EXHIBIT H-1
______________________________________________________________________________
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
Owner
and
EMC MORTGAGE CORPORATION
Servicer
SERVICING AGREEMENT
Dated as of March 1, 2007
______________________________________________________________________________
EXHIBITS
Exhibit A Mortgage Loan Schedule
Exhibit B Custodial Account Letter Agreement
Exhibit C Escrow Account Letter Agreement
Exhibit D Form of Request for Release
Exhibit E Reporting Data for Monthly Report
Exhibit F Reporting Data for Defaulted Loans
Exhibit G Form of Owner Certification
Exhibit H Summary of Regulation AB Servicing Criteria
Exhibit I Summary of Applicable Regulation AB Requirements
Exhibit J Servicing Criteria to be Addressed in Assessment of Compliance
Exhibit K Reporting Data for Realized Losses and Gains
THIS IS A SERVICING AGREEMENT, dated as of March 1, 2007, and is executed between Structured
Asset Mortgage Investments II Inc. (the "Owner") and EMC Mortgage Corporation (the "Servicer").
W I T N E S S E T H :
WHEREAS, the Owner is the owner of the Mortgage Loans;
WHEREAS, the Owner and the Servicer wish to prescribe the permanent management, servicing
and control of the Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, and for
other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the
Owner and the Servicer agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meaning specified in this Article:
Accepted Servicing Practices: The procedures, including prudent collection and loan
administration procedures, and the standard of care (i) employed by prudent mortgage servicers which
service mortgage loans of the same type as the Mortgage Loans in the jurisdictions in which the
related Mortgage Properties are located or (ii) in accordance with the Xxxxxx Xxx Guide or Xxxxxxx
Mac Guide, subject to any variances negotiated with Xxxxxx Xxx or Xxxxxxx Mac and subject to the
express provisions of this Agreement. Such standard of care shall not be lower than that the
Servicer customarily employs and exercises in servicing and administering similar mortgage loans for
its own account and shall be in full compliance with all federal, state, and local laws, ordinances,
rules and regulations.
Adjustment Date: As to each ARM Loan, the date on which the Mortgage Interest Rate is
adjusted in accordance with the terms of the related Mortgage Note.
Agreement: This Servicing Agreement including all exhibits hereto, amendments hereof and
supplements hereto.
ARM Loans: First lien, conventional, 1-4 family residential Mortgage Loans with interest
rates which adjust from time to time in accordance with the related Index and are subject to Periodic
Rate Caps and Lifetime Rate Caps and which may permit conversion to fixed interest rates.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a legal holiday in the
States of Maryland, Minnesota, New York or the jurisdiction in which the Servicer conducts its
servicing activities, or (iii) a day on which banks in the States of Maryland, Minnesota, New York or
the jurisdiction in which the Servicer conducts its servicing activities are authorized or obligated
by law or executive order to be closed.
Code: The Internal Revenue Code of 1986, as it may be amended from time to time, or any
successor statute thereto, and applicable U.S. Department of the Treasury regulations issued pursuant
thereto.
Commission or SEC: The Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged Property,
whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in accordance with the terms
of the related Mortgage Loan Documents.
Custodial Account: One or more demand account or accounts created and maintained pursuant
to Section 4.04 which shall be entitled "EMC Custodial Account in trust for XXXX XX, Owner of Whole
Loan Mortgages and various Mortgagors" established at a Qualified Depository, each of which accounts
shall be held by such Qualified Depository in a fiduciary capacity, separate and apart from its
funds and general assets.
Custodian: Xxxxx Fargo Bank, National Association, or such other custodian as Owner shall
designate.
Cut-off Date: The open of business on March 1, 2007.
Delinquent: As defined in the related pooling and servicing agreement.
Depositor: The depositor, as such term is defined in Regulation AB, with respect to any
Pass-Through Transfer.
Determination Date: The 15th day (or if such 15th day is not a Business Day, the Business
Day immediately preceding such 15th day) of the month of the Remittance Date.
Due Date: Each day on which payments of principal and interest are required to be paid in
accordance with the terms of the related Mortgage Note, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing on the second day
of the month preceding the month of such Remittance Date and ending on the first day of the month of
the Remittance Date.
Escrow Account: The separate trust account or accounts created and maintained pursuant to
Section 4.06 which shall be entitled "EMC Escrow Account, in trust for XXXX XX, Owner of Whole Loan
Mortgages and various Mortgagors" and shall be established at a Qualified Depository, each of which
accounts shall in no event contain funds in excess of the FDIC insurance limits.
Escrow Payments: With respect to any Mortgage Loan, the amounts constituting ground rents,
taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire
and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any one of the conditions or circumstances enumerated in Section 9.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Mae: Xxxxxx Xxx, or any successor thereto.
Xxxxxx Mae Guide: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae Servicing Guide and all
amendments or additions thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as
amended from time to time.
Xxxxxxx Mac: Xxxxxxx Mac, or any successor thereto.
Xxxxxxx Mac Guide: The Xxxxxxx Mac Selling Guide and the Xxxxxxx Mac Servicing Guide and
all amendments or additions thereto.
Full Principal Prepayment: A Principal Prepayment made by a Mortgagor of the entire
principal balance of a Mortgage Loan.
GAAP: Generally accepted accounting procedures, consistently applied.
HUD: The United States Department of Housing and Urban Development or any successor.
Index: With respect to each ARM Loan, on the related Adjustment Date, the index used to
determine the Mortgage Interest Rate on each such ARM Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of insurance policies
insuring the Mortgage Loan or the related Mortgaged Property.
Lifetime Rate Cap: With respect to each ARM Loan, the maximum Mortgage Interest Rate over
the term of such Mortgage Loan, as specified in the related Mortgage Note.
Liquidation Proceeds: Amounts, other than Insurance Proceeds and Condemnation Proceeds,
received in connection with the liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise, other than amounts
received following the acquisition of an REO Property pursuant to Section 4.13.
Margin: With respect to each ARM Loan, the fixed percentage amount set forth in each
related Mortgage Note which is added to the Index in order to determine the related Mortgage Interest
Rate.
Master Servicer: Xxxxx Fargo Bank, National Association, its successors in interest and
assigns, or any successor thereto designated by the Owner.
Monthly Advance: The aggregate of the advances made by the Servicer on any Remittance Date
pursuant to Section 5.03.
Monthly Payment: With respect to each Mortgage Loan, the scheduled monthly payment of
principal and interest thereon which is payable by the related Mortgagor under the related Mortgage
Note.
Mortgage: The mortgage, deed of trust or other instrument securing a Mortgage Note which
creates a first lien on an unsubordinated estate in fee simple in real property securing the Mortgage
Note.
Mortgage Interest Rate: The annual rate at which interest accrues on any Mortgage Loan in
accordance with the provisions of the related Mortgage Note, and in the case of an ARM Loan, as
adjusted from time to time on each Adjustment Date for such Mortgage Loan to equal the Index for such
Mortgage Loan plus the Margin for such Mortgage Loan, and subject to the limitations on such interest
rate imposed by the Periodic Rate Cap and the Lifetime Rate Cap.
Mortgage Loan: An individual Mortgage Loan described herein and as further identified on
the Mortgage Loan Schedule, which Mortgage Loan includes without limitation the Mortgage Loan
Documents, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition Proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The original mortgage loan legal documents held by the Custodian.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the annual rate of
interest remitted to the Owner, which shall be equal to the related Mortgage Interest Rate minus the
Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans attached hereto as Exhibit A, such
schedule being acceptable to the Owner and the Servicer.
Mortgage Note: The note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged Property: The underlying real property securing repayment of a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Liquidation Proceeds: As to any Mortgage Loan, Liquidation Proceeds net of unreimbursed
Servicing Advances, Servicing Fees and Monthly Advances and expenses incurred by the Servicer in
connection with the liquidation of the Mortgage Loan and the related Mortgaged Property.
Nonrecoverable Advance: Any advance previously made by the Servicer pursuant to Section
5.03 or any Servicing Advance proposed to be made by the Servicer in respect of a Mortgage Loan or
REO Property which, in the good faith judgment of the Servicer, may not be ultimately recoverable by
the Servicer from Liquidation Proceeds or Insurance Proceeds on such Mortgage Loan or REO Property as
provided herein. The determination by the Servicer that it has made a Nonrecoverable Advance, or
that a proposed advance may constitute a Nonrecoverable Advance, shall be evidenced by an Officer's
Certificate of the Servicer delivered to the Owner and detailing the reasons for such determination.
Officer's Certificate: A certificate signed by the Chairman of the Board, the Vice Chairman
of the Board, the President, a Senior Vice President or a Vice President or by the Treasurer or the
Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Servicer, and delivered
to the Owner as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of the party on
behalf of whom the opinion is being given, reasonably acceptable to the Owner.
Owner: Structured Asset Mortgage Investments II Inc. ("XXXX XX"), its successors in
interest and assigns (including the Trustee in connection with a Pass-Through Transfer).
Partial Principal Prepayment: A Principal Prepayment by a Mortgagor of a partial principal
balance of a Mortgage Loan.
Pass-Through Transfer: Any transaction involving either (1) a sale or other transfer of some
or all of the Mortgage Loans directly or indirectly to an issuing entity in connection with an
issuance of publicly offered or privately placed, rated or unrated mortgage-backed securities or (2)
an issuance of publicly offered or privately placed, rated or unrated securities, the payments on
which are determined primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage Loans.
Periodic Rate Cap: With respect to each ARM Loan, the maximum increase or decrease in the
Mortgage Interest Rate on any Adjustment Date.
Permitted Investments: Any one or more of the following obligations or securities:
(i) direct obligations of, and obligations the timely payment of which are
fully guaranteed by the United States of America or any agency or instrumentality of
the United States of America the obligations of which are backed by the full faith
and credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers' acceptances issued
by any depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (including any Trustee or the Master
Servicer) and subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term deposit rating
and/or the long-term unsecured debt obligations or deposits of such depository
institution or trust company at the time of such investment or contractual
commitment providing for such investment are rated in one of the two highest rating
categories by each Rating Agency and (b) any other demand or time deposit or
certificate of deposit that is fully insured by the Federal Deposit Insurance
Corporation;
(iii) repurchase obligations with respect to (a) any security described in clause
(i) above or (b) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, the obligations of which are backed
by the full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal) described
in clause (ii)(a) above;
(iv) securities bearing interest or sold at a discount issued by any corporation
(including any Trustee or the Master Servicer) incorporated under the laws of the
United States of America or any state thereof that are rated in one of the two
highest rating categories by each Rating Agency at the time of such investment or
contractual commitment providing for such investment; provided, however, that
securities issued by any particular corporation will not be Permitted Investments to
the extent that investments therein will cause the then outstanding principal amount
of securities issued by such corporation and held as Permitted Investments to exceed
10% of the aggregate outstanding principal balances and amounts of all the Permitted
Investments;
(v) commercial paper (including both non-interest-bearing discount obligations
and interest-bearing obligations payable on demand or on a specified date not more
than one year after the date of issuance thereof) which are rated in one of the two
highest rating categories by each Rating Agency at the time of such investment;
(vi) any other demand, money market or time deposit, obligation, security or
investment as may be acceptable to each Rating Agency; and
(vii) any money market funds the collateral of which consists of obligations
fully guaranteed by the United States of America or any agency or instrumentality of
the United States of America the obligations of which are backed by the full faith
and credit of the United States of America (which may include repurchase obligations
secured by collateral described in clause (i)) and other securities (including money
market or common trust funds for which any Trustee or the Master Servicer or any
affiliate thereof acts as a manager or an advisor) and which money market funds are
rated in one of the two highest rating categories by each Rating Agency;
provided, however, that no instrument or security shall be a Permitted Investment if such instrument
or security evidences a right to receive only interest payments with respect to the obligations
underlying such instrument or if such security provides for payment of both principal and interest
with a yield to maturity in excess of 120% of the yield to maturity at par.
Person: Any individual, corporation, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
Prepayment Charge: Any prepayment premium, penalty or charge payable by a Mortgagor in
connection with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the related
Mortgage Note.
Prepayment Interest Excess: With respect to any Remittance Date, for each Mortgage Loan that
was the subject of a Principal Prepayment in full or in part during the portion of the related
Prepayment Period occurring between the first day of the calendar month in which such Remittance Date
occurs and the Determination Date of the calendar month in which such Remittance Date occurs, an
amount equal to interest (to the extent received) at the applicable Mortgage Loan Remittance Rate on
the amount of such Principal Prepayment for the number of days commencing on the first day of the
calendar month in which such Remittance Date occurs and ending on the last date through which
interest is collected from the related Mortgagor.
Prepayment Interest Shortfall: With respect to any Remittance Date, for each such Mortgage
Loan that was the subject of a Principal Prepayment during the portion of the related Prepayment
Period occurring between the first day of the related Prepayment Period and the last day of the
calendar month preceding the month in which such Remittance Date occurs, an amount equal to interest
(to be paid by the Servicer out of its own funds without reimbursement therefor) at the applicable
Mortgage Loan Remittance Rate on the amount of such Principal Prepayment for the number of days
commencing on the date on which the prepayment is applied and ending on the last day of the calendar
month preceding such Remittance Date.
Prepayment Period: As to any Remittance Date, (a) in the case of Full Principal Prepayments,
the period commencing on the 16th day of the month prior to the month in which the related Remittance
Date occurs and ending on the 15th day of the month in which such Remittance Date occurs, and (b) in
the case of Partial Principal Prepayments or other recoveries, the preceding calendar month.
Primary Mortgage Insurance Policy: Each primary policy of mortgage insurance, or any
replacement policy therefor obtained by the Servicer pursuant to Section 4.08.
Prime Rate: The prime rate of U.S. money center banks as published from time to time in The
Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a Mortgage Loan full or
partial which is received in advance of its scheduled Due Date, including any Prepayment Charge and
which is not accompanied by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Qualified Appraiser: An appraiser, duly appointed by the Servicer, who had no interest,
direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage Loan, which appraiser and
the appraisal made by such appraiser both satisfy the requirements of Title XI of FIRREA and the
regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated.
Qualified Depository: (a) The Custodian, (b) a depository, the accounts of which are
insured by the FDIC and the short term debt ratings and the long term deposit ratings of which are
rated in one of the two highest rating categories by either of Xxxxx'x Investors Service, Inc. or
Fitch, Inc., or (c) a depository, the short-term debt obligations, or other short-term deposits of
which are rated at least 'A-2' and the long-term unsecured debt obligations of which are rated at
least 'AA-' by Standard & Poor's Ratings Service, a division of The McGraw Hill Companies Inc.
Qualified Insurer: An insurance company duly qualified as such under the laws of the
states in which the Mortgaged Properties are located, duly authorized and licensed in such states to
transact the applicable insurance business and to write the insurance provided, approved as an
insurer by Xxxxxx Xxx and Xxxxxxx Mac.
Rating Agency: Standard & Poor's Ratings Service, a division of The McGraw Hill Companies
Inc., and Xxxxx'x Investors Service, Inc.
Realized Loss: With respect to each Mortgage Loan which is the subject of a Servicing
Modification during the calendar month immediately preceding the related distribution date of the
related trust, the sum of (a) the total amount of interest and principal which is forgiven with
respect to the related Mortgage Loan and (b) the amount of any Servicing Advances made by the
Servicer with respect to such Mortgage Loan which are reimbursable from the related trust by the
Servicer with respect to that Servicing Modification.
Reconstitution Agreement: Any agreement involving any Pass-Through Transfer or Whole Loan
Transfer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as amended from time to time, and subject to such clarification and
interpretation as have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning of Section 860D of
the Code.
REMIC Provisions: The provisions of the Federal income tax law relating to a REMIC, which
appear at Section 860A through 860G of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from time to time.
Remittance Date: The Remittance Date shall be the 20th day of any month, or if such 20th
day is not a Business Day, the first Business Day immediately preceding such 20th day.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: Amounts received by the Servicer in connection with a related
REO Disposition.
REO Property: A Mortgaged Property acquired by the Servicer on behalf of the Owner as
described in Section 4.13.
XXXX XX: Structured Asset Mortgage Investments II Inc.
Sarbanes Certification: A certification required pursuant to The Xxxxxxxx-Xxxxx Act of 2002
and the rules and regulations of the Commission promulgated thereunder (including any interpretations
or amendments thereof by the Commission's staff).
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: The securities administrator with respect to any Pass-Through
Transfer.
Servicer: EMC Mortgage Corporation, or any of its successors in interest or any successor
under this Agreement appointed as herein provided.
Servicing Advances: All customary, reasonable and necessary "out of pocket" costs and
expenses (including reasonable attorneys' fees and disbursements) incurred in the performance by the
Servicer of its servicing obligations relating to each Mortgage Loan, including, but not limited to,
the cost of (a) the preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement, administrative or judicial proceedings, or any legal work or advice specifically related
to servicing the Mortgage Loans, including but not limited to, foreclosures, bankruptcies,
condemnations, drug seizures, elections, foreclosures by subordinate or superior lienholders, and
other legal actions incidental to the servicing of the Mortgage Loans (provided that such expenses
are reasonable and that the Servicer specifies the Mortgage Loan(s) to which such expenses relate),
(c) the management and liquidation of the Mortgaged Property if the Mortgaged Property is acquired in
full or partial satisfaction of the Mortgage, (d) taxes, assessments, water rates, sewer rates and
other charges which are or may become a lien upon the Mortgaged Property, and Primary Mortgage
Insurance Policy premiums and fire and hazard insurance coverage and (e) compliance with the
obligations under Section 4.08.
Servicing Criteria: As of any date of determination, the "servicing criteria" set forth in
Item 1122(d) of Regulation AB, or any amendments thereto, a summary of the requirements of which as
of the date hereof is attached hereto as Exhibit H for convenience of reference only. In the event
of a conflict or inconsistency between the terms of Exhibit H and the text of Item 1122(d) of
Regulation AB, the text of Item 1122(d) of Regulation AB shall control (or those Servicing Criteria
otherwise mutually agreed to by the Owner, the Servicer and any Person that will be responsible for
signing any Sarbanes Certification with respect to a Pass-Through Transfer in response to evolving
interpretations of Regulation AB and incorporated into a revised Exhibit H).
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual servicing fee
the Owner shall pay to the Servicer, which shall, for a period of one full month, be equal to
one-twelfth of the product of (a) the applicable Servicing Fee Rate and (b) the outstanding principal
balance of the Mortgage Loan. Such fee shall be payable monthly, computed on the basis of the same
principal amount and period respecting which any related interest payment on a Mortgage Loan is
computed. The obligation of the Owner to pay the Servicing Fee is limited to, and the Servicing Fee
is payable from the interest portion of such Monthly Payment collected by the Servicer or as
otherwise provided under Section 4.05.
Servicing Fee Rate: The Servicing Fee Rate shall be a rate per annum equal to 0.375%.
Servicing File: The documents, records and other items pertaining to a particular Mortgage
Loan and any additional documents relating to such Mortgage Loan as are in, or as may from time to
time come into, the Servicer's possession.
Servicing Officer: Any officer of the Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans whose name appears on a list of servicing officers
furnished by the Servicer to the Owner upon request, as such list may from time to time be amended.
Servicing Modification: Any modification of a Mortgage Loan which is effected by the
Servicer in accordance with the terms of this Agreement.
