REPAIR ESCROW AGREEMENT THIS REPAIR ESCROW AGREEMENT (the “Agreement”), including the provisions below is made this _________ day of ______________, 20________, between you ___________________________________________________________________________ and Pacific Union Financial, LLC (the “Lender”) to establish the conditions under which the Lender will allow repair escrow funds which will come from the Seller, you or others at the closing of the mortgage or deed of trust on the property listed below (the “Property”) to be held in trust by the Lender after loan closing. The subject Property is located in the County of _____________________________________ State of _______________ and is described as:___________________________________________________. 1. Payments required under the executed mortgage or deed of trust must be made by you on the date specified, even though the proposed repairs and/or improvement may not be completed. 2. The Lender intends to request insurance from the Department of Housing and Urban Development (“HUD”) under the provisions of Section 203(b) of the National Housing Act; therefore, you agree to conform to, and to cause improvements to be constructed in conformance with all HUD requirements. 3. Cost of repairs: a. The cost of repair(s) as indicated on the appraisal report and construction contract is $_________. b. The reserve contingency required by HUD (10% of the estimated cost of repairs) is $ _____________________. c. Escrow Repair Administration Fee, the estimated cost of the final inspection(s) by the fee inspector or appraiser (if applicable) after all of the work has been completed is $_______. d. The total escrowed funds for the property listed above is (the sum of 5a, b and c) is $____________. 4. If the repair escrow will be provided by the seller, the amount to be advanced by the Seller, as provided in the contract of sale or other repair escrow agreement as approved by both parties, must be approved by the Lender prior to closing. 5. The Lender will place the entire amount of the repair escrow plus any reserve amount as required by the Lender in a trust or escrow interest bearing account (hereafter called, “escrowed funds”). 6. Any changes to the approved repairs must be approved in writing by the Lender prior to the beginning of the work. All requests must be in writing and sent to [email protected]. HUD REO with Repair Escrow Agreement Revision Date 10-23-2013 7. You and/or the Contractor will cause all improvements to be made in a workmanlike manner and in accordance with all applicable statutes and regulations. All licenses, permits and privileges required by local governmental authorities must be obtained by you prior to closing. 8. All repairs must be completed within 90 days of closing. The date of estimated completion is _____________. If exterior repairs are needed, the 90 days may be extended due to inclement weather, with the prior written consent of the Lender. 9. If you fail to complete the required repairs within 90 days of closing or such additional time as is has been consented to by the Lender in writing or the repairs are unsatisfactory, the Lender will apply the escrow funds to reduce the outstanding principal balance of the Loan. Payments required under the executed mortgage or deed of trust must continue to be made by the you on the date specified. 10. Representatives of the Lender and or HUD representatives will have the right to enter upon the property at all times during the period of improvements and/or repair completion to determine whether the work conforms with this agreement and to determine the amount of the escrowed funds to be released by the Lender. 11. Upon satisfactory completion of repairs contact Customer Service at 1-877-516-7998 to request a copy of the Escrow Completion Package. Customer service will advise you that all required Escrow Completion Package documents, from you and/or the contractor, must be submitted as follows: a. Via email: [email protected] b. Fax: 469-522-3003 c. Mail: Pacific Union Financial, LLC Escrow/Draw Specialist 1603 LBJ Freeway, Suite 500 Farmers Branch, TX 75234 12. Upon Lender receipt of the completed required Escrow Completion Package documents, the Lender will order the final inspection. The property must be available to the HUD Fee Inspector or Appraiser to complete the final inspection. 13. If the final inspection confirms that repairs have been completed in a manner that meets HUD’s minimum property requirements, the Lender or HUD’s Asset Manager (when applicable) will disburse the escrow funds as follows: a. To you if you performed minor repairs and have provided a receipt for the items purchased to make the repairs; b. To the contractor/vendor that performed the repairs, if the Escrow Completion Package documents are on file. 14. If actual repair costs are less than the amount escrowed, payment of the escrow balance will not be paid directly to you. The balance of the escrow will be applied to reduce the outstanding principal balance of your mortgage loan. Payments required under the executed mortgage or deed of trust must continue to be made by the you on the date specified. HUD REO with Repair Escrow Agreement Revision Date 10-23-2013 15. If the escrow is inadequate to make the necessary repairs it is your responsibility to pay the additional cost. 16. You will furnish such records, contracts, bills and other documents related to the Property and the improvements as the Lender or HUD may require. 17. Without prior written consent of the Lender, no materials, equipment, fixtures or any part of improvements financed with this loan will be purchased or installed subject to conditional sales contracts, security agreements, lease agreements or other arrangements whereby title is retained or the right is reserved or accrues to anyone to remove or reposes any item, or to consider it as personal property. 18. You will cause either this instrument or the construction contract under which the improvements are to be made to be filed in the public records, if the effect of recording will be to relieve the mortgaged property from mechanics’ and materialmen’s liens. Before any advance under this Agreement, the Lender may require you to obtain acknowledgment of payment and releases of lien from the contractor and all subcontractors and materialmen dealing directly with the principal contractor (if applicable). The releases will cover the period down to the date covered by the last advance, and concurrently with the final payment for the entire project. These acknowledgments and releases must be in the form required by local or state lien laws and must cover all work done, labor performed and materials (including equipment and fixtures) furnished for the project. 19. In the event of any Stop Notices, Notices to Withhold, Mechanics Liens, or claims of lien are filed against the property, the Lender, after five (5) days notice to you of its intention to do so, may pay any or all of such liens or claims, or may contest the validity of any claim. 20. Your failure to perform under the terms of this Repair Escrow Agreement will make the entire loan amount and any unpaid interests and costs, at the option of the lender, due and payable. 21. ATTACHED EXHIBITS. The following Exhibits are attached to this Agreement: Exhibit A: HUD REO Inspection report HUD Repair Escrow/Disclosure Addendum HUD Property Disclosure and Repair Escrow Pages 1 & 2 of the Uniform Residential Appraisal Report and/or any applicable attachments to the appraisal report Exhibit B – Pacific Union Addendum to Escrow Repair Agreement IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first above written. _____________________________________ Mortgagor Date _____________________________________ Pacific Union Financial, LLC Date HUD REO with Repair Escrow Agreement Revision Date 10-23-2013 ___________________________________________ Mortgagor Date