Exhibit 99.7
FLOW SERVICING AGREEMENT
(Residential Mortgage Loans)
Dated as of November 1, 2006
by and among
LUMINENT MORTGAGE CAPITAL, INC.,
MERCURY MORTGAGE FINANCE STATUTORY TRUST
and
MAIA MORTGAGE FINANCE STATUTORY TRUST,
as Purchasers,
AURORA LOAN SERVICES LLC,
as Servicer,
and
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.,
as Servicing Rights Owner
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................................................................1
ARTICLE II POSSESSION OF MORTGAGE FILES; MAINTENANCE OF SERVICING FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF
DOCUMENTS.............................................................................................15
Section 2.01 Possession of Mortgage Files; Maintenance of Servicing Files.........................15
Section 2.02 Custodial Agreement; Delivery of Documents...........................................15
Section 2.03 Closing Conditions...................................................................16
ARTICLE III REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH...................................................16
Section 3.01 Servicer Representations and Warranties..............................................16
Section 3.02 Purchaser Representations............................................................17
ARTICLE IV ADMINISTRATION AND SERVICING OF MORTGAGE LOANS........................................................19
Section 4.01 Servicer to Act as Servicer..........................................................19
Section 4.02 Liquidation of Mortgage Loans........................................................20
Section 4.03 Collection of Mortgage Loan Payments.................................................21
Section 4.04 Establishment of and Deposits to Custodial Account...................................22
Section 4.05 Permitted Withdrawals From Custodial Account.........................................24
Section 4.06 Establishment of and Deposits to Escrow Account......................................25
Section 4.07 Permitted Withdrawals From Escrow Account............................................26
Section 4.08 Payment of Taxes, Insurance and Other Charges........................................27
Section 4.09 Transfer of Accounts.................................................................27
Section 4.10 Maintenance of Hazard Insurance......................................................27
Section 4.11 Maintenance of Mortgage Impairment Insurance.........................................29
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance......................29
Section 4.13 Inspections..........................................................................29
Section 4.14 Restoration of Mortgaged Property....................................................29
Section 4.15 Maintenance of PMI Policy; Claims....................................................30
Section 4.16 Title, Management and Disposition of REO Property....................................31
Section 4.17 Real Estate Owned Reports............................................................32
Section 4.18 Liquidation Reports..................................................................32
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property.......................33
Section 4.20 Application of Buydown Funds.........................................................33
Section 4.21 Notification of Adjustments..........................................................34
Section 4.22 Modifications, Waivers, Amendments and Consents......................................34
Section 4.23 Fair Credit Reporting Act............................................................35
Section 4.24 Prepayment Premiums..................................................................35
ARTICLE V PAYMENTS TO PURCHASER..................................................................................36
Section 5.01 Remittances..........................................................................36
Section 5.02 Statements to Purchaser..............................................................36
Section 5.03 Monthly Advances by Servicer.........................................................37
ARTICLE VI GENERAL SERVICING PROCEDURES..........................................................................37
Section 6.01 Due-on-Sale Provision and Assumptions................................................37
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files..............................38
Section 6.03 Servicing Compensation...............................................................38
Section 6.04 Right to Examine Servicer Records....................................................39
ARTICLE VII SERVICER TO COOPERATE................................................................................39
Section 7.01 Provision of Information.............................................................39
Section 7.02 Financial Statements; Servicing Facility.............................................39
Section 7.03 Cooperation with Third-party Service Providers.......................................39
ARTICLE VIII THE SERVICER........................................................................................40
Section 8.01 Indemnification; Third Party Claims..................................................40
Section 8.02 Merger or Consolidation of the Servicer..............................................40
Section 8.03 Limitation on Liability of Servicer and Others.......................................41
Section 8.04 Limitation on Resignation and Assignment by Servicer.................................41
ARTICLE IX WHOLE LOAN TRANSFERS AND Securitization Transactions..................................................42
Section 9.01 Removal of Mortgage Loans from Inclusion Under this Agreement........................42
ARTICLE X DEFAULT 43
Section 10.01 Events of Default....................................................................43
Section 10.02 Waiver of Defaults...................................................................45
ARTICLE XI TERMINATION...........................................................................................45
Section 11.01 Termination..........................................................................45
Section 11.02 Termination Without Cause............................................................46
ARTICLE XII MISCELLANEOUS PROVISIONS.............................................................................46
Section 12.01 Successor to Servicer................................................................46
Section 12.02 Amendment............................................................................47
Section 12.03 Governing Law........................................................................47
Section 12.04 [Reserved];..........................................................................48
Section 12.05 Duration of Agreement................................................................48
Section 12.06 Notices..............................................................................48
Section 12.07 Severability of Provisions...........................................................49
Section 12.08 Relationship of Parties..............................................................49
Section 12.09 Execution; Successors and Assigns; Counterparts......................................49
Section 12.10 Recordation of Assignments of Mortgage...............................................49
Section 12.11 Assignment by Purchaser..............................................................50
Section 12.12 Solicitation of Mortgagor............................................................50
Section 12.13 Further Agreements...................................................................51
Section 12.14 Confidential Information.............................................................51
Section 12.15 Exhibits.............................................................................51
Section 12.16 General Interpretive Principles......................................................52
Section 12.17 Reproduction of Documents............................................................52
EXHIBITS
Exhibit A Form of Assignment, Assumption and Recognition Agreement
Exhibit B Mortgage Loan Documents
Exhibit C Custodial Agreement
Exhibit D-1 Form of Custodial Account Certification Notice
Exhibit D-2 Form of Escrow Account Certification Notice
Exhibit E Monthly Remittance Advice
Exhibit F Reserved
Exhibit G Form of Liquidation Report
Exhibit H Regulation AB Compliance Addendum
Exhibit I Special Foreclosure Rights Provisions
FLOW SERVICING AGREEMENT, dated as of November 1, 2006 (as amended,
restated, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), is made by and among LUMINENT MORTGAGE CAPITAL, INC., MERCURY
MORTGAGE FINANCE STATUTORY TRUST, MAIA MORTGAGE FINANCE STATUTORY TRUST, as
purchasers (collectively, the "Purchasers", and individually, as the purchaser
of any Mortgage Loan (defined below) hereunder, the "Purchaser"), AURORA LOAN
SERVICES LLC, as servicer (the "Servicer"), and XXXXXX CAPITAL, A DIVISION OF
XXXXXX HOLDINGS INC., as servicing rights owner (the "Servicing Rights Owner").
W I T N E S S E T H
WHEREAS, pursuant to the Sales Agreement, the Purchasers may purchase from
time to time from Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.
(in such capacity, the "Seller") first and second lien fixed and adjustable rate
mortgage loans in pools or groups of whole loans on various Closing Dates, with
the servicing retained by the Seller as Servicing Rights Owner (each, a
"Mortgage Loan Package"); and
WHEREAS, the Servicing Rights Owner has designated the Servicer to service
the Mortgage Loans in each Mortgage Loan Package, and the Servicer is willing to
do so for the benefit of the Purchaser, in accordance with the terms herein set
forth;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, each of the Purchasers and the Servicer agree
as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Sales Agreement. Whenever used herein, the
following words and phrases, unless the content otherwise requires, shall have
the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices and procedures (including collection procedures)
(i) of prudent mortgage lending institutions which service mortgage loans of the
same type as such Mortgage Loans in the jurisdiction where the related Mortgaged
Property is located, (ii) that comply with applicable federal, state and local
law and (iv) that, where applicable, are in accordance with the Xxxxxx Xxx
Guides in all material respects.
Adjustable Rate Mortgage Loan: A Mortgage Loan that contains a provision
pursuant to which the Mortgage Interest Rate is adjusted periodically.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, the date on
which the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note and Mortgage.
Agreement: As defined in the introductory paragraph hereof.
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ALTA: The American Land Title Association or any successor thereto.
Appraisal: A written appraisal of a Mortgaged Property made by a Qualified
Appraiser, which appraisal must be written, in form and substance, to Xxxxxx Xxx
and Xxxxxxx Mac standards, and satisfy the requirements of Title XI of the
Financial Institution, Reform, Recovery and Enforcement Act of 1989 and the
regulations promulgated thereunder, in effect as of the date of the appraisal.
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.
Approved Flood Policy Insurer: An insurer that meets the guidelines of the
Federal Insurance Administration.
Assignment, Assumption and Recognition Agreement: The agreement
substantially in the form of Exhibit A to this Agreement.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser.
BPO: A broker's price opinion with respect to a Mortgaged Property.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions in the State of New York,
Colorado, Nebraska or the state in which the Servicer's servicing operations are
located are authorized or obligated by law or executive order to be closed.
Buydown Agreement: An agreement which provides for the application of
Buydown Funds.
Buydown Funds: In respect of any Buydown Mortgage Loan, an amount held by
the servicer of such Buydown Mortgage Loan in order to enable the Mortgagor to
reduce the portion of each Monthly Payment required to be made from the
Mortgagor's funds.
Buydown Mortgage Loan: Any Mortgage Loan that is subject to a Buydown
Agreement.
Buydown Period: The period of time when a Buydown Agreement is in effect
with respect to a related Buydown Mortgage Loan.
Closing Date: With respect to a Mortgage Loan Package, the date or dates,
set forth in the related Memorandum of Sale, on which the Purchaser will
purchase and the Seller will sell the Mortgage Loans identified therein.
Code: The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
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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.
Consumer Information: Shall have the meaning set forth in the Interagency
Guidelines Establishing Standards for Safeguarding Customer Information
published in final form on February 1, 2001, 66 Fed. Reg. 8616 (as amended,
supplemented or restated).
Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.04.
Custodial Agreement: The agreement governing the retention of the originals
of each Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage Loan
Documents, which is annexed hereto as Exhibit C.
Custodian: The custodian under the Custodial Agreement, or its successor in
interest or assigns, or any successor to the Custodian under the Custodial
Agreement as provided therein.
Cut-off Date: With respect to each Mortgage Loan in a Mortgage Loan
Package, the date set forth in the related Purchase Price and Terms Letter.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: The fifteenth calendar day of each month (or if such
fifteenth day is not a Business Day, the next immediately preceding Business
Day).
DIF: The Deposit Insurance Fund, or any successor thereto.
Due Date: The first day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace. With respect to each Mortgage
Loan for which payment from the related Mortgagor is due on a day other than the
first day of the month, each such Mortgage Loan will be treated as if the
Monthly Payment is due on the first day of the month following the actual Due
Date.
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 on the first day of the month of the Remittance Date.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Servicer pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
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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 related
document.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 10.01.
Xxxxxx Xxx: The entity formerly known as Federal National Mortgage
Association (FNMA), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant to
Section 4.12.
First Lien Mortgage Loan: A Mortgage Loan secured by a first priority lien
on the related Mortgaged Property.
First Remittance Date: As identified in the applicable Memorandum of Sale.
Xxxxxxx Mac: The entity formerly known as the Federal Home Loan Mortgage
Corporation (FHLMC), or any successor thereto.
GAAP: With respect to the financial statements or other financial
information of any Person, generally accepted accounting principals in the
United States that are in effect from time to time.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note which is added to the
Index in order to determine the related Mortgage Interest Rate.
HUD: The United States Department of Housing and Urban Development or any
successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index set
forth in the related Mortgage Note for the purpose of calculating interest
therein.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan that requires only payments of
interest for a period of time specified in the related Mortgage Note.
Interim Funder: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the Person
named on the MERS System as the investor pursuant to the MERS Procedures Manual.
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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, discounted payoff, foreclosure sale or otherwise, or the
sale of an REO Property acquired in satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio of
the original loan amount of the Mortgage Loan at its origination (unless
otherwise indicated) to the lesser of (i) the Appraised Value of the Mortgaged
Property and (ii) if the Mortgage Loan was made to finance the acquisition of
the related Mortgaged Property, the purchase price of the Mortgaged Property.
Master Servicer: With respect to any Securitization Transaction, the
"master servicer," if any, identified in the related transaction documents.
Memorandum of Sale: With respect to each Mortgage Loan and the Mortgage
Loan Package, the memorandum of sale, substantially in the form of Exhibit E to
the Sales Agreement, confirming the sale by Seller and the purchase by Purchaser
of the Mortgage Loan Package on the related Closing Date.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: A Mortgage Loan for which (a) the Servicer
has designated or will designate MERS as, and has taken or will take such action
as is necessary to cause MERS to be, the mortgagee of record, as nominee for the
Servicer, in accordance with MERS Procedures Manual and (b) the Servicer has
designated or will designate the Purchaser as the Investor on the MERS System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be amended,
supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more particularly
described in the MERS Procedures Manual.
Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Servicer pursuant to Section 5.03 on the
Business Day immediately preceding the Remittance Date of the related month;
provided, for the purpose of clarification, that the Servicer shall not be
required to make a Monthly Advance for any payments of principal or interest
with respect to a reduction in the value of a Mortgage Note upon the order of a
bankruptcy court of competent jurisdiction.
Monthly Payment: With respect to any Mortgage Loan, the scheduled payment
of principal, if any, and interest payable by a Mortgagor under the related
Mortgage Note on each Due Date, which payment may change on any Adjustment Date
as provided in the related Mortgage Note and Mortgage for any Adjustable Rate
Mortgage Loan.
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Moody's: Xxxxx'x Investors Service, Inc.
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 or leasehold estate in real property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan, 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 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note in accordance with the provisions of the Mortgage Note net of any Relief
Act Reduction.
Mortgage Loan: An individual Mortgage Loan which is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule annexed to the related Memorandum
of Sale, which Mortgage Loan includes without limitation the Mortgage File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan, except for any and all Servicing Rights related thereto.
Mortgage Loan Documents: The documents referred to in Exhibit B.
Mortgage Loan Package: The pool or group of whole loans purchased on a
Closing Date, as described in the Mortgage Loan Schedule annexed to the related
Memorandum of Sale.
