EXECUTION COPY
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MASTER INTERIM SERVICING AGREEMENT
between
XXXXXX BROTHERS BANK, F.S.B,
Purchaser
and
FIRST NATIONAL BANK OF NEVADA
Seller
Dated as of September 24, 2004
CONVENTIONAL FIXED AND ADJUSTABLE RATE
RESIDENTIAL MORTGAGE LOANS
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EXECUTION COPY
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions...................................................................................1
ARTICLE II
SERVICING
Section 2.01 Seller to Act as Servicer.....................................................................9
Section 2.02 Liquidation of Mortgage Loans................................................................10
Section 2.03 Collection of Mortgage Loan Payments.........................................................11
Section 2.04 Establishment of and Deposits to Custodial Account...........................................11
Section 2.05 Permitted Withdrawals From Custodial Account.................................................12
Section 2.06 Establishment of and Deposits to Escrow Account..............................................13
Section 2.07 Permitted Withdrawals From Escrow Account....................................................14
Section 2.08 Payment of Taxes, Insurance and Other Charges................................................14
Section 2.09 PMI and LPMI Obligations.....................................................................15
Section 2.10 Protection of Accounts.......................................................................15
Section 2.11 Maintenance of Hazard Insurance..............................................................15
Section 2.12 Maintenance of Mortgage Impairment Insurance.................................................17
Section 2.13 Maintenance of Fidelity Bond and Errors and Omissions Insurance..............................17
Section 2.14 Inspections..................................................................................18
Section 2.15 Restoration of Mortgaged Property............................................................18
Section 2.16 Maintenance of PMI Policy and/or LPMI Policy; Claims.........................................18
Section 2.17 Title, Management and Disposition of REO Property............................................20
Section 2.18 Permitted Withdrawals with respect to REO Property...........................................21
Section 2.19 Real Estate Owned Reports....................................................................21
Section 2.20 Liquidation Reports..........................................................................21
Section 2.21 Reports of Foreclosures and Abandonments of Mortgaged Property...............................21
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances..................................................................................21
Section 3.02 Statements to Purchaser......................................................................22
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ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property..............................................................22
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files......................................23
Section 4.03 Servicing Compensation.......................................................................23
Section 4.04 Annual Statement as to Compliance............................................................24
Section 4.05 Annual Independent Public Accountants' Servicing Report......................................24
Section 4.06 Right to Examine Seller Records..............................................................24
ARTICLE V
SELLER TO COOPERATE
Section 5.01 Provision of Information.....................................................................24
Section 5.02 Financial Statements; Servicing Facilities...................................................25
ARTICLE VI
TERMINATION
Section 6.01 Agency Suspension..................................................ERROR! BOOKMARK NOT DEFINED.
Section 6.02 Damages......................................................................................25
Section 6.03 Termination Upon Transfer of Servicing.......................................................25
Section 6.04 Servicing Transfer Provisions................................................................26
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the Transfer Date.....................................27
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification..............................................................................28
Section 8.02 Limitation on Liability of Seller and Others.................................................28
Section 8.03 Limitation on Resignation and Assignment by Seller...........................................28
Section 8.04 Assignment by Purchaser......................................................................29
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ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
Section 9.01 Authority and Capacity.......................................................................30
Section 9.02 Assistance...................................................................................30
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 10.01 Due Organization and Authority...............................................................30
Section 10.02 Ordinary Course of Business..................................................................30
Section 10.03 No Conflicts.................................................................................30
Section 10.04 Ability to Service...........................................................................31
Section 10.05 Ability to Perform...........................................................................31
Section 10.06 No Litigation Pending........................................................................31
Section 10.07 No Consent Required..........................................................................31
Section 10.08 No Untrue Information........................................................................31
ARTICLE XI
DEFAULT
Section 11.01 Events of Default............................................................................31
Section 11.02 Waiver of Defaults...........................................................................33
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices......................................................................................33
Section 12.02 Waivers......................................................................................33
Section 12.03 Entire Agreement; Amendment..................................................................33
Section 12.04 Execution; Binding Effect....................................................................34
Section 12.05 Headings.....................................................................................34
Section 12.06 Applicable Law...............................................................................34
Section 12.07 Relationship of Parties......................................................................34
Section 12.08 Severability of Provisions...................................................................34
Section 12.09 Recordation of Assignments of Mortgage.......................................................34
Section 12.10 Appointment and Designation of Master Servicer...............................................34
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EXHIBITS
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EXHIBIT 1 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 MORTGAGE LOAN SCHEDULE
EXHIBIT 7 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 8 FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 9 FORM OF ACKNOWLEDGMENT AGREEMENT
EXHIBIT 10 FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
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INTERIM SERVICING AGREEMENT
This Interim Servicing Agreement (the "Agreement") is entered into as of
the twenty-fourth day of September, 2004, by and between First National Bank of
Nevada (the "Seller"), a national banking association and Xxxxxx Brothers Bank,
F.S.B., a federal savings bank (the "Purchaser").
WHEREAS, the Purchaser and Seller entered into a Master Mortgage Loan
Purchase and Warranties Agreement dated as of the date hereof (the "Purchase
Agreement") pursuant to which from time to time the Purchaser shall purchase
from the Seller certain conventional, residential, fixed and adjustable rate
first lien mortgage loans and fixed rate second lien mortgage loans (the
"Mortgage Loans") delivered as whole loans servicing released; and
WHEREAS, the Purchaser desires to have the Seller service the Mortgage
Loans in each Mortgage Loan Package during the period between the related
Closing Date and the related Transfer Date (the "Interim Period"), the Seller
desires to service and administer such Mortgage Loans on behalf of the
Purchaser, or its designee or assignee, during the related Interim Period, and
the parties desire to provide the terms and conditions of such interim servicing
by the Seller.
NOW, THEREFORE, in consideration of the mutual covenants made herein and
for other good and valuable consideration the sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The following terms are defined as follows
(except as otherwise agreed by the parties).
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Adequately Capitalized: Adequately Capitalized shall mean, with respect to
any Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for such
capital category under the regulations promulgated pursuant to Section 1831(o)
of the United States Code, as amended from time to time, by the Appropriate
Federal Banking Agency for such institution, as such regulation may be amended
from time to time.
Agreement: This agreement between the Purchaser and the Seller for the
interim servicing and administration of the Mortgage Loans.
Ancillary Income: All income (other than principal and interest) derived
from the Mortgage Loans, including but not limited to, late charges, prepayment
penalties, fees received with respect to checks or bank drafts returned by the
related bank for non-sufficient funds, assumption fees, optional insurance
administrative fees and all other incidental fees and charges. The Seller shall
retain all Ancillary Income as part of the Servicing Fee to the extent not
required to be deposited into the Custodial Account.
Appraised Value: The value set forth in an appraisal made in connection
with the origination of the related Mortgage Loan as the value of the Mortgaged
Property.
Appropriate Federal Banking Agency: Appropriate Federal Banking Agency
shall have the meaning ascribed to it by Section 1813(q) of Title 12 of the
United States Code, as amended from time to time.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
federal holiday.
Closing Date: The date or dates on which the Purchaser from time to time
shall purchase and the Seller from time to time shall sell, the Mortgage Loans
listed on the related Mortgage Loan Schedule.
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: The separate account or accounts created and maintained
pursuant to Section 2.04.
Cut-off Date: The first day of the month in which the related Closing Date
occurs.
Determination Date: The fifteenth (15th) day of the calendar month
immediately preceding the related Remittance Date (or if such day is not a
Business Day, the Business Day immediately preceding such day).
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace. With respect to the Mortgage
Loans for which payment from the Mortgagor is due on a day other than the first
day of the month, such Mortgage Loans will be treated as if the Monthly Payment
is due on the first day of the month following the actual Due Date.
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Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month preceding the month of the Remittance Date and
ending in the first day of the month preceding the Remittance Date.
Eligible Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than the
Determination Date in each month:
(i) direct obligations of, and 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; and
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution
or trust company incorporated or organized under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, so long as at the
time of such investment or contractual commitment providing for such
investment the commercial paper or other short-term debt obligations of
such depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal subsidiary
of a holding company, the commercial paper or other short-term debt
obligations of such holding company) are rated "P-1" by Xxxxx'x Investors
Service, Inc. and the long-term debt obligations of such holding company)
are rated "P-1" by Xxxxx'x Investors Service, Inc. and the long-term debt
obligations of such depository institution or trust company (or, in the
case of a depository institution or trust company which is the principal
subsidiary of a holding company, the long-term debt obligations of such
holding company) are rated at least "Aa" by Xxxxx'x Investors Service, Inc.
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 2.06.
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 11.01.
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Xxxxxx Mae: Xxxxxx Xxx, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Xxxxxxx Mac: Xxxxxxx Mac, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Seller pursuant to
Section 2.13.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall have
the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interim Period: The period between the related Closing Date and the related
Transfer Date.
Liquidation Proceeds: Cash 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, or the sale of the related
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio of
the outstanding principal amount of the Mortgage Loan as of the related Cut-off
Date (unless otherwise indicated) to the lesser of (a) the Appraised Value of
the Mortgaged Property and (b) if the Mortgage Loan was made to finance the
acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property, expressed as a percentage.
LPMI Loan: A Mortgage Loan with a LPMI Policy.
LPMI Policy: A policy of primary mortgage guaranty insurance issued by
United Guaranty Corporation or another Qualified Insurer pursuant to which the
related premium is to be paid by the Servicer of the related Mortgage Loan from
payments of interest made by the Mortgagor in an amount as is set forth in the
related Terms Letter and Mortgage Loan Schedule.
LPMI Fee: With respect to each LPMI Loan, the portion of the Mortgage
Interest Rate as set forth on the related Mortgage Loan Schedule (which shall be
payable solely from the interest portion of Monthly Payments, Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds), which, during such
period prior to the required cancellation of the LPMI Policy, shall be used to
pay the premium due on the related LPMI Policy.
Monthly Payment: The scheduled monthly payment of principal and interest on
a Mortgage Loan.
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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 File: The items pertaining to a particular Mortgage Loan referred
to in Exhibit 7 annexed hereto, and any additional documents required to be
added to the Mortgage File pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 2.12.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of this
Agreement, purchased by the Purchaser on a servicing released basis, each
Mortgage Loan being identified on the Mortgage Loan Schedule, which Mortgage
Loan includes without limitation the Mortgage File, the Monthly Payments,
Insurance Proceeds, Servicing Rights and all other rights, benefits, proceeds
and obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The documents contained in the Mortgage File
pertaining to each Mortgage Loan.
