The Federal Housing Administration ("FHA"), an organizational unit of the U.S. Department of Housing and Urban Development ("HUD"), is planning to sell certain single family mortgage loans by sale on March 20, 1996 ("Sale"). The undersigned understands and acknowledges that, before it can register for, or make an offer to bid on any of the loans at the Sale, the undersigned (whether an individual or an entity) must meet certain requirements to be a "qualified bidder." The information requested herein is being requested for the purpose of providing FHA/HUD with information to determine whether the undersigned is a qualified bidder. All or part of the information provided on this form may also be subject to disclosure under the Privacy Act of 1974, 5 U.S.C. § 552(a). Providing the requested information is voluntary; however, failure to furnish all of the requested information may result in the prospective purchaser, or agent, if any, not being permitted to bid at the Sale or other loan sale initiatives and/or not receiving notice of future loan sale initiatives.
NOTICE: Anyone who knowingly or willfully makes false or fraudulent statements or representations in connection with the disclosures or certifications will be referred to the Office of Inspector General and/or the appropriate law enforcement officials for investigations and legal enforcement. The penalty for knowingly making a false statement or report shall be a fine of not more than $1,000,000 or imprisonment for not more than 30 years, or both. 18 U.S.C. Sections 1001, 1007, and 1014.
NOTE: The following information is being solicited with respect to the individual or entity whose name should appear on all Loan Sale Agreements as the Buyer ("Buyer") and to whom the loans will be transferred after the Sale:
I. Buyer Information (identify Buyer exactly as the name will appear on all Loan Sale Agreements):
A. ____________________________________________________________
Name of Buyer Entity (or Individual, if Buyer is purchasing in its individual capacity)
B. ____________________________________________________________
Corporate or Partnership Designation and State of Formation/Origination (if applicable)
C. ____________________________________________________________
Name of Person who will execute Loan Sale Agreements on behalf of Buyer
D. ____________________________________________________________
Title of Person who will execute Loan Sale Agreements on behalf of Buyer
E. ____________________________________________________________
Address of Buyer
F. ____________________________________________________________
City, State, Zip Code
G. ______________ H. _____________ I. _______________________
Phone Telecopy Buyer Tax I.D./S.S. No.
II. Buyer Qualification. The undersigned understands that if it is determined to be a "qualified bidder" for the Sale, its status as such does not necessarily mean that it will be a "qualified bidder" for any other loans offered in any other FHA/HUD loan sale. The undersigned also understands that its status as a "qualified bidder" for any other FHA/HUD loan sale does not necessarily mean that it will be a "qualified bidder" for the Sale. ONLY THE NAMED BUYER IN THIS QUALIFICATION STATEMENT WILL BE ALLOWED TO BID FOR LOAN PACKAGES AT THE SALE. Buyer hereby certifies, represents and warrants to FHA/HUD that it is a "qualified bidder" based on Buyer's satisfaction of one or more of the following qualifying requirements 1 through 6. Buyer must check one or more of the following qualifying statements 1 through 6 to register to bid at the Sale and to qualify as a "qualified bidder" for the loans being sold in the Sale (CHECK ALL THAT ARE APPROPRIATE):
(____) 1. Buyer is a corporation, partnership or business trust with total assets in excess of $5,000,000, or a wholly-owned subsidiary of such an entity, and was not formed for the specific purpose of acquiring the loans to be offered for sale at the Sale.
(____) 2. Buyer is a bank, trust company, savings and loan association, insurance company, surety or guaranty company, savings institution, registered investment company or business development company as defined in the Investment Company Act of 1940, Small Business Investment Company, licensed small business investment company or private business development company as defined in the Small Business Investment Company Act of 1958, as amended, or a registered broker or dealer.
(____) 3. Buyer is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the loans to be offered for sale at the Sale, whose investment decisions are directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of purchasing the loans offered for sale at the Sale.
(____) 4. Buyer is a business entity, all of whose equity owners are entities that are "accredited investors" as defined in Rule 501 of the Securities Act of 1933, as amended ("Act") or, in the event any equity owners are individuals, who (i) have a net worth, or joint net worth with his or her spouse, in excess of $1,000,000, or (ii) had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years, and has a reasonable expectation of reaching the same level of income in the current year.
(____) 5. Buyer is an individual (i) whose individual net worth, or joint net worth with his or her spouse, currently exceeds, and at the time of purchase of the loans will exceed, $1,000,000, or (ii) who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years, and has a reasonable expectation of reaching the same level of income in the current year.
(____) 6. Buyer is a sophisticated entity either (i) that is in the business of buying, originating or selling some or all of the types of loans being offered for sale at the Sale or (ii) that otherwise deals in assets identical or similar to the types of loans being offered for sale at the Sale in the ordinary course of such Buyer's business. The term "sophisticated" for purposes of this certification means that Buyer by itself or with its advisors has such knowledge and experience in financial and business matters relating to the loans of the type being sold at the Sale to enable Buyer to evaluate the merits and risks of a purchase of the loans and to make an informed decision with respect thereto.
