Exhibit 99.9
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▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PMI Mortgage Insurance Co. (an Arizona corporation hereinafter called the
"Company") agrees to pay to the Insured, in consideration of the premium or
premiums to be paid as hereinafter specified and in reliance upon the
Insured's representations and statements made in any Application for coverage
under this Policy, any loss due to the Default by a Borrower on a Loan,
subject to the terms and conditions contained herein.
To obtain information about this Policy, to register a complaint or to obtain
information about related mortgage guaranty insurance products and services
offered by the Company, the insured or its servicer may call the Company toll
free at 800-288-1970.
Insured's Name and Mailing Address Policy Number
The Bank of New York Trust Company N.A. as Co-Trustee ▇▇▇▇▇-▇▇▇▇-▇
for the CWABS Asset-Backed Certificates Series 2006-6
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
IN WITNESS WHEREOF, the Company has caused its Corporate Seal to be affixed
hereto and these presents to be signed by its duly authorized officers in
facsimile to become effective as its original seal and signature and binding
on the Company.
PMI Mortgage Insurance Co.
[Company Seal]
/s/ L. ▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------- ----------------------------------
L. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Secretary
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TERMS AND CONDITIONS
I. Definitions
A. Acquisition Option means the method of determining the amount of the
Insurance Benefit with respect to a Loan as set forth in Section V., C.,
1.
B. Advances means the reasonable and necessary sums paid by the Insured
with respect to Loan after Default, for the following:
1. Hazard insurance premiums;
2. Real estate property taxes;
3. Property protection and preservation expenses;
4. Property sales expenses;
5. Customary foreclosure costs including Court Expenses and
reasonable attorney's fees;
6. Costs of other customary legal proceedings, as may be necessary to
obtain Good and Merchantable Title to or Possession of the
Property; and
7. Loss mitigation expenses.
C. Anticipated Loss means, in connection with a Claim, an amount equal to
the Company's cost of paying the full Claim Amount calculated in
accordance with Section V., B., less the amount the Company reasonably
anticipates receiving as net proceeds of the sale of the Property,
subtracting also from such proceeds all anticipated costs of the sale
and holding costs, but in any event, such amount shall never be greater
than the Loss calculated under the Percentage Option in accordance with
Section V., C., 2.
D. Application means the Insured's statements and descriptions, both oral
and written, relative to the Loan made in connection with the
application or negotiation for the insurance provided by this Policy,
including the representations made, and documents executed by the
Borrower, as evidenced by documents, writings, electronic media
transfers, telephone data transmissions, and the like.
E. Appropriate Proceedings means any legal or administrative action or
proceeding by the Insured affecting either the Loan or the title to the
Property, and include, but are not limited to:
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1. enforcing the terms of the Loan as allowed by the laws where the
Property is located; or
2. establishing a deficiency amount where appropriate and permissible
and where directed by the Company; or
3. acquiring all the Borrower's right and title to the Property in
the Insured's name, but excluding any voluntary conveyance under
Section IV., D., (Voluntary Conveyance); or
4. asserting the Insured's interest in the Property in a Borrower's
bankruptcy or similar proceeding.
F. Borrower means any Person required to repay the debt obligation created
pursuant to the Loan. The Borrower may be more than one Person, and the
term shall include any co-signer or guarantor of the Loan.
G. Borrower's Own Funds means any funds owned by the Borrower and neither
borrowed from other sources, nor subject to refund, rebate, or
repayment.
H. Borrower's Title means such title to a Property as was vested in the
Borrower at the time of a conveyance to the Insured extinguishing all of
the Borrower's rights in the Property; provided, however, if the Insured
so elects, the redemption period need not have expired. The deed
evidencing such title in the Insured need not be recorded unless
required by applicable law.
I. Certificate means once all conditions for coverage have been satisfied,
the number issued by the Company to a Loan, as listed on a Certificate
Schedule.
J. Certificate Schedule means a list of Loans to which coverage has been
extended under this Policy, and which is attached to this Policy, or
added thereto by endorsement, and any document issued by the Company
pursuant to this Policy amending coverage for a Loan.
K. Claim means the timely filed written request, made on a form provided by
or in a manner approved by the Company, to receive benefits of this
Policy. A Claim received by the Company containing all information or
proof required by the Company shall be called a Perfected Claim.
L. Claim Amount means the actual loss incurred by the Insured with respect
to a Loan as calculated in accordance with Section V., B., (Calculation
of Claim Amount) giving effect to adjustments made by the Company due to
failure of the Insured to mitigate loss.
M. Claim Settlement Period means a sixty (60) day period following the
filing of a Claim with the Company provided that such period shall be
extended by the number of days elapsed from the date the Company sends
notice of deficiency of a Claim to the Insured to the date that the
Insured files a Perfected Claim with the Company.
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N. Closed means the later of:
1. The date on which all Loan documents were executed and delivered;
or
2. The date on which the funds under the Loan were initially
disbursed to or for the benefit of the Borrower.
O. Court Expenses means the out-of-pocket cost of initiating and conducting
Appropriate Proceedings or any eviction proceedings. These expenses
include costs of filing or serving pleadings, conducting discovery and
enforcing judgment. These expenses do not include reimbursement for any
time spent by the Insured or the Insured's employees, officers or
agents, nor do these expenses include attorney's fees.
P. Default means the failure by a Borrower to pay when due: (i) an amount
equal to or greater than one (1) regular periodic payment due under the
terms of a Loan, or (ii) the failure by a Borrower to pay when due all
amounts due under a Loan after the exercise by the Insured of the "due
on sale" provision of such Loan, provided however, that a Default as
defined in (i) above which is cured within 59 days of the payment due
date, will not be deemed to be a Default for purposes of administration
of this Policy unless the missed payment is the first payment due under
a Loan. Default does not mean any other non-monetary default or
violation of any other term or condition of the Loan, which would allow
for acceleration of the debt or foreclosure or other action to realize
upon the security provided by the Loan.
A Loan is deemed to be in Default for the period for which, as of the
close of business on the installment due date, a scheduled installment
payment has not been made. For example, a Loan is "four periodic
payments in Default" if the periodic payments due on January 1 through
April 1 remain unpaid as of the close of business on April 1.
Q. Default Amount means the unpaid principal balance of a Loan as of the
date of Default excluding any Negative Amortization. If a Loan has been
divided into secured and unsecured portions pursuant to proceedings
under the federal bankruptcy laws, the Default Amount shall include the
unpaid principal balance due under the unsecured portion of the Loan
even if the Insured has written off such unsecured portion of the Loan,
provided that the premium paid has been calculated based on both the
secured and unsecured portions of the Loan.
R. Deficiency Expenses means reasonable attorneys fees and necessary court
costs incurred by the Insured for those Appropriate Proceedings
necessary to pursue or establish a deficiency against the Borrower and
which are in addition to those incurred in standard and customary
foreclosure proceedings, plus additional interest accruing on the Loan,
real estate taxes, casualty insurance premiums and Property preservation
expenses incurred during such Appropriate Proceedings and any additional
related redemption period.
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S. Down Payment means (i) a cash contribution made by the Borrower, either
prior to or at the time the Loan is Closed, from the Borrower's Own
Fund's towards the purchase price of the Property, or (ii) a verifiable
equity in the Property vested in the Borrower only, after completion of
the improvements in accordance with the Original Appraisal.
T. Effective Date means, provided that the premium has been paid as
required herein, 12:01 a.m. on the date of coverage as indicated on the
Certificate Schedule.
U. Environmental Impairment means Physical Damage to a Property occurring
by reason of environmental contamination including, but not limited to,
nuclear reaction or radioactive waste, toxic waste, poisoning or
pollution of earth or water subjacent to the Property or of the
atmosphere above the Property; or similar hazard including any condition
giving rise to liability under the Comprehensive Environmental Response,
Compensation and Liability Act or any similar law existing under either
federal law or the law of the state where the Property is located.
V. First Party means (a) the Insured or any officer, employee or agent of
the Insured or (b) any of the following Persons: the correspondent
lender, mortgage loan broker or other intermediary underwriting or
originating the Loan on behalf of the Insured or originating lender, or
escrow or closing agents or anyone under contract with the Insured or
originating lender in connection with the origination of such Loan, such
as an appraiser.
W. FMV means the fair market value of a Property as of a specific date
which shall be equal to the lesser of the appraised value or the sale
price of the Property on that date; or in the event of a foreclosure
sale, the appraised value or estimated value determined in accordance
with customary servicing practices, or the value as determined under
applicable law, where such law prescribes a method for determining the
value of a Property.
