Member Agreement 20070301[1]

NACA MEMBERSHIP AGREEMENT1 I. INTRODUCTION The Neighborhood Assistance Corporation of America ("NACA") and the Neighborhood Stabilization Fund, Inc. (“NSF”) are affiliated Massachusetts non-profit membership corporations. Through community outreach and aggressive advocacy activities, NACA has identified, exposed and opposed predatory lending policies and exploitative practices by financial institutions. Largely as a result of NACA’s advocacy activities, NACA provides the best homeownership program in America, including an incredible mortgage product, comprehensive pre- and postpurchase counseling, and other services and benefits for people who become members of NACA (“Member” or “Members”). NACA’s homeownership services were established to provide affordable homeownership opportunities for low-to-moderate-income persons and people purchasing in low-to-moderateincome communities. Members who satisfy the requirements of the NACA Program are eligible to obtain mortgage loans to purchase, purchase and renovate a home, or refinance predatory loans on their home, at a below-market interest rate with no down payment, no closing costs, no mortgage fees, and no private mortgage insurance premiums. Members are also also eligible to receive additional benefits developed by NACA in its effort to bring full economic justice to Members, including post-purchase counseling and financial assistance (the “NACA Program”). Since NACA does not charge Members for its services, NACA raises the money it needs to operate and administer the Program from a variety of sources. Some of these sources include mortgage brokerage, real estate brokerage, and title insurance brokerage fees (paid by persons other than than Members), and Membership Dues. NACA encourages Members to to contribute additional funds to support all of NACA’s programs and advocacy. Such additional support is greatly appreciated. This Membership Agreement is very important and should be carefully read and understood because it sets forth your rights, and the limitation thereof, in the NACA Program and with respect to NACA and NSF. By signing this Membership Agreement, you acknowledge your agreement with these terms as a condition of becoming a Member of NACA and participating in all aspects of the NACA Program. People interested in NACA can obtain information on NACA and attend a NACA Homebuyer Workshop without becoming NACA NACA Members. A Member in good standing can begin the home buying process or refinancing, access the Membership Benefits, work with a NACA Mortgage Consultant and/or other NACA staff, or access any other aspect of the NACA Program available to Members. For a Member to be in good-standing, s/he must have completed this Membership Agreement, be current on his/her Membership Dues if applicable, and adhere to NACA’s requirements and conditions.

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This Membership Agreement is subject to modification by NACA from time to time so it may differ from prior versions. Hence, it is important that that you obtain the most recent version and read it carefully prior prior to signing.

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3/1/2007 Copyright NACA

II. NACA MEMBERSHIP NACA Members are individual residents in a household who are jointly pursuing, or have obtained homeownership or refinancing, through NACA, or persons who join for other reasons and benefits: “Participating Members” are persons in a household who have not yet purchased a home; “Homeowner Members” have purchased or refinanced through the NACA Program; and, “Community Members” support NACA’s mission and access non-homeownership benefits. NACA provides an extensive array of benefits benefits to all Members and is working to provide additional benefits. Participating and Homeowner Members are also entitled to any non-homeownership benefits provided by NACA. The benefits and Member responsibilities are described below as they relate to the Member’s status in the NACA Program: A. Participating Member Benefits - Home buying Program The NACA Program consists of comprehensive housing counseling for purchase and refinance to help Members decide whether and how to purchase a home, how much of a monthly mortgage payment they can afford, and how to address repairs issues to a home. NACA’s Participating Members are eligible for a broad range of homeownership services including: extensive written materials regarding home buying process and issues; homebuyer classes, which include important real estate information; one-on-one comprehensive financial and credit counseling; counseling and assistance regarding documentation necessary to apply and qualify for a mortgage; Purchase Workshops, which include information on the housing search, use of real estate agents, home repair issues, mortgage submission and processing, and NACA’s post-purchase program; and, other assistance as may be important to move Participating Members through the mortgage and homeownership process. Homeowner Members are also entitled entitled to extensive postpurchase assistance reserved exclusively for these Members. NACA provides other benefits to its Members whether or not the Member purchases and finances a home, or refinances through the NACA Program.

NACA services to its Members are free. Members are required to pay for credit reports, which are credited to the Member at closing, 2 and home inspections. Renovation of a Member’s home requires payment for services provided to assist the Member’s renovation project, including but not limited to: administration, work write-ups, inspections during renovation (Participating Lenders pay up to $600 of these inspection costs), and other nonconstruction costs. These costs may have to be paid by the Member or may be financed as part of the mortgage . Members will likely be required to provide a deposit when they sign a purchase and sale contract, which is applied towards the purchase of the home. NACA is not responsible for any of the costs incurred by a Member, including other fees related to the purchase, financing, refinancing or renovation of a home, and NACA will not reimburse or indemnify the Member for any costs if a Participating Lender denies the loan application or for any other reason. Mortgage Application and NACA Credit Access: The Member’s request to submit a mortgage application to a Participating Lender will be considered an application for NACA Credit Access, and no further paperwork or signature 2

