” means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 5) for: (i) damage to, or destruction of, the Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property. (O) “Mortgage Insurance” means insurance protecting Lender against the nonpayment of, or default on, the Loan. (P) “Periodic Payment” means the regularly scheduled amount due for (i) principal and interest under the Note, plus (ii) any amounts under Section 3 of this Security Instrument. (Q) “RESPA” means the Real Estate Settlement Procedures Act (12 U.S.C. §2601 et seq.) and its implementing regulation, Regulation X (24 C.F.R. Part 3500), as they might be amended from time to time, or any additional or successor

Initials _________

(E) “MERS” is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as anominee for Lender and Lender's successors and assigns. MERS is the beneficiary under this Security Instrument.MERS is organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026,Flint, MI 48501-2026, tel. (888) 679-MERS.


legislation or regulation that governs the same subject matter. As used in this Security Instrument, “RESPA” refers to all requirements and restrictions that are imposed in regard to a “federally related mortgage loan” even if the Loan does not qualify as a “federally related mortgage loan” under RESPA. (R) “Successor in Interest of Borrower” means any party that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument. TRANSFER OF RIGHTS IN THE PROPERTY The beneficiary of this Security Instrument is MERS (solely as nominee for Lender and Lender's successors and assigns) and the successors and assigns of MERS. This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in the

of : [Type of Recording Jurisdiction] [Name of Recording Jurisdiction]

Assessor’s Identification Number: which currently has the address of [Street]

, California (“Property Address”): [City] [Zip Code] TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the “Property.” Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument. BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record.

The beneficiary of this Security Instrument is MERS (solely as nominee for Lender and Lender's successors and assigns) andthe successors and assigns of MERS. This Security Instrument secures to Lender: (i) the repayment of the Loan, and allrenewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements underthis Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, withpower of sale, the following described property located in the

TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements,appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered bythis Security Instrument. All of the foregoing is referred to in this Security Instrument as the “Property.” Borrowerunderstands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument,but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has theright: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; andto take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.

Initials _________


THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property. UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3. Payments due under the Note and this Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity; or (d) Electronic Funds Transfer. Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument. 2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) principal due under the Note; (c) amounts due under Section 3. Such payments shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note. If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note. Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date, or change the amount, of the Periodic Payments. 3.Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until the Note is paid in full, a sum (the “Funds”) to provide for payment of amounts due for: (a) taxes and assessments and other items which can attain priority over this Security Instrument as a lien or encumbrance on the Property; (b) leasehold payments or ground rents on the Property, if any; (c) premiums for any and all insurance required by Lender under Section 5; and (d) Mortgage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the payment of Mortgage Insurance premiums in accordance with the provisions of Section 10. These items are called “Escrow Items.” At origination or at any time during the term of the Loan, Lender may require that Community Association Dues, Fees, and Assessments, if any, be escrowed by Borrower, and such dues, fees and assessments shall be an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Section. Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the Funds for any or all Escrow Items. Lender may waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing. In the event of such waiver, Borrower shall pay directly, when and where payable, the amounts due for any Escrow Initials _________

LawDept 2012-03

MERS® System Terms&Conditions

1. MERSCORP Holdings, Inc. (“MERSCORP Holdings”) and Mortgage Electronic Registration Systems, Inc. (“MERS”) (collectively, the “Companies”)1

2. The Member, at its own expense, shall promptly, or as soon as practicable, cause MERS to appear in the appropriate public records as the mortgagee of record with respect to each mortgage loan that the Member registers on the MERS® System (each, a “MERS Loan”)

, and the Member shall abide by these Terms and Conditions (“T&C”), the MERS® System Rules of Membership (the “Rules”), and applicable Procedures (collectively, the “Governing Documents”), copies of which will be supplied upon request. The Governing Documents shall be a part of the terms and conditions of every transaction that the Member may make or have with the Companies or the MERS® System either directly or through a third party. The Member shall be bound by any amendment to any of the Governing Documents.

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3. The Companies shall, at all times, comply with the instructions of the holder of mortgage loan promissory notes regarding a MERS Loan. In the absence of contrary instructions from the note holder, the Companies shall comply with instructions from the Servicer shown on the MERS® System in accordance with the Rules and/or applicable Procedures.

4. No rights or obligations of the Member with respect to any data or information supplied to the Companies by or on behalf of the Member shall be altered or affected in any manner by the provision of such data or information to the Companies (except as otherwise specifically provided in these T&C or the Rules).

. MERS shall serve as mortgagee of record with respect to all MERS Loans solely as a nominee, in an administrative capacity, for the beneficial owner or owners thereof from time to time. MERS shall have no rights whatsoever to any payments made on account of MERSLoans, to any servicing rights related to MERS Loans, or to any mortgaged properties securing MERS Loans. MERS agrees not to assert any rights (other than rights specified in the Governing Documents) with respect to MERS Loans or mortgaged properties. References herein to “mortgage(s)” and “mortgagee of record” shall include deed(s) of trust and beneficiary under a deed of trust and any other form of security instrument under applicable state law.

5. If the Member uses MERS as Original Mortgagee (“MOM”) on the security instrument, the loan must be registered on the MERS® System within 10 days of the Note Date.

6. The Companies and the Member agree that: (i) the MERS® System is not a vehicle for creating or transferring beneficial interests in mortgage loans, (ii) transfers of servicing interests reflected on the MERS® System are subject to the consent of the beneficial owner of the mortgage loans, and (iii) MERS® membership or a Member’s use of the MERS® System shall not modify or supersede any agreement between or among the Members having interests in mortgage loans registered on the MERS® System.

7. If the Member has a thirdparty register loans (the “Registrar”) on the MERS® System on behalf of the Member, the Registrar shall not be deemed an agent of MERS or of MERSCORP Holdings. The Registrar shall be solely an agent for the Member, and the Companies are only giving consent to the Member to use a Registrar to enter information on the MERS® System on behalf of the Member. The Member agrees that the Companies are not liable to the Member for any errors and omissions, negligence, breach of confidentiality, breach of the Rules and/or applicable Procedures, or willful misconduct of the Registrar, or any employee, director, officer, agent or affiliate of the Registrar in performing its services to the Member.

8. The Member shall promptly pay MERSCORP Holdingsthe compensation due for transactions registered on the MERS® System and other services rendered to the Member based on the then current MERS® System fee schedules, which may change from time to time. The Member shall promptly pay MERSCORP Holdingsany interest and penalties on delinquent fee payments at the rate set by MERSCORP Holdingsfrom time to time. MERSCORP Holdingsshall have the authority to impose reasonable penalties and fines on Members for breach of the Governing Documents, and the Member shall promptly pay such fines in accordance with the terms of their imposition.

9. The Companies shall indemnify and hold harmless the Member, and any employee, director, officer, agent or affiliate of the Member (a “Member Party”), from and against any and all third-party claims, losses, penalties, fines, forfeitures, reasonable attorney fees and related costs, judgments, and any other costs, fees and expenses (“Indemnified Payments”) that the Member Party may sustain directly from the negligence, errors and omissions, breach of confidentiality, breach of the

1MERSCORP Holdings is the service provider for MERS. 2MERS Loans also include any mortgage loan that is shown to be registered to the Member on the MERS® System.

LawDept 2012-03

Governing Documents, or willful misconduct of the Companies, or any employee, director, officer, agent or affiliate of the Companies (a “MERSCORP Holdings/MERS Indemnified Claim”). Notwithstanding the foregoing, the Companies shall not be liable or responsible under the terms of this Paragraph for any losses or claimsresulting from the actions or omissions of any person other than an employee, director, officer, agent or affiliate of the Companies.

The Member shall indemnify and hold harmless the Companies, and any employee, director, officer, agent or affiliate of the Companies (each, a “MERSCORP Holdings/MERS Party”), for any Indemnified Payments which do not result from a MERSCORP Holdings/MERS Indemnified Claim and which such MERSCORP Holdings/MERS Party incurs (i) from the negligence, errors and omissions, breach of confidentiality, breach of the Governing Documents, or willful misconduct of a Member Party, (ii) with respect to a transaction on the MERS® System initiated by such Member, or (iii) as a result of compliance by the Companies with instructions given by the Member, or its designee, as beneficial owner, servicer or secured party shown on the MERS® System (a “Member Indemnified Claim”).

The Companies shall promptly notify the Member if a claim is made by a third party against either the Companies or the Member with respect to any MERS Loan in which the Member is shown on the MERS® System as beneficial owner, servicer or secured party in accordance with the Rules and/or applicable Procedures. The Member shall promptly notify the Companies if a claim is made against the Member that may be subject to the indemnification provisions of this Paragraph.

The obligations of the Companies and the Member under this Paragraph shall survive the termination of the Member’s use of the MERS® System and the Member’s MERS® membership.

