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04-21-2020 - AGENDA ITEM 04 Consideration of Contract Award for Loan Servicing for Housing Loan ProgramAGENDA ITEM NO.4 Xft AGENDA STAFF REPORT City of West Covina I Office of the City Manager DATE: April 21, 2020 TO: Mayor and City Council FROM: David Carmany City Manager SUBJECT: Consideration of Contract Award for Loan Servicing for Housing Loan Program RECOMMENDATION: It is recommended that the Community Development Commission award the housing loan servicing agreement to AmeriNational Community Services, LLC dba AmeriNat for loan servicing for the housing loan programs, and authorize the Executive Director to execute the agreement. BACKGROUND: The City of West Covina Community Development Commission (CDC) (formerly the Redevelopment Agency (RDA)) established the Housing Preservation Loan Program (HPP), the Housing Improvement Loan Program (HILP), and a West Covina First Time Home Buyer Program (FTHB). The loan programs were designed to assist households of very -low, low and moderate income to provide financial assistance and to improve and preserve the housing stock. The FTHB program provided low and moderate income households assistance in purchasing residential property in the City of West Covina. These programs were implemented starting 1993 and, with the dissolution of Redevelopment in 2012, the last loans were issued in 2011. CDC staff administers these loan programs with AmeriNational Community Services, LLC, which does business as AmeriNat and services the HPP and FTHB loans. On March 1, 2011, the CDC entered into a Service Agreement with AmeriNat to provide administration services, including loan collection, title reconveyances, and any necessary loss mitigation services such as forbearance or foreclosure proceedings for the HPP and FTHB programs. Currently, AmeriNat is managing thirty-seven (37) loans, including eighteen (18) HPP loans, which have monthly payments, and nineteen (19) FTHB loans, which have deferred payments as well as equity sharing provisions. Pursuant to amendments to the Service Agreement, AmeriNat's current agreement with the City has been extended through August 30, 2020 (unless terminated before). The most recent extension granted loan servicing of the home loans while staff conducted a Request for Proposals (RFP) for a new agreement. DISCUSSION: On February 3, 2020, CDC staff released a Request for Proposal (RFP) for Loan Servicing of the Housing Loan Programs. The RFP was posted on the City's website through Planet Bids on February 3, 2020. Bidding closed on February 27, 2020. The City received only one (1) proposal, which was from AmeriNat (Exhibit A to Attachment No. 1). Below, please find a brief summary of the proposal: Features and Fees AmeriNational Community Services, LLC D.B.A. AmeriNat Scope of Specialization Loan servicer for affordable housing Local Office Downey, California New Loan Set -Up Fee $45 Monthly Fee for Amortized Loans $15.50 Foreclosure Services Fees $430.00 — for document preparation 1. City of Los Angeles Housing & Community References Provided Investment Department 2. City of Visalia 3. Sacramento Housing and Redevelopment Agency Staff recommends awarding the bid to AmeriNat, as they are currently our loan servicing provider and the only company that submitted a proposal. AmeriNafs proposal includes the same fee schedule currently under their extended agreement. AmeriNat will continue to provide the same level of services they currently provide, which incudes; current month reconciliation, portfolio status and delinquent aging reports. Their services will include follow-up notifications and calls on delinquent accounts and IRS Form 1098 reporting. Both the City and the borrowers will have access to their account information via internet and toll -free customer support. AmeriNat has the expertise in handling bankruptcy cases, delinquencies, and foreclosure in accordance with local, state, and federal statutes. The proposed Professional Service Agreement (PSA) provides for a three (3) year agreement with AmeriNat, with the option to extend the term for two (2) successive one-year periods thereafter. A projection of the cost for their service are provided on the chart below. Contract Year Fiscal Year First Time Homebuyer (FTHB) Home Preservation Program (HPP) Loan Set Up Fee Monthly Service Fee Loan Set Up Fee Monthly Service Fee One FY 2020-21 N/A $3,534.00 $90.00 $3,348.00 Two FY 2021-22 $0.00 $3,534.00 70.00 $3,348.00 Three FY 2022-23 1$0.00 $3,534.00 1$0.00 $3,348.00 Four FY 2023-24 $0.00 $3,534.00 J$0.00 $3,348.00 Five FY 2024-25 J$0.00 1$3,534.00 J$90.00 1$3,348.00 Total Over 5Years J$0.00 1$17,670.00 J$90.00 J$16,740 Total *$34,500 N/A: AmeriNat is currently servicing our housing loans. *These projections do not include any loss mitigation services that the City may request. Early loan payoffs will save the City on the set-up and monthly service fees. Fee is also subject to change iffee changes are increased during renewal of agreement. The contract cost is approximately $34,500 over the course of the five (5) year term. To enable the City to utilize additional services as they are required, the PSA provides for a maximum compensation amount of $44,500. The City anticipates an additional two (2) loans transferred to AmeriNat this calendar year (2020), which will include a fee of $90 ($45/loan) for the loan set-up. Please note that as the loans are paid off, the monthly fees will be reduced. Staff recommends that CDC approve the PSA with AmeriNat to enable the City to continue to utilize the services provided by AmeriNat. LEGAL REVIEW: The City Attorney's Office has reviewed and approved the proposed agreement as to form. OPTIONS: The Community Development Commission has the following options: 1. Approve staffs recommendation; or 2. Provide alternative direction. Prepared by: Karen Ko, Economic Development Specialist Additional Approval: Paulina Morales, Economic Development & Housing Manager Fiscal Impact FISCAL IMPACT: Funding for the agreement with AmeriNat will be paid out of low/mod housing funds budget (Account Number 820.22.2240.6110 and 820.22.2241.6110) as the loan programs were for low -moderate income households. The annual agreement costs approximately $6,882 with an anticipated $34,500 for the three (3)-year term as well as the possible two (2), one (1) year extensions. The agreement provides for a maximum compensation amount of $44,500 to enable to utilize additional services from AmeriNat if they are required. There is adequate funding in the City's low/mod housing fund to cover the contract amount. Attachments Attachment No. 1 - Professional Services Agreement CITY COUNCIL GOALS & OBJECTIVES: Respond to the Global COVID-19 Pandemic Engage in Proactive Economic Development ATTACHMENT NO. 1 CITY OF WEST COVINA COMMUNITY DEVELOPMENT COMMISSION WITH AMERINATIONAL COMMUNITY SERVICES, LLC DBA AMERINAT FOR LOAN SERVICING FOR HOUSING LOAN PROGRAMS THIS AGREEMENT is made and entered into this 1st day of July, 2020 ("Effective Date"), by and between the CITY OF WEST COVINA COMMUNITY DEVELOPMENT COMMISSION, a public corporation ("City"), and AMERINATIONAL COMMUNITY SERVICES, LLC, a Minnesota limited liability company DBA AMERINAT ("Consultant"). WITNESSETH: A. WHEREAS, City proposes to utilize the services of Consultant as an independent contractor to City to provide loan servicing for housing loan programs, as more fully described herein; and B. WHEREAS, Consultant represents that it has that degree of specialized expertise contemplated within California Government Code Section 37103, and holds all necessary licenses to practice and perform the services herein contemplated, except that if Consultant is required to but does not yet hold a City business license, it will promptly obtain a business license and will not provide services to the City until it has done so; and C. WHEREAS, City and Consultant desire to contract for the specific services described in Exhibit "A" and desire to set forth their rights, duties and liabilities in connection with the services to be performed; and D. WHEREAS, no official or employee of City has a financial interest, within the provisions of Sections 1090-1092 of the California Government Code, in the subject matter of this Agreement. E. WHEREAS, Consultant responded to the City's Request for Proposals dated February 3, 2020, incorporated via this reference as if fully set forth herein, and Consultant's response to the Request for Proposals was a material inducement to the City ultimately entering into this agreement. NOW, THEREFORE, for and in consideration of the mutual covenants and conditions contained herein, the parties hereby agree as follows: 1.0. SERVICES PROVIDED BY CONSULTANT 1.1. Scope of Services. Consultant shall provide the professional services described in the Consultant's Proposal, attached hereto as Exhibit "A" and incorporated herein by this reference. (a) Penalties and Assessments Related to 1098 and/or 1099 Reporting. Consultant will submit the required 1098 and/or 1099 forms to the Internal Revenue Service as required. If the loan data provided by the City does not include a valid social 1 AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 security number for a borrower(s), Consultant will exercise all reasonable means to obtain such valid social security number(s). Consultant will also notify the City, at a minimum of one time annually, of any missing or invalid social security numbers which remain outstanding. If the lack of an available and/or valid social security number(s) results in a penalty or fine assessed by the Internal Revenue Service, the City will be notified of the amount of the penalty and fine and will immediately reimburse Consultant for any such penalty or fine paid or to be paid. (b) Anti -Money Laundering. The Consultant agrees to perform its services in accordance with established policies and procedures designed to detect, prevent, and mitigate the risk of money laundering, terrorist financing or other crimes. Such policies and procedures are available for review by the City on their request. The City is responsible for OFAC screening of borrowers prior to loan origination to ensure they do not appear on the U.S. Department of Treasury's "Specially Designated Nationals List (SDN)" (http://www.treasury.gov/resource- center/sanctions/SDN-List/Pages/default.aspx), and for compliance with Anti - Money Laundering program requirements of 31 U.S.C. § 5318(h), or other directives that may relate to the appropriate verification of borrower identity to ensure the prohibition of transactions with certain foreign countries and/or their nationals. The City also agrees to immediately notify Consultant if it becomes aware of any of its borrowers being added to the SDN during the term of this agreement. (c) Protection of Nonpublic Personal Information. Consultant performs its services in accordance with established policies and procedures designed to provide for adequate privacy, protection, security and confidentiality of consumer information. The City acknowledges its obligation under the Gramm -Leach -Bliley Act (15 U.S.C. 6801) and confirms that it adheres to the provisions of this regulation and related guidance, including issuance of the proper privacy notices to its customers. 1.2. Professional Practices. All professional services to be provided by Consultant pursuant to this Agreement shall be provided by personnel experienced in their respective fields and in a manner consistent with the standards of care, diligence and skill ordinarily exercised by professional consultants in similar fields and circumstances in accordance with sound professional practices. Consultant also warrants that it is familiar with all laws that may affect its performance of this Agreement and shall advise City of any changes in any laws that may affect Consultant's performance of this Agreement. Consultant shall keep itself informed of State and Federal laws and regulations which in any manner affect those employed by it or in any way affect the performance of its service pursuant to this Agreement. The Consultant shall at all times observe and comply with all such laws and regulations. City officers and employees shall not be liable at law or in equity for any claims or damages occurring as a result of failure of the Consultant to comply with this section. 1.3. Performance to Satisfaction of City. Consultant agrees to perform all the work to the reasonable satisfaction of the City. Evaluations of the work will be conducted by the City Manager or his or her designee. If the quality of work is not satisfactory, City in its discretion has the right to: (a) Meet with Consultant to review the quality of the work and resolve the AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 matters of concern; (b) Require Consultant to repeat the work at no additional fee until it is satisfactory; and/or (c) Terminate the Agreement as hereinafter set forth. 1.4. Warranty. Consultant warrants that it shall perform the services required by this Agreement in compliance with all applicable Federal and California employment laws, including, but not limited to, those laws related to minimum hours and wages; occupational health and safety; fair employment and employment practices; workers' compensation; and all other Federal, State and local laws and ordinances applicable to the services required under this Agreement. 1.5. Non-discrimination. In performing this Agreement, Consultant shall not engage in, nor permit its agents to engage in, discrimination in employment of persons because of their race, religion, color, national origin, ancestry, age, physical or mental disability, medical condition, genetic information, pregnancy, marital status, sex, gender, gender identity, gender expression, sexual orientation, or military or veteran status, except as permitted pursuant to Section 12940 of the Government Code. 1.6. Non -Exclusive Agreement. Consultant acknowledges that City may enter into agreements with other consultants for services similar to the services that are subject to this Agreement or may have its own employees perform services similar to those services contemplated by this Agreement. 1.7. Confidentiality. Employees of Consultant in the course of their duties may have access to financial, accounting, statistical, and personnel data of private individuals and employees of City. Consultant covenants that all data, documents, discussion, or other information developed or received by Consultant or provided for performance of this Agreement are deemed confidential and shall not be disclosed by Consultant without written authorization by City. City shall grant such authorization if disclosure is required by law. All City data shall be returned to City upon the termination of this Agreement. Consultant's covenant under this Section shall survive the termination of this Agreement. 1.8 Public Records Act Disclosure. Consultant has been advised and is aware that this Agreement and all reports, documents, information and data, including, but not limited to, computer tapes, discs or files furnished or prepared by Consultant, or any of its subcontractors, pursuant to this Agreement and provided to City may be subject to public disclosure as required by the California Public Records Act (California Government Code Section 6250 et seq.). Exceptions to public disclosure may be those documents or information that qualify as trade secrets, as that term is defined in California Government Code Section 6254.7, and of which Consultant informs City of such trade secret. The City will endeavor to maintain as confidential all information obtained by it that is designated as a trade secret. The City shall not, in any way, be liable or responsible for the disclosure of any trade secret including, without limitation, those records so marked if disclosure is deemed to be required by law or by order of the court. 2.0. COMPENSATION AND BILLING 2.1. Compensation. Consultant shall be paid in accordance with the fee schedule set 3 AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 forth in Exhibit "B," attached hereto and made a part of this Agreement (the "Fee Schedule"). Consultant's total compensation shall not exceed Forty -Four Thousand Five Hundred Dollars ($44,500.00). 2.2. Additional Services. Consultant shall not receive compensation for any services provided outside the scope of services specified in the Consultant's Proposal unless the City, prior to Consultant performing the additional services, approves such additional services in writing. It is specifically understood that oral requests and/or approvals of such additional services or additional compensation shall be barred and are unenforceable. Should the City request in writing additional services that increase the Scope of Services, an additional fee based upon the Consultant's standard hourly rates shall be paid to the Consultant for such additional services. Such increase in additional fees shall be limited to 25% of the total contract sum or to the maximum total contract amount of $25,000, whichever is greater. The Department Head or City Manager is authorized to approve a Change Order for such additional services. 2.3. Method of Billing. Consultant may submit invoices to the City for approval on a progress basis, but no more often than once a month. Said invoice shall be based on the total of all Consultant's services which have been completed to City's sole satisfaction. City shall pay Consultant's invoice within forty-five (45) days from the date City receives said invoice. Each invoice shall describe in detail the services performed, the date of performance, and the associated time for completion. Any additional services approved and performed pursuant to this Agreement shall be designated as "Additional Services" and shall identify the number of the authorized change order, where applicable, on all invoices. 2.4. Records and Audits. Records of Consultant's services relating to this Agreement shall be maintained in accordance with generally recognized accounting principles and shall be made available to City for inspection and/or audit at mutually convenient times from the Effective Date until three (3) years after the termination or expiration of this Agreement. 3.0. TIME OF PERFORMANCE 3.1. Commencement and Completion of Work. Unless otherwise agreed to by the parties, the professional services to be performed pursuant to this Agreement shall commence within five (5) days from the Effective Date of this Agreement. Failure to commence work in a timely manner and/or diligently pursue work to completion may be grounds for termination of this Agreement. 3.2. Excusable Delays. Neither party shall be responsible for delays or lack of performance resulting from acts beyond the reasonable control of the party or parties. Such acts shall include, but not be limited to, acts of God, fire, strikes, material shortages, compliance with laws or regulations, riots, acts of war, or any other conditions beyond the reasonable control of a party. If a delay beyond the control of the Consultant is encountered, a time extension may be mutually agreed upon in writing by the City and the Consultant. The Consultant shall present documentation satisfactory to the City to substantiate any request for a time extension. 4.0. TERM AND TERMINATION 4.1. Term. This Agreement shall commence on the Effective Date and continue for a period of three (3) years, ending on June 30, 2023, unless previously terminated as provided herein or as otherwise agreed to in writing by the parties. Thereafter, this Agreement may be 4 AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 extended for a maximum of two (2) successive one (1) year periods. Such extensions, if any, will be evidenced by a written amendment to this Agreement. Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. 4.2. Notice of Termination. The City reserves and has the right and privilege of canceling, suspending or abandoning the execution of all or any part of the work contemplated by this Agreement, with or without cause, at any time, by providing at least fifteen (15) days prior written notice to Consultant. In the event of such termination, Consultant shall immediately stop rendering services under this Agreement unless directed otherwise by the City. If the City suspends, terminates or abandons a portion of this Agreement such suspension, termination or abandonment shall not make void or invalidate the remainder of this Agreement. If the Consultant defaults in the performance of any of the terms or conditions of this Agreement, it shall have ten (10) days after service upon it of written notice of such default in which to cure the default by rendering a satisfactory performance. In the event that the Consultant fails to cure its default within such period of time, the City shall have the right, notwithstanding any other provision of this Agreement, to terminate this Agreement without further notice and without prejudice to any other remedy to which it may be entitled to at law, in equity, or under this Agreement. The City also shall have the right, notwithstanding any other provisions of this Agreement, to terminate this Agreement, at its option and without prejudice to any other remedy to which it may be entitled to at law, in equity, or under this Agreement, immediately upon service of written notice of termination on the Consultant, if the latter should: a. Be adjudged a bankrupt; b. Become insolvent or have a receiver of its assets or property appointed because of insolvency; C. Make a general assignment for the benefit of creditors; d. Default in the performance of any obligation or payment of any indebtedness under this Agreement; e. Suffer any judgment against it to remain unsatisfied or unbonded of record for thirty (30) days or longer; or f. Institute or suffer to be instituted any procedures for reorganization or rearrangement of its affairs. 4.3. Compensation. In the event of termination, City shall pay Consultant for reasonable costs incurred and professional services satisfactorily performed up to and including the effective date of the City's written notice of termination, within forty-five (45) days after the effective date of the notice of termination or the final invoice of the Consultant, whichever occurs last. Compensation for work in progress shall be prorated based on the percentage of work completed as of the effective date of termination in accordance with the fees set forth herein. 4.4. Documents. In the event of termination of this Agreement, all documents 5 AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 prepared by Consultant in its performance of this Agreement including, but not limited to, finished or unfinished design, development and construction documents, data studies, drawings, maps and reports, shall be delivered to the City within ten (10) days of the effective date of the notice of termination, at no cost to City. 5.0. INSURANCE 5.1. Minimum Scope and Limits of Insurance. Consultant shall obtain, maintain, and keep in full force and effect during the life of this Agreement all of the following minimum scope of insurance coverages with an insurance company authorized to do business in California, with a current A.M. Best's rating of no less than A:VII, and approved by City: (a) Broad -form commercial general liability, including premises -operations, products/completed operations, broad form property damage, blanket contractual liability, independent contractors, personal injury or bodily injury with a policy limit of not less than Two Million Dollars ($2,000,000.00), combined single limits, per occurrence. If such insurance contains a general aggregate limit, it shall apply separately to this Agreement or shall be twice the required occurrence limit. (b) Business automobile liability for owned vehicles, hired, and non -owned vehicles, with a policy limit of not less than One Million Dollars ($1,000,000.00), combined single limits, per accident for bodily injury and property damage. (c) Workers' compensation insurance as required by the State of California, with Statutory Limits, and Employer's Liability Insurance with a limit of no less than One Million Dollars ($1,000,000.00) per accident for bodily injury or disease. Consultant agrees to waive, and to obtain endorsements from its workers' compensation insurer waiving subrogation rights under its workers' compensation insurance policy against the City, its officers, agents, employees, and volunteers for losses arising from work performed by Consultant for the City and to require each of its subcontractors, if any, to do likewise under their workers' compensation insurance policies. By execution of this Agreement, the Consultant certifies as follows: I am aware of, and will comply with, Section 3700 of the Labor Code, requiring every employer to be insured against liability of Workers' Compensation or to undertake self-insurance before commencing any of the work. The Consultant shall also comply with Section 3800 of the Labor Code by securing, paying for and maintaining in full force and effect for the duration of this Agreement, complete Workers' Compensation Insurance, and shall furnish a Certificate of Insurance to the City before execution of this Agreement by the City. The City, its officers and employees shall not be responsible for any claims in law or equity occasioned by failure of the consultant to comply with this section. AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 (d) Professional errors and omissions ("E&O") liability insurance with policy limits of not less than One Million Dollars ($1,000,000.00), combined single limits, per occurrence or claim, and Two Million Dollars ($2,000,000.00) aggregate. Architects' and engineers' coverage shall be endorsed to include contractual liability. If the policy is written as a "claims made" policy, the retroactivity date shall be prior to the start of the work set forth herein. Consultant shall obtain and maintain said E&O liability insurance during the life of this Agreement and for five (5) years after completion of the work hereunder. If coverage is canceled or non - renewed, and not replaced with another claims -made policy form with a retroactive date prior to the effective date of this Agreement, Consultant shall purchase "extended reporting" coverage for a minimum of five (5) years after completion of the work. If the Consultant maintains higher limits or has broader coverage than the minimums shown above, the City requires and shall be entitled to all coverage, and to the higher limits maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. 