8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
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APPENDIX II
Gillespie Complaint to HUD, August 9, 2012
U.S. Department of Housing and Urban Development (HUD)RE: Reverse Mortgage Solutions, acct./loan no. 68011002615899
Exhibit 22 HUD final settlement statement, HECM, June 5, 2008
Exhibit 23 Email from Liz Baize, Park Ave Bank, problem with documents, June 10, 2008
Exhibit 24 HECM Notice of Right to Cancel, June 5, 2008
Exhibit 25 Fax to RMS, dispute the delinquency and foreclosure, June 19, 2012
Exhibit 26 Bank Failure, Geoorgia Dept. Banking closed Park Ave. Bank, April 29, 2011
Exhibit 27 FDIC, receiver for Park Ave. Bank, April 29, 2011
Exhibit 28 FDIC, Park Ave. Bank, Consent, 09-084-WA/RB-HC-SM, July 14, 2009
Exhibit 29 San Jose Business Journal, Financial Title Shuts Down, July 30, 2008
Exhibit 30 Genworth lures Liberty Reverse Mortgage with $50 million, July 29, 2007
Exhibit 31 Durable Power of Attorney, Neil Gillespie, February 21, 2006
Exhibit 32 HECM Mortgage, with INTERLINEATION
Exhibit 33 HECM Second Mortgage, with INTERLINEATION
Exhibit 34 Tom DeBeauchamp, BofA FedEX label, January 15, 2009
Exhibit 35 Negative growth reimbursement check, $38.89, January 6, 2009
Exhibit 36 Reimbursement check, $133.38 January 6, 2009
Exhibit 37 Letter, Karen Yantis, BofA, RE: Negative Growth, January 14, 2009
Exhibit 38 Liberty Reverse Mortgage, Fla. Div. Corp., 2008 Annual Report
Exhibit 39 Liberty Reverse Mortgage, Fla. Div. Corp., 2008 name change to Genworth
Exhibit 40 HUD: $1 BILLION TO BE PAID BY THE BANK OF AMERICA
Exhibit 41 HUD Rev. Mortgage Handbook, B.10 Reviewing Client’s Level of Understanding
Exhibit 42 General Allegations, HUD, breach of Fiduciary Duty, Predatory Lending
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FORM APPROVED
OMB NO 2.502-0265
U.S. DEPARTMENT OF HOUSINO AND URBAN DEVELOPMENT
TYPIOP LOAN 1. ...)(_
FIlA
1-
_PI I I i l A
SETILBMENT
STATEMENT
3.
Cl:lHV.
VI'llNS. 4.
VA
3. COHV,IIIS.
J.
1'lLlI1I1JMB1IIl:
17.LOANNUMBIIIl:
39100
: ; 1 ~ : ~ u a A N O I C A l I N U M B I l I \ :
C: NOTE: This form is frmlished
/0
rlWl you a ItaJulwnt
of Q C t u a l l ~ I I I n t M t
COlli. Amovnll
paid
to and by off/tlllntmt armt an Ihown.
tcm.r
marked (P.o.c)
wtn
oaldoutsld th, CIOlinll:
thCII
arc
Ihown hut
for informational
DUrtJOIG
and an no/Included
In
the
Totau.
D. N A M B O F B O R R O ~
PendoDe
M
GDleiolo
E. NAME
AND
ADDRESS
OF
SELLER:
_
F. NAME AND
ADDRESS OF LENDER:
r IN L
berty
RevtneMortpp, 11Ic,
10951 WbII1 Rock Road. SuIte 100
Ranello CordO\l1l CA 95670
G.
PROPERTY LOCATION:
8091 SW 115111 Loop
OClla FL 34481
H. SETILEMENT
AGENT:
FINANCIAL TITLE
I.
SETILEMENT
DA"fE: PLACE OF SElTLEMENT:
OO.'nl Date:
JUIlO 85,
1008
81 BLUE
RAVINE ROAD (mO
Disbunement Date: JUllolO,ZOIl
FOLSOM,
CA 95630
1.
SUMMARY OF
BORROWER'S TRANSACTION
K.
SUMMARY
01' SELLER'S TRANSACTION
100. GROSS AMOUNT DUE FROM
BORROWER: 400. GROSS
AMOUNT DUB
TO
SELLER:
101.
Contracl
salenrice
401.
COIIlracUal. . Drioo
101. POrlonl1 DrOIlortv
402.
J'enonal
DrODllI1V
10J. Soulemenl
charRes
10 bonower (line 14001 9 1 7 9 ~
03.
104.
PIVOtT 10:
SURTNll
\6 n9 4
404.
lOS. Payoff to:
Sun
T uII 30323.6:'
140,.
106. Plyoff 10:
1406
107. Oi$bunemenl
10:
1407.
108. Di,bunemcnl
10:
1408.
109. Oi,bunemenl 10; U _ ftw
Id Itwsfllu
n -
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
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U.S. DEPARTMENT OF
HOUSING
AND URBAN DEVELOPMENT
SETTLEMENT
STATEMENT
Paolor2
FHA
CuD
No. : 091-440574)1952·255
L.
SETTLEMENT CHARGES
700. TOTAL SALESIBROKER'S
COMMISSION:
based on orice
S
a
-
PAID PROM
PAm fROM
Divi.ion
ofCommiSlion
Oine 700) 81
fonOWl:
BORROWER'S
SELLER S
.
701.
S
to
FUNDS AT
PUNDSAT
SB'rI'L6MENT
SJm'L!MENT
702.
S
to
703.
Commission
paid
at
SeUlemcnt
704.
800. ITEMS PAYABLE IN CONNECfiON W1TH LOAN
801.
Loan Oriaination
Fee
to
Park
AVeDUO BIDIe
2,640.00
803. APDriisal Fee
to
Mee.tip I i
Morales
AwraiJals
250.00
804. Credit Report
to
Park A
venue BlnkIKroll
10. 4
80.5. Lender's Insuection Feo
co
0.00
806.
807. Tax Service
Feo
to
0.00
808. Repair Administration Poe
to
0.00
809. Flood Certificate Fee
to Park
Ave
BankIKroll
12.00
810. Compliance Certificate
to
0.00
8I
I.
Broker Fec
to
(POe: S 3'8.70
Parle
AvonUi Bank)
0.00
812. Corresuondent Fee
to poe: S 250.00 Park Avenue Bank)
8)
3. Peo to
Scrvicinl Company
to
CPOe: $ 395.00 LRMl
900. ITEMS REQUIRED
BY
LENDER TO BE PAID IN ADVANCE
901.
rnterest
From
to
@ Slday
902. Mortpgc Insurance Premium for
to
2,640.00
903. Hazard
Insurance Premium
for
yean
to
(POC:
S
698.00 Marlcet
Plaee)
0.00
904. Field904Labcl
tQ
0.00
90S.
to
0.00
1000.
RESERVES
DEPOSITED
WITH
LENDER
1001.
Hazard
mODthl@S
1002.
M0rtello Insurance
montbJ@S
1003. City
Property Taxe
montb,@S
1004.
County
Property monthl@S
laos
AnnulI
Assessments
monthl@S
IJOO.
TITLE CHARGES
110 J.
SeUlemenl or
closing Cee to
Financial Titlo Company
484.00
1102.
Abstract or title search
to
PilUUlcial Title ComD8llY
J7'.00
1I03. Title examination to
0.00
1104. TitJo
Insuranco Binder
to 0.00
11
OS Documena
Preparation
to
BayDoCI
100.00
1106. Notary feel to
Richard KwlatkowalJc
48S.00
J
107.
Attorney's fees
to
0.00
(lncilides
Qbove
i / . .
..
bm )
II
08.
Title inlurance
to
Financial Tide
ComPany
735.00
(rnclwkl 4160 . .
I t ,
numlMn:)
J
J
09.
Lender's
coverage S
132.000.00
)110. Owner's coverage
1111. TitlC' Endorsements
to Financial
Title ComPlnY
100.00
1112. ALTA 9
to
Financial TiU,
ComPIDY
73.50
) 1
13.
to
J
00.
GOVERNMENT
RECORDING
AND TRANSFER CHARGES
)20
1. R e c o r d i m ~ fees:
Deed' MortPlc
295.00 lleJoaes 295.00
1202. City/county
taxl'tamps
Ooed' Morton
J 089.70
1089.10
1203.
Stato tax/slamps
Deed'
MOnDIe
0.00
1204.
Doc Prep
to
Financial
Title
ComlJlDY
'0.00
120S.
to
1300. ADDITIONAL SETfLEMENTCHARGES
J301.