10. The Companies and the Member shall maintain appropriate insurance coverage that shall include an errors and omissions insurance policy, as well as a fidelity bond. The Companies shall not be required to maintain coverage for persons who may be appointed at the request of the Member as MERS Signing Officers. The Member’s policies shall protect and insure the Companies against losses in connection with the release or satisfaction of a mortgage loan without having obtained payment in full of the indebtedness secured thereby. Upon request, the Companies or the Member shall cause to be delivered to the other a certified true copy of such errors and omissions insurance policy and fidelity bond.

In the event of any loss of principal or interest on a mortgage loan or any Indemnified Payments for which reimbursement is received from a fidelity bond or any errors and omissions insurance policy or other insurance policy, the proceeds from any such bond or insurance shall be held in trust for and be promptly paid to the Member who is shown as the servicer on the MERS® System on behalf of the beneficial owner unless otherwise requested by the beneficial owner.

11. Any notice or other communication which is required or permitted to be given or made to the Companies pursuant to any provision of the Governing Documents shall be given or made in writing, and shall be sent by nationally recognized overnight courier or facsimile, followed by delivery of the original via first class mail, addressed as follows: MERSCORP Holdings, Inc., Corporate Secretary, 1818 Library Street, Suite 300, Reston, VA 20190.

12. These T&C and all transactions effected by the Member with the Companies shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia without regard to its choice of law provisions.

13. Neither the Member nor the Companies shall institute a proceeding before any tribunal to resolve any controversy or claim arising out of or relating to the Governing Documents, or the breach, termination or invalidity thereof (a “Dispute), before such party has sought to resolve the Dispute through direct negotiation with the other party. If the Dispute is not resolved within thirty (30) days after a written demand for direct negotiation, the parties shall attempt to resolve the Dispute through mediation. If the parties do not promptly agree on a mediator, either party may request the then chief judge of the Circuit Court of Fairfax County, Virginia to appoint a mediator. All mediation proceedings hereunder shall be held in Washington, D.C. If the mediator is unable to facilitate a settlement of the Dispute within a reasonable period of time, as determined by the mediator, the mediator shall issue a written statement to the parties to that effect, and the aggrieved party may then seek relief in accordance with the arbitration provisions of this Paragraph. The fees and expenses of the mediator shall be paid by the party initiating the Dispute.

In the event that the Member and the Companies are not able to resolve a Dispute in accordance with the mediation provisions of this Paragraph, such Dispute shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof; provided, however, that the place of arbitration shall be Washington, DC, and fees and expenses for the arbitration proceedings shall be paid by the party initiating arbitration.

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MERS® SYSTEM RULES OF MEMBERSHIP

Table of Contents RULE 1—MEMBERSHIP ........................................................................................................... 2

RULE 2—REGISTRATION ON THE MERS® SYSTEM ....................................................... 8 RULE 3—OBLIGATIONS OF MERS® ENTITIES ............................................................... 14

RULE 4—RULE CHANGES .................................................................................................... 17 RULE 5—FEES .......................................................................................................................... 18

RULE 6—PROCEDURES ......................................................................................................... 22 RULE 7—DISCIPLINARY ACTIONS .................................................................................... 23

RULE 8—FORECLOSURE & BANKRUPTCY .................................................................... 25 RULE 9—USE AND OWNERSHIP OF INFORMATION .................................................... 28

RULE 10—INTERIM SECURITY INTERESTS ................................................................... 31 RULE 11—SERVICES .............................................................................................................. 32

RULE 12—WARRANTIES ....................................................................................................... 34 RULE 13—INDEMNIFICATION ............................................................................................ 37

RULE 14— NOTIFICATION TO MERSCORP HOLDINGS OF PENDING LAWSUITS AND ADDITIONAL INDEMNIFICATION PROVISIONS .................................................. 39

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RULE 1

MEMBERSHIP Section 1. MERSCORP Holdings, Inc. (“MERSCORP Holdings”) and Mortgage

Electronic Registration Systems, Inc. (“MERS SPE Inc.”) shall make the services of the

mortgage electronic registration system (the “MERS® System”) available to any. A Member is

defined as an organization or natural person who has signed a Membership Agreement and is not

more than sixty (60) days past due as to the payment of any fees due and owing to MERSCORP

Holdings or MERS SPE Inc. MERS SPE Inc. and MERSCORP Holdings are each referred to as

a “MERS Entity”. Following a Service Provider Replacement Event, as defined in Rule 11,

Section 2, “MERSCORP Holdings” shall mean either MERS SPE Inc. or the Replacement

Service Provider, as determined by MERS SPE Inc.

Section 2. Actions with respect to approval or disapproval of applications for

membership shall be taken on behalf of MERSCORP Holdings by such persons as may from

time to time be designated by the Board of Directors of MERSCORP Holdings. Subject to

Section 3 of this Rule, no applicant shall be approved unless it meets each of the standards of

financial condition, operational capability and character defined below:

(a) If the applicant anticipates registering transactions on the MERS® System, the

applicant has demonstrated to the satisfaction of MERSCORP Holdings that it has adequate

personnel capable of registering transactions on the MERS® System with necessary promptness

and accuracy, that such personnel shall complete the computer-based training program

designated by MERSCORP Holdings, and that the applicant has internal security procedures in

place to conform to any condition and requirement which MERSCORP Holdings reasonably

deems necessary for its protection and the protection of other Members:

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(b) MERSCORP Holdings has received no information which, in the sole

discretion of MERSCORP Holdings, would adversely reflect on the applicant, or any person

associated with the applicant as defined in Section 3 below, to such extent that access of the

applicant to the MERS® System should be denied, and any such applicant may be deemed not to

meet the qualifications set forth in this paragraph only if:

(i) MERSCORP Holdings shall have reasonable grounds to believe that

the applicant, or any person associated with the applicant, has been or is responsible for

(A) fraud, fraudulent acts or breach of fiduciary duty, (B) making a misstatement of a

material fact or omitting to state a material fact to MERSCORP Holdings in connection

with its application to become a Member, or thereafter while a Member, or (C) the

violation of such statutes, rules and regulations applicable to the applicant.

(ii) the applicant, or any person associated with the applicant, has been

convicted prior to the filing of its application to become a Member, or at any time

thereafter while a Member, of any crime, felony or misdemeanor which involves the

purchase, sale or pledge of a mortgage loan or any interest therein or arose out of conduct

of the business of funding, acquiring, lending on the security of, or servicing mortgage

loans (or any business ancillary or related to any of the foregoing), or involves robbery,

larceny, embezzlement, fraudulent conversion, forgery or misappropriation of funds or

other property, or other dishonest acts; or

(iii) the applicant has been, or while a Member is, prohibited from

transacting business with one or more of the following: (A) Fannie Mae, (B) Freddie

Mac, (C) Ginnie Mae, (D) the U.S. Department of Housing and Urban Development, or

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(E) the U.S. Department of Veterans Affairs; provided, however, that such prohibition

shall not be the sole basis for denial of membership.

(c) Eligible organizations and natural persons seeking to become Members shall

make application on such form as MERSCORP Holdings shall from time to time prescribe. In

connection with its application, an applicant shall submit its audited financial statements for its

two most recent fiscal years. MERSCORP Holdings shall review the application to verify that

the applicant satisfies all of the standards for membership, and in connection therewith the

applicant shall make available to MERSCORP Holdings such books and records and shall

provide such other information as MERSCORP Holdings shall reasonably request for such

purpose. Failure of an applicant to cooperate in providing requested books, records, and

information shall be grounds for denial of the application for membership.

Section 3. MERSCORP Holdings may approve the application of any applicant,

either unconditionally or on an appropriate temporary or other conditional basis, if MERSCORP

Holdings in its sole discretion determines that any standard specified in this Rule, as applied to

such applicant, or any person associated with such applicant, is unduly or disproportionately

severe or that the conduct of such applicant or person associated with such applicant has been

such as not to make it against the interest of MERSCORP Holdings, the existing Members, and

the public to approve such application. MERSCORP Holdings shall notify each applicant of the

action taken with respect to its application and the reasons therefor. For purposes of this Rule,

the term “person associated with” when applied to any person or entity shall mean (i) any partner,

senior officer, director or controlling person of such person or entity or (ii) any officer or

employee of such person or entity who has, or shall have, access to the MERS® System.

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Section 4. Notwithstanding the foregoing, MERSCORP Holdings may decline to

accept the application of any applicant upon a determination by MERSCORP Holdings that the

MERS® System does not have adequate space, data processing capacity or other operational

capability at that time to permit the inclusion of additional Members without impairing the

ability of the MERS® System to provide services for existing Members; provided, however, that

applicants whose applications are denied solely pursuant to this section shall be approved as

promptly as the capabilities of the MERS® System permit, in the reasonable judgment of

MERSCORP Holdings, in the order in which their applications were filed with MERSCORP

Holdings or in such other order as may be determined by MERSCORP Holdings from time to

time in its reasonable judgment.