5.2. Endorsements. The insurance policies are to contain, or be endorsed to contain, the following provisions: (a) Additional Insureds: The City of West Covina and its elected and appointed boards, officers, officials, agents, employees, and volunteers are additional insureds with respect to: liability arising out of activities performed by or on behalf of the Consultant pursuant to its contract with the City; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; automobiles owned, leased, hired, or borrowed by the Consultant. (b) Notice of Cancelation: Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City. (c) Primary Coverage: The Consultant's insurance coverage shall be primary insurance as respects the City of West Covina, its officers, officials, agents, employees, and volunteers. Any other insurance maintained by the City of West Covina shall be excess and not contributing with the insurance provided by this policy. (d) Waiver of Subrogation: Consultant hereby grants to City a waiver of any right to subrogation which any insurer of said Consultant may acquire against the City by virtue of the payment of any loss under such insurance. Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer. (e) Coverage Not Affected: Any failure to comply with the reporting provisions of the policies shall not affect coverage provided to the City of West 7 AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 Covina, its officers, officials, agents, employees, and volunteers. (f) Coverage Applies Separately: The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5.3. Deductible or Self Insured Retention. If any of such policies provide for a deductible or self -insured retention to provide such coverage, the amount of such deductible or self -insured retention shall be approved in advance by City. The City may require the Consultant to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self -insured retention may be satisfied by either the named insured or City. 5.4. Certificates of Insurance. Consultant shall provide to City certificates of insurance showing the insurance coverages and required endorsements described above, in a form and content approved by City, prior to performing any services under this Agreement. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. 5.5. Non -limiting. Nothing in this Section shall be construed as limiting in any way the indemnification provision contained in this Agreement. 6.0. GENERAL PROVISIONS 6.1. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to any matter referenced herein and supersedes any and all other prior writings and oral negotiations. This Agreement may be modified only in writing, and signed by the parties in interest at the time of such modification. 6.2. Representatives. The City Manager or his or her designee shall be the representative of City for purposes of this Agreement and may issue all consents, approvals, directives and agreements on behalf of the City, called for by this Agreement, except as otherwise expressly provided in this Agreement. Consultant shall designate a representative for purposes of this Agreement who shall be authorized to issue all consents, approvals, directives and agreements on behalf of Consultant called for by this Agreement, except as otherwise expressly provided in this Agreement. 6.3. Key Personnel. It is the intent of both parties to this Agreement that Consultant shall make available the professional services of Michael Torres, Chief Operating Officer, who shall coordinate directly with City. Any substitution of key personnel must be approved in writing by City's Representative. 6.4. Notices. Any notices, documents, correspondence or other communications concerning this Agreement or the work hereunder may be provided by personal delivery, facsimile, Email or by U.S. mail. If by U.S. mail, it shall be addressed as set forth below and placed in a sealed envelope, postage prepaid, and deposited in the United States Postal Service. Such communication shall be deemed served or delivered: a) at the time of delivery if 8 AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 such communication is sent by personal delivery; b) at the time of transmission if such communication is sent by facsimile or by Email; and c) 72 hours after deposit in the U.S. Mail as reflected by the official U.S. postmark if such communication is sent through regular United States mail. IF TO CONSULTANT: IF TO CITY: AmeriNat City of West Covina 8121 E. Florence Avenue 1444 West Garvey Ave. South Downey, CA 90240 West Covina, CA 91790 Tel: (562) 927-6686 ext. 1225 Tel: (626) 939-8401 Fax: (562) 927-2362 Fax: (626) 939-8406 Email: mtorres@amitnatls.com Email: dcarmany@westcovina.org Attn: Michael Torres, Chief Operating Officer Attn: David Carmany, City Manager 6.5. Attorneys' Fees. If litigation is brought by any party in connection with this Agreement against another party, the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions, or provisions hereof. 6.6. Governing Law. This Agreement shall be governed by and construed under the laws of the State of California without giving effect to that body of laws pertaining to conflict of laws. In the event of any legal action to enforce or interpret this Agreement, the parties hereto agree that the sole and exclusive venue shall be a court of competent jurisdiction located in Los Angeles County, California. 6.7. Assignment. Consultant shall not voluntarily or by operation of law assign, transfer, sublet or encumber all or any part of Consultant's interest in this Agreement without City's prior written consent, which consent shall not be unreasonably withheld. Any attempted assignment, transfer, subletting or encumbrance shall be void and shall constitute a breach of this Agreement and cause for termination of this Agreement. Regardless of City's consent, no subletting or assignment shall release Consultant of Consultant's obligation to perform all other obligations to be performed by Consultant hereunder for the term of this Agreement. 6.8. Indemnification and Hold Harmless. Consultant agrees to defend, indemnify, hold free and harmless the City, its elected and appointed officials, officers, agents and employees, at Consultant's sole expense, from and against any and all claims, demands, actions, suits or other legal proceedings brought against the City, its elected and appointed officials, officers, agents and employees arising out of the performance of the Consultant, its employees, and/or authorized subcontractors, of the work undertaken pursuant to this Agreement. The defense obligation provided for hereunder shall apply without any advance showing of negligence or wrongdoing by the Consultant, its employees, and/or authorized subcontractors, but shall be required whenever any claim, action, complaint, or suit asserts as its basis the negligence, errors, omissions or misconduct of the Consultant, its employees, and/or authorized subcontractors, and/or whenever any claim, action, complaint or suit asserts liability against the City, its elected and appointed officials, officers, agents and employees based upon the work performed by the Consultant, its employees, and/or authorized subcontractors under this Agreement, whether or not the Consultant, its employees, and/or 9 AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 authorized subcontractors are specifically named or otherwise asserted to be liable. Notwithstanding the foregoing, the Consultant shall not be liable for the defense or indemnification of the City for claims, actions, complaints or suits arising out of the sole active negligence or willful misconduct of the City. This provision shall supersede and replace all other indemnity provisions contained either in the City's specifications or Consultant's Proposal, which shall be of no force and effect. 6.9. Independent Contractor. Consultant is and shall be acting at all times as an independent contractor and not as an employee of City. Consultant shall have no power to incur any debt, obligation, or liability on behalf of City or otherwise act on behalf of City as an agent. Neither City nor any of its agents shall have control over the conduct of Consultant or any of Consultant's employees, except as set forth in this Agreement. Consultant shall not, at any time, or in any manner, represent that it or any of its or employees are in any manner agents or employees of City. Consultant shall secure, at its sole expense, and be responsible for any and all payment of Income Tax, Social Security, State Disability Insurance Compensation, Unemployment Compensation, and other payroll deductions for Consultant and its officers, agents, and employees, and all business licenses, if any are required, in connection with the services to be performed hereunder. Consultant shall indemnify and hold City harmless from any and all taxes, assessments, penalties, and interest asserted against City by reason of the independent contractor relationship created by this Agreement. Consultant further agrees to indemnify and hold City harmless from any failure of Consultant to comply with the applicable worker's compensation laws. City shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant's failure to promptly pay to City any reimbursement or indemnification arising under this paragraph. 6.10. PERS Eligibility Indemnification. In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement claims or is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of the City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City. Notwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing service under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in PERS as an employee of City and entitlement to any contribution to be paid by City for employer contribution and/or employee contributions for PERS benefits. 6.11. Cooperation. In the event any claim or action is brought against City relating to Consultant's performance or services rendered under this Agreement, Consultant shall render any reasonable assistance and cooperation which City might require. 6.12. Ownership of Documents. All findings, reports, documents, information and data including, but not limited to, computer tapes or discs, files and tapes furnished or prepared by Consultant or any of its subcontractors in the course of performance of this Agreement, shall be 10 AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 and remain the sole property of City. Consultant agrees that any such documents or information shall not be made available to any individual or organization without the prior consent of City. Any use of such documents for other projects not contemplated by this Agreement, and any use of incomplete documents, shall be at the sole risk of City and without liability or legal exposure to Consultant. City shall indemnify and hold harmless Consultant from all claims, damages, losses, and expenses, including attorneys' fees, arising out of or resulting from City's use of such documents for other projects not contemplated by this Agreement or use of incomplete documents furnished by Consultant. Consultant shall deliver to City any findings, reports, documents, information, data, in any form, including but not limited to, computer tapes, discs, files audio tapes or any other related items as requested by City or its authorized representative, at no additional cost to the City. Consultant or Consultant's agents shall execute such documents as may be necessary from time to time to confirm City's ownership of the copyright in such documents. 6.13. Electronic Safeguards. Consultant shall identify reasonably foreseeable internal and external risks to the privacy and security of personal information that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of the information. Contractor shall regularly assess the sufficiency of any safeguards and information security awareness training in place to control reasonably foreseeable internal and external risks, and evaluate and adjust those safeguards in light of the assessment. 6.14. Economic Interest Statement. Consultant hereby acknowledges that pursuant to Government Code Section 87300 and the Conflict of Interest Code adopted by City, Consultant is designated in said Conflict of Interest Code and is therefore required to file an Economic Interest Statement (Form 700) with the City Clerk, for each employee providing advice under this Agreement, prior to the commencement of work, unless waived by the City Manager. 6.15. Conflict of Interest. Consultant and its officers, employees, associates and subconsultants, if any, will comply with all conflict of interest statutes of the State of California applicable to Consultant's services under this agreement, including, but not limited to, the Political Reform Act of 1974 (Government Code Section 81000, et seq.) and Government Code Sections 1090-1092. Consultant covenants that none of Consultant's officers or principals have any interest in, or shall acquire any interest, directly or indirectly, which will conflict in any manner or degree with the performance of the services hereunder, including in any manner in violation of the Political Reform Act. Consultant further covenants that in the performance of this Agreement, no person having such interest shall be used by Consultant as an officer, employee, agent, or subconsultant. Consultant further covenants that Consultant has not contracted with nor is performing any services, directly or indirectly, with any developer(s) and/or property owner(s) and/or firm(s) and/or partnership(s) owning property in the City and further covenants and agrees that Consultant and/or its subconsultants shall provide no service or enter into any agreement or agreements with a/any developer(s) and/or property owner(s) and/or firm(s) and/or partnership(s) owning property in the City prior to the completion of the work under this Agreement. 6.16. Prohibited Employment. Consultant will not employ any regular employee of City while this Agreement is in effect. 6.17. Order of Precedence. In the event of an inconsistency in this Agreement and any of the attached Exhibits, the terms set forth in this Agreement shall prevail. If, and to the extent this Agreement incorporates by reference any provision of any document, such provision AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 shall be deemed a part of this Agreement. Nevertheless, if there is any conflict among the terms and conditions of this Agreement and those of any such provision or provisions so incorporated by reference, this Agreement shall govern over the document referenced. 6.18. Costs. Each party shall bear its own costs and fees incurred in the preparation and negotiation of this Agreement and in the performance of its obligations hereunder except as expressly provided herein. 6.19. No Third Party Beneficiary Rights. This Agreement is entered into for the sole benefit of City and Consultant and no other parties are intended to be direct or incidental beneficiaries of this Agreement and no third party shall have any right in, under or to this Agreement. 6.20. Headings. Paragraphs and subparagraph headings contained in this Agreement are included solely for convenience and are not intended to modify, explain or to be a full or accurate description of the content thereof and shall not in any way affect the meaning or interpretation of this Agreement. 6.21. Amendments. Only a writing executed by the parties hereto or their respective successors and assigns may amend this Agreement. 6.22. Waiver. The delay or failure of either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way be deemed a waiver of those rights to require such performance or compliance. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought. The waiver of any right or remedy in respect to any occurrence or event shall not be deemed a waiver of any right or remedy in respect to any other occurrence or event, nor shall any waiver constitute a continuing waiver. 6.23. Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be unenforceable in any circumstance, such determination shall not affect the validity or enforceability of the remaining terms and provisions hereof or of the offending provision in any other circumstance. Notwithstanding the foregoing, if the value of this Agreement, based upon the substantial benefit of the bargain for any party, is materially impaired, which determination made by the presiding court or arbitrator of competent jurisdiction shall be binding, then both parties agree to substitute such provision(s) through good faith negotiations. 6.24. Counterparts and Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. All counterparts shall be construed together and shall constitute one agreement. Counterpart written signatures may be transmitted by facsimile, email or other electronic means and have the same legal effect as if they were original signatures. 6.25. Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by doing so the parties hereto are formally bound to the provisions of this Agreement. 12 AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 6.26 Taxpayer Identification Number. Consultant shall provide City with a complete Request for Taxpayer Identification Number and Certification, Form W9, as issued by the Internal Revenue Service. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their respective authorized officers, as of the date first above written. CITY OF WEST COVINA, A municipal corporation David Carmany Executive Director CONSULTANT Michael Torres COO ATTEST: Lisa Sherrick Secretary APPROVED AS TO FORM: Thomas P. Duarte General Counsel APPROVED AS TO INSURANCE: Helen Tran Human Resources and Risk Management Director 13 Date: Date: Date: Date: AmeriNational Community Services, LLC dba AmeriNat Form Revised April 2020 EXHIBIT A SCOPE OF SERVICES EXHIBIT A PROPOSAL TO PROVIDE SERVICES City of West Covina RFP for Housing Loan Servicing (RFP 71-005) Presented by: MAMERINA T February 24, 2020 fl AMERINAT February 24, 2020 Office of the City Clerk City of West Covina Attn: Karen Ko 1444 W. Garvey Avenue S. #317 West Covina, CA 91790 AmeriNat is pleased to offer the City of West Covina ("City") the enclosed proposal in response to the RFP 71-005 for Housing Loan Servicing. For over 45 years, AmeriNat has been a trusted partner and advisor to our clients. AmeriNat offers the City a comprehensive and proven solution for all of its loan portfolio needs As a regulated servicer, AmeriNat's solutions are based upon processes and procedures developed in compliance with pertinent regulations. AmeriNat is an experienced loan servicer providing all facets of services needed for the City's loan programs, including loan boarding, billing, payment collection, processing and remittant:e, delinquency notices, escrow administration including maintenance of escrows and performance of escrow analyses as well as lender -placed insurance and advancement of taxes, 1098 reporting, collection services and other back -office functions necessary in effectively administering a loan program. We also provide, via our LoanLink solution, a robust loan accounting database accessible 24/7/365 over the intemet, literally at the City's fingertips, containing standard and customizable investor reports and providing all borrower activity and loan history As the City's current service provider, we are familiar with your staff and your servicing requirements. We thank the City for allowing us to service your portfolio needs since 2011 and look forward to continuing our relationship with you. Notwithstanding our existing relationship, we would like to approach your renewal as if this were a new program. Upon re -award, AmeriNat staff will arrange a visit the City so that we can review the portfolio together. We will explore additional options on your loans with you, and discuss how AmeriNat can best fit your needs. The pricing, terms and conditions stated in this proposal will remain valid for 90 days from the date of submittal to the City. The persons authorized to make representations on behalf of the firm and authorized to bind the firm to a contract include: Adrienne Thorson, Chairwoman and CEO, Danelle Thomsen, Chief Financial Officer, and myself, Michael Torres, Chief Operating Officer. I'm the key contact person and am located at 8121 E. Florence Avenue, Downey, CA. I can be reached by telephone at (562) 927-6686 ext. 1225, by fax at (562) -2362 or by email at mtoiTesna.amerinatls.com. Sine el Micha orres COO (800)943-1988 • (562)927-6686 • 8121 E. Florence Ave.. Do" nev. CA 90240 • sve sv.amerina11s.com Over 40 Years q/7ndu.stry-Lending Experience Table of Contents COVER LETTER TABLE OF CONTENTS PROJECT SUMMARY SECTION 1 METHODOLOGY SECTION 1 FEE SCHEDULE 11 EXCLUDED OR SUBCONTRACTED SERVICES 15 LIST OF PROJECTS CONDUCTED 15 EXHIBIT A - STATEMENT OF QUALIFICATIONS EXHIBIT B - PIGGYBACK OPTION EXHIBIT C- EXCEPTIONS TO PROFESSIONAL SERVICES AGREEMENT EXHIBIT D - AUDITED FINANCIAL STATTEIV=S EXHIBIT E - SAMPLE LETTERS AND REPORTS EXHIBIT F - STATEMENT OF NON -COLLUSION BY CONTRACTOR AmeriNat Proposal to Provide Services Project Summary Section AmeriNat understands the City's need for administration of its affordable housing loan projects funded under HUD's CDBG and Low -Moderate Income Housing funds. AmeriNat has been a leading servicer of specialty mortgages in the affordable housing and economic development industries since 1975. We have unparalleled experience in this industry, working with approximately 300 clients nationwide, including hundreds of government agencies, numerous nonprofits, financial institutions and private investors (including loan servicing for the City of West Covina since 2011). We service over 65,000 loans with a principal balance in excess of $12 billion, the majority of which were generated to promote affordable housing and economic development. AmeriNat will provide the City with housing loan servicing consistent with established local and state law and guidelines and affordable housing requirements. Further details regarding our approach to the Scope of Work can be found in the Methodology section of this proposal below. Methodology Section AmeriNat will provide loan servicing functions on all loans made by the City and its agents. The services delivered will encompass all service items identified in the City's RFP. The detailed work plan below will be followed by AmeriNat, adhering to the City's service delivery standards and desired problem reporting and resolution procedures: Loan Servicing for Amortized and Deferred Loans 1. Introductory Package: Upon boarding of each new loan, AmeriNat will send to each borrower a welcome package. This welcome package contains a Notice of Servicing Transfer, Fair Debt Notice, FACT Act Letter, ACH sign-up form and a supply of coupons. 2. Collection and Remittance of Payments: AmeriNat will collect payments from the borrowers through monthly or other scheduled remittances of principal, interest, fees, escrow balances and other identified payments. These remittances will be posted to the loan and ancillary records in accordance with the loan documents and the City's written instructions. Payments will be posted the same day as receipt. All funds will be maintained in an FDIC insured banking institution in a custodial account for the benefit of the City and the borrowers as applicable. AmeriNat will ensure the proper balancing of cash received and transmitted and loan portfolio totals on a daily and monthly basis. Remittances will be forwarded to the City monthly net of fees and other authorized charges due to AmeriNat. 