Stated Principal Balance: As to each Mortgage Loan as of any date of determination, (i) the
principal balance of such Mortgage Loan after giving effect to payments of principal due and received
or for which a Monthly Advance has been made, minus (ii) all amounts previously distributed to the
Owner with respect to the Mortgage Loan representing Principal Prepayments.
Subcontractor: Any vendor, subcontractor or other Person that is not responsible for the
overall servicing (as "servicing" is commonly understood by participants in the mortgage-backed
securities market) of Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of the
Servicer or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the Servicer or any
Subservicer and is responsible for the performance (whether directly or through Subservicers or
Subcontractors) of a substantial portion of the material servicing functions required to be performed
by the Servicer under this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Trustee: The Person appointed as trustee in connection with any Pass-Through Transfer.
Whole Loan Transfer: The sale or transfer of some or all of the ownership interest in the
Mortgage Loans by the Owner to one or more third parties in whole loan or participation format, which
third party may be Xxxxxx Mae or Xxxxxxx Mac.
ARTICLE II
SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES; BOOKS AND RECORDS; DELIVERY OF MORTGAGE
LOAN DOCUMENTS
Section 2.01. Servicing of Mortgage Loans.
The Servicer does hereby agree to service the Mortgage Loans in accordance with the terms of
this Agreement. The rights of the Owner to receive payments with respect to the Mortgage Loans shall
be as set forth in this Agreement.
Section 2.02. Maintenance of Servicing Files.
The Servicer shall maintain a Servicing File consisting of all documents necessary to
service the Mortgage Loans. The possession of each Servicing File by the Servicer is for the sole
purpose of servicing the Mortgage Loan, and such retention and possession by the Servicer is in a
custodial capacity only. The Servicer acknowledges that the ownership of each Mortgage Loan,
including the Note, the Mortgage, all other Mortgage Loan Documents and all rights, benefits,
proceeds and obligations arising therefrom or in connection therewith, has been vested in the Owner.
All rights arising out of the Mortgage Loans including, but not limited to, all funds received on or
in connection with the Mortgage Loans and all records or documents with respect to the Mortgage Loans
prepared by or which come into the possession of the Servicer shall be received and held by the
Servicer in trust for the exclusive benefit of the Owner as the owner of the related Mortgage Loans.
Any portion of the related Servicing Files retained by the Servicer shall be appropriately identified
in the Servicer's computer system to clearly reflect the ownership of the related Mortgage Loans by
the Owner. The Servicer shall release its custody of the contents of the related Servicing Files
only in accordance with written instructions of the Owner, except when such release is required as
incidental to the Servicer's servicing of the Mortgage Loans, such written instructions shall not be
required.
Section 2.03. Books and Records.
The Servicer shall be responsible for maintaining, and shall maintain, a complete set of
books and records for the Mortgage Loans which shall be appropriately identified in the Servicer's
computer system to clearly reflect the ownership of the Mortgage Loan by the Owner. In particular,
the Servicer shall maintain in its possession, available for inspection by the Owner, or its designee
and shall deliver to the Owner upon demand, evidence of compliance with all federal, state and local
laws, rules and regulations, and requirements of Xxxxxx Mae or Xxxxxxx Mac, as applicable, including
but not limited to documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the Mortgaged Property,
documentation evidencing insurance coverage and eligibility of any condominium project for approval
by Xxxxxx Mae and periodic inspection reports as required by Section 4.13. To the extent that
original documents are not required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Servicer may be in the form of microfilm or microfiche or such
other reliable means of recreating original documents, including but not limited to, optical imagery
techniques so long as the Servicer complies with the requirements of the Xxxxxx Xxx Guide.
The Servicer shall maintain with respect to each Mortgage Loan and shall make available for
inspection by any Owner or its designee the related Servicing File (or copies thereof) during the
time the Owner retains ownership of a Mortgage Loan and thereafter in accordance with applicable laws
and regulations.
Section 2.04. Transfer of Mortgage Loans.
No transfer of a Mortgage Loan may be made unless such transfer is in compliance with the
terms hereof. For the purposes of this Agreement, the Servicer shall be under no obligation to deal
with any person with respect to this Agreement or any Mortgage Loan unless a notice of the transfer
of such Mortgage Loan has been delivered to the Servicer in accordance with this Section 2.04. The
Owner may, subject to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans in accordance with Sections 10.02 and 11.12, provided, however, that the transferee will not be
deemed to be an Owner hereunder binding upon the Servicer unless such transferee shall agree in
writing to be bound by the terms of this Agreement and an assignment and assumption of this Agreement
reasonably acceptable to the Servicer. The Owner shall advise the Servicer in writing of the
transfer. Upon receipt of notice of the permitted transfer, the Servicer shall xxxx its books and
records to reflect the ownership of the Mortgage Loans of such assignee, and shall release the
previous Owner from its obligations hereunder with respect to the Mortgage Loans sold or transferred.
Section 2.05. Delivery of Mortgage Loan Documents.
The Servicer shall forward to the Custodian on behalf of the Owner original documents
evidencing an assumption, modification, consolidation or extension of any Mortgage Loan entered into
in accordance with Section 4.01 or 6.01 within 4 week(s) of their execution; provided, however, that
the Servicer shall provide the Custodian on behalf of the Owner with a certified true copy of any
such document submitted for recordation within 4 week(s) after its execution, and shall provide the
original of any document submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the original within 180 days of
its execution. If delivery is not completed within 180 days solely due to delays in making such
delivery by reason of the fact that such documents shall not have been returned by the appropriate
recording office, the Servicer shall continue to use its best efforts to effect delivery as soon as
possible thereafter.
From time to time the Servicer may have a need for Mortgage Loan Documents to be released by
the Custodian. If the Servicer shall require any of the Mortgage Loan Documents, the Servicer shall
notify the Custodian in writing of such request in the form of the request for release attached
hereto as Exhibit D. The Custodian shall deliver to the Servicer within five (5) Business Days, any
requested Mortgage Loan Document previously delivered to the Custodian, provided that such
documentation is promptly returned to the Custodian when the Servicer no longer requires possession
of the document, and provided that during the time that any such documentation is held by the
Servicer, such possession is in trust for the benefit of the Owner.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SERVICER
The Servicer represents, warrants and covenants to the Owner that as of the date hereof or
as of such date specifically provided herein:
(a) The Servicer is a validly existing corporation in good standing under the laws of the
State of its organization and is qualified to transact business in, is in good standing under the
laws of, and possesses all licenses necessary for the conduct of its business in, each state in which
any Mortgaged Property is located or is otherwise exempt or not required under applicable law to
effect such qualification or license and no demand for such qualification or license has been made
upon the Servicer by any such state, and in any event the Servicer is in compliance with the laws of
each such State to the extent necessary to ensure the enforceability of each Mortgage Loan and the
servicing of the Mortgage Loans in accordance with the terms of this Agreement;
(b) The Servicer has full power and authority to execute, deliver and perform, and to enter
into and consummate all transactions contemplated by this Agreement and to conduct its business as
presently conducted, has duly authorized the execution, delivery and performance of this Agreement,
has duly executed and delivered this Agreement, and this Agreement constitutes a legal, valid and
binding obligation of the Servicer, enforceable against it in accordance with its terms subject to
bankruptcy laws and other similar laws of general application affecting rights of creditors and
subject to the application of the rules of equity, including those respecting the availability of
specific performance;
(c) None of the execution and delivery of this Agreement, the consummation of the
transactions contemplated thereby and hereby, or the fulfillment of or compliance with the terms and
conditions of this Agreement will conflict with any of the terms, conditions or provisions of the
Servicer's articles of incorporation or by-laws or materially conflict with or result in a breach of
any of the terms, conditions or provisions of any legal restriction or any agreement or instrument to
which the Servicer is now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the material violation of any law, rule,
regulation, order, judgment or decree to which the Servicer or its property is subject;
(d) There is no litigation pending or, to the Servicer's knowledge, threatened with respect
to the Servicer which is reasonably likely to have a material adverse effect on the execution,
delivery or enforceability of this Agreement, or which is reasonably likely to have a material
adverse effect on the financial condition of the Servicer;
(e) No consent, approval, authorization or order of any court or governmental agency or
body is required for the execution, delivery and performance by the Servicer of or compliance by the
Servicer with this Agreement or the consummation of the transactions contemplated by this Agreement
except for consents, approvals, authorizations and orders which have been obtained;
(f) The Servicer is an approved seller/servicer of residential mortgage loans for Xxxxxx
Xxx and Xxxxxxx Mac. The Servicer is in good standing to service mortgage loans for Xxxxxx Mae and
Xxxxxxx Mac and no event has occurred which would make the Servicer unable to comply with eligibility
requirements or which would require notification to either Xxxxxx Mae or Xxxxxxx Mac;
(g) As of the date of each Pass-Through Transfer, and except as has been otherwise
disclosed to the Owner, the Master Servicer and any Depositor, or disclosed in any public filing: (1)
no default or servicing related performance trigger has occurred as to any other Pass-Through
Transfer due to any act or failure to act of the Servicer; (2) no material noncompliance with
applicable servicing criteria as to any other Pass-Through Transfer has occurred, been disclosed or
reported by the Servicer; (3) the Servicer has not been terminated as servicer in a residential
mortgage loan Pass-Through Transfer, either due to a servicing default or to application of a
servicing performance test or trigger; (4) no material changes to the Servicer's servicing policies
and procedures for similar loans have occurred in the preceding three years; (5) there are no aspects
of the Servicer's financial condition that could have a material adverse impact on the performance by
the Servicer of its obligations hereunder; (6) there are no legal proceedings pending, or known to be
contemplated by governmental authorities, against the Servicer that could be material to investors in
the securities issued in such Pass-Through Transfer; and (7) there are no affiliations, relationships
or transactions relating to the Servicer of a type that are described under Item 1119 of Regulation
AB;
(h) If so requested by the Owner, the Master Servicer or any Depositor on any date, the
Servicer shall, within five Business Days following such request, confirm in writing the accuracy of
the representations and warranties set forth in clause (g) of this Article or, if any such
representation and warranty is not accurate as of the date of such request, provide reasonably
adequate disclosure of the pertinent facts, in writing, to the requesting party;
(i) Notwithstanding anything to the contrary in the Agreement, the Servicer shall (or shall
cause each Subservicer) (i) immediately notify the Owner, the Master Servicer and any Depositor in
writing of (A) any material litigation or governmental proceedings pending against the Servicer or
any Subservicer, (B) any affiliations or relationships that develop following the closing date of a
Pass-Through Transfer between the Servicer or any Subservicer and any of the parties specified in
clause (7) of paragraph (g) of this Article (and any other parties identified in writing by the
requesting party) with respect to such Pass-Through Transfer, (C) any Event of Default under the
terms of this Agreement or any Reconstitution Agreement, (D) any merger, consolidation or sale of
substantially all of the assets of the Company, and (E) the Company's entry into an agreement with a
Subservicer to perform or assist in the performance of any of the Company's obligations under this
Agreement or any Reconstitution Agreement and (ii) provide to the Owner and any Depositor a
description of such proceedings, affiliations or relationships;
(j) As a condition to the succession to the Servicer or any Subservicer as servicer or
subservicer under this Agreement or any Reconstitution Agreement by any Person (i) into which the
Servicer or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a
successor to the Servicer or any Subservicer, the Servicer shall provide to the Owner, the Master
Servicer and any Depositor, at least 15 calendar days prior to the effective date of such succession
or appointment, (x) written notice to the Owner, the Master Servicer and any Depositor of such
succession or appointment and (y) in writing and in form and substance reasonably satisfactory to the
Owner, the Master Servicer and such Depositor, all information reasonably requested by the Owner, the
Master Servicer or any Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to any class of asset-backed securities; and
(k) Servicer has delivered to the Owner and the Master Servicer financial statements of
its parent, for its last two complete fiscal years. All such financial information fairly presents
the pertinent results of operations and financial position for the period identified and has been
prepared in accordance with GAAP consistently applied throughout the periods involved, except as set
forth in the notes thereto. There has been no change in the servicing policies and procedures,
business, operations, financial condition, properties or assets of the Servicer since the date of the
Servicer's financial information that would have a material adverse effect on its ability to perform
its obligations under this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01. Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and administer the Mortgage
Loans in accordance with this Agreement and with Accepted Servicing Practices (giving due
consideration to the Owner's reliance on the Servicer), and shall have full power and authority,
acting alone, to do or cause to be done any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable and consistent with the terms of
this Agreement and with Accepted Servicing Practices and shall exercise the same care that it
customarily employs for its own account. In addition, the Servicer shall furnish information
regarding the borrower credit files related to such Mortgage Loan to credit reporting agencies in
compliance with the provisions of the Fair Credit Reporting Act and the applicable implementing
regulations. Except as set forth in this Agreement, the Servicer shall service the Mortgage Loans in
accordance with Accepted Servicing Practices in compliance with the servicing provisions of the
Xxxxxx Xxx Guide, which include, but are not limited to, provisions regarding the liquidation of
Mortgage Loans, the collection of Mortgage Loan payments, the payment of taxes, insurance and other
charges, the maintenance of hazard insurance with a Qualified Insurer, the maintenance of fidelity
bond and errors and omissions insurance, inspections, the restoration of Mortgaged Property, the
maintenance of Primary Mortgage Insurance Policies, insurance claims, and title insurance, management
of REO Property, permitted withdrawals with respect to REO Property, liquidation reports, and reports
of foreclosures and abandonments of Mortgaged Property, the transfer of Mortgaged Property, the
release of Mortgage Loan Documents, annual statements, and examination of records and facilities. In
the event of any conflict, inconsistency or discrepancy between any of the servicing provisions of
this Agreement and any of the servicing provisions of the Xxxxxx Mae Guide, the provisions of this
Agreement shall control and be binding upon the Owner and the Servicer. The Owner may, at its
option, deliver powers-of-attorney to the Servicer sufficient to allow the Servicer as servicer to
execute all documentation requiring execution on behalf of Owner with respect to the servicing of the
Mortgage Loans, including satisfactions, partial releases, modifications and foreclosure
documentation or, in the alternative, shall as promptly as reasonably possible, execute and return
such documentation to the Servicer.
Consistent with and in addition to the terms set forth in this Agreement, if a Mortgage Loan
is in default or such default is reasonably foreseeable, the Servicer may also waive, modify or vary
any term of any Mortgage Loan or consent to the postponement of strict compliance with any such term
or in any manner grant indulgence to any mortgagor, including without limitation, to (1) capitalize
any amounts owing on the Mortgage Loan by adding such amount to the outstanding principal balance of
the Mortgage Loan, (2) defer such amounts to a later date or the final payment date of such Mortgage
Loan, (3) extend the maturity of any such Mortgage Loan, (4) amend the related Mortgage Note to
reduce the related Mortgage Rate with respect to any Mortgage Loan, (5) convert the Mortgage Rate on
any Mortgage Loan from a fixed rate to an adjustable rate or vice versa, (6) with respect to a
mortgage loan with an initial fixed rate period followed by an adjustable rate period, extend the
fixed period and reduced the adjustable rate period, and/or (7) forgive the amount of any interest
and principal owed by the related Mortgagor; provided that, in the Servicer's reasonable and prudent
determination, such waiver, modification, postponement or indulgence: (A) is not materially adverse
to the interests of the Owner on a present value basis using reasonable assumptions (including taking
into account any estimated Realized Loss that might result absent such action); and (B) does not
amend the related Mortgage Note to extend the maturity thereof later than the date of the Latest
Possible Maturity Date (as such term is defined in the related pooling and servicing agreement). In
connection with any modification which is not in connection with a situation where the related
Mortgagor is in default or such default is reasonably foreseeable, unless the Servicer has provided
to the Owner a certification addressed to the Owner, based on the advice of counsel or certified
public accountants that have a national reputation with respect to taxation of REMICs that a
modification of such Mortgage Loan will not result in the imposition of taxes on or disqualify from
REMIC status any of the REMICs and has obtained the prior written consent of the Owner, the Servicer
shall not permit any modification with respect to any Mortgage Loan. Notwithstanding the foregoing,
for any modification which may result in a Realized Loss of 20% or more of the outstanding principal
balance of a Mortgage Loan, the Company shall present such proposed modification, together with any
supporting documentation, to the Master Servicer for consideration and approval.
In the event of any such waiver, modification, postponement or indulgence which has been
agreed to in writing by the Owner and which permits the deferral of interest or principal payments on
any Mortgage Loan, the Servicer shall, on the Business Day immediately preceding the related
Remittance Date in any month in which any such principal or interest payment has been deferred,
deposit in the Custodial Account from its own funds, in accordance with Section 4.04 and Section
5.03, the difference between (a) such month's principal and one month's interest at the related
Mortgage Loan Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b) the
amount paid by the Mortgagor. The Servicer shall be entitled to reimbursement for such advances to
the same extent as for all other advances pursuant to Section 4.05. Without limiting the generality
of the foregoing, the Servicer shall continue, and is hereby authorized and empowered, to prepare,
execute and deliver, all instruments of satisfaction or cancellation, or of partial or full release,
discharge and all other comparable instruments, with respect to the Mortgage Loans and with respect
to the Mortgaged Properties.
In connection with any such Servicing Modification, the Servicer may reimburse itself from
the related trust for any outstanding Monthly Advances and Servicing Advances at the time of the
modification to the extent interest and principal is forgiven or Servicing Advances are reimbursed.
Any such reimbursement shall occur during the same calendar month as the Servicing Modification, and
any such reimbursement will be treated as a Realized Loss which will be incurred on the distribution
date of the related trust related to the calendar month during which the Servicing Modification
occurred. To the extent Monthly Advances and Servicing Advances or other amounts owed the Servicer
are capitalized, the related Servicer may reimburse itself from such arrearages on a first priority
basis.
The Servicer shall perform all of its servicing responsibilities hereunder or may cause a
subservicer to perform any such servicing responsibilities on its behalf, but the use by the Servicer
of a subservicer shall not release the Servicer from any of its obligations hereunder and the
Servicer shall remain responsible hereunder for all acts and omissions of each subservicer as fully
as if such acts and omissions were those of the Servicer. Any such subservicer must be a Xxxxxx Xxx
approved seller/servicer or a Xxxxxxx Mac seller/servicer in good standing and no event shall have
occurred, including but not limited to, a change in insurance coverage, which would make it unable to
comply with the eligibility requirements for lenders imposed by Xxxxxx Xxx or for seller/servicers by
Xxxxxxx Mac, or which would require notification to Xxxxxx Xxx or Xxxxxxx Mac. The Servicer shall
pay all fees and expenses of each subservicer from its own funds, and a subservicer's fee shall not
exceed the Servicing Fee.
At the cost and expense of the Servicer, without any right of reimbursement from the
Custodial Account, the Servicer shall be entitled to terminate the rights and responsibilities of a
subservicer and arrange for any servicing responsibilities to be performed by a successor subservicer
meeting the requirements in the preceding paragraph, provided, however, that nothing contained herein
shall be deemed to prevent or prohibit the Servicer, at the Servicer's option, from electing to
service the related Mortgage Loans itself. In the event that the Servicer's responsibilities and
duties under this Agreement are terminated pursuant to Section 8.04, 9.01 or 10.01, and if requested
to do so by the Owner, the Servicer shall at its own cost and expense terminate the rights and
responsibilities of each subservicer effective as of the date of termination of the Servicer. The
Servicer shall pay all fees, expenses or penalties necessary in order to terminate the rights and
responsibilities of each subservicer from the Servicer's own funds without reimbursement from the
Owner.