Survey
to
0.00
1302. Pest
Inspection
to
0.00
1303.
Courier
Chime
to
Financial Titlo
Company 40.00
1304. to
130S.
10
1400. TOTAL SElTLEMENTCHARGES
(ar.,
on
(Ina 103
etlan J
QtIl/
S01 SfIC#O J )
S9,179.44
I have prepared the HUD-)
SetdelJlentStatemeot
By: ; -
Liberty
ReveRe
Mortgage, Inc.
Company
Repraentatlve
To'the orm)' knowledge,
Ib
RUD·I S e t t l J l t R ~ i C 4 I C l J I C l D w Y h
~ f t r l J J a j m t I ICCUI ato
account
oltbe
fundi
whidl jpllfcjttlCl.
orwiIJ
be di,burled, by
onderslpoclll
J*1or ,
By:
~ f 1 ~ . t ......
~ ~ ~ ~ ~ ~ .......
-
Date
WARNINO:
It il • crime to knowiaaJy make falsCllea
to
tho Unitecl
Statu oa
thil or aDy .imllar fbrm. PenaJtia upon
convlctioa
CIa
i
'imprisonment. for dcllill.cc: TlUc 18 U.S. Code Scctioa
JOOI
and
ScctJuu
1010.
(t7/)·
/d
Y
. 2 0 ( 2
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Page 1
of
eil Gillese!!"----- _
rom:
"LIZ BAIZE"
Tuesday, June 10, 2008 4:49 PM
update
, there may be a day or two delay in funding your loan. I
just
notified your attorney that a
ll revision needed to be done because A) with all that signing, a signature line for your mom
ND
the interest rate for the week before, although a slight difference, was picked up
ckage and identified prior to being sent to HUD.
OlIT
expense) has agreed to
go
to
your
attorneys office to meet you there to sign the
and
Mr
Stermer said that was fine with him. I am trying to confIrm with Liberty that
l cover any cost incurred
if
a notary needs to go
back
out to Mark.
nce in rate over the life of the loan is less than 1/8th percent. s soon as I know more I
n touch.
B
care about your privacy and security.
of communication, please do not send any
6/10/2008
23
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NOTE: This fax and the accompanying information is privileged and confidential and is intended only for use by the above
addressee. If you are not the intended recipient, you are hereby notified that any use, dissemination or copying of this fax
and the accompanying communications is strictly prohibited. If you have received this communication in error, please
immediately notify the sender by telephone, collect if necessary, and return the original message to me at the above address
via U.S. mail. Thank you for your cooperation.
FaxFrom: Neil J. Gillespie
8092 SW 115th Loop Ocala, FL 34481
Telephone: (352) 854-7807
To: Reverse Mortgage Solutions (RMS) Foreclosure Department
Fax: 1-866-790-3451
Date: June 19, 2012
Pages: two (2) including this pageRe: DISPUTE: loan 68011002615899 - Notice of Default - Intent to Foreclose
Please be advised that loan no. 68011002615899 is not in default, and I/we hereby dispute the
delinquency. The records of RMS are not accurate, there are three borrowers, and I am living in the
home. An “Assignment of Mortgage” provided by RMS in response to my RESPA request clearly
shows me as one of three original borrowers. A copy of the assignment accompanies this fax.
RMS did not provide a copy of the note in response to my RESPA request dated May 14, 2012
showing that the loan was legally transferred from Bank of America to RMS. This copy is needed to
show proof that RMS has a legal claim to the transferred mortgage by demonstrating a proper chain of custody of the promissory note. The “Assignment of Mortgage” provided by RMS is not legally
sufficient in Florida to show a chain of custody.
Please be advised that I/we will defend any foreclosure action by RMS.
If RMS has a “cash for keys” program please advise. Thank you.
25
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Recording Requested By:
Bank of America
Prepared By: Diana De Avila
888-603-9011
When recorded mail to:
Reverse Mortgage Solutions, Inc.
2727 Spring Creek Drive
Spring , TX 77373
DocID# 1266801100261589920032
Property Address:
8092
SW
115TH LOOP
OCALA, FL 34481
FLO-AM 18001254 3 2712012 This space for Recorder's use
ASSIGNMENT
OF
MORTGAGE
For Value Received, the undersigned holder
of
a Mortgage (herein "Assignor") whose address
is
190
QUEEN
ANNE,
NORTH SUITE 100 SEATTLE WA 98109 does hereby grant, sell, assign, transfer and convey unto REVERSE
MORTGAGE SOLUTI ONS, INC., whose address is 2727 SPRING CREEK DRIVE SPRING TX 77373 all
beneficial interest under that certain Mortgage described below together with the note(s) and obligations therein
described and the money due and to become due thereon with interest and all rights accrued or to accrue under said
Mortgage,
Original Lender:
LIBERTY REVERSE MORTGAGE INC.
Original Borrower(s): PENELOPE M. GILLESPIE INDIVIDUALLY AND AS TRUSTEE NEIL J.
GILLESPIE AND MARK GILLESPIE AS CO-TRUSTEES OF
THE
GILLESPIE
FAMILY LIVING TRUST AGREEMENT DATED FEBRU ARY 10, 1997
Date
of
Mortgage:
6/5/2008
Original Loan Amount: $198,000.00
Recorded in Marion County, FL on: 6/25/2008 book OR 05057, page 1670 and instrument number 2008065289
IN W T ~ ~ S Yo tQ::REOF, the undersigned has caused this Assignment of Mortgage to be executed on
MAR Z
/
ZOlZ
Assistant
Vice President
By L£2:0G
ominique
Jobnso
itness: C_hest _ L_9_'V_i _g_S
Witness: Edward Gallegos
State of
California
County of Ventura
On
MAR 27
2 12 before me,
appeared Jane Martorana
J jJ jan
JEllison
and
,No4U"Y
Public, perso
O6mlnlqUe Johnson
nally
who proved
to me on the basis
of
satisfactory evidence to be the person(s)
whose
name(s) is/are subscribed to the within
instrument and acknowledged to me that helshelthey executed the same in hislher/their authorized capacity(ies),
and that by hislher/their signature(s) on the instrumen t
the
person(s), or the entity upon behalf of which the person
(s) acted, executed the instrument.
I certify
under
PENALTY OF PERJURY under the laws of
the
State
of
California that the foregoing
paragraph is
true and correct.
Notary Pu c:
Lillian
J.
Ellison
•
LILLIAN J. ELLISON
C(lIMIIllion t 256\7
. Public -Cllltornit
, los
Angele. County.
..
M
Comm.
Ex
res Mar 13. 2015
My Commission Expires: Ma ch 13, 2015
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FOR IMMEDIATE RELEASE Friday, April 29, 2011
Georgia Department of Banking and Finance TakesPossession of The Park Avenue Bank, Valdosta, Georgia
A t l a n t a , Ge o r g i a - The Georgia Department of Banking and Finance (“Department”) took possessionof The Park Avenue Bank, Valdosta, Georgia on April 29, 2011. The Superior Court of LowndesCounty issued an Order appointing the Federal Deposit Insurance Corporation (“FDIC”) as Receiver of the Bank effective upon the Department taking possession of The Park Avenue Bank.
The Department took possession of The Park Avenue Bank pursuant to the Official Code of Georgia,
Section 7-1-150(a) which authorizes the Department in its discretion to take possession of thebusiness and property of any state chartered financial institution whenever such financial institution iseither insolvent or operating in an unsafe or unsound condition to transact its business, is operating in
violation of any court order, statute, rule or regulation, or requests the Department to takepossession of its business and property.
Through an agreement with the FDIC, The Park Avenue Bank will be acquired by Bank of the Ozarks,Little Rock, Arkansas.
All deposit accounts of The Park Avenue Bank have been transferred to Bank of the Ozarks and will beavailable immediately. Depositors will be able to access their accounts at the former main office andbranch locations of The Park Avenue Bank during regular business hours. Customers of both banksshould continue to use their existing branches until Bank of the Ozarks can fully integrate the depositrecords of The Park Avenue Bank. Additionally, the former depositors of The Park Avenue Bank cancontinue to access their accounts through automated teller machine transactions, checks and debittransactions.
All deposits will be transferred to Bank of the Ozarks and, therefore, it is not anticipated that therewill be any loss exposure to former The Park Avenue Bank depositors that have deposits exceedingthe FDIC Deposit Insurance amounts.