X. Good and Merchantable Title means title to the Property, free and clear
of all liens and encumbrances, covenants, conditions, restrictions,
easements and rights of redemption, except for:
1. Any lien established by public bond, assessment or tax, when no
installment, call or payment of or under such bond, assessment or
tax is delinquent; and
2. Any municipal or zoning ordinances, building restrictions or other
restrictions, covenants, regulations of use, provided the Property
is in compliance with, and its intended use and occupancy is not
materially adversely affected by, such restrictions, covenants,
regulations or ordinances; and
3. Easements, rights of way, sewer and utility rights, mineral, oil
or timber rights, or any impediments which will not have a
materially adverse effect on either the transferability of the
Property or the sale thereof to a bona fide purchaser.
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The Property must have, at a minimum, the following characteristics to
establish Good and Merchantable Title: (i) adequate means of ingress and
egress; (ii) the right to use of water and sewer facilities appertaining
to the Property, whether such rights be by virtue of public easement or
private grant; (iii) the Property must be free of any lien for any toxic
waste or environmental contamination or similar hazard or claim of such
hazard pursuant to the Comprehensive Environmental Response Compensation
and Liability Act, as amended, or similar federal or state law providing
for liens in connection with the clean up of environmental conditions,
and no proceedings to initiate such a lien may be pending, unless
otherwise agreed to by the Company.
Y. Insurance Benefit means the liability of the Company with respect to a
Loan calculated in accordance with this Policy. A right to receive an
Insurance Benefit shall be deemed to have arisen when a Default occurs
while the Policy is in force for a Loan, notwithstanding that the amount
of the Insurance Benefit is not then either presently ascertainable or
due and payable.
Z. Insured means with respect to any Loan:
1. The Person designated on the face of this Policy; or
2. Any Person, other than a natural Person, who owns the Loan, either
for its own benefit or as trustee for the benefit of a third
party.
AA. Loan means any note or other evidence of indebtedness and the
indebtedness it so evidences, together with the mortgage, bond, deed of
trust, or other instrument securing said indebtedness, and to which
coverage under this Policy has been extended.
BB. Negative Amortization means the additions to the principal amount of a
Loan arising from the insufficiency of regularly scheduled payments to
cover interest as it accrues against the principal amount of the Loan as
provided for therein.
CC. Original Appraisal means the appraisal, other report or description of
the Property, obtained by the lender under the Loan at the time it was
originated, which establishes the value of the Property at that time.
DD. Percentage Option means the method of determining the amount of the
Insurance Benefit with respect to a Loan set forth in Section V., C., 2.
EE. Person means any individual natural person, or any corporation,
partnership, association or other legally recognized entity.
FF. Physical Damage means tangible damage to a Property that materially
adversely affects the use, marketability, or value of the Property,
whether caused by accident or otherwise, including, but not limited to
damage caused by reason of fire, destruction of tangible property,
defects in construction, land subsidence, earth movement or slippage,
flood, earthquake, war, civil insurrection, or riot; and further,
Physical Damage includes Environmental Impairment and the destruction or
removal of
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chattel items that are considered part of the Property (see Section I.,
KK., [Property]) For purposes of this definition "material" shall mean
an amount equal to or greater than $1,500.00 such that the estimated
cost to repair a Property is $1,500.00 or more before the exclusion set
forth in Section III., G., (Physical Damage Exclusion) would apply to
exclude coverage for a Loan. The presence of radon gas, lead paint or
asbestos in the dwelling on the Property shall not be deemed to be
Physical Damage.
GG. Policy means this contract of insurance together with all Applications,
all endorsements, and the Certificate Schedule, all of which are
incorporated herein for all purposes.
HH. Possession of the Property means actual and physical occupancy and
control of the Property.
II. Pre-Arranged Sale means:
1. A sale of a Property, with the prior approval of the Company,
arranged by the Insured (or by the Borrower and approved by the
Insured) prior to foreclosure because of a Default by a Borrower,
or by the Insured after foreclosure and before expiration of the
Claim Settlement Period; or
2. A foreclosure or trustee's sale of a Property to a third party, or
redemption from foreclosure, at a price equal to or greater than
the minimum amount specified by the Company to be bid by the
Insured at such sale.
JJ. Pre-Arranged Sale Option means the method of determining the amount of
the Insurance Benefit with respect to a Loan set forth in Section V.,
C., 3.
KK. Property means the real property and all improvements thereon including
any chattel items (including any built-in appliances) which are noted in
the Original Appraisal, including all replacements or additions thereto,
together with all easements and appurtenances, all rights of access, all
rights to use, as well as any co-ownership interests in common areas,
recreational and appurtenant facilities, and all replacements or
additions thereto.
LL. Residential means:
1. A type of building which is designed for occupancy by not more
than four families; or
2. A single-family condominium or planned unit development unit; or
3. Any other single-family residence unit as to which Good and
Merchantable Title may be held or conveyed freely under law, and
which the Company has approved in writing.
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MM. Servicer means that Person, other than a natural Person, who at any time
is servicing a Loan (as a master servicer, if subservicing is also
involved) with respect to the Insured's obligations under the Policy.
The Insured shall be presumed to be the Servicer unless the Company is
notified otherwise.
NN. Uninsured Casualty means Physical Damage to a Property which is either
not covered by casualty insurance, or not covered in an amount
sufficient to restore such Physical Damage to the Property.
OO. Uninsured Loan Balance means, at any time, with respect to a Loan, the
estimated Claim Amount less the Insurance Benefit estimated pursuant to
the Percentage Option.
PP. Any pronouns, when used herein, shall mean the single or plural,
masculine or feminine, as the case may be.
II. Coverage
A. Extension of and Level of Coverage- Extension of coverage to a Loan
under this Policy shall be evidenced by issuance of a Certificate number
on the Certificate Schedule. The Certificate Schedule and the
Application for each Loan are incorporated herein by reference and made
a part hereof for all purposes. The Policy is issued in reliance upon
the Application and on the representations made in connection therewith.
Coverage shall commence upon the payment of the initial premium, as of
the Effective Date of the Certificate Schedule. The coverage level for
each Loan shall be indicated on the Certificate Schedule.
B. Initial Premium - On the Effective Date of the Certificate Schedule, the
Insured shall forward the appropriate initial premium due to the Company
to establish coverage as of the Effective Date.
C. Payment of Renewal Premium - For coverage to be renewed, the entire
renewal premium must be paid no later than the fifteenth (15th) day of
the second month following the month in which each anniversary of the
Effective Date occurs. For example, if the Effective Date was January
12, renewal premium must be paid by March 15. The Company shall give the
Servicer, if a Servicer is shown on the records of the Company, or
otherwise, the Insured, notice of the renewal premium due date. If the
renewal premium is not paid by the last day of the grace period provided
above, then the liability of the Company shall terminate as of 12:01
a.m. on the later of the last anniversary of the Effective Date through
which the premium has been paid, or, if a non-payment notice is required
by applicable law, the last day of the cure period specified in such
non-payment notice or as may be required by applicable law (the "Lapse
Date"). However, failure to pay a renewal premium will not impair or
terminate coverage for Defaults occurring prior to the Lapse Date.
Notwithstanding the foregoing, if the renewal premium is not paid by the
last day of the above-stated grace period and such Loan is among a group
of Loans whose coverage has lapsed due to the transfer, seizure or
surrender of the servicing for such Loans, the Insured shall have an
additional sixty (60) day grace period in which to pay the renewal
premium for such Loan.
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D. Full Premium Payment - The Company shall have the right to hold in a
suspense account for up to ninety (90) days any premium payment
received, without obligation to apply such premium to coverage while any
of the following circumstances exist:
1. The payment received is less than the full amount of the premium
due with respect to a Certificate;
2. Information received with the payment is insufficient to identify
the Loan to which the payment applies.
At the end of the ninety (90) day period if the Company has not been
able to resolve the suspended premium payment with the Insured, then the
Company shall either refund the payment or be deemed to have accepted
and applied it without lapse of coverage. Where the Company has received
notice that there is a Servicer for a Loan then, if a premium is
refunded, the Insured shall be notified that such refund was made and
shall have sixty (60) days from such notice to cure or perform the
conditions precedent to coverage.
E. Cancellation by the Insured of Coverage for a Loan - The Insured may
cancel coverage with respect to a Loan by making a request for
cancellation to the Company in writing or via any medium acceptable to
the Company. Upon receipt thereof, for coverage having refundable
premiums, the Company shall refund such sum as may be determined to be
due in accordance with the appropriate cancellation or premium schedule.