Notwithstanding any of the provisions of this Agreement relating to agreements or
arrangements between the Servicer and a subservicer or any reference herein to actions taken through
a subservicer or otherwise, the Servicer shall not be relieved of its obligations to the Owner and
shall be obligated to the same extent and under the same terms and conditions as if it alone were
servicing and administering the Mortgage Loans. The Servicer shall be entitled to enter into an
agreement with a subservicer for indemnification of the Servicer by the subservicer and nothing
contained in this Agreement shall be deemed to limit or modify such indemnification.
Any subservicing agreement and any other transactions or services relating to the Mortgage
Loans involving a subservicer shall be deemed to be between such subservicer and Servicer alone, and
the Owner shall have no obligations, duties or liabilities with respect to such Subservicer including
no obligation, duty or liability of Owner to pay such subservicer's fees and expenses. For purposes
of distributions and advances by the Servicer pursuant to this Agreement, the Servicer shall be
deemed to have received a payment on a Mortgage Loan when a subservicer has received such payment.
Section 4.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the date each Mortgage Loan ceases to be subject to
this Agreement, the Servicer will proceed with diligence to collect all payments due under each
Mortgage Loan when the same shall become due and payable and shall, to the extent such procedures
shall be consistent with this Agreement and the terms and provisions of related Primary Mortgage
Insurance Policy, follow such collection procedures as it follows with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Further, the Servicer will take
reasonable care in ascertaining and estimating annual ground rents, taxes, assessments, water rates,
fire and hazard insurance premiums, mortgage insurance premiums, and all other charges that, as
provided in the Mortgage, will become due and payable to the end that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become due and payable.
The Servicer shall not waive any Prepayment Charge unless: (i) the enforceability thereof
shall have been limited by bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally, (ii) the enforcement thereof is illegal, or any local, state
or federal agency has threatened legal action if the prepayment penalty is enforced, (iii) the
mortgage debt has been accelerated in connection with a foreclosure or other involuntary payment or
(iv) such waiver is standard and customary in servicing similar Mortgage Loans and relates to a
default or a reasonably foreseeable default and would, in the reasonable judgment of the Servicer,
maximize recovery of total proceeds taking into account the value of such Prepayment Charge and the
related Mortgage Loan. If a Prepayment Charge (exclusive of any Prepayment Charges with regards to
the Group II Mortgage Loans, but inclusive of any Prepayment Charges with regards to the Group I
Mortgage Loans) is waived, but does not meet the standards described above, then the Servicer is
required to pay the amount of such waived Prepayment Charge by remitting such amount to the Owner by
the Remittance Date.
Section 4.03. Realization Upon Defaulted Mortgage Loans.
The Servicer shall use its reasonable efforts, consistent with the procedures that the
Servicer would use in servicing loans for its own account and the requirements of the Xxxxxx Mae
Guide, to foreclose upon or otherwise comparably convert the ownership of properties securing such of
the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements
can be made for collection of delinquent payments pursuant to Section 4.01. In determining the
delinquency status of any Mortgage Loan, the Servicer will apply the definition of Delinquent as such
term is defined under the related pooling and servicing agreement. The Servicer shall use its
reasonable efforts to realize upon defaulted Mortgage Loans in such manner as will maximize the
receipt of principal and interest by the Owner, taking into account, among other things, the timing
of foreclosure proceedings. The foregoing is subject to the provisions that, in any case in which
Mortgaged Property shall have suffered damage, the Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its discretion (i) that
such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Owner
after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by
the Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property,
as contemplated in Section 4.05. The Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings or functions as Servicing Advances; provided, however, that it
shall be entitled to reimbursement therefor as provided in Section 4.05. Notwithstanding anything to
the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of
foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Owner otherwise requests an
environmental inspection or review of such Mortgaged Property, such an inspection or review is to be
conducted by a qualified inspector. Upon completion of the inspection, the Servicer shall promptly
provide the Owner with a written report of the environmental inspection. After reviewing the
environmental inspection report, the Owner shall determine how the Servicer shall proceed with
respect to the Mortgaged Property.
Section 4.04. Establishment of Custodial Accounts; Deposits in Custodial Accounts.
The Servicer shall segregate and hold all funds collected and received pursuant to each
Mortgage Loan separate and apart from any of its own funds and general assets and shall establish and
maintain one or more Custodial Accounts. Each Custodial Account shall be established with a
Qualified Depository. To the extent such funds are not deposited in a Custodial Account, such funds
may be invested in Permitted Investments for the benefit of the Owner (with any income earned thereon
for the benefit of the Servicer). Custodial Accounts will be reconciled within 45 days after bank
statement cutoff date. Funds deposited in the Custodial Account may be drawn on by the Servicer in
accordance with Section 4.05. The creation of any Custodial Account shall be evidenced by a letter
agreement in the form shown in Exhibit B hereto. The original of such letter agreement shall be
furnished to the Owner upon request. The Servicer acknowledges and agrees that the Servicer shall
bear any losses incurred with respect to Permitted Investments. The amount of any such losses shall
be immediately deposited by the Servicer in the Custodial Account, out of the Servicer's own funds,
with no right to reimbursement therefor.
The Servicer shall deposit in a mortgage clearing account on a daily basis, and in the
Custodial Account or Accounts no later than two (2) Business Days after receipt and identification of
funds and retain therein the following payments and collections:
(i) all payments on account of principal, including Principal Prepayments
(exclusive of any Prepayment Charges with regards to the Group II Mortgage Loans, but
inclusive of any Prepayment Charges with regards to the Group I Mortgage Loans), on the
Mortgage Loans received after the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans adjusted to the
related Mortgage Loan Remittance Rate received after the Cut-off Date;
(iii) all Net Liquidation Proceeds received after the Cut-off Date;
(iv) any net amounts received by the Servicer after the Cut-off Date in
connection with any REO Property pursuant to Section 4.13;
(v) all Insurance Proceeds received after the Cut-off Date including amounts
required to be deposited pursuant to Sections 4.08 and 4.10, other than proceeds to be held
in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with the Servicer's normal servicing procedures, the
loan documents or applicable law;
(vi) all Condemnation Proceeds affecting any Mortgaged Property received after
the Cut-off Date other than proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance
with the Servicer's normal servicing procedures, the loan documents or applicable law;
(vii) any Monthly Advances as provided in Section 5.03;
(viii) any amounts received after the Cut-off Date and required to be deposited in
the Custodial Account pursuant to Section 6.02; and
(ix) with respect to each full or partial Principal Prepayment received after
the Cut-off Date, any Prepayment Interest Shortfalls, to the extent of the Servicer's
aggregate Servicing Fee received with respect to the related Due Period.
The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being
understood and agreed that, without limiting the generality of the foregoing, payments in the nature
of late payment charges and assumption fees, to the extent permitted by Section 6.01, and all
Prepayment Interest Excess need not be deposited by the Servicer in the Custodial Account.
Section 4.05. Permitted Withdrawals From the Custodial Account.
The Servicer may, from time to time, make withdrawals from the Custodial Account for the
following purposes:
(i) to make payments to the Owner in the amounts and in the manner provided for in
Section 5.01;
(ii) to reimburse itself for Monthly Advances, the Servicer's right to reimburse itself
pursuant to this subclause (ii) being limited to amounts received on the related Mortgage Loan which
represent late collections (net of the related Servicing Fees) of principal and/or interest
respecting which any such advance was made;
(iii) to reimburse itself for unreimbursed Servicing Advances and Monthly Advances, the
Servicer's right to reimburse itself pursuant to this subclause (iii) with respect to any Mortgage
Loan being limited to Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds received
after the Cut-off Date related to such Mortgage Loan;
(iv) to pay to itself as servicing compensation (a) any interest earned on funds in the
Custodial Account (all such interest to be withdrawn monthly not later than each Remittance Date) and
(b) the Servicing Fee from that portion of any payment recovery attributable to interest on a
particular Mortgage Loan;
(v) to reimburse itself for any Nonrecoverable Advances or advances made in connection
with any Servicing Modification pursuant to Section 4.01;
(vi) to transfer funds to another Qualified Depository in accordance with Section 4.09
hereof;
(vii) to reimburse itself as provided in Section 8.03 hereof;
(viii) to remove funds inadvertently placed in the Custodial Account in error by the
Servicer; and
(ix) to clear and terminate the Custodial Account upon the termination of this Agreement.
Section 4.06. Establishment of Escrow Accounts; Deposits in Escrow Accounts.
The Servicer shall segregate and hold all funds collected and received pursuant to each
Mortgage Loan which constitute Escrow Payments separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Escrow Accounts. Each Escrow Account
shall be established with a Qualified Depository. To the extent such funds are not deposited in an
Escrow Account, such funds may be invested in Permitted Investments. Funds deposited in an Escrow
Account may be drawn on by the Servicer in accordance with Section 4.07. The creation of any Escrow
Account shall be evidenced by a letter agreement in the form shown in Exhibit C. The original of such
letter agreement shall be furnished to the Owner upon request. The Servicer acknowledges and agrees
that the Servicer shall bear any losses incurred with respect to Permitted Investments. The amount
of any such losses shall be immediately deposited by the Servicer in the Escrow Account, as
appropriate, out of the Servicer's own funds, with no right to reimbursement therefor.
The Servicer shall deposit in a mortgage clearing account on a daily basis, and in the
Escrow Account or Accounts no later than two (2) Business Days after receipt of funds and retain
therein:
(i) all Escrow Payments collected on account of the Mortgage Loans, for the purpose of
effecting timely payment of any items as are required under the terms of this Agreement;
(ii) all Insurance Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow Payments are insufficient to
cover escrow disbursements.
The Servicer shall make withdrawals from an Escrow Account only to effect such payments as
are required under this Agreement, and for such other purposes as shall be as set forth in and in
accordance with Section 4.07. Except as provided in Section 4.07, the Servicer shall be entitled to
retain any interest paid on funds deposited in an Escrow Account by the Qualified Depository.
Section 4.07. Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments, water rates, fire and
hazard insurance premiums, Primary Mortgage Insurance Policy premiums, if applicable, and comparable
items;
(ii) to reimburse Servicer for any Servicing Advance made by Servicer with respect to a
related Mortgage Loan but only from amounts received on the related Mortgage Loan which represent
late payments or collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined to be overages;
(iv) for transfer to the Custodial Account in connection with an acquisition of REO
Property;
(v) for application to restoration or repair of the Mortgaged Property;
(vi) to pay to the Servicer, or to the Mortgagor to the extent required by law, any
interest paid on the funds deposited in the Escrow Account;
(vii) to pay to the Mortgagors or other parties Insurance Proceeds deposited in accordance
with Section 4.06;
(viii) to remove funds inadvertently placed in an Escrow Account in error by the Servicer;
and
(ix) to clear and terminate the Escrow Account on the termination of this Agreement.
As part of its servicing duties, the Servicer shall pay to the Mortgagors interest on funds
in an Escrow Account, to the extent required by law, and to the extent that interest earned on funds
in the Escrow Account is insufficient, shall pay such interest from its own funds, without any
reimbursement therefor.
Section 4.08. Payment of Taxes, Insurance and Other Charges, Maintenance of Primary
Mortgage Insurance Policies, Collections Thereunder.
With respect to each Mortgage Loan, the Servicer shall maintain accurate records reflecting
the status of ground rents, taxes, assessments, water rates and other charges which are or may become
a lien upon the Mortgaged Property and the status of Primary Mortgage Insurance Policy premiums and
fire and hazard insurance coverage and shall obtain, from time to time, all bills for the payment of
such charges, including renewal premiums and shall effect payment thereof prior to the applicable
penalty or termination date and at a time appropriate for securing maximum discounts allowable,
employing for such purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Servicer in amounts sufficient for such purposes, as allowed under
the terms of the Mortgage or applicable law. To the extent that the Mortgage does not provide for
Escrow Payments, the Servicer shall determine that any such payments are made by the Mortgagor when
due. The Servicer assumes full responsibility for the timely payment of all such bills and shall
effect timely payments of all such bills irrespective of the Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments and shall make advances from its own funds to
effect such payments.
The Servicer will maintain in full force and effect Primary Mortgage Insurance Policies
issued by a Qualified Insurer with respect to each Mortgage Loan for which such coverage is herein
required. Such coverage will be maintained until the ratio of the current outstanding principal
balance of the related Mortgage Loan to the appraised value of the related Mortgaged Property, based
on the most recent appraisal of the Mortgaged Property performed by a Qualified Appraiser, such
appraisal to be included in the Servicing File, is reduced to an amount for which Xxxxxx Xxx no
longer requires such insurance to be maintained. The Servicer will not cancel or refuse to renew any
Primary Mortgage Insurance Policy that is required to be kept in force under this Agreement unless a
replacement Primary Mortgage Insurance Policy for such canceled or nonrenewed policy is obtained from
and maintained with a Qualified Insurer. The Servicer shall not take any action which would result
in noncoverage under any applicable Primary Mortgage Insurance Policy of any loss which, but for the
actions of the Servicer would have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Section 6.01, the Servicer
shall promptly notify the insurer under the related Primary Mortgage Insurance Policy, if any, of
such assumption or substitution of liability in accordance with the terms of such policy and shall
take all actions which may be required by such insurer as a condition to the continuation of coverage
under the Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance Policy is terminated
as a result of such assumption or substitution of liability, the Servicer shall obtain a replacement
Primary Mortgage Insurance Policy as provided above.
In connection with its activities as servicer, the Servicer agrees to prepare and present,
on behalf of itself and the Owner, claims to the insurer under any Private Mortgage Insurance Policy
in a timely fashion in accordance with the terms of such Primary Mortgage Insurance Policy and, in
this regard, to take such action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to Section 4.04, any amounts
collected by the Servicer under any Primary Mortgage Insurance Policy shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 4.05.
Section 4.09. Transfer of Accounts.
The Servicer may transfer the Custodial Account or the Escrow Account to a different
Qualified Depository from time to time. The Servicer shall notify the Owner of any such transfer
within 15 Business Days of transfer. If any one of the investment ratings of a Qualified Depository
holding funds or Eligible Investments in the Custodial Account or Escrow Account is downgraded by the
issuing rating agency, the Servicer shall, within three (3) Business Days of receipt of notice of the
downgrading, transfer all such accounts, funds and Permitted Investments to a different Qualified
Depository in accordance with this Agreement.
Section 4.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan fire and hazard insurance
with extended coverage as is customary in the area where the Mortgaged Property is located in an
amount which is equal to the lesser of (i) the maximum insurable value of the improvements securing
such Mortgage Loan or (ii) the greater of (a) the outstanding principal balance of the Mortgage Loan,
and (b) the percentage such that the proceeds thereof shall be sufficient to prevent the Mortgagor
and/or the Mortgagee from becoming a co-insurer. If the Mortgaged Property is in an area identified
in the Federal Register by the Federal Emergency Management Agency as being a special flood hazard
area that has federally-mandated flood insurance requirements, the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current guidelines of the Federal
Insurance Administration with a generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (i) the outstanding principal balance of the Mortgage Loan, (ii)
the maximum insurable value of the improvements securing such Mortgage Loan or (iii) the maximum
amount of insurance which is available under the Flood Disaster Protection Act of 1973, as amended.
The Servicer shall also maintain on the REO Property, fire and hazard insurance with extended
coverage in an amount which is at least equal to the maximum insurable value of the improvements
which are a part of such property, liability insurance and, to the extent required and available
under the Flood Disaster Protection Act of 1973, as amended, flood insurance in an amount as provided
above. Any amounts collected by the Servicer under any such policies other than amounts to be
deposited in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or
REO Property, or released to the Mortgagor in accordance with the Servicer's normal servicing
procedures, shall be deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05. It is understood and agreed that no other additional insurance need be required by the
Servicer or the Mortgagor or maintained on property acquired in respect of the Mortgage Loans, other
than pursuant to the Xxxxxx Mae Guide or such applicable state or federal laws and regulations as
shall at any time be in force and as shall require such additional insurance. All such policies
shall be endorsed with standard mortgagee clauses with loss payable to the Servicer and its
successors and/or assigns and shall provide for at least thirty days prior written notice of any
cancellation, reduction in the amount or material change in coverage to the Servicer. The Servicer
shall not interfere with the Mortgagor's freedom of choice in selecting either his insurance carrier
or agent, provided, however, that the Servicer shall not accept any such insurance policies from
insurance companies unless such companies currently reflect a General Policy Rating in Best's Key
Rating Guide currently acceptable to Xxxxxx Xxx and are licensed to do business in the state wherein
the property subject to the policy is located.
Section 4.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a mortgage impairment or blanket
policy issued by an issuer that has a Best rating of A:VI insuring against hazard losses on all of
Mortgaged Properties securing the Mortgage Loans, then, to the extent such policy provides coverage
in an amount equal to the amount required pursuant to Section 4.10 and otherwise complies with all
other requirements of Section 4.10, the Servicer shall conclusively be deemed to have satisfied its
obligations as set forth in Section 4.10, it being understood and agreed that such policy may contain
a deductible clause, in which case the Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy complying with Section 4.10,
and there shall have been one or more losses which would have been covered by such policy, deposit in
the Custodial Account the amount not otherwise payable under the blanket policy because of such
deductible clause. In connection with its activities as Servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of the Owner, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy. Upon request of the Owner, the Servicer
shall cause to be delivered to the Owner a certified true copy of such policy and a statement from
the insurer thereunder that such policy shall in no event be terminated or materially modified
without thirty (30) days prior written notice to the Owner.
Section 4.12. Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity bond and an errors and
omissions insurance policy, with broad coverage with responsible companies that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac on all officers, employees or other persons acting in any
capacity with regard to the Mortgage Loans and who handle funds, money, documents and papers relating
to the Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be in the form of
the Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of such
persons. Such Fidelity Bond and errors and omissions insurance shall also protect and insure the
Servicer against losses in connection with the failure to maintain any insurance policies required
pursuant to this Agreement and the release or satisfaction of a Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of this Section 4.12 requiring the
Fidelity Bond and errors and omissions insurance shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement. The minimum coverage under any such Fidelity
Bond and insurance policy shall be at least equal to the corresponding amounts required by Xxxxxx Mae
in the Xxxxxx Xxx Guide or by Xxxxxxx Mac in the Xxxxxxx Mac Guide. The Servicer shall, upon request
of Owner, deliver to the Owner a certificate from the surety and the insurer as to the existence of
the Fidelity Bond and errors and omissions insurance policy and shall obtain a statement from the
surety and the insurer that such Fidelity Bond or insurance policy shall in no event be terminated or
materially modified without thirty days prior written notice to the Owner. The Servicer shall notify
the Owner within five Business Days of receipt of notice that such Fidelity Bond or insurance policy
will be, or has been, materially modified or terminated. The Owner and its successors or assigns as
their interests may appear must be named as loss payees on the Fidelity Bond and as additional
insured on the errors and omissions policy.