NACA has negotiated a reduced-rate fee for credit reports charged by the reporting agencies; these fees are collected by NACA in order to purchase purchase a report. The credit report is used as part of the NACA NACA Program and is not provided to the Member.



shall be required for the application to be submitted. For NACA to review and accept the the Member’s application for NACA Credit Access, the Member must be NACA Qualified, have a signed and executed Purchase and Sale Agreement, and have adhered to NACA’s other program requirements. The application for NACA NACA Credit Access is not a loan application application to a NACA Participating Lender. NACA may request that the Member’s information and documentation be updated in order to reconsider and/or approve an application for NACA Credit Access. The taking and submission of the mortgage application to a Participating Lender reflects approval of the NACA NACA Credit Access application. Regardless of the outcome of the application for NACA Credit Access, NACA is under no obligation to submit a mortgage application to a Participating Lender or any other lender. NACA’s approval of the Member’s application for NACA Credit Access does not guarantee that a Participating Lender will approve the loan application. The Member is free at any time to to apply directly for credit to any mortgage lender, including Participating Lenders or other lenders outside of the NACA Program. The Member can submit an application for NACA Credit Access in writing at their discretion at any time. NACA can either accept or reject the the application, within its sole discretion, and its decision is final and non-reviewable. If the Member’s application for NACA Credit Access is denied, NACA will communicate that to the Member and the Member may request a formal denial from NACA’s national office. office. A written denial must be requested before it can be processed. This may take some time, during which period NACA is not responsible for any costs, damages, or consequences associated with any delays. The Participating Member has the sole responsibility to apply for NACA Credit Access, complete a mortgage application, and make sure that all requested documents and information are timely provided. The act of submitting submitting a mortgage application to a Participating Lender is the application for NACA Credit Access, and no other actions (including accessing credit reports as Members move through the NACA Program) by NACA staff, its agents, or associated vendors constitute an application for credit or NACA Credit Access. As part of a Member’s application for NACA Credit Access, an investigation of the Member’s credit standing is conducted, which includes obtaining a consumer credit report that discloses information concerning a Member’s credit standing, creditworthiness, and credit capacity. The nature and scope of any such investigation investigation will be furnished to to a Member Member upon written request made within a reasonable period of time. If an application for NACA Credit Access is denied due to an unfavorable consumer credit report, the Member will be advised of the identity of the Consumer Reporting Agency from whom the credit report was received and of their right to request within sixty (60) days the reason for the adverse action. This notice is given pursuant to the Fair Credit Reporting Act of 1970, as amended. B. Homeowner Members’ Benefits – Post-Purchase Program Benefits Participating Members can become Homeowner Members by purchasing a home through the NACA Program and meeting all NACA Program requirements. NACA provides extensive assistance to Homeowner Members after they purchase their home for as long as they have a mortgage through the NACA Program. This includes budget counseling, payment arrangements, and access to financial assistance. This post-purchase program is in contrast to standard Private Mortgage Insurance, which generally provides little or no benefit, counseling, or assistance (counseling or financial) to homeowners.



NACA provides Homeowner Members access to Home Save Counselors, who are available to work with them if they have budgeting issues, encounter serious financial difficulties, are late on their mortgage payments, or at risk of losing their home. NACA has established procedures with its Participating Lenders to provide opportunities for Homeowner Members to become current on their mortgage and save their home. This includes assistance with forbearance agreements, which consist of making additional payments to become current, and modification agreements, which restructure a mortgage so payments can become current over time. If necessary, NACA can also assist the Homeowner Members in selling their home even when the payoff would be less than the amount due, to avoid a more damaging foreclosure sale. In addition to this post-purchase counseling and assistance, NACA can make financial assistance available to Homeowner Members in the NACA Program who have suffered a serious financial setback and require financial help in order to retain their homes and prevent foreclosure. All NACA Homeowner Members who are Members Members in good-standing are eligible to apply for assistance if, at the time they seek assistance, they meet the following criteria and any other criteria established by NACA in its sole discretion: 1. The Homeowner Member occupies the property purchased through the NACA Program, and his/her membership is in good-standing; 2. The Homeowner Member has retained retained his/her mortgage mortgage through the the NACA Program, whether with the same lender or through a lender that purchased the mortgage. Persons who refinance their mortgage forfeit entitlement entitlement to assistance from NACA, the NSF Assistance, and post-purchase counseling and related benefits; 3. The Homeowner Member has suffered suffered a serious financial setback preventing him/her from making regular monthly mortgage payment; 4. The Homeowner Member demonstrates a willingness to overcome the setback, bring his/her mortgage current, and work with NACA’s Home Save Department; 5. The Homeowner Member does not have in excess of three months of mortgage mortgage assistance from NACA or NSF outstanding and unpaid; and 6. The Homeowner Member executes a promissory note and lien securing his/her promise to repay the assistance obtained from NACA, on such terms as NACA may establish. The Homeowner Member must must sign the Neighborhood Stabilization Agreement at mortgage application, which incorporates his/her agreement to repay any assistance that may be obtained. obtained. While the NACA lien ensures owneroccupancy and re-payment of the post-purchase financial assistance provided by NACA, it also protects Members from putting their home at risk with an unaffordable second mortgage. Since the NACA lien is considered a soft-second, a lender lender providing a second mortgage will ordinarily request that the NACA lien be subordinated to its its lien. NACA will not subordinate for debt consolidation and in most other circumstances, except for renovations to the home or for a Member’s education expenses. NACA will evaluate the Member’s financial situation, the terms of the second mortgage, and the proposed use of the funds in making its decision as to whether to subordinate. Hence, Members must understand that it is NACA Membership Agreement Page 4 of 15