The Company reserves the right to net out any unpaid premium from any
premium refund. However, no refund on a Certificate will be paid if a
notice of Default has been filed unless the Insured waives its rights to
the Insurance Benefit with respect to that Loan. Cancellation of
coverage for a Loan will not cancel this Policy.
F. Cancellation of Policy - Once coverage has become effective with respect
to a Loan, this Policy may not be canceled by the Company for as long as
any Certificate assigned under this Policy remains in force. If the
Insured desires to cancel this Policy, it may do so by canceling all
outstanding Certificates that have been issued under this Policy.
G. Loan Modifications - Unless prior written approval is obtained from the
Company, the Insured shall not make any change in the terms of any Loan
including, but not limited to, any change in the amount of the
indebtedness, the interest rate, the use of escrow funds or other funds,
term or amortization schedule of the Loan, change in the Property, nor
release any Borrower from liability on a Loan, provided, however, that
changes in the Loan permitted by the instrument evidencing the Loan
shall be deemed approved without prior approval.
H. Assumptions and Balloon Restructures - The renewal or restructure of a
Loan at the maturity of a Balloon Payment (hereinafter defined) and the
assumption of a Loan by a purchaser of the Property, with or without the
release of the original Borrower, are changes to a Loan requiring the
Company's prior approval as set forth in Section II., G., (Loan
Modifications) above, provided, however, that if under applicable law,
the Insured cannot enforce the "Due on Sale" provision of a Loan, then
the Company will be deemed to have approved the assumption of such Loan.
Notwithstanding anything
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to the contrary in this Section II., H., the Company will be deemed to
have approved the assumption of any Loan where no release is requested
and under Section II-406.02 of the Federal National Mortgage
Association's Servicing Guide or any successor provision thereof, or any
similar provision of the Federal Home Loan Corporation's Sellers' &
Servicers' Guide, the assumption is an "exempt transaction" that the
Servicer is to approve without review of the terms of the transaction.
I. Increase in Loan Amount - In addition to the approval requirement of
Section II., G., (Loan Modifications) above, if the principal balance of
a Loan is increased (excluding any Negative Amortization), the Insured
shall pay an additional premium corresponding to the increase in
coverage, at the then prevailing premium rate.
J. Approval of Loan Modifications - The Company shall not unreasonably
withhold any approval required to be obtained in connection with any of
the changes listed in Sections II., G., and H.,; however, failure by the
Insured to obtain any such approval with respect to any Loan shall
constitute a waiver of coverage for that Loan and the Company shall
refund premium for the period following such waiver.
K. Servicing - The Loans will be serviced by one of five servicers
qualified and approved by the Company and the Insured. Unless the prior
written approval of the Company is obtained, the Servicing of any of the
Loans may not be transferred, sold, or assigned unless such transfer,
sale or assignment is approved in writing by the Company. The Company
shall not unreasonably withhold approval of a proposed servicer. The
Company's approval shall be deemed to be given for the transfer, sale or
assignment of all or part of the Loans to a federally insured bank or
savings association, an institutional investor, the Federal Home Loan
Mortgage Corporation ("▇▇▇▇▇▇▇ Mac"), ▇▇▇▇▇▇ Mae, or to a ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac approved mortgage banker, provided that notice of the same
is given as required by this paragraph.
L. Change of Insured - If all of the Loans are transferred, sold or
assigned by the Insured, coverage will continue PROVIDED THAT (a) notice
thereof is given to the Company within thirty (30) days of such change,
(b) the change in ownership, however denominated, is not occasioned by
the redemption, repurchase, cancellation or other method of
extinguishing the transaction pursuant to which the Loans were
securitized, and (c) the Company approves the change in writing. The
Company shall not unreasonably withhold approval of an new Insured.
M. Coordination and Duplication of Insurance Benefits -
1. If any portion of a Loan is uninsured, all payments made by the
Borrower on the Loan shall be allocated to the insured portion of
the Loan in the same ratio as the insured principal amount bears
to the total principal amount of the Loan. The Insurance Benefit
hereunder shall likewise be calculated on the same pro rata basis.
2. The Insured shall not carry duplicate mortgage guaranty insurance
(other than mortgage guaranty pool insurance or supplemental
mortgage guaranty insurance) on any Loan.
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3. If at the time of Default there is any other valid and collectible
insurance in effect for the Loan which would attach if this
insurance were not in effect, then the coverage under this Policy
shall apply only as excess coverage and in no event as
contributing insurance.
N. Mitigation of Loss - The Insured and its Servicer shall attempt to limit
and mitigate loss by adhering to customary servicing standards
applicable to delinquent Loans, which may include in appropriate cases,
but is not limited to, trying to obtain a cure of Defaults and trying to
effectuate a Pre-Arranged Sale or voluntary conveyance of the Property.
The Insured shall permit the Company to participate in workout
activities for any Loan in Default. Failure of the Insured to materially
comply with this Section II., N., with respect to any Loan shall entitle
the Company to adjust the Claim Amount by the amount the Company was
damaged by such noncompliance. The Company shall attempt to limit and
mitigate any loss to the Insured which will not be covered by the
Insurance Benefit provided under this Policy.
III. Exclusions from Coverage
The Company shall not be liable for, and the Policy shall not apply to,
extend to or cover the exclusions listed below. In the event that coverage
is excluded for any Loan, the Company will refund all premium for that Loan
for the period following the occurrence of the event giving rise to such
exclusion. Except where prohibited by law, if the damage to the Company
arising from an excluded event can be reasonably quantified, the Company
shall adjust the Claim Amount by the amount of such damage rather than
exclude coverage altogether for such Loan, unless a refund of premium as
provided for in the preceding sentence would provide a greater payment to
the Insured.
A. Balloon Payment Exclusion - Any Claim arising out of or in connection
with the failure of the Borrower to make any payment of principal and
interest due under the Loan, which payment becomes due when the Insured
exercises its right to call the Loan when not in default or because the
term of the Loan is shorter than the amortization period, and which
payment is for an amount more than twice the regular periodic payment of
principal and interest that are set forth in the Loan (commonly referred
to as a "Balloon Payment"); provided, however, that this Exclusion shall
not apply if the Insured or its Servicer offers the Borrower in writing,
before the due date of the Balloon Payment, a renewal or extension of
the Loan, or a new loan at then current market rates, in an amount not
less than the then outstanding principal balance and with no decrease in
the amortization period and the Borrower declines to seek such renewal
or refinancing.
B. Effective Date Exclusion - Any Claim resulting from a Default occurring
before the Effective Date of the Policy or after its lapse,
cancellation, or expiration; or after coverage is canceled with respect
to the Loan.
C. Incomplete Construction Exclusion - Any Claim when, as of the date of
such Claim, construction of the Property had not been completed in
accordance with the construction plans and specifications approved by
the Loan originator at the time the Loan was originated or in accordance
with the
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Original Appraisal. (This Incomplete Construction Exclusion shall not
apply if the construction of the Property has been fully completed and,
if Physical Damage occurs during construction, any repairs necessary to
restore the Property to its complete condition, reasonable wear and tear
excepted, have been completed.) However, coverage for a Default
occurring during construction may be excluded by Section III., B.,
(Effective Date Exclusion) above.
D. Residential Property Exclusion - Any Claim where the Property is not, as
of the date the Loan is Closed, on the Effective Date, and on the date
the Claim is filed, Residential real property.
E. Negligence and Fraud Exclusion - Any Claim involving or arising out of,
or any Claim where the origination of the Loan or extension of coverage
hereunder involved or arose out of, any dishonest, fraudulent, criminal,
or knowingly wrongful act (including error or omission) by the Insured,
the Servicer or any agent of the Insured or Servicer; or any Claim
involving or arising out of the negligence of the Insured or the
Servicer, which negligence is material either to the acceptance of the
risk or to the hazard assumed by the Company.
F. Non-Approved Servicer Exclusion - Any Claim occurring when the Servicer,
at the time of Default or thereafter, was not approved by the Company,
provided, however, that this Non-Approved Servicer Exclusion shall not
apply to any Loan for which a Default occurs within 150 days after the
Company withdraws approval of the Servicer for such Loan. If the Company
decides to withdraw approval of a Servicer it shall give written notice
of that decision to the Insured for each affected Loan as shown in the
Company's records.