Section 4.13. Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in
lieu of foreclosure, the deed or certificate of sale shall be taken in the name of the Owner or its
designee. Any such Person or Persons holding such title other than the Owner shall acknowledge in
writing that such title is being held as nominee for the benefit of the Owner.
The Servicer shall assume the responsibility for marketing each REO Property in accordance
with Accepted Servicing Practices. Thereafter, the Servicer shall continue to provide certain
administrative services to the Owner relating to such REO Property as set forth in this Section 4.13.
The REO Property must be sold within three years following the end of the calendar year of the date
of acquisition, unless a REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held and (i) the Owner shall have been supplied with an Opinion
of Counsel (at the Servicer's expense) to the effect that the holding by the related trust of such
Mortgaged Property subsequent to such three-year period (and specifying the period beyond such
three-year period for which the Mortgaged Property may be held) will not result in the imposition of
taxes on "prohibited transactions" of the related trust as defined in Section 860F of the Code, or
cause the related REMIC to fail to qualify as a REMIC, in which case the related trust may continue
to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel), or
(ii) the Owner (at the Servicer's expense) or the Servicer shall have applied for, prior to the
expiration of such three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year period shall be extended
by the applicable period. If a period longer than three years is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall report monthly to the Owner as
to progress being made in selling such REO Property.
Notwithstanding any other provision of this Agreement, if a REMIC election has been made, no
Mortgaged Property held by a REMIC shall be rented (or allowed to continue to be rented) or otherwise
used for the production of income by or on behalf of the related trust or sold or managed in such a
manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify at
any time as "foreclosure property" within a meaning of Section 860G(a)(8) of the Code, (ii) subject
the related trust to the imposition of any federal or state income taxes on "net income from
foreclosure property" with respect to such Mortgaged Property within the meaning of Section 860G(c)
of the Code, or (iii) cause the sale of such Mortgaged Property to result in the receipt by the
related trust or any income from non-permitted assets as described in Section 860F(a) (2)(B) of the
Code, unless the Servicer has agreed to indemnify and hold harmless the related trust with respect to
the imposition of any such taxes.
The Servicer shall deposit or cause to be deposited, on a daily basis in each Custodial
Account all revenues received with respect to the related REO Property and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of the REO Property, including
the cost of maintaining any hazard insurance pursuant to Section 4.10 hereof. The Servicer shall
maintain separate records with respect to each REO Property identifying all deposits and withdrawals
from the Custodial Account for each REO Property.
The Servicer shall furnish to the Owner on each Remittance Date, an operating statement for
each REO Property covering the operation of each REO Property for the previous month. Such operating
statement shall be accompanied by such other information as the Owner shall reasonably request.
The Servicer shall, either itself or through an agent selected by the Servicer, and in
accordance with the Xxxxxx Mae Guide, manage, conserve, protect and operate each REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed property for its own
account, and in the same manner that similar property in the same locality as the REO Property is
managed. Each REO Disposition shall be carried out by the Servicer at such price and upon such terms
and conditions as the Servicer deems to be in the best interest of the Owner. The REO Disposition
Proceeds from the sale of the REO Property shall be promptly deposited in the Custodial Account. As
soon as practical thereafter, the expenses of such sale shall be paid and the Servicer shall
reimburse itself for any related Servicing Advances, or Monthly Advances made pursuant to Section
5.03.
The Servicer shall cause each REO Property to be inspected promptly upon the acquisition of
title thereto and shall cause each REO Property to be inspected at least monthly thereafter or more
frequently as may be required by the circumstances. The Servicer shall make or cause the inspector to
make a written report of each such inspection. Such reports shall be retained in the Servicing File
and copies thereof shall be forwarded by the Servicer to the Owner.
Section 4.14. Notification of Adjustments.
With respect to each Mortgage Loan, the Servicer shall adjust the Mortgage Interest Rate on
the related Interest Rate Adjustment Date in compliance with requirements of applicable law and the
related Mortgage and Mortgage Note. The Servicer shall execute and deliver any and all necessary
notices required under applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Interest Rate adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Owner such notifications and any additional applicable data regarding such
adjustments and the methods used to calculate and implement such adjustments. Upon the discovery by
the Servicer or the receipt of notice from the Owner that the Servicer has failed to adjust a
Mortgage Interest Rate in accordance with the terms of the related Mortgage Note and Mortgage, the
Servicer shall immediately deposit in the Custodial Account from its own funds the amount of any
interest loss or deferral caused to the Owner thereby.
ARTICLE V
PAYMENTS TO THE OWNER
Section 5.01. Remittances.
On each Remittance Date, the Servicer shall remit to the Owner (i) all amounts credited to
the Custodial Account as of the close of business on the last day of the calendar month preceding the
Determination Date, net of charges against or withdrawals from the Custodial Account pursuant to
Section 4.05, except (a) Full Principal Prepayments received on or before the 15th day of the month
in which a Remittance Date occurs shall be remitted to the Owner on the Remittance Date of such
month, and (b) Full Principal Prepayments received after the 15th day of the month in which a
Remittance Date occurs shall be remitted to the Owner on the next following Remittance Date, plus, to
the extent not already deposited in the Custodial Account, the sum of (ii) all Monthly Advances, if
any, which the Servicer is obligated to distribute pursuant to Section 5.03 and (iii) all Prepayment
Interest Shortfalls the Servicer is required to make up pursuant to Section 4.04, minus (iv) any
amounts attributable to Monthly Payments collected after the Cut-off Date but due on a Due Date or
Dates subsequent to the last day of the related Due Period, which amounts shall be remitted on the
related Remittance Date next succeeding the Due Period for such amounts.
With respect to any remittance received by the Owner after the Business Day on which such
payment was due, the Servicer shall pay to the Owner interest on any such late payment at an annual
rate equal to the Prime Rate, adjusted as of the date of each change, plus two percentage points, but
in no event greater than the maximum amount permitted by applicable law. Such interest shall be
remitted to the Owner by the Servicer on the date such late payment is made and shall cover the
period commencing with the day following such Business Day and ending with the Business Day on which
such payment is made, both inclusive. The payment by the Servicer of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by the Servicer.
Section 5.02 Statements to the Owner and the Master Servicer.
The Servicer shall furnish to the Master Servicer an individual Mortgage Loan accounting
report (a "Report"), as of the last Business Day of each month and the end of the related Prepayment
Period, as applicable, in the Servicer's assigned loan number order to document Mortgage Loan payment
activity on an individual Mortgage Loan basis. With respect to each month, such Report shall be
received by the Owner and the Master Servicer no later than the tenth Business Day of the month of
the related Remittance Date (or, with respect to information as to Full Principal Prepayments and
prepayment penalties no later than one (1) Business Day after the end of each Prepayment Period), a
report in an Excel (or compatible) electronic format, in such format as may be mutually agreed upon
by both the Owner and the Servicer, and which shall provide the information required to be contained
in the monthly statements to certificateholders as specified in the related pooling and servicing
Agreement, to the extent applicable to the Servicer.
In addition, the Servicer shall provide to the Master Servicer and the Owner such other
information known or available to the Servicer that is necessary in order to provide the distribution
and pool performance information as required under Regulation AB, as amended from time to time, as
determined by the Owner in its sole discretion. The Servicer shall also provide a monthly report, in
the form of Exhibit E hereto, or such other form as is mutually acceptable to the Servicer, the Owner
and the Master Servicer, Exhibit F with respect to defaulted mortgage loans and Exhibit K, with
respect to realized losses and gains, with each such report.
The Servicer shall prepare and file any and all information statements or other filings
required to be delivered to any governmental taxing authority or to Owner or the Master Servicer
pursuant to any applicable law with respect to the Mortgage Loans and the transactions contemplated
hereby. In addition, the Servicer shall provide the Owner and the Master Servicer with such
information concerning the Mortgage Loans as is necessary for the Owner and the Master Servicer to
prepare its federal income tax return as Owner and the Master Servicer may reasonably request from
time to time.
In addition, not more than 60 days after the end of each calendar year, the Servicer shall
furnish to each Person who was an Owner and the Master Servicer at any time during such calendar year
an annual statement in accordance with the requirements of applicable federal income tax law as to
the aggregate of remittances of principal and interest for the applicable portion of such year.
Section 5.03. Monthly Advances by the Servicer.
Not later than the close of business on the Business Day preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account an amount equal to all payments not previously
advanced by the Servicer, whether or not deferred pursuant to Section 4.01, of Monthly Payments,
adjusted to the related Mortgage Loan Remittance Rate, which are delinquent at the close of business
on the related Determination Date; provided, however, that the amount of any such deposit may be
reduced by the Amount Held for Future Distribution (as defined below) then on deposit in the
Custodial Account. Any portion of the Amount Held for Future Distribution used to pay Monthly
Advances shall be replaced by the Servicer by deposit into the Custodial Account on any future
Remittance Date to the extent that the funds that are available in the Custodial Account for
remittance to the Owner on such Remittance Date are less than the amount of payments required to be
made to the Owner on such Remittance Date.
The "Amount Held for Future Distribution" as to any Remittance Date shall be the total of
the amounts held in the Custodial Account at the close of business on the preceding Determination
Date which were received after the Cut-off Date on account of (i) Liquidation Proceeds, Insurance
Proceeds, and Principal Prepayments received or made in the month of such Remittance Date, and (ii)
payments which represent early receipt of scheduled payments of principal and interest due on a date
or dates subsequent to the related Due Date.
The Servicer's obligation to make such Monthly Advances as to any Mortgage Loan will
continue through the final disposition or liquidation of the Mortgaged Property, unless the Servicer
deems such advance to be nonrecoverable from Liquidation Proceeds, REO Disposition Proceeds or
Insurance Proceeds with respect to the applicable Mortgage Loan. In such latter event, the Servicer
shall deliver to the Owner an Officer's Certificate of the Servicer to the effect that an officer of
the Servicer has reviewed the related Servicing File and has obtained a recent appraisal and has made
the reasonable determination that any additional advances are nonrecoverable from Liquidation or
Insurance Proceeds with respect to the applicable Mortgage Loan.
Section 5.04. Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof by the Owner
pursuant to a deed-in-lieu of foreclosure, the Servicer shall submit to the Owner a liquidation
report with respect to such Mortgaged Property in such form as the Servicer and the Owner shall
agree. The Servicer shall also provide reports on the status of REO Property containing such
information as Owner may reasonably require.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01. Assumption Agreements.
The Servicer will, to the extent it has knowledge of any conveyance or prospective
conveyance by any Mortgagor of a Mortgaged Property (whether by absolute conveyance or by contract
of, sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note
and/or the Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that the Servicer shall not
exercise any such rights if prohibited by law or the terms of the Mortgage Note from doing so or if
the exercise of such rights would impair or threaten to impair any recovery under the related Primary
Mortgage Insurance Policy, if any. If the Servicer reasonably believes it is unable under applicable
law to enforce such "due-on-sale" clause, the Servicer, will enter into an assumption agreement with
the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant
to which such person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Where an assumption is allowed pursuant
to this Section 6.01, the Servicer, with the prior consent of the primary mortgage insurer, if any,
is authorized to enter into a substitution of liability agreement with the person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to which the original
mortgagor is released from liability and such Person is substituted as mortgagor and becomes liable
under the related Mortgage Note. Any such substitution of liability agreement shall be in lieu of an
assumption agreement.
In connection with any such assumption or substitution of liability, the Servicer shall
follow the underwriting practices and procedures of the Xxxxxx Mae Guide. With respect to an
assumption or substitution of liability, the Mortgage Interest Rate borne by the related Mortgage
Note and the amount of the Monthly Payment may not be changed. The Servicer shall notify the Owner
that any such substitution of liability or assumption agreement has been completed by forwarding to
the Owner the original of any such substitution of liability or assumption agreement, which document
shall be added to the related Mortgage Loan Documents and shall, for all purposes, be considered a
part of such related mortgage file to the same extent as all other documents and instruments
constituting a part thereof. All fees collected by the Servicer for entering into an assumption or
substitution of liability agreement shall belong to the Servicer.
Notwithstanding the foregoing paragraphs of this section or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any other violation of its
obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law or any
assumption which the Servicer may be restricted by law from preventing, for any reason whatsoever.
For purposes of this Section 6.01, the term "assumption" is deemed to also include a sale of the
Mortgaged Property subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
Section 6.02. Satisfaction of Mortgages and Release of Mortgage Loan Documents.
Upon the payment in full of any Mortgage Loan, the Servicer will immediately notify the
Custodian with a certification and request for release by a Servicing Officer, which certification
shall include a statement to the effect that all amounts received in connection with such payment
which are required to be deposited in the Custodial Account pursuant to Section 4.04 have been so
deposited, and a request for delivery to the Servicer of the portion of the Mortgage Loan Documents
held by the Custodian. Upon receipt of such certification and request, the Owner shall promptly
release or cause the Custodian to promptly release the related Mortgage Loan Documents to the
Servicer and the Servicer shall prepare and deliver for execution by the Owner or at the Owner's
option execute under the authority of a power of attorney delivered to the Servicer by the Owner any
satisfaction or release. No expense incurred in connection with any instrument of satisfaction or
deed of reconveyance shall be chargeable to the Custodial Account.
In the event the Servicer satisfies or releases a Mortgage without having obtained payment
in full of the indebtedness secured by the Mortgage or should it otherwise prejudice any right the
Owner may have under the mortgage instruments, the Servicer, upon written demand, shall remit within
one Business Day to the Owner the then outstanding principal balance of the related Mortgage Loan by
deposit thereof in the Custodial Account. The Servicer shall maintain the Fidelity Bond insuring the
Servicer against any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
From time to time and as appropriate for the servicing or foreclosure of the Mortgage Loans,
including for the purpose of collection under any Primary Mortgage Insurance Policy, upon request of
the Servicer and delivery to the Custodian of a servicing receipt signed by a Servicing Officer, the
Custodian shall release the portion of the Mortgage Loan Documents held by the Custodian to the
Servicer. Such servicing receipt shall obligate the Servicer to promptly return the related Mortgage
Loan Documents to the Custodian, when the need therefor by the Servicer no longer exists, unless the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Custodial Account or such documents have been delivered to an attorney, or to a
public trustee or other public official as required by law, for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Servicer has promptly delivered to the Owner or the Custodian a certificate
of a Servicing Officer certifying as to the name and address of the Person to which such documents
were delivered and the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated, the servicing receipt shall be
released by the Owner or the Custodian, as applicable, to the Servicer.
Section 6.03. Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be entitled to withdraw from
the Custodial Account or to retain from interest payments on the Mortgage Loans the amounts provided
for as the Servicer's Servicing Fee. Additional servicing compensation in the form of Prepayment
Charges with regards to the Group II Mortgage Loans, assumption fees, as provided in Section 6.01,
late payment charges and other ancillary fees shall be retained by the Servicer to the extent not
required to be deposited in the Custodial Account. The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided for.
Section 6.04. Annual Statement as to Compliance; Annual Certification.
(a) The Servicer will deliver to the Owner and the Master Servicer, not later than March
15th of each calendar year beginning in 2007, an Officer's Certificate (an "Annual Statement of
Compliance") stating, as to each signatory thereof, that (i) a review of the activities of the
Servicer during the preceding calendar year and of performance under this Agreement or other
applicable servicing agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all of its obligations
under this Agreement or other applicable servicing agreement in all material respects throughout such
year, or, if there has been a failure to fulfill any such obligation in any material respect,
specifying each such failure known to such officer and the nature and status of cure provisions
thereof. Such Annual Statement of Compliance shall contain no restrictions or limitations on its
use. Copies of such statement shall be provided by the Servicer to the Owner upon request and by the
Owner to any Person identified as a prospective purchaser of the Mortgage Loans. In the event that
the Servicer has delegated any servicing responsibilities with respect to the Mortgage Loans to a
Subservicer, the Servicer shall deliver an Annual Statement of Compliance of the Subservicer as
described above as to each Subservicer as and when required with respect to the Servicer.
(b) With respect to the Mortgage Loans, by March 15th of each calendar year beginning in
2007, an officer of the Servicer shall execute and deliver an Officer's Certificate (an "Annual
Certification") to the Owner, the Master Servicer, the Securities Administrator, and any related
Depositor for the benefit of each such entity and such entity's affiliates and the officers,
directors and agents of any such entity and such entity's affiliates, in the form attached hereto as
Exhibit G. In the event that the Servicer has delegated any servicing responsibilities with respect
to the Mortgage Loans to a Subservicer or a Subcontractor, to the extent such Subcontractor is
"participating in the servicing function" pursuant to Item 1122 of Regulation AB, the Servicer shall
deliver an Annual Certification as to each such Subservicer and Subcontractor, as and when required
with respect to the Servicer.
In the event the Servicer or any Subservicer or Subcontractor engaged by it is terminated,
assigns its rights and obligations under, or resigns pursuant to the terms of this Agreement, or any
other applicable agreement in the case of a Subservicer or Subcontractor, as the case may be, such
party shall provide an Annual Statement of Compliance pursuant to this Section 6.04 or to the related
section of such other applicable agreement, as the case may be, as to the performance of its
obligations with respect to the period of time it was subject to this Agreement or any other
applicable agreement, as the case may be, notwithstanding any such termination, assignment or
resignation.
The Servicer shall indemnify and hold harmless the Master Servicer and its officers,
directors, agents and affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach by the Servicer or any of its officers, directors, agents or affiliates of its
obligations under this Section 6.04 or Section 6.09 or the negligence, bad faith or willful
misconduct of the Servicer in connection therewith. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Master Servicer, then the Servicer agrees that it
shall contribute to the amount paid or payable by the Master Servicer as a result of the losses,
claims, damages or liabilities of the Master Servicer in such proportion as is appropriate to reflect
the relative fault of the Master Servicer on the one hand and the Servicer on the other in connection
with a breach of the Servicer's obligations under this Section 6.04 or Section 6.09 or the Servicer's
negligence, bad faith or willful misconduct in connection therewith.
Upon request by the Owner or the Master Servicer, the Servicer will deliver to such
requesting party a copy of the audited (if such financial statements are available, otherwise
unaudited) financial statements of the Servicer for the most recent fiscal year of the Servicer.
Section 6.05. [Reserved]
Section 6.06. Owner's Right to Examine Servicer Records.
The Owner shall have the right to examine and audit, at its expense, upon reasonable notice
to the Servicer, during business hours or at such other times as might be reasonable under applicable
circumstances, any and all of the books, records, documentation or other information of the Servicer,
or held by another for the Servicer or on its behalf or otherwise, which relate to the performance or
observance by the Servicer of the terms, covenants or conditions of this Agreement.
The Servicer shall provide to the Owner and any supervisory agents or examiners representing
a state or federal governmental agency having jurisdiction over the Owner access to any documentation
regarding the Mortgage Loans in the possession of the Servicer which may be required by any
applicable regulations. Such access shall be afforded without charge, upon reasonable request,
during normal business hours and at the offices of the Servicer, and in accordance with the
applicable federal or state government regulations.
Section 6.07. Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under which the Mortgage
Loans and REO Property are held, the Servicer shall not take any action, cause the REMIC to take any
action or fail to take (or fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited to the tax on "prohibited
transactions" as defined in Section 860F(a)(2) of the Code and the tax on "contribution" to a REMIC
set forth in Section 860G(d) of the Code unless the Servicer has received an Opinion of Counsel (at
the expense of the party seeking to take such actions) to the effect that the contemplated action
will not endanger such REMIC status or result in the imposition of any such tax.