very unlikely that they will be able to utilize any equity in their home to obtain a second mortgage. NACA has sole discretion on this issue and its decision is final and not subject to review or challenge in any court or arbitration proceeding brought by a Member. Serious financial setbacks include loss of a job or layoffs, unanticipated medical expenses, loss of tenants in a purchased property, or unanticipated significant home repairs. In such circumstances, the Homeowner Member applies for assistance to a Peer Lending Committee (“PLC”) established by NACA that is comprised of other Homeowner Members. As a condition of applying for assistance, the Homeowner Member may be required first to consult with a NACA counselor as well as attend a PLC meeting. The PLC follows guidelines established by NACA, including that the Homeowner Member can only apply for one month of mortgage payment assistance at a time. The decision to to allow or deny assistance is discretionary and not subject to review or challenge in any court or arbitration proceeding brought by a Member. The assistance received by a Homeowner Member accrues no interest, and there is no monthly repayment schedule unless specifically agreed upon at the time assistance is rendered. Repayment by a Homeowner Member must occur as soon as possible, but either before or when the Homeowner Member sells the property or refinances the mortgage. To secure repayment, NACA requires the Homeowner Homeowner Member to execute a promissory note, and NACA also places a lien on the Homeowner Member’s property. The lien is released and the promissory note discharged when the Homeowner Member repays the assistance in full or sells or refinances the home. Repayment of the the assistance is required even if a lien and/or promissory note has not been executed and/or recorded. Homeowner Members expressly authorize NACA to monitor their mortgage payments and payment status in order to protect the interests and performance of the NACA Program. NACA intends to operate the assistance substantially as described above, however, NACA may determine in the future that it is necessary or appropriate to change the criteria, payments and/or policies for various reasons, including to ensure compliance with applicable laws or other requirements, meet the changing needs and circumstances of the low- to- moderate-income persons and neighborhoods that NACA is dedicated to serve, and/or satisfy NACA’s other goals, organizational needs, and programs. NACA reserves the right to retroactively apply any such changes to future and existing Homeowner Members. Homeowner Members are encouraged to become part of a PLC as well as a Neighborhood Stabilization Committee (“NSC”) as they are established by NACA. An NSC is a NACA neighborhood association that usually consists of ten to twenty NACA Homeowner Members and other residents of the same neighborhood or area. The NSCs meet regularly, work together and form a powerful force in affecting neighborhood, city, and national issues, including such issues as government services, safety concerns, neighborhood events and other issues the NSC identifies. NACA staff and volunteers assist in the establishment and on-going activities activities of the NSCs. While NACA Homeowner Homeowner Members form the foundation of the NSC, they can and do include other community residents. NACA Membership Agreement Page 5 of 15


C. General Benefits - Other Benefits, Advocacy and Information NACA’s advocacy has provided the foundation and funding for its best in America homeownership program. This is consistent with its goals of improving housing, economic and living conditions, and opportunities for primarily low and moderate income persons and communities throughout the United States States and other countries. NACA shall address, develop, provide, and/or administer housing, financial, lending, credit, employment, community development, economic revitalization, educational, health care and other programs and services to increase the prosperity and quality of life of low and moderate income people and communities, particularly minority, and/or other persons who have may have been victimized by abusive lending practices and/or deprived of equal access to such opportunities, capital, and services. NACA is continually developing programs and benefits for its Members. NACA is working to to provide financial opportunities opportunities in the areas of banking services, credit cards, automobile financing and insurance, and other consumer financial products. NACA also, in its sole discretion, addresses economic and social justice justice issues in all areas of society.

To accomplish the above, NACA will continue to utilize direct, high-profile (often intentionally confrontational and uncompromising) advocacy campaigns that may include protests, demonstrations, actions, and/or engaging in litigation against persons or companies that discriminate against or victimize others. NACA will provide information, positions and/or opportunities for its Members regarding the above activities and/or relating to policies, legislation, initiatives, local and federal representatives, and persons to the greatest extent permitted by law and regulations. NACA also assists its Members in understanding and using internet technologies, including web and email access. This helps reduce the technology divide, improve Members’ opportunities, and is important in effectively utilizing the NACA Program. All Members must be aware of and understand these goals and activities since they constitute an essential mission of NACA. While NACA respects any person’s or Member’s right to disagree with these goals or tactics, any person seeking membership in NACA who strongly disagrees with NACA’s mission, methods of advocacy, and services are advised to discontinue pursuit of membership or homeownership through NACA. NACA. Joining NACA is an person’s expression of approval of NACA’s mission and tactics, and Members specifically authorize NACA to correspond with them on a regular basis to advise and update them on these and other activities and issues of interest.