G. Physical Damage Exclusion - Any Claim where there is Physical Damage to
the Property, occurring or manifesting itself after the Effective Date;
provided, however, that this exclusion will not apply (i.e., the Company
will provide coverage for a Claim) where Physical Damage has occurred to
the Property if:
1. The Default giving rise to a Claim was not primarily caused by an
Uninsured Casualty occurring prior to such Default, and the
Company has elected to pay either the Percentage Option or the
Pre-Arranged Sale Option as the Insurance Benefit for the Loan; or
2. The Property has been restored to its condition as reported in the
Original Appraisal (as fully completed), reasonable wear and tear
excepted. The Insured may elect to accept a reduction in the Claim
Amount by an amount equal to the estimated cost to completely
restore the Property as would otherwise be required by this
exclusion rather than be required to restore the Property to
obtain an Insurance Benefit under this Policy. In the event the
Company relies on an estimate for such restoration that is not
obtained by the Insured, then the Company shall, at the request of
the Insured, provide a copy of such estimate to the Insured.
H. Loan to Value Ratio Exclusion - Any Claim where the original principal
balance of the Loan exceeded one hundred percent (100%) of the FMV of
the Property at the time the Loan was
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originated, and such fact was not disclosed to the Company at the time
coverage under this Policy was extended to such Loan.
I. Negative Amortization Exclusion - Unless otherwise endorsed, any
Negative Amortization with respect to a Loan.
J. Defenses to Loan Exclusion - That portion of any Claim equal to the
amount of the indebtedness from which the Borrower is released, or any
Claim against which the Borrower successfully asserts defenses that have
the effect of releasing, in whole or in part, the Borrower's obligations
to repay the Loan, provided, however, this Defenses to Loan Exclusion
shall not apply where the release of the Borrower is the result of a
bankruptcy "cram down" so long as the Insured has continued to pay
premium on the full amount of the indebtedness and that all other
conditions of this Policy have met.
K. Environmental Impairment Exclusion - Any Claim where there is
Environmental Impairment to the Property which existed prior to the
Effective Date if the existence, or suspected existence, of the
Environmental Impairment was not disclosed in the Application and the
Environmental Impairment (i) is a principal cause of the Default, and
(ii) has made the principal Residential structure on the Property
uninhabitable. A structure will be considered "uninhabitable" if
generally recognized standards for residential occupancy are violated or
if, in the absence of such standards, a fully informed and reasonable
person would conclude that such structure was not safe to live in
without fear of injury to health or safety. Notwithstanding the
foregoing, this exclusion shall not apply if the Insured has removed or
remedied the condition that constitutes the Environmental Impairment or
the Insured has removed the hazardous character of such condition in
accordance with applicable federal, state or local laws.
IV. Conditions Precedent to Payment of Claim
The following Claim payment procedures contain the conditions precedent to,
and additional limitations upon the Company's obligation to pay Insurance
Benefits under this Policy:
A. Notice of Default - The Insured shall give the Company notice:
1. Within forty-five (45) days of Default, if it occurs when the
first payment is due under a Loan; or
2. Not later than the last business day of the month following the
month in which the first of the following events occur:
a. The date when the Borrower becomes three (3) periodic payments
in Default on the Loan if the periodic payments are made monthly,
and not later than ninety (90) days after the occurrence of a
Default for Loans having periodic payments more often than once a
month; or
b. Foreclosure or other Appropriate Proceedings have been
commenced.
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Such notice shall be on forms provided by or approved by the Company or
via a medium acceptable to the Company. Unavailability of Company forms
is not a valid reason for delay in reporting. Failure to report a
Default as required by this Section IV., B., shall entitle the Company
to deduct from the Claimable Amount of a Claim thirty (30) days of
interest accruing on the Loan during the period between the date the
notice of Default should have been filed and the date it was submitted
to the Company.
B. Monthly Reports - Following a notice of Default on a Loan or the
commencement of Appropriate Proceedings, the Insured shall give the
Company monthly reports on forms furnished or approved by the Company or
via a medium acceptable to the Company, on the status of the Loan and on
the servicing efforts undertaken to remedy the Default or conclude the
Appropriate Proceedings. These monthly reports shall continue until the
Borrower is no longer in Default, the Appropriate Proceedings terminate,
or until title to the Property has been transferred to the Insured.
C. Company's Options after Notice of Default - If the Company so directs,
at any time after receiving the Insured's notice of Default, the Insured
shall file a Claim within twenty (20) days and the Company may elect to
pay the Insurance Benefit pursuant to the Percentage Option. Thereafter,
following the Insured's acquisition of the Borrower's Title to the
Property, the Insured shall be entitled to file a supplemental Claim in
an amount equal to the sum of the Advances not included in the initial
Claim, plus any Deficiency Expenses (See Section I.,R.) subject to the
limitations and deductions of Section V., B., (Calculation of Claim
Amount) and such supplemental Claim shall be paid by the Company in
accordance with the Percentage Option.
D. Voluntary Conveyance - The Insured may accept a conveyance of title from
the Borrower in lieu of foreclosure or other proceedings if:
1. The ability of the Insured to preserve, transfer and assign to the
Company the Insured's rights against the Borrower is not impaired;
and
2. The rights of the Company under this Policy against such Borrower
are not adversely affected; or if
3. The written approval of the Company has been obtained; provided,
however, it is understood that such approval shall not constitute
nor be deemed an admission of liability by the Company with
respect to coverage for the related Loan.
E. Appropriate Proceedings - The Insured MUST begin Appropriate Proceedings
when the Loan becomes six (6) months in Default unless the Company
provides written instructions that some other action be taken. The
Company reserves the right to direct the Insured to institute
Appropriate Proceedings at any time after Default. When either defending
against or bringing Appropriate Proceedings, the Insured shall report
the status of these proceedings to the Company as reasonably and
expeditiously as possible.
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In conducting Appropriate Proceedings, the Insured shall:
1. Diligently pursue the Appropriate Proceedings once they have
begun;
2. Apply for the appointment of a receiver and assignment of rents,
if permitted by law, requested by the Company, and appropriate for
the Property;
3. At the request of the Company, furnish the Company with copies of
all notices and pleadings filed or required in the Appropriate
Proceedings;
4. Act so that its ability to preserve, transfer and assign to the
Company its rights against the Borrower is not impaired; and so
that the rights of the Company under this Policy against the
Borrower are not adversely affected, including any rights to
obtain a deficiency judgment, provided that the Insured shall not
be required to pursue or establish a deficiency against the
Borrower in those states where the Company is not permitted to
pursue such a deficiency;
5. Bid an amount at the foreclosure sale which is not less than the
minimum amount nor more than the maximum amount set forth below,
unless the Company notifies the Insured of other instructions or
waives its right to give bidding instructions, in writing.
a. If the FMV of a Property is less than the Uninsured Loan
Balance, the Insured shall start bidding at not less than the FMV
of the Property and may continue bidding up to a maximum of the
Uninsured Loan Balance.
b. If the FMV of a Property is greater than the Uninsured Loan
Balance, the Insured shall start bidding at not less than the
Uninsured Loan Balance up to a maximum amount equal to the Claim
Amount.
If other bidding instructions are provided they will not specify a
maximum bid that is less than the Uninsured Loan Balance, and, if
the Property is subject to redemption for less than the
outstanding amount of the Loan, then such other bidding
instructions will not specify an opening bid of less than the
Uninsured Loan Balance.
F. Pre-Arranged Sales - In the event of Default on a Loan, it shall be a
condition precedent to payment of any Insurance Benefit on the Loan that
(i) the Insured attempt to obtain a Pre-Arranged Sale of the Property
whenever reasonable, and (ii) the Insured shall authorize its broker,
when requested by the Company, to release marketing information for the
Property to the Company, if requested by the Company, unless the Insured
shall have notified the broker that the Company's right to acquire the
Property has expired or been waived. For purposes of this section, a
"Pre-Arranged Sale Offer" means an offer to purchase the Property
received by the Insured, together with a schedule of (i) expense items
proposed by the Insured to be included in the settlement amount of the
Pre-Arranged Sale Offer is accepted and the proposed Property sale
closes, and (ii) the Insured's then-
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estimated amounts thereof. Pre-Arranged Sale Offers that the Insured
chooses to submit to the Company will be approved or rejected by the
Company.