Section 5. An applicant whose application to become a Member has been approved

by MERSCORP Holdings shall be considered a Member after signing and delivering to

MERSCORP Holdings a Membership Agreement and paying the initial MERS® System

membership fee.

Section 6. Each Member shall immediately notify MERSCORP Holdings if at any

time it fails to meet any of the membership criteria specified in this Rule.

Section 7. Any Member may withdraw its membership from the MERS® System by

giving ninety (90) days written notice to the President or Secretary of MERSCORP Holdings.

Such withdrawal shall be effective on the ninetieth day after receipt at which time all rights and

obligations of the withdrawing Member shall cease, except any obligation of such Member to

pay fees or assessments assessed prior to withdrawal to the extent such obligation has not been

fulfilled and except for any conditions the MERSCORP Holdings Board of Directors may

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establish for the de-registration of mortgages from the MERS® System, including fees to defray

the costs of such deregistration.

(a) Any Member that sells, transfers, or otherwise disposes of all or substantially

all of its assets to any entity that is not a member of the MERS® System, shall be treated as

having withdrawn from membership in the MERS® System as of the effective time of such

disposition of assets or combination with such entity unless the acquiring entity signs a

Membership Agreement with MERSCORP Holdings and as such shall be bound by the MERS®

System Rules of Membership (these “Rules of Membership”) and Procedures (as defined in Rule

6).

(b) If any Member that merges or otherwise combines with any other entity and

such other entity is the surviving entity and is a non-Member of the MERS® System, then the

Membership Agreement entered into by the Member shall remain in full force and effect as to

the non-Member entity unless the surviving non-Member withdraws from membership or is

removed in accordance with these Rules of Membership or the Procedures.

(c) Members have an affirmative obligation to notify MERSCORP Holdings in

writing in the event of (i) any merger or combination with, or acquisition of, another member or

(ii) merger, combination or acquisition by another entity.

(d) Members acknowledge and agree that the Member’s Organization

Identification Number (“Org ID”) and each Mortgage Identification Number (“MIN”) associated

with that Org ID are the property of MERSCORP Holdings, and the use of such Org ID and

MINs are subject to the terms and conditions of these Rules of Membership and the other

governing documents for membership, including the MERS® System Membership Terms and

Conditions.

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(e) If a Member sells the contractual rights to service a loan registered on the

MERS® System to another Member, then the selling Member shall reflect such transfer on the

MERS® System in accordance with these Rules of Membership and Procedures and a Seasoned

Servicing Transfer Fee in the amount specified in the MERS® System Fees Schedule (as defined

in Rule 5) in effect at the time the transfer is effective shall be due to MERSCORP Holdings for

each loan transferred, provided that the transfer date is more than two-hundred-seventy (270)

days from the Note Date for that loan. If (i) a Member initiates a servicing transfer transaction

on the MERS® System between two Org IDs issued to that Member or (ii) a Member initiates a

servicing transfer transaction on the MERS® System to another Member who is affiliated with

that Member, then such transfer transaction shall be subject to a Intracompany Transfer Fee for

each loan transferred in the amount specified in the MERS® System Fees Schedule in effect at

the time the transfer is effective, provided that the transfer date is more than

two-hundred-seventy (270) days from the Note Date for that loan and further provided that the

affiliate relationship between the two Org IDs is shown on the MERS® System (i.e., referred to

as a Parent/Child relationship in the Procedures).

Section 8. A Member may change its Membership Profile on the MERS® System at

any time. Each Member shall designate one individual within its organization as its contact

person for all of such Member’s dealings with the MERS® System, MERSCORP Holdings or

MERS SPE Inc. It is the Member’s responsibility to update the MERS® System if the contact

person changes.

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RULE 2

REGISTRATION ON THE MERS® SYSTEM Section 1. MERSCORP Holdings, in its sole discretion, shall determine the type and

level of access to the MERS® System permitted to each Member and the types of transactions

that such Member may register on the MERS® System. No Member may register or attempt to

register any transaction not authorized under these Rules of Membership or the Procedures.

Section 2. Subject to Section 1 above, each Member may register any mortgage loan

on the MERS® System in accordance with the Procedures.

Section 3. Each Member shall promptly, or as soon as practicable, register on the

MERS® System, in accordance with these Rules of Membership and the Procedures, any and all

of the following transactions to which such Member is a party which involve a mortgage loan

registered on the MERS® System until such time as the mortgage loan is deactivated from the

MERS® System:

(a) the pledge of any mortgage loan or security interest therein and the

corresponding release of such security interests;

(b) the pledge of any servicing rights or security interest therein and the

corresponding release of such servicing rights or security interests;

(c) the transfer of beneficial ownership of a mortgage loan by a Member to a

Member;

(d) the transfer of beneficial ownership of a mortgage loan by a non-Member to a

Member;

(e) the transfer of beneficial ownership of a mortgage loan by a Member to a

non-Member;

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(f) the transfer of servicing rights with respect to a mortgage loan by a Member to

a Member;

(g) the registration of servicing rights with respect to a mortgage loan from a

non-Member to a Member;

(h) the transfer of servicing rights with respect to a mortgage loan from a Member

to a non-Member (requiring deactivation);

(i) the initiation of foreclosure of any mortgage loan registered on the MERS®

System;

(j) the release of a lien with respect to a mortgage loan registered on the MERS®

System;

(k) the creation of a sub-servicing relationship with respect to a mortgage loan

registered on the MERS® System; and

(l) any renewal, extension or modification of a mortgage loan registered on the

MERS® System that involves the recording of a new security instrument and does not merely

change the rate, principal balance or term.

Section 4. (a) The transfer to a non-Member of servicing rights with respect to a

mortgage loan registered on the MERS® System shall require the deactivation of such mortgage

loan from the MERS® System in accordance with these Rules of Membership and the Procedures.

Upon the withdrawal or removal of a Member, all mortgage loans for which such Member acts

as servicer shall be deactivated from the MERS® System, provided, however, that the mortgage

loans shall remain registered with the MERS® System if the substitute servicer is a Member and

all MERS® System fees relating to the servicing transfer to the substitute servicer are paid. The

transfer to a non-Member of a beneficial interest in a mortgage loan registered on the MERS®

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System shall not require the de-registration of such mortgage loan from the MERS® System and

such transfer shall reflect the non-Member investor by using Org ID 1000002, effective October

1, 2011. A deactivation is required if: (i) the servicer is a non-Member or (ii) such non-Member

beneficial owner shall require deactivation.

(b) As long as there are no contrary instructions, when the beneficial

ownership of a mortgage loan registered on the MERS® System is vested in a non-Member,

MERSCORP Holdings and MERS SPE Inc. shall at all times comply with the instructions of the

Member shown on the MERS® System as the servicer of such mortgage loan with respect to

transactions relating to such mortgage loan. Such Member shall indemnify and hold harmless

MERSCORP Holdings and MERS SPE Inc., and any employee, director, officer or affiliate of

MERSCORP Holdings or MERS SPE Inc., for any and all liability incurred as a result of

compliance by MERSCORP Holdings or MERS SPE Inc. with instructions given by such

Member on behalf of the non-Member beneficial owner.

Section 5. (a) Each Member, at its own expense, shall cause “Mortgage

Electronic Registration Systems, Inc.” to appear in the appropriate public records as the

mortgagee of record with respect to each mortgage loan that the Member registers on the

MERS® System. MERS SPE Inc. is a wholly owned subsidiary of MERSCORP Holdings

created for the purpose of serving as the mortgagee of record in the appropriate public records.

The Member shall monitor the public records to verify that it has complied with the preceding

sentence and shall maintain an adequate quality assurance program to ensure that its verification

procedures are effective. The Member hereby warrants to MERSCORP Holdings and MERS

SPE Inc. that either (i) an appropriate mortgage, or deed of trust, or other such instrument as may

be required under applicable state law, naming “Mortgage Electronic Registration Systems, Inc.”

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as mortgagee, or (ii) an appropriate assignment of mortgage, or assignment of deed of trust, or

other such instrument as may be required under applicable state law, naming “Mortgage

Electronic Registration Systems, Inc.” as mortgagee, has been or as soon as practicable shall be,

properly prepared and delivered to the appropriate recording office and the Member shall

promptly register on the MERS® System the date on which such instrument was delivered. Upon

the Member’s becoming aware of any discrepancy between the information shown on the

MERS® System and the information in the public records, the Member shall promptly correct the

information on the MERS® System.

(b) At or prior to the time a Member registers a mortgage loan on the MERS®

System, such Member shall provide evidence reasonably satisfactory to MERSCORP Holdings

demonstrating that “Mortgage Electronic Registration Systems, Inc.” is, or as soon as practicable

shall be, properly recorded as mortgagee of record in the appropriate public records with respect

to such mortgage loan.

