Legal REO Letter

LEGAL REO LETTER

This Legal Real Estate Owned Letter (the Letter) is made effective as of Effective Date: , by and between Lender Name: with principal address: (\"Lender\"), and Asset Manager Name: with principal address: (\"Asset Manager\").

RECITALS

WHEREAS, Lender is the current holder of a loan secured by real property that has been charged-off and designated as real estate owned (REO); and

WHEREAS, Lender requires an agent to manage, preserve, market, and effectuate the disposition of the REO property in a commercially reasonable manner; and

WHEREAS, Asset Manager has represented that it has the experience, personnel and authority to perform REO preservation, marketing, and sale services on Lender's behalf under the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Letter and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. PROPERTY IDENTIFICATION

2. ACCOUNT DATA

REO Account Number: Loan Number: Outstanding Balance:

3. APPOINTMENT AND AUTHORITY

Lender hereby appoints Asset Manager as Lender's limited agent to take possession, preserve, secure, market, and sell the Property and to perform the specific duties set forth in this Letter. Asset Manager shall have the authority to obtain bids, contract for and oversee preservation and repair work, secure insurance where required, and engage brokers to market the Property, provided that Asset Manager shall not settle any sale or encumber the Property without prior written authorization from Lender as set forth herein.

4. PRESERVATION, REPAIR, AND EXPENDITURES

Asset Manager is authorized to undertake preservation and repair work necessary to secure and maintain the Property in a manner consistent with industry standards. Expenditures for any single work order in excess of must receive Lender's prior written authorization. Asset Manager shall retain receipts and invoices and submit a written expenditure report to Lender within thirty (30) days of incurring each expenditure.

5. TITLE, LIENS, AND ENCUMBRANCES

Asset Manager shall not take any action that would impair Lender's title interests. Asset Manager shall promptly notify Lender of any recorded liens, notices of default, tax delinquencies, or other encumbrances discovered in the course of its duties. Asset Manager shall cooperate with Lender to ensure that title defects are disclosed to prospective purchasers and addressed in any sale documentation.

6. MARKETING AND SALE

Asset Manager shall market the Property in a commercially reasonable manner and shall present to Lender all bona fide offers. Asset Manager may accept offers only with Lender's prior written approval. Any contract for sale shall contain representations, warranties and closing conditions reasonably acceptable to Lender and shall preserve Lender's right to reimburse or direct cure of title matters as necessary.

7. INSURANCE

Asset Manager shall ensure that insurance coverage, where necessary, is maintained in amounts reasonably required by Lender and shall provide evidence of such insurance upon Lender's request. Proceeds from insurance shall be held and applied in accordance with Lender's written directions.

8. INDEMNIFICATION

Asset Manager shall indemnify, defend and hold harmless Lender from and against any and all claims, liabilities, losses, costs and expenses (including reasonable attorneys' fees) arising from Asset Manager's gross negligence, willful misconduct, or breach of this Letter. Lender shall indemnify Asset Manager for claims arising from Lender's breach or negligence, except to the extent caused by Asset Manager.

9. RECORDS, REPORTING, AND AUDIT

Asset Manager shall maintain complete records of all activities, work orders, receipts, contracts and communications concerning the Property for a period of not less than three (3) years following final disposition. Lender shall have the right to inspect and audit such records upon reasonable prior notice during normal business hours.

10. CONFIDENTIALITY

All non-public information obtained by Asset Manager in connection with the performance of its duties shall be treated as confidential and shall not be disclosed except as required by law or with Lender's prior written consent. This obligation shall survive the termination of this Letter.

11. NOTICES

All notices required or permitted under this Letter shall be in writing and delivered to the addresses set forth below or to such other address as either party shall designate by written notice to the other.

12. MISCELLANEOUS

Governing Law: This Letter shall be governed by and construed in accordance with the laws of the state in which the Property is located, without regard to conflict of law principles.

Entire Agreement: This Letter constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

Severability: If any provision of this Letter is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the parties shall negotiate in good faith a substitute provision to effect the original intent.

Amendments; Waiver: No amendment, modification, or waiver of any provision of this Letter shall be effective unless in writing and signed by both parties. No waiver of any breach shall constitute a waiver of any subsequent breach.

Counterparts: This Letter may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

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