G. Claim Requirements - The Insured must provide the Company with:
1. A completed form furnished or approved by the Company for payment
of a Claim ("Claim for Loss Form"); and
2. All information reasonably requested on the Claim for Loss Form
together with all documentation requested on or necessary to
complete such Claim for Loss Form; and
3. Evidence satisfactory to the Company that the Insured has acquired
the Borrower's Title to the Property, except where the Company has
elected the Pre-Arranged Sale Option provided, however, if the
primary cause of the Default was a circumstance or event which
would prevent the Insured from obtaining Good and Merchantable
Title, then no matter which settlement option the Company elects,
the Insured must comply with the requirements of Section IV., G.,
4, as if the Company had elected the Acquisition Option; and
4. In the event the Company elects the Acquisition Option, a
recordable deed in normal and customary form containing the usual
warranties and covenants conveying to the Company or its designee
Good and Merchantable Title to the Property, along with evidence
satisfactory to the Company that the Insured has acquired and can
convey to the Company or its designee Good and Merchantable Title
to the Property; and
5. All other documentation or information reasonably requested by the
Company for purposes of investigating and/or adjusting the Claim;
and
6. Access to the Property for purposes of determining its value, and
for investigating and/or adjusting the Claim; provided, however,
if the Company elects the Acquisition Option, then Possession of
the Property must be provided by the Insured, unless the Company
waives this requirement in writing.
V. Loss Payment Procedure
A. Filing of Claim - The Insured shall file a Claim no later than sixty
(60) days after the earlier of acquiring the Borrower's Title to the
Property or a Pre-Arranged Sale, provided that if the Company elects to
acquire the Property, then no later than sixty (60) days after the
Insured acquires Good and Merchantable Title to the Property. Failure of
the Insured to file a Claim within this time period shall (i) relieve
the Company of any obligation to include in the Claim Amount interest
and Advances accruing on the Loan after such sixty (60) day period has
expired, and (ii) entitle the Company to adjust such Claim to the extent
that the Company is prejudiced by such late filing of the Claim, up to
100% of the Insurance Benefit.
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Unavailability of Company forms is not a valid reason to delay filing a
Claim. If a Claim filed by the Insured is incomplete the Company shall
within twenty (20) days of receipt of a Claim, notify the Insured of all
items needed to perfect such Claim. If no notice of deficiency of the
Claim is sent within the twenty (20) day period following receipt of the
Claim by the Company, then the Claim shall be deemed to be perfected as
of the date the Company received the Claim.
B. Calculation of Claim Amount - The Claim Amount for any Loan shall be an
amount equal to the sum of:
1. The Default Amount but excluding any portion of the principal
balance attributable to any increase therein after the first
payment is due and payable, and excluding capitalized penalty
interest or late payment charges. (See Section III., I., (Negative
Amortization Exclusion) THIS POLICY DOES NOT COVER NEGATIVE
AMORTIZATION UNLESS SUCH COVERAGE IS ENDORSED FOR A LOAN); and
2. The amount of accumulated delinquent interest due on the Loan at
the contract rate stated in the Loan from the date of Default
through the date that the Claim is submitted to the Company, but
excluding applicable late charges and penalty interest; additional
interest computed on the Default Amount until the Pre-Arranged
Sale of the Property, and thereafter until the Pre-Arranged Sale
closing information is submitted, computed on the Default Amount
reduced by the net proceeds of such Pre-Arranged Sale (For
purposes of this Section, "late charges and penalty interest"
includes, but is not limited to, increases in interest rate caused
by non-performance of the Borrower. In no event will the Claim
Amount include interest at a rate other than what the Insured
would receive if the Loan were paid as current in accordance with
its own terms); and
3. The amount of Advances made by the Insured; provided that:
a. Attorney's fees advanced thereunder shall not exceed three
percent (3%) of the sum of the (1) and (2) above; and
b. Payment for Advances other than Attorney's fees, shall be
prorated through the earlier of the date the Claim is submitted to
the Company or the Pre-Arranged Sale of the Property;
less:
4. All rents and other payments (excluding proceeds of fire and
extended coverage insurance and proceeds of a Pre-Arranged Sale)
collected or received by the Insured, which are derived from or in
any way related to the Property;
5. The amount of cash available to the Insured remaining in any
escrow account as of the last payment date;
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6. The amount of cash to which the Insured has retained the right of
possession as security for the Loan; and
7. The amount paid under applicable fire and extended coverage
policies which has not been applied to either the restoration of
the Property, if the Property suffered Physical Damage, or to the
payment of the Loan; and
8. The amount expended by the Insured for Advances requiring approval
by the Company which are not in compliance with the Company's
guidelines and which have not been approved by the Company.
C. Payment of Insurance Benefit - The Company, at its sole option, shall
elect one of the following three options and pay to the Insured, on or
before the last day of the Claim Settlement Period, as the Insurance
Benefit, either:
1. The Acquisition Option which shall equal the Claim Amount less the
amount of any payments of Loss previously made by the Company with
respect to the Loan, payable in exchange for the conveyance of
Good and Merchantable Title to and Possession of the Property;
provided, however, that if the Insured is unable to perform any
conditions precedent to payment of a Claim within the later of
thirty (30) days after the redemption period or ninety (90) days
after the Claim Adjustment Period, then, so long as the Claim is
not otherwise excluded, the Insured may retain title to the
Property and the Insurance Benefit under this Acquisition Option
shall be an amount equal to the Company's Anticipated Loss in
connection with such Property ; or
2. The Percentage Option which is an amount equal to the Claim Amount
multiplied by the percentage of coverage specified in this Policy,
or
3. The Pre-Arranged Sale Option is an amount equal to the lesser of
the Percentage Option or the Insured's actual loss in connection
with a Pre-Arranged Sale of the Property. The Insured's actual
loss shall be an amount equal to the Claim Amount plus all
reasonable costs incurred in obtaining and closing such sale less
the proceeds of the Pre-Arranged Sale.
In addition to payment under one of the foregoing options, the Company
will pay whatever Deficiency Expenses are payable to the Insured
pursuant to Section V., D. (Deficiency Expenses).
In the event that a Pre-Arranged Sale fails to close prior to the end of
the Claim Settlement Period, the Company may postpone payment of the
Insurance Benefit for up to (90) ninety days, or if earlier, until such
Pre-Arranged Sale closes or is terminated, provided that interest on the
Default Amount at the rate due upon the Loan during such postponement is
paid to the Insured.
Further, in the event the Property is redeemed after the payment of the
Percentage Option, the Insured shall be obligated to promptly refund to
the Company the amount, if any, by which the redemption price plus the
Insurance Benefit exceeds the Claim Amount.
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In the event the Company does not pay the Insurance Benefit within the
Claim Settlement Period, it will pay interest on the Insurance Benefit
at the rate due under the Loan from the last day of the Claim Settlement
Period until the Claim is paid.
D. Deficiency Expenses - Notwithstanding the provisions of Section V., C.,
(Payment of Insurance Benefit) above, in the case where a deficiency
against the Borrower is being pursued solely at the request of the
Company, then any Deficiency Expenses shall be added to the amount of
the Insurance Benefit. If a deficiency against a Borrower is being
pursued as part of Appropriate Proceedings, for the benefit of both the
Insured and the Company, then at the time such deficiency rights are
established or a deficiency judgment is obtained, whichever shall occur
first, the Deficiency Expenses plus any similar expenses incurred by the
Company in connection with such deficiency shall be settled between the
parties on the same pro rata basis set forth in Section VI., B.
(Subrogation) for the settlement of deficiency recoveries. Expenses and
costs arising after that point shall be treated as collection expenses
to be netted against the deficiency recovery, if any, (and, if none, to
be shared between the parties on the same pro rata basis when it becomes
clear that nothing will be recovered).
To facilitate the decision of whether to pursue or establish a
deficiency against a Borrower, the Insured shall provide the Company
with any information it may have relevant to collecting on a deficiency
judgment for that case. The Company will discuss all such information it
may have with the Insured so that the parties can decide whether any
Appropriate Proceedings (necessary to establishing or pursuing a
deficiency) are to be pursued for the benefit of both parties or whether
one of the parties will elect not to participate in any recovery. The
Insured will be deemed to be participating in Appropriate Proceedings
solely at the request of the Company when such proceedings are not a
condition precedent to obtaining Borrower's Title to or Possession of a
Property and, after the parties have exchanged information on the Loan,
the Insured has advised the Company in writing why the Insured does not
wish to participate in such proceedings.
E. Discharge of Obligation - Any payment by the Company in accordance with
Section V., C., (Payment of Insurance Benefit) and, if applicable,
Section V., D., (Deficiency Expenses) or Section IV., C., (Company's
Options after Notice of Default), taking into account appropriate
adjustments, shall be a full and final discharge of the Company's
obligation under this Policy with respect to the related Loan.
Notwithstanding the preceding sentence, the Company shall not be
relieved of its obligation to pay any appropriate supplemental Claims
filed pursuant to Section IV., C., (Company's Options after Notice of
Default) or as may otherwise be agreed to by the Company.