3. Payment of Property Taxes: At the City's request, AmeriNat will monitor the timely payment of property taxes. Tax service will be required to monitor payment of property tax. NAMERINAT AmeriNat Proposal to Provide Services 4. Insurance Monitoring: AmeriNat will notify the insurance agent in writing that AmeriNat is monitoring premium payments and that we are to be made aware of delinquencies or cancellations. AmeriNat will force place insurance in accordance with respective regulation (see Insurance section). 5. Escrow/Impound Account: If the City chooses, AmeriNat will establish an escrow/impound account for any borrower for the payment of taxes and insurance. Many borrowers find it easier to pay into an escrow account on a monthly basis rather than making large semi-annual or annual tax and insurance payments. AmeriNat will collect the monthly escrow payment from the borrower and make the tax and insurance payments on the borrower's behalf. The borrower escrow accounts will be analyzed annually in accordance with the Real Estate Settlement Procedures Act (RESPA). Tax service is necessary to ensure the timely and accurate payment of property taxes. Please note: Unless respective state law requires otherwise, AmeriNat's escrow analysis utilizes a 2-month cushion in accordance with RESPA. This cushion is an industry standard and is intended to minimize the likelihood of escrow shortages / deficits when and if escrow disbursement items increase. If this cushion is not consistent with the City's current escrow analysis process, borrowers' escrow analysis may result in a shortage and/or escrow payment increase at the time of AmeriNat's first analysis. This may impact borrowers' ability to make increased monthly payments to escrow. Should the City request alternative handling of loan accounts with escrow payment increases, this may result in the City incurring extraordinary services charges. If the City chooses to establish an escrow/impound account for any borrower, AmeriNat will also establish a Client Escrow Deficit account. This account is used to track and reconcile all advances made by AmeriNat on borrower accounts with escrow deficits as a result of payments made on the borrower's behalf in excess of their escrow balance. Additionally, this account also serves to track the monthly reimbursement to AmeriNat for all aforementioned advances. The escrow deficit account will be reconciled monthly and the net change will be included or deducted from the City's monthly remittance; a net shortage/negative will be deducted and a net overage/positive will be remitted. Any advances made by AmeriNat that are not reimbursed by the City the following month will be subject to an interest charge of 1% per month compounded until such time said reimbursement occurs. Regardless of whether or not the net shortage/negative is deducted from remittance, the City remains responsible for all escrow advances made by AmeriNat. At portfolio transfer AmeriNat will require a cash deposit of the total amount of positive escrow balances. Negative escrow balances will be set up, and the aggregate total will need to be deposited in to an "Escrow Advances" account until such time that said advance is recouped from the respective borrower. 6. Late Fees: In keeping with the provisions of the City's promissory note, AmeriNat will assess and retain a late fee when payment is not made within the grace period. Loans boarded for servicing that do not contain a late fee provision are subject to an additional monthly servicing fee surcharge. WAMERINAT AmeriNat Proposal to Provide Services Lender Placed Insurance In accordance with respective regulation, upon notification of a policy cancellation from the borrower's insurance carrier, or when proof of a current policy is not received, AmeriNat will request lender -placed insurance from AmeriNat's insurance provider. 1. Coverage is instantly bound upon receipt of request with an effective date up to 90 days prior to receipt of our request. 2. AmeriNat's insurance provider or their carrier will send out three letters to the borrower over the course of forty-five days. If the borrower provides proof of coverage, lender -placed coverage will be cancelled. 3. If the effective date of this coverage is the same and there is no lapse in coverage, there will be no premium charged. If there is a lapse in coverage, there may be a fee charged to the borrower's account for an earned premium. 4. If the borrower does not provide proof of coverage, AmeriNat's insurance provider will send an insurance policy and notification of premium to the borrower and bill AmeriNat for a one- year policy. If the borrower does not have an established impound account; AmeriNat will create one and disburse the premium from it. If the borrower fails to pay the premium before the end of the month, and the disbursed premium results in an escrow deficit balance, said balance will be accounted for in that month's reconciliation of the Client Escrow Deficit Account. If the aggregate portfolio remittance for said month is insufficient to cover the deficit amount, the City will be billed and responsible for the cost until recouped from the borrower. Any pay-off quotations or demands will reflect any impound deficit amounts (caused by the cost of any forced -place insurance or other advances) so that the borrower will still be held responsible for the cost even if they are unresponsive. The Portfolio Status Report, delivered monthly to the City, will also reflect such negative impound balances (i.e. the total amount of such premiums owed by borrower). 5. The one-year policy is cancelable at any time by either AmeriNat or the City. Account Inquiries Borrowers and the City have 24-hour electronic access to their loan information via AmeriNat's website at www.amerinatls.com. Continuous access to all loan account information is also provided during normal working hours through our toll -free customer service telephone lines. In addition, we can provide hard copy account payment histories or other information through facsimile transmission or email. When requested by a borrower, AmeriNat will provide, without charge, a detailed statement of all transactions relating to the borrower's payments and/or escrow account. MAMERINAT AmeriNat Proposal to Provide Services Non -sufficient Funds (NSF) Checks In the event that a check is returned to us unpaid due to non -sufficient funds, a returned check fee will be assessed. A letter will be sent to the borrower requesting immediate payment plus the returned check fee. If this fee is not received, a memo will be placed on the individual's account and the fee will be collected at the time the loan is paid off. Additional Portfolio Management Services 1. Loan Payoff Ouotations, Satisfactions, Reconveyances: AmeriNat will provide Loan Payoff Quotations and will perform Satisfactions and Reconveyances of Mortgage at the borrower's expense for any loan at the City's request. 2. Loan Amortization Schedules: AmeriNat will provide Loan Amortization Schedules for any loan at the City's request. 3. 1098 Tax Forms: Pursuant to IRS regulations and, on behalf of the City, AmeriNat will submit required 1098 tax form for any and all borrowers paying interest on any City loan. 4. Year -End Account Summary: AmeriNat will supply a year-end account summary statement to each borrower if there has been principal, interest or escrow activity on their account. The report will indicate principal and interest paid, amount of payments AmeriNat made on the borrower's behalf for taxes and insurance, and any remaining escrow balance. 5. Tickler Notifications: AmeriNat will provide for an annual tickler notification to any borrower, at the City's request. Loan Transfer In the event the City requires AmeriNat to transition loans back to the City or to another Servicer, AmeriNat will gather and package all loan files (hard -copy and/or electronic copy) for shipment. AmeriNat has an in-house IT department that is dedicated to the maintenance and enhancement of its proprietary loan servicing system. AmeriNat's IT department will work with the City's staff to electronically transmit servicing data in an agreed upon format. Loan Reconstruction Over the course of our history, we have assisted our wide range of clients in reconstructing their portfolio of loans to ensure the accuracy and consistency of the booked loans with the terms and conditions of the original loan documents. Reconstruction work may involve a detailed review of payment histories to determine posting accuracy and compliance with promissory notes, truth in lending statements, and other applicable related loan documents. WAMERINAT AmeriNat Proposal to Provide Services Loss Mitieation AmeriNat provides treatment for delinquent mortgages through positive pressure that is fair but firm. If delinquent borrowers have a positive attitude toward their obligations, we will work with them to help them retain title to their property. The following policy of follow-up will be adhered to by AmeriNat to minimize any loss of income to the City: 1. First Payment Default: Early delinquency can be a sign of a chronic delinquent borrower. AmeriNat forwards its first letter to new delinquent borrowers at 5 days past the first payment due date. If there is no response, a second letter is sent at 15 days. Borrowers are invited to contact our office to discuss difficulties they may be facing in meeting their obligations. If no response is received to either letter, due diligence phone calls begin at 17 days delinquent. 2. Delinquency/Default Letter Production: While most borrowers will pay without much individual attention, delinquencies will rise because some borrowers, left alone, will fall into poor paying habits. Therefore, letters of varying tone and composition will be sent at 15, 30 and 45 and 90 days past the payment due date. The 45-day letter will include the Consumer Financial Protection Bureau (CFPB) mandated notification informing the borrower of the available loss mitigation options. The 90-day letter will detail for the borrower possible escalated collection activity up to and including foreclosure. The letters emphasize the seriousness of the situation, the potential for loss of the borrower's property, and demands immediate payment. 3. Due Diligence Phone Calls: Telephone calls will be placed to all mortgage loan borrowers in accordance with CFPB guidance and best practices. We will attempt to establish live contact with the borrower beginning at the 17th day of delinquency with a good faith goal of establishing contact with the borrower by the 36th day of delinquency. We will make one or more subsequent attempts to contact the borrower every 30 days thereafter. Telephone contact offers several advantages: it demands attention; it interrupts other activity; it establishes a personal communication; and it requires immediate response. The objective of the call is to secure or demand prompt payment, obtain information needed to determine the reason for the delinquency, and to gain a commitment for future payments. 4. Credit Reporting: AmeriNat will report to the credit bureaus any borrower payment activity on a monthly basis. 5. Confirmation Letters: Contact with borrowers is used to solicit commitments to repay past due amounts. A borrower will be provided with the opportunity to bring the loan current immediately, and within six months. Once a commitment is gained, AmeriNat will forward a confirmation letter to document both the call and the commitment. The revised payment plan of no greater than six month's duration is then implemented. Default under this plan may cause AmeriNat to recommend foreclosure. The collection letters and telephone outreach that has been done has, and will continue, to impact delinquencies. However, there are additional steps that can also be impactful to the portfolio performance, including repayment plans and forbearance agreements and loan MAMERINAT AmeriNat Proposal to Provide Services modifications. AmeriNat is able to offer all of those services to the City and looks forward to developing a program for their implementation, as well as discussing viable alternatives. Forbearance Plans Formal forbearance plans are typically used for defaults of 90+ days. A forbearance plan of less than six months duration is executed by the borrower and immediately implemented by AmeriNat, with notice immediately provided to the City. Formal modifications to promissory note terms and forbearance plans of greater than six months duration are forwarded to the City for pre -approval. Before the borrower executes the agreement, the City is requested to approve the plan. Once approved, AmeriNat will implement the new payment schedule. Should a borrower default from the new payment schedule without cause, AmeriNat will recommend foreclosure. Forbearance Evaluation Process: A hardship is defined as a situation or set of events or circumstances beyond the normal control of the borrower that prohibits the borrower from adhering to a planned repayment schedule. If a borrower states, either verbally or in writing, that a hardship situation exists, AmeriNat will document the circumstances and provide the following: i. Letter from borrower requesting the City's consideration of hardship ii. Nature of the hardship iii. Expected duration of the hardship iv. Evidence to substantiate hardship V. Forbearance Plan Proposal If the City approves the Forbearance Plan Proposal and executes the agreement with the borrower, AmeriNat will resume loan servicing under the new payment plan. The file will be tickled for follow-up at the expiration of the temporary plan. AmeriNat's objective is to formulate a plan to bring the loan current as soon as possible. However, in light of the City's original purpose in making these loans (to assist the low/moderate income and disadvantaged citizens of its community), AmeriNat may recommend forbearance plans that defer all or part of the regular repayments for a specified period of time. Loan Modification Analysis 1. Preliminary Screening_ When contact with the borrower indicates a short-term forbearance agreement will not be enough to bring the account current, and initial assessment of the Borrower's circumstances indicate the Borrower may possibly be eligible for an available loss mitigation option, Borrower will be encouraged to submit a loss mitigation application. 2. Application: Upon receipt of a loss mitigation application, AmeriNat will review the application to determine supporting materials are present and that the forms are complete. Support materials may include but are not limited to, paycheck stubs, W-2's, Federal Tax Returns, bank statements, mortgage statements, property tax bills and insurance policies. Once VdAMERINAT AmeriNat Proposal to Provide Services the application is reviewed and found to be complete, a credit report and escrow analysis are ordered, as applicable, and the application is submitted to underwriting 3. Analysis and Recommendation: Underwriting of the application is performed using the City's eligibility criteria. This analysis will reflect information such as ability to repay or affordability (debt -to -income ratio), status of V mortgage, and occupancy. Based on the aforementioned, the recommendation will convey whether it is reasonable to proceed with the modification and what type of modification will best suit the needs of the borrower and City. The recommendation along with the supporting documentation will be sent to City for approval. 4. Approval: Once a loan modification has been approved, AmeriNat shall prepare and forward the required documents to the borrower for signature and recording, unless City retains these functions. After the documents have been executed, originals will be retained by City and copies will be promptly sent to AmeriNat along with any funds required for escrow, legal fees, etc. After receipt of executed modification documents and required funds, AmeriNat will make the appropriate modifications to the loan, send the borrower new payment coupons, if applicable, and electronically notate the account. All respective modification documentation will be retained in the electronic loan file. Loan Foreclosure The mortgage transaction and all collections efforts are predicated on the assumption that the borrower is motivated and able to meet the mortgage obligation. A decision to foreclose is based on an analysis of an individual loan. We will look at the borrower with particular emphasis on basic motivation, ability to pay; and attitude or level of cooperation. If a borrower has been uncooperative, non -responsive, or unwilling to cure the existing default by all reasonable means, AmeriNat will recommend foreclosure. This step is generally not taken until after a loan becomes over 120 days delinquent. Upon the City's approval, and in accordance with respective local, state and federal statutes, AmeriNat will send the borrower a notice of intent to foreclose/demand letter, with a copy to the City. If no response is received within 30 days, AmeriNat will advise the City of the non -response. Upon the City's direction, AmeriNat will proceed to foreclosure. AmeriNat will properly document all steps taken to affect a cure. If the loan is not reinstated or paid off, AmeriNat will continue foreclosure up to and including the sale of the property. Upon sale of the property, AmeriNat will return all proceeds of the sale to the City less foreclosure fees and any previously un-reimbursed costs incurred. In the event the borrower reinstates the loan, AmeriNat will remit to the City all payments received from the borrower. For those loans that are reinstated by the borrower, AmeriNat will resume normal servicing functions. MAMERINAT AmeriNat Proposal to Provide Services Bankruptcy Administration Services 1. Chanter 7 Bankrumcv: a. Upon receipt of notification from a court of law, debtor (borrower), or the City, of a Chapter 7 bankruptcy for a debtor serviced by AmeriNat, AmeriNat will modify account in preparation for monitoring of payments. Additionally, a Reaffirmation Agreement will be generated and forwarded to the borrower's attorney (debtor's counsel) for signature, and to the appropriate court upon receipt of the executed document. This fully enforceable agreement, if executed, will retain the lien as secured and will keep the lien from being discharged as part of the Chapter 7 discharge. If the borrower has no legal counsel and has filed their bankruptcy petition "pro se", (on their own behalf) or with the assistance of a licensed paralegal; AmeriNat can communicate directly with the borrower. b. Upon any default of borrower's remittance of payments during the bankruptcy, AmeriNat will notify the borrower's (debtor's) counsel and Chapter 7 Trustee advising of the default, but if filed pro se, then the debtor would be notified directly. c. Should the Chapter 7 Trustee determine that assets are available for distribution to creditors, AmeriNat will file a Proof of Claim on behalf of the City, indicating total amount due. 2. Chapter 13 Bankruptcy: a. Upon receipt of notification from a court of law, debtor (borrower), or the City, of a Chapter 13 bankruptcy for a debtor serviced by AmeriNat, AmeriNat will notify the City its intention to file a Proof of Claim as well as supporting bankruptcy documentation. Such Proof of Claim will indicate the total amount past due at time of Chapter 13 filing. AmeriNat will then file a Proof of Claim with the appropriate court. Upon receipt of a returned filed Proof of Claim from the court, AmeriNat will forward a copy of same to the City and will begin monitoring post and pre -petition payments to borrower's loan account. b. Upon any default of borrower in the remittance of post -petition payments, AmeriNat will notify the borrower's (debtor's) counsel of the default, instructing that any further default will result in the filing of a Motion for Relief. If the borrower has no legal counsel and has filed their bankruptcy petition "pro se", (on their own behalf) or with the assistance of a licensed paralegal; AmeriNat can communicate directly with the borrower. In addition, notification of the default will be forwarded to the Trustee's office. Should there be a continued default in post -petition payments, and at the instruction of the City, AmeriNat will file the Motion for Relief. Once authorized by the court, and as directed by the City, AmeriNat may then begin foreclosure proceedings. Subordination Processin¢ 1. Subordination Request Package: The City, upon receiving a request for subordination, will refer the borrower to AmeriNat. AmeriNat will send a Subordination Request Package to the FdAMERINAT AmeriNat Proposal to Provide Services borrower or designee (lender or title). The City may require the borrower to pay the cost of the subordination processing at application or the City may pay the cost upon billing from AmeriNat. 2. Review Process: The purpose of the subordination review process is to determine that the new senior loan on the borrower's property will be made in conformance with the City's subordination policy and that the City's title position and security for its note is properly treated. Also, a review of income of the borrower may be performed if there are ongoing restrictions on income levels for the program participant. Documentation typically required for the review may include the following: a. Letter from borrower with reasons for requesting subordination b. FNMA 1003 application, or other applicable application, for new senior loan c. Lender's approval of new senior loan d. Title report e. Appraisal f. Closing instructions and estimated closing statement g. Credit report (if required) h. Tax return or other income documentation (if required) i. Completed Subordination Agreement ready for signature j. Request for Notice document on new senior loan(s) 3. Document Preparation: AmeriNat prepares (or reviews docs prepared by new senior lender): a. Subordination Agreement b. Request for Notice document on new senior loan(s) c. Closing instructions 4. Recommendation: At the completion of the review, a report is forwarded to the City with a recommendation to either approve the request and to execute the Agreement, or to deny the request. The report will contain a recapitulation of pertinent information such as lowered monthly payment amounts, old and new LTV's, new and old senior debt loan amounts, etc. 5. Approval: Upon the City's approval of a request for subordination, the City will forward to borrower's lender or Title Company: a. Completed and executed Subordination Agreement between the City and borrower b. Closing instructions dictating terms / use of Subordination Agreement document c. Request for Notice document for new senior loan Affidavit of Owner AmeriNat will forward an instructional letter and Affidavit of Owner to each borrower. The Affidavit requires the owner to affirm continued compliance with all provisions of the promissory note and/or rehabilitation agreement. Such provisions may include, but are not limited to, the following: FdAMERiNAT AmeriNat Proposal to Provide Services - Continued residence - Timely payment of property taxes - Ongoing hazard and flood insurance coverage - Timely payment of all sums due to superior lien holders - Proper maintenance of the property - Non -subordination If no response is received within two weeks, AmeriNat will send a second letter, again requesting owner to sign and return affidavit. AmeriNat will compile responses and will forward original affidavits to the City. Reports AmeriNat's standard reports are designed to meet the City's objectives and funding source requirements. Data reporting is flexible and can be reported in several ways, including program type, funding source and funding year. Soft -copy reports are available as indicated in addition to the electronic reporting available to the City online through our Internet LoanLink service. Through LoanLink, the City has unlimited access to account and portfolio data, and can view the information as well as generate reports that can be downloaded into Excel. 1. Portfolio Status Report: The report provides a complete accounting per loan of the total portfolio. The report identifies annual payments made, remaining balances, borrower's name and account number, original loan balance, interest rate, and loan term. For those deferred loans accruing interest, the report shows the ongoing accrued interest balance. Frequency: Available on-line, one soft -copy report forwarded monthly to the City. 2. Current Month Reconciliation Report: This report serves as reconciliation for the loan payments remitted by borrowers. Frequency: Available on-line, one soft -copy report, along with remittance check, forwarded to the City within ten working days of the close of the month. 3. Delinquent Aging Report: This report reflects delinquent accounts at the 30, 60, 90, and over 90-day levels. Borrower accounts moved into the forbearance or foreclosure process are designated. Frequency: Available on-line, one soft -copy report forwarded monthly to the City. 4. Loan Amortization Schedule: The Loan Amortization Schedule shows the breakout of principal and interest paid for each payment during the term of the loan. This schedule is useful in determining how much principal is still owed and how much interest has been paid, at any period of time. This report can also be used in determining any balloon amounts due per the terms of the note. Frequency: Available to the City upon request. 