III. MEMBERSHIP REQUIREMENTS To obtain the NACA mortgage and to receive all of NACA’s services and benefits for free, NACA requires all Members to retain membership in good-standing by satisfying, adhering to and agreeing to the below Membership requirements. The below requirements universally apply to Members. Other NACA Program and Membership criteria may vary slightly from office to office. NACA, in its sole and absolute discretion, determines whether a Member satisfies the requirements and procedures of the NACA Program and is qualified to obtain or retain membership. NACA reserves the right to deny, disqualify or terminate membership, benefits and services to a Member at any time, or to change NACA Program and membership NACA Membership Agreement Page 6 of 15


requirements to comply with applicable laws or other requirements, meet the changing needs and circumstances of the low- to- moderate-income persons and neighborhoods, and/or satisfy NACA’s other goals, organizational needs, and programs. NACA’s decisions regarding Membership, NACA Program procedures, requirements, and the compliance thereof are final and cannot be made the subject of any civil claim, suit, litigation, or arbitration brought by a Member (or a person whose membership has been denied or terminated) against NACA. These requirements include, without limitation: 1. Compliance with the policies, procedures, and requirements as set forth in this Membership Agreement and such policies, procedures and requirements as they are developed from time to time by NACA in its its sole discretion. Any changes become effective on the date specified by NACA and shall apply to all Members as determined by NACA; 2. Meeting all deadlines and NACA Program requirements, including scheduling and attending all required appointments and completing all required documentation on a timely basis; 3. Participation in at least five activities activities a year to support neighborhood stabilization initiatives and other issues in support of NACA’s Program and mission. Such participation may be required as a condition for the Member to be NACA Qualified. The Member can participate in whatever manner he/she feels comfortable. In this regard, the Member makes the following pledge upon execution of this Agreement, which will be signed at the initial counseling session: I pledge to participate with NACA in future community outreach and advocacy campaigns. I understand that community community advocacy is the major reason that NACA can provide America’s Best Homeownership Program including free individualized comprehensive housing services to its Members. I embrace NACA’s mission to revitalize communities, address financial exploitation, promote economic justice, and eliminate predatory and discriminatory lending practices. I therefore pledge to stand with NACA in pursuit of this mission. I will participate in at least five actions and activities a year, such as neighborhood outreach, rallies, demonstrations and public education during my home buying process and for as long as I have the loan I obtained through NACA. 4. All Members, including the applicant, co-applicant(s), and other household members who will live in the home, cannot own other property at the time of the closing on the home through the NACA Program; 5. Residence by the Member(s) in the home purchased or refinanced through the NACA Program for as long as the Member has a mortgage obtained through the NACA Program. Owner-occupied housing is fundamental to NACA’s NACA’s mission of stabilizing communities. To enforce this this requirement and prevent the the NACA Program from being abused by investors or others with no long-term interest in the community, NACA requires that a lien be placed on any property purchased through NACA Membership Agreement Page 7 of 15


the NACA Program, and that Member(s) execute a promissory note to NACA in an amount and upon such terms as are determined by NACA in its sole discretion to be paid if the the property is not owner-occupied (e.g. converted to an “investment”). You will need to sign the Neighborhood Stabilization Agreement that incorporates this lien and promissory note at mortgage application. The lien and/or note do not limit NACA or the lender from taking additional actions to enforce the owner-occupancy requirement, such as foreclosing on the mortgage or NACA’s lien. NACA will will release the lien upon the sale or refinancing of the house upon payment of any postpurchase received by the Member; 6. Payment of the NSF Fee/Membership Dues Dues as stated in Section IV herein; 7. Membership in NACA does not carry with it any rights to participate or vote in the election of NACA’s Directors, Officers, or on any amendments to its Bylaws or policies or procedures. Members are not empowered to participate in any other corporate matter or affair, unless specifically identified and agreed to by NACA. Members are not entitled to any financial statements or information from NACA regarding corporate affairs, programs, other Members or persons involved in any aspect of the NACA Program, or use of funds including Membership Dues except to the extent required by law; 8. Execution of the Member’s Member’s Authorization Authorization form; 9. Members are prohibited from paying any other fee or making any other payment to a NACA employee, independent contractor or approved vendor in the NACA Program, other than those specifically authorized in writing under the NACA NACA Program. NACA, at its discretion, can disqualify Members from the NACA Program and take other appropriate action if the Member pays any unauthorized fee or payment. Any other payments must be approved in advance in writing by NACA’s national office. Members are to contact NACA’s Member Services Coordinator at 1-888-297-5568 if they are requested to make any other payment or make payment to any person other than NACA in connection with the NACA Program; 10. Refrain from engaging in any conduct deemed by NACA to be harmful, threatening, demeaning, or contrary to its interests, staff, mission, and agents; and 11. Execution by the Member of this Agreement, Agre ement, whereby the Member forever and fully releases, discharges, and holds harmless NACA, its affiliates, officers, and employees from any and all damages, liability, or claims of any kind resulting from the Member’s participation in the NACA Program, in accordance with the terms and conditions further set forth below in this Membership Agreement. Because these NACA Program requirements are serious and set forth the terms, rights, and conditions of this non-profit program, any person who has questions or concerns about these terms, or who does not fully understand or agree with such terms, should refrain from or delay joining NACA. NACA encourages anyone who has any concerns about any of the rights, responsibilities, limitations of the NACA Program (or the risk and benefits of homeownership and financing) to seek independent legal, financial, and/or tax advice NACA Membership Agreement Page 8 of 15