VI. Additional Conditions
A. Proceedings of Eminent Domain - In the event that part or all of the
Property is taken by eminent domain, condemnation or by any other
proceedings by federal, state or local governmental unit or agency, the
Insured shall require that the Borrower apply the maximum permissible
amount of any
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compensation awarded in such proceedings to reduce the principal balance
of the Loan, in accordance with the law of the jurisdiction where the
Property is located.
B. Subrogation - The Company shall be subrogated pro rata, to the full
extent permitted by law (except where the Company is prohibited by law
from pursuing recovery of a Loan), to all of the Insured's Recovery
Rights with respect to a Loan, upon payment of a Claim hereunder.
"Recovery Rights" shall mean all rights of recovery against the Borrower
and any other Person or organization relating to the Loan or to the
Property. The Company's pro rata share of the net deficiency recovered
(i.e., amounts recovered less reasonable costs and expenses) with
respect to any Loan shall be the amount of the Insurance Benefit divided
by the amount of the deficiency judgment. Internal staff costs and
overhead expenses shall not be deducted in determining the amount of a
net deficiency recovery unless specifically agreed to in writing by the
parties.
The Insured hereby designates the Company its exclusive agent (i) to
pursue all of the Insured's Recovery Rights to which the Company has not
become subrogated by payment of a Claim (i.e., the Insured's share of
the Recovery Rights), (ii) to file any action in the Company's name as
assignee of the Insured, to collect on the Insured's Recovery Rights,
and (iii) to settle and compromise any such Recovery Rights on behalf of
the Insured, it being understood and agreed that the Company shall have
the exclusive rights to pursue and settle all Recovery Rights for any
Loan on which a Claim payment is made hereunder, unless waived in
writing by the Company. If the Company decides not to pursue Recovery
Rights with respect to a Loan, then the Company shall issue a written
waiver of its subrogation and management rights to the Insured. The
Insured shall execute and deliver at the request of the Company such
instruments and documents, and undertake such actions as may be
necessary to transfer, assign and secure such Recovery Rights to the
Company. The Insured shall refrain from any action, either before or
after payment of a Claim hereunder that shall prejudice such Recovery
Rights.
Notwithstanding any provision in the foregoing paragraph to the
contrary, in the event the Insured has, in addition to Recovery Rights
against a Borrower or any other Person, a claim or claims against such
Borrower or other Person not related to the Recovery Rights, then the
Insured shall have the right to pursue in its own name all the Recovery
Rights in conjunction with the Insured's other claim or claims, and the
Company will waive its right to manage the pursuit of the Recovery
Rights.
The execution by the authorized party, even if it be a party other than
the Insured, of a release or waiver of the right to collect the unpaid
balance of a Loan, if it has such effect, shall release the Company from
its obligations hereunder to the extent and amount of such release or
waiver, unless the Company is prohibited by law from pursuing recovery
of such Loan.
C. Representations and Reliance; Incontestability - All statements made by
the Insured, the Servicer, the Borrower or any other Person in any part
of the Application, including the Original Appraisal, plans and
specifications, or any exhibits or documents submitted therewith, are
deemed to be the Insured's representations. The Company has issued this
Policy and has extended coverage to
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each Loan listed on the Certificate Schedule in reliance on the
correctness and completeness of such representations as made or deemed
to be made by the Insured.
No Claim otherwise payable under this Policy with respect to a Loan will
be denied, nor will the coverage for such Loan be rescinded, based on
any misrepresentation in the Application made by the Borrower or any
Person other than a First Party, once twelve (12) regularly scheduled
periodic payments have been made on that Loan from the Borrower's Own
Funds.
Notwithstanding the foregoing provisions of this Section VI., C.,, the
Company will not be precluded from denying a Claim or rescinding
coverage for a Loan where prior to the Borrower making twelve (12)
regularly scheduled payments from the Borrower's Own Funds, the Company
notifies the Insured in writing that the Company has sufficient evidence
to establish a reasonable belief that there was a material
misrepresentation made in the Application with respect to such Loan and
the Company provides a reasonable description of such misrepresentation.
D. Notice - Premium payments are to be paid as provided in Sections II.,
B., and C., and sent to the Company at the address listed on the
Commitment, or as otherwise instructed by the Company in writing. All
other notices, Claims, tenders, reports and other data required to be
submitted to the Company by the Insured shall be either (i) mailed
postpaid, (ii) sent by overnight courier, (iii) transmitted
electronically or via magnetic tape or other media in a manner approved
by the Company, or (iv) sent by telephonic facsimile transmission, to
the Company's home office at the following address and facsimile number:
For Claim matters:
PMI Mortgage Insurance Co.
P. O. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Claim Department
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
For Customer Service matters:
PMI Mortgage Insurance Co.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Customer Service Department
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
All notices to the Insured shall be given to the Servicer unless the
Company has not been notified that a Loan is being serviced by a Person
other than the Insured, and shall be either (i) mailed postpaid, (ii)
sent by overnight courier, (iii) transmitted electronically or
magnetically in a manner approved by the Insured, or (iv) sent by
telephonic facsimile transmission, to the Servicer, at the
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address and facsimile number provided in writing by the Insured to the
Company, or to the last known address and facsimile number for that
Servicer, except that for facsimile transmissions, the Company shall
confirm telephonically or otherwise the accuracy of the facsimile number
used. Nonpayment notices under Section II., C. and notices required
under Section III., F. shall be sent to both the Insured and the
Servicer whenever the Company has been notified that the Servicer is a
Person other than the Insured. All notices to the Insured and Servicer
will be sent to those Persons whom the Company was last notified as
owning or servicing the Loan, respectively, at the last known address
for such Persons as reflected in the records of the Company.
Either party may notify the other of a change in address in the same
manner as provided for giving notice. All notices, Claims, tenders,
reports and other data required to be submitted to the Company or to the
Insured shall be deemed to have been given five (5) days after the same
is deposited in the U.S. Mail, delivered to an overnight courier, or
transmitted in a manner approved above, unless actually received
earlier. If the Insured requests that notices be sent to a third party
other than the Insured and Servicer, the Company agrees to use its best
efforts to give such notices but the Company shall not incur any
liability for failure to send any notice to any third parties.
E. Reports and Examinations - As pertinent to any Loan or the Policy, the
Company may call on the Insured for such reports as it may deem
reasonably necessary, and may inspect the files, books and records of
the Insured as they pertain to any Loan or to the Policy. The Company
has the right to require that any information which the Insured is
required to provide under this Policy be certified as to its
truthfulness and accuracy by an officer or properly authorized employee
of either or both the Insured and the Servicer.
F. Arbitration - Unless prohibited by applicable law, any controversy or
dispute, including any Claim made hereunder, arising out of or relating
to this Policy, may, upon the mutual consent of all parties to the
dispute, be settled by binding arbitration in accordance with the title
insurance rules of the American Arbitration Association in effect on the
date the demand for arbitration is made. If this remedy is elected by
all parties to the dispute, then the decision of the arbitrator(s) shall
be final and binding on all the parties, and shall be enforceable in any
court of competent jurisdiction in the United States of America.
G. Suit -
1. No suit or action for recovery of any Claim or Insurance Benefit
under this Policy shall be sustained in any court of law or equity
unless the Insured has materially and substantially complied with
the terms and conditions of this Policy, and unless the suit or
action in equity is commenced within three (3) years or such
longer period of time as may be required by applicable law, after
(i) the Claim has been presented to the Company or (ii) the date
on which the cause of action accrued, whichever is earlier. No
suit or action on a Claim or Insurance Benefit may be brought
against the Company until sixty (60) days have elapsed from the
later of the date that the Insured is notified that Claim is
perfected or from the date the Claim is
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deemed to be a Perfected Claim, unless the subject matter of the
suit or action is whether a Perfected Claim has been filed.
2. If a dispute arises concerning the Loan and involving either the
Property or the Insured, the Company has the right to protect its
interest by defending any action arising from such dispute, even
if the allegations involved are groundless, false or fraudulent.
The Company is NOT REQUIRED to defend any lawsuit involving either
the Insured, the Property or the Loan. The Company shall also have
the right to direct the Insured to institute suit on the Insured's
behalf, if this suit is necessary or appropriate to preserve the
Company's rights in connection with a Loan or Property. If any
litigation costs and expenses incurred by either the Company or
the Insured under this Section VI., G., arise out of an action
involving the negligent or wrongful conduct or breach of contract
on the part of the Insured, then the Insured shall bear all such
costs and expenses, and in all other cases, the Company shall bear
such costs and expenses.