Section 6.08. Non-solicitation.
The Servicer shall not knowingly conduct any solicitation exclusively targeted to the
Mortgagors for the purpose of inducing or encouraging the early prepayment or refinancing of the
related Mortgage Loans. It is understood and agreed that promotions undertaken by the Servicer or
any agent or affiliate of the Servicer which are directed to the general public at large, including,
without limitation, mass mailings based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this section. Nothing contained
herein shall prohibit the Servicer from (i) distributing to Mortgagors any general advertising
including information brochures, coupon books, or other similar documentation which indicates
services the Servicer offers, including refinances or (ii) providing financing of home equity loans
to Mortgagors at the Mortgagor's request.
Section 6.09. Assessment of Compliance with Servicing Criteria.
On and after January 1, 2006, the Servicer shall service and administer, and shall cause
each subservicer to service or administer, the Mortgage Loans in accordance with all applicable
requirements of the Servicing Criteria.
With respect to the Mortgage Loans, the Servicer shall deliver to the Owner or its designee,
the Master Servicer, the Securities Administrator, and any Depositor on or before March 15th of each
calendar year beginning in 2007, a report (an "Assessment of Compliance") regarding the Servicer's
assessment of compliance with the Servicing Criteria during the preceding calendar year as required
by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB, or as otherwise
required by the Master Servicer, which as of the date hereof, require a report by an authorized
officer of the Servicer that contains the following:
(a) A statement by such officer of its responsibility for assessing compliance with the
Servicing Criteria applicable to the Servicer;
(b) A statement by such officer that such officer used the Servicing Criteria to assess
compliance with the Servicing Criteria applicable to the Servicer;
(c) An assessment by such officer of the Servicer's compliance with the applicable
Servicing Criteria for the period consisting of the preceding calendar year, including disclosure of
any material instance of noncompliance with respect thereto during such period, which assessment
shall be based on the activities it performs with respect to asset-backed securities transactions
taken as a whole involving the Servicer, that are backed by the same asset type as the Mortgage Loans;
(d) A statement that a registered public accounting firm has issued an attestation
report on the Servicer's Assessment of Compliance for the period consisting of the preceding calendar
year; and
(e) A statement as to which of the Servicing Criteria, if any, are not applicable to the
Servicer, which statement shall be based on the activities it performs with respect to asset-backed
securities transactions taken as a whole involving the Servicer, that are backed by the same asset
type as the Mortgage Loans.
Such report at a minimum shall address each of the Servicing Criteria specified on Exhibit J
hereto.
With respect to the Mortgage Loans, on or before March 15th of each calendar year beginning
in 2007, the Servicer shall furnish to the Owner or its designee, the Master Servicer, the Securities
Administrator and any Depositor a report (an "Attestation Report") by a registered public accounting
firm that attests to, and reports on, the Assessment of Compliance made by the Servicer, as required
by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, or as otherwise
required by the Master Servicer, which Attestation Report must be made in accordance with standards
for attestation reports issued or adopted by the Public Company Accounting Oversight Board.
The Servicer shall cause each Subservicer, and each Subcontractor determined by the Servicer
pursuant to Section 11.15 to be "participating in the servicing function" within the meaning of Item
1122 of Regulation AB, to deliver to the Owner, the Master Servicer, the Securities Administrator and
any Depositor an assessment of compliance and accountants' attestation as and when provided in
Section 6.09.
In the event the Servicer or any Subservicer or Subcontractor engaged by it is terminated,
assigns its rights and obligations under, or resigns pursuant to the terms of this Agreement or any
other applicable agreement in the case of a Subservicer or Subcontractor, as the case may be, such
party shall provide an Assessment of Compliance and cause to be provided an Attestation Report
pursuant to this Section 6.09 or to the related section of such other applicable agreement, as the
case may be, notwithstanding any such termination , assignment or resignation.
Section 6.10. Intent of the Parties; Reasonableness.
The Owner and the Servicer acknowledge and agree that a purpose of clause (g) of Article
III, Sections 5.02, 6.04, 6.09 and 10.02 of this Agreement is to facilitate compliance by the Owner
and any Depositor with the provisions of Regulation AB and related rules and regulations of the
Commission. None of the Owner, the Master Servicer or any Depositor shall exercise its right to
request delivery of information or other performance under these provisions other than in good faith,
or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and
regulations of the Commission thereunder. The Servicer acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive guidance provided by
the Commission or its staff, consensus among participants in the asset-backed securities markets,
advice of counsel, or otherwise, and agrees to comply with requests made by the Owner or any
Depositor in good faith for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with any Pass-Through Transfer, the Servicer shall
cooperate fully with the Owner to deliver to the Owner (including any of its assignees or designees)
and any Depositor, any and all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Owner or any Depositor to permit the Owner or such
Depositor to comply with the provisions of Regulation AB, together with such disclosures relating to
the Servicer, any Subservicer and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Owner or any Depositor to be necessary in order to effect such compliance.
ARTICLE VII
REPORTS TO BE PREPARED BY SERVICER
Section 7.01. Servicer Shall Provide Information as Reasonably Required.
The Servicer shall furnish to the Owner upon request, during the term of this Agreement,
such periodic, special or other reports or information, whether or not provided for herein, as shall
be necessary, reasonable or appropriate with respect to the purposes of this Agreement. The Servicer
may negotiate with the Owner for a reasonable fee for providing such report or information, unless
(i) the Servicer is required to supply such report or information pursuant to any other section of
this Agreement, or (ii) the report or information has been requested in connection with Internal
Revenue Service or other regulatory agency requirements. All such reports or information shall be
provided by and in accordance with all reasonable instructions and directions given by the Owner. The
Servicer agrees to execute and deliver all such instruments and take all such action as the Owner,
from time to time, may reasonably request in order to effectuate the purpose and to carry out the
terms of this Agreement.
ARTICLE VIII
THE SERVICER
Section 8.01. Indemnification; Third Party Claims.
The Servicer agrees to indemnify the Owner, its successors and assigns, any agent of the
Owner, and the Master Servicer, and hold each of such Persons harmless from and against any and all
claims, losses, damages, penalties, fines, forfeitures, legal fees and related costs, judgments, and
any other costs, fees and expenses that such Person may sustain in any way related to the failure of
the Servicer to perform in any way its duties and service the Mortgage Loans in strict compliance
with the terms of this Agreement and for breach of any representation or warranty of the Servicer
contained herein. The Servicer shall immediately notify the Owner or other indemnified Person if a
claim is made by a third party with respect to this Agreement or the Mortgage Loans, assume (with the
consent of the Owner and such other Indemnified Person and with counsel reasonably satisfactory to
the Owner and such Person) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against it or such other indemnified Person in respect of such claim but failure
to so notify the Owner and such other indemnified Person shall not limit its obligations hereunder.
The Servicer agrees that it will not enter into any settlement of any such claim without the consent
of the Owner and such other indemnified Person unless such settlement includes an unconditional
release of the Owner and such other indemnified Person from all liability that is the subject matter
of such claim. The provisions of this Section 8.01 shall survive termination of this Agreement.
Section 8.02. Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights and franchises as a corporation
under the laws of the state of its incorporation except as permitted herein, and will obtain and
preserve its qualification to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and enforceability of this Agreement
or any of the Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer shall be a party, or any
Person succeeding to the business of the Servicer whether or not related to loan servicing, shall be
the successor of the Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person shall be an institution (i) having a GAAP
net worth of not less than $25,000,000, (ii) the deposits of which are insured by the FDIC, or which
is a HUD-approved mortgagee whose primary business is in origination and servicing of first lien
mortgage loans, and (iii) which is a Xxxxxx Xxx or Xxxxxxx Mac approved seller/servicer in good
standing.
Section 8.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the officers, employees or agents of the Servicer shall be
under any liability to the Owner for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement, or for errors in judgment made in good faith; provided,
however, that this provision shall not protect the Servicer or any such person against any breach of
warranties or representations made herein, or failure to perform in any way its obligations in
compliance with any standard of care set forth in this Agreement, or any liability which would
otherwise be imposed by reason of gross negligence or any breach of the terms and conditions of this
Agreement. The Servicer and any officer, employee or agent of the Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by the Owner respecting any
matters arising hereunder. The Servicer shall not be under any obligation to appear in, prosecute or
defend any legal action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it in any expenses or liability;
provided, however, that the Servicer may, with the consent of the Owner, which consent shall not be
unreasonably withheld, undertake any such action which it may deem necessary or desirable with
respect to this Agreement and the rights and duties of the parties hereto. In such event, the
reasonable legal expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities for which the Owner will be liable, and the Servicer shall be
entitled to be reimbursed therefor from the Custodial Account pursuant to Section 4.05.
Section 8.04. Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties hereby imposed on it except by
mutual consent of the Servicer and the Owner or upon the determination that its duties hereunder are
no longer permissible under applicable law and such incapacity cannot be cured by the Servicer. Any
such determination permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Owner which Opinion of Counsel shall be in form and substance
acceptable to the Owner. No such resignation shall become effective until a successor shall have
assumed the Servicer's responsibilities and obligations hereunder in the manner provided in Section
11.01.
Section 8.05. No Transfer of Servicing.
With respect to the retention of the Servicer to service the Mortgage Loans hereunder, the
Servicer acknowledges that the Owner has acted in reliance upon the Servicer's independent status,
the adequacy of its servicing facilities, plan, personnel, records and procedures, its integrity,
reputation and financial standing and the continuance thereof. Without in any way limiting the
generality of this section, the Servicer shall not either assign this Agreement or the servicing
hereunder or delegate its rights or duties hereunder or any portion thereof, or sell or otherwise
dispose of all or substantially all of its property or assets, without the prior written approval of
the Owner, which approval shall not be unreasonably withheld; provided that the Servicer may assign
the Agreement and the servicing hereunder without the consent of Owner to an affiliate of the
Servicer to which all servicing of the Servicer is assigned so long as (i) such affiliate is a Xxxxxx
Xxx and Xxxxxxx Mac approved servicer and (ii) if it is intended that such affiliate be spun off to
the shareholders of the Servicer, such affiliate have a GAAP net worth of at least $25,000,000 and
(iii) such affiliate shall deliver to the Owner a certification pursuant to which such affiliate
shall agree to be bound by the terms and conditions of this Agreement and shall certify that such
affiliate is a Xxxxxx Mae and Xxxxxxx Mac approved servicer in good standing.
ARTICLE IX
DEFAULT
Section 9.01. Events of Default.
In case one or more of the following Events of Default by the Servicer shall occur and be
continuing, that is to say:
(i) any failure by the Servicer to remit to the Owner any payment required to be made
under the terms of this Agreement which continues unremedied for one (1) Business Day after written
notice thereof (it being understood that this subparagraph shall not affect Servicer's obligation
pursuant to Section 5.01 to pay default interest on any remittance received by the Owner after the
Business Day on which such payment was due); or
(ii) any failure on the part of the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer set forth in this
Agreement (other than those described in clause (ix) hereof), the breach of which has a material
adverse effect and which continue unremedied for a period of thirty days (except that such number of
days shall be fifteen in the case of a failure to pay any premium for any insurance policy required
to be maintained under this Agreement and such failure shall be deemed to have a material adverse
effect) after the date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Owner; or
(iii) a decree or order of a court or agency or supervisory authority having jurisdiction
for the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the Servicer and such
decree or order shall have remained in force undischarged or unstayed for a period of sixty days; or
(iv) the Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and liabilities
or similar proceedings of or relating to the Servicer or of or relating to all or substantially all
of its property; or
(v) the Servicer shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) the Servicer ceases to be approved by either Xxxxxx Mae or Xxxxxxx Mac (to the
extent such entities are then operating in a capacity similar to that in which they operate on the
date hereof) as a mortgage loan servicer for more than thirty days to the extent such entities
perform similar functions; or
(vii) the Servicer attempts to assign its right to servicing compensation hereunder or the
Servicer attempts, without the consent of the Owner, to sell or otherwise dispose of all or
substantially all of its property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion thereof except as
otherwise permitted herein; or
(viii) the Servicer ceases to be qualified to transact business in any jurisdiction where
it is currently so qualified, but only to the extent such non-qualification materially and adversely
affects the Servicer's ability to perform its obligations hereunder; or
(ix) failure by the Servicer to duly perform, within the required time period, its
obligations under Section 6.04, 6.09 or any of clauses (v) through (viii) of Section 10.02;
then, and in each and every such case, so long as an Event of Default shall not have been remedied,
the Owner, by notice in writing to the Servicer may, in addition to whatever rights the Owner may
have under Section 8.01 and at law or equity to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the Servicer (and if the Servicer is
servicing any of the Mortgage Loans in a Pass-Through Transfer, appoint a successor servicer
reasonably acceptable to the Master Servicer for such Pass-Through Transfer) under this Agreement and
in and to the Mortgage Loans and the proceeds thereof without compensating the Servicer for the
same. On or after the receipt by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass to
and be vested in the successor appointed pursuant to Section 11.01. Upon written request from the
Owner, the Servicer shall prepare, execute and deliver, any and all documents and other instruments,
place in such successor's possession all Servicing Files, and do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at the Servicer's sole expense. The Servicer agrees to cooperate with the Owner and such
successor in effecting the termination of the Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to such successor for administration by it of all cash
amounts which shall at the time be credited by the Servicer to the Custodial Account or Escrow
Account or thereafter received with respect to the Mortgage Loans or any REO Property.
The Servicer shall promptly reimburse the Owner (or any designee of the Owner, such as a
master servicer) and any Depositor, as applicable, for all reasonable expenses incurred by the Owner
(or such designee) or such Depositor, as such are incurred, in connection with the termination of the
Servicer as servicer and the transfer of servicing of the Mortgage Loans to a successor servicer, if
the termination and/or transfer of servicing is for cause related to a servicer default. The
provisions of this paragraph shall not limit whatever rights the Owner or any Depositor may have
under other provisions of this Agreement and/or any applicable Reconstitution Agreement or otherwise,
whether in equity or at law, such as an action for damages, specific performance or injunctive relief.
Section 9.02. Waiver of Defaults.
The Owner may waive only by written notice any default by the Servicer in the performance of
its obligations hereunder and its consequences. Upon any such waiver of a past default, such default
shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereon except to the extent expressly so waived in writing.
ARTICLE X
TERMINATION
Section 10.01. Termination.
The respective obligations and responsibilities of the Servicer shall terminate upon: (i)
the later of the final payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of all REO Property and the remittance of all funds due hereunder;
or (ii) by mutual consent of the Servicer and the Owner in writing; or (iii) termination by the Owner
pursuant to Section 9.01. Simultaneously with any such termination and the transfer of servicing
hereunder, the Servicer shall be entitled to be reimbursed for any outstanding Servicing Advances and
Monthly Advances.
Section 10.02. Cooperation of Servicer with a Reconstitution.
The Servicer and the Owner agree that with respect to some or all of the Mortgage Loans, on
or after the related closing date, on one or more dates (each a "Reconstitution Date") at the Owner's
sole option, the Owner may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(a) one or more third party purchasers in one or more in whole loan transfers (each, a
"Whole Loan Transfer"); or
(b) one or more trusts or other entities to be formed as part of one or more
Pass-Through Transfers.
The Servicer agrees to execute in connection with any agreements among the Owner, the
Servicer, and any servicer in connection with a Whole Loan Transfer, an assignment, assumption and
recognition agreement, or, at Owner's request, a seller's warranties and servicing agreement or a
participation and servicing agreement or similar agreement in form and substance reasonably
acceptable to the parties, and in connection with a Pass-Through Transfer, a pooling and servicing
agreement in form and substance reasonably acceptable to the parties. It is understood that any such
Reconstitution Agreements will not contain any greater obligations on the part of Servicer than are
contained in this Agreement.
With respect to each Whole Loan Transfer and each Pass-Through Transfer entered into by the
Owner, the Servicer agrees (1) to cooperate fully with the Owner and any prospective purchaser with
respect to all reasonable requests and due diligence procedures; (2) to execute, deliver and perform
all Reconstitution Agreements required by the Owner; (3) to restate the representations and
warranties set forth in this Agreement as of the settlement or closing date in connection with such
Reconstitution (each, a "Reconstitution Date").
In addition, the Servicer shall provide to such servicer or issuer, as the case may be, and
any other participants in such Reconstitution:
(i) any and all information and appropriate verification of information which may be
reasonably available to the Servicer, whether through letters of its auditors and counsel or
otherwise, as the Owner or any such other participant shall request upon reasonable demand;
(ii) such additional representations, warranties, covenants, opinions of counsel, letters
from auditors, and certificates of public officials or officers of the Servicer as are reasonably
agreed upon by the Servicer and the Owner or any such other participant;
(iii) within 5 Business Days after request by the Owner, the information with respect to
the Servicer (as servicer) as required by Item 1108(b) and (c) of Regulation AB, a summary of the
requirements of which as of the date hereof is attached hereto as Exhibit I for convenience of
reference only, as determined by Owner in its sole discretion. In the event that the Servicer has
delegated any servicing responsibilities with respect to the Mortgage Loans to a Subservicer, the
Servicer shall provide the information required pursuant to this clause with respect to the
Subservicer;
(iv) within 5 Business Days after request by the Owner,
(a) information regarding any legal proceedings pending (or known to be
contemplated) against the Servicer (as servicer) and each Subservicer as required by Item 1117 of
Regulation AB, a summary of the requirements of which as of the date hereof is attached hereto as
Exhibit I for convenience of reference only, as determined by Owner in its sole discretion,
(b) information regarding affiliations with respect to the Servicer (as servicer)
and each Subservicer as required by Item 1119(a) of Regulation AB, a summary of the requirements of
which as of the date hereof is attached hereto as Exhibit I for convenience of reference only, as
determined by Owner in its sole discretion, and
(c) information regarding relationships and transactions with respect to the
Servicer (as servicer) and each Subservicer as required by Item 1119(b) and (c) of Regulation AB, a
summary of the requirements of which as of the date hereof is attached hereto as Exhibit I for
convenience of reference only, as determined by Owner in its sole discretion;
(v) for the purpose of satisfying the reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Servicer shall (or shall cause each Subservicer
to) (i) provide prompt notice to the Owner, the Master Servicer and any Depositor in writing of (A)
any material litigation or governmental proceedings involving the Servicer or any Subservicer, (B)
any affiliations or relationships that develop following the closing date of a Pass-Through Transfer
between the Servicer or any Subservicer and any of the parties specified in clause (D) of paragraph
(a) of this Section (and any other parties identified in writing by the requesting party) with
respect to such Pass-Through Transfer, (C) any Event of Default under the terms of this Agreement or
any Reconstitution Agreement, (D) any merger, consolidation or sale of substantially all of the
assets of the Servicer, and (E) the Servicer's entry into an agreement with a Subservicer to perform
or assist in the performance of any of the Servicer's obligations under this Agreement or any
Reconstitution Agreement and (ii) provide to the Owner and any Depositor a description of such
proceedings, affiliations or relationships;
(vi) as a condition to the succession to the Servicer or any Subservicer as servicer or
subservicer under this Agreement or any Reconstitution Agreement by any Person (i) into which the
Servicer or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a
successor to the Servicer or any Subservicer, the Servicer shall provide to the Owner, the Master
Servicer, and any Depositor, at least 15 calendar days prior to the effective date of such succession
or appointment, (x) written notice to the Owner and any Depositor of such succession or appointment
and (y) in writing and in form and substance reasonably satisfactory to the Owner and such Depositor,
all information reasonably requested by the Owner or any Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed securities;
(vii) in addition to such information as the Servicer, as servicer, is obligated to
provide pursuant to other provisions of this Agreement, not later than ten days prior to the deadline
for the filing of any distribution report on Form 10-D in respect of any Pass-Through Transfer that
includes any of the Mortgage Loans serviced by the Servicer or any Subservicer, the Servicer or such
Subservicer, as applicable, shall, to the extent the Servicer or such Subservicer has knowledge,
provide to the party responsible for filing such report (including, if applicable, the Master
Servicer) notice of the occurrence of any of the following events along with all information, data,
and materials related thereto as may be required to be included in the related distribution report on
Form 10-D (as specified in the provisions of Regulation AB referenced below):
(A) any material modifications, extensions or waivers of pool asset terms,
fees, penalties or payments during the distribution period or that have cumulatively become material
over time (Item 1121(a)(11) of Regulation AB);
(B) material breaches of pool asset representations or warranties or
transaction covenants (Item 1121(a)(12) of Regulation AB); and
(C) information regarding new asset-backed securities issuances backed by the
same pool assets, any pool asset changes (such as, additions, substitutions or repurchases), and any
material changes in origination, underwriting or other criteria for acquisition or selection of pool
assets (Item 1121(a)(14) of Regulation AB); and
(viii) the Servicer shall provide to the Owner, the Master Servicer and any Depositor,
evidence of the authorization of the person signing any certification or statement, copies or other
evidence of Fidelity Bond Insurance and Errors and Omission Insurance policy, financial information
and reports, and such other information related to the Servicer or any Subservicer or the Servicer or
such Subservicer's performance hereunder.