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
related Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package, the
schedule of Mortgage Loans annexed to the related Memorandum of Sale (and
delivered in electronic format to the Purchaser), such schedule setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package:
(1) the Servicer's Mortgage Loan number;
(2) Mortgagor's name (including any co-mortgagors);
(3) the full xxxxxx xxxxxxx, xxxx, xxxxx and zip code of the
Mortgaged Property;
(4) the Mortgagor's and co-mortgagor's FICO score;
(5) a code indicating whether the loan was originated through a
correspondent, retail, or wholesale channel;
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(6) the number of units for all Mortgaged Properties;
(7) [Reserved];
(8) a code indicating whether the Mortgaged Property is a single
family residence, two-family residence, three-family residence,
four-family residence, PUD, townhouse or condominium or secured
by Co-op Shares;
(9) the Mortgage Interest Rate as of the Cut-off Date;
(10) the Mortgage Interest Rate as of the date of origination;
(11) the current Mortgage Loan Remittance Rate;
(12) the Monthly Payment as of the date of origination;
(13) the Monthly Payment as of the Cut-off Date;
(14) the date of the Mortgage Note;
(15) the principal balance of the Mortgage Loan as of the Cut-off Date
after deduction of payments of principal due on or before the
Cut-off Date whether or not collected;
(16) the date on which the first Monthly Payment was due;
(17) the last payment date on which a payment was applied;
(18) the original term 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;
(19) the scheduled maturity date;
(20) the Loan-to-Value Ratio;
(21) a code indicating the type of Adjustable Rate Mortgage Loan (i.e.
3/1, 5/1, 7/1, etc.);
(22) the Gross Margin;
(23) the Index;
(24) Adjustment Dates and the next Adjustment Date;
(25) the lifetime Mortgage Interest Rate cap and Periodic Caps;
(26) a code indicating whether the Mortgage Loan is convertible or
not;
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(27) a code indicating the name of the issuer of the PMI Policy, if
any;
(28) a code indicating the lien status of the Mortgage Loan;
(29) a code indicating whether the Mortgage Loan is a Buydown Mortgage
Loan;
(30) a code indicating whether such Mortgage Loan provides for a
Prepayment Penalty and, if applicable, the Prepayment Penalty
period for such loan;
(31) a code indicating whether the Mortgaged Property is
owner-occupied or investor property;
(32) the documentation level (full, alternative, limited);
(33) loan purpose;
(34) the Appraised Value;
(35) the applicable Servicing Fee Rate;
(36) a code indicating whether the Mortgage Loan is a "high cost" (or
similarly classified) loan under applicable federal, state and
local laws;
(37) the debt-to-income ratio of the Mortgagor; and
(38) delinquency counter.
With respect to the Mortgage Loans in the aggregate in the related
Mortgage Loan Package, the respective Mortgage Loan Schedule shall set
forth the following information, as of the Cut-Off Date:
(i) the number of Mortgage Loans;
(ii) the current aggregate outstanding principal balance of the
Mortgage Loans;
(iii) the weighted average Mortgage Interest Rate of the Mortgage
Loans;
(iv) the weighted average months to 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, including any improvements, securing
repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
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Nonrecoverable Advance: Any Monthly Advance or Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property that,
in the good faith business judgment of the Servicer, will not or, in the case of
a proposed Monthly Advance or Servicing Advance, would not ultimately be
recoverable from collections on such Mortgage Loan, Monthly Payments, Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds or other amounts
received with respect to such Mortgage Loan or REO Property as provided herein.
OCC: The Office of the Comptroller of the Currency.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President, a Senior Vice President, a
First Vice President, a Vice President, Assistant Vice President, Treasurer,
Secretary, Assistant Treasurer, Assistant Secretary or another authorized
signatory of the Servicer.
Opinion of Counsel: A written opinion of counsel, who may be an employee of
the Servicer, reasonably acceptable to the Purchaser.
Payment Adjustment Date: With respect to each Adjustable Rate Mortgage Loan
or Interest Only Mortgage Loan, the date on which Monthly Payments shall be
adjusted. With respect to each Adjustable Rate Mortgage Loan, the Payment
Adjustment Date shall occur on the date which is 11 months from the first
payment date for the Mortgage Loan, unless otherwise specified in the Mortgage
Note, and on each anniversary of such first Payment Adjustment Date.
Periodic Interest Rate Cap: As to each Adjustable Rate Mortgage Loan, the
maximum increase or decrease in the Mortgage Interest Rate on any Adjustment
Date pursuant to the terms of the Mortgage Note.
Permitted Investments: Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued or managed by the Servicer or any of its affiliates or for which
an affiliate of the Servicer serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by or federal funds sold by any depository
institution or trust company incorporated under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the
time of such investment or contractual commitment providing for such
investment, such depository institution or trust company or its
ultimate parent has a short-term uninsured debt rating in the highest
available rating category of each Rating Agency and provided that each
such investment has an original maturity of no more than 365 days; and
provided further that, if the only Rating Agency is S&P and if the
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depository or trust company is a principal subsidiary of a bank
holding company and the debt obligations of such subsidiary are not
separately rated, the applicable rating shall be that of the bank
holding company; and, provided further that, if the original maturity
of such short-term obligations of a domestic branch of a foreign
depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of S&P
if S&P is the Rating Agency; and (B) any other demand or time deposit
or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into
with a depository institution or trust company (acting as principal)
rated F-1+ or higher by Fitch, rated A-1+ by S&P and rated A2 or
higher by Xxxxx'x;
(iv) securities bearing interest or sold at a discount that are issued
by any corporation incorporated under the laws of the United States of
America or any State thereof and that are rated by each Rating Agency
in its highest long-term unsecured rating category at the time of such
investment or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency in its highest short-term
unsecured debt rating available at the time of such investment; and
(vi) units of taxable money market funds (which may be 12b-1 funds, as
contemplated under the rules promulgated by the Securities and
Exchange Commission under the Investment Company Act of 1940), which
funds have the highest rating available for such securities from the
Rating Agencies or which have been designated in writing by the Rating
Agencies as Permitted Investments;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
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.
Prepayment Period: With respect to any Remittance Date, the calendar month
preceding such Remittance Date.
Prepayment Interest Shortfall: As to any Remittance Date and each Mortgage
Loan subject to a Principal Prepayment received during the calendar month
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preceding such Remittance Date, the amount, if any, by which one month's
interest at the related Mortgage Loan Remittance Rate on such Principal
Prepayment exceeds the amount of interest paid in connection with such Principal
Prepayment. In no event shall the aggregate Prepayment Interest Shortfall for a
month with respect to a Mortgage Loan Package exceed the Servicing Fee for such
month with respect to such Mortgage Loan Package.
Prepayment Premium: Payments received on a Mortgage Loan as a result of a
Principal Prepayment hereon, not otherwise due thereon in respect of principal
or interest, which, unless otherwise set forth in the Purchase Price and Terms
Letter, shall be retained by the Servicer.
Prime Rate: With respect to any date of determination, the prime rate
published in The Wall Street Journal on such date.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Premium thereon (to the extent the Purchaser is entitled to such
pursuant to the related Purchase Price and Terms Letter) and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser to the
Servicer for the Mortgage Loans.
Purchaser(s): As defined in the introductory paragraph hereof.
Qualified Appraiser: An appraiser who had no interest, direct or indirect
in the Mortgaged Property or in any loan made on the security thereof, and whose
compensation was not affected by the approval or disapproval of the Mortgage
Loan, and such appraiser and the appraisal made by such appraiser both satisfied
the requirements of Title XI of the Financial Institution Reform, Recovery, and
Enforcement Act and the regulations promulgated thereunder, all as in effect on
the date the Mortgage Loan was originated.
Qualified Depository: Any of (i) a depository the accounts of which are
insured by the FDIC and the debt obligations of which are rated AA (or its
equivalent) or better by each Rating Agency; or (ii) the corporate trust
department of any bank the debt obligations of which are rated at least A-1 or
its equivalent by each Rating Agency.
Qualified Insurer: (i) With respect to any PMI Policy, 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 and (ii) with respect to any other insurance policy, an insurance
company (i) duly authorized and licensed where required by law to transact and
(ii) approved pursuant to the Underwriting Guidelines without regard to any
exceptions thereto.
Rating Agency: Each of Fitch, Inc., Xxxxx'x and S&P, or any successor
thereto.
Reconstitution Agreement: As defined in Section 9.01.
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Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement shall be removed from this Agreement and
reconstituted as part of a Securitization Transaction or Whole Loan Transfer
pursuant to Section 9.01 hereof. The Reconstitution Date shall be such date
which the Purchaser and the subsequent purchaser or transferee of the related
Mortgage Loans shall designate. On such date, except as provided in this
Agreement, the Mortgage Loans transferred shall cease to be covered by this
Agreement and the Servicer's servicing responsibilities shall cease under this
Agreement with respect to the related transferred Mortgage Loans.
Regulation AB Compliance Addendum: Exhibit H attached hereto and
incorporated herein by reference thereto.
Relief Act Reduction: With respect to any Mortgage Loan as to which there
has been a reduction in the amount of interest collectible thereon as a result
of the application of the Servicemembers Civil Relief Act, as amended, or any
similar state or local law, any amount by which interest collectible on such
Mortgage Loan for the Due Date in the related Due Period is less than the
interest accrued thereon for the applicable one-month period at the Mortgage
Interest Rate without giving effect to such reduction.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately succeeding such 18th day) of any month,
beginning with the First Remittance Date.
REO Disposition: The final sale or other disposition by the Servicer of any
REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Servicer on behalf of
the Purchaser through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.
Repurchase Price: With respect to any Mortgage Loan, the Stated Principal
Balance of the Mortgage Loan plus interest on such Stated Principal Balance at
the Mortgage Loan Remittance Rate from the date on which interest has last been
paid and distributed to the Purchaser to the last day of the month in which such
repurchase occurs, less amounts received or advanced in respect of such
repurchased Mortgage Loan which are being held in the Custodial Account for
distribution in the month of repurchase plus the amount of any advances owed to
any servicer.
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Sales Agreement: The Agreement dated as of November 1, 2006, by and among
the Seller and the Purchasers.
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies., Inc.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second priority
lien on the related Mortgaged Property.
Securities Act of 1933 or the 1933 Act: The Securities Act of 1933, as
amended.
Securitization Transaction: Any transaction involving either (1) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.
Servicer: As defined in the introductory paragraph hereof.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses (including reasonable attorneys' fees and disbursements)
other than Monthly Advances incurred in the performance by the Servicer 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, administrative or judicial proceedings, including bankruptcies and
foreclosures, (c) the management and liquidation of any REO Property, (d)
compliance with the obligations under Section 4.08, (e) any losses sustained by
the Servicer with respect to the liquidation of the Mortgaged Property and (f)
compliance with the obligations pursuant to the provisions of the Xxxxxx Xxx
Guides.
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual
fee the Purchaser shall pay to the Servicer, which shall, for a period of one
full month, be equal to one-twelfth of the product of (a) the applicable
Servicing Fee Rate and (b) the Stated Principal Balance of such Mortgage Loan.
Such fee shall be payable monthly, computed on the basis of the same principal
amount and period respecting which any related interest payment on a Mortgage
Loan is computed. The obligation of the 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,
Condemnation Proceeds and Insurance Proceeds to the extent permitted by Section
4.05) of such Monthly Payment collected by the Servicer, or as otherwise
provided under Section 4.05.
Servicing Fee Rate: With respect to each Mortgage Loan, the per annum rate
specified for such Mortgage Loan set forth in the Memorandum of Sale.
Servicing File: With respect to each Mortgage Loan, the file retained by
the Servicer consisting of originals or copies, which may be imaged copies, of
all documents in the Mortgage File which are not delivered to the Custodian and
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copies of the Mortgage Loan Documents listed in the Custodial Agreement the
originals of which are delivered to the Custodian pursuant to Section 2.02.
Servicing Officer: Any officer of the Servicer involved in or responsible
for the administration and servicing of the Mortgage Loans whose name appears on
a list of servicing officers furnished by the Servicer to the Purchaser upon
request, as such list may from time to time be amended.
Servicing Rights: With respect to each Mortgage Loan, any of the following:
(a) all rights to service the Mortgage Loan; (b) any payments or monies payable
or received or receivable for servicing the Mortgage Loan, (c) any late fees,
assumption fees, penalties or similar payments with respect to the Mortgage; (d)
all agreements or documents creating, defining or evidencing any such servicing
rights and all rights of the Servicer thereunder; (e) Escrow Payments or other
similar payments with respect to the Mortgage Loan and any amounts actually
collected with respect thereto; (f) all accounts and other rights to payment
related to any of the property described in this paragraph; (g) possession and
use of any and all Servicing Flies pertaining to the Mortgage Loan or pertaining
to the past, present or prospective servicing of the Mortgage Loan; and (h) all
rights, powers and privileges incident to any of the forgoing.
Servicing Rights Owner: As defined in the introductory paragraph hereof.
Stated Principal Balance: As to each Mortgage Loan as to any date of
determination, (i) the principal balance of the Mortgage Loan at the related
Cut-off Date after giving effect to the principal portion of any Monthly
Payments due on or before such date, whether or not received, as well as any
Principal Prepayments received before such date, minus (ii) all amounts
previously distributed to the Purchaser with respect to the Mortgage Loan
representing payments or recoveries of principal, or advances in lieu thereof.
Subservicer: Any Person with which the Servicer has entered into a
Subservicing Agreement, provided that such Person is a Xxxxxx Xxx or Xxxxxxx Mac
approved seller/servicer in good standing and no event has occurred, including
but not limited to a change in insurance coverage, that would make it unable to
comply with the eligibility for seller/servicers imposed by Xxxxxx Mae or
Xxxxxxx Mac.