Mortgage Loan Package: A pool of Mortgage Loans sold to the Purchaser on a
Closing Date.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
Mortgage Interest Rate minus (i) the Interim Servicing Fee Rate, and (ii) with
respect to LPMI Loans, the LPMI Fee.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto as
Exhibit 6, such schedule setting forth the following information with respect to
each Mortgage Loan: (1) the Company's Mortgage Loan identifying number; (2) the
Mortgagor's and Co-Mortgagor's (if applicable) names; (3) the street address of
the Mortgaged Property, including the city, state, zip code, county, lot number,
block number and section number; (4) a code indicating whether the Mortgaged
Property is a single family residence, a 2 family dwelling, a 3-4 family
dwelling, a manufactured home, a PUD, a townhouse, a unit in a condominium
project, a co-operative, a mixed-use property, land, or a non-residential
property (require current S&P coding convention from Purchaser); (5) a code
indicating the loan is a fixed rate or adjustable rate Mortgage Loan (require
current S&P coding convention from Purchaser); (6) Product Description (require
current S&P coding convention from Purchaser); (7) a code indicating the lien
status of the Mortgage Loan; (8) the original months to maturity or the
remaining months to maturity from the related Cut-off Date, in any case based on
the original amortization schedule, and if different, the maturity expressed in
the same manner but based on the actual amortization schedule; (9) the Loan to
Value Ratio at origination; (10) the combined Loan to Value Ratio at
origination; (11) the Mortgage Interest Rate as of the related Cut-off Date;
(12) the Payment and Rate Adjustment Frequencies (if applicable); (13) the Index
(if applicable); (14) the initial Interest Rate Adjustment Date (if applicable);
(15) the initial Payment Adjustment Date (if
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applicable); (16) the next Interest Rate Adjustment Date (if applicable); (17)
the next Payment Adjustment Date (if applicable); (18) the Gross Margin (if
applicable); (19) the minimum Mortgage Interest Rate under the terms of the
Mortgage Note (if applicable); (20) a code indicating Interest Only Loans (yes
or no); (21) the maximum Mortgage Interest Rate under the terms of the Mortgage
Note (if applicable); (22) the Mortgage Interest Rate adjustment cap at the
initial Interest Rate Adjustment Date (if applicable); (23) the Mortgage
Interest Rate adjustment cap at all subsequent Interest Rate Adjustment Dates
(if applicable); (24) the Lifetime Mortgage Interest Rate Cap (if applicable);
(25) the rounding provisions under the terms of the Mortgage Note (if
applicable); (26) the lookback provisions (#of days) under the terms of the
Mortgage Note (if applicable); (27) negative amortization indicator and limit;
(28) the date on which the first payment is due; (29) the original term of the
Mortgage Loan; (30) the stated maturity date; (31) the amount of the Monthly
Payment; (32) the Annual Payment Cap expressed as a percentage (for Arms only);
(33) the next due date as of the related Cut-off Date; (34) the original
principal amount of the Mortgage Loan; (35) the Senior and Subordinate balances
(if applicable); (36) the closing date of the Mortgage Loan; (37) the principal
balance of the Mortgage Loan as of the close of business on the related Cut-off
Date; after deduction of payments of principal actually received on or before
the related Cut-off Date; (38) monthly payment histories on current and prior
mortgages (24 months if available); (39) prior foreclosure history or a code
indicating whether the Mortgagor or the co-Mortgagor has been in foreclosure at
any time during the previous twenty-four months (to the extent available); (40)
prior bankruptcy history or a code indicating whether the Mortgage or the
co-Mortgagor has been bankrupt in the previous twenty-four months; (41) the loan
purpose code; (42) the occupancy code; (43) the loan documentation type, (to be
provided in conformance with Standard and Poor's documentation categories- Field
5); (44) Asset Verification (Purchase Money loans only), (yes or no); (45) a
code indicating the Credit Grade of the Mortgage Loan (if applicable); (46) the
debt to income ratio; (47) the Mortgagor's and Co-Mortgagor's (if applicable)
social security numbers; (48) the Mortgagor's and Co-Mortgagor's (if applicable)
original FICO score and the Next Generation FICO score for new credit scores (if
available); (49) a code indicating Next Generation FICO (Y/N); (50) the
Mortgagor's mailing address if different from Number (3) above; (51) the
Mortgagor's home telephone number; (52) the Mortgagor's business telephone
number; (53) the purchase price of the Mortgaged Property (if a purchase); (54)
the Appraisal date and the Appraisal value of the Mortgaged Property; (55) the
Mortgagor's and Co-Mortgagor's (if applicable) race; (56) the Mortgagor's and
Co-Mortgagor's (if applicable) gender; (57) the Mortgagor's and Co-Mortgagor's
(if applicable) date of birth; (58) the number of bedrooms; (59) the combined
annual income; (60) the application date; (61) the broker's name (to the extent
available); (62) the broker's firm name (to the extent available); (63) the
appraiser's name (to the extent available); (64) the appraiser's firm name (to
the extent available); (65) the settlement agent (to the extent available); (66)
the origination channel (wholesale, retail, or correspondent); (67) flood
insurance contract provider; (68) tax service contract provider; (69) number of
units; (70) as of date; (71) amortization term; (72) balloon flag; (73)
prepayment penalty flag; (74) prepayment penalty term as well as the percentage
amount and prepayment penalty description (i.e.- 6 months interest, set
percentage of UPB) (to the extent available); (75) payment history current loan;
(76) payment history previous loan; (77) mortgage insurance provider, or code
for LPMI; (78) mortgage insurance coverage percentage; (79) mortgage insurance
certificate number; (80) number of borrowers; (81) first time home buyer flag;
(82) the year in which the Mortgaged Property was built; (83) the monthly tax
and
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insurance payment; (84) the monthly servicing fee (if applicable); (85) the
escrow balance as of the Cut-off Date (to the extent available); (86) The MIN
number assigned to each Mortgage Loan, if applicable; (87) a code indicating the
Appraisal Type (Tax Assessment, BPO, Drive-By Form 704, URAR, Form 2065, Form
2055 (Exterior only), Form 2055 (Interior Inspection), or AVM; (88) if the
Appraisal Type in #87 is an AVM, then a description of the AVM type; (89) a code
indicating whether the Borrower(s) is self-employed (yes or no); (90) a code
indicating whether the loan is High Cost or Covered (HC, CV, HL); (91) a section
32 flag and the origination points and or fees; (92) a code indicating if a loan
is assumable (yes or no); (93) the APR on the Mortgage Loan and (94) any
additional data requested by purchaser to comply with Standard & Poor's
LEVELS(R). With respect to the Mortgage Loans in the aggregate, the Mortgage
Loan Schedule shall set forth the following information, as of the related
Cut-off Date: (1) the number of Mortgage Loans; (2) the current aggregate
outstanding principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
assistant Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Purchaser or Seller, as
applicable, and delivered as required by this Agreement.
Opinion of Counsel: Written opinion of counsel, who may be salaried counsel
for the Person on behalf of whom the opinion is being given, reasonably
acceptable to each Person to whom such opinion is addressed.
PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans.
Prime Rate: The prime rate announced to be in effect from time to time, as
published as the average rate in The Wall Street Journal.
Purchase Agreement: The Mortgage Loan Purchase and Warranties Agreement
between the Purchaser and the Seller related to the purchase of the Mortgage
Loans dated as of the Cut-off Date.
Purchaser: Xxxxxx Brothers Bank, F.S.B. and its assigns and or successors
in interest.
Qualified Depository: ______________________ or such other depository the
accounts of which are insured by the FDIC through the BIF or the SAIF.
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Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by Xxxxxx Mae or Xxxxxxx Mac.
Remittance Date: The remittance date shall be the 18th day of each calendar
month (or if such 18th day is not a Business Day, the first Business Day
immediately following such 18th day).
REO Disposition: The final sale by the Seller of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 2.17.
REO Property: A Mortgaged Property acquired by the Seller on behalf of the
Purchaser through foreclosure or by deed in lieu of foreclosure, as described in
Section 2.17.
Repurchase Price: With respect to any Mortgage Loan, a price equal to (i)
the Stated Principal Balance of the Mortgage Loan plus (ii) interest on such
Stated Principal Balance at the Mortgage Interest Rate from the date on which
interest has last been paid and distributed to the Purchaser to the date of
repurchase, less amounts received, if any, plus amounts advanced, if any, by any
servicer, in respect of such repurchased Mortgage Loan.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
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 Seller of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of the
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage and (d) compliance with the obligations under Section 2.08.
Servicing Fee: With respect to each Mortgage Loan, an amount equal to
$12.00 per month. Such fee shall be payable monthly and shall be pro rated for
any portion of a month during which the Mortgage Loans is serviced pursuant to
this Agreement. The obligation of the Purchaser to pay the Servicing Fee is
limited to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to the
extent permitted by Section 2.05) of such Monthly Payment collected by the
Seller, or as otherwise provided under Section 2.05.
Servicing File: With respect to each Mortgage Loan, the file retained by
the Seller consisting of originals of all documents in the Mortgage File which
are not delivered to the Purchaser or the Purchaser's designee, and copies of
the Mortgage Loan Documents listed on Exhibit 7 attached hereto.
Servicing Officer: Any officer of the Seller involved in or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing
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officers furnished by the Seller to the Purchaser upon request, as such list may
from time to time be amended.
Servicing Rights: Any and all of the following: (a) any and all rights to
service the Mortgage Loans; (b) any payments to or monies received by the Seller
for servicing the Mortgage Loans; (c) any late fees, penalties or similar
payments with respect to the Mortgage Loans; (d) all agreements or documents
creating, defining or evidencing any such servicing rights to the extent they
relate to such servicing rights and all rights of the Seller thereunder; (e)
Escrow Payments or other similar payments with respect to the Mortgage Loans and
any amounts actually collected by the Seller with respect thereto; (f) all
accounts and other rights to payment related to any of the property described in
this paragraph; and (g) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records, or other
information pertaining to the Mortgage Loans or pertaining to the past, present
or prospective servicing of the Mortgage Loans.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the Cut-off Date after giving effect to payments
of principal received on or before such date, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal or advances in lieu thereof.
Terms Letter: With respect to each purchase of a Mortgage Loan Package,
that certain Purchase Price and Terms Letter setting forth the general terms and
conditions of such transaction and identifying the Mortgage Loans to be
purchased thereunder, by and between the Seller, or its designee, and the
Purchaser.