5. Escrow Analysis Report: For loans requiring monthly escrow/impound payments for taxes and/or insurance, AmeriNat conducts an annual escrow analysis to determine the proper VdAMERINAT 10 AmeriNat Proposal to Provide Services monthly payment a given borrower needs to make in order to cover future tax and insurance payments. This report is especially useful when escrow requirements change significantly, e.g., a marked increase in property tax due to a reassessment or supplemental tax. Frequency: Available to the City upon request. 6. Account Status Information Report: Provides borrower profile, loan term and current balance and status information for individual borrower accounts within a client's portfolio. This report includes a vast amount of information on any particular account within the City's portfolio. Frequency: Available on-line. 7. Current Year Payment History: Details transactions on individual accounts for the current year's activity. Frequency: Available on-line. 8. Payment History with Memos: AmeriNat uses a series of memo codes to help classify various borrower requests or processing activity. Activities subject to memo code classification include, for example, requests for duplicate coupon books, payoff requests, and other miscellaneous borrower questions. This report summarizes the loan history with identification of these types of activities along with associated comments by AmeriNat personnel. Frequency: Available on-line. 9. Memo Listing Report: This report lists the various coded activities and their dates. It is particularly useful when researching activity on any particular borrower account. Frequency: Available on-line. Fee Schedule Loan Portfolio Management: New Loan Set-up fee: $45.00 per loan Monthly Service Fee for Amortized Loans: $15.50 per loan per month The above fees include delinquency monitoring and collections activities on past due accounts and all other servicing activities unless separate service fees are identified below. Escrowing and/or monitoring of taxes and insurance are included with the service at no additional cost except for a one-time tax service vendor fee if acceptable transferable tax contracts are not already in place. Monthly Service Fee for Deferred Loans: i. Warehouse: $2.25 per loan per month ii. Warehouse and monitor of taxes and/or insurance: $5.85 per loan per month plus a one-time tax service vendor fee. VdAMERINAT 11 AmeriNat Proposal to Provide Services iii. Warehouse and escrow of taxes and/or insurance: $15.50 per loan per month plus a one-time tax service vendor fee. iv. Flat fee for receiving occasional payments on deferred loans: $15.50 per payment Tax Service Fee: If it is determined that Tax Service is needed, then a one-time fee of $69.00 per loan upfront at time of servicing commencement will be charged (may be assessable to borrower) for all loan amounts up to $500,000. For loan amounts over $500,000, there is an additional charge of $10 per $100,000. Future charges may vary based on outside vendor pricing. Please note: Any additional or supplemental charges that may be imposed by the respective taxing authority for procurement of duplicate tax bills will be directly passed through to the City. Forbearance Plans: If requested by the City, AmeriNat will charge a flat fee of $375.00 per loan per occurrence to institute a formal forbearance plan (usually in excess of 6 months in duration and with approval of the City). The City may require the borrower to pay this fee. Informal forbearances (usually less than 6 months in duration) to allow a delinquent borrower to catch up and bring their loan current are performed at no charge to the borrower or the City. Loan Modification Analysis: If requested by the City, AmeriNat will charge the following fees for a Loan Modification Analysis: 1. Analysis and Recommendation, plus outside costs * $375.00 2. Subsequent Analyses and Recommendations (each) $150.00 3. Loan Document Preparation, plus outside costs *. $325.00 (State and federal compliant documents provided by Contractor) 4. Document redraws (per occurrence) $150.00 Cancellation Fee: The fee due will be the sum of all fees for tasks (1-4 above) completed, plus one-half of the fee for the task in process at the time of cancellation. *Outside costs include, but are not limited to, title, credit, and appraisal / valuation. These costs are passed through from outside vendors and are subject to marketplace increases. VdAMERINAT 12 AmeriNat Proposal to Provide Services Loan Foreclosure: If requested by the City, AmeriNat will charge the following fees for Loan Foreclosure services: 1. Document Preparation: A one-time charge of $430.00 to prepare documents to commence foreclosure proceedings and to manage the foreclosure process on behalf of the City. In addition to the above foreclosure service fee, AmeriNat will deduct and pay from remittance or bill the City for other costs incurred in the foreclosure process such as, but not limited to, conventional legal fees, sheriffs' deposits, bankruptcy closing costs, fees set by law, etc. These fees will be accurately quoted on a case -by -case basis upon request by the City and within all applicable statutory limits. 2. Reinstatement Terms: The City reimbursement for foreclosure services rendered, and its costs and other charges, will be made by the borrower upon reinstatement or full payment of any Deed of Trust or Mortgage under foreclosure. Bankruptcy Services: If requested by the City, AmeriNat will charge the following fees for Bankruptcy services: 1. Account Modification Fee: $45.00 per occurrence to modify account for respective Bankruptcy monitoring 2. Proof of Claim Filing Fee (per occurrence): a. $300.00 for Chapter 7 b. $850.00 for Chapter 13 3. Reaffirmation Agreement Filing Fee: $225.00 per occurrence 4. Monitoring and Repayment Fee: $12.00 per loan per month for the duration of an active Chapter 7 or Chapter 13 case. This includes monitoring respective payment plans, discharges, and dismissals. 5. Motion for Relief Filing Fee: $175.00 per occurrence plus out-of-pocket fees and costs. Such fees and costs include, but are not limited to, obtaining local counsel in the bankruptcy jurisdiction and as approved by the City. The City will be responsible for the payment of any fees for filing suit or related outside costs due AmeriNat that cannot be reimbursed from the borrower. Subordination Processinu: A fee of $380.00 per analysis per loan. VdAMERINAT 13 AmeriNat Proposal to Provide Services Loan Payoffs: Payoff demand fees vary based on loan documents and state specific regulations. The fee may be assessed when a borrower requests a written demand statement itemizing the amounts required to fully satisfy all obligations secured by the loan. Per -Event Fees: Tickler Notifications: $12.50 per notification Loan Transfer Fee: $75.00 per loan one-time fee if transferred from AmeriNat Affidavit of Owner: $13.00 per loan (entire portfolio done at one-time) with a $500 minimum fee Note: Pass -through (reimbursable) expenses not reimbursed monthly, will be considered servicer advances and will be subject to an interest charge at a rate of 1 % per month compounded. A finance charge of 1 % per month compounded will be applied to any invoice outstanding and unpaid for more than 60 days. Extraordinary Account Research and/or Loan Reconstruction AmeriNat will conduct ongoing routine maintenance and general customer service activities on borrower information and balances as part of its servicing duties at no additional cost. Should the City request additional research to be conducted, or if the City engages AmeriNat to conduct a Loan Reconstruction Service on its portfolio, an extraordinary research fee of $150.00 per hour will be charged, with a minimum of one hour per occurrence. Any such fee will be approved by the City before the research is conducted. When research is conducted at the request of the City because of a discrepancy between the City's records and AmeriNat's records relating to the principal balance or other loan information, and the result of the research determines that the discrepancy was the result of activity being posted at the City and not forwarded to AmeriNat for updating of its records, the extraordinary research fee will be charged for the time spent on the research. In the event the City requests additional services to be performed by AmeriNat not specifically set forth in the Scope of Services and AmeriNat agrees to perform the requested additional service(s), AmeriNat shall undertake such services(s) after receiving written authorization from City. Additional compensation for such service(s) shall be allowed as agreed upon in writing by both the City and AmeriNat. FdAMERINAT 14 AmeriNat Proposal to Provide Services Excluded or Subcontracted Services AmeriNat does not intend to engage any subcontractors to perform the work under this contract. List of Projects Conducted AmeriNat considers our project and client lists confidential and proprietary, as it consists of our entire organization's business livelihood. In addition to the references we've provided in the Statement of Qualifications exhibit of this proposal, we would be happy to provide a further detailed listing of our clients to the City, under confidential cover, upon request. MAMERwAT 15 AmeriNat Proposal to Provide Services Exhibit A — Statement of Qualifications Per Section 10.11 of the City's RFP, all Proposers should identify or affirm each of the following requirements: 10.11.1 Have a minimum of three (3) similar projects within the last three (3) years providing the same or similar services requested in this RFP. AmeriNat provides services to approximately 300 clients nationwide, of which the majority have active loan servicing agreements. Many of these are government entities similar to the City. We have provided reference information for three of our current clients with a similar scope of work. City of Los Angeles Housing & Community Investment Department Mark Gandara, Finance Development Officer II 1200 West 701 Street, 9`n Floor Los Angeles, CA 90017 Phone: (213) 808-8677 City of Visalia Rhonda Haynes, Housing Specialist 315 E. Acquia Ave. Visalia, CA 93291 Phone: (559) 713-4460 Sacramento Housing and Redevelopment Agency Susan Perry, Sr. Loan Servicing Analyst 801 12d' Street Sacramento, CA 95814 Phone: (916) 440-1386 10.11.2 Have no outstanding or pending complaints as determined through the Better Business Bureau or State of California Department of Consumer Affairs. There are no outstanding or pending complaints through the Better Business Bureau or the State of California Department of Consumer Affairs. In addition, AmeriNat holds 106 state licenses and is an approved FNMA, HUD, and RD servicer, and there are also no outstanding or pending complaints against AmeriNat from those agencies. AmeriNat adheres to the requirements of the Real Estate Settlement Procedures Act (RESPA) when handling borrower inquiries. This means that all written inquiries to AmeriNat are treated as "Qualified Written Requests", and responded to in accordance with the RESPA timelines. If any customer inquiries are pending at any point in time, from borrowers, they are addressed in compliance with the above. AmeriNat has an average borrower complaint rate of .01 % on the 65,000 plus loans that it services. FdAMERINAT 16 AmeriNat Proposal to Provide Services 10.11.3 Have the administrative and fiscal capability to provide and manage the proposed services. Request for Qualification Questions 1. Your pricing schedule should include the following services: a. Loan set up fee b. Monthly servicing fee for payments loans c. Monthly servicing fee for deferred loans d. Fee for calculating payoffs e. Fee for processing loan payoffs f. Conduct monthly homeownership verification. g. Loan transfer fees h. Any other fees your company has established for services As detailed in the Fee Section of this proposal, AmeriNat's pricing structure includes all of the aforementioned services. 2. Provide information that will enable us to evaluate your company's financial stability, and track record. We require that you include the following: a. Description and history of the Company AmeriNat has provided asset management, loan servicing and other specialized financial services to government agencies, nonprofits, financial institutions and other investors for over 45 years. AmeriNat has unparalleled experience in the affordable housing industry. Working with approximately 300 clients nationwide, we service over 65,000 loans with a principal balance in excess of $12 billion. We have also underwritten multiple thousands of single-family affordable housing loans and also has over 300 actively reporting multifamily affordable housing developments ranging in size from $500,000 to $20,000,000. In addition, we monitor over 30,000 units for affordability and maintenance that are restricted under affordable programs including LIHTC and HOME. AmeriNat has provided federal labor standards (Davis Bacon) wage compliance monitoring for over 350 developments throughout the nation. AmeriNat manages portfolios of commercial/economic development, single family and multifamily loans with widely varying structures. These loans are originated under multiple funding arenas including CDBG, HOME, HHF, ARRA, NSP, HOPE, EECBG, tax-exempt bonds and other common federal and state sources and are insured by FHA, VA, RD, and private insurers. They include first and junior lien loans. We are also extensively familiar with the LIHTC program. VdAMERINAT 17 AmeriNat Proposal to Provide Services AmeriNat is an approved servicer for: ■ FHA Title I and Title II ■ Fannie Mae • Federal Home Loan Bank ■ Veterans Administration ■ Guaranteed Rural Housing The locations in which AmeriNat either performs work or has offices are indicated on the map below. 11 AMERINAT J •1 >7 • r 4 , • "_ • ��.Offi- AmeriNat offers a comprehensive menu of services that has been customized to meet the special requirements of its clients, including: Program Consultation AmeriNat's single-family and commercial/multifamily divisions support government -sponsored loan programs across the nation, and are able to partner with clients in the review and development of loan program criteria, including policy and procedures, that will best address funding -source requirements and program objectives. Services include the creation and expansion of policies, build -out of procedures, development of underwriting requirements and associated checklists, and inclusion of KPIs for successful outcome measurement. AmeriNat staff can also review current systems and processes for improvement identification and potential cost -saving (or outcome maximization) opportunities. FdAMERINAT 18 AmeriNat Proposal to Provide Services Single Family Loan Processing and Underwriting AmeriNat's loan processing and underwriting teams support clients' loan delivery teams. AmeriNat can serve as either the entire back -office to loan delivery or can assist with designated tasks in the process. Services include pre-screening activities, Preliminary Risk Analysis (PRA) reporting, build - out of the applicant file, and outsourced underwriting in accordance with established standards including funding -source requirements. AmeriNat is able to order and evaluate credit reports, VOEs, VOIs, appraisals, title studies and other third -party verifications, and provide decision -packages with final underwriting. AmeriNat can also generate loan documents, with applicable security documentation, for client execution with borrowers. Multifamily Loan Processing and Underwriting AmeriNat's multifamily division has expertise in the full analysis and underwriting of multifamily developments. Services include full -scope underwriting including compliance with programmatic rule and LIHTC or other funding source requirements, analyses of sources and uses of funds and determination of debt service coverage, identification of market need, assessment of the experience and qualifications of the development team, analysis of partner resources including evaluation of partner financial strength, and overall project feasibility assessments. Limited scope subsidy layering reviews and other ad -hoc services are also available. Loan Portfolio Management AmeriNat's loan portfolio management services cover the complete array of loan servicing responsibilities for single-family, multifamily and commercial loans. This includes loan boarding, payment posting, tax and insurance monitoring, escrow management and analysis, custodial account maintenance and disbursement, lender (servicer-) placed insurance, UCC processing and updating, satisfactions, reconveyances, payoffs, 1098 and 1099 reporting, and credit bureau reporting. A complete suite of investor reports is available for clients via hard -copy and electronic download into PDF or excel. AmeriNat also provides construction loan servicing on single-family, multifamily and commercial loan programs. Single Family Loss Mitigation The loss mitigation teams within AmeriNat are trained and experienced in single-family loan management. In compliance with all pertinent regulations and licensing, AmeriNat's collections teams issue late notices, send letters of varying tone and composition based upon the number of days delinquent, and execute collection calls in accordance with regulatory and client -defined timelines. FdAMERINAT 19 AmeriNat Proposal to Provide Services AmeriNat offers a loan modification program for borrowers to assist with loss mitigation efforts. The modification program can incorporate client -defined benchmarks or requirements. AmeriNat also refers borrowers to professional credit counselors both independent of and in conjunction with its loan modification offerings. Experienced collectors evaluate borrowers for forbearance programs or other work-out programs offered by the client. Staff will also manage credits through bankruptcies or foreclosures, including necessary property inspections, REO management, and claim reporting. Asset Management AmeriNat offers Asset Management services for both commercial and multifamily loans. These services include the quarterly or annual review of borrower and guarantor financial statements, tax returns, and other applicable documentation. A comprehensive analysis of Debt Service Coverage and compliance with other loan covenants is provided. Loans are reviewed for proper risk rating along with the development of any watch list recommendations. Work-out solutions are strategized and implemented, with all relevant documentation included on Problem Loan Reports (PLARs). PLARs are reviewed with management on a monthly or quarterly basis. Progress reporting is continued through loan resolution. Inspection and management of REO or other loan collateral occurs regularly throughout loan resolution. AmeriNat also conducts quarterly rent -roll analyses on multifamily affordable properties, as well as quarterly, semi- annual or annual compliance visits with compliance monitoring reporting to both initial and ongoing program requirements. AmeriNat conducts repair and replacement reserve analyses and will invoice borrowers, hold, and disburse funds accordingly. Property Conditions Profiles, Affidavits of Ownership and Income Re - verifications As an ad -hoc service, AmeriNat staff can assess the condition of loan collateral through site inspections and provide comprehensive reporting on asset status. In addition, AmeriNat offers an Affidavit of Ownership service, verifying property owners, including occupancy and ownership status in order to determine compliance with loan covenants. A reverification of income, debt levels and other borrower financial data, in addition to occupancy and title status, can also be conducted as frequently as quarterly. Compliance Monitoring AmeriNat has over sixteen years of experience working with the reporting and compliance requirements of LIHTC, HOME, HUD, and USDA programs, and tax-exempt bond projects, and a multitude of state level programs. In addition to the monitoring services offered in connection with its Asset Management FdAMERINAT 20 AmeriNat Proposal to Provide Services activities, AmeriNat provides a comprehensive LIHTC and state program compliance monitoring service. From construction through the life of the compliance period, AmeriNat will conduct site visits, review tenant files, interview management companies and review site maintenance agreements and issue comprehensive reporting regarding compliance with program requirements. In addition, AmeriNat provides wage compliance services on CDBG and other federal- or state -program funded construction projects. AmeriNat's payroll review is conducted to verify that laborers are paid in compliance with the appropriate wage bracket and according to Davis Bacon or state prevailing requirements. This service includes pre -construction conferences with general and sub -contractors, site visits, and comprehensive payroll report auditing. All exceptions are documented and tracked through resolution; reporting of all resolved as well as any outstanding violations are reported to management. Financial Monitoring In addition to its financial reviews conducted under AmeriNat's Asset Management services, a comprehensive analysis of borrower and guarantor financial statements and tax returns is provided ad -hoc as well. AmeriNat will request periodic financial reporting from borrowers and/or guarantors, issue past -due and technical default notices upon non -receipt, and log and review financial information provided. The review will include a debt service coverage calculation, liquidity analyses, and other investigations as necessary to verify ongoing compliance with loan covenants or program requirements. This review will also serve as the required calculation of surplus cash flow for cash -flow dependent loans, and will lead to AmeriNat's issuance of a payment invoice to the borrower and updating of the loan servicing records. PACE Assessment Administration AmeriNat offers a complete property tax management service offering for the Commercial Pace (C-PACE) industry. This service is offered on a stand-alone basis as well as complementary to C-Pace loan servicing activities. AmeriNat staff will set up the assessment database, enroll assessments with the appropriate government agency, track and report on assessments, make payoff calculations, and provide extensive investor reporting. AmeriNat is also able to direct -bill assessments to the property owner/borrower. Ethics & Integrity AmeriNat has built a foundation that emphasizes sustainability, integrity of operations, and successful outcomes for its clients as well as the company's employees and shareholders. AmeriNat operates in a fiscally responsible VdAMERINAT 21 AmeriNat Proposal to Provide Services manner across its operations and meets or exceeds the financial requirements of all of its regulatory agencies. The company has an extensive system of internal controls to ensure the accuracy and integrity of financial reporting. AmeriNat has always operated within a heavily regulated industry and its infrastructure emphasizes compliance with all applicable local, state and federal laws and regulations. AmeriNat holds the appropriate licenses for every jurisdiction in which it operates. All employees operate under a Code of Ethics that has been established by AmeriNat's Board of Directors. The policy reinforces the high standards of conduct underlying all operations. A Compliance Committee composed of each senior line manager maintains a strong and consistent focus on ethical and regulatory compliant operations. AmeriNat also adheres to a rigorous audit program that operates under the jurisdiction of an independent audit committee. Audits conducted include: • Annual audited financial statement and report on internal controls ■ Annual USAP audit ■ Annual SSAE 18 audit, SOC 1 and SOC 2 • Annual HUD audit ■ Annual FNMA audit procedures ■ Quarterly loan audits • Annual to 18-month compliance audits over all pertinent federal regulations ■ Annual to 18-month SAFE and BSA audits • Outsourced internal audits based on annual risk assessment Technology & Innovation AmeriNat devotes extensive emphasis to utilizing technology in ways that maximize results. Its own servicing platforms have been customized based on the markets in which it operates and its clients' needs. The IT department within AmeriNat, which is supplemented through outside third -party vendors for areas requiring a unique technology or expertise, utilizes a "continual improvement" model of operations. Ongoing upgrades and enhancements, which are driven by clients and staff members, align with the company's commitment to superior service for each client. AmeriNat has a tested Business Continuity Plan in place that is designed to recover all critical business functions in