before executing this Agreement or becoming a NACA Member. Any person or Member who has concerns about his/her membership and/or NACA’s services and benefits must contact NACA’s Member Services Director at the National Office in Boston at 1-888-297-5568 so that NACA can be given a fair opportunity to evaluate and resolve the particular concerns.

IV. NSF FEE/MEMBERSHIP DUES The Homeowner Member pays a monthly NSF Fee or Membership Dues (collectively the “NSF Fee/Membership Dues”). Payment of the NSF Fee constitutes and automatically and automatically satisfies the Membership Dues. Participating and Community Community Members pay Membership Dues that are set by NACA, the amount of which may be ascertained from NACA’s staff, its local offices, or from other methods of communication. communication. All Membership Dues and the NSF Fee are non-refundable and non-transferable, regardless of whether a Member ever obtains a purchase mortgage or refinance loan. All fees are set, subject to change at any time, and used by NACA in in its sole discretion and do not constitute investments by a Member in NACA, or entitle Members to any assets, principal or income of or that may be generated by NACA and/or its affiliates. NACA may also from time to time make special assessments on its Members, and any such assessments will be payable as an additional amount of the NSF Fee/Membership Dues. Failure by a Homeowner Member to pay the NSF Fee/Membership Dues due to mortgage delinquency shall not automatically affect the Homeowner Member’s membership status. Failure to timely and fully pay NSF Fee/Membership Dues for other reasons may result in a loss of good-standing and establish cause for immediate termination of eligibility to participate in any programs benefits or services in the NACA Program and constitute being held in default of this Agreement. 1. Participating Members The Membership Dues are a set amount payable annually that covers and includes all residents of a household who are jointly pursuing homeownership. This fee applies regardless of when the person(s) or household become a Member (i.e. the Membership Dues are not pro-rated). The Participating Member’s Membership Dues that covers all aspects of pursuing home ownership through the NACA Program for 2007 are $20. These Dues must be paid for all current and new participants in the NACA Program prior to receiving counseling or any other aspect of the NACA Program, including applying for NACA Credit Access and submitting a purchase mortgage application. The Dues should be paid at the local NACA office or national office and are non-refundable, even if the Member declines to pursue a mortgage or other services from NACA. For people considering the NACA Program, they can only become Members after attending a Homebuyer Workshop and for people seeking to refinance they must also be approved as eligible for the NACA Program prior to becoming Members. 2. Homeowner Members NACA Homeowner Members pay the monthly NSF Fee/Membership Dues of $50 per month over a period ranging from five to ten years (total payments of between $3,000 and $6,000). This payment covers all all residents of a household who have purchased or refinanced a home through the NACA Program. The total NSF Fee/Membership Dues depend on the mortgage amount: Mortgages less than $100,000 require Homeowner NACA Membership Agreement Page 9 of 15