Transfer Date: The date on which the Purchaser, or its
designee, shall receive the transfer of servicing responsibilities and begin to
perform the servicing of the Mortgage Loans, and the related Seller shall cease
all servicing responsibilities. Such Transfer Date shall occur on the date set
forth in the related Terms Letter.
ARTICLE II
SERVICING
Section 2.01 Seller to Act as Servicer. With respect to the Mortgage Loans
in each Mortgage Loan Package purchased by the Purchaser, from and after the
related Closing Date, the Seller, as an independent contractor, shall, from time
to time, service and administer the Mortgage Loans, during the related Interim
Period, by execution and delivery of (a) the related Acknowledgement Agreement,
in the form attached hereto as Exhibit 9, and (b) the related Assignment and
Assumption Agreement, in the form attached hereto as Exhibit 10, and shall have
full power and authority, acting alone, to do any and all things in connection
with such servicing and administration which the Seller may deem necessary or
desirable, consistent with the terms of this Agreement and with Accepted
Servicing Practices.
Consistent with the terms of this Agreement, the Seller may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with
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any such term or in any manner grant indulgence to any Mortgagor if in the
Seller's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser, provided,
however, that unless the Seller has obtained the prior written consent of the
Purchaser, the Seller shall not permit any modification with respect to any
Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive the
payment of principal or interest, reduce or increase the outstanding principal
balance (except for actual payments of principal) or change the final maturity
date on such Mortgage Loan. In the event of any such modification which permits
the deferral of interest or principal payments on any Mortgage Loan, the Seller
shall, on the Business Day immediately preceding the 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 2.04,
the difference between (a) such month's principal and one month's interest at
the Mortgage Loan Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor. The Seller shall be
entitled to reimbursement for such advances to the same extent as for all other
advances made pursuant to Section 2.05 or upon the related Transfer Date.
Without limiting the generality of the foregoing, the Seller shall continue, and
is hereby authorized and empowered, to execute and deliver on behalf of itself
and the Purchaser, 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. If
reasonably required by the Seller, the Purchaser shall furnish the Seller with
any powers of attorney and other documents necessary or appropriate to enable
the Seller to carry out its servicing and administrative duties under this
Agreement.
In servicing and administering the Mortgage Loans, the Seller shall employ
procedures (including collection procedures) and exercise the same care that it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser's reliance on the Seller.
The Seller shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Seller shall
note transfers 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 Seller shall be under no obligation to deal with any Person
with respect to this Agreement or the Mortgage Loans unless the Seller has been
notified of such transfers as provided in this Section 2.01. The Purchaser may
sell and transfer, in whole or in part, the Mortgage Loans, provided that no
such sale and transfer shall be binding upon Seller unless such transferee shall
agree in writing in the form of the Assignment and Assumption Agreement attached
hereto Exhibit 8, to be bound by the terms of this Agreement, and an executed
copy of the same shall have been delivered to the Seller. Upon receipt thereof,
the Seller shall xxxx its books and records to reflect the ownership of the
Mortgage Loans by such assignee, and the previous Purchaser shall be released
from its obligations hereunder. This Agreement shall be binding upon and inure
to the benefit of the Purchaser and Seller and their permitted successors,
assignees and designees.
Section 2.02 Liquidation of Mortgage Loans. In the event that any payment
due under any Mortgage Loan and not postponed pursuant to Section 2.01 is not
paid when the same becomes due and payable, or in the event the Mortgagor fails
to perform any other covenant or
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obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Seller shall take such action as (1) the Seller
would take under similar circumstances with respect to a similar mortgage loan
held for its own account for investment, (2) shall be consistent with Accepted
Servicing Practices, (3) the Seller shall determine prudently to be in the best
interest of Purchaser, and (4) is consistent with any related PMI Policy or LPMI
Policy. In the event that any payment due under any Mortgage Loan is not
postponed pursuant to Section 2.01 and remains delinquent for a period of 90
days or any other default continues for a period of 90 days beyond the
expiration of any grace or cure period, the Seller shall commence foreclosure
proceedings, provided that, prior to commencing foreclosure proceedings, the
Seller shall notify the Purchaser in writing of the Seller's intention to do so,
and the Seller shall not commence foreclosure proceedings if the Purchaser
objects to such action within 10 Business Days of receiving such notice. In such
connection, the Seller shall from its own funds make all necessary and proper
Servicing Advances, provided, however, that the Seller shall not be required to
expend its own funds in connection with any foreclosure or towards the
restoration or preservation of any Mortgaged Property, unless it shall determine
(a) that such preservation, restoration and/or foreclosure will increase the
proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to
itself for such expenses and (b) that such expenses will be recoverable by it
either through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 2.05) or
through Insurance Proceeds (respecting which it shall have similar priority).
Section 2.03 Collection of Mortgage Loan Payments. Continuously from the
date hereof until the related Transfer Date, the Seller shall proceed diligently
to collect all payments due under each of the Mortgage Loans when the same shall
become due and payable and shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loans and each related Mortgaged Property,
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.
Section 2.04 Establishment of and Deposits to Custodial Account. The Seller
shall segregate and hold all funds collected and received pursuant to the
Mortgage Loans separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form of
time deposit or demand accounts, titled "First National Bank of Nevada in trust
for Purchasers of Residential Fixed and Adjustable Rate Mortgage Loans, Group
No. 2004-1 and various Mortgagors". The Custodial Account shall be established
with a Qualified Depository acceptable to the Purchaser. Any funds deposited in
the Custodial Account shall at all times be fully insured to the full extent
permitted under applicable law. Funds deposited in the Custodial Account may be
drawn on by the Seller in accordance with Section 2.05. The creation of any
Custodial Account shall be evidenced by a certification in the form of Exhibit 2
hereto, in the case of an account established with the Seller, or by a letter
agreement in the form of Exhibit 3 hereto, in the case of an account held by a
depository other than the Seller. A copy of such certification or letter
agreement shall be furnished to the Purchaser and, upon request, to any
subsequent Purchaser.
The Seller shall deposit in the Custodial Account on a daily basis, and
retain therein, the following collections received by the Seller after the
related Cut-off Date:
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(i) all payments on account of principal on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 2.11 (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 Section 2.15), Section 2.12
and Section 2.16;
(v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 2.15;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 2.01, 2.10, 2.17, 4.01 or 4.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 7 of the Purchase Agreement; and
(viii) any amounts required to be deposited by the Seller pursuant to
Section 2.12 in connection with the deductible clause in any blanket hazard
insurance policy.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of assumption fees, to the extent
permitted by Section 4.01, need not be deposited by the Seller into the
Custodial Account. Any interest paid on funds deposited in the Custodial Account
by the depository institution shall accrue to the benefit of the Seller and the
Seller shall be entitled to retain and withdraw such interest from the Custodial
Account pursuant to Section 2.05.
Section 2.05 Permitted Withdrawals From Custodial Account. The Seller
shall, from time to time, withdraw funds from the Custodial Account for the
following purposes:
(i) to make payments to the Purchaser in the amounts and in the manner
provided for in Section 3.01;
(ii) with respect to each LPMI Loan, in the amount of the LPMI Fee, to
make payments with respect to premiums for LPMI Policies;
(iii) to reimburse itself for unreimbursed Servicing Advances, any
unpaid Servicing Fees and for unreimbursed advances of Seller funds made
pursuant to Section 2.17, the Seller's right to reimburse itself pursuant
to this subclause (iii) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and
such other amounts as may be collected by the Seller from the Mortgagor or
otherwise relating to the Mortgage Loan, it being understood that,
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in the case of any such reimbursement, the Seller's right thereto shall be
prior to the rights of the Purchaser except that, where the Seller is
required to repurchase a Mortgage Loan pursuant to Section 4.02 of this
Agreement, the Seller's right to such reimbursement shall be subsequent to
the payment to the Purchaser of the Repurchase Price pursuant to such
sections and all other amounts required to be paid to the Purchaser with
respect to such Mortgage Loan;
(iv) to pay itself interest on funds deposited in the Custodial
Account;
(v) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 4.03;
(vi) to clear and terminate the Custodial Account upon the termination
of this Agreement; and
(vii) to withdraw funds deposited in error.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Seller shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 3.01, the Seller is not
obligated to remit on such Remittance Date. The Seller may use such withdrawn
funds only for the purposes described in this Section 2.05.
Section 2.06 Establishment of and Deposits to Escrow Account. The Seller
shall segregate and hold all funds collected and received pursuant to a Mortgage
Loan constituting Escrow Payments separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Escrow Accounts,
in the form of time deposit or demand accounts, titled, "First National Bank of
Nevada in trust for Purchasers of Residential Fixed and Adjustable Rate Mortgage
Loans, Group No. 2004-1 and various Mortgagors". The Escrow Accounts shall be
established with a Qualified Depository, in a manner which shall provide maximum
available insurance thereunder. Funds deposited in the Escrow Account may be
drawn on by the Seller in accordance with Section 2.07. The creation of any
Escrow Account shall be evidenced by a certification in the form of Exhibit 4
hereto, in the case of an account established with the Seller, or by a letter
agreement in the form of Exhibit 5 hereto, in the case of an account held by a
depository other than the Seller. A copy of such certification shall be
furnished to the Purchaser and, upon request, to any subsequent Purchaser.
The Seller shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement;
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The Seller shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
2.07. The Seller shall be
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entitled to retain any interest paid on funds deposited in the Escrow Account by
the depository institution, other than interest on escrowed funds required by
law to be paid to the Mortgagor. To the extent required by law, the Seller shall
pay interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account may be non-interest bearing or that interest paid thereon is
insufficient for such purposes.
Section 2.07 Permitted Withdrawals From Escrow Account. Withdrawals from
the Escrow Account or Accounts may be made by the Seller only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for
the related Mortgage;
(ii) to reimburse the Seller for any Servicing Advance made by the
Seller pursuant to Section 2.08 with respect to a related Mortgage Loan,
but only from amounts received on the related Mortgage Loan which represent
late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to reduce
the principal balance of the Mortgage Loan in accordance with the terms of
the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged Property
in accordance with the procedures outlined in Section 2.15;
(vi) to pay to the Seller, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
(vii) to clear and terminate the Escrow Account on the termination of
this Agreement; and
(viii) to withdraw funds deposited in error.