The Department’s Commissioner, Robert M. Braswell, reminds depositors that deposits of all Georgiabanks are insured by the FDIC up to $250,000. Special rules are in place for accounts held in truststatus and joint accounts that may further expand deposit insurance coverage. Additional informationon FDIC Deposit Insurance may be found at www.fdic.gov.
The FDIC has established a website and a toll-free phone number to answer questions fromdepositors, creditors and other interested parties regarding the receivership of The Park Avenue
Bank. Please refer to the FDIC’s website for further information regarding the details of the purchaseand assumption transaction. The website is http://www.fdic.gov/bank/individual/failed
ia.gov - 2011 Releases http://dbf.georgia.gov/00/press_print/0,2669,43414745_1665088
7/3/2012
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UNITED STATES OF AMERICABEFORE THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEMWASHINGTON, DC.
STATE OF GEORGIADEPARTMENT OF BANKING AND FINANCEATLANTA, GEORGIA
Written Agreement by and among
PAB BANKSHARES, INC.Valdosta, Georgia
THE PARK AVENUE BANKValdosta, Georgia
FEDERAL RESERVE BANK OF ATLANTAAtlanta, Georgia
and
BANKING COMMISSIONER OFTHE STATE OF GEORGIA
Atlanta, Georgia
Docket Nos. 09-084-WA/RB-HC09-084-WA/RB-SM
WHEREAS, in recognition of their common goal to maintain the financial soundness of
PAB Bankshares, Inc., Valdosta, Georgia ("Bankshares"), a registered bank holding company,
and its subsidiary bank, The Park Avenue Bank, Valdosta, Georgia (the "Bank"), a state
chartered bank that is a member of the Federal Reserve System, Bankshares, the Bank, the
Federal Reserve Bank of Atlanta (the "Reserve Bank"), and the Banking Commissioner of the
State of Georgia (the "Commissioner") have mutually agreed to enter into this Written
Agreement (the "Agreement"); and
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WHEREAS, on July 9, 2009, Bankshares's and the Bank's boards of directors,
at duly constituted meetings, adopted resolutions authorizing and directing Donald J. Torbert, Jr.,
president and chief executive officer to consent to this Agreement on behalf of Bankshares and
the Bank and consenting to compliance with each and every applicable provision of this
Agreement by Bankshares, the Bank, and their institution-affiliated parties, as defined in
sections 3(u) and 8(b)(3) of the Federal Deposit Insurance Act, as amended (the "FDI Act")
(12U.S.C. §§ 1813(u)and 1818(b)(3)).
NOW, THEREFORE, Bankshares, the Bank, the Reserve Bank, and the Commissioner
agree as follows:
Credit Risk Management
1. Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and
the Commissioner an acceptable written plan to strengthen credit risk management practices.
The plan shall, at a minimum, address, consider, and include:
(a) Procedures to periodically review and revise risk exposure limits to
address changes in market conditions;
(b) strategies to minimize credit losses;
(c) procedures to identify, limit, and manage concentrations of credit that are
consistent with the Interagency Guidance on Concentrations in Commercial Real Estate Lending,
Sound Risk Management Practices, dated December 12, 2006 (SR 07-1), including but not
limited to: establishment of concentration of credit risk tolerances or limits by types of loan
products, geographic locations, and other common risk characteristics or sensitivities; enhanced
stress testing; and enhanced periodic reporting to management and the board of directors; and
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(d) measures to address the criticisms regarding credit risk management noted
in the report of the examination of the Bank that was conducted jointly by the Reserve Bank and
Commissioner that commenced on January 26, 2009 (the "Report of Examination").
Lending and Credit Administration
2. Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and
the Commissioner an acceptable written lending and credit administration program that shall, at a
minimum, address, consider, and include:
(a) Underwriting standards that require documented analyses of any borrower's
and guarantor's repayment sources, global cash flow, and overall debt service ability;
(b) procedures for the periodic analyses of any current borrower's and
guarantor's repayment sources, global cash flow, and overall debt service ability;
(c) an enhanced internal loan review process that includes, but is not limited to,
increased frequency of loan reviews;
(d) the appropriate use of interest reserves;
(e) limitations on the capitalization of interest; and
(f) improved documentation of loan modifications.
Asset Improvement
3. (a) The Bank shall not, directly or indirectly, extend or renew any credit to or
for the benefit of any borrower, including any related interest of the borrower, who is obligated
to the Bank in any manner on any extension of credit or portion thereof that has been charged off
by the Bank or classified, in whole or in part, "loss" in the Report of Examination or in any
subsequent report of examination, as long as such credit remains uncollected.
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(b) The Bank shall not, directly or indirectly, extend or renew any credit to or
for the benefit of any borrower, including any related interest of the borrower, whose extension
of credit has been classified "doubtful" or "substandard" in the Report of Examination or in any
subsequent report of examination, without the prior approval of the Bank's board of directors.
The board of directors shall document in writing the reasons for the extension of credit or
renewal, specifically certifying that: (i) the extension of credit is necessary to protect the Bank's
interest in the ultimate collection of the credit already granted or (ii) the extension of credit is in
full compliance with the Bank's written loan policy, is adequately secured, and a thorough credit
analysis has been performed indicating that the extension or renewal is reasonable and justified,
all necessary loan documentation has been properly and accurately prepared and filed, the
extension of credit will not impair the Bank's interest in obtaining repayment of the already
outstanding credit, and the board of directors reasonably believes that the extension of credit or
renewal will be repaid according to its terms. The written certification shall be made a part of
the minutes of the board of directors meetings, and a copy of the signed certification, together
with the credit analysis and related information that was used in the determination, shall be
retained by the Bank in the borrower's credit file for subsequent supervisory review. For
purposes of this Agreement, the term "related interest" is defined as set forth in section 215.2(n)
of Regulation O of the Board of Governors of the Federal Reserve System (the "Board of
Governors") (12 C.F.R. § 215.2(n)).
4. (a) Within 60 days of this Agreement, the Bank shall submit to the Reserve
Bank and the Commissioner an acceptable written plan designed to improve the Bank's position
through repayment, amortization, liquidation, additional collateral, or other means on each loan
or other asset in excess of $500,000, including OREO, that: (i) is past due as to principal or
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interest more than 90 days as of the date of this Agreement; (ii) is on the Bank's problem loan
list; or (iii) was adversely classified in the Report of Examination. In developing the plan for
each loan, the Bank shall, at a minimum, review, analyze, and document the financial position of
the borrower, including source of repayment, repayment ability, and alternative repayment
sources, as well as the value and accessibility of any pledged or assigned collateral, and any
possible actions to improve the Bank's collateral position.
(b) Within 30 days of the date that any additional loan or other asset in excess
of $500,000, including OREO: (i) becomes past due as to principal or interest for more than
90 days; (ii) is on the Bank's problem loan list; or (iii) is adversely classified in any subsequent
report of examination of the Bank, the Bank shall submit to the Reserve Bank and the
Commissioner an acceptable written plan to improve the Bank's position on such loan or asset.
(c) Within 30 days after the end of each calendar quarter thereafter, the Bank
shall submit a written progress report to the Reserve Bank and the Commissioner to update each
asset improvement plan, which shall include, at a minimum, the carrying value of the loan or
other asset and changes in the nature and value of supporting collateral, along with a copy of the
Bank's current problem loan list, extension report, and past due/non-accrual report. The board of
directors shall review the progress reports before submission to the Reserve Bank and shall
document the review in the minutes of the board of directors' meetings.
Allowance for Loan and Lease Losses
5. (a) Within 10 days of this Agreement, the Bank shall eliminate from its
books, by charge-off or collection, all assets or portions of assets classified "loss" in the Report
of Examination that have not been previously collected in full or charged off. Thereafter the
Bank shall, within 30 days from the receipt of any federal or state report of examination, charge
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capital at Bankshares, on a consolidated basis, and the Bank as a separate legal entity on a
stand-alone basis. The plan shall, at a minimum, address, consider, and include:
(a) Bankshares's current and future capital requirements, including
compliance with the Capital Adequacy Guidelines for Bank Holding Companies: Risk-Based
Measure and Tier 1 Leverage Measure, Appendices A and D of Regulation Y of the Board of
Governors (12 C.F.R. Part 225, App. A and D);
(b) the Bank's current and future capital requirements, including compliance
with the Capital Adequacy Guidelines for State Member Banks: Risk-Based Measure and Tier 1
Leverage Measure, Appendices A and B of Regulation H of the Board of Governors (12 C.F.R.