Members to make monthly payments for five years; mortgages of $100,000 to $199,999 require Homeowner Members to make monthly payments for seven and one-half years; and, mortgages of $200,000 and greater require Members to make monthly payments for ten years.3 By executing this Membership Agreement, Homeowner Members agree to the NSF Fee/Membership Dues, which are collected by the Participating Lender along with mortgage payments. The NSF Fee/Membership Dues eliminate the need for costly private mortgage insurance (“PMI”). Historically, mortgage lenders have required that low- to moderateincome persons pay PMI because they typically do not have enough savings to make substantial down payments plus pay closing costs when purchasing a home. The premiums charged for PMI are paid by the homebuyer in addition to the homebuyer’s monthly mortgage payments. For example, the typical premiums for PMI for a home that costs $100,000 could be greater than $9,000 over the life life of a 30 year loan. PMI provides no real benefit to the homeowner or to the community. Payment of the NSF Fee/Membership Dues begins at the time the mortgage is obtained. This payment is sometimes included as a part of settlement costs with the first installment collected at the the time of closing. Thereafter, the NSF Fee/Membership Dues are included in the Homeowner Member’s monthly mortgage payment to the Participating Lender. The lender’s sole responsibilities with respect to the NSF Fee/Membership Dues are to collect and remit payments to NACA. The Homeowner Member releases the Lender from any liability, claims, or damages of any kind related to the administration and collection of the NSF Fee/Membership Dues, and may be required to sign a release giving further evidence of this agreement (the “Lender’s Release”). The Lender’s Release must be signed by the Homeowner Member at or prior to the closing on the mortgage. The NSF Fee/Membership Dues are not refundable under any circumstance, even if the Homeowner Member never receives any post-purchase assistance or financial assistance, or fails to meet the eligibility eligibility requirements. Thus, the NSF Fee/Membership Dues are retained by NACA and made available for use by NACA and/or other Homeowner Members and programs consistent with legal or other restrictions. Once the Homeowner Member has paid all NSF Fee/Membership Dues required (i.e. between $3,000 and $6,000 depending on the mortgage amount), the Homeowner Member may stop making additional additional payments. The Homeowner Member is not obligated to make payments if they sell their home or refinance through another program or lender. The Homeowner Member is then a Lifetime Member of NACA, eligible to receive all of the benefits associated with the NACA Program, subject to the eligibility requirements: post-purchase assistance, including the NSF Assistance, is only available for Members who continue to have the mortgage obtained through NACA and meet all other NACA Program requirements. The Life Time Membership Membership is not dependent on having a NACA Mortgage or owning the home they purchased through 3

These periods may be extended by NACA to account for any Homeowner Member who fails to timely make all required monthly payments. NACA may change the monthly contribution contribution and/or the total time period for making making such payments.



NACA, although they must remain a Member in good- standing and NACA will continue to have the sole discretion in terminating terminating members as stated herein. If the Homeowner Member sells or refinances prior to making full payment of the NSF Fee/Membership Dues, they will not be Life Time Members but can remain Members of NACA by paying the yearly Membership Dues for Participating and Community Members. 3. Community Members The Membership Dues are a set amount determined by NACA payable annually. These dues apply regardless of when the person(s) become a Member (i.e. the Membership Dues are not pro-rated). All persons must pay the required Membership Dues to be eligible for NACA NACA Program benefits. These Dues are non-refundable, even if the Member declines to pursue a mortgage or other services from NACA. The Community Member’s Dues for 2007 are $20. These Dues need to to be sent to NACA’s national office.

V. EXPRESS LIMITATIONS LIMITATIONS ON RIGHTS, REPRESENTATIONS, AND WARRANTIES The following sections are very important and should be carefully read and understood because they set forth specific limitations and restrictions on, and waivers of, your rights in the NACA Program and with respect to NACA and its affiliates. A. Compliance with Law and Non-Discrimination NACA promotes fair housing and equal credit and complies with all applicable laws and regulations. NACA does not unlawfully unlawfully discriminate against any applicants, persons or Members on the basis of race, color, religion, national origin, sex, marital status, age (provided the person has the capacity to enter into a binding contract); because all or part of an Member’s income is derived from any public assistance program; because such person has in good faith exercised any right under the Consumer Credit Protection Act; or, on the basis of any other protected status. Members need not reveal income derived from alimony, child support or separate maintenance payments, unless they want this income considered in determining their creditworthiness. NACA will request information from the Member regarding the number and ages of any dependents or about dependent-related financial obligations or expenditures; however, NACA shall not inquire about childbearing or child rearing intentions. Any information a Member is asked to provide regarding race, national origin, citizenship, sex, age, religion, gender, marital status, disability, and source of income, NACA may request for its own information or is required to request by the Federal Government in order to monitor compliance with the Equal Credit Opportunity Act or other applicable regulations. Unless expressly required by law, a Member is not required to supply this information. B. Notice of Risk of Homeownership and Related Disclaimers The process of looking for, buying, financing, and owning a home is filled with emotional, legal, important obligations and financial financial risks. All persons are strongly advised not to pursue membership in NACA, sign a binding Purchase and Sale agreement for a home, or submit a mortgage loan application through NACA or any other entity until they have consulted with an attorney and/or other qualified professionals who can advise them in connection with the purchase, refinance, or renovation of their home and the closing of their