each location. This includes the engagement of a third -party vendor to provide turnkey disaster recovery procedures, backup and recovery strategies over all critical data, off site storage and processing, data redundancy on a continual operating basis, and robust privacy and IT controls throughout the firm. The disaster recovery plan is tested annual through a formulated disaster scenario. FdAMERINAT 22 AmeriNat Proposal to Provide Services AmeriNat's leadership believes that excellence can best be achieved by operating in a continual learning environment. Based on that philosophy, the company's systems are structured to be highly customizable with extensive reporting available. By delivering data in a flexible format, AmeriNat and its clients can learn and orient to desired outcomes, make better quality decisions, and implement ongoing improvements based on analytical observations. b. Most recent audited financial statements AmeriNat has had financial statement audits performed for over 20 years, always with a clean (unqualified) opinion. AmeriNat has provided a copy of our most recent audited financial statement under Exhibit D of this proposal. c. Ownership of the company AmeriNat is a wholly owned and independently operated subsidiary of O'Brien - Staley Partners. d. Principal officers of the company AmeriNat's leadership has a wealth of experience in the financial services, affordable housing and economic development arenas. The company's commitment to quality starts with its Board of Directors, which is comprised of individuals listed below: Adrienne Thorson. Chairwoman and CEO Adrienne Thorson serves as Chairwoman and CEO. Adrienne has over 31 years' experience in financial services, including 20 years at AmeriNat. Prior to coming to AmeriNat, Adrienne was CFO of Americana National Bank and spent 8 years in public accounting at CliftonLarsonAllen LLP as a manager in the audit division overseeing audits of both financial institutions and local government clients. Adrienne holds a BS in Accounting from Mankato State University and is a Certified Public Accountant. E. Gerald (Jerry) O'Brien, Board Member Jerry O'Brien serves as the President, CEO and Chief Investment Officer of O'Brien -Staley Partners, of which AmeriNat is an independent subsidiary. Jerry was formerly with Cargill for 17 years and was senior partner and head of global loan portfolios for CarVal Investors. Jerry holds an MBA from the University of Chicago and a BA from the University of Michigan. FdAMERINAT 23 AmeriNat Proposal to Provide Services Adam Bernier. Board Member Adam Bernier is the Managing Director and Chief Operating Officer for O'Brien Staley Partners. Adam was formerly with Cargill and CarVal Investors for over 21 years with disciplines spanning investment management, internal audit and controllership. Adam is a Certificated Management Accountant and holds a BS in Accounting & Finance from Minnesota State University -Moorhead. AmeriNat's leadership is further supplemented by a board -appointed audit committee that assists with oversight of integrity of financial reporting as well as compliance with legal and regulatory requirements. Audit committee members include: Jennifer Wietecki. Chair Jennifer specializes in Risk and Investor Relations for O'Brien -Staley Partners with previous experience in loan portfolios and real estate investment, including as C&I Risk Analyst for Car Val Investors. Sue Hai¢h. Member Sue served 13 years as CEO and President of Twin Cities Habitat for Humanity. Prior to joining Habitat Sue served 10 years as a County Commissioner and multiple years as a county attorney. Sue has over 30 years of experience in public service. Jacaui Dorsev. Member Jacquie is a Shareholder at Hvistendahl, Moersch, Dorsey & Hahn, P.A., law firm in Northfield, Minnesota. She has over 20 years' legal experience in Minnesota, Beverly Hills, Los Angeles, Seattle and Phoenix, involving corporate management, commercial real estate and insurance defense. The executive team of AmeriNat is skilled and committed to keeping the client's interest at the center of our operations. Executive officers of AmeriNat include: FdAMERINAT 24 AmeriNat Proposal to Provide Services Michael Torres, Chief Operating Officer Michael serves as Chief Operating Officer. Michael has over 30 years' experience working for AmeriNat. Prior to his employment with AmeriNat, Michael served in the United States Marine Corps. Michael holds a Bachelor's degree in Business Administration with a concentration in Finance from the University of Phoenix Danelle Thomsen, Chief Financial Officer Danelle serves as Chief Financial Officer. Danelle has over 10 years' experience in financial institutions, both private and public. Prior to AmeriNat, Danelle served as the Controller for Opus Bank. Danelle has also served as the CFO of Foothills Bank in Arizona. Danelle holds a Bachelor's degree in Business Administration from the California State Polytechnic University. Shaunda Clark. Controller Shaunda serves as Controller. Shaunda has over 17 years of experience in corporate and financial strategy, risk mitigation and balance sheet management. Prior to AmeriNat, Shaunda served as the Chief Financial Officer for various financial institutions in Nevada and Washington. Shaunda holds an Executive Master's degree in Business Administration and a Bachelor's degree in Accounting from the University of Nevada, Las Vegas. Mark Fredericks, Senior Vice President Mark serves as Senior Vice President of Multifamily Services. Mark has over 17 years' experience directly related to affordable multifamily real estate finance and Section 42 Low Income Housing Tax Credit equity investments. Prior to AmeriNat, Mark was Vice President for Wachovia Bank and Vice President for Bank of America. He holds a Bachelor's degree in Accounting from Florida State University. 3. Customer support a. Please include a listing of your management staff and support personnel. Any information on customer service standards would be advantageous. Proposer should supply the City with any information on how borrower will contact the Company, and response times to telephone or written communication from the borrower(s). if the proposer uses a call tracking system, reports on call history that will the City in making its decision. FdAMERINAT 25 AmeriNat Proposal to Provide Services Reports can include number of calls, wait time, and percentage of call resolutions within defined time frames. Management Staff and Support Personnel: AmeriNat is proud to have a highly trained and motivated, caring team of staff members. We have 120 employees located throughout our offices who combine proven experience with a level of personal care and concern for their clients and borrowers that we have found to be unmatched in this industry. We engage in continual training and industry education and stay abreast of the ever - changing regulations and practices in the loan servicing arena. We have established robust hiring criteria, utilize background checks and screening processes, and maintain a supervisor to staff ratio that ensures sufficient oversight, mentoring and feedback. The managers and supervisors listed below will manage the City's relationship and portfolio needs, and will be assisted by our other staff members. Staff member Job Title/Classification Role Oversee the overall financial and strategic direction of the company. Ms. Thorson Adrienne Thorson Chairwoman and CEO has over 30 years of experience in financial services, and manages the firm's success to established client satisfaction objectives. Oversee and supervise the overall operations of the City's loan portfolio. Michael Torres Chief Operations Officer Mr. Torres has over 30 years of experience with AmeriNat and directly supervises the City's servicing activities. Oversee the overall Danelle Thomsen Chief Financial Officer financial direction of firm's service delivery. Oversee tactical functions of the Anesu Manjengwa Director of Information Information Services Technology team and address customized technology needs of clients. VdAMERINAT 26 AmeriNat Proposal to Provide Services Investor reporting and Shaunda Clark Controller accounting management. Project manager, Debbie Vranesh Operations Manager servicing line management. Project manager, special Jackie Phelps Client Services Manager requests and client services. Robert Ramirez Loss Mitigation/Collections Loss mitigation and Manager collections delivery. Mortgagor services, including reconveyance, Jason Rembert Customer Service Manager payoffs, and other mortgagor service requests. Payment processing Mary Puertos Payment Processing & activities, including tax Monitoring Manager and insurance administration. Customer Service: AmeriNat has six defined corporate -wide goals that align with the company's vision/mission/philosophy and values. The first of those goals is to "strengthen customer relationships." We are a "customer driven" service firm. Our staff and departments are organized to provide the highest level of attention to each customer and borrower as possible, and to reach a satisfactory outcome for each inquiry as soon as possible. Customer service and collection staff is available by telephone through our toll - free number at (800) 943-1988 between the hours of 8:00 AM and 8:00 PM Eastern Time, Monday through Friday. AmeriNat also has an automated voicemail system available 24 hours a day, 7 days a week. It is our firm's policy that all calls/emails are responded to within 24 hours. Borrowers can also easily reach our representatives via email from our website. Our borrower services departments in each of our offices consist of experienced staff working side by side with other departments. In the rare occasion they cannot answer a question for a borrower directly, their supervisor, manager or a coworker are right there to assist them. AmeriNat treats all written inquiries as "Qualified Written Requests" under the Real Estate Settlement Procedures Act (RESPA). All contact with the client and borrower is captured and notated in the loan servicing system and is available for inquiry or review. Tasks are logged, VdAMERINAT 27 AmeriNat Proposal to Provide Services monitored and evaluated for completion. In addition, all phone calls are recorded. The recordings are reviewed by management for quality control and training purposed, and we will query the system for particular customer calls for clients who might wish to review a particular call or when we have reason to delve further into certain specifics. Both the borrowers and the City will have 24-hour electronic access to their loan information via AmeriNat's Website at www.amerinatls.com. The website offers our clients a secure, quick and convenient method of accessing all pertinent loan level data, including borrower information, payment history, outstanding current principal balance, escrow account balance and disbursements, and form 1098 information. In addition, the City will be able to access the pertinent loan information online, including transaction history, payments posted, interest paid to date, next payment due date, late charge assessment dates and balances, and payoff amounts with per diem, among other items. As a customer -driven service organization, AmeriNat strives to provide the highest level of customer service to its clients and borrowers on each and every interaction. A Client Services Center is available to serve the specific needs of clients, and a Borrower Services Center is in place to service the specific needs of borrowers. These departments are staffed with trained and experienced representatives who are able to address questions or needs of our clients and borrowers. b. Inform customers any potential payment fees (e.g. credit card fees) AmeriNat's lists all payment option fees on our LoanLink website. Customer Service representatives also disclose all applicable fees to borrowers before a payment transaction is processed. Additionally, customers receive a list of applicable fees with their annual coupon book. 4. Provide the City with following sample documents. The borrower's names and confidential information may be blacked out or sample documents may be drawn in a fictitious name: a. Letter of introduction to borrowers, also known as the welcome letter b. Payment coupon or statement c. Demand letter for payoff d. Delinquency notice AmeriNat has provided sample letters in Exhibit E of this proposal. 5. Provide the City with samples of monthly reports sent to loan originators, including, but not limited to: FdAMERINAT 28 AmeriNat Proposal to Provide Services a. Balance information payment processing b. Payoffs received c. Past due loans d. Insurance monitoring The City prefers the reports be sent via electronic means each month and please state in the RFP if your company has the ability to do that. AmeriNat has provided samples of our standard month end reports in Exhibit E of this proposal. Soft -copy reports are sent to the City in addition to the electronic reporting available online through our LoanLink service. Through LoanLink, the City has unlimited access to account and portfolio data, and can view the information as well as generate reports that can be downloaded into Excel. 6. Other a. Does your company have the ability for a customer to make a payment over the phone? If so, briefly explain the process and the fee. AmeriNat has the ability to take payments through "check -by -phone". Borrowers call our 800 number and are guided through menu options to a customer service representative who will process their payment. Borrowers must have their loan account number and their checking account and ABA routing number available. The fee for this service is $14.00 per payment. This is a beneficial transaction when the borrower is trying to avoid a late fee when they forgot to make their payment, but AmeriNat encourages ACH payments as a more economical (and mutually beneficial) method of making payments. Online payment options are also available, as explained below. b. Does your company have the ability for a customer to enter a company website and pay the payment electronically via the internet? If so, briefly explain the process and the fee. AmeriNat's online payment option is available through our LoanLink system. Borrowers log on to their account and click on the "Make Online Payments" link. The following online payment options are available: • Electronic check transaction (eCheck): Borrowers can make a one-time payment using their checking account. They simply input their bank's routing number and checking account number. The fee for this service is $1.70 per payment. • Debit card payment: Borrowers can make a one-time payment using their debit card. The fee for this service is $16.25 per payment. FdAMERINAT 29 AmeriNat Proposal to Provide Services 7. Describe the level and types of insurance carried, including the deductible amount, to cover errors and omissions, improper judgement, or negligence. AmeriNat has a broad package of insurance coverage in place to provide protection for AmeriNat and its clients, including business liability of $1,000,000 per occurrence and umbrella liability of $5,000,000 per occurrence; a mortgage bond (fidelity bond) in the amount of $13,500,000; errors and omissions liability in the amount of $4,000,000; management liability insurance of $5,000,000; workers compensation of $1,000,000 per accident; cyber liability insurance of $3,000,000, along with automobile, personal property and other standard coverages. 8. Any other information that may assist the City is making its selection. There are many loan servicing firms across the country, but very few that specialize in the affordable housing and economic development arena. AmeriNat has unapparelled experience with government funded loans. That specialty is one we are very loyal to, and it enables us to provide consistent value to our clients. Based upon the experience gained from working closely with other government agencies, we have a thorough understanding of the unique needs specific to the industry. This experience has enabled us to provide programs tailored to meet the requirements of our valued clients. Our uniqueness is complemented by our size. We are large enough to be very good and efficient at what we do, and yet are small enough that we operate with the flexibility of a small firm — each of our customers is very important to us and our continued growth and success. Our customers especially appreciate the value of LoanLink. They've come to view this internet tool as vital to their ability to receive any amount of detail on their portfolio at, literally, any time. This truly allows our clients to feel like they have an in-house system, but with none of the responsibilities that go along with in-house servicing of a loan portfolio. At the same time, they appreciate that their borrowers gain this same benefit from LoanLink, and all free of charge to either the City or their borrowers. Our customers also gain the protection from a regulated environment. We have a strong audit and compliance program in place, and also provide a comprehensive package of insurance coverage in place that is designed to meet or exceed the City's requirements. Our philosophy and values are built around the industry we work in. Specifically, our philosophy centers on ethics, customer service, technology and innovation, and our employees and shareholders. We operate with honesty, integrity, and trust. We strive for outstanding customer satisfaction and engagement. We are creative with technology and continue to innovate our systems to bring efficiencies to our clients FdAMERiNAT 30 AmeriNat Proposal to Provide Services and the ultimate benefactors of our services. We deliver on our commitments by empowering and challenging our employees to thrive in a demanding and rewarding environment, ensuring an acceptable return on investment to our shareholders. FdAMERwAT 31 AmeriNat Proposal to Provide Services Exhibit B - Piggyback Option Per section 10.20 of the City's RFP, Bidders are to indicate whether they will extend the same pricing structure to other local and State agencies and for what length of time. AmeriNat's pricing is based on many determining factors, including our client's particular needs and the health of each loan portfolio we service, as such, we will not guarantee the same pricing structure to other local and State agencies. MAMERwAT 32 AmeriNat Proposal to Provide Services Exhibit C — Exceptions to Professional Services Agreement AmeriNat has the following exceptions to the City's Professional Services Agreement included as Attachment D of the RFP: / Section 6.3 Key Personnel. Should it become necessary for AmeriNat to replace a key staff member assigned to the City's portfolio, AmeriNat will seek the City's approval of such replacement; however, we are unable to seek written approval before any said change or substitution can become effective. / Section 6.7 Assienment. AmeriNat would like to add the following language to this paragraph: "Consultant shall not voluntarily or by operation of law assign, transfer, sublet, or encumber all or any party of Consultant's interest in this Agreement without City's prior written consent, which such consent shall not be unreasonably withheld." / Section 6.8 Indemnification and Hold Harmless. AmeriNat would like to add the following language to this paragraph: "Contractor's liability under this paragraph is limited to the amount Contractor has been paid in servicing fees under the program." / Section 6.9 Independent Contractor. AmeriNat would like to replace all references to Independent Contractor to "Independent Party" throughout this section. / AmeriNat requests that the following additional terms be included in the Agreement: Force Majeure: Any delays in or failure of performance by either party, except in respect of the obligation of payments under this Agreement, shall not constitute default of this Agreement, if and to the extent such delays or failures are caused by occurrence(s) beyond the reasonable control of the party affected, and which by the exercise of due diligence such party is unable to prevent, such occurrence(s) including but not limited to: acts of God, sabotage, war, acts of terrorism, riots, insurrections, civil unrest, riots, embargoes, strikes, lockouts, fires, floods, tornados, hurricanes or other natural disaster or governmental actions. In any such event, the party claiming Force Majeure shall promptly notify the other party of the nature of the event in writing, and, if reasonably possible, such notice shall set forth the extent and duration thereof and shall resume performance at the earliest possible date. Penalties and Assessments Related to 1098 and/or 1099 Reporting: Consultant will submit the required 1098 and/or 1099 forms to the Internal Revenue Service as required. If the loan data provided by the City does not include a valid social security number for a borrower(s), Consultant will exercise all reasonable means to obtain such valid social security number(s). Consultant will also notify the City, at a minimum of one time annually, of any missing or invalid social security numbers which remain outstanding. If the lack of an available and/or valid social security number(s) results in a penalty or fine assessed by the Internal Revenue Service, the City will be notified of VdAMERwAf 33 AmeriNat Proposal to Provide Services the amount of the penalty and fine and will immediately reimburse Consultant for any such penalty or fine paid or to be paid. Anti -Money Laundering: The Consultant agrees to perform its services in accordance with established policies and procedures designed to detect, prevent, and mitigate the risk of money laundering, terrorist financing or other crimes. Such policies and procedures are available for review by the City on their request. The City is responsible for OFAC screening of borrowers prior to loan origination to ensure they do not appear on the U.S. Department of Treasury's "Specially Designated Nationals List (SDN) (htto://www.treasury. gov/resource-center/sanctions/SDN-List/Pages/default.asox), and for compliance with Anti -Money Laundering program requirements of 31 U.S.C. § 5318(h), or other directives that may relate to the appropriate verification of borrower identity to ensure the prohibition of transactions with certain foreign countries and/or their nationals. The City also agrees to immediately notify Consultant if it becomes aware of any of its borrowers being added to the SDN during the term of this agreement. Protection of Nonpublic Personal Information: Consultant performs its services in accordance with established policies and procedures designed to provide for adequate privacy, protection, security and confidentiality of consumer information. The City acknowledges its obligation under the Gramm -Leach -Bliley Act 15 USC 6801 and confirms that it adheres to the provisions of this regulation and related guidance, including issuance of the proper privacy notices to its customers. Survival: Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. FdAMERINAT 34 AmeriNat Proposal to Provide Services Exhibit D — Audited Financial Statement Attached is AmeriNat's most recent audited financial statement. MAMERwAf 35 CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION YEARS ENDED DECEMBER 31. 2018 AND 2017 CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY TABLE OF CONTENTS YEARS ENDED DECEMBER 31, 2018 AND 2017 INDEPENDENT AUDITORS' REPORT CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION CONSOLIDATED STATEMENTS OF INCOME CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' EQUITY CONSOLIDATED STATEMENTS OF CASH FLOWS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR HUD PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE CONSOLIDATED AUDIT GUIDE FORAUD/TSOFHUD PROGRAMS 16 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUD/T/NG STANDARDS 18 SCHEDULE OF FINDINGS AND RESPONSES 20 SUPPLEMENTAL SCHEDULES REQUIRED BY HUD 21 CONFIDENTIAL CliftonLarsonAllen LLP �. CLAwnnectxom INDEPENDENT AUDITORS' REPORT Board of Directors AmeriNational Community Services, LLC and Subsidiary Albert Lea, Minnesota Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of AmeriNational Community Services, LLC and Subsidiary (the Company), which comprise the consolidated statements of financial condition as of December 31, 2018 and 2017, and the related consolidated statements of income, changes in members' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements. Management's Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. A member of Nexia c�> International CONFIDENTIAL Board of Directors AmeriNational Community Services, LLC and Subsidiary Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of AmeriNational Community Services, LLC and Subsidiary as of December 31, 2018 and 2017 and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The supplemental schedules required by HUD, as required by HUD, are presented for purposes of additional analysis and are not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our reports dated March 16, 2019, on our consideration of AmeriNational Community Services, LLC and Subsidiary's internal control over financial reporting and on our tests of compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of those reports are to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not provide an opinion on the internal control over financial reporting or on compliance. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards in considering AmeriNational Community Services, LLC and Subsidiary's internal control over financial reporting and compliance. CliftonLarsonAllen LLP Minneapolis, Minnesota March 16, 2019 (2) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION DECEMBER 31, 2018 AND 2017 2018 2017 ASSETS Cash and Cash Equivalents $ 1,765,281 $ 989,807 Accounts Receivable, Net 1,003,855 1,224,112 Premises and Equipment, Net 3,584,772 3,732,373 Accrued Fee Income 857,482 518,804 Other Assets 3,254,489 2,510,113 Mortgage Servicing Rights 39,788,000 24,328,000 Total Assets $ 50,253,879 $ 33,303, 009 LIABILITIES AND MEMBERS' EQUITY LIABILITIES Borrowed Funds $ 3,560,662 $ 4,126,529 Accrued Expenses and Other Liabilities 3,362,206 2,750,719 Total Liabilities 6,922,868 6,877,248 MEMBERS' EQUITY Class A Membership Units 35,000 35,000 Class C Membership Units - 445,000 Additional Paid In Capital 4,427,257 4,427,257 Retained Earnings 38,868,754 21,518,704 Total Members' Equity 43,331,011 26,425,961 Total Liabilities and Members' Equity $ 50,253,879 $ 33,303, 009 See accompanying Notes to Consolidated Financial Statements. (3) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2018 AND 2017 2018 2017 INCOME Servicing and Other Income Servicing $ 14,123,696 $ 12,164,797 Fees and Service Charges 1,242,188 1,021,322 Loan Processing and Underwriting 1,599,673 2,502,983 Monitoring 1,079,574 1,085,140 Other 964,134 545,135 Total Financial Service Income 19,009,265 17,319,377 Interest Income: Securities and Interest Bearing Deposits 37,585 3,749 Fair Value Change in Mortgage Servicing Rights 15,600,000 3,925,306 Total Income 34,646,850 21,248,432 EXPENSES Salary and Employee Expense 10,357,226 9,024,746 Occupancy and Equipment 1,459,590 1,330,539 Data Processing 310,322 232,439 Management Fees 75,000 75,000 Professional Fees 545,061 185,727 Interest Expense 166,522 148,072 Other 1,617,641 1,200,455 Total Expenses 14,531,362 12,196,978 INCOME BEFORE INCOME TAXES 20,115,488 9,051,454 INCOME TAX EXPENSE 55,261 93,493 NET INCOME $ 20,060,227 $ 8,957,961 See accompanying Notes to Consolidated Financial Statements. (4) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' EQUITY YEARS ENDED DECEMBER 31, 2018 AND 2017 BALANCE - JANUARY 1, 2017 Redemption of Class B Stock Dividends Paid Net Income BALANCE - DECEMBER 31, 2017 Additional Membership Units Paid In Retained Class A Class B Class C Capital Earnings Total $ 35,000 $ 1,520,556 $ 445,000 $ 4,427,257 $ 15,241,674 $ 21,669,487 - (1,520,556) - - (534,906) (2,055,462) (2,146,025) (2,146,025) 35,000 - 445,000 4,427,257 21,518,704 26,425,961 Redemption of Class C Stock - - (445,000) - - (445,000) Dividends Paid - - - - (2,710,177) (2,710,177) Net Income - - - - 20,060,227 20,060,227 BALANCE - DECEMBER 31, 2018 $ 35,000 $ $ $ 4,427,257 $ 38,868,754 $ 43,331,011 See accompanying Notes to Consolidated Financial Statements. (5) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2018 AND 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net Income Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization Fair Value Change in Mortgage Servicing Rights Decrease in Accounts Receivable Increase in Accrued Fee Income Increase in Other Assets Increase in Accrued Expenses and Other Liabilities Net Cash Provided by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of Premises and Equipment CASH FLOWS FROM FINANCING ACTIVITIES Repayments on Term Borrowings Distributions Paid to Owners Redemption of Class B Shares Redemption of Class C Shares Net Cash Used by Financing Activities NET CHANGE IN CASH AND CASH EQUIVALENTS Cash and Cash Equivalents - Beginning of Year CASH AND CASH EQUIVALENTS - END OF YEAR SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION Cash Paid for Interest See accompanying Notes to Consolidated Financial Statements. (6) 4111E-�%GVA $ 20,060,227 $ 8,957,961 273,015 257,672 (15,600,000) (3,925,306) 220,257 98,442 (338,678) (99,733) (744,376) (2,014,859) 751,487 630,157 4,621,932 3,904,334 (125,414) (221,755) (565,867) (568,103) (2,710,177) (2,146,025) (2,055,462) (445,000) (3,721,044) (4,769,590) 775,474 (1,087,011) 989,807 2,076,818 $ 1,765, 881 $ 889,807 $ 166,522 $ 148, 772 CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 NOTE 1 DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations AmeriNational Community Services, LLC, dba: AmeriNat, (the Company) is a Limited Liability Company (LLC) operating under Chapter 322C of the Minnesota Statutes. The Company provides loan servicing and other various fee -based financial and compliance services. Principles of Consolidation The consolidated financial statements include the accounts of AmeriNational Community Services, LLC (the Company) and its wholly owned subsidiary, AmeriNat Loan Services, Inc., a loan servicing company that provides services to accounts in California. All significant intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the valuation of mortgage servicing rights and the determination of the allowance for uncollectible accounts. Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and balances due from banks. Accounts Receivable, Net The Company uses the allowance method to account for uncollectible accounts receivable. The allowance is sufficient to cover both current and anticipated future losses. Uncollectible amounts are charged against the allowance account. Management estimated an allowance of $32,042 and $37,132 based upon prior experience with customers and analysis of individual accounts at December 31, 2018 and 2017, respectively. The Company offers most customers net 30-day terms. In special situations, the Company may offer extended terms or discounts to selected customers. Accounts are considered past due when invoices become 30 days past terms. Fees from clients are received either via deduction from investor remittances or through payment of invoices. (7) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 NOTE 1 DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Premises and Equipment, Net Land is carried at cost. Other premises and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed on the straight-line method based principally on the estimated useful lives of the assets. Maintenance and repairs are expensed as incurred and major additions and improvements are capitalized. Gains and losses on dispositions are included in current operations. Servicing Rights Servicing assets are recognized as separate assets when rights are acquired through purchases or when new contracts to service loans are entered into. Capitalized servicing rights are recorded at fair value, with changes in fair value reported into income during the year in which they occur. Advertising Costs Advertising costs are expensed as incurred. Advertising expense charged to operations for the years ended December 31, 2018 and 2017 was $14,175 and $12,675, respectively. Revenue Recognition The Company sets up contracts with the customers determining when they will be billed for servicing. Customers are billed periodically when the services or a percentage of the services have been performed. Loan servicing and financial service income is recognized when earned. Income Taxes The Company is not a tax paying entity for federal income tax purposes, however, the Company is subject to state franchise fees or income taxes. The Company has evaluated its tax positions and determined that it has no uncertain tax positions as of December 31, 2018 or 2017. Fair Value Measurements The Company categorizes its assets and liabilities measured at fair value into a three -level hierarchy based on the priority of the inputs to the valuation technique used to determine fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used in the determination of the fair value measurement fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement. Assets and liabilities valued at fair value are categorized based on the inputs to the valuation techniques as follows: Level 1 — Inputs that utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. (8) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 NOTE 1 DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fair Value Measurements (Continued) Level 2 — Inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 3 — Inputs that are unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity. Subsequent to initial recognition, the Company may remeasure the carrying value of assets and liabilities measured on a nonrecurring basis to fair value. Adjustments to fair value usually result when certain assets are impaired. Such assets are written down from their carrying amounts to their fair value. Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at fair value for the initial and subsequent measurement on an instrument -by -instrument basis. The Company adopted the policy to value certain financial instruments at fair value. New Accounting Pronouncements In May 2014, the FASB approved ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required regarding customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The standard will be effective for the Company for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. Management is evaluating the impact of the amended revenue recognition guidance on the Company's consolidated financial statements. In February 2016, the FASB approved ASU 2016-02, Leases (Topic 842). The ASU is designed to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the Consolidated Statement of Financial Condition and disclosing key information about leasing arrangements. The ASU is effective for the Company for the fiscal year beginning after December 15, 2019, and interim periods within the fiscal year beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-02 on the consolidated financial statements. (9) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 NOTE 1 DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Subsequent Events In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through March 16, 2019, the date the consolidated financial statements were available to be issued. NOTE 2 PREMISES AND EQUIPMENT, NET Components of premises and equipment consist of the following at December 31 Estimated Useful Lives 2018 2017 Land $ 928,971 $ 928,971 Building Improvements 10 Years 78,471 78,471 Buildings 40 Years 1,843,511 1,843,511 Furniture and Equipment 10 Years 1,102,441 1,407,727 Computers and Software 5 Years 939,416 939,443 Subtotal 4,892,810 5,198,123 Accumulated Depreciation 1,308,038 1,465,750 Total $ 3,584,772 $ 3,732,373 NOTE 3 MORTGAGE LOANS SERVICED FOR OTHERS Mortgage loans serviced for others are not included in the accompanying consolidated statement of financial condition as these loans are originated and owned by others. The unpaid principal balance of mortgage loans serviced for others was $12,268,214,816 and $7,754,120,797 at December 31, 2018 and 2017, respectively. NOTE 4 FUNDS MANAGED FOR OTHERS The Company manages funds on behalf of their borrowers and clients which are also not included on the accompanying consolidated statements of financial condition. At December 31, 2018 and 2017, these deposits totaled $124,068,991 and $122,551,497, respectively. (10) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 NOTE 5 MORTGAGE SERVICING RIGHTS The balance of mortgage servicing rights is included in the consolidated financial statements at fair value. The mortgage servicing liability is included in accrued expenses and other liabilities on the consolidated statement of financial condition. See Note 14 for a summary of activity of mortgage servicing assets and liabilities for the years ended December 31, 2018 and 2017. NOTE BORROWED FUNDS At December 31, 2018 and 2017, the Company had an available line of credit of $1,000,000 with Bridgewater Bank. The interest rates applied on any borrowing are determined on the date the borrowing occurs. Substantially all assets and earnings of the Company are pledged as collateral on the line of credit, except those pledged on other lines. The line of credit expires on July 14, 2019. There was no outstanding balance on this line at December 31, 2018 and 2017. On July 14, 2015, the Company entered into a Loan Agreement with Bridgewater Bank whereby substantially all assets and earnings of the Company were pledged in support of this agreement. Borrowed funds consisted of the following at December 31: Description Promissory Note from Bridgewater Bank at Variable Interest Rate of 30-Day of London Interbank Offered Rate (LIBOR) Plus 2.25%, Maturing July 14, 2022. The maturities of borrowed funds are as follows: Year Ending December 31, 2019 2020 2021 2022 Total 9018 7017 $ 3,560,662 $ 4,126,529 Amount $ 569,795 569,795 569,795 1,851,277 $ 3,560,662 BE CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 NOTE LEASES The Company leases branch facilities under noncancellable operating lease agreements, which expire at various times, excluding renewal periods, through 2022. The following table shows the future minimum lease payments under noncancellable operating leases with terms in excess of one year as of December 31, 2018: Year Ending December 31, Amount 2019 $ 242,355 2020 104,460 2021 107,587 2022 36,213 Total $ 490,615 Total rent expense for the years ended December 31, 2018 and 2017 amounted to $329,349 and $238,599, respectively. NOTE 8 401(K) PLAN The Company has a 401(k) plan for its employees. A participant may elect to make pre-tax contributions up to the maximum amount allowed by the Internal Revenue Service. The Company made matching contributions of $271,257 and $264,921 for the years ended December 31, 2018 and 2017, respectively. NOTE 9 RELATED PARTY TRANSACTIONS The Company paid OSP, LLC, an owner of the Company, a management fee which amounted to $75,000 for the years ended December 31, 2018 and 2017. This fee is for various services OSP, LLC provides to the Company. NOTE 10 NET WORTH AND LIQUIDITY REQUIREMENTS The Company is subject to minimum net worth and liquidity requirements imposed by the Federal Housing Administration regulatory mandates. Failure to meet minimum net worth and liquidity requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. As of December 31, 2018 and 2017, management believes that the Company met the net worth requirement to which it is subject. In addition, management believes that at December 31, 2018 and 2017, the Company met the liquidity requirements to which it is subject and no events have occurred since the calculation dates that would affect the Company's calculation. (12) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 NOTE 10 NET WORTH AND LIQUIDITY REQUIREMENTS (CONTINUED) As of December 31, 2018 and 2017, the Company's actual adjusted net worth compared to FHA net worth requirements are as follows: Actual FHA Adjusted Net Worth Net Worth Requirement December 31, 2018 $ 40,076,522 $ 2,500,000 December 31, 2017 $ 23,915,848 $ 2,500, 000 As of December 31, 2018 and 2017, the Company's liquidity compared to FHA requirements is as follows: Total FHA Liquidity Liquid Assets Requirement December 31, 2018 $ 1,765,281 $ 500,000 December 31, 2017 $ 989,807 $ 500, 000 NOTE 11 FINANCIAL STATEMENT INSTRUMENTS WITH OFF -BALANCE SHEET RISK In the normal course of business, the Company has outstanding commitments and contingent liabilities, such as standby letters of credit and surety bonds, which are not included in the accompanying consolidated financial statements. Standby letters of credit and surety bonds are conditional commitments issued by Bridgewater Bank to guarantee the performance of the company to a third party. Standby letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. Substantially all assets and earnings of the Company are pledged as collateral on the letters of credit and surety bonds. The following off -balance sheet commitments are as follows: Letters of Credit Surety Bonds 2018 2017 $ 2,250,000 $ 2,250,005 5,225,000 4,585,000 The Company was not required to perform on any financial guarantees and did not incur any losses on its commitments during the years ended December 31, 2018 and 2017. (13) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 NOTE 12 LEGAL CONTINGENCIES The Company may be subject to claims and lawsuits which may arise primarily in the ordinary course of business. It is the opinion of management, if such claims are made, that the disposition or ultimate resolution of the claims and lawsuits will not have a material adverse effect on the consolidated financial position of the Company. NOTE 13 MAJOR CUSTOMERS During the years ended December 31, 2018 and 2017, 46% and 47% of the Company's revenues excluding fair value changes in mortgage servicing rights were from four customers, respectively. NOTE 14 FAIR VALUE Recurring Basis The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. For additional information on how the Company measures fair value refer to Note 1. The following tables present the balances of the assets and liabilities measured at fair value on a recurring basis: December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Mortgage Servicing Rights $ $ $ Jg 88,000 $ 3g,788,000 Liabilities: Mortgage Servicing Rights $ $ $ 284,000 $ 284,000 December 31, 2017 Level Level Level Total Assets: Mortgage Servicing Rights $ $ $ 24,328,000 $ 24,328,000 Liabilities: Mortgage Servicing Rights $ $ $ 424,000 $ 424,000 (14) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 NOTE 14 FAIR VALUE (CONTINUED) Recurring Basis (Continued) The following tables present changes in assets and liabilities measured at fair value using Level 3 inputs on a recurring basis for the years ended December 31: Mortgage Servicing Asset: Balance at January 1 Total Gains or Losses (Realized or Unrealized) for the Year Included in: Net Income Assumption of Servicing Assets Balance at December 31 Mortgage Servicing Liability: Balance at January 1 Total Gains or Losses (Realized or Unrealized) for the Year Included in: Net Income Assumption of Servicing Liabilities Balance at December 31 2018 2017 $ 24,328,000 $ 20,399,430 (729,898) 2,071,434 16,189,898 1,857,136 $ 39,788,000 $ 24,328,000 $ 424,000 $ 420,736 (139,672) 3,264 (328) - $ 284,000 $ 424,000 The following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy. Servicing Rights Servicing rights, both assets and liabilities, are valued using a discounted cash flow methodology, and are classified within Level 3. The Company determines fair value for the servicing rights by projecting future cash flows using prepayment rates and other assumptions. The actual discount rate used at December 31, 2018 and 2017 was 9.87%. Contract periods and the associated cash flow projections were estimated based upon contract terms and renewal histories, which were estimated between three and eight years. There is minimal observable market activity for the Company's servicing assets on comparable portfolios, therefore, the determination of fair value requires significant management judgement. CONFIDENTIAL CliftonLarsonAllen LLP CLAwnnectxom INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR HUD PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE CONSOLIDATED AUDIT GUIDE FOR AUDITS OF HUD PROGRAMS Board of Directors AmeriNational Community Services, LLC and Subsidiary Albert Lea, Minnesota Report on Compliance for Each Major HUD Program We have audited AmeriNational Community Services, LLC and Subsidiary's compliance with the compliance requirements described in the Consolidated Audit Guide for Audits of HUD Programs (the Guide) that could have a direct and material effect on each of AmeriNational Community Services, LLC and Subsidiary's major U.S. Department of Housing and Urban Development (HUD) programs for the year ended December 31, 2018. AmeriNational Community Services, LLC and Subsidiary's major HUD programs and the related direct and material compliance requirements are as follows: Name of Major HUD Programs Direct and Material Compliance Requirements FHA Lending Quality Control Plan; Loan Servicing, Lender Annual Recertification, Adjusted Net Worth, Liquidity and Licensing, Title II Lenders (Escrow Accounts) Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its HUD programs. Auditors' Responsibility Our responsibility is to express an opinion on compliance for each of AmeriNational Community Services, LLC and Subsidiary's major HUD programs based on our audit of the compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the Guide. Those standards and the Guide require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the compliance requirements referred to above that could have a direct and material effect on a major HUD program occurred. An audit includes examining, on a test basis, evidence about AmeriNational Community Services, LLC and Subsidiary's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major HUD program. However, our audit does not provide a legal determination of AmeriNational Community Services, LLC and Subsidiary's compliance. A member of Nexia (16) International CONFIDENTIAL Board of Directors AmeriNational Community Services, LLC and Subsidiary Opinion on Each Major HUD Program In our opinion, AmeriNational Community Services, LLC and Subsidiary complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major HUD programs for the year ended December 31, 2018. Report on Internal Control Over Compliance Management of AmeriNational Community Services, LLC and Subsidiary is responsible for establishing and maintaining effective internal control over compliance with the compliance requirements referred to above. In planning and performing our audit of compliance, we considered AmeriNational Community Services, LLC and Subsidiary's internal control over compliance with the requirements that could have a direct and material effect on each major HUD program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major HUD program and to test and report on internal control over compliance in accordance with the Guide, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of AmeriNational Community Services, LLC and Subsidiary's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a compliance requirement of a HUD program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a compliance requirement of a HUD program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a compliance requirement of a HUD program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Guide. Accordingly, this report is not suitable for any other purpose. CliftonLarsonAllen LLP Minneapolis, Minnesota March 16, 2019 (17) CONFIDENTIAL CLAconnect.com INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors AmeriNational Community Services, LLC and Subsidiary Albert Lea, Minnesota We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the consolidated financial statements of AmeriNational Community Services, LLC and Subsidiary, which comprise the consolidated statement of financial condition as of December 31, 2018, and the related consolidated statements of income, changes in members' equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements, and have issued our report thereon dated March 16, 2019. Internal Control Over Financial Reporting In planning and performing our audit of the consolidated financial statements, we considered AmeriNational Community Services, LLC and Subsidiary's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the consolidated financial statements, but not for the purpose of expressing an opinion on the effectiveness of AmeriNational Community Services, LLC and Subsidiary's internal control. Accordingly, we do not express an opinion on the effectiveness of AmeriNational Community Services, LLC and Subsidiary's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's consolidated financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. A member of Nexia (18) International CONFIDENTIAL Board of Directors AmeriNational Community Services, LLC and Subsidiary Compliance and Other Matters As part of obtaining reasonable assurance about whether AmeriNational Community Services, LLC and Subsidiary's consolidated financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. CliftonLarsonAllen LLP Minneapolis, Minnesota March 16. 