Part 208, App. A and B);
(c) the adequacy of the Bank's capital, taking into account the volume of
classified credits, concentrations of credit, ALLL, current and projected asset growth, and
projected retained earnings;
(d) the source and timing of additional funds to fulfill Bankshares's and the
Bank's future capital requirements; and
(e) the requirements of section 225.4(a) of Regulation Y of the Board of
Governors (12 C.F.R. § 225.4(a)) that Bankshares serve as a source of strength to the Bank.
7. Bankshares shall notify the Reserve Bank and the Commissioner, in writing, no
more than 30 days after the end of any quarter in which any of Bankshares's consolidated capital
ratios fall below the approved plan's minimum ratios. Bankshares and the Bank shall notify the
Reserve Bank and the Commissioner, in writing, no more than 30 days after the end of any
quarter in which any of the Bank's capital ratios (total risk-based, Tier 1 risk-based, or leverage)
fall below the approved plan's minimum ratios. Together with the notification, Bankshares and
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(b) a timetable to reduce reliance on borrowing and short-term wholesale
funding, including brokered deposits; and
(c) specific liquidity targets and parameters and the maintenance of sufficient
liquidity to meet contractual obligations and unanticipated demands.
10. Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and
the Commissioner an acceptable revised written contingency funding plan that, at a minimum,
identifies available sources of liquidity and includes adverse scenario planning.
Dividends
11. (a) Bankshares and the Bank shall not declare or pay any dividends without
the prior written approval of the Reserve Bank and the Director of the Division of Banking
Supervision and Regulation of the Board of Governors (the "Director"), and the Commissioner.
(b) Bankshares shall not take any other form of payment representing a
reduction in capital from the Bank without the prior written approval of the Reserve Bank and
the Commissioner.
(c) Bankshares and its nonbank subsidiaries shall not make any distributions
of interest, principal, or other sums on subordinated debentures or trust preferred securities
without the prior written approval of the Reserve Bank, the Director, and the Commissioner.
(d) All requests for prior approval shall be received at least 30 days prior to
the proposed dividend declaration date, proposed distribution on subordinated debentures, and
required notice of deferral on trust preferred securities. All requests shall contain, at a minimum,
current and projected information, as appropriate, on the parent's capital, earnings, and cash
flow; the Bank's capital, asset quality, earnings and ALLL needs; and identification of the
sources of funds for the proposed payment or distribution. For requests to declare or pay
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dividends, Bankshares and the Bank, as appropriate, must also demonstrate that the requested
declaration or payment of dividends is consistent with the Board of Governors' Policy Statement
on the Payment of Cash Dividends by State Member Banks and Bank Holding Companies, dated
November 14, 1985 (Federal Reserve Regulatory Service, 4-877 at page 4-323).
Debt and Stock Redemption
12. (a) Bankshares shall not, directly or indirectly, incur, increase, or guarantee
any debt without the prior written approval of the Reserve Bank and the Commissioner. All
requests for prior written approval shall contain, but not be limited to, a statement regarding the
purpose of the debt, the terms of the debt, and the planned source(s) for debt repayment, and an
analysis of the cash flow resources available to meet such debt repayment.
(b) Bankshares shall not, directly or indirectly, purchase or redeem any shares
of its stock without the prior written approval of the Reserve Bank and the Commissioner.
Compliance with Laws and Regulations
13. (a) The Bank shall immediately take all necessary steps to correct the
violations of section 7-1-285 of the Financial Institutions Code of Georgia cited in the Report of
Examination. In addition, the Bank shall take necessary steps to ensure future compliance with
all applicable laws and regulations.
(b) In appointing any new director or senior executive officer, or changing the
responsibilities of any senior executive officer so that the officer would assume a different senior
executive officer position, Bankshares and the Bank shall comply with the notice provisions of
section 32 of the FDI Act (12 U.S.C. § 1831i) and Subpart H of Regulation Y of the Board of
Governors (12 C.F.R. §§ 225.71 et seq.).
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(c) Bankshares and the Bank shall comply with the restrictions on
indemnification and severance payments of section 18(k) of the FDI Act (12 U.S.C. § 1828(k))
and Part 359 of the Federal Deposit Insurance Corporation's regulations (12 C.F.R. Part 359).
Compliance with the Agreement
14. (a) Within 10 days of this Agreement, the boards of directors of Bankshares
and the Bank shall appoint a joint committee (the "Compliance Committee") to monitor and
coordinate Bankshares's and the Bank's compliance with the provisions of this Agreement. The
Compliance Committee shall include a majority of outside directors who are not executive
officers or principal shareholders of Bankshares and the Bank, as defined in sections 215.2(e)(1)
and 215.2(m)(1) of Regulation O of the Board of Governors (12 C.F.R. §§ 215.2(e)(1) and
215.2(m)(1)). At a minimum, the Compliance Committee shall meet at least monthly, keep
detailed minutes of each meeting, and report its findings to the boards of directors of Bankshares
and the Bank.
(b) Within 30 days after the end of each calendar quarter following the date of
this Agreement, the Bank shall submit to the Reserve Bank and the Commissioner written
progress reports detailing the form and manner of all actions taken to secure compliance with
this Agreement and the results thereof.
Approval and Implementation of Plans and Programs
15. (a) The Bank and, as applicable, Bankshares shall submit written plans and
programs that are acceptable to the Reserve Bank and the Commissioner within the applicable
time periods set forth in paragraphs 1, 2, 4, 5(c), 6, 9, and 10 of this Agreement.
(b) Within 10 days of approval by the Reserve Bank and the Commissioner,
the Bank and, as applicable, Bankshares shall adopt the approved plans and programs. Upon
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adoption, the Bank and, as applicable, Bankshares shall promptly implement the approved plans
and programs, and thereafter fully comply with them.
(c) During the term of this Agreement, the approved plans and programs shall
not be amended or rescinded without the prior written approval of the Reserve Bank and the
Commissioner.
Communications
16. All communications regarding this Agreement shall be sent to:
(a) Mr. Robert D. HawkinsAssistant Vice President
Federal Reserve Bank of Atlanta1000PeachtreeSt.,N.E.Atlanta, Georgia 30309-4470
(b) Mr. Robert M. BraswellCommissionerDepartment of Banking and Finance2900 Brandywine RoadSuite 200Atlanta, Georgia 30341
(c) Mr. Donald J. Torbert, Jr.President and Chief Executive OfficerPAB Bankshares, Inc.The Park Avenue BankP.O. Box 3460Valdosta, Georgia 31604-3460
Miscellaneous
17. Notwithstanding any provision of this Agreement, the Reserve Bank and the
Commissioner may, in their sole discretion, grant written extensions of time to Bankshares and
the Bank to comply with any provision of this Agreement.
18. The provisions of this Agreement shall be binding upon Bankshares, the Bank,
and their institution-affiliated parties, in their capacities as such, and their successors and assigns.
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19. Each provision of this Agreement shall remain effective and enforceable until
stayed, modified, terminated, or suspended in writing by the Reserve Bank and the
Commissioner.
20. The provisions of this Agreement shall not bar, estop, or otherwise prevent the
Board of Governors, the Reserve Bank, the Commissioner, or any other federal or state agency
from taking any other action affecting Bankshares, the Bank, or any of their current or former
institution-affiliated parties and their successors and assigns.
21. Pursuant to Section 50 of the FDI Act (12 U.S.C. § 1831aa), this Agreement is
enforceable by the Board of Governors under Section 8 of the FDI Act (12 U.S.C. § 1818).
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the 14th day of July, 2009.
PAB BANKSHARES, INC.
By: /s/ Donald J. Tolbert, Jr.President and CEO
FEDERAL RESERVE BANK OFATLANTA
By: /s/ Robert D. HawkinsAssistant Vice President
THE PARK AVENUE BANK
By: /s/ Donald J. Tolbert, Jr.President and CEO
BANKING COMMISSIONER OFTHE STATE OF GEORGIA
By: /s/ George A. ReynoldsGeorge A. Reynolds forRobert M. BraswellCommissioner
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From the Silicon Valley / San Jose Business Journal:http://www.bizjournals.com/sanjose/stories/2008/07/28/daily50.html
Silicon Valley / San Jose Business Journal by Sharon Simonson
Date: Wednesday, July 30, 2008, 11:23am PDT
Related:
Residential Real Estate
Financial Title Co. has shut its doors across the state as part of a closure of multiple offices andtitle companies by its parent, Mercury Cos. of Colorado.
The decision by the largest real-estate title agent in Silicon Valley follows a move by Mercury'slenders to pull their line of credit after Mercury failed to meet loan requirements, according to ane-mail from Jim Hilbun, president of United Title of Texas. Unite Title is also owned by Mercury.