Subservicing Agreement: Any subservicing agreement (which, in the event the
Subservicer is an affiliate of the Servicer, need not be in writing) between the
Servicer and any Subservicer relating to servicing and/or administration of
certain Mortgage Loans as provided in Section 4.01(b).
Underwriting Guidelines: The underwriting guidelines pursuant to which one
or more of the Mortgage Loans were originated, as attached as an exhibit to the
Memorandum of Sale. The exception policies of the Servicer shall be incorporated
into and considered a part of the Underwriting Guidelines.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans, other than a Securitization Transaction.
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ARTICLE II
POSSESSION OF MORTGAGE FILES; MAINTENANCE OF SERVICING FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS
Section 2.01 Possession of Mortgage Files; Maintenance of Servicing Files.
(a) The contents of each Servicing File are and shall be held in trust by
the Servicer for the benefit of the Purchaser as the owner thereof. The Servicer
shall take all necessary steps to ensure that the documents required to be
included in the Servicing File are complete and shall maintain the Servicing
File as required by this Agreement, Accepted Servicing Practices and applicable
law. Possession of each Servicing File by the Servicer is at the will of the
Purchaser for the sole purpose of servicing the related Mortgage Loan, and such
retention and possession by the Servicer is in a custodial capacity only. The
ownership of all records and documents with respect to the Mortgage Loans
prepared by or which come into the possession of the Servicer shall vest
immediately in the Purchaser and shall be retained and maintained by the
Servicer, in trust, at the will of the Purchaser and only in such custodial
capacity. All such records and documents, except for collateral documents such
as the Mortgage and the Mortgage Note, may be stored by the Servicer as imaged
files. The Servicer shall release its custody of the contents of any Servicing
File only in accordance with written instructions from the Purchaser or the
Servicing Rights Owner.
(b) The Servicer shall keep books and records in which, subject to such
reasonable regulations as it may prescribe, the Servicer 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
Servicer 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 and 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 Servicer unless such transferee shall agree in
writing to be bound by the terms of this Agreement and an Assignment, Assumption
and Recognition Agreement. Subject to Article VI of this Agreement, if the
Servicer receives written notification of a transfer, the Servicer's duties to
remit and report to the related assignee pursuant to Article V shall begin with
the next Due Period; provided that such notification shall include all
information reasonably necessary relating to such transfer to facilitate the
servicing for the related assignee.
(c) The Servicer shall maintain with respect to each Mortgage Loan and
shall make available for inspection, during regular business hours on a Business
Day, by the Purchaser or its designee, at the expense of the Purchaser, upon
reasonable request and reasonable advance notice, the related Servicing File
during the time that Purchaser retains ownership of a Mortgage Loan and
thereafter in accordance with applicable laws and regulations.
Section 2.02 Custodial Agreement; Delivery of Documents.
(a) If the Seller repurchases a Mortgage Loan that is a MERS Designated
Mortgage Loan, the Servicer shall either (i) cause MERS to execute and deliver
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an Assignment of Mortgage in recordable form to transfer the Mortgage from MERS
to the Servicer and shall cause such Mortgage to be removed from registration on
the MERS system in accordance with MERS' rules and regulations or (ii) cause
MERS to designate on the MERS System the Seller or its designee as the
beneficial holder of such Mortgage Loan.
(b) The Servicer shall be responsible for recording the Assignments of
Mortgage, if necessary, in accordance with Accepted Servicing Practices and this
Agreement. The Purchaser shall be responsible for the initial and on-going fees
and expenses of the Custodian.
(c) The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with Section 4.01 or 6.01 within ten
Business Days of their execution, provided, however, that the Servicer shall
provide the Custodian with a copy of any such document submitted for recordation
within ten Business Days after its execution, and shall provide the original
thereof upon receipt following its recordation. If such copy has not been
returned by the applicable recording office within 360 days of its submission,
upon request, the Servicer shall notify the requesting party of such delinquency
and identify the actions that the Servicer has taken to obtain such copy and
shall, thereafter, continue to use such commercially reasonable best efforts to
obtain such copy.
Section 2.03 Closing Conditions.
This Agreement will be effective, as to any Mortgage Loan Package, upon the
respective Closing Date for such Mortgage Loans Package
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.01 Servicer Representations and Warranties.
The Servicer hereby represents and warrants to the Purchaser that, as of
the related Closing Date:
(a) Due Organization and Authority. The Servicer is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware 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 Servicer; the Servicer has the full company 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 of
transfer to be delivered pursuant to this Agreement) by the Servicer 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 Servicer; and all requisite company action has been taken by
the Servicer to make this Agreement valid and binding upon the Servicer in
accordance with its terms.
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(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Servicer.
(c) No Conflicts. Neither the execution and delivery of this Agreement, the
acquisition of the Mortgage Loans by the Servicer, the sale of the Mortgage
Loans to the Purchaser or the transactions contemplated hereby, 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 organizational documents
of the Servicer, or constitute a default or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Servicer or its
property is subject.
(d) Ability to Service. The Servicer is an approved seller/servicer of
conventional residential mortgage loans for Xxxxxx Mae or Xxxxxxx Mac, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The Servicer
is in good standing to service mortgage loans for the Xxxxxx Mae or Xxxxxxx Mac.
(e) Ability to Perform. The Servicer 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.
(f) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or to its knowledge threatened against the Servicer 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 Servicer, or in any material impairment of the right or ability of
the Servicer to carry on its business substantially as now conducted, or in any
material liability on the part of the Servicer, or which would draw into
question the validity of this Agreement or of any action taken or to be
contemplated herein, or which would be likely to impair materially the ability
of the Servicer to perform under the terms of this Agreement.
(g) 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 Servicer of or compliance by the Servicer with this
Agreement or the sale of the Mortgage Loans as evidenced by the consummation of
the transactions contemplated by this Agreement, or if required, such consent,
approval, authorization or order has been obtained prior to the related Closing
Date.
(h) MERS. The Servicer is in good standing, and will comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the MERS Designated Mortgage Loans.
Section 3.02 Purchaser Representations.
Each Purchaser hereby represents and warrants to the Servicer that, as of
the related Closing Date:
(a) Due Organization and Authority. The Purchaser is either a Maryland
corporation or Maryland business trust, in each case duly organized, validly
existing and in good standing 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
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require licensing or qualification in order to conduct business of the type
conducted by the Purchaser; each Purchaser 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 of transfer to be delivered pursuant to this Agreement) by such
Purchaser and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of each Purchaser; and all requisite entity action has
been taken by the Purchaser to make this Agreement valid and binding upon such
Purchaser in accordance with its terms.
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of each
Purchaser.
(c) No Conflicts. Neither the execution and delivery of this Agreement, the
acquisition of the Mortgage Loans by a Purchaser, the sale of the Mortgage Loans
to a Purchaser or the transactions contemplated hereby, 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 organizational documents of such Purchaser,
or constitute a default or result in the violation of any law, rule, regulation,
order, judgment or decree to which such Purchaser or its property is subject.
(d) Ability to Perform. The Purchaser 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.
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or to its knowledge threatened against the Purchaser
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 Purchaser, or in any material impairment of the
right or ability of the Purchaser to carry on its business substantially as now
conducted, or in any material liability on the part of the Purchaser, or which
would draw into question the validity of this Agreement or the Mortgage Loans or
of any action taken or to be contemplated herein, or which would be likely to
impair materially the ability of the Purchaser to perform under the terms of
this Agreement.
(f) 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 Purchaser of or compliance by the Purchaser with this
Agreement or the sale of the Mortgage Loans as evidenced by the consummation of
the transactions contemplated by this Agreement, or if required, such consent,
approval, authorization or order has been obtained prior to the related Closing
Date.
(g) No Brokers' Fees. No Purchaser has dealt with any broker, investment
banker, agent or other Person that may be entitled to any commission or
compensation in the connection with the sale of the Mortgage Loans.
(h) Ownership. As of the related Closing Date, the Purchaser is the sole
owner and holder of the Mortgage Loans, except for the Servicing Rights.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Servicer to Act as Servicer.
(a) The Servicer, as an independent contractor, shall service and
administer the Mortgage Loans, all in accordance with the terms of this
Agreement (including, without limitation, the provisions set forth in the
Regulation AB Compliance Addendum attached as Exhibit H hereto, as applicable),
Accepted Servicing Practices, applicable law and the terms of the Mortgage Notes
and Mortgages. In connection with such servicing and administration, the
Servicer shall have full power and authority, acting alone or through
Subservicers, to do or cause to be done any and all things in connection with
such servicing and administration which the Servicer may deem necessary or
desirable, including, without limitation, the power and authority (1) to execute
and deliver, on behalf of the Purchaser, customary consents or waivers and other
instruments and documents, (2) to consent, with respect to the Mortgage Loans it
services, to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages (but only in the manner provided in this Agreement),
(3) to collect any Insurance Proceeds and other Liquidation Proceeds relating to
the Mortgage Loans it services, and (4) to effectuate foreclosure or other
conversion of the ownership of the Mortgaged Property securing any Mortgage Loan
it services. The Servicer shall represent and protect the interests of the
Purchaser in the same manner as it protects its own interests in mortgage loans
in its own portfolio in any claim, proceeding or litigation regarding a Mortgage
Loan and shall not make or permit any modification, waiver or amendment of any
term of any Mortgage Loan, except as provided pursuant to Section 4.22. Without
limiting the generality of the foregoing, the Servicer 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, chargeoff, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties. If
reasonably required by the Servicer, the Purchaser shall furnish the Servicer
with any powers of attorney and other documents necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties under
this Agreement.
(b) The Servicer may arrange for the subservicing of any Mortgage Loan it
services by a Subservicer pursuant to a Subservicing Agreement; provided,
however, that such subservicing arrangement and the terms of the related
Subservicing Agreement must provide for the servicing of such Mortgage Loan in a
manner consistent with the servicing arrangements contemplated hereunder. The
Servicer shall be solely liable for all fees owed to the Subservicer under the
Subservicing Agreement, regardless whether the Servicer's compensation hereunder
is adequate to pay such fees. Notwithstanding the provisions of any Subservicing
Agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Servicer and a Subservicer or reference to actions
taken through a Subservicer or otherwise, the Servicer shall remain obligated
and liable to the Purchaser for the servicing and administration of the Mortgage
Loans it services in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such Subservicing
Agreements or arrangements or by virtue of indemnification from the Subservicer
and to the same extent and under the same terms and conditions as if the
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Servicer alone were servicing and administering those Mortgage Loans. All
actions of each Subservicer performed pursuant to the related Subservicing
Agreement shall be performed as agent of the Servicer with the same force and
effect as if performed directly by the Servicer. For purposes of this Agreement,
the Servicer shall be deemed to have received any collections, recoveries or
payments with respect to the Mortgage Loans it services that are received by a
Subservicer regardless of whether such payments are remitted by the Subservicer
to the Servicer. Any Subservicing Agreement entered into by the Servicer shall
provide that it may be assumed or terminated by the Purchaser at any time, if
the Purchaser has assumed the duties of the Servicer, or by any successor
servicer, at the Purchaser's or successor servicer's option, as applicable,
without cost or obligation to the assuming or terminating party or its assigns.
Any Subservicing Agreement, and any other transactions or services relating to
the Mortgage Loans involving a Subservicer, shall be deemed to be between the
Servicer and such Subservicer alone, and the Purchaser shall not be deemed
parties thereto and shall have no claims or rights of action against, rights,
obligations, duties or liabilities to or with respect to the Subservicer or its
officers, directors or employees, except as set forth in Section 4.01(a).
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not postponed
pursuant to Section 4.01 is not paid when the same becomes due and payable, or
in the event the Mortgagor fails to perform any other covenant or obligation
under the Mortgage Loan and such failure continues beyond any applicable grace
period, the Servicer shall take such action as (1) the Servicer 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 Servicer shall determine prudently to be in the best interest
of the Purchaser, and (4) is consistent with any related PMI Policy. The
Servicer, on behalf of the Purchaser, may also, in its sole and exclusive
discretion, as an alternative to foreclosure, sell defaulted Mortgage Loans at
fair market value to third-parties, if the Servicer believes, in its sole and
exclusive discretion, that such sale would maximize proceeds to the Purchaser
(on a present value basis) with respect to each such Mortgage Loan.
Notwithstanding any other provision in this Agreement or otherwise, the Servicer
shall have no liability to the Purchaser or any other party for the Servicer's
determination hereunder. Subject to the requirements in this Agreement to the
contrary, foreclosure or comparable proceedings shall be initiated within 120
days after a payment default (without regard to any grace periods) with respect
to Mortgaged Properties for which no satisfactory arrangements can be made for
collection of delinquent payments unless prevented by statutory limitations or
states whose bankruptcy laws prohibit such actions within such timeframe;
provided that the Servicer shall not be required to initiate foreclosure or
comparable proceedings if it determines, in its good faith reasonable judgment,
that such initiation would not be in the best interest of the Purchaser. The
Servicer shall use its commercially reasonable best efforts to realize upon
defaulted Mortgage Loans in such manner as will maximize the receipt of
principal and interest by the Purchaser, taking into account, among other
things, the timing of foreclosure proceedings. In such connection, the Servicer
shall from its own funds make all necessary and proper Servicing Advances,
provided, however, that the Servicer 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
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through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or
through Insurance Proceeds (respecting which it shall have similar priority).
Notwithstanding anything to the contrary contained in this Agreement, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has reasonable cause to believe that a Mortgaged Property
is contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Servicer shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser shall
determine how the Servicer shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Purchaser directs the Servicer to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all reasonable costs associated with such foreclosure or acceptance of a
deed in lieu of foreclosure and any related environmental clean up costs, as
applicable, from the related Liquidation Proceeds, and/or Insurance Proceeds, or
if the Liquidation Proceeds and/or Insurance Proceeds are insufficient to fully
reimburse the Servicer, the Servicer shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event
the Purchaser directs the Servicer not to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all
Servicing Advances made with respect to the related Mortgaged Property from the
Custodial Account pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, in accordance with this Agreement and Accepted
Servicing Practices, the Servicer 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 Loan and the 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. Notwithstanding anything herein to the contrary,
the Servicer shall have no obligation to collect, or make payments to the
Purchaser with respect to, any Prepayment Premiums, late fees, fees or other
items which are prohibited under any applicable law, rule, regulation or order
of any governmental authority.