(c) MERS SPE Inc. shall not act as mortgagee of record for the purpose of

procuring borrowers for the Member or making mortgage loans on behalf of the Member.

(d) Reference herein to “mortgage(s)” shall include deed(s) of trust, and any

other form of security instrument under applicable state law. References herein to “mortgagee of

record” shall include the named beneficiary under a deed of trust in those jurisdictions where

deeds of trust are used to secure loans, and any similar status as used in connection with any

other form of security instrument under applicable state law.

Section 6. Each Member hereby appoints “Mortgage Electronic Registration Systems,

Inc.,” as its nominee (as a limited agent) with respect to each mortgage that such Member

registers on the MERS® System. MERSCORP Holdings and MERS SPE Inc. shall at all times

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comply with the instructions of the holder of mortgage loan promissory notes. In the absence of

contrary instructions from the beneficial owner, MERSCORP Holdings and MERS SPE Inc. may

rely on instructions from the servicer shown on the MERS® System in accordance with these

Rules of Membership and the Procedures with respect to transfers of beneficial ownership,

transfers of servicing rights, and releases of security interests applicable to such mortgage loan.

The beneficial owner shall give any such contrary instructions to MERSCORP Holdings and

MERS SPE Inc. in writing and they may rely on such instructions until receipt of further written

instructions from the beneficial owner.

Section 7. Each Member shall review for accuracy and completeness all information

shown on the MERS® System with respect to mortgage loans and related transactions registered

by such Member, and promptly update any incorrect information.

Section 8. Within ten (10) business days of receiving notice from the Member

servicing the loan that the mortgage loan has been paid in full, MERSCORP Holdings shall give

notice to all Members shown on the MERS® System as having interests in such mortgage loan.

The Member servicing the mortgage loan shall be responsible, at its own expense, to:

(a) Take, or cause to be taken, appropriate action, including delivery to the

appropriate recording office of an instrument of satisfaction or release (which may be signed by

a certifying officer of MERS SPE Inc.), to extinguish the lien of such mortgage in the proper

manner within the applicable state imposed time frames, and register on the MERS® System the

date of such action, or

(b) Notify MERSCORP Holdings that, in fact, the mortgage loan has not been

paid in full. If MERSCORP Holdings is notified that a lien release has not been executed in

compliance with applicable state imposed time frames, and the Member fails to take such action

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or give MERSCORP Holdings notice that the mortgage loan has not been paid in full, then each

MERS Entity reserves the right to release such mortgage. Such Member, upon demand, shall

reimburse MERS SPE Inc. for its out-of-pocket costs in connection with release of the mortgage,

including any penalties for failure to release the mortgage or take other action in a timely manner,

and shall pay an administrative fee determined by MERS SPE Inc., and

(c) Indemnify MERSCORP Holdings and MERS SPE Inc. with respect to any

liability which may arise as a result of the failure of such Member to take such action or give

MERSCORP Holdings such notice in a timely and accurate manner. Without limiting the

generality of the foregoing, such indemnification shall extend to circumstances in which a

mortgage is released by MERS SPE Inc., but the mortgage loan has not been paid in full, or in

which such Member wrongfully refuses to authorize MERS SPE Inc. to release the mortgage.

(remainder of the page left intentionally blank)

14

RULE 3

OBLIGATIONS OF MERS® ENTITIES Section 1. MERSCORP Holdings shall within two (2) business days forward to the

appropriate Member or Members, in the form prescribed by and otherwise in accordance with

the Procedures, all properly identified notices, payments, and other correspondence received by

MERSCORP Holdings or MERS SPE Inc. with respect to mortgage loans registered on the

MERS® System for which MERS SPE Inc. serves as mortgagee of record.

Section 2. MERSCORP Holdings shall provide to Members certain standard reports

concerning information contained on the MERS® System, as specified in the Procedures, and

such other reports as MERSCORP Holdings may determine from time to time.

Section 3. (a) Upon request from the Member, MERS SPE Inc. shall promptly

furnish to the Member, in accordance with the Procedures, a corporate resolution designating one

or more officers of such Member, selected by such Member, as “certifying officers” of MERS

SPE Inc. (a “MERS Corporate Resolution”) to permit such Member (i) to release the lien of any

mortgage loan registered on the MERS® System to such Member, (ii) assign the lien of any

mortgage naming “Mortgage Electronic Registration Systems, Inc.” as the mortgagee when the

Member is also the current promissory note-holder, or if the mortgage is registered on the

MERS® System, is shown to be registered to the Member, (iii) to foreclose upon the property

securing any mortgage loan registered on the MERS® System to such Member, (iv) to take any

and all actions necessary to protect the interest of the Member or the beneficial owner of a

mortgage loan in any bankruptcy proceeding regarding a loan registered on the MERS® System

that is shown to be registered to the Member, (v) to take such actions as may be necessary to

fulfill such Member’s servicing obligations to the beneficial owner of such mortgage loans

(including mortgage loans that are removed from the MERS® System as a result of the transfer

15

thereof to a non-Member), (vi) to take action and execute all documents necessary to refinance,

amend or modify any mortgage loan registered on the MERS® System to such Member, (vii)

endorse checks made payable to “Mortgage Electronic Registration Systems, Inc.” to the

Member that are received by the Member in payment on any mortgage loan registered on the

MERS® System that is shown to be registered to the Member. In instances where MERS SPE

Inc. designates an officer of a Member as a certifying officer of MERS SPE Inc. for the limited

purposes described above, such Member shall indemnify each of MERSCORP Holdings and

MERS SPE Inc. and any of its employees, directors, officers, agents or affiliates against all loss,

liability and expenses which they may sustain as a result of any and all actions taken by such

certifying officer.

(b) Upon request by MERS SPE Inc. , the Member shall deliver to MERS

SPE Inc. a corporate resolution naming the Corporate Secretary of MERS SPE Inc. as a

“certifying officer” of the Member solely for the purpose of installing “Mortgage Electronic

Registration Systems, Inc.” as mortgagee of record on mortgage loans which have been

registered on the MERS® System by the Member.

(c) At the request of the beneficial owner of a mortgage loan, or any designee

thereof as shown on the MERS® System, MERS SPE Inc. shall provide to such beneficial owner

or designee a recordable assignment for such mortgage loan to another party designated by the

beneficial owner or designee; provided, however, that such beneficial owner or designee shall

warrant to MERS SPE Inc. that such assignment shall be promptly recorded. Requests for

recordable assignments may be made only for purposes of deactivating a mortgage loan from the

MERS® System. The deactivation of a mortgage loan for any reason shall be subject to the

payment of all applicable fees and expenses, including, without limitation, the costs of preparing

16

and recording the assignment. All such applicable fees and expenses shall be included in a fee

schedule.

Section 4. Unless otherwise specifically stated herein, any action required or

permitted to be taken by MERSCORP Holdings or MERS SPE Inc. pursuant to these Rules of

Membership shall be taken on behalf of MERSCORP Holdings or MERS SPE Inc. , as

applicable, by such persons as may from time to time be designated by the respective Board of

Directors of MERSCORP Holdings or MERS SPE Inc.


17

RULE 4

RULE CHANGES Section 1. (a) MERSCORP Holdings shall notify in writing all Members of any

proposed changes to these Rules of Membership, and shall provide a copy of such proposed

changes to all Members no fewer than ninety (90) days prior to the proposed implementation

date of such changes.

(b) Members may submit to MERSCORP Holdings for its consideration their

comments with respect to any such proposal, and such comments shall be reviewed by

MERSCORP Holdings and filed with the records kept by MERSCORP Holdings.

Notwithstanding the receipt of any such comments, the Board of Directors of MERSCORP

Holdings, in its sole discretion, shall have the right to amend, add to or repeal any Rule or part

thereof after the expiration of such ninety (90) day comment period, so long as such amendment

is not contrary to the Certificate of Incorporation of MERSCORP Holdings.

(c) Each Member shall be bound by any amendment to the Rules with respect to

any transaction occurring subsequent to the time such amendment takes effect as fully as though

such amendment were now a part of the Rules; provided, however, that no such amendment shall

affect the Member’s right to withdraw from the MERS® System in accordance with the

procedures set forth in these Rules of Membership before such amendment or change becomes

effective.

(d) MERSCORP Holdings shall provide a ninety (90) day written notice for

any changes to the MERS® System Membership Terms and Conditions.

18

RULE 5

FEES Section 1. (a) Each Member shall pay such fees, charges and assessments to

MERSCORP Holdings for membership, registrations, transfers, and other transactions on the

MERS® System and other services rendered by MERSCORP Holdings as shall be determined

from time to time by MERSCORP Holdings in its sole discretion, and specified in a fees

schedule promulgated by MERSCORP Holdings which may change from time to time (the

“MERS® System Fees Schedule”).