Section 2.08 Payment of Taxes, Insurance and Other Charges. With respect to
each Mortgage Loan, the Seller shall maintain accurate records reflecting the
status of ground rents, taxes, assessments, water rates, sewer rents, and other
charges which are or may become a lien upon the Mortgaged Property and the
status of PMI 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, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Seller in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage. To the extent that a Mortgage does not provide for Escrow
Payments, the Seller shall determine that any such payments are made by the
Mortgagor at the time they first become due. The Seller assumes full
responsibility for the timely payment of all such bills and shall effect timely
payment of all such charges irrespective of each
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Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments, and the Seller shall make advances from its own funds to effect
such payments.
Section 2.09 PMI and LPMI Obligations. The Seller shall comply with all
provisions of applicable state and federal law relating to the cancellation of,
or collection of premiums with respect to, PMI Policies and LPMI Policies,
including, but not limited to, the provisions of the Homeowners Protection Act
of 1998, and all regulations promulgated thereunder, as amended from time to
time. The Seller shall be obligated to make premium payments with respect to (a)
LPMI Policies, and (b) if the Mortgagor fails to pay any PMI Policy premium,
such PMI Policy.
Section 2.10 Protection of Accounts. The Seller may transfer the Custodial
Account or the Escrow Account to a different Qualified Depository from time to
time. Such transfer shall be made only upon obtaining the consent of the
Purchaser, which consent shall not be withheld unreasonably.
The Seller shall bear any expenses, losses or damages sustained by the
Purchaser because the Custodial Account and/or the Escrow Account are not demand
deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may at
the option of the Seller be invested in Eligible Investments; provided that in
the event that amounts on deposit in the Custodial Account or the Escrow Account
exceed the amount fully insured by the FDIC (the "Insured Amount") the Seller
shall be obligated to invest the excess amount over the Insured Amount in
Eligible Investments on the same Business Day as such excess amount becomes
present in the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Determination Date next following the
date of such Eligible Investment, provided, however, that if such Eligible
Investment is an obligation of a Qualified Depository (other than the Seller)
that maintains the Custodial Account or the Escrow Account, then such Eligible
Investment may mature on such Remittance Date. Any such Eligible Investment
shall be made in the name of the Seller in trust for the benefit of the
Purchaser. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Seller and may be withdrawn at any time by the
Seller. Any losses incurred in respect of any such investment shall be deposited
in the Custodial Account or the Escrow Account, by the Seller out of its own
funds immediately as realized.
Section 2.11 Maintenance of Hazard Insurance. The Seller shall cause to be
maintained for each Mortgage Loan, hazard insurance such that all buildings upon
the Mortgaged Property are insured by a generally acceptable insurer rated A:VI
or better in the current Best's Key Rating Guide ("Best's") against loss by
fire, hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is located, in an amount which is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
thereof shall be sufficient to prevent the Mortgagor or the loss payee from
becoming a co-insurer.
If upon origination of the Mortgage Loan, the related Mortgaged Property
was located in an area identified in the Federal Register by the Flood Emergency
Management
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Agency as having special flood hazards (and such flood insurance has
been made available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect with a
generally acceptable insurance carrier rated A:VI or better in Best's in an
amount representing coverage equal to the lesser of (i) the minimum amount
required, under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Seller determines in accordance with applicable law and
Accepted Servicing Practices that a Mortgaged Property is located in a special
flood hazard area and is not covered by flood insurance or is covered in an
amount less than the amount required by the Flood Disaster Protection Act of
1973, as amended, the Seller shall notify the related Mortgagor that the
Mortgagor must obtain such flood insurance coverage, and if said Mortgagor fails
to obtain the required flood insurance coverage within forty-five (45) days
after such notification, the Seller shall immediately force place the required
flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the Seller
shall verify that the coverage required of the owner's association, including
hazard, flood, liability, and fidelity coverage, is being maintained in
accordance with then current Accepted Servicing Practices, and secure from the
owner's association its agreement to notify the Seller promptly of any change in
the insurance coverage or of any condemnation or casualty loss that may have a
material effect on the value of the Mortgaged Property as security.
The Seller shall cause to be maintained on each Mortgaged Property
earthquake or such other or additional insurance as may be required pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In the event that any Purchaser or the Seller shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Seller shall, in accordance with Accepted
Servicing Practices, provide notice of such to the Mortgagor.
All policies required hereunder shall name the Seller as loss
payee and shall be endorsed with standard or New York mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.
The Seller shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Seller shall not accept any such insurance policies from insurance companies
unless such companies are rated A:VI or better in Best's and are licensed to do
business in the jurisdiction in which the Mortgaged Property is located. The
Seller shall determine that such policies provide sufficient risk coverage and
amounts, that they insure the property owner, and that they properly describe
the property
-16-
address. The Seller shall furnish to the Mortgagor a formal notice of expiration
of any such insurance in sufficient time for the Mortgagor to arrange for
renewal coverage by the expiration date.
Pursuant to Section 2.04, any amounts collected by the Seller under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Seller's normal servicing procedures as
specified in Section 2.15) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 2.05.
Section 2.12 Maintenance of Mortgage Impairment Insurance. In the event
that the Seller shall obtain and maintain a blanket policy insuring against
losses arising from fire and hazards covered under extended coverage on all of
the Mortgage Loans, then, to the extent such policy provides coverage in an
amount equal to the amount required pursuant to Section 2.11 and otherwise
complies with all other requirements of Section 2.11, it shall conclusively be
deemed to have satisfied its obligations as set forth in Section 2.11. Any
amounts collected by the Seller under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section 2.05. Such policy may contain a deductible clause, in which case, in
the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 2.11, and there shall have been a loss
which would have been covered by such policy, the Seller shall deposit in the
Custodial Account at the time of such loss the amount not otherwise payable
under the blanket policy because of such deductible clause, such amount to be
deposited from the Seller's funds, without reimbursement therefor. Upon request
of the Purchaser, the Seller shall cause to be delivered to the Purchaser 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
30 days' prior written notice to the Purchaser.
Section 2.13 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Seller shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("Seller Employees"). Any such Fidelity Bond and
Errors and Omissions Insurance Policy shall be in the form of the Mortgage
Banker's Blanket Bond and shall protect and insure the Seller against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Seller Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Seller against
losses in connection with the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby. No
provision of this Section 2.13 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Seller from its duties
and obligations as set forth in this Agreement. The minimum coverage under any
such bond and insurance policy shall be at least equal [$5,000,000]. Upon the
request of the Purchaser, the Seller shall cause to be delivered to the
Purchaser a certified true copy of such fidelity bond and insurance policy and a
statement from the surety and the insurer that such fidelity bond and insurance
policy shall in no event be terminated or materially modified without 30 days'
prior written notice to the Purchaser.
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Section 2.14 Inspections. The Seller shall inspect the Mortgaged Property
as often as deemed necessary by the Seller to assure itself that the value of
the Mortgaged Property is being preserved. In addition, if any Mortgage Loan is
more than 60 days delinquent, the Seller immediately shall inspect the Mortgaged
Property and shall conduct subsequent inspections in accordance with Accepted
Servicing Practices or as may be required by the primary mortgage guaranty
insurer. The Seller shall keep a written report of each such inspection.
Section 2.15 Restoration of Mortgaged Property. The Seller need not obtain
the approval of the Purchaser prior to releasing any Insurance Proceeds or
Condemnation Proceeds to the Mortgagor to be applied to the restoration or
repair of the Mortgaged Property if such release is in accordance with Accepted
Servicing Practices. At a minimum, the Seller shall comply with the following
conditions in connection with any such release of Insurance Proceeds or
Condemnation Proceeds:
(i) the Seller shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Seller shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
(iii) the Seller shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Seller shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Seller is hereby
empowered to endorse any loss draft issued in respect of such a claim in the
name of the Purchaser.
Section 2.16 Maintenance of PMI Policy and/or LPMI Policy; Claims. With
respect to each Mortgage Loan with a LTV in excess of 80%, the Seller shall:
(i) with respect to Mortgage Loans which are not LPMI Loans, without
any cost to the Owner, maintain or cause the Mortgagor to maintain in full
force and effect a PMI Policy insuring that portion of the Mortgage Loan in
excess of 75% (or such other percentage as stated in the related
Acknowledgment Agreement) of value, and shall pay or shall cause the
Mortgagor to pay the premium thereon on a timely basis, until the LTV of
such Mortgage Loan is reduced to 80%. In the event that such PMI Policy
shall be terminated, the Seller shall obtain from another Qualified Insurer
a comparable replacement policy, with a total coverage equal to the
remaining coverage of such terminated PMI Policy, at substantially the same
fee level. If the insurer shall cease to be a Qualified Insurer, the Seller
shall determine whether recoveries under the PMI Policy are jeopardized for
reasons related to the financial condition of such insurer, it being
understood that the Seller shall in no event have any responsibility or
liability for any failure to recover under the PMI Policy for such reason.
If the Seller determines that recoveries are so jeopardized, it shall
notify the Purchaser and the Mortgagor, if required, and obtain from
another Qualified Insurer a replacement insurance policy. The Seller
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shall not take any action which would result in noncoverage under any
applicable PMI Policy of any loss which, but for the actions of the Seller
would have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to
Section 4.01, the Seller shall promptly notify the insurer under the
related PMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such PMI Policy and shall take all actions
which may be required by such insurer as a condition to the continuation of
coverage under such PMI Policy. If such PMI Policy is terminated as a
result of such assumption or substitution of liability, the Seller shall
obtain a replacement PMI Policy as provided above.