mortgage loan. NACA does not, and does not claim to, advise about, indemnify, or protect any Member from these or related risks. NACA cannot (and does not undertake any duties to) protect the Member from these risks. For example, the Member makes makes the decision to purchase a home and is responsible for the required deposit, but the Participating Lenders in the NACA Program make the final underwriting decision. In addition, the Member may, through no fault of his/her own, suffer a serious financial setback that could prevent him/her from making monthly mortgage payments. If problems arise, NACA may be available to provide counseling, but Members must understand that NACA may not be able to suggest and/or provide the best or most appropriate solution that is acceptable to them. NACA, its employees and agents do not now, and are not later authorized to, make any representations, statements, warranties or assurances of any kind that its mortgage product or services (or those of outside vendors participating in the NACA Program) are appropriate, the best for, or the only ones available to a particular person or Member. NACA encourages all persons and Members to research and identify other mortgage products, real estate broker and agent services, real estate settlement and title insurance services, and any other services that may also or better meet their needs than the programs and services provided by NACA (or by others to whom Members may be referred). If requested, NACA can help Members evaluate other mortgage products and services. Members ultimately decide which mortgage product, real estate services and other venders and services to select, and whether or not to pursue a mortgage through the NACA Program on its terms, conditions, and limitations C. No Representations or Warranties No Member should, or is entitled to, rely upon any statement, representation, or alleged warranty that is different from or inconsistent with the provisions and restrictions herein. NACA employees or agents do not have the authority to warrant, recommend, require or encourage any Member to purchase, refinance or renovate a particular property even when the Member meets the eligibility requirements and/or is qualified to submit a mortgage (“NACA Qualification”), or make any representations or warranties regarding the benefits, risks, rights, interests, quality, or any conditions relating to the purchase, refinance, home renovation, and/or participation participation in the NACA Program. NACA also cannot and does not offer legal, tax or accounting advice to Members. Members should discuss these issues with a lawyer and/or the person who helps the Member Member prepare their taxes. Members must understand that NACA disclaims and denies any obligations (including any obligation to indemnify a Member), and does not make any representations, warranties or promises, express or implied, to Members, or upon which Members should rely, concerning any of the below disclaimers and denials: 1. That NACA represents the the Member’s interests, either as a fiduciary, agent, broker, or in some other capacity wherein it would owe a duty of care to the Member; 2. That the Member will qualify for a mortgage loan loan from one of the Participating Lenders; 3. That a Member who is NACA Qualified or NACA Credit Access approved will have their mortgage application approved by a Participating Lender; 4. That the Member will receive financial or other assistance and that NACA is responsible for any damages that may result if assistance is not provided; 5. That participating in in the NACA Program and purchasing, refinancing or renovating a particular home is the correct financial, tax, legal, or personal decision for the Member;



6. That the home the Member purchases, refinances or renovates through the NACA Program is suitable and will meet his/her purposes or expectations; 7. That the home the Member purchases, refinances or renovates is free of defects, has only those defects identified during a home inspection, or that any defects in the property can be resolved through renovation or for a specific price; 8. That participating in in the NACA Program is free from risk, including risks associated with the purchase, refinancing and renovation of a home such as, without limitation, loss of financing, default, faulty, incomplete or substandard construction services, and property loss through natural or other causes; 9. That the property is worth the amount of the mortgage or that the property’s value will remain the same or increase in value; 10. That NACA is responsible re sponsible for scheduling any an y appointment and ensuring ens uring that all deadlines will be met, including, but not limited to: taking and submitting the mortgage application; Purchase and Sale Agreement requirements and commitments; Mortgage approval date; Closing Date; Payoff Date; stopping submission to foreclosure; preventing property auction; home renovations by third-party contractors, vendors, and inspectors; and/or any other contractual or other requirements. That NACA has any financial, contractual or other obligation if these, other deadlines, or other obligations of the Members are not met; 11. That the services performed by vendors, vendor s, contractors, inspectors, or o r other third-parties will be cost-effective, satisfactorily satisfactorily performed, or free of defect. NACA makes no representations, warranties, or guarantees whatsoever regarding the performance of such third-parties, and denies and does not assume any obligations to monitor, inspect, indemnify the Member against losses, poor workmanship, theft, or be in any way responsible for the quality, completeness, and performance of their work. D. General Program and Membership Requirements and Disclaimers NACA materials, procedures and requirements apply generally to the NACA Program and are not intended to specifically address Member’s unique financial situation or issues. NACA undertakes no duty, and has no obligation, to the Member to monitor or ensure that s/he satisfies each requirement or procedure regarding the NACA Program and his/her loan, home, or other NACA Program benefit. Any obligation on behalf of NACA to provide any benefits under any aspect of the NACA Program is expressly conditioned upon the Member first satisfying all of the NACA Program requirements.

If NACA is requested to obtain documentation or take actions on the Member’s behalf that result in costs to NACA, such costs may be passed on to the Member. NACA may provide Members with referrals or lists of third-party vendors or refer Members to them. NACA may require that Members use venders who meet certain requirements as determined by NACA. These third-party venders could include, include, but are not limited to: Home Inspectors, Attorneys, Appraisers, Homeowner Insurance Agencies, Rehabilitation Specialists, general contractors and construction tradespersons, and/or Real Estate Agents/Brokers. NACA makes absolutely no representations or warranties as to the qualifications, skills or appropriateness of these persons or companies, and NACA makes absolutely no representations concerning, and does not in any circumstance warrant or guarantee any aspect of their performance. NACA will not reimburse or indemnify Members for for any funds NACA Membership Agreement Page 13 of 15