In the event of a conflict or inconsistency between the terms of Exhibit I and the text of
the applicable Item of Regulation AB as cited above, the text of Regulation AB, its adopting release
and other public statements of the SEC shall control.
The Servicer shall indemnify the Owner, each affiliate of the Owner, and each of the
following parties participating in a Pass-Through Transfer: each issuing entity; each Person
(including, but not limited to, the Master Servicer, if applicable) responsible for the preparation,
execution or filing of any report required to be filed with the Commission with respect to such
Pass-Through Transfer, or for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to such Pass-Through Transfer; each broker dealer
acting as underwriter, placement agent or initial purchaser, each Person who controls any of such
parties or the Depositor (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act); and the respective present and former directors, officers, employees, agents and
affiliates of each of the foregoing and of the Depositor (each, an "Indemnified Party"), and shall
hold each of them harmless from and against any claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or alleged to be contained in any
information, report, certification, data, accountants' letter or other material provided under this
Section 10.02 by or on behalf of the Servicer, or provided under this Section 10.02, Sections 6.04
and 6.09 and by or on behalf of any Subservicer or Subcontractor (collectively, the "Servicer
Information"), or (B) the omission or alleged omission to state in the Servicer Information a
material fact required to be stated in the Servicer Information or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this paragraph shall be construed solely by
reference to the Servicer Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether the Servicer Information or any
portion thereof is presented together with or separately from such other information;
(ii) any breach by the Servicer of its obligations under this Section 10.02, including
particularly any failure by the Servicer, any Subservicer or any Subcontractor to deliver any
information, report, certification, accountants' letter or other material when and as required under
this Section 10.02, including any failure by the Servicer to identify pursuant to Section 11.15 any
Subcontractor "participating in the servicing function" within the meaning of Item 1122 of Regulation
AB;
(iii) any breach by the Servicer of a representation or warranty set forth in Section
Article III or in a writing furnished pursuant to clause (h) of Article III and made as of a date
prior to the closing date of the related Pass-Through Transfer, to the extent that such breach is not
cured by such closing date, or any breach by the Servicer of a representation or warranty in a
writing furnished pursuant to clause (h) of Article III to the extent made as of a date subsequent to
such closing date; or
(iv) the negligence bad faith or willful misconduct of the Servicer in connection with its
performance under this Section 10.02.
If the indemnification provided for herein is unavailable or insufficient to hold harmless
an Indemnified Party, then the Servicer agrees that it shall contribute to the amount paid or payable
by such Indemnified Party as a result of any claims, losses, damages or liabilities incurred by such
Indemnified Party in such proportion as is appropriate to reflect the relative fault of such
Indemnified Party on the one hand and the Servicer on the other.
In the case of any failure of performance described above, the Servicer shall promptly
reimburse the Owner, any Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with respect to such
Pass-Through Transfer, or for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to such Pass-Through Transfer, for all costs reasonably
incurred by each such party in order to obtain the information, report, certification, accountants'
letter or other material not delivered pursuant to this Section or Section 6.04 or Section 6.09 as
required by the Servicer, any Subservicer or any Subcontractor.
This indemnification shall survive the termination of this Agreement or the termination of
any party to this Agreement.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan Transfer or Pass Through
Transfer shall be subject to this Agreement and shall continue to be serviced in accordance with the
terms of this Agreement and with respect thereto this Agreement shall remain in full force and effect.
Section 10.03. Master Servicer.
The Servicer, including any successor servicer hereunder, shall be subject to the
supervision of the Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Mortgage Loans in accordance with the provisions of this Agreement. The Master
Servicer, acting on behalf of the Owner, shall have the same rights as the Owner to enforce the
obligations of the Servicer under this Agreement. The Master Servicer shall be entitled to terminate
the rights and obligations of the Servicer under this Agreement upon the failure of the Servicer to
perform any of its obligations under this Agreement if such failure constitutes an Event of Default
as provided in Article IX of this Agreement. Notwithstanding anything to the contrary, in no event
shall the Master Servicer assume any of the obligations of the Owner under this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Successor to the Servicer.
Prior to termination of the Servicer's responsibilities and duties under this Agreement
pursuant to Sections 8.04, 9.01 or 10.01(ii), the Owner shall (i) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations under this Agreement, or (ii) appoint a
successor having the characteristics set forth in Section 8.02 hereof and which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the Servicer under this
Agreement prior to the termination of the Servicer's responsibilities, duties and liabilities under
this Agreement. In connection with such appointment and assumption, the Owner may make such
arrangements for the compensation of such successor out of payments on Mortgage Loans as the Owner
and such successor shall agree. In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to the aforementioned sections, the
Servicer shall discharge such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same degree of diligence and
prudence which it is obligated to exercise under this Agreement, and shall take no action whatsoever
that might impair or prejudice the rights or financial condition of its successor. The resignation
or removal of the Servicer pursuant to the aforementioned sections shall not become effective until a
successor shall be appointed pursuant to this section and shall in no event relieve the Servicer of
the representations and warranties made pursuant to Article III and the remedies available to the
Owner under Section 8.01, it being understood and agreed that the provisions of such Article III and
Section 8.01 shall be applicable to the Servicer notwithstanding any such resignation or termination
of the Servicer, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and deliver to the
Servicer and to the Owner an instrument accepting such appointment, whereupon such successor shall
become fully vested with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Servicer or this Agreement pursuant to Section 8.04, 9.01 or
10.01 shall not affect any claims that the Owner may have against the Servicer arising prior to any
such termination or resignation.
The Servicer shall promptly deliver to the successor the funds in the Custodial Account and
the Escrow Account and the Servicing Files and related documents and statements held by it hereunder
and the Servicer shall account for all funds. The Servicer shall execute and deliver such
instruments and do such other things all as may reasonably be required to more fully and definitely
vest and confirm in the successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer. The successor shall make such arrangements as it may deem appropriate
to reimburse the Servicer for unrecovered Monthly Advances and Servicing Advances which the successor
retains hereunder and which would otherwise have been recovered by the Servicer pursuant to this
Agreement but for the appointment of the successor servicer.
Upon a successor's acceptance of appointment as such, the Servicer shall notify the Owner of
such appointment.
All reasonable costs and expenses incurred in connection with replacing the Servicer upon
its resignation or the termination of the Servicer in accordance with the terms of this Agreement,
including, without limitation, (i) all legal costs and expenses and all due diligence costs and
expenses associated with an evaluation of the potential termination of the Servicer as a result of an
Event of Default and (ii) all costs and expenses associated with the complete transfer of servicing,
including all servicing files and all servicing data and the completion, correction or manipulation
of such servicing data as may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with this Agreement, shall be payable on demand by the resigning or
terminated Servicer without any right of reimbursement therefor.
Section 11.02. Amendment.
This Agreement may be amended from time to time by the Servicer and the Owner by written
agreement signed by the Servicer and the Owner.
Section 11.03. Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject to recordation in all
appropriate public offices for real property records in all the counties or other comparable
jurisdictions in which any of all the properties subject to the Mortgages are situated, and in any
other appropriate public recording office or elsewhere, such recordation to be effected by the
Servicer at the Owner's expense on direction of the Owner accompanied by an opinion of counsel to the
effect that such recordation materially and beneficially affects the interest of the Owner or is
necessary for the administration or servicing the Mortgage Loans.
Section 11.04. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS. THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.05. Notices.
Any demands, notices or other communications permitted or required hereunder shall be in
writing and shall be deemed conclusively to have been given if personally delivered at or mailed by
registered mail, postage prepaid, and return receipt requested or transmitted by telecopier and
confirmed by a similar mailed writing, as follows:
(i) if to the Servicer:
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
(ii) if to the Owner:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Credit Administration
Telecopier No.: (000) 000-0000
(iii) if to the Master Servicer:
Xxxxx Fargo Bank, National Association
X.X. Xxx 00
Xxxxxxxx, Xxxxxxxx 00000
Attention: Master Servicing - Bear Xxxxxxx ALT-A Trust 2007-2
And for overnight delivery to:
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Master Servicing - Bear Xxxxxxx ALT-A Trust 2007-2
Telecopier No.: (000) 000-0000
or such other address as may hereafter be furnished to the other party by like notice. Any such
demand, notice, or communication hereunder shall be deemed to have been received on the date
delivered to or received at the premises of the address (as evidenced, in the case of registered or
certified mail, by the date noted on the return receipt).
Section 11.06. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or unenforceable or is held to be
void or unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction, to the
extent of such prohibition or unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not
invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit intended to be conferred
by this Agreement, the parties shall negotiate, in good faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this Agreement without
regard to such invalidity.
Section 11.07. Exhibits
The exhibits to this Agreement are hereby incorporated and made a part hereof and are an
integral part of this Agreement.
Section 11.08. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(i) the terms defined in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular, and the use of any gender herein shall be
deemed to include the other gender;
(ii) accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(iii) references herein to "Articles," "Sections," "Subsections," "Paragraphs," and other
subdivisions without reference to a document are to designated Articles, Sections, Subsections,
Paragraphs and other subdivisions of this Agreement;
(iv) a reference to a Subsection without further reference to a Section is a reference to
such Subsection as contained in the same Section in which the reference appears, and this rule shall
also apply to Paragraphs and other subdivisions;
(v) the words "herein," "hereof," "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular provision; and
(vi) the term "include" or "including" shall mean without limitation by reason of
enumeration.
Section 11.09. Reproduction of Documents.
This Agreement and all documents relating hereto, including, without limitation, (i)
consents, waivers and modifications which may hereafter be executed, (ii) documents received by any
party at the closing, and (iii) financial statements, certificates and other information previously
or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process. The parties agree that any such reproduction shall
be admissible in evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such reproduction was made by a party
in the regular course of business, and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 11.10. Confidentiality of Information.
Each party recognizes that, in connection with this Agreement, it may become privy to
non-public information regarding the financial condition, operations and prospects of the other
party. Except as required to be disclosed by law, each party agrees to keep all non-public
information regarding the other party strictly confidential, and to use all such information solely
in order to effectuate the purpose of this Agreement.
Section 11.11. Assignment by the Owner.
The Owner shall have the right, without the consent of the Servicer hereof, to assign, in
whole or in part, its interest under this Agreement with respect to some or all of the Mortgage
Loans, and designate any person to exercise any rights of the Owner hereunder, by executing an
assignment and assumption agreement reasonably acceptable to the Servicer and the assignee or
designee shall accede to the rights and obligations hereunder of the Owner with respect to such
Mortgage Loans. In no event shall Owner sell a partial interest in any Mortgage Loan. All
references to the Owner in this Agreement shall be deemed to include its assignees or designees. It
is understood and agreed between the Owners and the Servicer that no more than five (5) Persons shall
have the right of owner under this Agreement at any one time.
Section 11.12. No Partnership.
Nothing herein contained shall be deemed or construed to create a co-partnership or joint
venture between the parties hereto and the services of the Servicer shall be rendered as an
independent contractor and not as agent for Owner.
Section 11.13. Execution, Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the different parties
hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original;
such counterparts, together, shall constitute one and the same agreement. Subject to Section 8.05,
this Agreement shall inure to the benefit of and be binding upon the Servicer and the Owner and their
respective successors and assigns.
Section 11.14. Entire Agreement.
Each of the Servicer and the Owner acknowledge that no representations, agreements or
promises were made to it by the other party or any of its employees other than those representations,
agreements or promises specifically contained herein. This Agreement sets forth the entire
understanding between the parties hereto and shall be binding upon all successors of both parties.
Section 11.15. Use of Subservicers and Subcontractors.
(a) The Servicer shall not hire or otherwise utilize the services of any Subservicer to
fulfill any of the obligations of the Servicer as servicer under this Agreement or any Reconstitution
Agreement unless the Servicer complies with the provisions of paragraph (b) of this Section. The
Servicer shall not hire or otherwise utilize the services of any Subcontractor, and shall not permit
any Subservicer to hire or otherwise utilize the servicers of any Subcontractor, to fulfill any of
the obligations of the Servicer as servicer under this Agreement or any Reconstitution Agreement
unless the Servicer complies with the provisions of paragraph (d) of this Section. The Servicer must
notify the Owner, the Master Servicer and any Depositor in writing of any affiliations or
relationships that develop following the closing date between the Servicer or any Subservicer.
(b) The Servicer shall cause any Subservicer used by the Servicer (or by any
Subservicer) for the benefit of the Owner and any Depositor to comply with the provisions of this
Section and with clauses (g) and (j) of Article III, Sections 6.04, 6.09 and 10.02 of this Agreement
to the same extent as if such Subservicer were the Owner, and to provide the information required
with respect to such Subservicer under Section 3.01(i) of this Agreement. The Servicer shall be
responsible for obtaining from each Subservicer and delivering to the Owner, the Master Servicer and
any Depositor any Annual Statement of Compliance required to be delivered by such Subservicer under
Section 6.04(a), any Assessment of Compliance and Attestation Report required to be delivered by such
Subservicer under Section 6.09, any Annual Certification required under Section 6.04(b), any
Additional Form 10-D Disclosure and any Form 8-K Disclosure Information, as and when required to be
delivered.
(c) The Servicer shall promptly upon request provide to the Owner, the Master Servicer
and any Depositor (or any designee of the Depositor, such as an administrator) a written description
(in form and substance satisfactory to the Owner, the Master Servicer and such Depositor) of the role
and function of each Subcontractor utilized by the Servicer or any Subservicer, specifying (i) the
identity of each such Subcontractor, (ii) which (if any) of such Subcontractors are "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB, and (iii) which elements of
the Servicing Criteria will be addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (ii) of this paragraph.
(d) As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of Regulation AB, the
Servicer shall cause any such Subcontractor used by the Servicer (or by any Subservicer) for the
benefit of the Owner and any Depositor to comply with the provisions of Sections 6.07 and 10.02 of
this Agreement to the same extent as if such Subcontractor were the Servicer. The Servicer shall be
responsible for obtaining from each Subcontractor and delivering to the Owner and any Depositor any
Assessment of Compliance and Attestation Report and other certificates required to be delivered by
such Subservicer and such Subcontractor under Section 6.09 (and any Annual Certification required
under Section 6.09(b)), in each case as and when required to be delivered.
11.16. Third Party Beneficiary
For purposes of this Agreement, each Master Servicer shall be considered a third party
beneficiary to this Agreement, entitled to all the rights and benefits hereof as if it were a direct
party to this Agreement.
IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to be signed hereto
by their respective officers thereunto duly authorized as of the date and year first above written.
EMC MORTGAGE CORPORATION
Servicer
By: /s/ Xxxx XxxxxxxΒ Β Β Β Β
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
Owner
By: /s/ Xxxxx XxxxxxxxxxxΒ Β Β Β Β
Name: Xxxxx Xxxxxxxxxxx
Title: Senior Managing Director
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[Provided Upon Request]
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
(date)
To:______________________
_________________________
_________________________
(the "Depository")
As "Servicer" under the Servicing Agreement, dated as of March 1, 2007, (the "Agreement"),
we hereby authorize and request you to establish an account, as a Custodial Account pursuant to
Section 4.04 of the Agreement, to be designated as "BSALTA 2007-2 Custodial Account, in trust for
XXXX XX, Owner of Whole Loan Mortgages, and various Mortgagors." All deposits in the account shall
be subject to withdrawal therefrom by order signed by the Servicer. You may refuse any deposit which
would result in violation of the requirement that the account be fully insured as described below.
This letter is submitted to you in duplicate. Please execute and return one original to us.
By:____________________
Name:__________________
Title:_________________
The undersigned, as "Depository", hereby certifies that the above described account has been
established under Account Number __________, at the office of the depository indicated above, and
agrees to honor withdrawals on such account as provided above. The full amount deposited at any time
in the account will be insured up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund or the Savings Association Insurance Fund or will be invested in
Permitted Investments as defined in the Agreement.
[ ]
(name of Depository)
By:____________________
Name:__________________
Title:_________________
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
(date)
To:___________________________
______________________________
______________________________
(the "Depository")
As "Servicer" under the Servicing Agreement, dated as of March 1, 2007 (the "Agreement"), we
hereby authorize and request you to establish an account, as an Escrow Account pursuant to Section
4.06 of the Agreement, to be designated as "BSALTA 2007-2 Escrow Account, in trust for XXXX XX, Owner
of Whole Loan Mortgages, and various Mortgagors." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. You may refuse any deposit which would result
in violation of the requirement that the account be fully insured as described below. This letter is
submitted to you in duplicate. Please execute and return one original to us.
By:____________________
Name:__________________
Title:_________________
The undersigned, as "Depository", hereby certifies that the above described account has been
established under Account Number __________, at the office of the depository indicated above, and
agrees to honor withdrawals on such account as provided above. The full amount deposited at any time
in the account will be insured up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund or the Savings Association Insurance Fund or will be invested in
Permitted Investments as defined in the Agreement.
[ ]
(name of Depository)
By:____________________
Name:__________________
Title:_________________
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank, National Association
0000 00xx Xxxxxx X.X.
Xxxx., XX 00000
Attn: ________________
Re: Custodial Agreement dated as of November 30, 1999, between EMC Mortgage Corporation
and Xxxxx Fargo Bank, National Association, as Custodian
In connection with the administration of the Mortgage Loans held by you as Custodian for the
Owner pursuant to the above-captioned Custody Agreement, we request the release, and hereby
acknowledge receipt, of the Custodian's Mortgage File for the Mortgage Loan described below, for the
reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_______ 1. Mortgage Paid in Full
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation (Repurchases, etc.)