"Mercury is closing all of its companies outside of Colorado, which includes Arizona, California,Oregon and Nevada," Hilbun told employees.
Examiners representing the California Department of Insurance, which regulates and polices title-policy underwriters and agents, were on hand at all 57 Financial Title offices in the stateWednesday to ensure that escrow funds were properly handled and not stolen or lost, said Darrel
Ng, press secretary for the agency.
Financial Title did not close due any enforcement action by the state nor has First Americanassumed responsibility for the pending escrows as a result of state pressure or requirement, hesaid.
Workers were removing items before dawn on Wednesday from Financial Title's Pruneyard officein Campbell. A sign posted on the door said the office was closing and referred inquiries to First
American, Financial's title policy underwriter, and to Mercury.
The Pruneyard office is one of 16 listed in Santa Clara County on Financial Title's Web site. It also
lists five in San Mateo County, five in San Francisco, four in Contra Costa County and 15 inSacramento County.
Neither Financial Title nor Mercury nor First American responded to calls for this story immediately.
Sources who have spoken to Financial Title employees said the title company began closing itsdoors in Santa Clara County Tuesday night. Those sources said all employees have lost their jobs,and Financial's underwriter, First American Title Co., has been collecting open escrow files at theclosed offices. They also say Financial Chief Executive Officer Ivy Anderson has resigned.
Anderson did not return a message left on her cell phone. Jim Cortese, county manager of
cial Title Co. shuts down in California - Silicon Valley / San Jose B... http://www.bizjournals.com/sanjose/stories/2008/07/28/daily50.htm
7/3/2012
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Financial's Santa Clara County operations, also has lost his job.
The abrupt move mirrors that of Financial's former sister company, Alliance Title Co., which alsoclosed with almost no notice late last year. Former employees and landlords of Alliance have filedmultiple lawsuits alleging they were not paid. Alliance declared Chapter 7 bankruptcy in NorthernCalifornia federal court June 5.
Mercury is owned by the Jerrold G. "Jerry" Hauptman family of Colorado. Financial Title is still
operating in Colorado.
cial Title Co. shuts down in California - Silicon Valley / San Jose B... http://www.bizjournals.com/sanjose/stories/2008/07/28/daily50.htm
7/3/2012
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..
DURABLE POWER OF ATTORNEY
I, PENELOPE M. GILLESPIE of8 92 SW 115thLoop, Ocala, Florida 34481, appoint
NEIL J GILLESPIE of8 92 SW 115
th
Loop, Ocala, Florida 34481, my true and lawful attorney
in fact for me and in my name, place, and stead and for my use and benefit to manage my affairs
as set forth below. Upon the death, failure or inability ofhim to act as my attorney in fact, then
I appoint ELIZABETH
A
BAUERLE of6356 SW 106
th
Place, Ocala, Florida 34476; to act as
my attorney in fact in
his
stead.
1 Powers Granted: Except as otherwise limited by applicable law or by this durable
power
of
attorney, my attorney
in
fact has full authority to perform, without prior court approval,
every act authorized and specifically enumerated below:
a To exercise, do, or perform any act, right, power, duty, or obligation
whatsoever that I now have or may acquire the legal right, power or capacity to exercise, do, or
perform in connection with, arising out of, or relating to any person, item, thing, transaction,
business property, real or personal, tangible or intangible, including homestead real property, and
whether held in joint tenancy with right
of
survivorship, tenancy in common or tenancy by the
entirety, and all property over which I hold a general, limited or special power of appointment,
and all contractual or statutory rights or elections, including but not limited to, any rights or
elections in any probate or similar proceedings to which I am or may become entitled; or any other
matter whatsoever;
b
To ask, demand, redeem, sue for, recover, collect, receive, and hold and possess
all such sums of money, debts, dues, bonds, notes, checks, drafts, accounts, deposits, legacies,
bequests, devises, interests, dividends, stock certificates, certificates ofdeposit, annuities, pension
1
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and retirement benefits, insurance benefits and proceeds, documents
of
title, choses in action, per-
sonal and real property, intangible and tangible property and property rights, and demands
whatsoever, liquidated
or
unliquidated, as are now,
or
shall hereafter become due, owing, payable,
owned, or belonging
to
me
or
in which I have or may acquire an interest, and
to
have, use, and
take all lawful ways and means and legal and equitable remedies, procedures, and writs in my name
for the collection and recovery thereof, and to compromise, settle, and agree for the same, and to
make, execute, and deliver for me and in my name all endorsements, acquittances, releases,
receipts,
or
other sufficient discharges for the same;
c. To lease, purchase, exchange and acquire, and to bargain, contract, and agree
for the lease, purchase, exchange and acquisition of, and to take, receive, and possess any real
or
personal property whatsoever, intangible
or
tangible, or interest therein, on such terms and
conditions, and under such covenants as my attorney in fact shall deem proper;
d
To improve, repair, maintain, manage, insure, rent, lease, sell, release, convey,
subject
to
liens, mortgage, and hypothecate, and in any way
or
manner deal with all
or
any part
of
any real
or
personal property, intangible and tangible, whatsoever,
or
any interest therein, which
I
now
own
or
may hereafter acquire, for me and in my name, and under such terms and conditions,
and under such covenants as such attorney in fact shall deem proper, including my homestead
property which I may own.
If
am married, my attorney in fact may not mortgage
or
convey my
homestead property without joinder
of
my spouse
or
my spouse's legal guardian. Joinder by my
spouse may be accomplished by the exercise
of
authority in a durable power
of
attorney executed
by my joining spouse, and either my spouse
or
I may appoint the other as attorney in fact;
e. To engage in and transact any and all lawful business
of
whatever nature or kind
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for me and in my name;
f To sign, endorse, execute, acknowledge, deliver, receive, and possess such
applications, contracts, agreements, bills
of
sale, leases, mortgages, assignments, insurance
policies, bills oflading, warehouse receipts, documents of title, bills, bonds, debentures, checks,
drafts, bills
of
exchange, notes, stock certificates, proxies, warrants, commercial paper, receipts,
withdrawal receipts and deposit instruments relating to accounts or deposits in, or certificatesof
deposit
of
banks, savings and loan
or
other institutions or associations, proofs
ofloss
evidences
ofdebts, releases, and satisfaction ofmortgages, judgments, liens, security agreements, and other
debts and obligations, and such other instruments in writing
of
whatever kind and nature as may
be necessary
or
proper in the exercise
of
the rights and powers herein granted;
g. Borrow moneyon such terms and with such security as my attorney in fact may
think
fit
and to execute all notes, mortgages and other instruments that my attorney in fact finds
necessary or desirable;
h
Enter any safe deposit box or other place
of
safekeeping standing in my name
alone or jointly with another and to remove the contents and to make additions, substitutions and
replacements;
i To execute stock powers or similar documents on my behalfand delegate to a
transfer agent or similar person the authority to register any stocks, bonds, or other securities
either into
or
out
of
my name or nominee's name;
j. To represent me before the Treasury Department in connection with any matter
involving any federal taxes in which I am a party, to make, sign, execute,
verifY
and
file
any return
required to be made under the revenue laws
of
the United States, or the Internal Revenue Code,
3
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or
under the statutes
of
any state and
to fil
any claim for refund, offer and compromise
or
application for a closing agreement, receive refund checks, execute waivers of any period of
limitation, extensions of time, execute any waiver of restrictions on assessment for collection of
any tax, and execute Petition of Appeal
to
the United States Tax Court;
k. To make gifts ofcash or ofany interest that I may own in other assets and real
property to any person
or
enti ty,just as I made the gifts myself, as long as any such transfers do
not incur any Federal
or
State Gift Tax liability; and
1
Transfer th title of any interest that I may
own
in property, whether it be
personal
or
real and
how v r
it be held, into the name
of
any living trust, and necessary the
Successor Trustee of said trust, which I may have previously made
or
will make in the future.
2. Full Real Estate Powers: My attorney in fact herein named is granted the authority
to
sell,
to
convey, to maintain, to mortgage
or
to dispose ofth following described real property,
and to execute any and ll documents necessary to effectuate the sale and/or conveyance, and to
encumber, and to dispose of, the following described real property, unless previously titled in the
name
of
my Living Trust, any:
See Exhibit "A" which is attached and incorporated hereto by reference.