By executing this Qualification Statement, Buyer certifies, represents and warrants to FHA/HUD that EACH of the following statements A through and including G is true and correct as to such Buyer:
A. Buyer has such knowledge and experience in the origination, sale and/or purchase of performing and non-performing or distressed loans, including, without limitation, loans secured by real estate or other types of collateral, as well as knowledge and experience in other financial and business matters, as to enable Buyer to utilize the information made available in connection with the Sale to evaluate the merits and risks of a prospective acquisition and ownership of the loans to be offered for sale at the Sale and to make an informed decision with respect thereto.
B. Buyer acknowledges, understands and is able to bear the economic risks associated with the acquisition and ownership of the loans, including, without limitation, the risk of a total loss of Buyer's purchase price for the loans and/or the risk that Buyer may be required to hold the loans for an indefinite period of time.
C. Buyer acknowledges and agrees that, whether or not it chooses to review any information made available to it regarding the loans being offered for sale at the Sale, the Buyer has the ability and shall be responsible for making its own independent investigation and evaluation of the loans and the economic, credit or other risks involved in a purchase of the loans, including, without limitation, the restrictions on resale or other liquidation any of the loans purchased at the Sale.
D. Buyer is bidding for, and will purchase the loans for its own account and not for resale with a view toward distribution within the meaning of the Securities Act of 1933, and Buyer's ownership of the loans and intended use of the loans will comply fully with all applicable federal and state laws, regulations and requirements, including, without limitation, any and all laws and/or restrictions imposed on resale of the loans by federal and state securities or Blue Sky laws, rules, regulations or requirements.
The only exception to the statement that the Buyer is purchasing the loans for its own account and not for resale is the circumstance set forth in Answer #15 of the Question and Answer Section of the Supplement dated March 19, 1996, of which this Special Qualification Statement is a part. Question and Answer #15 relate specifically to the execution of Transfer Documents (as defined in the Loan Sale Agreement) in favor of entities other than the Buyer. To qualify for this limited exception, the Buyer must comply with all requirements set forth in Answer #15.
E. Buyer acknowledges and agrees that (i) the proposed sale of the loans at the Sale does not involve, nor is it intended in any way to constitute, the sale of a "security" within the meaning of the Act or any applicable federal or state securities laws, (ii) no inference as to whether the loans are or are not "securities" under such federal or state securities laws shall be drawn from any of the certifications, representations or warranties made by Buyer in this Qualification Statement for purposes of qualifying Buyer as a "qualified bidder" at the Sale, (iii) it is not contemplated that any filing will be made with the Securities and Exchange Commission or pursuant to the Blue Sky or securities laws of any jurisdiction, and (iv) if the loans are securities, they may not be resold or otherwise transferred by Buyer except in accordance with any and all applicable securities and Blue Sky laws.
F. Buyer represents and warrants that, if it is an entity, it has full authority to deliver this Qualification Statement and that the individual executing this Qualification Statement has full authority to do so on behalf of the undersigned and all principals thereof, and that, to the best of such undersigned's knowledge, all information provided herein is true, complete and correct. The undersigned further understands that this Qualification Statement is being furnished to permit FHA to qualify the Buyer and, in connection therewith, the Buyer authorizes and has the authority to authorize, FHA and its agents to conduct credit investigations of the Buyer and all principals of the Buyer through appropriate third-party reporting agencies.
G. Buyer acknowledges and agrees that FHA has the right to request additional or updated information at any time, including, without limitation, financial statements and/or confirmation of the representations, warranties and certifications made herein, and, in its sole discretion, to refuse to qualify any prospective bidder who, in FHA's sole judgment, does not have the requisite knowledge and experience to enable such bidder to evaluate the merits and risks of purchasing and to make an informed decision with respect to the purchase of the loans to be offered for sale at the Sale.
H. Buyer acknowledges and agrees that the mortgage loans may only be transferred and assigned to a person or entity that is either an FHA-approved mortgagee or who has entered into a contract for the servicing of these loans with an FHA approved servicing mortgagee. These loans shall be serviced in accordance with the provisions in Article VI of the Loan Sale Agreement. These sales and servicing provisions shall continue to apply unless and until the loan documentation is modified, for consideration, with consent of the mortgagor, or the loan is refinanced or satisfied of record.
Buyer understands that the above certifications, representations, and warranties are made for the purpose of qualifying Buyer as a "qualified bidder" at the Sale. Buyer hereby represents that the above certifications are true and correct in all respects as of the time they are made and as of the time Buyer purchases any of the loans offered for sale at the Sale and understands that FHA/HUD is relying upon the truthfulness and correctness of such statements.
Dated:_____________________, 1996
BUYER:
By:________________________________
Printed Name:______________________
Print Title:_______________________