_______ 5. Nonliquidation
[Reason:_______________________________]
Address to which Custodian should
Deliver the Custodian's Mortgage File:
__________________________________________
__________________________________________
__________________________________________
By:_______________________________________
(authorized signer)
Issuer:_____________________________________
Address:___________________________________
___________________________________
Date:______________________________________
Custodian
Xxxxx Fargo Bank, National Association
Please acknowledge the execution of the above request by your signature and date below:
____________________________________ _________________
Signature Date
Documents returned to Custodian:
____________________________________ _________________
Custodian Date
EXHIBIT E
REPORTING DATA FOR MONTHLY REPORT
_______________________________________________________________________________________________________________________________
Standard Loan Level File Layout - Master
Servicing
_______________________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________________
Exhibit 1: Layout
_______________________________________________________________________________________________________________________________
Max
Column Name Description Decimal Format Comment Size
_______________________________________________________________________________________________________________________________
Each file requires the following fields:
_______________________________________________________________________________________________________________________________
SER_INVESTOR_NBR A value assigned by the Servicer to define a Text up to 20 digits
group of loans. 20
_______________________________________________________________________________________________________________________________
LOAN_NBR A unique identifier assigned to each loan by Text up to 10 digits
the investor. 10
_______________________________________________________________________________________________________________________________
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 digits
Servicer. This may be different than the 10
LOAN_NBR.
_______________________________________________________________________________________________________________________________
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or
interest payment that a borrower is expected to dollar signs ($) 11
pay, P&I constant.
_______________________________________________________________________________________________________________________________
NOTE_INT_RATE The loan interest rate as reported by the 4 Max length of 6
Servicer. 6
_______________________________________________________________________________________________________________________________
NET_INT_RATE The loan gross interest rate less the service 4 Max length of 6
fee rate as reported by the Servicer. 6
_______________________________________________________________________________________________________________________________
SERV_FEE_RATE The servicer's fee rate for a loan as reported 4 Max length of 6
by the Servicer. 6
_______________________________________________________________________________________________________________________________
SERV_FEE_AMT The servicer's fee amount for a loan as 2 No commas(,) or
reported by the Servicer. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
NEW_PAY_AMT The new loan payment amount as reported by the 2 No commas(,) or
Servicer. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
NEW_LOAN_RATE The new loan rate as reported by the Servicer. 4 Max length of 6
6
_______________________________________________________________________________________________________________________________
ARM_INDEX_RATE The index the Servicer is using to calculate a 4 Max length of 6
forecasted rate. 6
_______________________________________________________________________________________________________________________________
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or
beginning of the processing cycle. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
ACTL_END_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or
end of the processing cycle. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle that MM/DD/YYYY
the borrower's next payment is due to the 10
Servicer, as reported by Servicer.
_______________________________________________________________________________________________________________________________
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or
dollar signs ($) 11
_______________________________________________________________________________________________________________________________
SERV_CURT_DATE_1 The curtailment date associated with the first MM/DD/YYYY
curtailment amount. 10
_______________________________________________________________________________________________________________________________
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or
curtailment amount, if applicable. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or
dollar signs ($) 11
_______________________________________________________________________________________________________________________________
SERV_CURT_DATE_2 The curtailment date associated with the second MM/DD/YYYY
curtailment amount. 10
_______________________________________________________________________________________________________________________________
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or
curtailment amount, if applicable. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________________
Exhibit 1: Continued Standard Loan Level File Layout
_______________________________________________________________________________________________________________________________
Max
Column Name Description Decimal Format Comment Size
_______________________________________________________________________________________________________________________________
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or
dollar signs ($) 11
_______________________________________________________________________________________________________________________________
SERV_CURT_DATE_3 The curtailment date associated with the third MM/DD/YYYY
curtailment amount. 10
_______________________________________________________________________________________________________________________________
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or
curtailment amount, if applicable. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
PIF_AMT The loan "paid in full" amount as reported by 2 No commas(,) or
the Servicer. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
PIF_DATE The paid in full date as reported by the MM/DD/YYYY
Servicer. 10
_______________________________________________________________________________________________________________________________
Action Code Key:
ACTION_CODE The standard FNMA numeric code used to indicate 15=Bankruptcy, 2
the default/delinquent status of a particular 30=Foreclosure, ,
loan. 60=PIF,
63=Substitution,
65=Repurchase,70=REO
_______________________________________________________________________________________________________________________________
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,) or
reported by the Servicer. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,) or
applicable. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if applicable. 2 No commas(,) or
dollar signs ($) 11
_______________________________________________________________________________________________________________________________
LOAN_LOSS_AMT The amount the Servicer is passing as a loss, 2 No commas(,) or
if applicable. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
Plus the following applicable fields:
_______________________________________________________________________________________________________________________________
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount due 2 No commas(,) or
at the beginning of the cycle date to be passed dollar signs ($) 11
through to investors.
_______________________________________________________________________________________________________________________________
SCHED_END_PRIN_BAL The scheduled principal balance due to 2 No commas(,) or
investors at the end of a processing cycle. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
SCHED_PRIN_AMT The scheduled principal amount as reported by 2 No commas(,) or
the Servicer for the current cycle -- only dollar signs ($) 11
applicable for Scheduled/Scheduled Loans.
_______________________________________________________________________________________________________________________________
SCHED_NET_INT The scheduled gross interest amount less the 2 No commas(,) or
service fee amount for the current cycle as dollar signs ($) 11
reported by the Servicer -- only applicable for
Scheduled/Scheduled Loans.
_______________________________________________________________________________________________________________________________
ACTL_PRIN_AMT The actual principal amount collected by the 2 No commas(,) or
Servicer for the current reporting cycle -- dollar signs ($) 11
only applicable for Actual/Actual Loans.
_______________________________________________________________________________________________________________________________
ACTL_NET_INT The actual gross interest amount less the 2 No commas(,) or
service fee amount for the current reporting dollar signs ($) 11
cycle as reported by the Servicer -- only
applicable for Actual/Actual Loans.
_______________________________________________________________________________________________________________________________
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,) or
prepays on his loan as reported by the dollar signs ($) 11
Servicer.
_______________________________________________________________________________________________________________________________
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan 2 No commas(,) or
waived by the servicer. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________________
Exhibit 1: Continued Standard Loan Level File Layout
_______________________________________________________________________________________________________________________________
Max
Column Name Description Decimal Format Comment Size
_______________________________________________________________________________________________________________________________
MOD_DATE The Effective Payment Date of the Modification MM/DD/YYYY
for the loan. 10
_______________________________________________________________________________________________________________________________
MOD_TYPE The Modification Type. Varchar - value can
be alpha or numeric 30
_______________________________________________________________________________________________________________________________
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and interest 2 No commas(,) or
advances made by Servicer. dollar signs ($) 11
_______________________________________________________________________________________________________________________________
Flag to indicate if the repurchase of a loan is Y=Breach
BREACH_FLAG due to a breach of Representations and N=NO Breach 1
Warranties Let blank if N/A
_______________________________________________________________________________________________________________________________
Exhibit 2: Monthly Summary Report by Single Investor MONTHLY SUMMARY REPORT
For Month Ended:________mm/dd/yyyy Servicer Name_____________________________
Prepared by:_________________________Investor Nbr_______________________________
Section 1. Remittances and Ending Balances - Required Data
_______________________________________________________________________________________________________
Beginning Ending Total Monthly Total Ending Unpaid Total Monthly Principal
Loan Count Loan Count Remittance Amou Principal Balance Balance
_______________________________________________________________________________________________________
0 0 $0.00 $0.00 $0.00
_______________________________________________________________________________________________________
Principal Calculation
1. Monthly Principal Due + $0.00
__________________
2. Current Curtailments + $0.00
__________________
3. Liquidations + $0.00
__________________
4. Other (attach explanation) + $0.00
__________________
5. Principal Due $0.00
__________________
6. Interest (reported "gross") + $0.00
__________________
7. Interest Adjustments on Curtailments + $0.00
__________________
8. Servicing Fees - $0.00
__________________
9. Other Interest (attach explanation) + $0.00
__________________
10. Interest Due (need to subtract ser fee) $0.00
__________________
Remittance Calculation
11. Total Principal and Interest Due (lines 5+10) + $0.00
__________________
12. Reimbursement of Non-Recoverable Advances - $0.00
__________________
13. Total Realized gains + $0.00
__________________
14. Total Realized Losses - $0.00
__________________
15. Total Prepayment Penalties + $0.00
__________________
16. Total Non-Supported Compensating Interest - $0.00
__________________
17. Other (attach explanation) $0.00
__________________
18. Net Funds Due on or before Remittance Date $ $0.00
__________________
_______________________________________________________________________________________________________
Section 2. Delinquency Report - Optional Data for Loan Accounting
_______________________________________________________________________________________________________
Installments Delinquent
_______________________________________________________________________________________________________
Total No. Total No. In Total Dollar
Real Estate
of of 30- 60- 90 or more Foreclosure Amount of
Owned
Loans Delinquencies Days Days Days (Optional) Delinquencies
(Optional)
_______________________________________________________________________________________________________
0 0 0 0 0 0 0 $0.00
_______________________________________________________________________________________________________
_________________________________________________________________________________________________________________
Section 3. REG AB Summary Reporting - REPORT ALL APPLICABLE FIELDS
_________________________________________________________________________________________________________________
REG XX XXXXXX LOAN COUNT BALANCE
_________________________________________________________________________________________________________________
PREPAYMENT PENALTY AMT 0 $0.00
_________________________________________________________________________________________________________________
PREPAYMENT PENALTY AMT WAIVED 0 $0.00
_________________________________________________________________________________________________________________
DELINQUENCY P&I AMOUNT 0 $0.00
_________________________________________________________________________________________________________________
EXHIBIT F
REPORTING DATA FOR DEFAULTED LOANS
Exhibit : Standard File Layout - Delinquency Reporting
*The column/header names in bold are the minimum fields Xxxxx Fargo must receive from every Servicer
________________________________________________________________________________________________________________________________________
Column/Header Name Description Decimal Format
Comment
________________________________________________________________________________________________________________________________________
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer. This may
be different than the LOAN_NBR
________________________________________________________________________________________________________________________________________
LOAN_NBR A unique identifier assigned to each loan by the originator.
________________________________________________________________________________________________________________________________________
CLIENT_NBR Servicer Client Number
________________________________________________________________________________________________________________________________________
SERV_INVESTOR_NBR Contains a unique number as assigned by an external servicer
to identify a group of loans in their system.
________________________________________________________________________________________________________________________________________
BORROWER_FIRST_NAME First Name of the Borrower.
________________________________________________________________________________________________________________________________________
BORROWER_LAST_NAME Last name of the borrower.
________________________________________________________________________________________________________________________________________
PROP_ADDRESS Street Name and Number of Property
________________________________________________________________________________________________________________________________________
PROP_STATE The state where the property located.
________________________________________________________________________________________________________________________________________
PROP_ZIP Zip code where the property is located.
________________________________________________________________________________________________________________________________________
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment is due to the MM/DD/YYYY
servicer at the end of processing cycle, as reported by
Servicer.
________________________________________________________________________________________________________________________________________
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
________________________________________________________________________________________________________________________________________
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
________________________________________________________________________________________________________________________________________
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
________________________________________________________________________________________________________________________________________
BANKRUPTCY_CASE_NBR The case number assigned by the court to the bankruptcy filing.
________________________________________________________________________________________________________________________________________
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been approved by MM/DD/YYYY
the courts
________________________________________________________________________________________________________________________________________
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either by MM/DD/YYYY
Dismissal, Discharged and/or a Motion For Relief Was Granted.
________________________________________________________________________________________________________________________________________
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The Servicer MM/DD/YYYY
________________________________________________________________________________________________________________________________________
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such As;
________________________________________________________________________________________________________________________________________
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To End/Close MM/DD/YYYY
________________________________________________________________________________________________________________________________________
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
________________________________________________________________________________________________________________________________________
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with MM/DD/YYYY
instructions to begin foreclosure proceedings.
________________________________________________________________________________________________________________________________________
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue Foreclosure MM/DD/YYYY
________________________________________________________________________________________________________________________________________
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a Foreclosure MM/DD/YYYY
Action
________________________________________________________________________________________________________________________________________
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to occur. MM/DD/YYYY
________________________________________________________________________________________________________________________________________
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
________________________________________________________________________________________________________________________________________
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
EVICTION_START_DATE The date the servicer initiates eviction of the borrower. MM/DD/YYYY
________________________________________________________________________________________________________________________________________
EVICTION_COMPLETED_DATE The date the court revokes legal possession of the property MM/DD/YYYY
from the borrower.
________________________________________________________________________________________________________________________________________
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
LIST_DATE The date an REO property is listed at a particular price. MM/DD/YYYY
________________________________________________________________________________________________________________________________________
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
OFFER_DATE_TIME The date an offer is received by DA Admin or by the Servicer. MM/DD/YYYY
________________________________________________________________________________________________________________________________________
REO_CLOSING_DATE The date the REO sale of the property is scheduled to close. MM/DD/YYYY
________________________________________________________________________________________________________________________________________
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
________________________________________________________________________________________________________________________________________
OCCUPANT_CODE Classification of how the property is occupied.
________________________________________________________________________________________________________________________________________
PROP_CONDITION_CODE A code that indicates the condition of the property.
________________________________________________________________________________________________________________________________________
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
________________________________________________________________________________________________________________________________________
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
________________________________________________________________________________________________________________________________________
CURR_PROP_VAL The current "as is" value of the property based on brokers 2
price opinion or appraisal.
________________________________________________________________________________________________________________________________________
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or appraisal.
________________________________________________________________________________________________________________________________________
If applicable:
________________________________________________________________________________________________________________________________________
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
________________________________________________________________________________________________________________________________________
DELINQ_REASON_CODE The circumstances which caused a borrower to stop paying on a
loan. Code indicates the reason why the loan is in default
for this cycle.
________________________________________________________________________________________________________________________________________
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
________________________________________________________________________________________________________________________________________
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
________________________________________________________________________________________________________________________________________
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
________________________________________________________________________________________________________________________________________
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The Pool MM/DD/YYYY
Insurer
________________________________________________________________________________________________________________________________________
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
________________________________________________________________________________________________________________________________________
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
________________________________________________________________________________________________________________________________________
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
________________________________________________________________________________________________________________________________________
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
________________________________________________________________________________________________________________________________________
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
________________________________________________________________________________________________________________________________________
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
________________________________________________________________________________________________________________________________________
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
MOTION_FOR_RELIEF_DATE The date the Motion for Relief was filed 10 MM/DD/YYYY
________________________________________________________________________________________________________________________________________
FRCLSR_BID_AMT The foreclosure sale bid amount 11 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
FRCLSR_SALE_TYPE The foreclosure sales results: REO, Third Party, Conveyance to
HUD/VA
________________________________________________________________________________________________________________________________________
REO_PROCEEDS The net proceeds from the sale of the REO property. No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
BPO_DATE The date the BPO was done.
________________________________________________________________________________________________________________________________________
CURRENT_FICO The current FICO score
________________________________________________________________________________________________________________________________________
HAZARD_CLAIM_FILED_DATE The date the Hazard Claim was filed with the Hazard Insurance 10 MM/DD/YYYY
Company.
________________________________________________________________________________________________________________________________________
HAZARD_CLAIM_AMT The amount of the Hazard Insurance Claim filed. 11 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
HAZARD_CLAIM_PAID_DATE The date the Hazard Insurance Company disbursed the claim 10 MM/DD/YYYY
payment.
________________________________________________________________________________________________________________________________________
HAZARD_CLAIM_PAID_AMT The amount the Hazard Insurance Company paid on the claim. 11 No commas(,)
or dollar
signs ($)
________________________________________________________________________________________________________________________________________
ACTION_CODE Indicates loan status Number
________________________________________________________________________________________________________________________________________
NOD_DATE MM/DD/YYYY
________________________________________________________________________________________________________________________________________
NOI_DATE MM/DD/YYYY
________________________________________________________________________________________________________________________________________
ACTUAL_PAYMENT_PLAN_START_DATE MM/DD/YYYY
________________________________________________________________________________________________________________________________________
ACTUAL_PAYMENT_ PLAN_END_DATE
________________________________________________________________________________________________________________________________________
ACTUAL_REO_START_DATE MM/DD/YYYY
________________________________________________________________________________________________________________________________________
REO_SALES_PRICE Number
________________________________________________________________________________________________________________________________________
REALIZED_LOSS/GAIN As defined in the Servicing Agreement Number
________________________________________________________________________________________________________________________________________
Exhibit 2: Standard File Codes - Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as follows:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
NOTE: Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those above, provided that
they are consistent with industry standards. If Loss Mitigation Types other than those above are
used, the Servicer must supply Xxxxx Fargo Bank with a description of each of the Loss Mitigation
Types prior to sending the file.