Such documents shall include, but not be limited to, contracts, deeds, affidavits, bills
of
sale, closing statements, mortgages, notes and such other instruments as may be required to carry
out the purposes herein expressed, and I hereby give and grant unto my attorney in fact named
herein, full authority and power to do and perform all and every act and thing whatsoever requisite
and necessary to be done in and about the premises as fully, to ll intents and purposes, as I might
or could do personally present, with full power of substitution and revocation, hereby ratifying
4
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and confirming all that my attorney in fact shall lawfully do or cause to be done by virtue o the
power granted herein.
3. Full Substitution: I grant to my attorney in fact full power and authority to do and
perform ll and every act and thing whatsoever requisite, necessary, and proper and to be done
in the exercise o any o the rights and powers herein granted, as fully
to
all intents and purposes
as I might or could do personally present, with full power o substitution
or
revocation, hereby
ratifying and confirming all that my attorney in fact, shall lawfully do or cause to be done by virtue
o this power o attorney and the rights and powers herein granted. The powers conferred upon
my attorney in fact extend to all
o
my right, title and interest in property in which I may have an
interestjointlywith any other person, whether in an estate by the entirety, joint tenancyor tenancy
mcommon.
4. Limitations: Notwithstanding the powers contained in this durable power o
attorney, my attorney in fact may not:
a
Performduties under contract that requires the exercise
o
my personal services;
b. Make any affidavit as to my personal knowledge;
c. Vote in any public election on my behalf;
d. Execute, create, amend, modifyor revoke any
will,
codicil or trust
on
my behalf;
and
e
Exercise powers and authority granted to me as trustee
or
as court-appointed
fiduciary.
5. Standard
o
Care: Except as otherwise provided herein, myattorney in fact named
herein is a fiduciary who must observe the standards o care applicable to trustees as described in
5
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Florida Statute Section 737.302. My attorney in fact
s
not liable to third parties for any act
pursuant to this durable power of attorney i the act was authorized at the time. the exercise
ofthe power s improper, my attorney in fact s liable to interested persons as described in Florida
Statute Section 731.201 for damage or loss resulting from a breach
of
fiduciary duty by my
attorney in fact to the same extent as the trustee of an express trust. f
my
attorney in fact h s
accepted appointment either expressly in writing or by acting under the powers granted herein, my
attorney in fact s not excused from liability for failure to participate in the administration ofassets
subject to the powers granted herein or for failure to attempt to prevent a breach of fiduciary
obligations thereunder.
6. Interpretation: This instrument s to be construed and interpreted as a durable
powerofattorney pursuant to Florida Statute Section 709.08. The enumerationofspecific items,
acts, rights, or powers herein does not limit or restrict, and s not to be construed or interpreted
as limiting or restricting the general powers herein granted to
my
attorney in fact. This durable
power ofattorney shall not be affected by any physicalor mental disability that I may suffer except
as provided by Florida Statute Section 709.08, and shall be exercisable from the date
of
execution.
All acts done by my attorney
n
fact pursuant to this durable power
of
attorney shall bind me, my
heirs, devisees and personal representatives. This durable power of attorney
s
nondelegable.
7. Governing Law: This instrument s executed by me n the State ofFlorida, but t
s my intention that this durable power
of
attorney shall be exercisable
n
any other state or
jurisdiction where I may have any property
or
interests in property. This instrument s executed
and delivered n the State ofFlorida and the laws ofthe State ofFlorida shall govern all questions
as to the validity of the powers herein and the construction of its provisions.
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8. Third Party Reliance:
a Any third party may rely upon the authority granted in my durable power
of
attorney until the third party has received notice as provided herein;
b. Until a third party has received notice
of
revocation pursuant to the terms
contained herein, partial
or
complete termination ofthis durable power
of
attorney by adjudication
of incapacity, suspension by initiation ofproceedings to determine incapacity, my death, or the
occurrence of an event referenced in this durable power ofattorney, the third party may act in
reliance upon the authority granted in this durable power ofattorney;
c. A third party that has not received written notice hereunder may, but need not,
require that my attorney in fact execute n affidavit stating that there has been no revocation,
partial
or
complete termination,
or
suspension
of
this durable power of attorney at the time this
power of attorney is exercised;
d. Third parties who act in reliance upon the authority granted to my attorney in
fact hereunder and in accordance with the instructions
ofthe attorney in fact will be held harmless
by me from any loss suffered or liability incurred as a result of actions taken prior
to
receipt of
written notice of revocation, suspension, notice of petition to determine incapacity, partial or
complete revocation, or my death. A person who acts in good faith upon any representation,
direction, decision,
or
act ofmy attorney in fact is not liable to me
or
to my estate, beneficiaries,
or joint owners for those acts; and
e. My attorney in fact is not liable for any acts
or
decisions made by
im
or
her in
good fuith and under the terms ofthis durable power of attorney.
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9. Notice:
a A notice, including but not limited to, a notice o revocation, partial or complete
termination, suspension, or otherwise,
is
not effective until written notice
is
served upon my
attorney in fact or any third persons relying upon this durable power
o
attorney; and
b. Notice must e in writing and served on the person or entity to e bound by
such notice. Service may e by any form
o
m il that requires a signed receipt
or
by personal
delivery as provided in the Florida Statutes for service
o process, and must otherwise
e
in
accordance with Florida Statutes Section 709.08.
10. Damages and Costs: In any judicial action regarding this durable power
o
attorney, including but not limited to, the unreasonable refusal
o
a third party to allow
my
attorney in fact to act pursuant to the powers granted herein and/or challenge o the proper
exercise o authority by the attorney
in
fact, per statute, the prevailing party
is
entitled to damages
and costs, including reasonable attorney's fees.
11 Validity: This durable power
o
attorney shall e valid until such time as I shall die,
revoke this durable power o attorney, either partially or completely, or shall e adjudged totally
or partially incompetent by a courto competent jurisdiction. I may revoke this durable power
o
attorney only by providing written notice to my attorney in fact. All acts o my attorney
in
fact,
taken or done without actual knowledge o my death, or adjudication o my incompetency or my
revocation, are valid and effective and are hereby ratified and confirmed by me.
12 Revocation
o
Prior Instruments: By this instrument, I hereby revoke any power
o
attorney, durable or otherwise, that I may have executed prior to the date of this durable power
o
attorney. I hereby confirm all acts
o
my attorney in fact pursuant to the powers herein granted.
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Any act that is done under the
powers
herein granted between the revocation of this instrument,
i any, and the notice of that revocation to my
attorney
in fact shall be valid unless the person
claiming the benefit of the act had notice of that revocation.
IN WITNESS WHEREOF I have hereunto set my hand and seal this
J
day f _ - - - - - L 0 _ ~ - - - = - - - - - - - - - 2006.
Signed, sealed and delivered
m t h e ~
N 2 ~ ~ ~ E M ~ I ~ r / 0
~ Address: 8092 SW 115th Loop
/
~ ~ ~ _
-Ocala, Florida 34481
Name: MARYBETH BOWMAN
N O T R Y K N O ~ E D G M E N T
STATE OF FLORIDA
COUNTY OF
CITRUS
I HEREBY CERTIFY that
on
this day personally appeared before me an officer duly
authorized to administer oaths and take acknowledgments, PENELOPE M. GILLESPIE, to me
personally
known
to
be the
person
described in and
who
executed the foregoing instruments
or
who provided
rL-
as identification, and she acknowledged and
swore before
me that
she executed the same freely and voluntarily for the
purposes therein
expressed.
WITNESS
my hand and official seal at Inverness, County ofCitrus, and State ofFlorida,
this d S ~ day of F h L _ J ~ , ~
~ ~ ~ y ~ ~
State of Florida at L a r g ( ; J r ' ~ ~ ~ : ~ : ~ ~ 4 ~ } ~ ~ ~ ~ l '
My
Commission x p i r e ~ ~ A : r ~ MY C ~ ~ ~ I ~ ~ ~ ~ R ~ ~ ~ 5 5
This Document Prepared By:
· · · ; f , . ~ f ; , i h ~ · ·
EXPIRES:
January
21
2007
Steven H.L. Bowman, Esquire
611 U.S. Highway 4 South
Inverness, Florida 34450
352) 726-3800
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EXHIBIT A
Lot
1
Block G, OAK RUN WOODSIDE TRACT, as per plat thereofrecorded
n
Plat
ook
2, pages
106 through 112, of the Public Records
of
Marion County, Florida.
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FedEx Ship Manager - Print Your Label(s)
Page 1 o 1
T
111
DeBeauchcrnp
Bank of America
190 Queen
Anne
Ave N 400
ActWgt
1.0 LB
CAD: 291482511NET8091
Account : S
Seattle.