(b) MERSCORP Holdings shall provide all Members with at least thirty (30)

days advance written notice of changes to the MERS® System Fees Schedule with the effective

date of the new fees.

(c) Transaction fees for the transfer of servicing between Members (including

Intra-company Transfers) shall be payable by the transferor. If the transferor fails to pay such

transaction fees due to bankruptcy, or because the transferor is no longer in business or cannot

otherwise be located or contacted, MERSCORP Holdings will invoice the transferee and the

immediate payment of those transaction fees shall be the responsibility of the transferee. Any

monies received by MERSCORP Holdings from the bankruptcy estate of the transferor shall be

applied as a credit to the transferee’s MERSCORP Holdings account. MERSCORP Holdings has

invoked this provision because the transferee has received the benefit of the service provided by

MERSCORP Holdings and is in the best position to protect itself by holding back a portion of

the purchase price when purchasing the corresponding loans. The transferee will also be

responsible for the cost if the servicing transfer transactions have not been initiated on the

MERS® System, and the transferor cannot initiate the transactions themselves due to the

19

circumstances listed in the preceding sentence and the transferee requests such transaction to be

initiated by MERSCORP Holdings. If the transferee fails to pay any transaction fees by the

invoice due date, MERSCORP Holdings may suspend the transferee’s access to the MERS®

System pending the payment in full by the transferee of such transaction fees.

(d) If a Member registers a mortgage loan on the MERS® System pursuant to

these Rules of Membership and Procedures, and that Member subsequently transfers the

servicing rights to that mortgage loan to another Member without first paying the registration fee

to MERSCORP Holdings pursuant to Rule 5, Section 1(a), and the transferor fails to pay such

transaction fees due to bankruptcy, or because the transferor is no longer in business or cannot

otherwise be located or contacted, MERSCORP Holdings will invoice the transferee and the

immediate payment of those transaction fees shall be the responsibility of the transferee. Any

monies received by MERSCORP Holdings from the bankruptcy estate of the transferor shall be

applied as a credit to the transferee’s MERSCORP Holdings account. MERSCORP Holdings has

invoked this provision because the transferee has received the benefit of the service provided by

MERSCORP Holdings and is in the best position to protect itself by holding back a portion of

the purchase price when purchasing the corresponding loans. If the transferor has not registered

the mortgage loan on the MERS® System and is unable to register the mortgage loan due to

bankruptcy, or because the transferor is no longer in business or cannot otherwise be located or

contacted, then the transferee must register the mortgage loan and pay the corresponding

registration fee pursuant to Rule 5, Section 1(a). If the transferee fails to pay any transaction fees

by the invoice due date, MERSCORP Holdings may suspend the transferee’s access to the

MERS® System pending the payment in full of such transaction fees.

20

Section 2. MERSCORP Holdings shall have the authority to charge a Member for

any unusual expenses caused directly or indirectly by such Member, or incurred at its request,

including, without limitation, the cost of producing records pursuant to a court order or other

legal process in any litigation or other legal proceeding to which such Member is a party or in

which such records relating to such Member are so required to be produced, whether such

production is required at the instance of such Member or of any other person, provided however,

that MERSCORP Holdings shall give the Member written notice of such Court Order or legal

process in advance of producing the records to enable the Member to pursue its legal rights to

refuse the request.

Section 3. Each Member shall pay interest on any delinquent fee payments at the rate

set from time to time by MERSCORP Holdings. Said interest rate shall be specified in the fees

schedule.

Section 4. Whenever a Member receives notice of a foreclosure proceeding, service

of process on a lawsuit naming a MERS Entity as a defendant, or a code violation notice, that is

forwarded to the Member by a MERS Entity on a property where MERS SPE Inc. holds a lien

or held a lien for that Member, the Member has an affirmative duty to the MERS Entities to

review the document and respond accordingly. This includes retaining counsel to defend the

MERS Entities against any possibility of a monetary judgment against a MERS Entity. If the

lawsuit or document involves a foreclosure action with MERS SPE Inc. holding a lien on behalf

of the Member, and the Member determines not to contest the foreclosure or answer the lawsuit,

the Member should inform the foreclosing party to send subsequent documents in the lawsuit or

foreclosure to MERS SPE Inc. c/o of the Member’s address.

21

If MERSCORP determines that MERS SPE Inc. ’s receipt of mail involving a

foreclosure proceeding, lawsuit or code violation resulted from a violation of any of these Rules

of Membership or the Procedures, then MERSCORP Holdings shall be entitled to charge the

Member a fee of $12.00 for each filing or document in the proceeding or for each piece of mail

received related to the code violation that MERS SPE Inc. forwards to the Member beyond the

initial service of process or notification that MERS SPE Inc. received on behalf of that Member.


22

RULE 6

PROCEDURES

Section 1. (a) MERSCORP Holdings shall prescribe from time to time reasonable

Procedures with respect to the business and operation of MERSCORP Holdings and the MERS®

System and the execution of transactions on the MERS® System (the “Procedures”). Each

Member shall be bound by such Procedures and any amendment thereto in the same manner as it

is bound by the provisions of these Rules of Membership.

(b) MERSCORP Holdings shall give Members sixty (60) days notice prior to

implementation of any amendment to the Procedures.


23

RULE 7

DISCIPLINARY ACTIONS Section 1. MERSCORP Holdings, in its sole reasonable discretion may sanction a

Member for one or more violations of these Rules of Membership or the Procedures or for errors,

delays or other conduct detrimental to the operation of MERSCORP Holdings or MERS SPE

Inc. , the MERS® System or other Members, including, without limitation, a Member’s failure to

provide adequate training and supervision to its employees to enable proper use of the MERS®

System, by imposing any of the following:

(a) removal as a Member, but only if the notice requirements of Rule 7, Section 2

below have been met by MERSCORP Holdings;

(b) suspension, for a period and upon terms determined by MERSCORP

Holdings;

(c) fines, in an amount determined by MERSCORP Holdings;

(d) censure; or

(e) any other fitting requirements that may be determined by MERSCORP

Holdings.

Section 2. MERSCORP Holdings shall give written notice to the applicable Member

of the terms of any such violation and possible sanction, which shall include a brief description

of the basis for the imposition of the sanction. The Member shall then have fifteen (15) days

from the date of receipt of the notice to provide a written response and have an opportunity to be

heard. At the expiration of the fifteen (15) days, if MERSCORP Holdings determines that a

breach has occurred and that sanctions may be imposed, the Member shall be given thirty (30)

days to cure the breach. If the breach is not cured within the thirty (30) days, MERSCORP

24

Holdings may impose such sanctions on the Member. If the Member does not cure the breach

during the thirty (30) day curing period, then upon the expiration of the curing period,

MERSCORP Holdings shall notify any other member of MERSCORP Holdings for whom the

breaching Member acts as an authorized servicer or sub-servicer of mortgage loans registered on

the MERS® System.

Section 3. If the nature of the breach is the same or similar to a breach by the Member

that has occurred within the last year, there may not be a curing period.


25

RULE 8

FORECLOSURE & BANKRUPTCY Section 1. (a) With respect to each mortgage loan, which shall mean a loan

secured by a mortgage, deed of trust or security deed (any such instrument is referred to herein as

a “Security Instrument”), for which the note owner or the note owner’s servicer has decided to: (i)

initiate foreclosure proceedings, whether judicial or non-judicial or (ii) file a Proof of Claim or

file a Motion for Relief from Stay in a bankruptcy (“Legal Proceedings”); and for which

“Mortgage Electronic Registration Systems, Inc.” is the mortgagee, beneficiary or grantee of

record (as applicable), the note owner or the note owner’s servicer shall cause a MERS

Certifying Officer (also known as a “Signing Officer”) to execute an assignment of the Security

Instrument from MERS SPE Inc. to the note owner’s servicer, or to such other party expressly

and specifically designated by the note owner. The Member agrees and acknowledges that

MERS SPE Inc. has the authority to execute such assignment of the Security Instrument in

accordance with the immediately preceding sentence. The assignment of the Security Instrument

must be executed, notarized, witnessed (if applicable) and be in recordable form and comply

with all applicable laws, regulations and rules.

(b) The Member agrees and acknowledges that when MERS SPE Inc. is

identified as nominee (as a limited agent) of the note owner in the Security Instrument, MERS

SPE Inc., as nominee, is the mortgagee, beneficiary, or grantee (as applicable), in the Security

Instrument on behalf of and for the benefit of the note owner.

(c) The Member servicing a mortgage loan registered on the MERS® System

shall be responsible for processing foreclosures in accordance with the applicable agreements

between such Member and the note owner and all applicable laws, regulations and rules.