The Servicer shall not be required to institute or join in litigation with
respect to collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law.
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Section 4.04 Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts
titled "[ - ], in trust for [Name of the Purchaser] and/or subsequent purchasers
of Mortgage Loans." The Custodial Account shall be established with a Qualified
Depository. Within ten days of written request by the Purchaser, the Servicer
shall provide the Purchaser with written confirmation of the existence of such
Custodial Account substantially in the form of the certification attached hereto
as Exhibit D-1. Any funds deposited in the Custodial Account shall at all times
be insured to the fullest extent allowed by applicable law. Funds deposited in
the Custodial Account may be drawn on by the Servicer in accordance with Section
4.05.
The Servicer shall deposit in the Custodial Account within two Business
Days of Servicer's receipt, and retain therein, the following collections
received by the Servicer and payments made by the Servicer after the related
Cut-off Date (other than payments of principal and interest due on or before the
related Cut-off Date) or received by the Servicer prior to the related Cut-off
Date but allocable to a period subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans, including
all Principal Prepayments (including, to the extent provided for in
the related Purchase Price and Terms Letter, Prepayment Premiums paid
by the Mortgagor or by the Servicer pursuant to Section 4.24 of this
Agreement);
(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 4.10 (other than proceeds to be held in the Escrow
Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with Section
4.14), Section 4.11 and Section 4.15;
(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 4.14;
(vi) any amounts required to be deposited in the Custodial Account pursuant
to Section 4.01, 5.01, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any Mortgage
Loan pursuant to Section 3.03;
(viii) with respect to each Principal Prepayment, an amount equal to the
Prepayment Interest Shortfall;
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(ix) any amounts required to be deposited by the Servicer pursuant to
Section 4.10 in connection with the deductible clause in any blanket
hazard insurance policy; and
(x) any amounts received with respect to or related to any REO Property
and all REO Disposition Proceeds pursuant to Section 4.16.
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 late payment charges, assumption
fees and other ancillary income (other than Prepayment Premiums, to the extent
provided for in the related Purchase Price and Terms Letter), may be retained by
the Servicer as additional servicing compensation and need not be deposited by
the Servicer 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 Servicer and the Servicer shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05. Additionally, any
other benefit derived from the Custodial Account associated with the receipt,
disbursement and accumulation of principal, interest, taxes, hazard insurance,
mortgage insurance, etc. shall accrue to the Servicer. The Servicer shall
maintain adequate records with respect to all deposits and withdrawals made
pursuant to this Section 4.04 and Section 4.05. All funds required to be
deposited in the Custodial Account shall be held in trust for the Purchaser
until withdrawn in accordance with Section 4.05.
The Servicer may direct any depository institution which holds the
Custodial Account to invest the funds in the Custodial Account in one or more
Permitted Investments bearing interest. All Permitted Investments shall mature
or be subject to redemption or withdrawal no later than one Business Day prior
to the next succeeding Remittance Date (except that if such Permitted Investment
is an obligation of a Qualified Depository that maintains the Custodial Account,
then such Permitted Investment shall mature not later than such applicable
Remittance Date). All such Permitted Investments shall be held to maturity,
unless payable on demand. In the event amounts on deposit in the Custodial
Account are at any time invested in a Permitted Investment payable on demand,
the Servicer shall:
(a) consistent with any notice required to be given thereunder, demand
that payment thereon be made on the last day such Permitted Investment
may otherwise mature hereunder in an amount equal to the lesser of (1)
all amounts then payable thereunder and (2) the amount required to be
withdrawn on such date; and
(b) demand payment of all amounts due thereunder promptly upon
determination by the Servicer or notice from the Purchaser that such
Permitted Investment would not constitute a Permitted Investment in
respect of funds thereafter on deposit in the Custodial Account.
All income and gain realized from investment of funds deposited in the
Custodial Account shall be for the benefit of the Servicer and shall be subject
to its withdrawal in accordance with Section 4.05. The Servicer shall deposit in
the Custodial Account the amount of any loss incurred in respect of any
Permitted Investment immediately upon realization of such loss.
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Section 4.05 Permitted Withdrawals From Custodial Account.
The Servicer 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 5.01;
(ii) in the event the Servicer has elected not to retain the Servicing Fee
out of any Mortgagor payments on account of interest or other recovery
of interest with respect to a particular Mortgage Loan (including late
collections of interest on such Mortgage Loan, or interest portions of
Insurance Proceeds or Liquidation Proceeds) prior to the deposit of
such Mortgagor payment or recovery in the Custodial Account, to pay to
itself the related Servicing Fee from all such Mortgagor payments on
account of interest or other such recovery for interest with respect
to that Mortgage Loan;
(iii) to reimburse itself for Monthly Advances of the Servicer's funds made
pursuant to Section 5.03, the Servicer's right to reimburse itself
pursuant to this subclause (ii) with respect to any Monthly Advance
(other than Nonrecoverable Advances) being limited to amounts received
on the related Mortgage Loan which represent late payments of
principal and/or interest respecting which any such advance was made,
it being understood that, in the case of any such reimbursement, the
Servicer'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 3.04 of the Sales Agreement or the
Servicer is required to repurchase a Mortgage Loan pursuant to Section
6.02 hereof, the Servicer's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price
pursuant and all other amounts required to be paid to the Purchaser
with respect to such Mortgage Loan;
(iv) to reimburse itself for unreimbursed Monthly Advances and Servicing
Advances, and for any unpaid Servicing Fees, the Servicer's right to
reimburse itself pursuant to this subclause (iii) with respect to any
Mortgage Loan (other than Nonrecoverable Advances) being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Servicer
from the Mortgagor or otherwise relating to the Mortgage Loan, it
being understood that, in the case of any such reimbursement, the
Servicer'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 3.04 of the Sales Agreement or the
Servicer is required to repurchase a Mortgage Loan pursuant to Section
6.02 hereof, the Servicer'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;
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(v) to reimburse itself for Nonrecoverable Advances, it being understood
that, in the case of any such reimbursements, the Servicer's right
thereto shall be prior to the rights of the Purchaser;
(vi) to pay itself interest on funds deposited in the Custodial Account;
(vii) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 8.01;
(viii) to pay any amount required to be paid pursuant to Section 4.16
related to any REO Property, it being understood that, in the case of
any such expenditure or withdrawal related to a particular REO
Property, the amount of such expenditure or withdrawal from the
Custodial Account shall be limited to amounts on deposit in the
Custodial Account with respect to the related REO Property and that
the foregoing shall not limit Servicing Advances with respect to such
REO Property;
(ix) to remove funds inadvertently placed in the Custodial Account by the
Servicer;
(x) to transfer funds invest funds in certain Permitted Investments or
with another Qualified Depository; and
(xi) to clear and terminate the Custodial Account upon the termination of
this Agreement.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Servicer shall withdraw all funds from the Custodial
Account except for those amounts which, pursuant to Section 5.01, the Servicer
is not obligated to remit on such Remittance Date. The Servicer may use such
withdrawn funds only for the purposes described in this Section 4.05.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Custodial Account.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Servicer 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, titled, "[ - ], in trust for [Name of the Purchaser]
and/or subsequent purchasers of Residential Mortgage Loans, and various
Mortgagors - T & I." The Escrow Accounts shall be established with a Qualified
Depository, in a manner which shall provide maximum available insurance
thereunder. Within ten days of written request by the Purchaser, the Servicer
shall provide the Purchaser with written confirmation of the existence of the
Escrow Account substantially in the form of the certification attached hereto as
Exhibit D-2. Funds deposited in the Escrow Account may be drawn on by the
Servicer in accordance with Section 4.07.
The Servicer shall deposit in the Escrow Account or Accounts, within two
Business Days after the Servicer's receipt, and retain therein:
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(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; and
(iii) all payments on account of Buydown Funds.
The Servicer shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
4.07. The Servicer may direct any depository institution which holds the Escrow
Account to invest the funds in the Escrow Account in one or more Permitted
Investments bearing interest. The Servicer shall be 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. Additionally, any other benefit derived from the Escrow Account
associated with the receipt, disbursement and accumulation of taxes, hazard
insurance, mortgage insurance, etc. shall accrue to the Servicer. To the extent
required by law, the Servicer 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 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Servicer
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 Servicer for any Servicing Advances made by the
Servicer pursuant to Section 4.08 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 for 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 the restoration or repair of the Mortgaged Property
in accordance with the procedures outlined in Section 4.14;
(vi) to pay to the Servicer, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
(vii) to remove funds inadvertently placed in the Escrow Account by the
Servicer;
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(viii) to remit to the Purchaser payments on account of Buydown Funds as
applicable; and
(ix) to clear and terminate the Escrow Account on the termination of this
Agreement.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan for which the Mortgagor is required to
escrow Escrow Payments with the Servicer, the Servicer 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 Servicer in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage. In such instances, the Servicer assumes full
responsibility for the timely payment of all such bills and shall effect timely
payment of all such charges irrespective of each Mortgagor's faithful
performance in the payment of same of the making of the Escrow Payments, and the
Servicer shall make advances from its own funds to effect such payments, which
advances shall constitute Servicing Advances hereunder; provided that the
Servicer shall be required to so advance only to the extent that the Servicer,
in its good faith judgment, believes the Servicing Advance to be recoverable
from Insurance Proceeds or Liquidation Proceeds or otherwise. The costs incurred
by the Servicer, if any, in effecting the timely payments of taxes and
assessments on the Mortgaged Properties and related insurance premiums shall not
be added to the Stated Principal Balances of the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so permit.
With regard to any Second Lien Mortgage Loans for which the Mortgagor is
not required to escrow Escrow Payments with the Servicer, the Servicer shall use
reasonable efforts consistent with Accepted Servicing Practices to determine
that any such payments are made by the Mortgagor and that the Mortgaged Property
is not lost to a tax lien as a result of nonpayment and that such Mortgage is
not left uninsured and shall make advances from its own funds to effect any such
delinquent payments to avoid the lapse of insurance coverage on the Mortgaged
Property or to avoid the imposition of a tax lien.
Section 4.09 Transfer of Accounts.
The Servicer may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository from time to time; provided that the Servicer
shall give written notice to the Purchaser of any proposed change of the
location of either Account not later than ten calendar days after such transfer
substantially in the form of the certification attached hereto as Exhibit D-1 or
D-2, as applicable.
Section 4.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan, with a
Qualified Insurer, fire and hazard insurance of extended coverage on the related
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Mortgaged Property, in an amount which is at least equal to the greater of (i)
the then outstanding principal balance of the Mortgage Loan and (ii) an amount
such that the proceeds thereof shall be sufficient to prevent the Mortgagor or
the loss payee from becoming a co-insurer. It is understood and agreed that no
earthquake or other additional insurance is required to be maintained by the
Servicer in connection with any Mortgage Loan or Mortgaged Property, other than
pursuant to applicable laws and regulations that require the Servicer to cause
such additional insurance to be maintained. In the event a hazard insurance
policy shall be in danger of being terminated, the Servicer shall notify the
related Mortgagor, and shall use its commercially reasonable best efforts, as
permitted by applicable law, to obtain from another qualified insurer a
replacement hazard insurance policy substantially and materially similar in all
respects to the original policy. In no event, however, shall a Mortgage Loan be
without a hazard insurance policy at any time, subject only to Section 4.11
hereof.
If the related Mortgaged Property is located in an area identified by the
Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available), the Servicer will cause to be
maintained 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 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 Servicer determines in accordance
with applicable law 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 Servicer shall notify the related Mortgagor to obtain such flood
insurance coverage, and if said Mortgagor fails to obtain the required flood
insurance coverage within 45 days after such notification, the Servicer shall
force place the required flood insurance on the Mortgagor's behalf. Any
out-of-pocket expenses or advance made by the Servicer on such force placed
flood insurance coverage shall be deemed a Servicing Advance.
All policies required hereunder shall name the Servicer as loss payee and
shall be endorsed with standard 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 Servicer shall not interfere with the Mortgagor's freedom of choice in
selecting either an insurance carrier or agent, provided, however, that the
Servicer shall not accept any such insurance policies from insurance companies
unless such companies are Qualified Insurers and are licensed to do business in
the jurisdiction in which the Mortgaged Property is located. The Servicer shall
furnish to the Mortgagor a written 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 4.04, any amounts collected by the Servicer under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
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Mortgagor, in accordance with the Servicer's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Servicer 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 (1) names
the Servicer as loss payee, (2) provides coverage in an amount equal to the
amount required pursuant to Section 4.10 without coinsurance, and (3) otherwise
complies with Accepted Servicing Practices and all other requirements of Section
4.10, it shall conclusively be deemed to have satisfied its obligations as set
forth in Section 4.10. The Servicer shall prepare and make any claims on the
blanket policy as deemed necessary by the Servicer in accordance with Accepted
Servicing Practices. Any amounts collected by the Servicer under any such policy
relating to a Mortgage Loan shall be deposited in the Custodial Account or
Escrow Account, as applicable. 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 4.10, and there shall
have been a loss which would have been covered by such policy, the Servicer
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 Servicer's funds, without reimbursement
therefor. Upon request of the Purchaser, the Servicer shall cause to be
delivered to the Purchaser a certificate of insurance evidencing the existence
of such policy.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket Fidelity Bond
and an Errors and Omissions Insurance Policy. Such Fidelity Bond and Errors and
Omissions Insurance shall be maintained with recognized insurers and shall be in
such form and amount as would permit the Servicer to be qualified as a Xxxxxx
Xxx or Xxxxxxx Mac seller/servicer. No provision of this Section 4.12 requiring
such Fidelity Bond and Errors and Omissions Insurance Policy shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. Upon the request of the Purchaser, the Servicer shall cause to be
delivered to the Purchaser a certificate of insurance evidencing the existence
of such Fidelity Bond and Errors and Omissions Insurance Policy.