(ii) with respect to LPMI Loans, maintain in full force and effect an
LPMI Policy insuring that portion of the Mortgage Loan in excess of 75% (or
such other percentage as stated in the related Acknowledgment Agreement) of
value, and from time to time, withdraw the LPMI Fee with respect to such
LPMI Loan from the Custodial Account in order to pay the premium thereon on
a timely basis, until the LTV of such Mortgage Loan is reduced to 80%. In
the event that the interest payments made with respect to any LPMI Loan are
less than the LPMI Fee, the Seller shall advance from its own funds the
amount of any such shortfall in the LPMI Fee, in payment of the premium on
the related LPMI Policy. Any such advance shall be a Servicing Advance
subject to reimbursement pursuant to the provisions on Section 2.05. In the
event that such LPMI Policy shall be terminated, the Seller shall obtain
from another Qualified Insurer a comparable replacement policy, with a
total coverage equal to the remaining coverage of such terminated LPMI
Policy, at substantially the same fee level. If the insurer shall cease to
be a Qualified Insurer, the Seller shall determine whether recoveries under
the LPMI Policy are jeopardized for reasons related to the financial
condition of such insurer, it being understood that the Seller shall in no
event have any responsibility or liability for any failure to recover under
the LPMI Policy for such reason. If the Seller determines that recoveries
are so jeopardized, it shall notify the Purchaser and the Mortgagor, if
required, and obtain from another Qualified Insurer a replacement insurance
policy. The Seller shall not take any action which would result in
noncoverage under any applicable LPMI Policy of any loss which, but for the
actions of the Seller would have been covered thereunder. In connection
with any assumption or substitution agreement entered into or to be entered
into pursuant to Section 4.01, the Seller shall promptly notify the insurer
under the related LPMI Policy, if any, of such assumption or substitution
of liability in accordance with the terms of such LPMI Policy and shall
take all actions which may be required by such insurer as a condition to
the continuation of coverage under such PMI Policy. If such LPMI Policy is
terminated as a result of such assumption or substitution of liability, the
Seller shall obtain a replacement LPMI Policy as provided above.
In connection with its activities as servicer, the Seller agrees to prepare
and present, on behalf of itself and the Owner, claims to the insurer under any
PMI Policy or LPMI Policy in a timely fashion in accordance with the terms of
such PMI Policy or LPMI Policy and, in this regard, to take such action as shall
be necessary to permit recovery under any PMI Policy or LPMI Policy respecting a
defaulted Mortgage Loan. Pursuant to Section 3.04, any amounts collected by the
Seller under any PMI Policy or LPMI Policy shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 2.05.
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Section 2.17 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 Purchaser, or in the event the Purchaser is not authorized or
permitted to hold title to real property in the state where the REO Property is
located, or would be adversely affected under the "doing business" or tax laws
of such state by so holding title, the deed or certificate of sale shall be
taken in the name of such Person or Persons as shall be consistent with an
Opinion of Counsel obtained by the Seller from any attorney duly licensed to
practice law in the state where the REO Property is located. The Person or
Persons holding such title other than the Purchaser shall acknowledge in writing
that such title is being held as nominee for the Purchaser.
The Seller shall manage, conserve, protect and operate each REO Property
for the Purchaser solely for the purpose of its prompt disposition and sale. The
Seller, either itself or through an agent selected by the Seller, shall manage,
conserve, protect and operate the 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. The Seller shall attempt to sell the same (and may
temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Seller deems to be
in the best interest of the Purchaser.
The Seller shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within one year
after title has been taken to such REO Property, unless the Seller determines,
and gives an appropriate notice to the Purchaser to such effect, that a longer
period is necessary for the orderly liquidation of such REO Property. If a
period longer than one year is permitted under the foregoing sentence and is
necessary to sell any REO Property, (i) the Seller shall report monthly to the
Purchaser as to the progress being made in selling such REO Property and (ii)
if, with the written consent of the Purchaser, a purchase money mortgage is
taken in connection with such sale, such purchase money mortgage shall name the
Seller as mortgagee, and such purchase money mortgage shall not be held pursuant
to this Agreement, but instead a separate participation agreement among the
Seller and Purchaser shall be entered into with respect to such purchase money
mortgage.
The Seller shall also maintain on each 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 the amount
required above.
The disposition of REO Property shall be carried out by the
Seller at such price, and upon such terms and conditions, as the Seller deems to
be in the best interests of the Purchaser. The proceeds of 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 Seller
shall reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to this Section, and on
the Remittance Date immediately following the Principal Prepayment Period in
which such sale proceeds are received the net cash proceeds of such sale
remaining in the Custodial Account shall be distributed to the Purchaser.
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With respect to each REO Property, the Seller shall hold all funds
collected and received in connection with the operation of the REO Property in
the Custodial Account. The Seller shall cause to be deposited on a daily basis
upon the receipt thereof in each Custodial Account all revenues received with
respect to the conservation and disposition of the related REO Property.
Notwithstanding the foregoing, at any time and from time to time, the
Purchaser may at its election terminate this Agreement with respect to one or
more REO Properties as provided by Section 6.03(c).
Section 2.18 Permitted Withdrawals with respect to REO Property. The Seller
shall withdraw REO funds on deposit in the Custodial Account with respect to
each related REO Property necessary for the proper operation, management and
maintenance of the REO Property, including the cost of maintaining any hazard
insurance pursuant to Section 2.11 and the fees of any managing agent acting on
behalf of the Seller. The Seller shall make monthly distributions on each
Remittance Date to the Purchaser of the net cash flow from the REO Property
(which shall equal the revenues from such REO Property net of the expenses
described in Section 2.17 and of any reserves reasonably required from time to
time to be maintained to satisfy anticipated liabilities for such expenses).
Section 2.19 Real Estate Owned Reports. Together with the statement
furnished pursuant to Section 2.20, the Seller shall furnish to the Purchaser on
or before the 15th day of each month a statement with respect to any REO
Property covering the operation of such REO Property for the previous month and
the Seller's efforts in connection with the sale of such REO Property and any
rental of such REO Property incidental to the sale thereof for the previous
month. That statement shall be accompanied by such other information as the
Purchaser shall reasonably request.
Section 2.20 Liquidation Reports. Upon the foreclosure sale of any
Mortgaged Property or the acquisition thereof by the Purchaser pursuant to a
deed in lieu of foreclosure, the Seller shall submit to the Purchaser a
liquidation report with respect to such Mortgaged Property.
Section 2.21 Reports of Foreclosures and Abandonments of Mortgaged
Property. Following the foreclosure sale or abandonment of any Mortgaged
Property, the Seller shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code.
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances. On each Remittance Date the Seller shall remit by
wire transfer of immediately available funds to the Purchaser (a) all amounts
deposited in the Custodial Account as of the close of business on the
Determination Date (net of charges against or withdrawals from the Custodial
Account pursuant to Section 2.05), plus (b) all amounts, if any, which the
Seller is obligated to distribute pursuant to Section 2.03.
With respect to any remittance received by the Purchaser after the second
Business Day following the Business Day on which such payment was due, the
Seller shall pay
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to the Purchaser interest on any such late payment at an annual rate equal to
the Prime Rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be deposited in the Custodial Account by the Seller on
the date such late payment is made and shall cover the period commencing with
the day following such second Business Day and ending with the Business Day on
which such payment is made, both inclusive. Such interest shall be remitted
along with the distribution payable on the next succeeding Remittance Date. The
payment by the Seller of any such interest shall not be deemed an extension of
time for payment or a waiver of any Event of Default by the Seller.
Section 3.02 Statements to Purchaser. Not later than the fifth Business Day
of each month, the Seller shall furnish to the Purchaser a Monthly Remittance
Advice, with a trial balance report attached thereto, in the form of Exhibit 1
annexed hereto in hard copy and electronic medium mutually acceptable to the
parties as to the preceding remittance and the period ending on the preceding
Determination Date.
In addition, not more than 60 days after the end of each calendar year, the
Seller shall furnish to each Person who was a Purchaser 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 for the
applicable portion of such year.
Such obligation of the Seller shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the Seller
pursuant to any requirements of the Internal Revenue Code as from time to time
are in force.
The Seller shall prepare and file any and all tax returns, information
statements or other filings required to be delivered to any governmental taxing
authority or to the Purchaser pursuant to any applicable law with respect to the
Mortgage Loans and the transactions contemplated hereby. In addition, the Seller
shall provide the Purchaser with such information concerning the Mortgage Loans
as is necessary for the Purchaser to prepare its federal income tax return as
the Purchaser may reasonably request from time to time.
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property. The Seller shall use its best
efforts to enforce any "due-on-sale" provision contained in any Mortgage or
Mortgage Note and to deny assumption by the person to whom the Mortgaged
Property has been or is about to be sold whether by absolute conveyance or by
contract of sale, and whether or not the Mortgagor remains liable on the
Mortgage and the Mortgage Note. When the Mortgaged Property has been conveyed by
the Mortgagor, the Seller shall, to the extent it has knowledge of such
conveyance, exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause applicable thereto, provided, however, that the
Seller shall not exercise such rights if prohibited by law from doing so or if
the exercise of such rights would impair or threaten to impair any recovery
under the related PMI Policy or LPMI Policy, if any.
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If the Seller reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Seller shall enter into (i) an assumption
and modification agreement with the person to whom such property has been
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and the original Mortgagor remains liable thereon or (ii) in the event the
Seller is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Seller has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Seller for entering into an assumption
agreement, a portion of such fee, up to an amount equal to one-half of one
percent (0.5%) of the outstanding principal balance of the related Mortgage
Loan, will be retained by the Seller as additional servicing compensation, and
any portion thereof in excess of one-half of one percent (0.5%) shall be
deposited in the Custodial Account for the benefit of the Purchaser. In
connection with any such assumption, neither the Mortgage Interest Rate borne by
the related Mortgage Note, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Seller shall inquire
diligently into the creditworthiness of the proposed transferee, and shall use
the underwriting criteria for approving the credit of the proposed transferee
which are used by the Seller with respect to underwriting mortgage loans of the
same type as the Mortgage Loans. If the credit of the proposed transferee does
not meet such underwriting criteria, the Seller diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate
the maturity of the Mortgage Loan.
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files. Upon
the payment in full of any Mortgage Loan, or the receipt by the Seller of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Seller shall notify the Purchaser in the Monthly Remittance
Advice as provided in Section 3.02, and may request the release of any Mortgage
Loan Documents from the Purchaser in accordance with this Section 4.02 hereof.
If the Seller satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Seller otherwise prejudice any rights the Purchaser may have under the
mortgage instruments, upon written demand of the Purchaser, the Seller shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit thereof
in the Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Seller shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 2.13 insuring the Seller against any
loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section 4.03 Servicing Compensation. As consideration for servicing the
Mortgage Loans during the Interim Period, the Seller shall retain a Servicing
Fee with respect to each Mortgage Loan, which amount shall be prorated for any
portion of a month during which the Mortgage Loan is serviced by the Seller
pursuant to this Agreement. The obligation of the
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Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds, to the extent permitted by Section 2.05) of
such Monthly Payment collected by the Seller, or as otherwise provided under
Section 2.05.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 4.01 and Ancillary Income, shall be retained by the
Seller to the extent not required to be deposited in the Custodial Account. The
Seller shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder and shall not be entitled to reimbursement
thereof except as specifically provided for herein.