2019 (19) CONFIDENTIAL None reported. AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY SCHEDULE OF FINDINGS AND RESPONSES YEAR ENDED DECEMBER 31, 2018 (20) CONFIDENTIAL (This page intentionally left blank) CONFIDENTIAL SUPPLEMENTAL SCHEDULES REQUIRED BY HUD CONFIDENTIAL (This page intentionally left blank) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY SUPPLEMENTAL SCHEDULES REQUIRED BY HUD DECEMBER 31, 2018 Balance Sheet- Assets Line Item # mom Title Value 100 Cash and Cash Equivalents $ 1,765,281 101 Escrow deposit Cash $ - 102 Restricted Cash / Compensating Balances $ - 103 Trading Account Securities $ - 104 Net Mortgage Servicing Rights $ 39,788,000 105 Other Real Estate Owned at Net Realizable Value $ - 106 Loans Held for Investment $ - Balance Sheet - Unacceptable Assets ne Item # Value 200 Pledged Assets $ - 201 Assets Due from an Officer, Stockholder, or Related Entity $ - 202 Personal Interest Investment $ - 203 Investment in Related Entity, Greater than Equity As Adjusted $ - 204 Intangible Assets, Net of Amortization $ - 205 Value of Servicing Contract not in Accordance with ASC 948 and ASC 860 $ - 206 Assets not Readily Marketable $ - 207 Marketable Security in Excess of Cost or Market $ - 208 Amount in Excess of Foreclosure Value $ - 209 Assets used for Personal Enjoyment $ - 210 Other Unacceptable Assets $ 3,254,489 211 Contributed Property in Excess of Appraised Value $ - 212 Total Unacceptable Assets $ 3,254,489 Balance Sheet- Liability (21) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY SUPPLEMENTAL SCHEDULES REQUIRED BY HUD DECEMBER 31, 2018 Statement of Operations and Equity - Revenue Line Item a Title Val 400 Gross Interest Income $ 37,585 401 Net Marketing Gain (Loss) on Loans and MBS sold with servicing retained $ - 402 Net Marketing Gain (Loss) on Loans and MBS sold with servicing released including the Servicing Release Premium $ 403 Net Gain (Loss) on Sales of Servicing Rights $ - 404 Net Gain (Loss) from Servicing Valuations $ 15,600,000 405 Net Gain (Loss) on Sale of Securities $ - 406 Net Gain (Loss) on Sale of OREO $ - 407 Retail Origination Fees $ - 408 Net Loan Administration Income $ 18,083,261 409 Correspondent and Broker Fee Income $ - 410 Other Retail Origination Income $ - 411 Other Income (Loss) Related To Mortgage Lending Activities $ - 412 Other Income (Loss) Not Related To Mortgage Lending Activities $ 926,004 413 Total Revenue $ 34,646,850 Statement of Equity Line Item q 500 Balance at Beginning of the Year, as Reported $ 26,425,961 501 Prior Period Adjustments $ - 502 Balance at Beginning of the Year, Restated $ 26,425,961 503 Net Income $ 20,060,227 504 Dividend/Distribution $ (3,155,177) 505 Contributions- from Cash Flow Statement $ - 506 Contributions - non -cash $ - 507 Other Equity $ - 508 Ending Balance $ 43,331,011 (22) CONFIDENTIAL AMERINATIONAL COMMUNITY SERVICES, LLC AND SUBSIDIARY SUPPLEMENTAL SCHEDULES REQUIRED BY HUD DECEMBER 31, 2018 Net Worth Line Item # Title 600 FHA Servicing Portfolio $ 209,610,623 601 FHA Originations $ - 602 FHA Purchases $ - 603 Subtotal- FHA Loan Activity $ 209,610,623 604 FHA Origination Servicing Retained $ - 605 FHA Purchase Servicing Retained $ - 606 Subtotal- Servicing Retained Adjustments $ - 607 Total Adjusted FHA Loan Activity $ 209,610,623 608 Net Worth Required Baseline $ 1,000,000 609 Additional Net Worth Required $ 1,846,106 610 Total Minimum Net Worth Required $ 2,500,000 611 Stockholder Equity -Ending Balance $ 43,331,011 612 Total Unacceptable Assets $ 3,254,489 613 Adjusted Net Worth $ 40,076,522 614 Adjusted Net Worth Above/Below Required Minimum Amount $ 37,576,522 Liquidity 700 Cash and Cash Equivalents $ 1,765,281 701 Trading Account Securities $ - 702 Total of Liquid Assets per HUD Guidelines $ 1,765,281 703 Liquid Assets Required $ 500,000 704 Liquid Assets Above/Below Required Amount $ 1,265,281 (23) AmeriNat Proposal to Provide Services Exhibit E — Sample Letters and Reports FdAMERwAT 36 WAMERINATU JAWARY 15, 2020 Borrower Name(s) Old Account # xxx-xx-xxxx Address New Account # 1000xxxxxx City, State, Zip Property Address: xxxx xxxxxxxxxxxxx City, State, Zip Code xxxxxxxxxxxxxxxxxxxx Dear Borrower(s) AmeriNat will begin servicing your loan on behalf of the effective 02/1/2020. The transfer of servicing does not affect any term or condition of your promissory note or loan agreement. remains your lender. If you have any questions relating to the transfer of servicing from to AmeriNat prior to 02/1/2020, please contact at xxx-xxx-xxxx. After 02/1/2020 please call AmeriNat Customer Service toll free at 800-943-1988. The current balance on your loan is $46246.3. The payment due date of your loan is 1/1/2020 . The balance and due date may change if payments are made to prior to the transfer effective date of 02/1/2020 If you have been discharged from personal liability on the mortgage because of bankruptcy proceedings and have not reaffirmed the mortgage, or if you are the subject of a pending bankruptcy proceeding, this letter is not an attempt to collect a debt from you but merely provides informational notice regarding the status of the loan. If you are represented by an attorney with respect to your mortgage, please forward this document to your attorney. Coupons through January 2021 are enclosed. In mid February 2021, a new coupon booklet will be sent to you. For your convenience, we offer an automatic payment withdrawal program. Saving you time and money, your payment is withdrawn monthly from your bank account. This service is offered free of charge. To startthis service, (your account must be current), please complete and return the enclosed Agreement for Monthly Automatic Payment form. AmeriNat also offers access to your account via our website www.amerinatls.com. Our Loan Link system allows you to access of your account 24 hours a day, 7 days a week. For more information, please contact our customer service department. Sincerely AmeriNat Customer Service This debt, or any portion thereof, will be assumed to be valid by AmeriNat unless written notice is received within thirty days after receipt of this notice. If written notice is received within the thirty day period that the debt, or any portion thereof, is disputed or you request the name and address of the original creditor, if different than the current creditor, the following will be mailed to you; verification of the debt (copies of the promissory note or loan agreement and/or the name and address of the original creditor, if different from the current creditor. (800) 943-1988 • (562) 927-6686 • 8121 E. Florence Avenue, Downey, CA 90240 • www.amerinatls.com Over 40 Years of Industry -Leading Experience DUE DATE PAYMENT ADDRESS: CORRESPONDENCE ADDRESS: 12/1/2019 AmeriNat AmeriNat ACCOUNT NUMBER P.O. BOX 123 P.O. Box 650402 DOWNEY, CA 90241 DATE PHONE # (562) 927-6686 Dallas, TX 75265-0402 CHECK DUE DATE IF NOT RECEIVED BY AMOUNT REMIT TO PAYMENT ADDRESS ABOVE ACCOUNT NUMBER MUST BE ON CHECK TO ENSURE 12/1/2019 12/16/2019 NOTES PROPER HANDLING PLEASE REMIT A SEPARATE COUPON WITH EACH PAYMENT OTHER CHARGES LATE CHARGE AMT. 10.00 BORROWERI AMOUNT DUE LATEPAYMENT 350.03 360.03 123 ANYWHERE ST ADDZ PRINCIPAL ANY TOWN, USA LATECHARGE 00000- TOTAL PAYMENT 1154 0010000908xxx 0036xxx 0035xxx 3 MAMERINAT' February 24, 2020 Borrower Name(s) Address City, State, Zip RE: Loan # 10000xxxxx Property address: Dear Borrower(s): This is in response to your recent request for the payoff balance of your account. Please refer to the attached payoff statement for your payoff figures. Please note that you can now access information regarding your account through our website — www.amerinatls.com. If you should have any questions or concerns, please contact a Payoff Representative at (800) 943-1988 Extension 1231. Sincerely, R 9 Payoff Department (800) 943-1988 • (562) 927-6686.8121 E. Florence Ave., Downey, CA 90240 • www.amerinatls.com Over 40 Years of Industry -Leading Experience NiAMERINA 0 James Doe Mary Doe 123 Mockingbird Lane Anytown, CA 12345 Dear Borrower(s), 10/08/2019 Subject Account Number: 100010xxxx Property Address: 123 Mockingbird Lane Anytown, CA 12345 Due Date: 10/O1/2019 We are concerned to see that your first payment on your new mortgage has not yet been received. Of course, prompt payment each month is the best way to protect your credit rating. For your information, loans secured by real property (such as your home) have the following terms and definitions. A loan is considered delinquent if the payment is not received by the due date. The loan is subject to a late charge after the grace period, (please see your loan documents). If a loan becomes due for two (2) payments (two months delinquent), it is considered in default and may be subject to possible acceleration of the total balance owing on the Note. Please DISREGARD this notice if your loan is currently setup on an ACH repayment method. As required by law, you are hereby notified that a negative credit report reflecting on your credit record may be submitted to a credit reporting agency if you fail to fulfill the terms of your credit obligations. This communication is from a debt collector and it is for the purpose of collecting a debt and any information obtained will be used for that purpose. If you have been discharged from personal liability on the mortgage because of bankruptcy proceedings and have not reaffirmed the mortgage, or if you are the subject of a pending bankruptcy proceeding, this letter is not an attempt to collect a debt from you but merely provides informational notice regarding the status of the loan. If you are represented by an attorney with respect to your mortgage, please forward this document to your attorney. If you would like to discuss your situation, please contact our office at (800) 943 1988, ext. 7901. Sincerely, Collections Department 800-943-1988 Ext7901 (800) 943-1988 • (562) 927-6686.8121 E. Florence Ave., Downey, CA 90240 • www.amerinatls.com Over 40 Years of Industry -Leading Experience Page 1 of 1 5 DAY DFU NiAMERINA 0 James Doe Mary Doe 123 Mockingbird Lane Anytown, CA 12345 Dear Borrower(s), 10/29/2019 Subject Account Number: xxxxxxx Property Address: 123 Mockingbird Lane Anytown, CA 12345 Amount Due: $83.33 Due Date: 10/01/2019 A review of our records indicates that your loan payment has not been received and is now subject to a late charge. The Deed of Trust or Mortgage you signed requires timely payments be made per the terms of your promissory note. Therefore, please send your payment today! Paying your installments late jeopardizes your credit rating and can cause an added late charge expense. In addition, your next monthly installment will be due soon. Allowing your loan to become delinquent for two (2) months may subject your loan to further collection efforts. There is a $0.00 unapplied balance, which can be used towards your current delinquency. If payment has been made recently or is in the mail, thank you. If you did not include the applicable late charge due, please include it with your next monthly payment. The Department of Housing and Urban Development(HUD) offers counseling for homeowners whose mortgage loans have become delinquent. This counseling could help you avoid foreclosure and you are urged to seek it. To locate a counseling agency near you, please call 800-569-4287. We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report. This communication is from a debt collector, it is for collecting a debt, and any information obtained will be used for that purpose. This notice is required by the provisions of the Federal Fair Debt Collection Practices Act, and any local and state laws governing debt collection. If you have been discharged from personal liability on the mortgage because of bankruptcy proceedings and have not reaffirmed the mortgage, or if you are the subject of a pending bankruptcy proceeding, this letter is not an attempt to collect a debt from you but merely provides informational notice regarding the status of the loan. If an attorney represents you with respect to your mortgage, please forward this document to your attorney. Sincerely, Collections Department 800-943-1988 Ext 7903 (800) 943-1988 • (562) 927-6686.8121 E. Florence Ave., Downey, CA 90240 • www.amerinatls.com Over 40 Years of Industry -Leading Experience Page 1 of 1 15 DAY DFU NiAMERINA 0 James Doe Mary Doe 123 Mockingbird Lane Anytown, CA 12345 Dear Borrower(s), 10/29/2019 Subject Account Number: 10000xxxxx Property Address: 123 Mockingird Lane Anytown, CA 12345 Total Due: $180.70 Due Date: 09/28/2019 Your mortgage payment is 30 days or more past due and is now in default. When your loan was made, you agreed to make payments as per the terms of your promissory note. You have not complied with those terms. Our records indicate your payment for last month has not been received and in addition, the payment due for this month is now due. Furthermore, a late charge for last month's payment is due, as authorized in the terms of your Deed of Trust or Mortgage. The total amount due is listed above. If payment is not received by the date as stated in your promissory note, an additional late charge will be assessed, if applicable. There is a $ 0.00 unapplied balance, which can be used towards your current delinquency. It is not our policy to accept less than the full amount due. Unless we receive the total amount due as indicated above or unless other arrangements are immediately made, your loan could be referred to the holder of your mortgage or deed of trust for further recommendations resulting in additional expenses to you. The Department of Housing and Urban Development(HUD) offers counseling for homeowners whose mortgage loans have become delinquent. This counseling could help you avoid foreclosure and you are urged to seek it. To locate a counseling agency near you, please call 800-569-4287. We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report. This communication is from a debt collector and it is for the purpose of collecting a debt and any information obtained will be used for that purpose. This notice is required by the provisions of the Federal Fair Debt Collection Practices Act, and any and all local and state laws governing debt collection. If you have been discharged from personal liability on the mortgage because of bankruptcy proceedings and have not reaffirmed the mortgage, or if you are the subject of a pending bankruptcy proceeding, this letter is not an attempt to collect a debt from you but merely provides informational notice regarding the status of the loan. If an attorney represents you with respect to your mortgage, please forward this document to your attorney. Sincerely, Loss Mitigation Department 800-943-1988 Ext 7901 (800) 943-1988 • (562) 927-6686.8121 E. Florence Ave., Downey, CA 90240 • www.amerinatls.com Over 40 Years of Industry -Leading Experience Page 1 of 3 30 DAY DFU NiAMERINA 0 IMPORTANT CONSUMER DISCLOSURES ON THIS PAGE PLEASE READ Legal Rights and Protections Under the SCRA Servicemembers Civil Relief U.S Department of Housing and OMB Approval 2502 - 0584 Act Notice Disclosure Urban Development Office of Housing Exp 3/31/2021 Servicemembers on "active duty" or "active service," or a spouse or dependent of such a servicemember may be entitled to certain legal protections and debt relief pursuant to the Servicemembers Civil Relief Act (50 USC §§ 3901--4043) (SCRA). Who May Be Entitled to Legal Protections Under the SCRA? • Regular members of the U.S. Armed Forces (Army, Navy, Air Force Marine Corps and Coast Guard). • Reserve and National Guard personnel who have been activated and are on Federal active duty • National Guard personnel under a call or order to active duty for more than 30 consecutive days under section 502(f) of title 32, United States Code, for purposes of responding to a national emergency declared by the President and supported by Federal funds • Active service members of the commissioned corps of the Public Health Service and the National Oceanic and Atmospheric Administration. • Certain United States citizens serving with the armed forces of a nation with which the United States is allied in the prosecution of a war or military action. What Legal Protections Are Service -members Entitled To Under the SCRA? • The SCRA states that a debt incurred by a servicemember, or servicemember and spouse jointly, prior to entering military service shall not bear interest at a rate above 6 % during the period of military service and one year thereafter, in the case of an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage, or during the period of military service in the case of any other obligation or liability. • The SCRA states that in a legal action to enforce a debt against real estate that is filed during, or within one year after the servicemember's military service, a court may stop the proceedings for a period of time or adjust the debt. In addition, the sale, foreclosure, or seizure of real estate shall not be valid if it occurs during or within one year after the servicemember's military service unless the creditor has obtained a valid court order approving the sale, foreclosure, or seizure of the real estate. • The SCRA contains many other protections besides those applicable to home loans. How Does A Service -member or Dependent Request Relief Under the SCRA? • In order to request relief under the SCRA from loans with interest rates above 6% a servicemember or spouse must provide a written request to the lender, together with a copy of the servicemember's military orders. [Note: AmeriNat 8121 E. Florence Ave Downey Ca 90240 or collections@amerinatls.com.] (800) 943-1988 • (562) 927-6686.8121 E. Florence Ave., Downey, CA 90240 • www.amerinatls.com Over 40 Years of Industry -Leading Experience Page 2 of 3 30 DAY DFU IjAMERINAT • There is no requirement under the SCRA, however, for a servicemember to provide a written notice or a copy of a servicemember's military orders to the lender in connection with a foreclosure or other debt enforcement action against real estate. Under these circumstances, lenders should inquire about the military status of a person by searching the Department of Defense's Defense Manpower Data Center's website, contacting the servicemember, and examining their files for indicia of military service. Although there is no requirement for servicemembers to alert the lender of their military status in these situations, it still is a good idea for the servicemember to do so. How Does a Service -member or Dependent Obtain Information About the SCRA? • Servicemembers and dependents with questions about the SCRA should contact their unit's Judge Advocate, or their installation's Legal Assistance Officer. A military legal assistance office locator for all branches of the Armed Forces is available at http://legalassistance.law.af.mil/content/locator.php • "Military OneSource" is the U. S. Department of Defense's information resource. If you are listed as entitled to legal protections under the SCRA (see above), please go to www.militaryonesource.mil/legal or call 1-800- 342-9647 (toll free from the United States) to find out more information. Dialing instructions for areas outside the United States are provided on the website. form HUD-92070 (800) 943-1988 • (562) 927-6686.8121 E. Florence Ave., Downey, CA 90240 • www.amerinatls.com Over 40 Years of Industry -Leading Experience Page 3 of 3 30 DAY DFU NiAMERINA 0 James Doe Mary Doe 123 Mockingbird Lane Anytown, CA 12345 IMMEDIATE ACTION REQUIRED Dear Borrower(s), 10/29/2019 Subject Account Number: 10000xxxx Property Address: 123 Mockingbird Lane Anytown, CA 12345 Total Due: $740.34 Due Date: 09/O1/2019 Your account is in default and may be subject to foreclosure action according to the terms of the Deed of Trust or Mortgage you signed. In order to halt further collection action, your account must be brought current immediately or other payment arrangements must be agreed upon. If you have contacted one of our loan counselors within the last ten (10) days, please disregard this letter. The total amount due is listed above and another payment becomes due next month. Unless funds are received in our office within fifteen (15) days of the date of this letter or you contact our offices to make other arrangements, further collection activities may proceed. If it becomes necessary to accelerate the amounts due on your loan, additional significant fees and costs may be added to the amount due. There is a $0.00 unapplied balance which can be used towards your current delinquency. The Department of Housing and Urban Development(HUD) offers counseling for homeowners whose mortgage loans have become delinquent. This counseling could help you avoid foreclosure and you are urged to seek it. To locate a counseling agency near you, please call 800-569-4287. We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report. This communication is from a debt collector and it is for the purpose of collecting a debt and any information obtained will be used for that purpose. This notice is required by the provisions of the Federal Fair Debt Collection Practices Act, and any and all local and state laws governing debt collection. If you have been discharged from personal liability on the mortgage because of bankruptcy proceedings and have not reaffirmed the mortgage, or if you are the subject of a pending bankruptcy proceeding, this letter is not an attempt to collect a debt from you but merely provides informational notice regarding the status of the loan. If you are represented by an attorney with respect to your mortgage, please forward this document to your attorney. Sincerely, Loss Mitigation Department 800-943-1988 Ext 7901 (800) 943-1988 • (562) 927-6686.8121 E. Florence Ave., Downey, CA 90240 • www.amerinatls.com Over 40 Years of Industry -Leading Experience Page 1 of 2 45 DAY DFU NZAMERINA 0 IMPORTANT CONSUMER DISCLOSURES ON THIS PAGE PLEASE READ Options That May be Available to Avoid Foreclosure AmeriNat is committed to helping you keep your property and your mortgage in good standing. If you are having difficulties making your mortgage payment, we strongly encourage you to call our Loss Mitigation Department so that we may assess your financial situation and explore your options to avoid foreclosure. One of the main reasons foreclosures occur is that homeowners facing financial difficulties stop communicating with the company that collects their mortgage payment. In most cases, if a homeowner is willing to work with that company, that company will consider every option available to assist that homeowner. Some of the options which may be available to you are: • Reinstatement -You have the option of paying the total amount that is past due by an agreed -upon date and if unable to do so you can discuss a repayment plan with your loan servicer. • Repayment Plan - This arrangement allows for an alternative payment amount to be made over a prescribed period of time in order to bring your mortgage current. A typical repayment plan may require paying a full payment each month, plus a partial payment on the delinquent amount, until such time that the entire delinquent amount is completely paid. • Loan Modification - This is a way to bring a mortgage loan current by modifying or restructuring the respective mortgage loan to accommodate a homeowner's financial situation that has changed since the loan was originally made. This typically entails changing the repayment terms to make the mortgage payment more affordable. The changes that may be available to you are specific to your existing loan terms and will be discussed with you during your interview with our staff member. • Deed in Lieu of Foreclosure - A Deed in Lieu of Foreclosure is where you transfer ownership of your property to the lender in exchange for being forgiven the entire amount of the mortgage and avoiding going through the foreclosure process. • Short Sale A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens' full amounts and where the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency balance. Check your local and state laws governing the liability of a deficiency balance owed to your creditor. The first and easiest step towards determining if we can help you avoid foreclosure and keep your property is to place a toll free call to our Loss Mitigation department at 1-800-943-1988 between the hours of 8:00 5:00 PST Mon -Fri. By reaching out to us, a member of our staff will listen to your situation and gather all pertinent information necessary to explore the options that may be available to you. The sooner you call us, the faster we'll know if and how we can help you. In order to commence the initial assessment of your financial situation, when you contact our office, please have the following information and financial documents available for each Borrower on the mortgage: • Loan number • The nature and expected duration of your hardship situation. • Supporting documentation for all income sources: 2 most recent paycheck stubs, YTD Profit & Loss (if self-employed), Social Security / SSDI, Unemployment, Welfare, etc. • An itemization of monthly household expenses and debt. • Amount of assets: Bank account balances - checking and savings, CD's, stocks / bonds, etc. Once we've learned your situation, our staff will guide you through the preparation and submittal of any additional documentation that may be required to formally complete your financial assessment. Please note: If you ever receive a call or a letter from us about your past -due mortgage, the best thing to do is immediately take the call or respond to the letter in order to focus on resolving the problem. We will always attempt to work with you, but we will need your cooperation to do so. The Department of Housing and Urban Development offers counseling for homeowners whose mortgage loans have become delinquent. This counseling could help you avoid foreclosure and you are urged to seek it. To find a homeownership counseling agency near you, please call 800-569-4287 or visit the following HUD Web site: W W W.HUD.GOV (800) 943-1988 • (562) 927-6686.8121 E. Florence Ave., Downey, CA 90240 • www.amerinatls.com Over 40 Years of Industry -Leading Experience Page 2 of 2 45 DAY DFU NiAMERINA 0 10/29/2019 James Doe Subject Account Number: 100002xxxx Mary Doe Property Address: 123 Mockingbird Lane 123 Mockingbird Lane Anytown, CA 12345 Anytown, CA 12345 Total Amount Due: $833.66 Due Date: 07/O1/2019 POSSIBLE ESCALATED COLLECTION ACTIVITY-90 DAY LATE NOTICE Dear Borrower(s), Your account is in default and may be subject to foreclosure action according to the terms of the Deed of Trust or Mortgage you signed; failure to respond in a timely manner may cause additional consequences to your loan. In order to halt further collection action, your account must be brought current immediately or other payment arrangements must be agreed upon. If you have contacted one of our loan counselors within the last ten (10) days, please disregard this letter. The amount due is listed above and another payment becomes due next month; the amount reflected above may not reflect all past due amounts. Unless certified funds are received in our office within fifteen (15) days of the date of this letter or you contact our offices to make other arrangements, further escalated collection activities may proceed. If it becomes necessary to accelerate the amounts due on your loan, additional significant fees and costs may be added to the amount due. We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report. The Department of Housing and Urban Development(HUD) offers counseling for homeowners whose mortgage loans have become delinquent. This counseling could help you avoid foreclosure and you are urged to seek it. To locate a counseling agency near you, please call 800-569-4287. This communication is from a debt collector and it is for collecting a debt and any information obtained will be used for that purpose. This notice is required by the provisions of the Federal Fair Debt Collection Practices Act, and any and all local and state laws governing debt collection. If you have been discharged from personal liability on the mortgage because of bankruptcy proceedings and have not reaffirmed the mortgage, or if you are the subject of a pending bankruptcy proceeding, this letter is not an attempt to collect a debt from you but merely provides informational notice regarding the status of the loan. If an attorney represents you with respect to your mortgage, please forward this document to your attorney. Sincerely, Loss Mitigation Department 800-943-1988 Ext 7901 (800) 943-1988 • (562) 927-6686.8121 E. Florence Ave., Downey, CA 90240 • www.amerinatls.com Over 40 Years of Industry -Leading Experience Page 1 of 1 90 DAY DFU 11 AMERINAT' CURRENT MONTH RECONCILIATION REPORT 10/8/2019 9/1/2019 through 9/30/2019 Page 12 of 13 CLIENT XXX: XXXXXX GROUP XXX: XXXX PROJECT XXX: XXXX REMITTAMTMDUCTIONS I ILOAN CREDIT Refereace No Borrower Name Payment Due Date Borrower's Escrow Borrower Client Svc Other Fee Reserve Unapplied Late Fees Other Remitted To Principal Interest Late Client Fee Principal Date Remittance Fee Fee Agency P 'L. Paid Cha a Invoiced Balance VA99XXX 3011OXXXXX XXXXXOCOLXXXX XXXX 09/30/2019 10/01/2019 1,550.00 0.00 0.00 0,00 0.00 0.00 0.00 0,00 0.00 1,550.00 1,550.00 0.00 0.00 0.00 0.00 34,080.00 SACOXXX 3011OXXXXX XXXXXXXX X, 09/09/2019 09/O1/2019 224.