Section 4.13 Inspections.
If any Mortgage Loan is more than 65 days delinquent and the Servicer has
not had significant contact with the Mortgagor, the Servicer shall order an
inspection of 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 Servicer shall maintain a record of the
results of each such inspection.
Section 4.14 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
29
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices (without regard to the Xxxxxx
Mae Guides). For claims greater than $15,000, at a minimum the Servicer shall
comply with the following conditions in connection with any such release of
Insurance Proceeds or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with
respect thereto;
(ii) the Servicer 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 Servicer shall verify that the Mortgage Loan is not in default;
and
(iv) pending repairs or restoration, the Servicer shall place the Insurance
Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
Section 4.15 Maintenance of PMI Policy; Claims.
If, as of the related Closing Date, a Mortgage Loan has, in full force and
effect, a PMI Policy, the Servicer shall maintain or cause the Mortgagor to
maintain in full force and effect such PMI Policy until terminated pursuant to
the Homeowners Protection Act of 1998, 12 USC ss.4901, et seq. In the event that
such PMI Policy shall be terminated other than as required by law, the Servicer
shall obtain from a Qualified Insurer a comparable replacement policy, with a
total coverage equal to the remaining coverage of such terminated PMI Policy.
The Servicer 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 Servicer
would have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Section
6.01, the Servicer shall promptly notify the insurer under the related 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 Servicer shall obtain a replacement PMI Policy
as provided above.
In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy in a timely fashion in accordance with the terms of
such PMI Policy and, in this regard, to take such action as shall be necessary
to permit recovery under any PMI Policy respecting a defaulted Mortgage Loan.
Pursuant to Section 4.04, any amounts collected by the Servicer under any PMI
Policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.05.
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Section 4.16 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 Servicer or MERS, as applicable, or in the
event the Servicer 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 Servicer 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 Servicer
shall acknowledge in writing that such title is being held as nominee for the
Purchaser.
The Servicer shall manage, conserve, protect and operate each REO Property
for the Purchaser solely for the purpose of its prompt disposition and sale.
However, the Purchaser shall have the option to manage and operate the REO
Property provided the Purchaser gives written notice of its intention to do so
within 60 days after such REO Property is acquired in foreclosure or by deed in
lieu of foreclosure; provided, for the purpose of clarification, that upon the
acceptance of such option, the Servicer shall no long be deemed a servicer of
such REO Property nor shall such REO Property be subject to this Agreement.
If the Purchaser does not elect to manage and operate the REO Property, the
Servicer shall manage, conserve, protect and operate each REO Property for the
Purchaser solely for the purpose of its prompt disposition and sale. The
Servicer, either itself or through an agent selected by the Servicer, 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 Servicer 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 Servicer deems to
be in the best interest of the Purchaser.
The Servicer may permit an obligor to pay off a non-performing Mortgage
Loan at less than its unpaid principal balance, chargeoff all or a portion of
such non-performing Mortgage Loan or sell the indebtedness related to a
non-performing Mortgage Loan, if such discounted payoff, chargeoff or sale is in
accordance with Accepted Servicing Practices and the Servicer believes that such
discounted payoff, chargeoff or sale is in the best interest of the Owner;
provided that in the case of any proposed discounted payoff, proposed chargeoff
or sale, the Servicer shall notify the Purchaser of the proposed discounted
payoff, chargeoff or sale.
The Servicer shall use its commercially reasonable best efforts to dispose
of the REO Property as soon as possible and shall sell such REO Property in any
event within three years after title has been taken to such REO Property, unless
(i) a REMIC election has not been made with respect to the arrangement under
which the Mortgage Loans and the REO Property are held, and (ii) the Servicer
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 three years is permitted under the foregoing
sentence and is necessary to sell any REO Property, (i) the Servicer 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
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money mortgage is taken in connection with such sale, such purchase money
mortgage shall name the Servicer as mortgagee, and such purchase money mortgage
shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Servicer and the Purchaser shall be entered
into with respect to such purchase money mortgage. Notwithstanding anything
herein to the contrary, the Servicer shall not be required to provide financing
for the sale of any REO Property.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in 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 price and other terms and conditions of any REO Disposition shall be
approved by the Purchaser or its designee. Upon any REO Disposition, the
Servicer shall be entitled to retain from REO Disposition Proceeds a disposition
fee equal to $1,000. The proceeds of sale of the REO Property shall be promptly
deposited in the Custodial Account.
The Servicer shall withdraw from the Custodial Account funds necessary for
the proper operation management and maintenance of the REO Property, including
the cost of maintaining any hazard insurance pursuant to Section 4.11 to the
extent permitted under Section 4.05(viii), or if such amounts are insufficient,
pursuant to Servicing Advances in accordance with Section 4.08. The Servicer
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 this Section 4.16 and of any
reserves reasonably required from time to time to be maintained to satisfy
anticipated liabilities for such expenses).
Section 4.17 Real Estate Owned Reports.
The Servicer shall provide the Purchaser with access to a secure website
containing data with respect to any REO Property covering the operation of such
REO Property for the previous month and the Servicer'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 and including, inter alia,
broker's price opinions, appraisals, realtor comments, Servicer personnel
comments, bids, monthly inspections from realtors, offers (with offer status)
and such other typical REO Property information. The Servicer shall provide the
Purchaser with such other information related to the REO Property as the
Purchaser shall reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Servicer pursuant to a deed in lieu of foreclosure, the Servicer
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property, substantially in the form of Exhibit G hereto.
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Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property,
the Servicer shall report such foreclosure or abandonment as required pursuant
to Section 6050J of the Code. The Servicer shall file information reports with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property as required by the Code. Such reports shall be in form
and substance sufficient to meet the reporting requirements imposed by the Code.
Section 4.20 Application of Buydown Funds.
With respect to each Buydown Mortgage Loan, the Servicer shall deposit into
a "buydown account" Buydown Funds in an amount equal to the aggregate
undiscounted amount of payments that, when added to the amount the Mortgagor on
such Mortgage Loan is obligated to pay on all Due Dates in accordance with the
terms of the Buydown Agreement, is equal to the full scheduled Monthly Payments
that are required to be paid by the Mortgagor under the terms of the related
Mortgage Note (without regard to the related Buydown Agreement as if the
Mortgage Loan were not subject to the terms of the Buydown Agreement). With
respect to each Buydown Mortgage Loan, the Servicer will distribute to the
Purchaser on each Remittance Date an amount of Buydown Funds equal to the amount
that, when added to the amount required to be paid on such date by the related
Mortgagor, pursuant to and in accordance with the related Buydown Agreement,
equals the full Monthly Payment that would otherwise be required to be paid on
such Mortgage Loan by the related Mortgagor under the terms of the related
Mortgage Note (as if the Mortgage Loan were not a Buydown Mortgage Loan and
without regard to the related Buydown Agreement).
If the Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan
during the Buydown Period and the Mortgaged Property securing such Buydown
Mortgage Loan is sold in the liquidation thereof (either by the Servicer or the
insurer under any related Primary Insurance Policy) the Servicer shall, on the
Remittance Date following the date upon which Liquidation Proceeds or REO
Disposition proceeds are received with respect to any such Buydown Mortgage
Loan, distribute to the Purchaser all remaining Buydown Funds for such Mortgage
Loan then remaining in the "buydown account." Pursuant to the terms of each
Buydown Agreement, any amounts distributed to the Purchaser in accordance with
the preceding sentence will be applied to reduce the outstanding principal
balance of the related Buydown Mortgage Loan. If a Mortgagor on a Buydown
Mortgage Loan prepays such Mortgage Loan in it entirety during the related
Buydown Period, the Servicer shall be required to withdraw from the "buydown
account" any Buydown Funds remaining therein with respect to such Buydown
Mortgage Loan in accordance with the related Buydown Agreement. If a principal
prepayment by a Mortgagor on a Buydown Mortgage Loan during the related Buydown
Period, together with any Buydown Funds then remaining in the "buydown account"
related to such Buydown Mortgage Loan, would result in a principal prepayment of
the entire unpaid principal balance of the Buydown Mortgage Loan, the Servicer
shall distribute to the Purchaser on the Remittance Date occurring in the month
immediately succeeding the month in which such Principal Prepayment is received,
all Buydown Funds related to such Mortgage Loan so remaining in the "buydown
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account," together with any amounts required to be deposited into the Custodial
Account.
Section 4.21 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related Adjustment Date in compliance
with the requirements of applicable law and the related Mortgage and Mortgage
Note. The Servicer shall execute and deliver any and all necessary notices
required under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate adjustments. The Servicer shall
promptly, upon written request, deliver to the Purchaser such notifications
along with information regarding the applicable date of such adjustments and the
methods used to calculate and implement such adjustments. Upon the discovery by
the Servicer or the receipt of notice from the Purchaser that the Servicer has
failed to adjust a Mortgage Interest Rate in accordance with the terms of the
related Mortgage Note, the Servicer shall immediately deposit in the Custodial
Account from its own funds the amount of any interest loss or deferral caused
the Purchaser thereby.
Section 4.22 Modifications, Waivers, Amendments and Consents.
(a) Subject to this Section 4.22, the Servicer may waive, modify or vary
any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if, in the Servicer's reasonable and prudent determination, such waiver,
modification, variation, postponement or indulgence is in the best interests of
the Purchaser; provided, however, that unless the Mortgagor is in default with
respect to the Mortgage Loan or such default is, in the judgment of the
Servicer, imminent, the Servicer shall not permit any modification with respect
to any Mortgage Loan that would change the Mortgage Interest Rate, defer or
forgive the payment of any principal or interest payments, reduce the
outstanding principal amount (except for actual payments of principal) or extend
the related maturity date. In the event of any such arrangement, the Servicer
shall make Monthly Advances on the related Mortgage Loan in accordance with the
provisions of Section 5.03 during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements.
(b) If the Servicer has received written notice form the Purchaser that a
REMIC election has been made with respect to the arrangement under which any
Mortgage Loans and REO Property are held, the Servicer shall not take any
action, cause the REMIC to take any action or fail to take (or fail to cause to
be taken) any action that, under the REMIC Provisions, if taken or not taken, as
the case may be, could (i) endanger the status of the REMIC as a REMIC, or (ii)
result in the imposition of a tax upon the REMIC (including but not limited to
the tax on "prohibited transactions" as defined in Section 860F(a)(2) of the
Code and the tax on "contributions" to a REMIC set forth in Section 860G(d) of
the Code) unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
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(c) Any payment of interest, which is deferred pursuant to any
modification, waiver, forbearance or amendment permitted hereunder, shall not,
for purposes hereof, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or such
modification, waiver or amendment so permit.
(d) The Servicer may, as a condition to granting any request by a Mortgagor
for consent, modification, waiver, forbearance or amendment, the granting of
which is within the Servicer's discretion pursuant to the Mortgage Loan and is
permitted by the terms of this Agreement, require that such Mortgagor pay to the
Servicer, as ancillary income, a reasonable or customary fee for the additional
services performed in connection with such request, together with any related
costs and expenses incurred by the Servicer, which amount shall be retained by
the Servicer as additional servicing compensation.
(e) The Servicer shall notify the Purchaser, in writing, of any material
modification, waiver, forbearance or amendment of any term of any Mortgage Loan
and the date thereof, and shall deliver to the Purchaser (or, at the direction
of the Purchaser the Custodian) for deposit in the related Mortgage File, an
original counterpart of any written agreement relating to any material
modification, waiver, forbearance or amendment of a Mortgage Loan Document,
promptly (and in any event within ten Business Days) following the execution
thereof; provided, however, that if any such modification, waiver, forbearance
or amendment is required by applicable law to be recorded, the Servicer (i)
shall deliver to the Purchaser a copy without evidence of recordation thereon
and (ii) shall deliver to the Purchaser such document, with evidence of
notification upon receipt thereof from the public recording office.
Section 4.23 Fair Credit Reporting Act.
(a) The Servicer shall furnish, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information on each Mortgagor's credit files to Equifax, Experian, and Trans
Union Credit Information Servicer, on a monthly basis.
(b) The Servicer agrees to transmit full-file credit reporting data for
each Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and for each
Mortgage Loan, the Servicer shall report one of the following statuses each
month: new origination, current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.
(c) The Servicer shall comply with Title V of the Xxxxx-Xxxxx-Xxxxxx Act of
1999 and all applicable regulations promulgated thereunder, relating to the
Mortgage Loans and the related Mortgagors and shall provide all required notices
thereunder.
Section 4.24 Prepayment Premiums.
To the extent consistent with the terms of this Agreement, the Servicer may
waive (or permit a Subservicer to waive) a Prepayment Premium only under the
following circumstances: (i) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Servicer,
maximize recovery of total proceeds taking into account the value of such
Prepayment Premium and the related Mortgage Loan, (ii) such waiver is required
under state or federal law or (iii) the mortgage debt has been accelerated as a
result of the Mortgagor's default in making its Monthly Payments. The Servicer
shall not waive any Prepayment Premium unless it is waived in accordance with
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this Section 4.24. To the extent the Purchase Price and Terms Letter provides
that the Purchaser is entitled to Prepayment Premiums, the Servicer shall pay
the amount of any Prepayment Premium under such Purchase Price and Terms Letter
(to the extent not collected and remitted to the Purchaser) to the Purchaser or
its assignees if the Servicer waives any Prepayment Premium other than as
permitted under this Section 4.24 by depositing such amount into the Custodial
Account at the time that the amount prepaid on the related Mortgage Loan is
required to be deposited into the Custodial Account.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Servicer 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
4.05), plus (b) all amounts, if any, which the Servicer is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds or REO Disposition Proceeds received after the applicable Prepayment
Period, which amounts shall be remitted on the following Remittance Date,
together with any additional interest required to be deposited in the Custodial
Account in connection with such Principal Prepayment in accordance with Section
4.04(viii); minus (d) any amounts attributable to Monthly Payments collected but
due on a Due Date or Dates subsequent to the first day of the month of the
Remittance Date, and minus (e) any amounts attributable to Buydown Funds being
held in the Custodial Account, which amounts shall be remitted on the Remittance
Date next succeeding the Due Period for such amounts.
