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3 - Summary of Mode of Operations of EMRC

3.1- Master Refinance Agreement

Prior to the approval of any advance request and disbursement of advance funds, The Primary Mortgage Lender (PML) executes a Master Refinance Agreement with EMRC before it may avail refinance loans from EMRC. The Master Refinance Agreement sets out the general terms and conditions governing the pledge of mortgage loans to EMRC and incorporates a declaration by the PML that it holds the mortgage loans pledged to EMRC

      3.2- Participation Agreement (PA) Brief

Clients requesting funding do so by providing written instructions to EMRC.  For each refinance of a group of loans by EMRC, the PML executes a Participation Agreement (PA).Advance proceeds will be credited to the client’s requested bank account. For each refinance of a group of loans by EMRC, the PML executes a PA by which the PML pledges the mortgage loans to EMRC. By virtue of such agreement the PML conveys, assigns and transfers the mortgage loans to EMRC.

3.3- Refinance Value

EMRC refinances the mortgage loans at book balance of the mortgage loan after deduction of (a) Required collateral coverage and (b) any unearned interest (if any) & According to Product Type

3.4- EMRC Rate

Products and services are priced in accordance with applicable regulations, taking into account the EMRC’s nature, the cost of raising funds in the capital markets, and its financial objectives. These objectives include preserving the value of our shareholders’ investment in the EMRC while producing earnings sufficient to pay a dividend to our shareholders after paying the EMRC’s obligations. The EMRC prices advances at or above the marginal cost of raising matching maturity funds in the marketplace, including the administrative and operating costs associated with making advances. EMRC prices its credit products consistently to all clients applying for advances. EMRC does not price its advances below its marginal cost of matching term and maturity funds in the marketplace, and the administrative cost associated with making such advances to clients. However, EMRC may price advances on a differential basis, based on tenor, volume, shareholders, or other reasonable criteria applied consistently to all clients.

 3.5- Annual Review:

Each PML is reviewed at least once annually to determine the ongoing relationship between the EMRC and PML. In some circumstances as requested by PML, an increase of mortgage refinance limit is prepared and submitted to appropriate approval body.

3.6- Prepayment of Mortgage refinances

 Prepayments will be subject to a prepayment fee negotiated in advance. In the event that, for any reason, such a loan becomes due and payable prior to its originally scheduled maturity date, the EMRC will charge the contractually agreed prepayment fee. Prepayment fees are due and payable on the date of the prepayment.

3.7- Reports

 The PML shall prepare and submit to EMRC defective loans and partial prepayments reports on a periodical basis (monthly, quarterly, semiannually, annually) as contractually agreed. The PML is required to replace any defective loan to maintain EMRC collateral at least 110% (According to Product type).

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