26

(d) The authority to initiate foreclosures and file Legal Proceedings in the

name of MERS SPE Inc. granted to a Member’s Certifying Officers under such Member’s

MERS Corporate Resolution is revoked for actions initiated on or after July 22, 2011, the

effective date of this Rule. (the “Effective Date”). Effective September 1, 2011, the Member

whose Certifying Officer initiates a foreclosure in MERS SPE Inc.’s name could be sanctioned

by MERSCORP Holdings pursuant to Rule 7, provided however, if the Member voluntarily

dismisses such foreclosure or withdraws the filed Legal Proceedings within 21 days of filing the

action, no sanction shall be levied. The authority to file Proof of Claims and Motions for Relief

from Stay in the name of MERS SPE Inc. granted to a Member’s certifying officer under the

Member’s MERS Corporate Resolution is revoked.

(e) (i) The note owner or the note owner’s servicer shall cause the

Certifying Officer to execute the assignment of the Security Instrument from MERS SPE

Inc. to the note owner’s servicer, or to such other party expressly and specifically

designated by the note-owner before initiating foreclosure proceedings or filing Legal

Proceedings and promptly send the assignment of the Security Instrument (in recordable

form) for recording in the applicable public land records.

(ii) Notwithstanding subsection (e)(i), in states in which the law does

not require the party initiating foreclosure proceedings or filing Legal Proceedings to also

be the mortgagee, beneficiary, or grantee of record (as applicable), the note owner or the

note owner’s servicer shall cause the Certifying Officer to execute the assignment of the

Security Instrument from MERS SPE Inc. to the note owner’s servicer or to such other

party expressly and specifically designated by the note-owner, either before or promptly

after initiating foreclosure proceedings or filing any Legal Proceedings and promptly

27

send the assignment of the Security Instrument (in recordable form) for recording in the

applicable land records; provided, however, until MERS SPE Inc. has identified and

MERSCORP has published a list of states that do not require an executed assignment of

the Security Instrument from MERS SPE Inc. to the note owner’s servicer, or to such

other party expressly and specifically designated by the note owner before initiating

foreclosure proceedings or filing Legal Proceedings, the note owner or the note-owner’s

servicer shall cause the Certifying Officer to execute the assignment from MERS SPE Inc.

to the note owner’s servicer, or to such other party expressly and specifically designated

by the note owner before initiating foreclosure or filing Legal Proceedings in all states.


28

RULE 9

USE AND OWNERSHIP OF INFORMATION

Section 1. (a) Each Member shall at all times keep confidential and shall not sell or

otherwise disclose any information contained on the MERS® System that is (i) not owned by

such Member, (ii) was not originally provided by Member to a MERS Entity, or (iii) is not

available in public records or otherwise known to the Member. The MERS Entities and the

Member shall use a reasonable degree of care consistent with the Standards for Safeguarding

Customer Information (16 C.F.R. parts 314) (the “Safeguards Rule”) to preserve the

confidentiality of any such information, and to take all reasonable action by instruction,

agreement or otherwise with its directors, officers, employees, affiliates and agents to satisfy its

obligation with respect to confidentiality, non-disclosure and limitation of use of any such

information. The obligations of the MERS Entities and the Member under this Rule 9 shall

survive termination of this agreement.

(b) The MERS Entities shall have no ownership rights whatsoever in or to any

information contained on the MERS® System. Notwithstanding the foregoing, each MERS

Entity is authorized to (i) use the information contained on the MERS® System to compile

transaction volume reports to track current or previous usage levels, project future usage and

provide the mortgage industry with usage data which may be used to gauge the success of the

MERS® System, but excluding any references to a particular borrower name or address other

than in reports given to the Board of Directors of a MERS Entity, (ii) use the information

contained on the MERS® System as part of its quality control process to monitor compliance

with operational standards and time frames, (iii) furnish any information contained on the

MERS® System to any governmental authority pursuant to a subpoena or court order, provided,

29

however, that MERSCORP Holdings shall undertake, to the extent it reasonably can under the

circumstances, to notify all Members shown on the MERS® System as having an interest in a

mortgage loan which is the subject of such subpoena or court order to allow such Members time

to attempt to quash such subpoena or court order, or (iv) provide information and reports (as

approved by the Board) regarding mortgage activity and mortgage loans registered on the

MERS® System that otherwise could have been obtained through the public land records if not

for the implementation of the MERS® System.

(c) Any reports given to third parties shall not identify individual Members or

borrower names and addresses as to transaction information without the Member’s prior consent.

Section 2. (a) Each MERS Entity acknowledges and agrees that: (a) the Member will be

entering customer information into the MERS® System to which a MERS Entity has access as a

part of the services provided to the Member, and (b) such customer information is subject to

Section 1 of Rule 9 of these Rules of Membership – “Use and Ownership of Information”.

(b) MERSCORP Holdings has implemented and will maintain an information

security program consisting of reasonable administrative, physical, and technical safeguards

designed to meet the Objectives set forth in 16 C.F.R. 314.3(b) of the Safeguards Rule.

MERSCORP Holdings’s controls and procedures designed to safeguard the

confidentiality and security of the information stored on the MERS® System are generally

described in the MERS® System Integration Handbook (Volumes I and II). MERSCORP

Holdings believes the controls and procedures so described meet the Objectives specified in the

Safeguards Rule. MERSCORP Holdings agrees to maintain controls and procedures designed to

safeguard the confidentiality and security of the information stored on the MERS® System that

are no less stringent than those described in the current version of the MERS® System

30

Integration Handbook. MERSCORP Holdings further agrees that any changes or modifications

to such controls and procedures will also be designed to meet the Objectives specified in the

Safeguards Rule. Each Member shall inform MERSCORP Holdings in writing whenever the

Member believes that the controls and procedures designed to safeguard the confidentiality and

security of the information stored on the MERS® System fail to meet the Objectives specified in

the Safeguards Rule. MERSCORP Holdings agrees the Member (or a mutually agreeable third

party representative) will be given access to monitor that MERSCORP Holdings has satisfied the

provisions of this paragraph, including access to any audits, summaries of test results or other

equivalent evaluations of the controls and procedures designed to safeguard the confidentiality

and security of the information stored on the MERS® System. MERSCORP Holdings will

promptly report to the Member any actual or suspected breach of the confidentiality or security

of any information contained on the MERS® System.

(c) As part of the controls and procedures described in paragraph (b) of this

section, MERSCORP Holdings maintains, and will continue to maintain, a Disaster Recovery

Plan, a summary of which will be supplied to the Member upon request. MERSCORP Holdings

agrees that the Disaster Recovery Plan will be reviewed at least annually and will include annual

testing to ensure that the MERS® System can be restored within 48 hours after the declaration of

a disaster under the plan.

31

RULE 10

INTERIM SECURITY INTERESTS

Section 1. The pledge of a security interest in any mortgage loan registered on the

MERS® System to an interim funding lender, such as a warehouse lender, shall be shown as

released on the MERS® System when the security interest has been released in accordance with

the methods and procedures established among the interim funding lender, the lender granting

the security interest and the subsequent purchaser of such mortgage loan, if any, as specified

below.

Section 2. An interim funding lender’s security interest shall be shown as released on

the MERS® System: (i) for investors selecting Option 1 of the Procedures, when the beneficial

owner registers its interest on the MERS® System; or (ii) for investors selecting Option 2 of the

Procedures, when the beneficial owner registers its ownership of the loan and the interim funding

lender registers the release of its security interest on the MERS® System.

Section 3. In the event that Member provides to MERSCORP Holdings specific

wiring instruction information relating to mortgage loans registered on the MERS® System,

MERSCORP Holdings and Member agree that: (i) such information is for informational

purposes only, (ii) Member makes no representations or warranties about the accuracy and

completeness of such information, and (iii) Member shall not be liable to MERSCORP Holdings,

any other member, or any other party based on the provision of, and reliance on, such

information.

32

RULE 11

SERVICES Section 1. MERSCORP Holdings shall provide, either directly or through a third

party, all services, resources, software, equipment and facilities (collectively, the “Services”) as

determined from time to time by the Board of Directors of MERSCORP Holdings and described

more particularly in the Procedures. MERSCORP Holdings shall provide the Services in

compliance with reasonable performance standards (the “Performance Standards”) as determined

from time to time by the Board of Directors of MERSCORP Holdings and described more

particularly in the Procedures.

Section 2. If MERSCORP Holdings ceases to be the service provider to MERS SPE

Inc. with respect to the operation of the MERS® System pursuant to the Intercompany Services

Agreement dated as of June 8, 2011 between MERSCORP Holdings and MERS SPE Inc. (as

amended if applicable) (a “Service Provider Replacement Event”), then MERS SPE Inc. shall

promptly notify the Members of such event in writing and designate one or more third parties

(each, a “Replacement Service Provider”) to provide such services to MERS SPE Inc.