With respect to any remittance received by the Purchaser after the
Remittance Date on which such payment was due, the Servicer shall pay to the
Purchaser interest on any such late payment at an annual rate equal to the Prime
Rate plus two percentage points, adjusted as of the date of each change, but in
no event greater than the maximum amount permitted by applicable law. Such
interest shall be deposited in the Custodial Account by the Servicer on the date
such late payment is made and shall cover the period commencing with the day
following the Business Day on which such payment was due 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 Servicer of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the Servicer.
Section 5.02 Statements to Purchaser.
Not later than the tenth day of each month, the Servicer shall furnish to
the Purchaser, with respect to the preceding month, a monthly collection report,
a monthly paid in full report that summarizes Mortgage Loans paid in full during
the Due Period and a monthly trial balance report that provides a trial balance
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as of the last day of the month preceding such Remittance Date in electronic
format agreed upon by the Servicer and the Purchaser.
Not later than the tenth day of each month, the Servicer shall furnish to
the Purchaser a monthly remittance advice in the form attached hereto as Exhibit
E as to the remittance on such Remittance Date and as to the period ending on
the last day of the month preceding such Remittance Date.
Section 5.03 Monthly Advances by Servicer.
No later than the Remittance Date, the Servicer shall deposit in the
Custodial Account from its own funds or from amounts held for future
distribution an amount equal to all Monthly Payments (with interest adjusted to
the Mortgage Loan Remittance Rate) which were due on the Mortgage Loans during
the applicable Due Period and which were delinquent at the close of business on
the related Determination Date or which were deferred pursuant to Section 4.01.
Any amounts held for future distribution and so used shall be replaced by the
Servicer by deposit in the Custodial Account on or before any future Remittance
Date if funds in the Custodial Account on such Remittance Date shall be less
than payments to the Purchaser required to be made on such Remittance Date. The
Servicer's obligation to make such Monthly Advances as to any Mortgage Loan will
continue through the last Monthly Payment due prior to the payment in full of
the Mortgage Loan, or through the earlier of: (i) the last Remittance Date prior
to the Remittance Date for the distribution of all Liquidation Proceeds and
other payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan; and (ii) the Remittance Date prior
to the date the Mortgage Loan is converted to REO Property, provided however,
that if requested by a Rating Agency in connection with a securitization, the
Servicer shall be obligated to make such advances through the Remittance Date
prior to the date on which cash is received in connection with the liquidation
of REO Property to the extent provided for in the related Reconstitution
Agreement; provided, however, that any such obligation under this Section 5.03
shall cease if the Servicer determines, in its sole reasonable opinion, that
advances with respect to such Mortgage Loan are Nonrecoverable Advances, as
evidenced by an Officer's Certificate delivered to the Purchaser by the
Servicer.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Due-on-Sale Provision and Assumptions.
The Servicer shall use its best efforts in accordance with Accepted
Servicing Practices 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 Servicer 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 Servicer shall not exercise such rights if prohibited by law
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from doing so or if the exercise of such rights would impair or threaten to
impair any recovery under the related PMI Policy, if any.
If the Servicer reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause or that either a decision not to exercise the
"due-on-sale" provision or a decision to permit an assumption of the Mortgage
Loan is in the best interest of the Purchaser, the Servicer 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 Servicer is unable under applicable law to require that the original
Mortgagor remain liable under the Mortgage Note and the Servicer 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.
The Servicer shall notify the Purchaser that any such substitution of liability
or assumption agreement has been completed by forwarding to the Purchaser the
original of any such substitution of liability or assumption agreement, which
document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. If an assumption
fee is collected by the Servicer for entering into an assumption agreement such
fee will be retained by the Servicer as additional servicing compensation. In
connection with any such assumption, neither the Mortgage Interest Rate borne by
the related Mortgage Note, the term of the Mortgage Loan, the outstanding
principal amount of the Mortgage Loan nor any other material terms shall be
changed without the Purchaser's consent.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.
If the Servicer satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Servicer otherwise prejudice any material rights the Purchaser may have
under the mortgage instruments, upon written demand of the Purchaser, the
Servicer shall attempt to cure such satisfaction, release or prejudice and if,
after 90 calendar days, such satisfaction, release or prejudice has not been
effected, the Servicer shall repurchase the related Mortgage Loan at the
outstanding principal balance, plus all accrued interest on such Mortgage Loan,
on the Remittance Date in the month following such 90th day.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be entitled
to retain the Servicing Fee, payable monthly. The obligation of the Purchaser to
pay the Servicing Fee is limited to, and payable solely from, the interest
portion of such Monthly Payments or as otherwise provided in Section 4.05.
Notwithstanding the foregoing, with respect to the payment of the Servicing Fee
for any month, the aggregate Servicing Fee shall be reduced (but not below zero)
by an amount equal to the Prepayment Interest Shortfall for the related Due
Period.
Additional servicing compensation in the form of assumption fees, late
payment charges and other ancillary income (including Prepayment Premiums,
except to the extent otherwise provided in the related Purchase Price and Terms
Letter) shall be retained by the Servicer to the extent not required to be
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deposited in the Custodial Account. The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement thereof except as specifically
provided for herein.
Section 6.04 Right to Examine Servicer Records.
The Purchaser, or its designee, shall have the right to examine and audit
any and all of the related books, records, or other information of the Servicer,
whether held by the Servicer 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. The Purchaser shall pay its own travel expenses
associated with such examination.
ARTICLE VII
SERVICER TO COOPERATE
Section 7.01 Provision of Information.
During the term of this Agreement, the Servicer shall provide to the OCC
and to comparable regulatory authorities supervising the Purchaser or, if
applicable, any of the Purchaser's permitted assigns and the examiners and
supervisory agents of the OCC and such other authorities, access to any
documentation regarding the Mortgage Loans in its possession that is required by
applicable regulations of the OCC and other authorities supervising the
Purchaser or any of such assigns with respect to the Mortgage Loans. Such access
shall be afforded without charge, but only upon execution of a confidentiality
agreement acceptable to the Servicer and reasonable and prior written request
and during normal business hours at the offices designated by the Servicer.
Section 7.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective purchaser the audited consolidating financial
statements of the Servicer's parent, if available, which shall include
information relating to the Servicer, for the most recently completed two fiscal
years for which such financial statements are publicly available. The Servicer
also shall make available, upon request, any comparable interim statements to
the extent any such statements have been prepared by or on behalf of the
Servicer (and are available upon request to members or stockholders of the
Servicer or to the public at large).
The Servicer also shall make available to a Purchaser or reasonable
prospective purchaser a knowledgeable financial or accounting officer for the
purpose of answering questions respecting recent developments affecting the
Servicer or the financial statements of the Servicer.
Section 7.03 Cooperation with Third-party Service Providers.
The Servicer shall reasonably cooperate with the Purchaser in servicing the
Mortgage Loans in accordance with the usual and customary requirements of any
credit enhancement, risk management and other service providers and shall
39
otherwise cooperate with the Purchaser in connection with such third-party
service providers and the provision of third-party services; provided, however,
that such requirements are reasonably acceptable to the Servicer and pose no
greater risk, obligation or expense to the Servicer than otherwise set forth in
this Agreement. Any additional costs and/or expenses will be paid by the
requesting party.
ARTICLE VIII
THE SERVICER
Section 8.01 Indemnification; Third Party Claims.
The Servicer shall indemnify each Purchaser and hold it harmless against
any and all Losses that any Purchaser may sustain resulting from or arising out
of the negligence, bad faith or willful misconduct of the Servicer in the
performance of its duties under this Agreement.
The Purchasers, jointly and severally, shall indemnify the Servicer and
hold it harmless against any and all Losses that the Servicer may sustain
resulting from or arising out the Mortgage Loans or this Agreement, except to
the extent such Losses directly result from or arise out of the negligence, bad
faith or willful misconduct of the Servicer or a breach by the Servicer.
The Servicer shall notify the Purchasers if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, 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
any Purchaser in respect of such claim. The Servicer shall follow any written
instructions received from the Purchaser in connection with such claim. The
Purchasers promptly shall reimburse the Servicer for all amounts advanced by it
pursuant to the preceding sentence, except when the claim results from or arises
out of a breach by the Servicer or the negligence, bad faith or willful
misconduct of the Servicer. The provisions of this Section 8.01 shall survive
termination of this Agreement.
Section 8.02 Merger or Consolidation of the Servicer.
The Servicer shall keep in full effect its existence, rights and franchises
as a corporation, and shall obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement
or any of the Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided,
however, that the successor or surviving Person shall be an institution (i)
having a GAAP net worth of not less than $15,000,000 and (ii) who is a Xxxxxx
Xxx or Xxxxxxx Mac-approved servicer in good standing. Furthermore, in the event
the Servicer transfers or otherwise disposes of all or substantially all of its
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assets to an affiliate of the Servicer, such affiliate shall satisfy the
condition above, and shall also be fully liable to the Purchasers for all of the
Servicer's obligations and liabilities hereunder.
Section 8.03 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to any 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 such parties for any negligent or bad faith
act, willful misconduct or any Breach. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
duties to service the Mortgage Loans in accordance with this Agreement and which
in its opinion may involve it in any expense or liability, provided, however,
that the Servicer may, with the consent of the Purchasers, 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 Servicer shall
be entitled to prompt reimbursement from the Purchasers of the reasonable legal
expenses and costs of such action.
Section 8.04 Limitation on Resignation and Assignment by Servicer.
Each Purchaser has entered into this Agreement with the Servicer and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Servicer, and the representations as to the adequacy
of its servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Servicer shall neither assign this Agreement or the servicing hereunder or
delegate its rights or duties hereunder, subject to the right of the Servicer to
hire Subservicers, or any portion hereof or sell or otherwise dispose of all of
its property or assets without the prior written consent of each Purchaser,
which consent shall not be unreasonably withheld. Notwithstanding anything in
this Agreement to the contrary, the Servicer, without the consent of the
Purchaser, may retain third party contractors to perform certain servicing and
loan administration functions, including without limitation, hazard insurance
administration, tax payment and administration, flood certification and
administration, collection services and similar functions; provided, that the
retention of such contractors by Servicer shall not limit the obligation of the
Servicer to service the Mortgage Loans pursuant to the terms and conditions of
this Agreement.
Except to the extent provided in Sections 4.01 and 8.02, the Servicer shall
not resign from the obligations and duties hereby imposed on it except by mutual
consent of the Servicer and each Purchaser or upon the determination that its
duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Purchasers, which Opinion of Counsel shall be in
form and substance acceptable to each Purchaser. No such resignation shall
become effective until a successor shall have assumed the Servicer's
responsibilities and obligations hereunder in the manner provided in Section
12.01.
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ARTICLE IX
WHOLE LOAN TRANSFERS AND SECURITIZATION TRANSACTIONS
Section 9.01 Removal of Mortgage Loans from Inclusion Under this Agreement.
The Purchasers and the Servicer agree that with respect to some or all of
the Mortgage Loans, the Purchaser, at its sole option, may effect one or more
Whole Loan Transfers or Securitization Transactions (but in no event may the
Purchaser effect more than three Reconstitutions of the Mortgage Loans in any
Mortgage Loan Package), retaining the Servicer as the servicer thereof or
subservicer if a master servicer is employed. On the Reconstitution Date, the
Mortgage Loans transferred shall cease to be serviced by the Servicer pursuant
to this Agreement; provided, however, that, in the event that any Mortgage Loan
transferred pursuant to this Section 9.01 is rejected by the transferee or
otherwise no longer subject to such Reconstitution, the Servicer shall continue
to service such Mortgage Loan on behalf of the Purchaser in accordance with the
terms and provisions of this Agreement.
The Servicer shall cooperate with the Purchaser in connection with each
Whole Loan Transfer or Securitization Transaction in accordance with this
Section 9.01. In connection therewith the Servicer shall:
(a) make representations (a) through (f) with respect to the Servicer
itself as of the closing date of each Whole Loan Transfer or Securitization
Transaction to the extent provided for in such Reconstitution Agreement;
provided, however, that the Servicer shall have no obligation to make or restate
any additional representations and warranties with respect to the Mortgage Loans
or itself;
(b) execute an Assignment, Assumption and Recognition Agreement or at the
option of the Purchaser, negotiate in good faith and execute any pooling and
servicing agreement or similar agreements (a "Reconstitution Agreement")
necessary to effectuate the foregoing provided (i) that the Servicer shall be
given reasonable time to negotiate any such Reconstitution Agreement, which
shall in no event be less than ten Business Days prior to the related Closing
Date and (ii) that such agreements create no greater obligation on the part of
the Servicer than otherwise set forth in this Agreement and do not materially
and adversely alter the Servicer's rights hereunder; and
(c) provide as applicable:
(i) any and all information and appropriate verification of
information which may be reasonably available to the Servicer,
including information regarding the Servicer's foreclosure,
delinquency and loss experience, as the Purchaser shall
reasonably request; and
(ii) such additional opinions of counsel, letters from auditors, and
certificates of public officials or officers of the Servicer as
are reasonably believed necessary by the trustee, any rating
agency or any credit enhancement provider, as the case may be, in
connection with Whole-Loan Transfers or Securitization
Transactions;
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Unless otherwise set forth in the Purchase Price and Term Letter, the
internal and third-party fees and costs of the Servicer associated with the
negotiation, preparation and delivery of the information required or requested
pursuant to this Section 9.01 in connection with the first Reconstitution with
respect to a Mortgage Loan Package shall be borne by the Servicer. The Purchaser
shall pay the reasonable third-party fees and costs of the Servicer associated
with the negotiation, preparation and delivery of the information required or
requested pursuant to this Section 9.01 in connection with any subsequent
Reconstitution with respect to a Mortgage Loan Package..