paid to these or any other vendors or for any damages incurred by Members as a result of any actions, inaction, negligence or misconduct of any kind by such persons, third-parties, or companies. Members should not leave leave any original or copies of any documents with with NACA. NACA has created a paperless mortgage counseling, processing and underwriting system. Thus, Members’ documents should be scanned into the system and returned as a matter of standard practice. While NACA may retain documents and/or copies, they will not be returned to the Member unless required by law. Any and all documentation obtained by NACA employees and staff becomes NACA’s privileged work-product and property. NACA is not responsible for the loss, theft or destruction of data, financial information, and/or documents, including identity theft excepting such liability as required by laws and regulations. NACA strongly recommends that all Members maintain maintain a file of their documents. E. EXPRESS WAIVERS OF LIABILITY AGAINST NACA, AND REQUIRMENT OF ARBITRATION OF ANY AND ALL CLAIMS The Member understands the benefits and obligations of participating in the NACA Program and that they may, at any time prior to the closing on their mortgage loan cease participating in in the NACA Program without obligation to NACA. In addition, by the signatures below, the Member acknowledges and understands the risks involved in purchasing, refinancing, renovating and owning their own home and hereby forever and fully releases and agrees to hold harmless NACA, its affiliates, directors, officers, staff, agents, independent contractors, consultants and programs from and against any and all claims (including claims of negligence), suits, losses, costs, expenses or damages (including attorneys’ fees) of any kind that may result from, arise out of, or otherwise relate in any way to his/her application, membership, or participation in NACA including, without limitation, from the purchase, financing, refinancing, renovation of his/her home, or participation in or exclusion from NACA or other NACA Program benefits and services.

In addition to the foregoing, the Member agrees that should there ever arise a controversy or claim with NACA, its affiliates, directors, officers, staff, agents or independent contractors resulting from, or otherwise relating in any way to, the NACA Program, the purchase, financing, refinancing, renovation of the Member’s home, or participation in or exclusion from NACA, or other NACA Program benefits and services including, without limitation, whether any such claim or dispute is subject to arbitration, the Member knowingly, willingly, and after having time to consult with legal counsel waives the right to trial by jury and agrees to submit any and all such controversies, dispute, suits, demands, or claims of damage of any kind for resolution to the American Arbitration Association or other arbitration service agreed to by the parties, to be resolved in accordance with its rules and procedures. Any arbitration hereunder shall be held in Boston, Massachusetts, or at such other convenient venue or forum as NACA may designate following receipt of a written demand for arbitration in in order to comply with law. If this venue provision is ever rendered unenforceable for any reason, it shall not affect the parties’ unconditional agreement and obligation to submit the controversy or claim to arbitration in a lawful lawful venue. The judgment in the arbitration proceeding shall be final and binding on the parties, and the judgment on such award rendered by the Arbitrator may be entered in any court having competent jurisdiction. Each party required to participate shall be personally responsible for their NACA Membership Agreement Page 14 of 15


share of the costs of arbitration (or those required by the arbitration tribunal); provided, however, that if NACA prevails in any such arbitration NACA shall, in addition to to all other remedies provided by law, be entitled to an award of its reasonable attorneys’ fees and costs. F. THE MEMBERSHIP AGREEMENT This Membership Agreement is the only such agreement between NACA and the Member, thereby replacing any other agreements or statements of any kind on the subject matter addressed in this Agreement. The Membership Agreement cannot be changed unless the Member and NACA agree to a change in writing. If NACA does not enforce a particular provision of the Agreement at any given time, it does not mean that it has given up its rights to insist that the the Member comply with the Agreement on all other other occasions. If the Membership Agreement contains any term(s) that are found to be invalid or overbroad for any reason, the overbroad provision may be narrowed to to comply with the law. law. The Agreement shall nevertheless remain in force. The Membership Agreement is is binding on all persons who execute the Agreement, as well as their heirs and other legal representatives. Membership in NACA, as well well as this Agreement, cannot be assigned by a Member to someone else. For convenience, this Agreement may be signed in counterparts without causing any change in the Agreement or its terms. Because NACA encourages every Member to take the time to review this and any other agreement with NACA with his/her own legal counsel, any ambiguity in the terms of this Agreement should not be interpreted against NACA.

By the signature(s) below, the Undersigned acknowledges and agrees that s/he has had time and the full opportunity to carefully read, and understand his/her rights and obligations as a NACA Member and agrees to be bound by the terms, statements, requirements, disclaimers, and restrictions as described and set forth in this Membership Agreement.4 Member One: Electronic Signature Name: _______________________________ Signature: _____________________________

Date: _____________

Social Security Number: _______

Member Two: Name: _______________________________ Signature: _____________________________ Date: _____________


Member Three: Name: _______________________________ Signature: _____________________________ Date: _____________


4

If the Member wishes to have a copy of this signed Membership Agreement, s/he should request it from a NACA staff person.



Member Agreement 20070301[1]

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