Section 4.04 Annual Statement as to Compliance. The Seller shall deliver to
the Purchaser, on or before March 31 each year beginning March 31, 2005, and on
the Transfer Date an Officer's Certificate, stating that (i) a review of the
activities of the Seller during the preceding calendar year and of performance
under this Agreement has been made under such officer's supervision, and (ii)
the Seller has complied fully with the provisions of Article II and Article IV,
and (iii) to the best of such officer's knowledge, based on such review, the
Seller has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and the action being taken by the Seller to cure such default.
Section 4.05 Annual Independent Public Accountants' Servicing Report. On or
before March 31st of each year beginning March 31, 2005, the Seller, at its
expense, shall cause a firm of independent public accountants which is a member
of the American Institute of Certified Public Accountants to furnish a statement
to each Purchaser to the effect that such firm has examined certain documents
and records relating to the servicing of the Mortgage Loans and this Agreement
and that such firm is of the opinion that the provisions of Article II and
Article III have been complied with, and that, on the basis of such examination
conducted substantially in compliance with the Single Audit Program for Mortgage
Bankers, nothing has come to their attention which would indicate that such
servicing has not been conducted in compliance therewith, except for (i) such
exceptions as such firm shall believe to be immaterial, and (ii) such other
exceptions as shall be set forth in such statement.
Section 4.06 Right to Examine Seller Records. The Purchaser shall have the
right to examine and audit any and all of the books, records, or other
information of the Seller, whether held by the Seller or by another on its
behalf, with respect to or concerning this Agreement or the Mortgage Loans,
during business hours or at such other times as may be reasonable under
applicable circumstances, upon reasonable advance notice.
ARTICLE V
SELLER TO COOPERATE
Section 5.01 Provision of Information. During the term of this Agreement,
the Seller shall furnish to the Purchaser such periodic, special, or other
reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate with respect
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to the Purchaser or the purposes of this Agreement. All such reports or
information shall be provided by and in accordance with all reasonable
instructions and directions which the Purchaser may give.
The Seller shall execute and deliver all such instruments and take all such
action as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this Agreement.
Section 5.02 Financial Statements; Servicing Facilities. In connection with
marketing the Mortgage Loans, the Purchaser may make available to a prospective
Purchaser a Financial Consolidated Statement of Operations of the Seller for the
most recently completed three fiscal years for which such a statement is
available, as well as a Consolidated Statement of Condition at the end of the
last two fiscal years covered by such Consolidated Statement of Operations. The
Seller also shall make available any comparable interim statements to the extent
any such statements have been prepared by or on behalf of the Seller (and are
available upon request to members or stockholders of the Seller or to the public
at large). If it has not already done so, the Seller shall furnish promptly to
the Purchaser copies of the statement specified above.
The Seller shall make available to the Purchaser or any prospective
Purchaser a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Seller or the
financial statements of the Seller, and to permit any prospective Purchaser to
inspect the Seller's servicing facilities for the purpose of satisfying such
prospective Purchaser that the Seller have the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE VI
TERMINATION
Section 6.01 Damages. The Purchaser shall have the right at any time to
seek and recover from the Seller any damages or losses suffered by it as a
result of any failure by the Seller to observe or perform any duties,
obligations, covenants or agreements herein contained or contained in the
Purchase Agreement.
Section 6.02 Termination Upon Transfer of Servicing.
(a) Termination Procedures. This Agreement shall terminate with respect to
the Mortgage Loans or portion thereof transferred on the related Transfer Date
set forth in the related Terms Letter; provided that the Purchaser shall have
the option to extend the related Transfer Date for 2 months from the original
related Transfer Date upon written notice to the Seller at least 15 days prior
to the related Transfer Date of its intent to extend the related Transfer Date
for 2 months.
The Purchaser may elect to terminate this Agreement and transfer the
servicing from the Seller prior to the Transfer Date with respect to all or any
portion of the Mortgage Loans by providing written notice to the Seller of its
intent to transfer servicing at least 30 days prior to the date on which it
intends to transfer the servicing from the Seller. On or before the
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date specified by the Purchaser in accordance with this paragraph (a) for the
transfer of servicing from the Seller, the Seller shall prepare, execute and
deliver to the successor entity designated by the Purchaser any and all
documents and other instruments, place in such successor's possession all
Mortgage Loan Documents necessary or appropriate to effect the purposes of such
notice of termination, including but not limited to the transfer and endorsement
or assignment of the Mortgage Loans and related documents, at the Seller's sole
expense. The Seller shall cooperate with the Purchaser and such successor in
effecting the termination of the Seller's responsibilities and rights hereunder.
Section 6.03 Servicing Transfer Provisions. On or prior to the related
Transfer Date the Seller shall, at its sole cost and expense take such steps as
may be necessary or appropriate to effectuate and evidence the transfer of the
servicing of the Mortgage Loans to the Purchaser, or its designee, including but
not limited to the following:
On the Transfer Date, the Seller shall comply with all of the provisions of
Section 14 of the Purchase Agreement to effect a complete transfer of the
Servicing Rights. On the related Transfer Date for each Mortgage Loan, this
Agreement, except for Articles VI, VIII, IX and X which shall survive the
Transfer Date, shall terminate.
(a) Mortgage Loans in Foreclosure. The servicing with respect to Mortgage
Loans in foreclosure on or before the Transfer Date shall not be transferred
from the Seller to the Purchaser or the successor servicer, as the case may be,
and such Mortgage Loans shall continue to be serviced by the Seller pursuant to
the terms of this Agreement. However, if the Purchaser so elects, the Purchaser
may waive the provisions of this paragraph (a) and accept transfer of servicing
of such Mortgage Loans and all amounts received by the Seller thereunder.
(b) Servicing Advances. Notwithstanding the fact that the Transfer Date has
occurred, the Seller shall not be reimbursed for any Servicing Advances with
respect to any Mortgage Loan until the Seller or the successor servicer receives
a Monthly Payment or Liquidation Proceeds with respect to such Mortgage Loan. At
such time, the Seller shall be entitled to be reimbursed for all unreimbursed
Servicing Advances with respect to such Mortgage Loan on a first priority basis
(but subject to any successor servicer's rights to reimbursement with respect to
Servicing Advances) from the Monthly Payment or Liquidation Proceeds received
with respect to such Mortgage Loan. This Section 6.03(b) shall survive the
Transfer Date.
(c) Additional Termination Provisions. Notwithstanding and in addition to
the foregoing, in the event that (i) a Mortgage Loan becomes delinquent for a
period of 120 days or more (a "Delinquent Mortgage Loan") or (ii) a Mortgage
Loan becomes an REO Property, the Purchaser may at its election terminate this
Agreement with respect to such Delinquent Mortgage Loan or REO Property, upon 15
days' written notice to the Seller.
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ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the Transfer Date.
Prior to the Transfer Date, the contents of each Servicing File are and shall be
held in trust by the Seller for the benefit of the Purchaser as the owner
thereof. The Seller shall maintain in the Servicing File a copy of the contents
of each Mortgage File and the originals of the documents in each Mortgage File
not delivered to the Purchaser. The possession of the Servicing File by the
Seller is at the will of the Purchaser for the sole purpose of servicing the
related Mortgage Loan, pursuant to this Agreement, and such retention and
possession by the Seller is in its capacity as Seller only and at the election
of the Purchaser. The Seller shall release its custody of the contents of any
Servicing File only in accordance with written instructions from the Purchaser,
unless such release is required as incidental to the Seller's servicing of the
Mortgage Loans pursuant to this Agreement or is in connection with a repurchase
of any Mortgage Loan pursuant to Section 7 of the Purchase Agreement.
The Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser or its designee, and shall deliver to the Purchaser
or its designee upon demand, evidence of compliance with all federal, state and
local laws, rules and regulations, 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 Xxx and periodic inspection reports as required
by Section 2.14.
The Seller shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Seller shall
note transfers 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 Seller shall be under no obligation to deal with any person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such person as the owner of the Mortgage Loan. The Purchaser may,
subject to the terms of this Agreement, sell or transfer one or more of the
Mortgage Loans, provided, however, that the transferee will not be deemed to be
a Purchaser hereunder binding upon the Seller unless such transferee shall agree
in writing to be bound by the terms of this Agreement and an original
counterpart of the instrument of transfer and an assignment and assumption of
this Agreement executed by the transferee shall have been delivered to the
Seller. The Purchaser also shall advise the Seller of the transfer. Upon receipt
of notice of the transfer, the Seller shall xxxx its books and records to
reflect the ownership of the Mortgage Loans of such assignee, and shall release
the previous Purchaser from its obligations hereunder with respect to the
Mortgage Loans sold or transferred.
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ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification. The Seller shall indemnify the Purchaser and
hold it harmless against any and all claims, losses, damages, penalties, fines,
and forfeitures, including, but not limited to reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
the Purchaser may sustain in any way related to the failure of the Seller to (a)
perform its duties and service the Mortgage Loans in strict compliance with the
terms of this Agreement, and/or (b) comply with applicable law. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement, assume (with the prior written consent of the
Purchaser) 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 the Purchaser in respect
of such claim. The Seller shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Seller for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Seller's
indemnification pursuant to Section 8 of the Purchase Agreement, or the failure
of the Seller to (a) service and administer the Mortgage Loans in strict
compliance with the terms of this Agreement and/or (b) comply with applicable
law.
Section 8.02 Limitation on Liability of Seller and Others. Neither the
Seller nor any of the directors, officers, employees or agents of the Seller
shall be under any liability to the Purchaser 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, provided, however, that this provision
shall not protect the Seller or any such person against any breach of warranties
or representations made herein, or failure to perform its obligations in strict
compliance with any standard of care set forth in this Agreement, or any
liability which would otherwise be imposed by reason of any breach of the terms
and conditions of this Agreement. The Seller and any director, officer, employee
or agent of the Seller may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Seller 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 expense or liability, provided, however, that the
Seller may, with the consent of the Purchaser, undertake any such action which
it may deem necessary or desirable in respect to this Agreement and the rights
and duties of the parties hereto. In such event, the Seller shall be entitled to
reimbursement from the Purchaser of the reasonable legal expenses and costs of
such action.
Section 8.03 Limitation on Resignation and Assignment by Seller. The
Purchaser has entered into this Agreement with the Seller and subsequent
Purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Seller, and the representations as to the adequacy of its
servicing facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Seller shall neither assign this Agreement or the servicing hereunder or
delegate its rights or duties hereunder or any portion hereof or sell or
otherwise dispose of all or
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substantially all of its property or assets without the prior written consent of
the Purchaser, which consent shall be granted or withheld in the sole discretion
of the Purchaser.