The Servicer hereby agrees to the inclusion in any Reconstitution
Agreement, where applicable, a section relating to special foreclosure rights in
the form of Exhibit I attached hereto, which provisions shall be applicable to
the Servicer or any subservicer with respect to the applicable Mortgage Loans.
In order to facilitate compliance with Regulation AB promulgated under the
Securities Act, the Servicer, the Servicer and the Purchaser agree to comply
with the provisions of the Regulation AB Compliance Addendum attached hereto as
Exhibit H.
All Mortgage Loans not sold or transferred pursuant to Whole Loan Transfers
or Securitization Transactions shall remain subject to this Agreement and shall
continue to be serviced in accordance with the terms of this Agreement and with
respect thereto this Agreement shall remain in full force and effect.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part of
the Servicer:
(i) any failure by the Servicer to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of two Business Day after the date upon which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Purchaser or, the
Servicer first becomes aware of such failure; or
(ii) failure by the Servicer duly to observe or perform its obligations
pursuant to Exhibit H as set forth therein; failure by the Servicer
duly to observe or perform in any material respect any other of the
covenants or agreements on the part of the Servicer set forth in this
Agreement, which continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Servicer by the
Purchaser; or
(iii) failure by the Servicer to maintain its license to do business in any
jurisdiction where the Mortgaged Property is located if such license
is required and such failure has a material and adverse effect on the
Servicer or the Mortgage Loans; or
43
(iv) 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, including
bankruptcy, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of
60 days; or
(v) the Servicer 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 Servicer or of or relating to all or substantially all
of its assets; or
(vi) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend
payment of its obligations; or
(vii) the Servicer ceases to meet the servicer eligibility qualifications
of Xxxxxx Xxx and Xxxxxxx Mac; or
(viii) with respect to the Mortgage Loans in a Reconstitution, failure by
the Servicer to maintain with each Rating Agency in such
Reconstitution a primary servicer rating with respect to the
Servicer's residential "prime" products (or other equivalent category)
no lower than the average rating for each respective Rating Agency (or
such lower rating as permitted by each such Rating Agency); provided,
in the event that such rating is lower than average and such lower
rating is not permitted by each such Rating Agency, that the Servicer
shall have 90 days to raise such rating to average or such lower
rating as permitted by each such Rating Agency; or
(ix) in violation of this agreement, the Servicer attempts (a) to assign
its right to servicing compensation hereunder, (b) to assign this
Agreement or the servicing responsibilities hereunder or (c) to
delegate its duties hereunder or any portion thereof.
If the Servicer obtains knowledge of an Event of Default, the Servicer
shall promptly notify the Purchasers. In each and every such case, so long as an
Event of Default shall not have been remedied within the applicable cure period,
if any stated above, in addition to whatever rights any Purchaser may have at
law or equity to damages, including injunctive relief and specific performance,
any Purchaser, by notice in writing to the Servicer, may terminate all the
rights and obligations of the Servicer under this Agreement, or the
Reconstitution Agreement in the case of paragraph (viii) above, and in and to
the Mortgage Loans and the proceeds thereof.
Upon receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the successor appointed
pursuant to Section 12.01. Upon written request from the Purchaser, the Servicer
shall, at its expense, prepare, execute and deliver to the successor entity
44
designated by the Purchaser any and all documents and other instruments, place
in such successor's possession all Mortgage Files, and do or cause to be done
all other acts or things 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 Servicer's
sole expense. The Servicer shall cooperate with the Purchaser and such successor
in effecting the termination of the Servicer's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchasers may waive any default by the Servicer
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 XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation of the last Mortgage Loan or the disposition of any
REO Property with respect to the last Mortgage Loan and the remittance of all
funds due hereunder; or (ii) mutual consent of the Servicer and the Purchaser in
writing. The representations and warranties and indemnification provisions
contained herein shall survive the termination of this Agreement.
Notwithstanding anything in this Agreement to the contrary and in addition
to the foregoing, the Servicing Rights Owner shall have the right to terminate
the Servicer's rights and obligations as servicer under this Agreement on 60
days notice and upon appointment of a successor servicer reasonably acceptable
to the Purchaser. With respect to a termination pursuant to the previous
sentence the Servicer shall not be entitled to a termination fee.
Upon written request from the Purchasers in connection with any such
termination, the Servicer shall prepare, execute and deliver, any and all
documents and other instruments, place in the Purchaser's possession all
Mortgage Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Servicer's sole expense. The Servicer
agrees to reasonably cooperate with the Purchasers and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder as servicer, including, without limitation, the transfer to such
successor for administration by it of all cash amounts which shall at the time
45
be credited by the Servicer to the Custodial Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the Servicer
may have hereunder with respect to any Mortgage Loan Package, without cause as
provided in this Section 11.02. Any such notice of termination shall be in
writing and shall specify a date of termination, which shall be within 90 days
of the date of such notice. Such termination shall be effective as of such date,
unless otherwise agreed to by the Servicer.
In the event the servicing rights with respect to a Mortgage Loan Package
are terminated pursuant to this Section 11.02, the Purchaser shall pay the
Servicer on the date of upon the transfer of the servicing rights in immediately
available funds, the Termination Fee. Unless otherwise provided in the Purchase
Price and Terms Letter, "Termination Fee" shall mean an amount equal to the sum
of (i) the outstanding principal balance of the Mortgage Loans as of the date of
such notice of termination multiplied by 2.00 plus (ii) all reasonable costs and
expenses incurred by the Servicer in transferring the servicing.
With respect to any termination pursuant to this Section 11.02, the
Purchaser shall reimburse the Servicer on the related transfer date for all
previously unreimbursed Servicing Fees, Servicing Advances and Monthly Advances
made by Servicer under this Agreement and other reasonable expenses of the
Servicer, including those fees, advances and expenses incurred by the Servicer
but not yet billed as of the related transfer date.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Servicer.
Simultaneous with the termination of the Servicer's responsibilities and
duties under this Agreement pursuant to Sections 8.04, 10.01, 11.01(ii) or
pursuant to Section 11.02, the Purchaser shall, (i) succeed to and assume all of
the Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth in
Section 8.02 and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
prior to the termination of Servicer's responsibilities, duties and liabilities
under this Agreement. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Servicer under this Agreement. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
46
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 3.01, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a party
to this Agreement. Any termination or resignation of the Servicer or termination
of this Agreement pursuant to Section 8.04, 10.01, or 11.01 shall not affect any
claims that any Purchaser may have against the Servicer arising out of the
Servicer's actions or failure to act prior to any such termination or
resignation.
The Servicer shall deliver promptly to the successor servicer the funds in
the Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Servicer shall account for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.
Unless the Servicer is terminated pursuant to Section 11.02, the Purchaser
shall be entitled to be reimbursed by the Servicer for all costs associated with
the transfer of servicing, including, without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Purchaser to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Purchaser to have the Mortgage Loans serviced properly
and effectively.
Notwithstanding anything to the contrary set forth herein, the Servicer
shall not be prohibited from retaining copies of Mortgage Loan documents,
Servicing Files and other records related to the Mortgage Loans as the Servicer
reasonably deems necessary.
Upon a successor's acceptance of appointment as such, the Servicer shall
notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.06.
Section 12.02 Amendment.
This Agreement may be amended from time to time by written agreement signed
by the Servicer and the Purchaser.
Section 12.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
EACH OF THE SERVICER, THE SERVICING RIGHTS OWNER AND THE PURCHASERS HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE
47
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY OTHER DOCUMENTS AND
INSTRUMENTS EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE SERVICER OR THE
PURCHASER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PURCHASER TO ENTER
INTO THIS AGREEMENT.
Section 12.04 [Reserved];
Section 12.05 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated as
herein provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section 12.06 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if sent by facsimile, personally
delivered at or mailed by overnight courier, addressed as follows:
(i) if to the Servicer:
Aurora Loan Services LLC
00000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxx (Luminent 2006-Flow)
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Aurora Loan Services LLC
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Manager, Loan Administration (Luminent 2006-Flow)
Tel: (000) 000-0000
Fax: (000) 000-0000
or such other address as may hereafter be furnished to the
Purchasers in writing by the Servicer;
(ii) if to any Purchaser:
Luminent Mortgage Capital, Inc.
Xxx Xxxxxxxx Xxxxxx,
00
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Luminent Mortgage Capital Inc.
One Market Street, Spear Tower, 30th floor
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx Xxxx
Telephone: 000-000-0000
Fax: 000-000-0000
or such other address as may hereafter be furnished to the Servicer in writing
by any Purchaser. The Servicer shall not be obligated to provide notices
pursuant to this Agreement to any party whose address is not provided in this
Section 12.06 until 15 days after the Servicer has received written notice of
such party's name, address, telephone number and facsimile number.
Section 12.07 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 12.08 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Servicer shall be rendered as an independent contractor and not as agent for any
Purchaser.
Section 12.09 Execution; Successors and Assigns; Counterparts.
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 Sections 8.02 and 8.04, this
Agreement shall inure to the benefit of and be binding upon the Servicer and
each Purchaser and their respective successors and assigns.
Section 12.10 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 Servicer's expense, in the event recordation is either necessary
or advisable in accordance with Acceptable Servicing Practices or under
49
applicable law or is requested by the Purchaser at its sole option in the case
of Mortgage Loans that are not registered on MERS.
Section 12.11 Assignment by Purchaser.
The Purchaser shall have the right, subject to the limits set forth in
Section 9.01 hereof, to assign, in whole or in part, its interest under this
Agreement with respect to some or all of the Mortgage Loans, and designate any
person to exercise any rights of the Purchaser hereunder, by executing a
Reconstitution Agreement (subject to the terms of Section 9.01) with the
Servicer and such assignee, and the assignee or designee shall accede to the
rights and obligations hereunder of the Purchaser with respect to such Mortgage
Loans (except with respect to any rights of indemnification pursuant to this
Agreement, which rights shall survive any assignment or termination). All
references to the Purchaser in this Agreement shall be deemed to include a
reasonable assignee or designee (except with respect to any indemnification
rights of the Purchaser under this Agreement), provided prior written notice of
such assignee of designee has been given to the Servicer by the Purchaser. In
the event the Purchaser assigns this Agreement, and the assignee assumes any of
the Purchaser's obligations hereunder, the Servicer acknowledges and agrees to
look solely to such assignee, and not the Purchaser, for performance of the
obligations so assumed and the Purchaser shall be relieved from any liability to
the Servicer with respect thereto, except with respect to any rights of
indemnification pursuant to this Agreement, which rights shall survive any
assignment or termination.
Section 12.12 Solicitation of Mortgagor.
From and after the Closing Date, the Servicer agrees that it will not take
any action or permit or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors or independent mortgage brokerage
companies on the Servicer's behalf, to personally, by telephone, mail or
electronic mail, solicit the Mortgagor under any Mortgage Loan (on a targeted
basis) for the purpose of refinancing such Mortgage Loan provided, however, that
this limitation shall not prohibit the Servicer from soliciting such Mortgagor
for purposes of prepayment, refinance or modification of any loan owned or
serviced by the Servicer other than a Mortgage Loan. Notwithstanding the
foregoing, it is understood and agreed that promotions, solicitations
(including, without limitation, those for purposes of prepayment, refinance or
modification) and other marketing activities undertaken by the Servicer or any
of its affiliates which are directed to the general public at large or which are
directed generally to a segment of the then existing customers of the Servicer
or any of its affiliates, including, without limitation, mass mailings based on
commercially acquired mailing lists, newspaper, radio or television
advertisements, the mailing of promotional materials to the Servicer's or its
affiliates' deposit customers by inserting such materials into customer account
statements shall not constitute solicitation under this Section and
solicitations made on the basis of information acquired by the Servicer or its
affiliates that indicates that a borrower may be planning to refinance, nor is
the Servicer prohibited from responding to unsolicited requests or inquiries
made by a Mortgagor or an agent of a Mortgagor. Language included on or in the
Servicer 's website, interactive voice response system, coupon books or billing
statements that is not specifically targeted at the borrower or obligor under
any Mortgage Loan, shall not be deemed to constitute solicitations under Section
12.12. Notwithstanding anything to the contrary, this section shall not prohibit
the Servicer or its agent or affiliates from serving the refinancing needs or
50
other financial needs of a Mortgagor who, without solicitation, contacts the
Servicer or its agents or affiliates directly.
Section 12.13 Further Agreements.
Each of the Purchasers and the Servicer agrees to execute and deliver to
the other such additional documents, instruments or agreements as may be
necessary or appropriate to effectuate the purposes of this Agreement.
Section 12.14 Confidential Information.
The Servicer and the Purchaser shall keep confidential and shall not
divulge to any other party, without the Purchaser's or the Servicer's, as
applicable, prior written consent, the price paid by the Purchaser for the
Mortgage Loans, except to the extent that it is reasonable and necessary for the
Servicer or the Purchaser to do so in working with legal counsel, auditors,
taxing authorities or other governmental agencies. The restrictions set forth in
this paragraph shall survive the termination of this Agreement.