The Occupant Code field should show the current status of the property code as follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The Property Condition field should show the last reported condition of the property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as follows:
__________________________________________________________________________________
Delinquency Code Delinquency Description
__________________________________________________________________________________
001 FNMA-Death of principal mortgagor
__________________________________________________________________________________
002 FNMA-Illness of principal mortgagor
__________________________________________________________________________________
003 FNMA-Illness of mortgagor's family member
__________________________________________________________________________________
004 FNMA-Death of mortgagor's family member
__________________________________________________________________________________
005 FNMA-Marital difficulties
__________________________________________________________________________________
006 FNMA-Curtailment of income
__________________________________________________________________________________
007 FNMA-Excessive Obligation
__________________________________________________________________________________
008 FNMA-Abandonment of property
__________________________________________________________________________________
009 FNMA-Distant employee transfer
__________________________________________________________________________________
011 FNMA-Property problem
__________________________________________________________________________________
012 FNMA-Inability to sell property
__________________________________________________________________________________
013 FNMA-Inability to rent property
__________________________________________________________________________________
014 FNMA-Military Service
__________________________________________________________________________________
015 FNMA-Other
__________________________________________________________________________________
016 FNMA-Unemployment
__________________________________________________________________________________
017 FNMA-Business failure
__________________________________________________________________________________
019 FNMA-Casualty loss
__________________________________________________________________________________
022 FNMA-Energy environment costs
__________________________________________________________________________________
023 FNMA-Servicing problems
__________________________________________________________________________________
026 FNMA-Payment adjustment
__________________________________________________________________________________
027 FNMA-Payment dispute
__________________________________________________________________________________
029 FNMA-Transfer of ownership pending
__________________________________________________________________________________
030 FNMA-Fraud
__________________________________________________________________________________
031 FNMA-Unable to contact borrower
__________________________________________________________________________________
INC FNMA-Incarceration
__________________________________________________________________________________
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as follows:
________________________________________________________________________________
Status Code Status Description
________________________________________________________________________________
09 Forbearance
________________________________________________________________________________
17 Pre-foreclosure Sale Closing Plan Accepted
________________________________________________________________________________
24 Government Seizure
________________________________________________________________________________
26 Refinance
________________________________________________________________________________
27 Assumption
________________________________________________________________________________
28 Modification
________________________________________________________________________________
29 Charge-Off
________________________________________________________________________________
30 Third Party Sale
________________________________________________________________________________
31 Probate
________________________________________________________________________________
32 Military Indulgence
________________________________________________________________________________
43 Foreclosure Started
________________________________________________________________________________
44 Deed-in-Lieu Started
________________________________________________________________________________
49 Assignment Completed
________________________________________________________________________________
61 Second Lien Considerations
________________________________________________________________________________
62 Veteran's Affairs-No Bid
________________________________________________________________________________
63 Veteran's Affairs-Refund
________________________________________________________________________________
64 Veteran's Affairs-Buydown
________________________________________________________________________________
65 Chapter 7 Bankruptcy
________________________________________________________________________________
66 Chapter 11 Bankruptcy
________________________________________________________________________________
67 Chapter 13 Bankruptcy
________________________________________________________________________________
EXHIBIT G
FORM OF SERVICER CERTIFICATION
Re: The [ ] agreement dated as of [ l, 200[ ] (the "Agreement"), among [IDENTIFY PARTIES]
I, ____________________________, the _______________________ of [NAME OF COMPANY] (the
"Company"), certify to [the Purchaser], [the Depositor], and the [Master Servicer] [Securities
Administrator] [Trustee], and their officers, with the knowledge and intent that they will rely upon
this certification, that:
I have reviewed the servicer compliance statement of the Company provided in accordance with
Item 1123 of Regulation AB (the "Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the "Servicing
Criteria"), provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934, as amended (the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing Assessment"),
the registered public accounting firm's attestation report provided in accordance with Rules 13a-18
and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the "Attestation Report"),
and all servicing reports, Officer's Certificates and other information relating to the servicing of
the Mortgage Loans by the Company during 200[ ] that were delivered by the Company to the [Depositor]
[Master Servicer] [Securities Administrator] [Trustee] pursuant to the Agreement (collectively, the
"Company Servicing Information");
Based on my knowledge, the Company Servicing Information, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in the light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company Servicing Information;
Based on my knowledge, all of the Company Servicing Information required to be provided by
the Company under the Agreement has been provided to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee];
I am responsible for reviewing the activities performed by the Company as servicer under the
Agreement, and based on my knowledge and the compliance review conducted in preparing the Compliance
Statement and except as disclosed in the Compliance Statement, the Servicing Assessment or the
Attestation Report, the Company has fulfilled its obligations under the Agreement in all material
respects; and
The Compliance Statement required to be delivered by the Company pursuant to this Agreement,
and the Servicing Assessment and Attestation Report required to be provided by the Company and by any
Subservicer and Subcontractor pursuant to the Agreement, have been provided to the [Depositor]
[Master Servicer]. Any material instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance of noncompliance with the
Servicing Criteria has been disclosed in such reports.
EXHIBIT H
SUMMARY OF REGULATION AB
SERVICING CRITERIA
NOTE: This Exhibit H is provided for convenience of reference only. In the event of a
conflict or inconsistency between the terms of this Exhibit H and the text of Regulation AB, the text
of Regulation AB, its adopting release and other public statements of the SEC shall control.
Item 1122(d)
(a) General servicing considerations.
(1) Policies and procedures are instituted to monitor any performance or other
triggers and events of default in accordance with the transaction agreements.
(2) If any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party's performance and compliance with
such servicing activities.
(3) Any requirements in the transaction agreements to maintain a back-up
servicer for the mortgage loans are maintained.
(4) A fidelity bond and errors and omissions policy is in effect on the party
participating in the servicing function throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the transaction agreements.
(b) Cash collection and administration.
(1) Payments on mortgage loans are deposited into the appropriate custodial
bank accounts and related bank clearing accounts no more than two business days following receipt, or
such other number of days specified in the transaction agreements.
(2) Disbursements made via wire transfer on behalf of an obligor or to an
investor are made only by authorized personnel.
(3) Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
(4) The related accounts for the transaction, such as cash reserve accounts or
accounts established as a form of overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the transaction agreements.
(5) Each custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign financial institution means a foreign
financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
(6) Unissued checks are safeguarded so as to prevent unauthorized access.
(7) Reconciliations are prepared on a monthly basis for all asset-backed
securities related bank accounts, including custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate; (B) prepared within 45 calendar days after the
bank statement cutoff date, or such other number of days specified in the transaction agreements; (C)
reviewed and approved by someone other than the person who prepared the reconciliation; and (D)
contain explanations for reconciling items.
(c) Investor remittances and reporting.
(1) Reports to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth
in the transaction agreements; (B) provide information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed with the Commission as required by its rules
and regulations; and (D) agree with investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the Servicer.
(2) Amounts due to investors are allocated and remitted in accordance with
timeframes, distribution priority and other terms set forth in the transaction agreements.
(3) Disbursements made to an investor are posted within two business days to
the Servicer's investor records, or such other number of days specified in the transaction agreements.
(4) Amounts remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
(d) Mortgage Loan administration.
(1) Collateral or security on mortgage loans is maintained as required by the
transaction agreements or related mortgage loan documents.
(2) Mortgage loan and related documents are safeguarded as required by the
transaction agreements.
(3) Any additions, removals or substitutions to the asset pool are made,
reviewed and approved in accordance with any conditions or requirements in the transaction agreements.
(4) Payments on mortgage loans, including any payoffs, made in accordance with
the related mortgage loan documents are posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number of days specified in the transaction
agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the
related mortgage loan documents.
(5) The Servicer's records regarding the mortgage loans agree with the
Servicer's records with respect to an obligor's unpaid principal balance.
(6) Changes with respect to the terms or status of an obligor's mortgage loans
(e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related mortgage loan documents.
(7) Loss mitigation or recovery actions (e.g., forbearance plans, modifications
and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated,
conducted and concluded in accordance with the timeframes or other requirements established by the
transaction agreements.
(8) Records documenting collection efforts are maintained during the period a
mortgage loan is delinquent in accordance with the transaction agreements. Such records are
maintained on at least a monthly basis, or such other period specified in the transaction agreements,
and describe the entity's activities in monitoring delinquent mortgage loans including, for example,
phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
(9) Adjustments to interest rates or rates of return for mortgage loans with
variable rates are computed based on the related mortgage loan documents.
(10) Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the obligor's mortgage loan documents, on
at least an annual basis, or such other period specified in the transaction agreements; (B) interest
on such funds is paid, or credited, to obligors in accordance with applicable mortgage loan documents
and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number of days specified in the transaction
agreements.
(11) Payments made on behalf of an obligor (such as tax or insurance payments)
are made on or before the related penalty or expiration dates, as indicated on the appropriate bills
or notices for such payments, provided that such support has been received by the Servicer at least
30 calendar days prior to these dates, or such other number of days specified in the transaction
agreements.
(12) Any late payment penalties in connection with any payment to be made on
behalf of an obligor are paid from the Servicer's funds and not charged to the obligor, unless the
late payment was due to the obligor's error or omission.
(13) Disbursements made on behalf of an obligor are posted within two business
days to the obligor's records maintained by the Servicer, or such other number of days specified in
the transaction agreements.
(14) Delinquencies, charge-offs and uncollectable accounts are recognized and
recorded in accordance with the transaction agreements.
(15) Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.
EXHIBIT I
SUMMARY OF APPLICABLE REGULATION AB REQUIREMENTS
NOTE: This Exhibit I is provided for convenience of reference only. In the event of a
conflict or inconsistency between the terms of this Exhibit I and the text of Regulation AB, the text
of Regulation AB, its adopting release and other public statements of the SEC shall control.
Item 1108(b) and (c)
Provide the following information with respect to each servicer that will service, including
interim service, 20% or more of the mortgage loans in any loan group in the securitization issued in
the Pass-Through Transfer:
-a description of the Owner's form of organization;
-a description of how long the Servicer has been servicing residential mortgage loans; a
general discussion of the Servicer's experience in servicing assets of any type as well as a more
detailed discussion of the Servicer's experience in, and procedures for the servicing function it
will perform under this Agreement and any Reconstitution Agreements; information regarding the size,
composition and growth of the Servicer's portfolio of mortgage loans of the type similar to the
Mortgage Loans and information on factors related to the Servicer that may be material to any
analysis of the servicing of the Mortgage Loans or the related asset-backed securities, as
applicable, including whether any default or servicing related performance trigger has occurred as to
any other securitization due to any act or failure to act of the Servicer, whether any material
noncompliance with applicable servicing criteria as to any other securitization has been disclosed or
reported by the Servicer, and the extent of outsourcing the Servicer uses;
-a description of any material changes to the Servicer's policies or procedures in the
servicing function it will perform under this Agreement and any Reconstitution Agreements for
mortgage loans of the type similar to the Mortgage Loans during the past three years;
-information regarding the Servicer's financial condition to the extent that there is a
material risk that the effect on one or more aspects of servicing resulting from such financial
condition could have a material impact on the performance of the securities issued in the
Pass-Through Transfer, or on servicing of mortgage loans of the same asset type as the Mortgage Loans;
-any special or unique factors involved in servicing loans of the same type as the Mortgage
Loans, and the Servicer's processes and procedures designed to address such factors;
-statistical information regarding principal and interest advances made by the Servicer on
the Mortgage Loans and the Servicer's overall servicing portfolio for the past three years; and
-the Owner's process for handling delinquencies, losses, bankruptcies and recoveries, such
as through liquidation of REO Properties, foreclosure, sale of the Mortgage Loans or workouts.
Item 1117
-describe any legal proceedings pending against the Servicer or against any of its property,
including any proceedings known to be contemplated by governmental authorities, that may be material
to the holders of the securities issued in the Pass-Through Transfer.
Item 1119(a)
-describe any affiliations of the Servicer, each other originator of the Mortgage Loans and
each Subservicer with the sponsor, depositor, issuing entity, trustee, any originator, any other
servicer, any significant obligor, enhancement or support provider or any other material parties
related to the Pass-Through Transfer.
Item 1119(b)
-describe any business relationship, agreement, arrangement, transaction or understanding
entered into outside of the ordinary course of business or on terms other than those obtained in an
arm's length transaction with an unrelated third party, apart from the Pass-Through Transfer, between
the Servicer, each other originator of the Mortgage Loans and each Subservicer, or their respective
affiliates, and the sponsor, depositor or issuing entity or their respective affiliates, that exists
currently or has existed during the past two years, that may be material to the understanding of an
investor in the securities issued in the Pass-Through Transfer.
Item 1119(c)
-describe any business relationship, agreement, arrangement, transaction or understanding
involving or relating to the Mortgage Loans or the Pass-Through Transfer, including the material
terms and approximate dollar amount involved, between the Servicer, each other originator of the
Mortgage Loans and each Subservicer, or their respective affiliates and the sponsor, depositor or
issuing entity or their respective affiliates, that exists currently or has existed during the past
two years.
EXHIBIT J
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS unless otherwise noted)
Key:
X - obligation
Where there are multiple checks for criteria the attesting party will identify in their
management assertion that they are attesting only to the portion of the distribution chain they are
responsible for in the related transaction agreements.
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RegAB Reference Servicing Criteria Servicers
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General Servicing Considerations
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1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or other triggers and X
events of default in accordance with the transaction agreements.
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1122(d)(1)(ii) If any material servicing activities are outsourced to third parties, policies and X
procedures are instituted to monitor the third party's performance and compliance with such
servicing activities.
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Any requirements in the transaction agreements to maintain a back-up servicer for the Pool
1122(d)(1)(iii) Assets are maintained.
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1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the party participating in X
the servicing function throughout the reporting period in the amount of coverage required
by and otherwise in accordance with the terms of the transaction agreements.
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Cash Collection and Administration
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1122(d)(2)(i) Payments on pool assets are deposited into the appropriate custodial bank accounts and X
related bank clearing accounts no more than two business days following receipt, or such
other number of days specified in the transaction agreements.
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Disbursements made via wire transfer on behalf of an obligor or to an investor are made X
1122(d)(2)(ii) only by authorized personnel.
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Advances of funds or guarantees regarding collections, cash flows or distributions, and any X
interest or other fees charged for such advances, are made, reviewed and approved as
1122(d)(2)(iii) specified in the transaction agreements.
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The related accounts for the transaction, such as cash reserve accounts or accounts X
established as a form of over collateralization, are separately maintained (e.g., with
1122(d)(2)(iv) respect to commingling of cash) as set forth in the transaction agreements.
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Each custodial account is maintained at a federally insured depository institution as set X
forth in the transaction agreements. For purposes of this criterion, "federally insured
depository institution" with respect to a foreign financial institution means a foreign
financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities
1122(d)(2)(v) Exchange Act.
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1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. X
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1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed securities related X
bank accounts, including custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after
the bank statement cutoff date, or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original identification, or such other number
of days specified in the transaction agreements.
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Investor Remittances and Reporting
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1122(d)(3)(i) Reports to investors, including those to be filed with the Commission, are maintained in X
accordance with the transaction agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance with timeframes and other terms
set forth in the transaction agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number of Pool Assets serviced by the
Servicer.
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Amounts due to investors are allocated and remitted in accordance with timeframes, X
1122(d)(3)(ii) distribution priority and other terms set forth in the transaction agreements.
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Disbursements made to an investor are posted within two business days to the Servicer's X
1122(d)(3)(iii) investor records, or such other number of days specified in the transaction agreements.
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Amounts remitted to investors per the investor reports agree with cancelled checks, or X
1122(d)(3)(iv) other form of payment, or custodial bank statements.
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Pool Asset Administration
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1122(d)(4)(i) Collateral or security on pool assets is maintained as required by the transaction X
agreements or related pool asset documents.
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1122(d)(4)(ii) Pool assets and related documents are safeguarded as required by the transaction agreements X
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1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, reviewed and approved X
in accordance with any conditions or requirements in the transaction agreements.
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1122(d)(4)(iv) Payments on pool assets, including any payoffs, made in accordance with the related pool X
asset documents are posted to the Servicer's obligor records maintained no more than two
business days after receipt, or such other number of days specified in the transaction
agreements, and allocated to principal, interest or other items (e.g., escrow) in
accordance with the related pool asset documents.
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The Servicer's records regarding the pool assets agree with the Servicer's records with X
1122(d)(4)(v) respect to an obligor's unpaid principal balance.
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Changes with respect to the terms or status of an obligor's pool assets (e.g., loan X
modifications or re-agings) are made, reviewed and approved by authorized personnel in
1122(d)(4)(vi) accordance with the transaction agreements and related pool asset documents.
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Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in X
lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated,
conducted and concluded in accordance with the timeframes or other requirements established
1122(d)(4)(vii) by the transaction agreements.
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1122(d)(4)(viii) Records documenting collection efforts are maintained during the period a pool asset is X
delinquent in accordance with the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the transaction agreements, and
describe the entity's activities in monitoring delinquent pool assets including, for
example, phone calls, letters and payment rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or unemployment).
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1122(d)(4)(ix) Adjustments to interest rates or rates of return for pool assets with variable rates are X
computed based on the related pool asset documents.
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1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds X
are analyzed, in accordance with the obligor's pool asset documents, on at least an annual
basis, or such other period specified in the transaction agreements; (B) interest on such
funds is paid, or credited, to obligors in accordance with applicable pool asset documents
and state laws; and (C) such funds are returned to the obligor within 30 calendar days of
full repayment of the related pool assets, or such other number of days specified in the
transaction agreements.
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Payments made on behalf of an obligor (such as tax or insurance payments) are made on or X
before the related penalty or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such other number of days specified in the
1122(d)(4)(xi) transaction agreements.
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Any late payment penalties in connection with any payment to be made on behalf of an X
obligor are paid from the Servicer's funds and not charged to the obligor, unless the late
1122(d)(4)(xii) payment was due to the obligor's error or omission.
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Disbursements made on behalf of an obligor are posted within two business days to the X
obligor's records maintained by the servicer, or such other number of days specified in the
1122(d)(4)(xiii) transaction agreements.
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Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in X
1122(d)(4)(xiv) accordance with the transaction agreements.
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Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or
1122(d)(4)(xv) Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.
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[NAME OF OWNER] [NAME OF SUBSERVICER]
Date: _________________________
By: _________________________
Name:
Title:
EXHIBIT K
REPORTING DATA FOR REALIZED LOSSES AND GAINS
Calculation of Realized Loss/Gain Form 332- Instruction Sheet
NOTE: Do not net or combine items. Show all expenses individually and all credits as
separate line items. Claim packages are due within 90 days of liquidation. Late
submissions may result in claims not being passed until the following month. The Servicer
is responsible to remit all funds pending loss approval and /or resolution of any disputed
items.
The numbers on the 332 form correspond with the numbers listed below.
Liquidation and Acquisition Expenses:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For documentation, an
Amortization Schedule from date of default through liquidation breaking out the net
interest and servicing fees advanced is required.
2. The Total Interest Due less the aggregate amount of servicing fee that would have
been earned if all delinquent payments had been made as agreed. For documentation,
an Amortization Schedule from date of default through liquidation breaking out the
net interest and servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of the Mortgage
Loan as calculated on a monthly basis. For documentation, an Amortization Schedule
from date of default through liquidation breaking out the net interest and servicing
fees advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form - breakdown
required showing period
of coverage, base tax, interest, penalty. Advances prior to default
require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all
payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and WFB's
approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
Credits:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid
instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b)
for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
23. The total derived from subtracting line 22 from 13. If the amount represents a
realized gain, show the amount in parenthesis ( ).
Calculation of Realized Loss/Gain Form 332
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
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Servicer Loan No. Servicer Name Servicer Address
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XXXXX FARGO BANK, N.A. Loan No._____________________________
Borrower's Name: _________________________________________________________
Property Address: _________________________________________________________
Liquidation Type: REO Sale 3rd Party Sale Short Sale
Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown Yes No
If "Yes", provide deficiency or cramdown amount _______________________________
Liquidation and Acquisition Expenses:
(1) Actual Unpaid Principal Balance of Mortgage Loan $ ______________ (1)
(2) Interest accrued at Net Rate ________________(2)
(3) Accrued Servicing Fees ________________(3)
(4) Attorney's Fees ________________(4)
(5) Taxes (see page 2) ________________(5)
(6) Property Maintenance ________________(6)
(7) MI/Hazard Insurance Premiums (see page 2) ________________(7)
(8) Utility Expenses ________________(8)
(9) Appraisal/BPO ________________(9)
(10) Property Inspections ________________(10)
(11) FC Costs/Other Legal Expenses ________________(11)
(12) Other (itemize) ________________(12)
Cash for Keys__________________________ ________________(12)
HOA/Condo Fees_______________________ ________________(12)
______________________________________ ________________(12)
Total Expenses $ _______________(13)
Credits:
(14) Escrow Balance $ _______________(14)
(15) HIP Refund ________________(15)
(16) Rental Receipts ________________(16)
(17) Hazard Loss Proceeds ________________(17)
(18) Primary Mortgage Insurance / Gov't Insurance ________________(18a)
HUD Part A
________________ (18b) HUD Part B
(19) Pool Insurance Proceeds ________________(19)
(20) Proceeds from Sale of Acquired Property ________________(20)
(21) Other (itemize) ________________(21)
_________________________________________ ________________(21)
Total Credits $________________(22)
Total Realized Loss (or Amount of Gain) $________________(23)
Escrow Disbursement Detail
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Type Date Period Total Base Penalties Interest
Paid of Coverage Paid Amount
(Tax
/Ins.)
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