Notwithstanding anything contained in these Rules of Membership or the

MERS® System Membership Terms and Conditions to the contrary, if a Service Provider

Replacement Event occurs (i) MERSCORP Holdings shall be deemed to no longer be a party to

or subject to these Rules of Membership or the MERS® System Membership Terms and

Conditions (except that the rights of MERSCORP Holdings to indemnification shall survive),

and (ii) MERSCORP Holdings shall no longer be entitled to any Member fees, charges and

assessments, and all Member fees, charges and assessments shall be payable directly by

Members to MERS SPE Inc. and/or the Replacement Service Provider(s) as directed by MERS

SPE Inc., with such amendments as MERS SPE Inc. may make as deemed necessary or

33

appropriate in accordance with the provisions of these Rules of Membership applicable to

amendments.


34

RULE 12

WARRANTIES

Section 1. Work Standards. MERSCORP Holdings represents and warrants that the

Services shall be rendered with promptness and diligence in accordance with the practices and

high professional standards used in well-managed operations performing services similar to the

Services and shall be performed in a workmanlike and cost effective manner. MERSCORP

Holdings represents and warrants that it shall use, and shall require all third-party vendors to use,

adequate numbers of qualified personnel with suitable training, education, experience, and skill

to perform the Services and satisfy the Performance Standards.

Section 2. Maintenance. MERSCORP Holdings represents and warrants that the

equipment and software used in the performance of the Services shall be maintained so that they

operate in accordance with the Performance Standards, including (i) maintaining such equipment

in good operating condition, subject to normal wear and tear, (ii) undertaking prudent repairs and

preventive maintenance on such equipment, and (iii) performing prudent software maintenance,

including timely updating software used in the performance of the Services, including the

MERS® System, to meet any applicable legal or regulatory changes.

Section 3. Technology. MERSCORP Holdings represents and warrants that the

Services shall be provided using proven technology which shall take advantage of technological

advancements in the industry.

Section 4. Non-Infringement. MERSCORP Holdings represents and warrants that it

shall, and shall require its Third Party Vendors to, perform its responsibilities in a manner that

does not infringe, or constitute an infringement or misappropriation of, any patent, copyright,

trademark, trade secret or other propriety rights of any third party.

35

Section 5. Software Ownership or Use. MERSCORP Holdings represents and

warrants that, with respect to the software used in the performance of the Services, it either owns,

or is authorized to use, the software in the performance of the Services.

Section 6. Authorization. MERSCORP Holdings represents and warrants that it has

the requisite corporate power and authority to carry out its responsibilities.

Section 7. Viruses. MERSCORP Holdings represents and warrants that it and any

third-party vendors providing the Services shall not code or introduce any Viruses (defined

herein) into the MERS® System and any other systems and software used to provide the Services

and it shall take reasonable business precautions to ensure that no Viruses are coded or

introduced into the MERS® System and any other systems and software used to provide the

Services. The term “Viruses” shall mean any (i) program code, programming instruction or set

of instructions intentionally construed with the ability to damage, interfere with or otherwise

adversely affect computer programs, data files or operations; or (ii) other code typically

designated to be a virus.

Section 8. Disabling Code. MERSCORP Holdings represents and warrants that it

and any third-party vendor providing the Services shall not insert into the MERS® System and in

any other systems and software used to provide the Services any code which would have the

effect of disabling or otherwise shutting down all or any portion of the MERS® System or

Services.

Section 9. Millennium Compliant. MERSCORP Holdings represents and warrants

that the MERS® System shall have the ability to provide all of the following functions: (a)

consistently handle date information before, during and after January 1, 2000, including without

limitation accepting date input, providing date output, and performing calculations on dates or

36

portions of dates; (b) function accurately and without interruption before, during and after

January 1, 2000, without change in operations associated with the advent of the new century; (c)

respond to two-digit year-date input in a way that resolves any ambiguity as to century in a

disclosed, defined, and predetermined manner; and (d) store and provide output of date

information in ways that are unambiguous as to century.

Section 10. Licensing and Qualification. MERSCORP Holdings and MERS SPE Inc.

represents and warrants that each has obtained all state licenses and has qualified to conduct

business in all fifty states and the District of Columbia where such licensing and/or qualification

is required by law for an entity serving as mortgagee of record, solely as nominee, in an

administrative capacity, for the beneficial owner thereof.

Section 11. Disaster Recovery Plan. MERSCORP Holdings represents and warrants

to the Member that it has in place and will continue to maintain a fully effective disaster

recovery plan. MERSCORP Holdings will routinely (no less often than once per year) test its

disaster recovery plan to ensure its continued effectiveness and capability of protecting its

Members in the event of a disaster. MERSCORP Holdings will provide the results of such test

to the a Member in writing upon request.


37

RULE 13

INDEMNIFICATION Section 1. MERSCORP Holdings and MERS SPE Inc. agree to indemnify the Member

and the Member agrees to indemnify MERSCORP Holdings and MERS SPE Inc. in accordance

with Paragraph 9 of the MERS® System Membership Terms and Conditions . In addition to

Paragraph 9 of the MERS® System Membership Terms and Conditions, the following provisions

shall apply:

(a) the indemnified party may but shall not be obligated to participate in the

defense at its own expense and using counsel of its own choosing; provided, however, that the

indemnifying party has the right to control the defense.

(b) the indemnified party shall cooperate and provide assistance as the

indemnifying party reasonably requests and shall be entitled to recover reasonable costs of

providing assistance.

(c) the indemnifying party shall keep the indemnified party informed on status of

claim and litigation.

(d) the indemnifying party shall not, without indemnified party’s written consent,

compromise or settle the claim if such compromise or settlement would impose an injunction or

other equitable relief upon indemnified party or such compromise or settlement does not include

the third party’s release of the indemnified party.

(e) if indemnifying party fails to timely defend, contest or otherwise protect

against the claim and fails to contest in writing the indemnified party’s right to indemnification,

the indemnified party may, but shall not be obligated to defend and make any compromise or

settlement and recover the costs thereof from the indemnifying party.

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(f) If the indemnifying party contests in writing the indemnified party’s right to

indemnification, then the indemnified party shall defend the claim and may seek to recover all

expenses paid by the indemnified party from the indemnifying party, and if successful, shall not

be liable to pay the fees and expenses of initiating the mediation or arbitration pursuant to the

Membership Agreement.


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RULE 14

NOTIFICATION TO MERSCORP HOLDINGS OF PENDING LAWSUITS AND ADDITIONAL INDEMNIFICATION PROVISIONS

Section 1. The provisions set forth in this Rule 14 are in addition to those provisions set

forth in Rule 13 of these Rules of Membership and Paragraph 9 of the MERS® System

Membership Terms and Conditions. To the extent that any provision of this Rule 14 conflicts

with any provision of Rule 13 of these Rules of Membership or Paragraph 9 of the MERS®

System Membership Terms and Conditions, the provisions of this Rule 14 shall control. The

notification requirements under this Rule shall become effective February 1, 2012.

Section 2. (a) Without regard to responsibility under Paragraph 9 of the MERS® System

Membership Terms and Conditions:

(i) After receipt of service of process of a lawsuit involving a

mortgage loan registered to a Member that names MERS SPE Inc. and/or MERSCORP

Holdings, the MERSCORP Holdings Mail Center will forward the lawsuit to the Member

showing on the MERS® System as the Servicer or Subservicer for such mortgage loan.

Within 21 days after a Member’s receipt of the lawsuit from the MERSCORP Holdings

Mail Center, the Member shall acknowledge its receipt and provide contact information

for the internal contact and outside counsel (if retained) to MERSCORP Holdings. If the

Member fails to provide such information, and MERSCORP Holdings determines that

the lawsuit is not being defended as an indemnified claim, then MERSCORP Holdings

and/or MERS SPE Inc. (as applicable), upon written notice to the Member, may retain

counsel to undertake the defense, settlement, and/or compromise of such lawsuit on

behalf of, and at the sole expense of, the Member. Upon written notice to MERSCORP

Holdings and with the consent of MERSCORP Holdings, (which consent shall not be

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unreasonably withheld), the Member may assume the defense, settlement and/or

compromise of such lawsuit after MERSCORP Holdings has retained counsel.

MERSCORP Holdings and/or MERS SPE Inc. (as applicable) shall provide further

written notice to the Member of its own intent to settle any such lawsuit where it has

retained its own counsel and the Member has not assumed the defense.

