FHA ADDENDUM 
(to authorize the Brokering of FHA files to RAC)
This Addendum for FHA Correspondent and Brokerage ("Addendum") supplements, amends, and is made part of the Correspondent and or Brokerage Agreement ("Agreement") between Residential Acceptance Corporation ("Lender") and Broker Company ("Company").Capitalized terms not defined herein shall have the same meaning as defined under the terms of the Agreement. 
WHEREAS, Company wishes to originate Mortgage loan application packages for mortgage loans insured by the Department of Housing and Urban Development ("HUD") through the Direct Endorsement Program under Section 203(b) the National Housing Act of 1934 ("Insured Mortgage Loans" or "FHA Loans"); and 
WHEREAS, Lender agrees to act as a Principal Authorized Agent for the origination and processing of applications for such Insured Mortgage Loans; and 
WHEREAS, Lender and Company wish to define the conditions pursuant to which Lender is willing to make available the funds necessary for Insured Mortgage Loans submitted to and accepted by Lender pursuant to the terms of the Agreement and this Addendum. 
NOW, THEREFORE, Lender and Company hereby agree to the following: 
1.	 FUNDING AGREEMENT. Company shall process and submit to Lender applications for Insured Mortgage Loans to be underwritten by Lender, all in accordance with the provisions specified in the Agreement and any applicable FHA loan regulations as may be amended from time to time. Lender agrees to fund Insured Mortgage Loans which meet Lender's then-current underwriting criteria and which meet all requirements for insurance under HUD's Direct Endorsement program. Approved Insured Mortgage Loans must be underwritten and closed in Lender's name in accordance with applicable Federal, State, and Local laws, rules, regulations and other requirements. Provided all such conditions are met, at the closing of the Insured Mortgage Loan, Lender shall advance to the closing agent the amount necessary to fund the Insured Mortgage Loan. 
2.	 COMPANY REPRESENTATIONS AND WARRANTIES. In addition to the Company representations and warranties in the Agreement, Company herby makes the following representations and warranties to Lender. Lender shall be deemed to have conclusively relied on the representations and warranties, regardless of any independent investigation Lender may have made or may hereafter make: 

(A) Company has the power, authority and legal right to make, deliver and perform under this Addendum, and all of the transactions contemplated hereunder; and has taken all necessary action to authorize, execute, deliver and perform under this Addendum. The execution of this Addendum has been duly authorized and executed by Company and is, or upon delivery will be, a legal, valid and binding obligation of Company enforceable in accordance with its terms, subject only to applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting creditor rights generally. 
(B) Company is authorized under applicable FHA regulations to originate FHA loans and has fully complied with all requirements, standards and guidelines under applicable FHA regulations as amended from time to time. 
(C) Neither Company, nor any officer, principal, or employee of Company has been suspended, debarred, or issued a Limited Denial of Participation, and Company remains in good standing with HUD. Company remains eligible to participate under all FHA programs for which Company will submit loans to Lender. 

(D) Company has and will continue to comply with all of the requirements for approval by the Department of Housing and Urban Development ("HUD") as a mortgagee as set forth in 24 C.F.R. §§ 202 and 203, as amended from time to time, HUD Handbook 060.1 REV-2, as updated by applicable Mortgagee Letters, and any other applicable HUD regulations, Handbooks, Mortgagee Letters, and guidelines. 
(E) Neither this Addendum nor any statement, report, or other document furnished or to be furnished pursuant to this Addendum or in connection with the transactions contemplated herby contains any untrue statement of fact or omits to state a fact necessary to make the statements contained therein not misleading. 
(F) To the extent that the mortgage activities contemplated in this Addendum require federal, state or local licensing, registration or other approval, Company has obtained such license, registration or approval and will maintain them in good standing at all times during the term of this Addendum. 
(G) Company has performed all loan origination functions with respect to processing applications for Insured Mortgage Loans to be underwritten by Lender, other than those which are authorized by HUD to be performed by third parties. 

(H) Company is authorized by HUD to originate and process applications for Insured Mortgage Loans in the jurisdiction where the property securing the Insured Mortgage Loan is located. 
(I) Company shall be responsible for the submission of all paperwork and payment of any application fees, annual fees and territorial fees that are required by HUD in order to obtain and maintain Company's status as an authorized FHA Mortgagee in all territories in which properties securing Insured Mortgage Loans are located. 
(J) In the event that Company receives from HUD the OTMIP Statement of Account, the MIC or a suspense letter with regard to the issuance of a MIC, Company shall forward same to Lender immediately. Company agrees to assist Lender in resolving any issues relating to the non-issuance or suspension of HUD insurance. 

1.	QUALITY REVIEW. Lender shall have the right to supervise or perform a quality control review of Company's business activities related to the origination and processing of applications for Insured Mortgage Loans submitted by Company to Lender pursuant to this Addendum. Company will, upon request, provide Lender with any documentation, including but not limited to financial records and audit reports, which Lender considers necessary to verify Company's compliance with federal and state requirements. The audit will be conducted in compliance with normal and customary procedures and policies outlined by Lender or HUD or both Lender and HUD. 
2.	WITHDRAWAL OF HUD APPROVAL. Company agrees to promptly notify Lender in the event that HUD terminates or suspends Company approval for any reason, including the termination of the Company’s origination authority as a Loan Correspondent in any FHA jurisdiction in connection with HUD’s Credit Watch Program, or in the event that a loan correspondent agreement entered into between Company and another entity is terminated for any reason. 
3.	INDEMNIFICATION. Company agrees to indemnify, defend and hold Lender harmless from and against any claims, penalties, loss, cost or damage, including but not limited to, reasonable attorney's fees and expenses incurred by Lender (or any successor or assign), arising out of Company's breach of the Agreement as amended by this Addendum, failure to comply with any federal or state requirements, including but not limited to HUD/FHA requirements, for qualification and approval as a Loan Correspondent for origination and processing of applications for Insured Mortgage Loans, or Company's failure to comply with each of its obligations for maintaining its status as an approved Loan Correspondent. This indemnification obligation shall be in addition to any obligation to indemnify Lender pursuant to the Agreement and shall survive termination of the Agreement. 
4.	TERMINATION. Termination of the Agreement shall result in automatic termination of this Addendum. In addition, this Addendum may be terminated in writing at any time by Residential Acceptance Corporation with written notice; provided, however, that in the event that Lender, in its sole discretion, deems Company to be in breach of any of the representations and warranties made herein, Lender may immediately terminate this Addendum without prior notice to Company. However, the termination of this Addendum shall not automatically terminate the Agreement. In the event of a termination of this Addendum, Lender and Company shall promptly notify HUD of such termination. 
5.	ASSIGNMENT. Company may not assign this Addendum. In the event of a conflict between the terms of this Addendum and the Agreement, the terms of the Agreement shall control. Subject to the modifications set forth herein, all other terms, conditions, and provisions of the Agreement are affirmed, incorporated herein by reference and shall remain in full force and effect. 

IN WITNESS, HEREOF, this Addendum has been executed this Day day of Month, 2013. 
Company Name: Company Name 
HUD ID #: HUD ID #

Company Address:      
Corporate Officer/Principal:      

Signature: ________________________________________________
Printed/Typed Name: Name
Title:  Title 

Residential Acceptance Corporation 
Corporate Officer/Principal:      

Signature: ________________________________________________ 
Printed/Typed Name: April Burkett       
Title: CFO