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$5,000 Pre-Approval Guarantee Certificate

 

It is hereby agreed that in the event a Loan Closing does not occur as anticipated due to some action, error or omission on the part of Primary Residential Mortgage, Inc. (“PRMI”), a one-time payment of $5,000.00 (the “Funds”) shall be made to ____________________________________ with an address of ____________________________________________________ (“Certificate Holder”) subject to the following conditions and eligibility requirements.

 

CONDITIONS

  1. The Funds will only be paid to a Certificate Holder who is an owner of real property (the “Property”) which is subject to a contract to purchase such Property (the “Contract”) from a Borrower or an assignee of a Borrower of PRMI who has completed a pre-approval application to borrow money from PRMI for the purpose of purchasing the Property which will be secured by a mortgage, a deed of trust or other similar document evidencing a security lien on the Property as collateral for the loan.
  2. The Funds will only be paid to a Certificate Holder when a loan closing does not take place as anticipated if, after a complete review of a Borrower’s application and supporting documents and satisfaction of these conditions and eligibility requirements, PRMI has determined that the Borrower meets its internal underwriting requirements to be deemed a qualified borrower and a loan commitment letter has been provided to the Borrower by PRMI.
  3. The loan closing guarantee funds will only be paid if the Loan Closing does not take place solely due to some action, error or omission on the part of PRMI.  The Funds will not be paid if the Loan Closing does not take place due to (a) the action(s) of a Borrower, a Seller, a title company, a closing agent, an attorney or any other party or combination of parties other than PRMI or (b) the closing date is missed due to acts of God outside the control of PRMI, including, but not limited to, inclement weather, natural disaster, catastrophic event, act or terrorism, disruption of utilities or services or any other public emergency beyond the control of PRMI.   
  4. PRMI agrees and warrants that it will use commercially reasonable efforts to take any necessary action to allow a loan to close.  The loan closing guarantee funds will not be paid to a Certificate Holder if PRMI is legally prohibited (due to bankruptcy, regulatory changes, etc.) from closing the Loan.
  5. The loan closing guarantee funds will only be paid to a Certificate Holder if a Loan Closing does not take place in accordance with the requirements herein.  The loan closing guarantee funds will not be paid merely because a Loan Closing was delayed beyond an anticipated closing date.
  6. The loan closing guarantee payment of $5,000.00 shall be paid only when a loan does not close as anticipated within 120 days of execution of the Contract (subject to any extensions, agreements or other arrangements between the Certificate Holder, Borrower and/or PRMI) and such payment shall be paid only to the Certificate Holder. 
  7. Certificate Holder may assign this certificate only to any individual who succeeds to Certificate Holder’s interest in the Property or the Contract prior to closing.  Upon completion of the assignment, the assignee shall be the only valid Certificate Holder.   
  8. A claim for a loan closing guarantee payment must be made by the Certificate Holder within 30 days of the anticipated closing date
  9. No loan closing guarantee payment will be made to a Certificate Holder if a Borrower takes some action between the issuance of the pre-approval letter and the anticipated Loan Closing that would materially change Borrower’s creditworthiness or financial situation. 

 

ELIGIBILITY REQUIREMENTS

 

To qualify for the Loan Closing Guarantee, the Borrower must meet the following eligibility requirements:

  1. Borrower shall have submitted all necessary pre-approval documents requested by PRMI to determine Borrower’s qualification for a loan.  A Pre-Approval letter and a $5,000 Guarantee Certificate must be issued by PRMI prior to Borrower entering into a Contract. 
  2.  All information related to the loan, the loan application, Borrower, the Property or any other information provided to PRMI must be accurate and must not contain fraudulent information or material misrepresentations.
  3.  The actual appraised value of the Property must be equal to or greater than the purchase price in the Contract and must be satisfactory to PRMI. 
  4.  Borrower shall not request any material loan term changes (i.e. changes in loan programs, term of loan, down payment amount, etc.) after issuance of the Pre-Approval letter by PRMI.
  5.  All loan requirements and conditions must be satisfied at least seven (7) days prior to the anticipated closing date.
  6.  If the loan is intended to be an FHA loan, the Property must qualify for FHA financing.
  7.  PRMI must be able to obtain, in its sole discretion, satisfactory title insurance coverage showing Borrower as the insured owner of the property and insuring the loan and not containing any exceptions, exclusions or conditions that are not acceptable to PRMI.

 

 

EXCLUSIONS

 

No Funds will be paid in the following circumstances:

 

  1. Refinance loans;
  2. Loans requiring a subordination of a prior loan;
  3. Loan applicants who have disputed credit accounts;
  4. Properties requiring repairs or re-inspection;
  5. Properties which are new construction, co-ops, bank-owned properties or homes purchased through a short sale; or
  6. The Loan is declined by PRMI, Borrower voluntarily withdraws the loan application or Seller     cancels the Contract..
  7. A Borrower takes any action between issuance of the loan Pre-Approval letter and the anticipated Loan Closing that materially changes the Borrower’s creditworthiness or financial situation.

DEFINITIONS

 

Borrower – as used herein shall mean a person or persons who have applied for a loan from PRMI for the purposes of purchasing real property and who have agreed to place such property as collateral for the loan.

Loan Closing – as used herein shall mean the time and place where the loan process is finalized and/or settled, all loan documents including the note and mortgage are executed and the loan funds are transferred to the proper parties.

Certificate Holder – an owner of real property for which a Borrower has submitted an offer to purchase and such offer has been accepted by such owner, pending closing.