H. Parties in Interest - This contract shall be binding upon and inure to
the benefit of the Company and its successors and assigns and the
Insured and its permitted successors and assigns. Neither the Borrower,
nor any successive owner of a Property, nor any pool insurance carrier,
nor any other Person is included or intended as a third party
beneficiary to this Policy. Payments made to the Insured hereunder are
intended as indemnification for actual loss and shall not affect nor
impair the Insured's rights of recovery against the Borrower subject,
however, to the provisions of Section VI., B., (Subrogation). Because
the Company and the Insured are the only parties to the Policy, they may
agree to modify or amend or terminate this Policy or any Certificate
without the consent of, or notice to, any Borrower, Servicer or any
other Person.
I. Agency - Neither the Insured, its Servicer, its originators, nor any of
their respective employees or agents shall be or shall be deemed to be
agents of the Company, nor shall the Company be or be deemed to be an
agent of the Insured or Servicer except to the extent of the Recovery
Rights assigned to the Company pursuant to Section IV., B.,
(Subrogation). The Servicer is deemed to be an agent of the Insured for
all purposes under this Policy, including, but not limited to, for
receiving notices, payments of Insurance Benefit, settling Claims, and
performing acts required of the Insured under this Policy excepting for
receipt of notices required under Section III., F., (Non-Approved
Servicer).
J. Governing Law; Conformity to Statute - This Policy, including the
Certificate Schedule, Claim or Insurance Benefit related to any Loan,
shall be governed by the law of the jurisdiction in which the original
named Insured is located as shown in on the face page hereof. Any
provision of this Policy which is in conflict with the law of the
aforesaid jurisdiction is hereby amended to conform to the minimum
requirements of that law.
K. Electronic Data Storage - It is understood that the Company may store
information, the contents or images of documents or other data on
electronic media or other media generally accepted for business records
(such as microfiche). The Company and Insured agree that the data stored
on such electronic or other media are equally acceptable between the
parties for all purposes as information,
23
[LOGO OMITTED] BULK PRIMARY
PMI FIRST LIEN MASTER POLICY
============================================================================
documents or other data maintained in printed or written form, including
but not limited to, for the purposes of litigation or arbitration.
L. No Waiver - Except as provided in Section VI., C., Representations and
Reliance; Incontestability, nothing contained in this Policy shall be
deemed to waive or limit the Company's rights arising at law or in
equity to rescind or reform this Policy or the Certificate in the event
that material misrepresentations of fact or fraudulent statements were
relied upon by the Company in issuing this Policy or extending coverage
hereunder to any Loan.
24
PMI Mortgage Insurance Co.
[GRAPHIC OMITTED]
PMI
BULK PRIMARY MASTER POLICY
BLOCKED PERSONS EXCLUSION ENDORSEMENT
==============================================================================
ENDORSEMENT TO
BULK PRIMARY FIRST LIEN MASTER POLICY,
FORMS UW 2510.00 & UW 2511.00TX
It is understood and agreed that the Bulk Primary First Lien Master Policy
("Policy") is amended as follows:
The following provision is added as a new Section III.,L. ("Blocked Persons
Exclusion"):
L. Any Claim arising from or related to a Loan made null and
void by any of the provisions of the Office of Foreign Asset
Control Regulations found in Title 31, Chapter V, Parts 500
through 598 of the United States Code of Federal
Regulations, or any other state or federal statute or
regulation prohibiting the making of a Loan to a specified
Person.
All other terms and conditions of the Policy remained unchanged.
Page 1 of 1
PMI Mortgage Insurance Co.
[GRAPHIC OMITTED]
PMI
BULK PRIMARY FIRST LIEN MASTER POLICY
BULK QUALITY PROGRAM ENDORSEMENT
===============================================================================
BULK QUALITY PROGRAM ENDORSEMENT TO
BULK PRIMARY FIRST LIEN MASTER POLICY,
FORMS UW 2510.00 (09/00) &
UW 2511.00 TX (09/00)
Section VI., C., (Representations and Reliance; Incontestability) is
hereby deleted in its entirety and there is substituted in its place the
following:
C. Representations and Reliance; Incontestability - The Company is
extending coverage under the Policy to Loans pursuant to the Bulk
Quality Program in reliance upon the truth and accuracy of the
information contained in the Application, including information in the
Insured's Loan files and the statements made in the electronic
transmittal of Loan information to PMI. The Insured agrees that
statements made by any First Party in any documents submitted to the
Insured at the time the Loan is originated, are deemed to be the
representations of the Insured. No Claim payable under this Policy with
respect to a Loan, arising from a Default otherwise covered under the
Policy, will be denied, nor will the Certificate for such Loan be
rescinded based on any misrepresentation made by any person other than a
First Party in the Application or in the electronic transmittal of Loan
information to PMI.
All conditions of the Policy not modified by this Endorsement remain in
full force and effect for all Loans insured under the Policy.
This Bulk Quality Program Endorsement attaches to Bulk Primary Master
Policy Number_▇▇▇▇▇-▇▇▇▇-▇_ and is effective as of _03/01/06__
[LOGO OMITTED]
pmi
MORTGAGE INSURANCE CO.(R)
SCHEDULE ENDORSEMENT TO
BULK PRIMARY FIRST LIEN MASTER POLICY
(the "Policy")
POLICY ISSUED TO: ATTACHED TO AND FORMING
PART OF POLICY NUMBER:
The Bank of New York Trust Company, N.A. ▇▇▇▇▇-▇▇▇▇-▇
as Co-Trustee for the CWABS Asset-Backed
Certificates Series 2006-6
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EFFECTIVE DATE OF POLICY: EFFECTIVE DATE OF SCHEDULE
ENDORSEMENT:
March 1, 2006 March 1, 2006
The Schedule Endorsement hereby extends coverage under the above Policy of
Insurance, from and after the date of this Schedule Endorsement, to those
Loans listed in the Certificate Schedule attached hereto and made a part to
this Schedule Endorsement (herein called "Schedule A").
The term "Effective Date" for the Loan(s) covered by this Schedule Endorsement
shall mean the date stated above.
Except for the foregoing amendments, the Policy and all terms, conditions,
provisions, and limitations of the Policy remain in full force and effect.
None of the terms, conditions, provisions and limitations of the Policy have
been varied, waived, altered or extended in any manner except as expressly set
forth in this Schedule Endorsement.
IN WITNESS WHEREOF, the Company has caused this Endorsement to be signed by
its duly authorized officers as of the Effective Date first above stated.
PMI Mortgage Insurance Co.