WA 98109
JCl.S1112t1121123
Delivery Address Bar Code
Ref
Invoice
PO
Dept
SHIP
TO:
(352) 854-7807
BILL
SENDER
MS.
PENELOPE M. GILLESPIE
8092
SW
105 LOOP
OCALA, FL
34481
TRK
1 2 1J 7972
5015 2826
XH OCFA
THU •
15JAN
STANDARD
OVERNI4
RES
34481,
FL-US
Mea
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34
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
65/92
' - - ~ ' - - - : - - _ . - - N_BKE_4_W_P1_62 _932_43
BANK OF AMERICA N.A. 30-1/1140
SEATTLE, WA CONSUMER REAL ESTATE, SEATTLE, WA #0014007
Date: 01/06/09
AMOUNT: 38.89
COMMENTS:
lOAN#: 68011002615899
NEGATIVE GROWTH REIMBURSEMENT CHECK
CHECK 90565
MEMO:
NEGATIVE GROWTH REIMBURSEMENT CHECK
PENELOPE
M.
GILLESPIE
NON NEGOTIABLE
8092 SW 115TH LOOP
CUSTOMER FILE COPY
OCALA FL 34481
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/
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O R I ; E ~ j
oCALA
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35
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
66/92
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Bank
of
America
WA3-513-04-01
0004336777
JAN072009
o MAILED FROM ZIP CODE 981
04
190 Queen Anne Ave
N.
400, Seattle, WA 98109
3448 i 3557 F :Ci45
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
67/92
NBKIX3116200912617
BANK OF AMERICA
N.A.
30 1/1140
SEATTLE,
WA
CONSUMER REAL ESTATE, SEATTLE,
WA
0014007
Date: 01/06/09
AMOUNT: 133.38
I
COMMENTS:
LOAN #: 68011002615899
CHECK 90327
MEMO:
PENELOPE
M.
GILLESPIE
NON NEGOTIABLE
8092 SW 115TH LOOP
CUSTOMER FILE COPY
OCALA FL 34481
.
TO·
THe
ORDER·
'OF
,// .:
PENELOPE
M.
GILLESPIE
8092;SW115TH LOOP
OoALA FL34481 .
;.
II-
12 111 :0 5 :1000
I.
b : l;;B b1 1 28
I.
•
36
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
68/92
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
69/92
Bankof merica -
• •
January 14 2009
PENELOPE M. GILLESPIE
8092
SW
115TH LOOP
OCALA, FL 34481
Re:
68011002615899
Dear Mortgagor(s):
This letter is being sent to you
in
regards to your recent inquiries about the Growth
accruing on your loan. The following paragraphs will describe how Growth
is
calculated
and how it reflects on your monthly statement. There are several components utilized in
the growth calculation process. Each of these components are listed below and the
calculations for each are described. For reference, copies of the Exhibit 1 Payment Plan
and the Home Equity Conversion Loan Agreement from your loan closing package have
been included with this letter.
Net Principal
imit
The Net Principal Limit reflects the funds available to a borrower at any given time.
These funds may be held
in
a Line of Credit, a Payment Reserve (for scheduled
payments), a Tax and Insurance Set Aside, or a combination of the three. The
calculation used to determine the Net Principal Limit at closing is the same calculation
used today. Examining the Exhibit 1 Payment Plan, Line 14 lists this calculation as
Principal Limit less Closing costs, Discharge of Liens, Loan Advances, Servicing Fee Set
Aside, Repairs, and First Year Property Charges. The Closing Costs, Discharge of
Liens and Loan Advances all make up the original Outstanding Loan Balance.
Using an example loan with a Principal Limit of 250,000.00, an Outstanding Loan
Balance of 75,000.00, a Servicing Fee Set Aside (SFSA) of 5,000.00, and 500.00
each for Repairs and First Year Property Charges the calculation works as follows:
$250,000.00 - $75,000.00 - $5,000.00 - $500.00 - $500.00 =$169,000.00
Principal Limit - Outstanding Loan Balance - SFSA - Repair &First Year =Net Principal Limit
This calculation will be revisited towards the end of this letter to better describe the
Growth calculation process.
Principal
imit
The Principal Limit is equal to the total amount of funds available to a borrower at the
very outset of the Reverse Mortgage prior to any closing and loan origination deductions.
You will notice in the Exhibit 1 Payment Plan this figure is listed on the first line. It is this
figure that will grow each month by one-twelfth of the current interest rate plus .5%. This
37
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
70/92
Bankof
merica
-.
. .
•
alculation is set down by the Department of Housing and Urban Development (HUD)
and is listed under section 1.7 of the Loan Agreement included with this letter.
As stated above, the Principal Limit undergoes this calculation once a month (at the end
of business on the last day
o
the month). The product of this calculation, the Growth, is
then added back into the existing Principal Limit value to increase the Principal Limit to a
new value. Below is an example of how this calculation works:
$250,000.00 * (3.5% + .5%) 12
=
$833.33
Principal Limit * Current rate + .5% /
2
= Growth
$250,000.00
+
$833.33
=
$250,833.33
Principal Limit + Growth =New Principal Limit
Outstanding Loan Balance
Each month Interest, Mortgage Insurance, and the Monthly Servicing Fee accrue on the
Outstanding Loan Balance. The Monthly Servicing Fee is a set amount; however,
interest and Mortgage Insurance (MIP) are based on rates, existing balances, and
advances and will vary over the life of the loan. These monthly accruals are added to
the eXisting Outstanding Loan Balance on the last day of the month similar to the way
in
which Growth is added to the Principal Limit. The interest and MIP calculations are a bit
more complex as they differ between monthly and daily accruals
Interest
Interest accrues based on the current interest rate in effect at the time which interest is
calculated. As mentioned above the calculation method may vary slightly depending on
whether the monthly
or
daily (or both) calculation methods are used. The monthly
interest calculation is based on the prior month's ending Outstanding Loan Balance,
while the daily interest calculation is used to calculate interest on advances made from
the loan. The daily calculation is used to ensure borrowers are only charged interest for
the number of days the advance was outstanding. An example of how this calculation
will work on loan with a 75,000.00 Outstanding Loan Balance from the previous month
end and a 2,000.00 advance taken on the 5
th
day
o
a 30 day month is as follows:
$75,000.00 * 3.5% 12
=
$218.75
Prior Month's Ending Balance * Current Interest Rate I
12 =
Monthly Interest
$2,000.00 * 3.5% 365 * 25 = $4.79
Advance Amount * Current Interest Rate
1
ofdays in the year * # ofdays outstanding =Daily Interest
$218.75
+
$4.79
=
$223.54
Monthly Interest
+
Daily Interest =Total Interest Accrual
In the example above there was Monthly and Daily interest accrued on the loan. These
two figures were then added together to provide the Total Interest Accrual for the month
which is the figure that would reflect on the monthly statement.
MIP
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
71/92
Bankof
merica
-
• •
ortgage Insurance works much the same way interest does. There is only one notable
difference between the two. While the rate used to calculate interest will vary over the
life of the loan, the MIP calculation uses a set .5% rate to calculate. Using the same
example listed above for the interest accrual, the MIP calculations below show how this
calculation would work:
$75,000
*
.5%
2
=
$31.25
Prior Month's Ending Balance
*
.5% / 12 =Monthly MIP
$2,000.00 * .5% I 365 * 25 =$0.68
Advance Amount *
.5% /
# ofdays in the year * # ofdays outstanding = Daily MIP
$31.25 + $0.68 = $31.93
Monthly MIP + Daily MIP =Total MIP Accrual
Servicing Fee
The monthly Servicing Fee amount was set at closing and will accrue
on
the Reverse
Mortgage at the end of each month along with the interest and MIP. Using the
calculations listed above with a monthly Servicing Fee
of
30.00, the new Outstanding
Loan Balance would reflect
as
$75,000.00 + $2,000.00 + $223.54 + $31.93 + $30.00 =$77,285.47
Prior Month's Balance
+
Advance
+
Interest
+
MIP
+
Servicing Fee = ewOutstanding Loan Balance
Servicing Fee Set Aside
The Servicing Fee Set Aside is a value calculated at closing. It represents the total
estimated funds that need to be set aside from the Principal Limit to ensure the monthly
Servicing Fee can be accrued on the Outstanding Loan Balance every month. This
figure is also listed on the Exhibit 1 Payment Plan and undergoes its own set of monthly
calculations.