The Seller shall not resign from the obligations and duties hereby imposed
on it except by mutual consent of the Seller and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Seller. Any such
determination permitting the resignation of the Seller shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Seller's responsibilities and obligations hereunder in the manner provided in
Section 6.03.
Without in any way limiting the generality of this Section 8.03, in the
event that the Seller either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or, subject to the provisions of the following paragraph,
otherwise dispose of all or substantially all of its property or assets, without
the prior written consent of the Purchaser, then the Purchaser shall have the
right to terminate this Agreement upon notice given as set forth in Section
6.03, without any payment of any penalty or damages and without any liability
whatsoever to the Seller or any third party.
Any Person into which the Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller 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 whose deposits are insured
by FDIC or a company whose business is the origination and servicing of mortgage
loans and shall satisfy any requirements of this Agreement with respect to the
qualifications of a successor to the Seller; provided however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
Section 8.04 Assignment by Purchaser. The Purchaser shall have the right,
without the consent of the Seller, 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 Purchaser hereunder, by
executing an Assignment and Assumption Agreement in the form of Exhibit 8
hereto. Upon such assignment of rights and assumption of obligations, the
assignee or designee shall accede to the rights and obligations hereunder of the
Purchaser with respect to such Mortgage Loans and the Purchaser as assignor
shall be released from all obligations hereunder with respect to such Mortgage
Loans from and after the date of such assignment and assumption. All references
to the Purchaser in this Agreement shall be deemed to include its assignee or
designee.
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ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
The Purchaser warrants and represents to, and covenants and agrees with,
the Seller as follows:
Section 9.01 Authority and Capacity. The execution, delivery and
performance by the Purchaser of this Agreement has been and will remain duly and
validly authorized by all necessary corporate action. This Agreement constitutes
and will continue to constitute a legal, valid and enforceable obligation of the
Purchaser.
Section 9.02 Assistance. To the extent possible, the Purchaser shall
cooperate with and assist the Seller as requested by the Seller, in carrying out
Seller's covenants, agreements duties and responsibilities under this Agreement
and in connection therewith shall execute and deliver all such papers, documents
and instruments as may be necessary and appropriate in furtherance thereof.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller warrants and represents to, and covenants and
agrees with, the Purchaser as follows:
Section 10.01 Due Organization and Authority. The Seller is a national
association duly organized, validly existing and in good standing under the laws
of the United States of America and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in each state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Seller, and in any event the Seller is in compliance with the
laws of any such state to the extent necessary to ensure the enforceability of
the related Mortgage Loan in accordance with the terms of this Agreement; the
Seller has the full corporate power and authority to execute and deliver this
Agreement and to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments or transfer to be
delivered pursuant to this Agreement) by the Seller and the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the Seller;
and all requisite corporate action has been taken by the Seller to make this
Agreement valid and binding upon the Seller in accordance with its terms;
Section 10.02 Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller;
Section 10.03 No Conflicts. Neither the execution and delivery of this
Agreement, nor the fulfillment of or compliance with the terms and conditions of
this Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Seller's charter or by-laws or any legal
restriction or any agreement or instrument to which
-30-
the Seller 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 violation
of any law, rule, regulation, order, judgment or decree to which the Seller or
its property is subject, or impair the ability of the Purchaser to realize on
the Mortgage Loans, or impair the value of the Mortgage Loans;
Section 10.04 Ability to Service. The Seller has the facilities,
procedures, and experienced personnel necessary for the sound servicing of
mortgage loans of the same type as the Mortgage Loans;
Section 10.05 Ability to Perform. The Seller does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
Section 10.06 No Litigation Pending. There is no action, suit, proceeding
or investigation pending or, to the Seller's knowledge, threatened against the
Seller which, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Seller, or in any material impairment of the right
or ability of the Seller to carry on its business substantially as now
conducted, or in any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the Mortgage Loans or
of any action taken or to be taken in connection with the obligations of the
Seller contemplated herein, or which would be likely to impair materially the
ability of the Seller to perform under the terms of this Agreement;
Section 10.07 No Consent Required. No consent, approval, authorization or
order of any court or governmental agency or body is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the Servicing of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the related Closing Date;
Section 10.08 No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of fact or omits to state a fact necessary to make
the statements contained therein not misleading.
ARTICLE XI
DEFAULT
Section 11.01 Events of Default. The following shall constitute an Event of
Default under this Agreement on the part of the Seller:
(a) any failure by the Seller to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of five days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to the Seller
by the Purchaser; or
(b) the failure by the Seller duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Seller set
forth in this Agreement which
-31-
continues unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Seller by the Purchaser; or
(c) 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, 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 Seller and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
(d) the Seller shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Seller or of
or relating to all or substantially all of its property; or
(e) the Seller 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
(f) the Seller and its Affiliates fail to maintain a minimum net worth of
$25,000,000; or
(g) the Seller, if it is an Insured Depository Institution, shall become
the subject of a cease and desist order of the Appropriate Federal Banking
Agency or enters into a memorandum of understanding, consent agreement or any
similar agreement with the Appropriate Federal Banking Agency, any of which,
would have or is purportedly the result of, any condition which would have a
material adverse effect on the Mortgage Loans, or the Seller's ability to
service the Mortgage Loans as provided hereunder; or
(h) the Seller shall fail to maintain its status as Adequately Capitalized;
or
(i) the Seller attempts to assign its right to servicing compensation
hereunder or the Seller attempts, without the consent of the Purchaser, 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.
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatever rights the Purchaser may have at law or
equity to damages, including injunctive relief and specific performance, the
Purchaser, by notice in writing to the Seller, may terminate all the rights and
obligations of the Seller under this Agreement and in and to the Mortgage Loans
and the proceeds thereof.
Upon receipt by the Seller of such written notice, all authority and power
of the Seller 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 6.03.
-32-
Section 11.02 Waiver of Defaults. By a written notice, the Purchaser may
waive any default by the Seller in the performance of its obligations hereunder
and its consequences. Upon any 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.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices. All notices, requests, demands and other
communications which are required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given upon the
delivery or mailing thereof, as the case may be, sent by registered or certified
mail, return receipt requested:
(a) If to Purchaser to:
Xxxxxx Brothers Bank, F.S.B.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Manager Contract Finance
(b) If to Seller to:
First National Bank of Nevada
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx XX 00000
Attention: Secondary Marketing
Facsimile: (000) 000-0000
Section 12.02 Waivers. Either the Seller or Purchaser may upon consent of
all parties, by written notice to the others:
(a) Waive compliance with any of the terms, conditions or covenants
required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations of the others
hereunder.
The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other subsequent
breach.
Section 12.03 Entire Agreement; Amendment. This Agreement and the Purchase
Agreement constitute the entire agreement between the parties with respect to
servicing of the Mortgage Loans during the Interim Period. This Agreement may be
amended and any provision hereof waived, but, only in writing signed by the
party against whom such enforcement is sought.
-33-
Section 12.04 Execution; Binding Effect. 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 8.03, this Agreement shall inure to the benefit of
and be binding upon the Seller and the Purchaser and their respective successors
and assigns.
Section 12.05 Headings. Headings of the Articles and Sections in this
Agreement are for reference purposes only and shall not be deemed to have any
substantive effect.
Section 12.06 Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of New York.
Section 12.07 Relationship of Parties. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the
parties. The duties and responsibilities of the Seller shall be rendered by them
as independent contractors and not as an agent of Purchaser. The Seller shall
have full control of all of its acts, doings, proceedings, relating to or
requisite in connection with the discharge of its duties and responsibilities
under this Agreement.
Section 12.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 12.09 Recordation of Assignments of Mortgage. To the extent
permitted by applicable law, each of the Assignments of Mortgage is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected at the Seller's expense in
the event recordation is either necessary under applicable law or requested by
the Purchaser at its sole option.
Section 12.10 Appointment and Designation of Master Servicer. The Purchaser
hereby appoints and designates Aurora Loan Services, Inc. as its master servicer
(the "Master Servicer") for the Mortgage Loans subject to this Agreement. The
Seller is hereby authorized and instructed to take any and all instructions with
respect to servicing the Mortgage Loans hereunder as if the Master Servicer were
the Purchaser hereunder. The authorization and instruction set forth herein
shall remain in effect until such time as the Seller shall receive written
instruction from the Purchaser that such authorization and instruction is
terminated.
-34-
IN WITNESS WHEREOF, the parties have executed this Agreement
under seal as of the date and year first above written.
XXXXXX BROTHERS BANK, F.S.B.
(the Purchaser)
By: ________________________________________
Name:
Title:
FIRST NATIONAL BANK OF NEVADA
(the Seller)
By: ________________________________________
Name:
Title:
EXHIBIT 1
FORM OF MONTHLY REMITTANCE ADVICE
LRSLNM LHACCT LHNTCD LHPRIN INT LHTTOT LHRPDT LHTRDT
------------------------------------------------------------------------------------------------------------------------------------
$ - $ -
1-1
1ST NATIONAL BANK OF ARIZONA MORTGAGE LOANS PROCESSING DATE 8/31/2004
INVESTOR REMITTANCE SUMMARY REPORT PROCESSING THRU 8/31/2004
SYSTEM DATE 9/1/2004
INVESTOR #
INVESTOR SERVICER NOTE INV. P & I PERCT PD TO INVESTOR INVESTOR INTERIM INVESTOR NET INVESTOR S
LOAN NBR. LOAN NBR. RATE RATE PAYMENT OWNED DATE PRINCIPAL INTEREST REMITTANCE DISBURSEMENT ESCROW T
GROUP TOTAL 0 0 0 0 0
1-1
EXHIBIT 2
FORM OF CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 200_
_____________________________________________ hereby certifies
that it has established the account described below as a Custodial Account
pursuant to Section 2.04 of the Interim Servicing Agreement, dated as of
September 24, 2004, Fixed and Adjustable Rate Mortgage Loans, Group 2004-1.
Title of Account: "First National Bank of Nevada, in trust for
the registered Purchaser, Group 2004-1."