[Company Seal]
BY: /s/ L. ▇▇▇▇▇▇▇ ▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------- ------------------------------
President Secretary
Schedule A
Certificate Schedule
Loan Level
No Certificate Number Loan Number Coverage % Premium
1 40409661 166405 40 2.365
2 40409670 1433453 40 4.682
3 40409688 1815889 39 3.765
4 40409696 2306478 40 3.128
5 40409700 4799200 39 1.426
6 40409718 7374795 39 3.661
7 40409726 7374883 39 2.941
8 40409734 44684533 40 5.118
9 40409742 94321456 40 5.160
10 40409751 94526898 40 1.267
11 40409769 97884361 40 3.083
12 40409777 97891362 40 2.757
13 40409785 97894851 40 1.694
14 40409793 98009044 40 2.033
15 40409807 98076249 40 0.757
16 40409815 103493759 40 0.863
17 40409823 103493831 40 3.798
18 40409831 103631561 40 3.498
19 40409840 105412354 40 0.740
20 40409858 106119874 40 0.822
21 40409866 106145573 40 1.973
22 40409874 106825635 40 2.267
23 40409882 107085224 40 1.676
24 40409891 108284806 40 5.064
25 40409904 108337949 40 1.496
26 40409912 108363331 40 4.440
27 40409921 108736065 40 5.213
28 40409939 108940578 40 5.134
29 40409947 108940802 40 4.606
30 40409955 109337934 40 5.188
31 40409963 109575392 40 3.992
32 40409971 109801159 40 4.122
33 40409980 109960051 40 5.560
34 40409998 110430996 40 4.746
35 40410007 110617726 40 3.171
36 40410015 111162785 40 1.647
37 40410023 111246169 40 1.316
38 40410031 111445492 40 3.510
39 40410040 111521720 40 5.184
40 40410058 111711178 40 2.230
41 40410066 112561975 40 3.935
42 40410074 112671199 40 3.969
43 40410082 113509471 40 1.288
44 40410091 113613734 40 4.697
45 40410104 113614014 40 4.456
46 40410112 113663903 40 3.542
47 40410121 114601974 40 5.189
48 40410139 114935965 40 2.185
49 40410147 115726193 40 1.908
50 40410155 116221543 40 1.765
51 40410163 116355257 40 1.817
52 40410171 116431546 40 2.296
53 40410180 116674137 40 0.933
54 40410198 116878970 40 3.639
55 40410201 116891028 40 4.840
56 40410210 116923496 40 2.106
57 40410228 116968254 39 3.436
58 40410236 117129274 40 4.559
59 40410244 117144364 40 1.978
60 40410252 117190650 40 5.027
61 40410261 117265547 40 1.349
62 40410279 117287557 40 6.181
63 40410287 117436621 40 1.804
64 40410295 117461704 40 1.864
65 40410309 117467688 40 6.709
66 40410317 117509990 40 1.354
67 40410325 117548291 40 0.626
68 40410333 117638691 40 3.367
69 40410341 117639563 40 3.018
70 40410350 117649460 40 2.744
71 40410368 117669462 40 6.178
72 40410376 117692273 40 3.381
73 40410384 117736487 40 1.117
74 40410392 117767827 40 3.247
75 40410406 117797815 40 3.437
76 40410414 117798687 40 5.694
77 40410422 117799247 40 4.839
78 40410431 117812704 40 5.455
79 40410449 117833243 40 3.245
80 40410457 117833291 40 1.995
81 40410465 117840956 40 3.264
82 40410473 118088877 40 5.326
83 40410481 118095741 40 3.887
84 40410490 118189625 40 2.537
85 40410503 120069708 40 5.363
86 40410511 120246063 40 4.688
87 40410520 120757684 40 4.993
88 40410538 120922793 40 5.416
89 40410546 121049340 40 3.064
90 40410554 121343370 40 4.655
91 40410562 121697903 40 2.275
92 40410571 122432871 40 3.420
93 40410589 123022667 40 2.190
94 40410597 123520603 40 2.778
95 40410601 123624995 40 0.807
96 40410619 123625699 40 1.780
97 40410627 123814035 40 2.764
98 40410635 124268242 40 3.253
99 40410643 124493275 40 1.197
100 40410651 124774624 40 4.882
101 40410660 124791847 40 1.459
102 40410678 124873981 40 2.591
103 40410686 124890546 40 0.841
104 40410694 124998677 40 0.906
105 40410708 125020770 40 1.150
106 40410716 125120036 40 0.746
107 40410724 125212627 40 2.791
108 40410732 125229058 40 1.167
109 40410741 125674841 40 5.096
110 40410759 125685273 40 2.323
111 40410767 125702772 40 1.815
112 40410775 125759891 40 1.364
113 40410783 125832105 40 0.613
114 40410791 125850162 40 3.324
115 40410805 125859959 40 4.967
116 40410813 125901179 40 4.745
117 40410821 125986561 40 3.836
118 40410830 126136110 40 5.805
119 40410848 126136646 40 2.475
120 40410856 126167469 40 5.172
121 40410864 126256422 40 5.304
122 40410872 126285205 40 5.446
123 40410881 126330456 40 3.905
124 40410899 126337085 40 2.072
125 40410902 126349435 40 3.186
126 40410911 126396788 40 3.030
127 40410929 126441001 40 3.307
128 40410937 126443040 40 4.764
129 40410945 126443120 40 3.859
130 40410953 126458676 39 0.952
131 40410961 126489438 40 3.067
132 40410970 126586800 40 3.140
133 40410988 126670227 40 7.307
134 40410996 126703967 40 2.842
135 40411003 126793542 40 5.896
136 40411011 126800613 40 3.614
137 40411020 126872815 40 2.434
138 40411038 126875860 40 3.087
139 40411046 126876596 40 1.007
140 40411054 126877935 40 5.392
141 40411062 126880288 40 5.219
142 40411071 126880448 40 2.166
143 40411089 126902049 40 5.701
144 40411097 126951224 40 1.647
145 40411101 127046748 40 1.589
146 40411119 127047700 40 2.412
147 40411127 127047748 40 2.359
148 40411135 127064651 40 5.858
149 40411143 127117424 40 1.708
150 40411151 127125851 40 5.236
151 40411160 127126499 40 2.767
152 40411178 127140110 40 1.583
153 40411186 127140566 40 4.083
154 40411194 127171859 40 6.255
155 40411208 127190179 40 1.698
156 40411216 127194864 40 6.258
157 40411224 127208721 40 2.063
158 40411232 127208985 40 3.182
159 40411241 127216381 40 3.608
160 40411259 127228615 40 2.968
161 40411267 127231447 40 3.604
162 40411275 127241509 40 2.218
163 40411283 127258686 40 2.056
164 40411291 127294997 40 2.597
165 40411305 127296155 40 1.704
166 40411313 127296907 40 1.987
167 40411321 127297691 40 2.908
168 40411330 127297779 40 3.422
169 40411348 127301477 40 2.808
170 40411356 127355155 40 2.650
171 40411364 127396929 40 3.086
172 40411372 127397073 40 2.598
173 40411381 127397233 40 3.480
174 40411399 127397313 40 3.589
175 40411402 127397465 40 2.469
176 40411411 127405436 40 5.719
177 40411429 127406148 40 3.196
178 40411437 127408773 40 3.062
179 40411445 127439975 40 2.932
180 40411453 127464378 40 4.382
181 40411461 127528303 40 1.196
182 40411470 127528335 40 1.878
183 40411488 127563028 40 4.746
184 40411496 127563508 40 5.398
185 40411500 127563996 40 2.341
186 40411518 127610044 40 3.530
187 40411526 127610700 40 5.686
188 40411534 127611741 40 4.933
189 40411542 127611949 40 5.596
190 40411551 127611965 40 5.042
191 40411569 127612557 40 3.110
192 40411577 127625863 40 4.638
193 40411585 127625951 40 3.360
194 40411593 127628213 40 2.863
195 40411607 127671210 40 4.902
196 40411615 127688035 40 5.789
197 40411623 127689221 40 2.753
198 40411631 127696003 40 5.197
199 40411640 127722487 40 1.431
200 40411658 127723754 40 2.524
201 40411666 127724261 40 0.780
202 40411674 127764714 40 2.442
203 40411682 127764954 40 0.692
204 40411691 127765066 40 2.083
205 40411704 127765458 40 2.602
206 40411712 127765618 40 2.764
207 40411721 127766594 40 2.747
208 40411739 127784303 40 5.174
209 40411747 127810007 40 2.841
210 40411755 127819472 38 3.579
211 40411763 127828911 40 5.537
212 40411771 127839712 40 4.073
213 40411780 127840872 40 5.120
214 40411798 127871104 40 2.130
215 40411801 127871712 40 5.012
216 40411810 127872280 40 3.265
217 40411828 127902845 40 5.950
218 40411836 127905181 40 3.019
219 40411844 132118362 40 3.113
220 40411852 132163698 40 3.821
221 40411861 132164074 40 3.615
222 40411879 132164746 40 3.427
223 40411887 132178115 40 6.055
224 40411895 132198562 40 5.836
225 40411909 132209178 40 5.165
226 40411917 132227162 40 2.975
227 40411925 132229437 40 0.575
228 40411933 132229477 40 4.840
229 40411941 132229533 40 0.615
230 40411950 132229845 40 5.499
231 40411968 132230165 40 3.389
232 40411976 132230573 40 3.303
233 40411984 132231814 40 3.132
234 40411992 132232966 40 3.726
235 40412000 132311826 40 4.577
236 40412018 132312322 40 0.767
237 40412026 132352834 40 2.106
238 40412034 132353506 40 3.976
239 40412042 132353578 40 2.973
240 40412051 132354450 40 4.109
241 40412069 132388746 40 2.280
242 40412077 132389494 40 5.559
243 40412085 132403322 40 5.704
244 40412093 132403778 40 1.478
245 40412107 132403890 40 2.336
246 40412115 132404170 40 5.855
247 40412123 132415472 40 4.373
248 40412131 132533128 40 4.738
249 40412140 132533168 40 2.721
250 40412158 132629690 40 1.323
251 40412166 132629722 40 2.580
252 40412174 132630314 40 1.914
253 40412182 132631394 40 2.957
254 40412191 132665767 40 2.208
255 40412204 132665847 40 5.103
256 40412212 132665927 40 2.105
257 40412221 132689792 40 1.413
258 40412239 132702253 40 2.477
259 40412247 132797525 40 2.635
260 40412255 132825772 40 4.765
261 40412263 133083800 40 1.619
262 40412271 133083848 40 1.654
263 40412280 133252063 40 3.704
264 40412298 133539285 40 7.400
265 40412301 133683419 40 4.187