(ii) The Member, or its retained counsel, shall review all “Legal

Filings” (defined for purposes of this Rule as lawsuits, subpoenas, discovery requests, or

similar documents, including but not limited to an objection to proof of claim,

counterclaim, cross-claim, third party claim, or objection to motion for relief from stay) it

receives upon service of legal process that are related to a mortgage, deed of trust, or

security deed for which MERS SPE Inc. is or was the mortgagee, beneficiary or grantee

of record (as applicable), and that both does not name MERSCORP Holdings and/or

MERS SPE Inc. as a defendant and which includes one or more of the following

categories:

(1) a challenge to the authority or ability of MERS SPE Inc. to hold,

assign, and/or foreclose on mortgage liens;

(2) a challenge to the legality of the operation of MERSCORP

Holdings, MERS SPE Inc., the MERS® System, or the MERS® eRegistry;

(3) a challenge to or examination of the actions, in his or her official

capacity, of a person who is identified in the Legal Filing to be an officer

or employee of MERSCORP Holdings, and/or MERS SPE Inc. (including

MERS Certifying or Signing Officers), in a Legal Filing;

(4) a challenge to the nominee or agency relationship between MERS

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SPE Inc. and its Members or any other entity;

(5) a challenge to the sufficiency or validity of an assignment by

MERS SPE Inc. on grounds that the assignment has not been recorded in

local records; and/or

(6) a dispute over whether MERS SPE Inc. is entitled to notice of

another lien-holder’s foreclosure proceedings or other debt collection

action.

The Member or its retained counsel shall make a good faith determination based on all

information reasonably available to the Member as to whether any Legal Filing that falls

into one or more of the enumerated categories listed above has a reasonable likelihood of

prevailing. If a Legal Filing has a reasonable likelihood of prevailing, then notice of the

Legal Filing must be provided by the Member to MERSCORP Holdings within 21 days

of receipt of service of process of the Legal Filing on the Member. The Member shall

establish written procedures, or supplement existing procedures governing case

management and reporting, for use in making the good faith determination required by

this Section.

(iii) The Member, or its retained counsel, shall notify MERSCORP

Holdings within 14 days of receipt of notice of the appeal of a court order or judgment by

any party to a Legal Filing where such appeal involves one of the categories set forth in

Section 2(a)(ii).

(b) In accordance with the procedures set forth in Section 2(a)(ii), the

Member, or its retained counsel, shall notify MERSCORP Holdings within 30 days of receipt of

any Legal Filing that is filed in response to a proceeding initiated by such Member (either in its

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own name or in the name of MERSCORP Holdings and/or MERS SPE Inc., notwithstanding

Rule 8).

(c) (i) If a Member has transferred or otherwise terminated its rights and

interests in a mortgage loan, and receives notice of a Legal Filing from the MERSCORP

Holdings Mail Center under Section 2(a)(i), the Member shall, within 14 days of receipt

of such Legal Filing, notify MERSCORP Holdings of the transfer or termination of the

Member’s rights and interests in the subject mortgage loan, and provide MERSCORP

Holdings with the name of the party to which those rights and interests were transferred.

(ii) The Member shall provide notice to MERSCORP Holdings within

30 days after receipt of service of legal process of a lawsuit that involves a mortgage loan

in which the Member no longer holds an interest, if the lawsuit involves a mortgage loan

where MERS SPE Inc. is the mortgagee, beneficiary, or grantee of record (as applicable),

MERS SPE Inc.’s recorded interest is readily determinable by the Member, and neither

MERSCORP Holdings nor MERS SPE Inc. are named as a party to the lawsuit.

(d) If a Member determines that it will file a lawsuit or similar action

(notwithstanding Rule 8) in the name of MERS SPE Inc., it shall provide MERSCORP Holdings

with 14 days advance notice of the filing unless the action involves an emergency measure which

requires the Member to immediately file the lawsuit or similar action to protect the lien interest

held by MERS SPE Inc., in which case the Member shall notify MERSCORP Holdings within 5

days of the filing.

(e) Notwithstanding any of the foregoing, a Member who is also a named

Investor appearing on the MERS® System shall be relieved of any obligation to provide the

notifications required under Sections 2(a)(ii), 2(a)(iii), 2(b), 2(c) and 2(d) when the Investor’s

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retained counsel or the Investor’s Servicer or Subservicer, as shown on the MERS® System, is

managing the Legal Filing, and the Investor has required the outside counsel, Servicer or

Subservicer to provide the notifications which would otherwise be required of the Investor under

this Rule.

Section 3. (a) All notifications and/or acknowledgments required by this Rule 14 shall

include the following (as applicable), unless certain information has previously been provided:

(i) the name, phone number, and email address of the contact person

of the Member with respect to the subject Legal Filing or action (which may be in-house

counsel);

(ii) the name, telephone number, and email address of the attorney and

law firm, if any, retained by the Member with respect to the subject Legal Filing; and

(iii) either a copy of the Legal Filing; or: 1) the name of the Legal

Filing; 2) the county, state and court in which the Legal Filing was filed; 3) the MIN of

the mortgage loan involved; and 4) the date the Legal Filing was filed and the date an

answer or response is due.

(b) All notices and/or acknowledgments required by this Rule 14 shall be sent

to the attention of the General Counsel of MERSCORP Holdings either (i) via facsimile to (703)

748-0183 (which is confirmed by transmission report or equivalent thereof), (ii) via e-mail to

[email protected] (which is confirmed by delivery report or equivalent thereof), (iii) via

registered or certified mail (return receipt requested and postage prepaid) to 1818 Library Street,

Suite 300, Reston, VA 20190, (iv) via a nationally recognized overnight courier (prepaid and

providing proof of delivery), or (v) via any other method approved by MERSCORP Holdings.

(c) MERSCORP Holdings will treat all information contained in notifications

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and/or acknowledgments provided under section 2(a)(ii) as confidential.

Section 4. With respect to a Member Indemnified Claim (as that term is defined in

Paragraph 9 of the MERS® System Membership Terms and Conditions), it is the responsibility

of the Member to inform its retained counsel of the Member’s indemnification obligations under

the MERS® System Membership Terms and Conditions and these Rules of Membership

(including, without limitation, this Rule 14). With respect to a Member Indemnified Claim, the

Member and/or its retained counsel shall take all necessary and appropriate actions to assert

promptly valid defenses available to MERSCORP Holdings and/or MERS SPE Inc., (as

applicable), even if such defenses are unavailable to the Member, including, without limitation,

the defense that the claim against MERSCORP Holdings and/or MERS SPE Inc. (as applicable)

should be dismissed because MERSCORP Holdings and/or MERS SPE Inc. is neither the

servicer nor investor of the subject mortgage loan.

(a) Regardless of whether a Member, MERSCORP Holdings, and/or MERS

SPE Inc. defended a Member Indemnified Claim or none of these entities defended such claim,

and regardless of whether MERSCORP Holdings and/or MERS SPE Inc. had notice of the

Member Indemnified Claim (provided that if MERSCORP Holdings and/or MERS SPE Inc.

received service of legal process of the claim, notice was provided to a Member pursuant to Rule

3 of these Rules of Membership), if a judgment is entered against MERSCORP Holdings and/or

MERS SPE Inc. for such claim, the Member shall either pay the full amount of the judgment, or

promptly post a Surety Bond, Letter of Credit, or the equivalent that is acceptable to the court,

for the amount of the judgment pending: 1) any motions to set aside or vacate the judgment; 2)

appeal of the judgment; or 3) any challenges made by either the Member or MERSCORP

Holdings and/or MERS SPE Inc., to the judgment. It is the Member’s responsibility to pay the

45

amount of the judgment and any other related Indemnified Payments (as that term is defined in

Paragraph 9 of the MERS® System Membership Terms and Conditions) on behalf of

MERSCORP Holdings and/or MERS SPE Inc. (as applicable), and (ii) if MERSCORP, Inc.,

and/or MERS defends against the enforcement of a judgment (which MERSCORP Holdings

and/or MERS SPE Inc. shall have the right to do in its discretion after notice to the Member), the

Member shall promptly reimburse MERSCORP Holdings and/or MERS SPE Inc. (as applicable)

for the amount of the Indemnified Payments related to such defense.

(b) With respect to a Member Indemnified Claim, upon request, the Member

shall provide MERSCORP Holdings with: (i) copies of all pleadings accessible to the public the

Member receives from third parties (and notice of protected pleadings (e.g., pleadings filed under

seal) it receives from third parties); (ii) copies of all public pleadings the Member files on its

own behalf; and (iii) copies of all pleadings the Member files on behalf of MERSCORP

Holdings and/or MERS SPE Inc.

(c) A Member shall in no way be relieved of its obligations under Paragraph 9

of the MERS® System Membership Terms and Conditions by (i) the failure of the Member to

receive proper notification from a third party with respect to a lawsuit, or (ii) the proper

notification, pursuant to this Rule 14, of a lawsuit, from the Member to MERSCORP Holdings.

Section 5. The obligations of the Member under this Rule 14 shall survive the

termination of the Member’s membership agreement. Notwithstanding the foregoing, if a

Member has resigned its membership, the former Member shall be relieved of its notification

obligations under Sections 2(a)(ii) and 2(c)(ii) two years after the effective date of the

resignation.