Account Number:______________________________________
Address of office or branch
of the Seller at
which Account is maintained:_________________________
---------------------------------
---------------------------------
FIRST NATIONAL BANK OF NEVADA
Seller
By: _____________________________
Name:
Title:
2-1
EXHIBIT 3
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 200_
To: ____________________________________________
____________________________________________
____________________________________________
(the "Depository")
As Seller under the Interim Servicing Agreement, dated as of September 24,
2004, Fixed and Adjustable Rate Mortgage Loans, Group 2004-1 (the "Agreement"),
we hereby authorize and request you to establish an account, as a Custodial
Account pursuant to Section 2.04 of the Agreement, to be designated as "First
National Bank of Nevada, in trust for the Purchaser of the Fixed and Adjustable
Rate Mortgage Loans - Group 2004-1". All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Seller. 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.
FIRST NATIONAL BANK OF NEVADA
Seller
By: _____________________________
Name:
Title:
Date:
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 by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
---------------------------------------
Depository
By: __________________________________
Name:
Title:
Date:
3-1
EXHIBIT 4
FORM OF ESCROW ACCOUNT CERTIFICATION
_________ ___, 200_
__________________________________ hereby certifies that it
has established the account described below as an Escrow Account pursuant to
Section 2.06 of the Interim Servicing Agreement, dated as of September 24, 2004,
Fixed and Adjustable Rate Mortgage Loans, Group 2004-1.
Title of Account:_"First National Bank of Nevada in trust for
the Purchaser of the Fixed and Adjustable Rate Mortgage Loans, Group 2004-1, and
various Mortgagors."
Account Number:______________________________________
Address of office or branch
of the Seller at
which Account is maintained:_________________________
-------------------------------
-------------------------------
FIRST NATIONAL BANK OF NEVADA
Seller
By: ___________________________
Name:
Title:
Date:
4-1
EXHIBIT 5
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 200_
To: ____________________________________________
____________________________________________
____________________________________________
(the "Depository")
As Seller under the Interim Servicing Agreement, dated as of September 24,
2004, Fixed and Adjustable Rate Mortgage Loans, Group 2004-1 (the "Agreement"),
we hereby authorize and request you to establish an account, as an Escrow
Account pursuant to Section 2.06 of the Agreement, to be designated as First
National Bank of Nevada in trust for the Purchasers of Fixed and Adjustable Rate
Mortgage Loans - Group 2004-1". All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Seller. 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.
FIRST NATIONAL BANK OF NEVADA
Seller
By: _____________________________
Name:
Title:
Date:
5-1
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 by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
------------------------------
Depository
By: _______________________________
Name:
Title:
Date:
5-2
EXHIBIT 6
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
6-1
EXHIBIT 7
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each of
the following items, which shall be available for inspection by the Purchaser
and any prospective Purchaser:
1) The original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________ without recourse" and signed in the
name of [Originator] by an authorized officer.
2) The original of any guarantee executed in connection with the
Mortgage Note.
3) The original Mortgage, with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or
prior to the related Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording office
retains the original recorded Mortgage, the Seller shall deliver or cause
to be delivered to the Purchaser, a photocopy of such Mortgage, together
with (i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the Seller stating that such Mortgage has been
dispatched to the appropriate public recording office for recordation and
that the original recorded Mortgage or a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the original
recorded Mortgage will be promptly delivered to the Purchaser upon receipt
thereof by the Seller; or (ii) in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the case
where a Mortgage is lost after recordation in a public recording office, a
copy of such Mortgage certified by such public recording office to be a
true and complete copy of the original recorded Mortgage.
4) The originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon.
5) The original Assignment of Mortgage for each Mortgage Loan, in
blank, in form and substance acceptable for recording.
6) Originals of all intervening assignments of the Mortgage with
evidence of recording thereon, or if any such intervening assignment has
not been returned from the applicable recording office or has been lost or
if such public recording office retains the original recorded assignments
of mortgage, the Seller shall deliver or cause to be delivered to the
Purchaser, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officer's
Certificate of the Seller stating that such intervening assignment of
mortgage has been dispatched to the appropriate public recording office for
recordation and that such original recorded intervening assignment of
mortgage or a copy of such intervening
7-1
assignment of mortgage certified by the appropriate public recording office
to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Purchaser upon
receipt thereof by the Seller; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a
true and complete copy of the original recorded intervening assignment.
7) The original mortgagee policy of title insurance.
8) Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
9) The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 2.11 of the Agreement.
10) The PMI Policy or certificate of insurance or an electronic
notation of the existence of such policy and the LPMI Policy, if
applicable.
11) Residential loan application.
12) Mortgage Loan closing statement.
13) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
14) Verification of acceptable evidence of source and amount of
downpayment except for Mortgage Loans originated under a Limited
Documentation Program.
15) Credit report on the Mortgagor.
16) Residential appraisal report.
17) Photograph of the Mortgaged Property.
18) Survey of the Mortgaged Property, if any.
19) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
20) All required disclosure statements.
21) If available, termite report, structural engineer's report, water
potability and septic certification.
22) Sales contract, if applicable.
7-2
23) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence,
current and historical computerized data files, and all other processing,
underwriting and closing papers and records which are customarily contained
in a mortgage loan file and which are required to document the Mortgage
Loan or to service the Mortgage Loan.
24) Amortization schedule.
In the event an Officer's Certificate of the Seller is delivered to the
Purchaser because of a delay caused by the public recording office in returning
any recorded document, the Seller shall deliver to the Purchaser, within 120
days of the related Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to Custodian. An extension of the date specified in (iv) above may be
requested from the Purchaser, which consent shall not be unreasonably withheld.
7-3
EXHIBIT 8
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated __________ __, 200_, between
__________________________________, a ___________________ corporation
("Assignor") and ____________________., a _____________ corporation
("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and other
valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee, as
Purchaser, all of the right, title and interest of Assignor under that
certain Interim Servicing Agreement, Conventional Residential Fixed and
Adjustable Rate Mortgage Loans, Group 2004-1 (the "Interim Servicing
Agreement"), dated as of September 24, 2004, by and between Xxxxxx Brothers
Bank, F.S.B (the "Purchaser"), and First National Bank of Nevada (the
"Interim Servicer").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor has not received notice of, and has no knowledge
of, any offsets, counterclaims or other defenses available to the
Interim Servicer with respect to the Interim Servicing Agreement or
the Mortgage Loans;
b. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Interim
Servicing Agreement, including without limitation, the transfer of the
servicing obligations under the Interim Servicing Agreement. The
Assignor has no knowledge of, and has not received notice of, any
waivers under or amendments or other modifications of, or assignments
of rights or obligations under, the Interim Servicing Agreement; and
3. That Assignee warrants and represents to, and covenants with, the
Assignor and the Interim Servicer pursuant to the Interim Servicing
Agreement that the Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Interim Servicing Agreement and from
and after the date hereof, the Assignee assumes for the benefit of each of
the Interim Servicer and the Assignor all of the Assignor's obligations as
Purchaser thereunder;
IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
Agreement to be executed by their duly authorized officers as of the date first
above written.
8-1
-------------------------------------- ---------------------------------
Assignor Assignee
By:___________________________________ By:______________________________
Its:__________________________________ Its:_____________________________
Taxpayer Taxpayer
Identification No.____________________ Identification No._______________
8-2
EXHIBIT 9
ACKNOWLEDGMENT AGREEMENT
On this ____ day of ____________, 200_, Xxxxxx Brothers Bank, F.S.B, (the
"Purchaser") as the Purchaser under that certain Interim Servicing Agreement
dated as of September 24, 2004, (the "Agreement"), does hereby contract with the
First National Bank of Nevada (the "Seller") as Seller under the Agreement, for
the servicing responsibilities related to the Mortgage Loans listed on the
Mortgage Loan Schedule attached hereto. The Seller hereby accepts the servicing
responsibilities transferred hereby and on the date hereof assumes all servicing
responsibilities related to the Mortgage Loans identified on the attached
Mortgage Loan Schedule all in accordance with the Agreement. The contents of
each Servicing File required to be delivered to service the Mortgage Loans
pursuant to the Agreement have been or shall be delivered to the Seller by the
Purchaser in accordance with the terms of the Agreement.
With respect to the Mortgage Loans made subject to the Agreement hereby,
the Closing Date shall be ___________________.
All other terms and conditions of this transaction shall be governed by the
Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
9-1
This Acknowledgment Agreement may be executed simultaneously in any number
of counterparts. Each counterpart shall be deemed to be an original, and all
such counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Purchaser and the Seller have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
PURCHASER:
XXXXXX BROTHERS BANK. F.S.B.
By:____________________________________
Name:__________________________________
Title:_________________________________
SELLER:
FIRST NATIONAL BANK OF NEVADA
By:____________________________________
Name:__________________________________
Title:_________________________________
9-2
EXHIBIT 10
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION, dated as of _______, 2000 between Xxxxxx
Brothers Bank, F.S.B. having an office at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Assignor") and First National Bank of Nevada, having an office at 0000
Xxxxx Xxxxxxxxxx Xxxx, Xxxxx X-000, Xxxxxxxxxx XX 00000 ("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and other
valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee, all of
the right, title and interest of Assignor, as "Servicer", with respect to the
mortgage loans identified on Exhibit A (the "Mortgage Loans"), under that
certain Custodial Agreement, dated as of July 13, 1999 (the "Agreement"), by and
between Assignor as owner and servicer, and LaSalle National Bank (the
"Custodian").
The Assignor specifically reserves any and all right, title and interest
and all obligations of the Assignor with respect to any mortgage loans subject
to the Agreement which are not the Mortgage Loans set forth on Exhibit A hereto
and are not the subject of this Assignment and Assumption Agreement.
2. The Assignor warrants and represents to, and covenants with, the
Assignee that with respect to the Mortgage Loans:
a._______The Assignor is assigning its interest as Servicer under the
Agreement for the sole purpose of permitting the Assignee as Servicer of
the Mortgage Loans, to act as Servicer under the Agreement; and
b._______The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Agreement. The
Assignor has no knowledge of, and has not received notice of, any waivers
under or amendments or other modifications of, or assignments of rights or
obligations under the Agreement.
3. The Assignee warrants and represents to, and covenants with, the
Assignor and the Custodian pursuant to the Agreement that the Assignee agrees to
be bound, as Servicer, by all of the terms, covenants and conditions of the
Agreement and from and after the date hereof, the Assignee assumes for the
benefit of the Assignor all of the Assignor's obligations as Servicer
thereunder.
10-1
IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
Agreement to be executed by their duly authorized officers as of the date first
above written.
FIRST NATIONAL BANK OF NEVADA XXXXXX BROTHERS BANK, F.S.B.
Assignor
Assignee
By:___________________________________ By______________________________________
Its: _________________________________ Its:____________________________________
10-2
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
10-3