Before describing the calculations used on the Servicing Fee Set Aside (SFSA) it is
important to discuss how the initial SFSA shown on the Payment Plan was calculated at
closing. The initial value was calculated using the monthly Servicing Fee amount, the
Expected Average Interest Rate (also listed on the Payment Plan), and the number of
months remaining until the youngest borrower's 100
th
birthday. You will notice however
that the monthly
e r v i i n ~
Fee amount multiplied by the number of month's until the
youngest borrower's 100 birthday produces a much higher figure than that listed on the
Payment Plan. This is because the SFSA grows every month as well and this monthly
growth was taken into account when the initial SFSA value was calculated at closing.
The Servicing Fee Set Aside goes through a set of calculations each month to arrive at
new figures. First the monthly Servicing Fee being added to the Outstanding Loan
Balance is deducted. Then the Growth on the SFSA is calculated and added back to the
remaining balance. For example:
$5,000.00 - $30.00 =$4,970.00
SFSA - Monthly Servicing Fee =Adjusted SFSA
$4,970.00
*
(4.3%
+
.5%) 12
=
$19.88
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
72/92
BankofAmerica
.
..
djusted SFSA
*
Expected Average Interest Rate + .5% /
2 =
SFSA Growth
$4,970.00 + $19.88
=
$4,989.88
Adjusted SFSA
+
SFSA Growth =
New
SFSA
As listed above, the SFSA value decreased and then grew using the Expected Average
Interest Rate as opposed to the current interest rate used to calculate Growth on the
Principal Limit. The Expected Average Interest Rate is another value determined and
set at closing. It will remain the same value for the life
of
the loan.
Repairs and First Year Property Charges
If there are repairs required as a stipulation to obtaining the Reverse Mortgage, or if a
borrower has elected to set aside funds from the Principal Limit to pay the property taxes
and homeowner's insurance for the first year
of
the loan, the Repair and/or First Year
Set Asides are created. These values will decrease as the necessary repairs, taxes, or
insurance are paid.
Net Principal imit (Revisited)
Now that each
of
the components
of
Growth have been discussed, refer back to the
initial Net Principal Limit calculation discussed at the beginning
of
this letter. The
calculation is listed as:
$250,000.00 - $75,000.00 - $5,000.00 - $500.00 - $500.00 =$169,000.00
Principal Limit
-
Outstanding Loan Balance
-
SFSA
-
Repair
&
First Year = Net Principal Limit
Using this as
an
example, the preceding sections have covered how each
of
these
figures grows and adjusts. After the next month end, the Net Principal Limit of
169,000.00 changes to 167,560.05 by using the calculation:
$250,833.33 - $77,285.47 - $4,989.88 - $500.00 - $500.00 = $ 167,557.98
Principal Limit
-
Outstanding Loan Balance
-
SFSA
-
Repair
&
First Year
=
Net Principal Limit
On the surface, this may seem to be a decrease in the Net Principal Limit. However, if
we take into consideration that there was a 2,000.00 advance added to the loan .
balance (see Outstanding Loan Balance section), we can see there is actually an
increase
in
the Net Principal Limit
of
557.98. To better highlight this, let's run through
another month of calculations using the new figures provided above.
Principal
imit
$250,833.33 * (3.5% + .5%) 12
=
$836.11
Principal Limit
*
Current rate + .5% /
2 =
Growth
$250,833.33+ $836.11= $251,669.44
Principal Limit + Growth
=
New Principal Limit
Outstanding Loan Balance
$77,285.47
*
3.5% 12 = $225.42
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
73/92
Bankof
merica
• •
rior Month's Ending Balance * Current Interest Rate
/ 12 =
Monthly Interest
$77,285.47 * .5% 12 = $32.20
Prior Month's Ending Balance * .5% / 12 =Monthly MIP
$77,285.47 + $225.42 + $32.20 + $30.00
=
$77,573.09
Prior Month's Balance
+
Interest
+
MIP
+
Servicing Fee
=
New Outstanding Loan Balance
Servicing
Fee
Set Aside
$4,989.88 - $30.00 =$4,959.88
SFSA - Monthly Servicing Fee
=
Adjusted SFSA
$4,959.88 * (4.3%
+
.5%)
12
=$19.84
Adjusted
SFSA
* Expected Average Interest Rate +
.5% / 12
=
SFSA
Growth
$4,959.88 + $19.84 =$4,979.72
Adjusted SFSA + SFSA Growth =
ew
SFSA
Net Principal Limit
$251,669.44 - $77,573.09 - $4,979.72 - $500.00 - $500.00 =$168,116.63
Principal Limit
-
Outstanding Loan Balance
-
SFSA
-
Repair
&
First Year =Net Principal Limit
The calculations listed above differ than those previously discussed only in that there
was no advance. In this scenario the Net Principal Limit changed from $167,557.98 to
$168,116.63, an increase of $558.65. This value will be reflected on the monthly
statement as the Net Principal Limit Increase just like the $557.98 figure did. This figure
reflects the net increase
in
the funds available to a borrower at any given time, or the
Growth.
I hope this letter has served to clarify the Growth process. The calculations referenced in
this letter are quite complex and as such your Reverse Servicing department welcomes
any questions you may have regarding the calculations. Please do not hesitate to
contact one of our specialists at the toll free number listed below with questions
regarding Growth or any other facet of your Reverse Mortgage.
iZ
aren Yantis
Bank of America
Reverse Servicing Division
190 Queen Anne Ave. N Suite 400
Seattle, W 98109
1-866-863-5224
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
74/92
Negative Growth
There is also the potential for the Net Principal Limit to begin decreasing. This phenomenon is
referred to as Negative Growth and will only occur on a Reverse Mortgage when certain
conditions are place, namely that the current interest rate is less than the expected average
interest rate and that the Net Principal Limit has a relatively small existing balance. When the
HUD calculations are used on a monthly basis to calculate the available funds (Net Principal
Limit), they will begin to decrease even though no advances were taken on the account. For
example, using the loan figures listed below we can see the Net Principal Limit is relatively small.
$250,000.00 - $243,000.00 - 5,000.00 - $500.00 - $500.00
=
$1,000.00
Principal Limit - Outstanding Loan Balance - SFSA - Repair &First Year = etPrincipal Limit
If the current interest rate was 3.5% and the expected average interest rate was 5.5% the
calculations would reflect as follows:
Principal imit
$250,000.00
*
(3.5%
+
.5%)
12
=
$833.33
Principal Limit * Current rate + .5% / 2 = Growth
$250,000.00
+
$833.33
=
$250,833.33
Principal Limit + Growth =
ew
Principal Limit
Outstanding Loan Balance
$243,000.00
*
3.50/0 12 = $708.75
Prior Month's Ending Balance
*
Current Interest Rate
/ 12
= Monthly Interest
$243,000.00
*
.5% 12 = $101.25
Prior Month's Ending Balance
* .5% / 12 =
Monthly MIP
$243,000.00
+
$708.75
+
$101.25
+
$30.00
=
$ 243,840.00
Prior Month's Balance + Interest + MIP + Servicing Fee =
ew
Outstanding Loan Balance
Servicing Fee Set Aside
$5,000.00 - 30.00
=
$4,970.00
SFSA - Monthly Servicing Fee =Adjusted SFSA
$4,970.00
*
(5.5%
+ .50/0 12 =
$24.85
Adjusted SFS
*
Expected Average Interest Rate
+ .5% / 12 =
SFSA Growth
$4,970.00 + $24.85
=
$4,994.85
Adjusted SFSA
+
SFSA Growth
=
ew
SFSA
Net Principal
imit
$250,833.33 - $243,840.00 - $4,994.85 - $500.00 - $500.00 = $998.48
Principal Limit
-
Outstanding Loan Balance
-
SFSA
-
Repair & First Year =
et
Principal Limit
In
this scenario the Net Principal Limit shows a clear decrease from 1,000.00 to 998.48. So
long as the expected average interest rate remains higher than the current interest rate, the
available Net Principal Limit will continue to decrease.
8/20/2019 HUD HECM Complaint Appendix II Exhibits 22-42
75/92
Bank o America has contacted the Department o Housing and Urban Development to notify
them o the calculation results and Negative Growth. However, there is a reimbursement process
n place to ensure our borrowers are not impacted by the results o Negative Growth. You will
find a Negative Growth Reimbursement Form attached to this letter. To seek reimbursement for
any funds lost due to Negative Growth all you need do is sign the form and send it back to the
Reverse Servicing Department. Doing so authorizes the Reverse Servicing Department to
release the remaining funds to you (to prevent further Negative Growth deductions) and to
reimburse you for funds lost to Negative Growth. Reverse Servicing Specialists will ensure you
are fully reimbursed for the most recent highest dollar amount available n your Net Principal
Li