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 224.45 224.45 0.00 0.00 0.00 0.00 2,288.47 EGOXXX 3011OXXXXX XXXXX, XXXX 09/04/2019 09/O1/2019 1,286.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,286.00 1,286.00 0.00 0.00 0.00 0.00 91,140.00 EGOXXX 3011OXXXXX XXXXX, XXXX 09/30/2019 10/O1/2019 1,286.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,286.00 1,286.00 0.00 0.00 0.00 0.00 89,854.00 EBQ2XXX 3011OXXXXX XXXX, XXXXXXXXXX 09/11/2019 09/O1/2019 933.33 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 933.33 933.33 0.00 0.00 0.00 0.00 74,669.39 EAQ2XXX 30110XXXXX XXXXXXX, XXXXXXXX 09/24/2019 10/Ol/2019 54.83 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 54.83 54.83 0.00 0.00 0.00 0.00 3,932.44 EBOXXX 30110XXXXX XXXXXXXX, XXXXXX 09/13/2019 09/0l/2019 180.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 180.00 180.00 0.00 0.00 0.00 0.00 11,520.00 SACOXXX 30110XXXXX XXXXXX, XXXXXX 09/04/2011 09/01/2019 152.62 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 152.62 144.96 7.66 0.00 0.00 0.00 2,917.46 EGOXXX 30110XXXXX XXXX, XXXX 09/11/2019 09/01/2019 3,768.33 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,768.3""""""33��J 3,768.33 0.00 0.00 0.00 0.00 256,227.35 EBQ2XXX 30110XXXXX XXXXX, XXXXX 09/13/2019 10/01/2019 356.67 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 356_ 356.67 0.00 0.00 0.00 0.00 25,670.03 TOTALS 175,29711 0.00 0.00 0.00 42.001 0.00I 95.00I 43.56 0.001 171,116.65 174,83721I 279.44 0.00 0.00 0.00 PROJECT TOTALS Previously Paid Re 1t a .00 0.08 0.00 0. Month End Remittance: 0.00 42.00 0.00 95.00 43.56 0.00 175,116.65 174,837.21 279A4 000 0.00 0.00 ....... ......... ____. ____... Monthly Agency Fee 0.00 __..... _......._ ___.... __� 0.00 Final Month End Remittance 175,116.65 11 AMERINAT CURRENT MONTH RECONCILIATION REPORT 9/1/2019 through 9/30/2019 CLIENT XXX: XXXXXX Borrower's Escrow Borrower Client Svc Other Fee Rcscrve Uuapplicd Late Fecs Other Remitted To Principal Interest Late Client Fee Remittance Amount Fee Fee Funds Agency Paid Paid Charge Fund Invoiced CLIENT TOTALS 247,662.92 0.00 75.00 0.00 242.00 0.00 95.00 43.56 0.00 247,207.36 243,893.01 3,314.35 0.00 0.00 45.00 Previously Paid Remittance: 0.00 200.00 0.00 0.00 0.00 0.00 52,644.09 52,644.09 0.00 0.00 0.00 0.00 Month End Remitta11e: 1,11 0.00 0.00 95.00 43.56 0.00 114,163.27 191,248.92 3,314.35 0.00 0.00 45.00 .... .................. .... Monthly Agency Fee 0.00 0.00 Final Month End Remittance 194,563.27 10/8/2019 Page 13 of 13 11 AMERINAT' PORTFOLIO STATUS REPe39of 9 9/1/2019 through 9/30/2019 CLIENTENT Page 39 of 39 XXX:XXXXXX GROUP XXX: XXXX PROJECT XXX: XXXX LOAN DESCRIPTION PAYMENT HISTORY BALANC Reference No Account No Borrower Name Original Balance Lom Prdik .1ty Next Pmt Paymen to Int Y-T-D Paid Y-T-D Paid Y-T-D Peid Y-T-D Paid YIDPaid Loan Principal Accrued ouv[ Pnvcipal SO99XXX 301103XXYX )D=XXXXXXX 27,500.00 P,240,0.00,M O8/01/2022 02/01/2020 115.06 09/11/2019 1,380.72 0.00 0.00 0.00 0.00 3,525.22 0.00 0.00 SO93XXX 301101XXXX XXXXX XXXXX 162,767.03 P,361,0.00,M 12/01/2033 10/O1/2019 354.00 09/09/2019 3,186.00 0.00 0.00 0.00 0.00 59,998.21 0.00 0.00 EAQ2XXX 301101XXYX )DD0c XXXX<`C{X XXXXXXXX 52,175.97 P,323,0.OQM 04/01/2026 11/O1/2019 162.00 09/05/2019 1,458.00 0.00 0.00 0.00 0.00 12,485.91 0.00 0.00 EGOXXX 301101XXXX XXXXX XXXXXX 444,651.00 P,360,0.00,M 05/01/2025 11/O1/2019 1,374.69 09/05/2019 12,372.21 0.00 0.00 0.00 0.00 89,980.98 0.00 0.00 SO99XXX 100000XXXX XXXXX XXXXXXX 34,331.76 P,240,0.00,M 01/01/2024 10/O1/2019 146.0009/05/2019 09/O1/2006 1,192.00 0.00 0.00 0.00 0.00 6,330.11 0.00 0.00 EFSXXX 301101XXX% XXXXX XXXXX 3,092.76 P,360,0.OQM 04/01/2026 04/O1/2008 11.45 02/06/2008 0.00 0.00 0.00 0.00 0.00 2,131.06 0.00 0.00 960979-XXX 100002XXXX XX7QCXXXXX)CLYX XXXXXXXX 480,726.00 P,360,0.00,M 11/01/2025 10/O1/2019 1,483.72 09/092019 13,353.48 0.00 0.00 0.00 0.00 1t6,627.36 0.00 0.00 EGOXXX 301101XXX% XXXXX XXXXXX 2,050,814.19 P,360,0.00,M 02/01/2026 10/O1/2019 6,371.62 09/04/2019 57,344.58 0.00 0.00 0.00 0.00 469,383.04 0.00 0.00 EBQ2XXX 100000XXXX XXXXX XXXIOM 129,177.36 P,360,0.00,M 05/012033 10/O1/2019 432.1009/112019 09/O1/2006 3,888.90 0.00 0.00 0.00 0.00 59,595.96 0.00 0.00 EBQIXXX 301101XXYX )0=XXXXX 199,700.00 P,360,0.OQM 09/012025 10/O1/2019 666.67 09/05/2019 6,000.03 0.00 0.00 0.00 0.00 47,699.24 0.00 0.00 EBQ2XXX 301101XXXX X7CIX0LXXX7CC{X XXXX30M 70,000.00 P,360,0.00,M 01/01/2026 10/O1/2019 233.33 09/05/2019 02/O1/2001 2,099.97 0.00 0.00 0.00 0.00 17,734.08 0.00 0.00 EAQIXXX 301101XXYX )0=XXXXXX 37,000.00 P,360,0.OQM 01/012025 07/Ol/2019 123.11 06/06/2019 616.65 0.00 0.00 0.00 0.00 7,631.22 0.00 0.00 EGOXXX 301101XXXX XXXXX XXXIOM 130,000.00 P,360,0.00,M 04/012025 10/O1/2019 433.33 09/05/2019 3,899.97 0.00 0.00 0.00 0.00 28,879.66 0.00 0.00 EBQ2XXX 301101XXXX XXXXX XXXXX 315,000.00 P,360,0.00,M 01/01/2026 10/O1/2019 1,050.0009/052019 9,450.00 0.00 0.00 0.00 0.00 78,750.00 0.00 0.00 WH99XXX 100001XXX% XXXXXXXXXXYXXXXXXXXX 128,366.54 PI,240,3.00,M 06/012026 11/O1/2019 859.63 09/05/2019 10/01/2019 6,572.04 1,164.63 0.00 0.00 0.00 48,097.74 0.00 0.00 EBQ2XXX 301101XXXX XXXXX XXXXXX 35,000.00 P,360,0.00,M 09/012027 12/O1/2019 t08.00 09/112019 1,188.00 0.00 0.00 0.00 0.00 10,160.00 0.00 0.00 EAQ2XXX 301101XXXX XX%7CX XXXXXXX 12,628.00 P,360,O.00,M ]0/012025 12/O1/2019 42.09 09/10/2019 378.81 0.00 0.00 000 O.o0 2,985.34 0.00 0.00 WH93XXX 301101XXXX XXXXX XXXXX 27,500.00 PI,240,7.00,M 10/012013 09/O1/2011 213.21103/242017 07/01/2011 0.00 0.00 0.00 0.00 0.00 1,359.80 796.65 0.00 EAQIXXX 301101XXXX XXXXXXXXXXXX XXXXXXXX 37,000.00 P,360,0.OQM 06/012025 08/O1/2012 123.33 O8/13/ M 0.00 0.00 0.00 0.00 0.00 19,114.41 0.00 0.00 EBQIXXX 301101XXXX XXXXX XXXXXX 28,800.00 P,360,0.00,M 01/01/2026 10/O1/2019 96.0009/09/2019 12/O1/2000 768.00 0.00 0.00 0.00 0.00 7,192.00 0.00 0.00 EBQIXXX 301101XXYX )D=XXXXXXX 25,310.00 P,360,0.OQM 01/012026 10/Ol/2019 84.37 09/09/2019 12/Ol/2000 674.96 0.00 0.00 0.00 0.00 6,326.85 0.00 0.00 VA99XXX 301101XXXX XXXXX XXXXX 372,000.00 P,240,0.00,M 09/01/2021 11/O1/2019 1,550.0009/30/2019 09/O1/2001 12,400.00 0.00 0.00 0.00 0.00 34,080.00 0.00 0.00 SACOXXX 301101XXXX XXXXXXXX =XXXXXXXX 53,867.00 P,270,0.00,M 05/01/2019 10/O1/2019 224.45 09/09/2019 2,020.05 0.00 0.00 0.00 0.00 2,288.47 0.00 0.00 EAQIXXX 301101XXXX XXXXX XXXXXX 17,355.00 P,360,0.00,M 06/012025 02/O1/2020 58.6703/29/2019 704.04 0.00 0.00 0.00 0.00 3,538.97 0.00 0.00 EAQIXXX 301101XXXX XXXXX XXXXXXX 19,000.00 P,360,0.00,M 06/01/2025 02/O1/2020 63.340325/2019 760.08 0.00 0.00 0.00 0.00 4,109.81 0.00 0.00 EGOXXX 301101XXX% XXXXX XXXXX 416,500.00 P,360,0.OQM 09/012025 11/O1/2019 1286.0009/30/2019 12,860.00 0.00 0.00 0.00 0.00 89,854.00 0.00 0.00 EBQ2XXX 301101XXXX XXXXX XXXXXX 280,000.00 P,360,0.00,M 11/012026 10/O1/2019 933.33 09/112019 8,398.98 0.00 0.00 0.00 0.00 74,669.39 0.00 0.00 EAQ2XXX 301101XXYX )0= XXXXXXX 17,700.00 P,360,0.OQM 10/012025 11/O1/2019 54.63 09/24/2019 546.50 0.00 0.00 0.00 0.00 3,932.44 0.00 0.00 EBQIXXX 301101XXXX XXXXX XXXXX 54,000.00 P,360,0.00,M 02/012025 10/O1/2019 180.0009/132019 1,620.00 0.00 0.00 0.00 0.00 11,520.00 0.00 0.00 SACOXXX 301101XXXX X)OM XXXXXX 27,500.00 PI,240,3.00,M 07/012021 10/Ol/2019 152.6209/04/2019 09/01/2019 1,149.63 71.33 0.01 0.00 0.10 2,917.46 7.01 0.00 EGOXXX 301101XXXX X)CM XX300M 1,130,500.00 P,360,0.00,M 06/01/2025 10/O1/2019 3,768.33 09/11/2019 33,914.97 0.00 0.00 0.00 0.00 256,227.35 0.00 0.00 EBQ2XXX EBQ2XXX 301101XXXX X)OM XXXXX P,360,0.00,M 10/01/2025 11/O1/2019 356.6709/13/2019 3,210.03 0.00 0.00 0.00 0.00 25,670.03 0.00 0.00 Total Accounts: 220 Active Accounts: 220 Totals 54,343,73931 178,118.64 1,558,809.86 3,568.94 252.71 0.00 0.00 14,150,373.59 99,723.65 0.00 Client Totals: q Total Accounts: 725 Active Accounts: 724 Totals 670,293,403.90 1,816,903.28 0.00 562,261,520.12 295,690,989.6E 11 AMERINAT' DELINQUENT AGING REPORT 9l1/2019 through 9/30I2019 CLIENT XXX:XXXXXX GROUP XXX: XXXX PROJECT XXX: XXXX Reference No AccountN Telephone Status Principal Accrued Payment Last Interest Payment No. Of Pants Unpaid Number Balance Interest Due Dale Payment Paid to Delinquent Installment Date _,k to BOOOXXX 301101XXXX XXXXX XXXXXXX POST 1,830.00 0.00 12/01/2015 04/18/2017 20,00 46 920A0 SACOXXx I00001xxxX XXXXX XXXXX 323-xxx-XXXX CLIENT 27,770.19 0.00 02/01/2019 09/18/2019 50,00 8 400.00 VSCOXXX 301101XXXX X7CC{XXX7)OM XXX)O= POST 1,954.82 0.00 09/01/2006 03/24/2017 300.00 7 1,954.82 EBQIXXX 301101XXXX X)OMXXXXXX 213-xxx-XXXX POST 52,044.13 0.00 07/012019 O7703/2019 793,33 3 21379.99 EBQ2XXX 301101XXXX XXXXX XXXXXXX 310-xxx-XXXX POST 18,606.36 0.00 OS/012019 Ob/21/2019 213,33 2 426.66 KPC9XXX 301101XXXX XXXXX XXXXX 323-xxx-XXXX CLIENT 871.61 0.00 02/01/2013 12/24/2013 145.83 6 871.61 EBQOXXX 301101XXXX )D000XX)0= XXXXXXXX 310-xxx-XXXX POST 87,317.44 0.00 08/01/2019 07/12/2019 1,283.33 2 2,566.66 EGOXXX 301101XXYX XXXXX XXXXXX 310-xxx-XXXX POST 338,171.26 0.00 09/03/2019 09/16/2019 371.16 1 371.16 NEM9xXX 301101XXYX XXXXX XXXXXXX 323-xxx-XXXX POST 0.82 0.00 02/01/2012 02/24/2012 02/01/2001 114.58 1 0.82 EAQIXXX 301101XXXX XXXXX XXXXX 323-xxx-XXXX POST 44,535.00 32,529.10 11/01/1995 06/14/1995 10/01/1995 255.77 175 44,759.75 AB2XXX 301101XXXX )OCOOXXX3OCCX XXX)O= 323-xxx-XXXX POST 44,455.00 0.00 12/01/2008 11/20/2008 306.00 130 39,780.00 EAQIXXX 301101XXYX X)OMXXXXXX 818-xxx-xxxx BK13D 1,438.25 0.00 09/01/2014 03/20/2015 95.83 16 1,438.25 EAQIXXX 301101XXXX XXXXX XXXXXXX POST 16,481.77 0.00 10/01/2003 12/27/2017 100.00 165 16,481.77 EA99XXX 301101XXXX XXXXX XXXXX 323-xxx-XXXX POST 28,838.41 0.00 07/01/2017 07/17/2017 01/01/2000 145.83 27 3,937.41 EP5XXX 301101XXXX X000C(X)0= XXXXXXXX 661-xxx-XXXX CLIENT 17,019.23 0.00 11/01/2012 03/11/2013 12/01/2000 116.67 83 9,683.61 CE99XXX IOOOOOXXXX XXXXX XXXXXXX 323-xxx-XXXX POST 20,961.42 0.00 12/01/2018 02/11/2019 08/01/2006 250.00 10 2,500.00 EBQ2XXX 301101XXXX XXXXX XXXXX POST 22,650.62 0.00 09/01/2019 09/12/2019 12/01/2002 233.33 1 233.33 EAQ2XXX 301101XXXX XXXXXXXXXXYXXXXXXXXX 805-xxx-XXXX POST 5,573.47 0.00 09/01/2019 07/15/2019 154.01 1 154.01 CYOOXXX 301101XXXX XXXXX xxxxxx 323-xxx-XXXX POST 1,296.01 813.39 10/01/2008 03/24/2017 07/012008 86.41 15 1,296.15 CH92XXX 301101YXXX XXXXXXXXIOM 323-xxx-XXXX CLIENT 54,939.96 23,825.63 09/01/2005 11/25/2015 07/01/2005 554.60 100 55,460.00 EBQIXXX 301101 XXXX XXXXX XXXXX 818-xxx-xxxx POST 31,458.63 0.00 09/01/2003 10/05/2004 01/01/2001 208.33 152 31,458.63 NHCOXXX 301101 XXXX XXXXXXXXXXXX XXXXXXXX 323-xxx-xxxx POST 3,636.00 0.00 09/01/2019 08/27/2019 87.00 1 87.00 AB2XXX 301101XXYX XXXXX XXXXXX 818-xxx-xxxx POST 17,948.60 0.00 11/01/2008 07/22/2019 133.50 131 17,488.50 EAQIXXX 301101XXXX XXXXX XXXXXXX 213-xxx-XXXX CLIENT 2,384.00 0.00 04/01/2016 02/10/2016 76.671 32 2,384.00 EGO= 301101XXXX XXXXX XXXXX 626-xxx-XXXX POST 45,457.89 0.00 08/01/2019 09/11/2019 700.00 2 1,400.00 EAQ2XXX 301101XXXX xx3ocxxxxxxyxXXXXXXXX CLIENT 75,943.60 39,143.00 01/01/2003 102/25/2008 04/01/2003 200.00 201 40,200.00 EAQIXXX 301101XXYX XXXXX XXXX 818-xxx-XXXX CLIENT 34,692.00 0.00 05/01/2007 07/29/2014 Ol/01/2001 183.33 149 27,316.17 CE99XXX 100000XXXX XXXX X3O Kx CLIENT 2,343.03 271.01 01/12/2016 12/17/2015 12/12/2015 221.00 11 2,431.00 EP5XXX 301101XXXX X3OKx XXXX POST 2,131.06 0.00 04/01/2008 02/06/2008 11,45 138 1,580.10 EAQIXXX 301101XXYX XXXXX XXXX 310-xxx-XXXX POST 7,631.22 0.00 07/01/2019 06/06/2019 123.33 3 369.99 WH93XXX 301101XXXX XXXXIO= 310-xxx-XXXX CLIENT 1,359.80 796.65 09/01/2011 03/24/2017 07/01/2011 213.21 7 1,492.47 EAQIXXX 301101XXXX XXXXX XXXX 323-xxx-XXXX POST 19,114.41 0.00 08/01/2012 08/13/2012 123.33 86 10,606.38 PROJECT TOTALS: 1,030,856.01 97,378.78 7,871.16 1,712 322,430.24 Recap of Portfolio Delinquency Number of Loans Delinquent 32 Percentage of Delinquent Loans (By Number) 88.89 Percentage of Delinquent Loans (By Principal) 16.23 CLIENT TOTALS: 6,352,195.23 4,800,261.21 35,647.28 2,079 2,750,457.08 0/8/20 9 Page 4 of 4 1-29 Days 30-59 Days 60-89 Days Over 90 Days 20.00 20.00 50.00 50.00 300.00 300.00 793.33 793.33 213.33 213.33 145.83 145.83 1,283.33 1,283.33 371.16 0.00 114.58 0.00 255.77 255.77 306.00 306.00 95.83 95.83 100.00 100.00 145.83 145.83 116.67 116.67 250.00 250.00 233.33 0.00 154.01 0.00 86.41 86.41 554.60 554.60 208.33 208.33 87.00 0.00 133.50 133.50 76.67 76.67 700.00 700.00 200.00 200.00 183.33 183.33 221.00 221.00 11.45 11.45 123.33 123.33 213.21 213.21 123.33 123.33 7,871.16 6,911.08 no 1 860.00 250.00 1,200.00 0.00 0.00 437.49 0.00 0.00 0.00 43,992.44 38,862.00 1,245.79 16,200.00 3,499.92 9,333.60 1,750.00 0.00 0.00 1,036.92 53,796.20 31,041.17 0.00 17,088.00 2,223.43 0.00 39,600.00 26,766.18 1,768.00 1,545.75 0.00 852.84 10,236.39 303,586.12 5 3 2 22 13.89 8.33 5.56 61.11 5.83 2.38 0.94 7.08 14,997.28 14,037.20 11,840.54 2,710,314.68 AmeriNat Proposal to Provide Services Exhibit F — Statement of Non -Collusion by Contractor FdAMERwAT 37 AAttachment A NONCOLLUSION DECLARATION TO BE EXECUTED BY BIDDER AND SUBMITTED WITH BID The undersigned declares: I am the COO of AmeriNat the party making the foregoing bid. The bid is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation. The bid is genuine and not collusive or sham. The bidder has not directly or indirectly induced or solicited any other bidder to put in a false or sham bid. The bidder has not directly or indirectly colluded, conspired, connived, or agreed with any bidder or anyone else to put in a sham bid, or to refrain from bidding. The bidder has not in any manner, directly or indirectly, sought by agreement, communication, or conference with anyone to fix the bid price of the bidder or any other bidder, or to fix any overhead, profit, or cost element of the bid price, or of that of any other bidder. All statements contained in the bid are true. The bidder has not, directly or indirectly, submitted his or her bid price or any breakdown thereof, or the contents thereof, or divulged information or data relative thereto, to any corporation, partnership, company, association, organization, bid depository, or to any member or agent thereof, to effectuate a collusive or sham bid, and has not paid, and will not pay, any person or entity for such purpose. Any person executing this declaration on behalf of a bidder that is a corporation, partnership, joint venture, limited liability company, limited liability .partnership, or any other entity, hereby represents that he or she has full power to execute, and does execute, this declaration on behalf of the bidder. I declare under penalty of perjury under the laws of the State of Califortu th t the foregoing is true and correct and that this declaration is executed on !4 '�[datej, at Downey __,[city], CA [state]." Firm AmeriNat (Signature) Street 8121 E. Florence Avenu Michael Torres, COO (Print Name & Title) CiState ZiP e1L%c��Q EXHIBIT B FEE SCHEDULE Loan Portfolio Management: New Loan Set-up fee: $45.00 per loan Monthly Service Fee for Amortized Loans: $15.50 per loan per month The above fees include delinquency monitoring and collections activities on past due accounts and all other servicing activities unless separate service fees are identified below. Escrowing and/or monitoring of taxes and insurance are included with the service at no additional cost except for a one-time tax service vendor fee if acceptable transferable tax contracts are not already in place. Monthly Service Fee for Deferred Loans i. Warehouse: $2.25 per loan per month ii. Warehouse and monitor of taxes and/or insurance: $5.85 per loan per month plus a one-time tax service vendor fee. iii. Warehouse and escrow of taxes and/or insurance: $15.50 per loan per month plus a one-time tax service vendor fee. iv. Flat fee for receiving occasional payments on deferred loans: $15.50 per payment Tax Service Fee: If it is determined that Tax Service is needed, then a one-time fee of $69.00 per loan upfront at time of servicing commencement will be charged (may be assessable to borrower) for all loan amounts up to $500,000. For loan amounts over $500,000, there is an additional charge of $10 per $100,000. Future charges may vary based on outside vendor pricing. Please note: Any additional or supplemental charges that may be imposed by the respective taxing authority for procurement of duplicate tax bills will be directly passed through to the City. Forbearance Plans: If requested by the City, AmeriNat will charge a flat fee of $375.00 per loan per occurrence to institute a formal forbearance plan (usually in excess of 6 months in duration and with approval of the City). The City may require the borrower to pay this fee. Informal forbearances (usually less than 6 months in duration) to allow a delinquent borrower to catch up and bring their loan current are performed at no charge to the borrower or the City. Loan Modification Analvsis: If requested by the City, AmeriNat will charge the following fees for a Loan Modification Analysis: 1. Analysis and Recommendation, plus outside costs ` $375.00 2. Subsequent Analyses and Recommendations (each) $150.00 3. Loan Document Preparation, plus outside costs `. $325.00 (State and federal compliant documents provided by Contractor) 4. Document redraws (per occurrence) $150.00 Cancellation Fee: The fee due will be the sum of all fees for tasks (1-4 above) completed, plus one-half of the fee for the task in process at the time of cancellation. `Outside costs include, but are not limited to, title, credit, and appraisal / valuation. These costs are passed through from outside vendors and are subject to marketplace increases. Loan Foreclosure: If requested by the City, AmeriNat will charge the following fees for Loan Foreclosure services: 1. Document Preparation: A one-time charge of $430.00 to prepare documents to commence foreclosure proceedings and to manage the foreclosure process on behalf of the City. In addition to the above foreclosure service fee, AmeriNat will deduct and pay from remittance or bill the City for other costs incurred in the foreclosure process such as, but not limited to, conventional legal fees, sheriffs' deposits, bankruptcy closing costs, fees set by law, etc. These fees will be accurately quoted on a case -by -case basis upon request by the City and within all applicable statutory limits. 2. Reinstatement Terms: The City reimbursement for foreclosure services rendered, and its costs and other charges, will be made by the borrower upon reinstatement or full payment of any Deed of Trust or Mortgage under foreclosure. Bankruptcy Services: If requested by the City, AmeriNat will charge the following fees for Bankruptcy services: 1. Account Modification Fee: $45.00 per occurrence to modify account for respective Bankruptcy monitoring 2. Proof of Claim Filing Fee (per occurrence): a. $300.00 for Chapter 7 b. $850.00 for Chapter 13 3. Reaffirmation Agreement Filing Fee: $225.00 per occurrence 4. Monitoring and Repayment Fee: $12.00 per loan per month for the duration of an active Chapter 7 or Chapter 13 case. This includes monitoring respective payment plans, discharges, and dismissals. 5. Motion for Relief Filing Fee: $175.00 per occurrence plus out-of-pocket fees and costs. Such fees and costs include, but are not limited to, obtaining local counsel in the bankruptcy jurisdiction and as approved by the City. The City will be responsible for the payment of any fees for filing suit or related outside costs due AmeriNat that cannot be reimbursed from the borrower. Subordination Processing: A fee of $380.00 per analysis per loan. Loan Payoffs: Payoff demand fees vary based on loan documents and state specific regulations. The fee may be assessed when a borrower requests a written demand statement itemizing the amounts required to fully satisfy all obligations secured by the loan. Per -Event Fees: Tickler Notifications: $12.50 per notification Loan Transfer Fee: $75.00 per loan one-time fee if transferred from AmeriNat Affidavit of Owner: $13.00 per loan (entire portfolio done at one-time) with a $500 minimum fee Note: Pass -through (reimbursable) expenses not reimbursed monthly, will be considered servicer advances and will be subject to an interest charge at a rate of 1 % per month compounded. A finance charge of 1 % per month compounded will be applied to any invoice outstanding and unpaid for more than 60 days. Extraordinary Account Research and/or Loan Reconstruction AmeriNat will conduct ongoing routine maintenance and general customer service activities on borrower information and balances as part of its servicing duties at no additional cost. Should the City request additional research to be conducted, or if the City engages AmeriNat to conduct a Loan Reconstruction Service on its portfolio, an extraordinary research fee of $150.00 per hour will be charged, with a minimum of one hour per occurrence. Any such fee will be approved by the City before the research is conducted. When research is conducted at the request of the City because of a discrepancy between the City's records and AmeriNat's records relating to the principal balance or other loan information, and the result of the research determines that the discrepancy was the result of activity being posted at the City and not forwarded to AmeriNat for updating of its records, the extraordinary research fee will be charged for the time spent on the research. In the event the City requests additional services to be performed by AmeriNat not specifically set forth in the Scope of Services and AmeriNat agrees to perform the requested additional service(s), AmeriNat shall undertake such services(s) after receiving written authorization from City. Additional compensation for such service(s) shall be allowed as agreed upon in writing by both the City and AmeriNat.