Each of the Purchasers and the Servicer agrees that it (i) shall comply
with all applicable laws and regulations regarding the privacy or security of
Consumer Information, (ii) shall not collect, create, use, store, access,
disclose or otherwise handle Consumer Information in any manner inconsistent
with any applicable laws or regulations regarding the privacy or security of
Consumer Information, (iii) shall not disclose Consumer Information to any
non-affiliated third party except to enforce or preserve its rights, as
otherwise permitted or required by applicable law (or by regulatory authorities
having jurisdiction in the premises) or, in the case of the Servicer, at the
specific written direction of the Purchaser, (iv) shall maintain appropriate
administrative, technical and physical safeguards to protect the security,
confidentiality and integrity of Consumer Information, including maintaining
security measures designed to meet the Interagency Guidelines Establishing
Standards for Safeguarding Consumer Information published in final form on
February 1, 2001, 66 Fed. Reg. 8616 (as amended, supplemented or restated), and
the rules promulgated thereunder and (v) shall promptly notify the other party
in writing upon becoming aware of any actual breach and of any suspected breach
of this section. The restrictions set forth in this paragraph shall survive the
termination of this Agreement.
The Servicer shall promptly provide any Purchaser's regulators reasonable
information regarding such security measures upon the reasonable request of such
Purchaser, which information shall include, but not be limited to, independent
audit reports, summaries of test results or equivalent measures taken by the
Servicer with respect to its security measures, as agreed upon by the parties.
Section 12.15 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
51
Section 12.16 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other
gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document
are to designated Articles, Sections, Subsections, Paragraphs and
other subdivisions of this Agreement;
(d) a reference to a Subsection without further reference to a Section is
a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to
Paragraphs and other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
Section 12.17 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
[SIGNATURES FOLLOW]
52
IN WITNESS WHEREOF, the Servicer and the Purchasers have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
SERVICER
AURORA LOAN SERVICES LLC
By: __________________________________
Name:
Title:
SERVICING RIGHTS OWNER
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By: __________________________________
Name:
Title:
PURCHASERS
LUMINENT MORTGAGE CAPITAL, INC.
By: __________________________________
Name:
Title:
MERCURY MORTGAGE FINANCE
STATUTORY TRUST
By: __________________________________
Name:
Title:
MAIA MORTGAGE FINANCE STATUTORY TRUST
By: __________________________________
Name:
Title:
EXHIBIT A
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
[DATE OF ASSIGNMENT]
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT dated ___________________,
among _________________, a _________________ corporation having an office at
_________________ ("Assignor"), _________________, having an office at
_________________ ("Assignee"), AURORA LOAN SERVICES LLC (the "Servicer"),
having an office at 00000 Xxxx Xxxxxxx Xx., Xxxxxxxxx, XX 00000, and XXXXXX
CAPITAL, A DIVISION OF XXXXXX BROTHERS HOLDINGS INC. (the "Seller"), as
servicing rights owner:
For and in consideration of the sum of one dollar ($1.00) and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. With respect to the Mortgage Loans listed on Exhibit A hereto, the
Assignor hereby grants, transfers and assigns to Assignee all of the right,
title and interest of Assignor, as Purchaser, in, to and under that certain Flow
Servicing Agreement, (the "Flow Servicing Agreement"), dated as of November 1,
2006, by and among Luminent Mortgage Capital, Inc., Mercury Mortgage Finance
Statutory Trust, Maia Mortgage Finance Statutory Trust, as purchasers
(collectively, the "Purchasers", and individually, as the purchaser of any
Mortgage Loan under the below-referenced Flow Sale Agreement, the "Purchaser"),
the Servicer and the Seller, as servicing rights owner, and the Mortgage Loans
delivered by the Seller to the Assignor pursuant to that certain Flow Sale
Agreement, dated as of November 1, 2006, by and among the Seller and the
Purchasers.
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Flow Servicing Agreement
or the Mortgage Loans. 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 Flow Servicing Agreement or the
Mortgage Loans; and
c. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other disposition of
the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
with, any person in any manner, or made any general solicitation by means of
A-1
general advertising or in any other manner, or taken any other action which
would constitute a distribution of the Mortgage Loans under the Securities Act
of 1933 (the "Securities Act") or which would render the disposition of the
Mortgage Loans a violation of Section 5 of the Securities Act or require
registration pursuant thereto.
3. That Assignee warrants and represent to, and covenants with, the
Assignor and the Servicer pursuant to Section 12.11 of the Flow Servicing
Agreement that:
a. The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Flow Servicing Agreement and the Mortgage
Loans, and from and after the date hereof, the Assignee assumes for the benefit
of each of the Servicer and the Assignor all of the Assignor's obligations as
Purchaser thereunder;
b. The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Flow Servicing Agreement
is:
[NAME AND ADDRESS OF ASSIGNEE]
Attention: __________________________
Telephone: _________________________
Fax: _______________________________
The Assignee's wire transfer instructions for purposes of all remittances
and payments related to the Mortgage Loans and the Flow Servicing Agreement is:
For the account of [NAME OF ASSIGNEE]
A/C#: ______________________________
ABA#: ______________________________
Attention: _________________________
Taxpayer ID#: _______________________
4. Accuracy of the Servicing Agreement.
The Servicer and the Assignor represent and warrant to the Assignee that
(i) attached hereto as Exhibit B is a true, accurate and complete copy of the
Flow Servicing Agreement and all amendments and modifications, if any, thereto,
(ii) the Flow Servicing Agreement has not been amended or modified in any
respect, except as set forth in this Agreement, and (iii) no notice of
termination has been given to the Servicer under the Flow Servicing Agreement.
The Servicer represents and warrants that through the date hereof the Servicer
has serviced the Mortgage Loans in accordance with the terms of the Flow
Servicing Agreement.
5. Recognition of Assignee.
From and after the date hereof, the Servicer shall note the transfer of the
Mortgage Loans to the Assignee in its books and records, the Servicer shall
recognize the Assignee as the owner of the Mortgage Loans and the Servicer shall
service the Mortgage Loans for the benefit of the Assignee pursuant to the Flow
Servicing Agreement, the terms of which are incorporated herein by reference. It
is the intention of the Servicer, the Seller, the Assignor and the Assignee that
A-2
the Flow Servicing Agreement shall be binding upon and inure to the benefit of
the Seller and the Assignee and their respective successors and assigns.
[Signatures Follow]
A-3
IN WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement be executed by their duly authorized officers as of the
date first above written.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By: ___________________________
Name: Name: _________________________
Its: Its: __________________________
XXXXXX CAPITAL, A DIVISION OF AURORA LOAN SERVICES LLC
XXXXXX BROTHERS HOLDINGS INC.,
as Seller
By: _________________________________ By: ___________________________
Name: _______________________________ Name: _________________________
Its: ________________________________ Its: __________________________
A-4
EXHIBIT A
to the Assignment, Assumption and Recognition Agreement
MORTGAGE LOAN SCHEDULE
A-5
EXHIBIT B
to the Assignment, Assumption and Recognition Agreement
EXECUTION COPIES OF FLOW SERVICING AGREEMENT
A-6
EXHIBIT B
MORTGAGE LOAN DOCUMENTS
With respect to each Mortgage Loan, the Mortgage Loan Documents shall
include each of the following items, which shall be available for inspection by
the Purchaser and any prospective Purchaser, and which shall be retained by the
Servicer in the Servicing File or delivered to the Custodian pursuant to
Sections 2.03 of the Sales Agreement:
(a) the original Mortgage Note bearing all intervening endorsements and
including any riders to the Mortgage Note endorsed "Pay to the order of
_____________________________, without recourse and signed in the name of
the previous owner by an authorized officer;
(b) the original of any guarantee executed in connection with the Mortgage Note
(if any);
(c) the original Mortgage with evidence of recording thereon or, copies
certified by the related recording office or if the original Mortgage has
not yet been returned from the recording office, a copy certified by the
Seller indicating that such Mortgage has been delivered for recording. The
return directions for the original Mortgage should indicate, when recorded,
mail to the Seller;
(d) the originals of all assumption, modification, consolidation or extension
agreements, (or, if an original of any of these documents has not been
returned from the recording office, a certified copy thereof, the original
to be delivered to the Seller forthwith after return from such recording
office) with evidence of recording thereon, if any;
(e) the original Assignment of Mortgage as appropriate, in recordable form, for
each Mortgage Loan to ___________, for Mortgage Loans that are not
registered with MERS,
(f) the originals of any intervening recorded Assignments of Mortgage showing a
complete chain of assignment from origination to the Seller, including
warehousing assignments, with evidence of recording thereon, (or, if any
original intervening Assignment of Mortgage has not been returned from the
recording office, a certified copy thereof, the original to be delivered to
the Custodian forthwith after return from such recording office);
(g) with respect to each Mortgage Loan, the original mortgage title insurance
policy or attorney's opinion of title and abstract or a title commitment or
title binder if an original title insurance policy has not been issued, or
a duplicate copy of an original title insurance policy; and
(h) the original or copy of the PMI policy or certificate of insurance, where
required; and
(i) such additional documents, instruments and/or agreements as may be
reasonably necessary or appropriate to accomplish the transfer.
X-0
XXXXXXX X
XXXXXXXXX XXXXXXXXX
X-0
XXXXXXX X-0
FORM OF CUSTODIAL ACCOUNT CERTIFICATION NOTICE
_____________ __, 200__
To:
[____________]
As Servicer under the Servicing Agreement, dated as of [____] (the "Agreement"),
among Aurora Loan Services LLC, as Servicer, Xxxxxx Brothers Holdings Inc., as
Servicing Rights Owner and certain owners as named therein, we hereby certify to
you that we have established an account at [insert name of financial
institution], as a Custodial Account pursuant to the Agreement, to be designated
as "[_____]."
AURORA LOAN SERVICES LLC
By: ____________________________
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF ESCROW ACCOUNT CERTIFICATION NOTICE
_____________ __, 200__
To:
[____________]
As Servicer under the Servicing Agreement, dated as of [____] (the "Agreement"),
among Aurora Loan Services LLC, as Servicer, Xxxxxx Brothers Holdings Inc., as
Servicing Rights Owner and certain owners as named therein, we hereby certify to
you that we have established an account at [insert name of financial
institution], as an Escrow Account pursuant to the Agreement, to be designated
as "[_____]."
AURORA LOAN SERVICES LLC
By: ____________________________
Name:
Title:
D-2-1
EXHIBIT E
MONTHLY REMITTANCE ADVICE
FIELD NAME DESCRIPTION FORMAT
---------- ----------- ------
INVNUM INVESTOR LOAN NUMBER Number no decimals
SERVNUM SERVICER LOAN NUMBER, REQUIRED Number no decimals
BEGSCHEDBAL BEGINNING SCHEDULED BALANCE FOR SCHED/SCHED Number two decimals
BEGINNING TRAIL BALANCE FOR ACTUAL/ACTUAL,
REQUIRED
SCHEDPRIN SCHEDULED PRINCIPAL AMOUNT FOR SCHEDULED/SCHEDULED Number two decimals
ACTUAL PRINCIPAL COLLECTED FOR ACTUAL/ACTUAL,
REQUIRED, .00 IF NO COLLECTIONS
CURT1 CURTAILMENT 1 XXXXXX, .00 IF NOT APPLICABLE Number two decimals
CURT1DATE CURTAILMENT 1 DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
CURT1ADJ CURTAILMENT 1 ADJUSTMENT, .00 IF NOT APPLICABLE Number two decimals
CURT2 CURTAILMENT 2 XXXXXX, .00 IF NOT APPLICABLE Number two decimals
CURT2DATE CURTAILMENT 2 DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
CURT2ADJ CURTAILMENT 2 ADJUSTMENT, .00 IF NOT APPLICABLE Number two decimals
LIQPRIN PAYOFF, LIQUIDATION PRINCIPAL, .00 IF NOT APPLICABLE Number two decimals
OTHPRIN OTHER PRINCIPAL, .00 IF NOT APPLICABLE Number two decimals
PRINREMIT TOTAL PRINCIPAL REMITTANCE AMOUNT, .00 IF NOT APPLICABLE Number two decimals
INTREMIT NET INTEREST REMIT, INCLUDE PAYOFF INTEREST, Number two decimals
.00 IF NOT APPLICABLE
TOTREMIT TOTAL REMITTANCE AMOUNT, .00 IF NOT APPLICABLE Number two decimals
ENDSCHEDBAL ENDING SCHEDULED BALANCE FOR SCHEDULED/SCHEDULED Number two decimals
ENDING TRIAL BALANCE FOR ACTUAL/ACTUAL
.00 IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF
ENDACTBAL ENDING TRIAL BALANCE Number two decimals
.00 IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF
ENDDUEDATE ENDING ACTUAL DUE DATE, NOT LAST PAID INSTALLMENT DD-MMM-YY
ACTCODE 60 IF PAIDOFF, BLANK IF NOT APPLICABLE Number no decimals
ACTDATE ACTUAL PAYOFF DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
INTRATE INTEREST RATE, REQUIRED Number seven decimals
Example .0700000 for 7.00%
SFRATE SERVICE FEE RATE, REQUIRED Number seven decimals
Example .0025000 for .25%
PTRATE PASS THRU RATE, REQUIRED Number seven decimals
Example .0675000 for 6.75%
PIPMT P&I CONSTANT, REQUIRED Number two decimals
.00 IF PAIDOFF
E-1
STANDARD LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT
------------------------------------------------------------------------------------------------------------------------------------
Data Field Format Data Description
------------------------------------------------------------------------------------------------------------------------------------
% of MI coverage NUMBER(6,5) The percent of coverage provided by the
PMI company in the event of loss on a
defaulted loan.
------------------------------------------------------------------------------------------------------------------------------------
Actual MI claim filed date DATE(MM/DD/YYYY) Actual date that the claim was submitted
to the PMI company.
------------------------------------------------------------------------------------------------------------------------------------
Actual bankruptcy start date DATE(MM/DD/YYYY) Actual date that the bankruptcy petition
is filed with the court.
------------------------------------------------------------------------------------------------------------------------------------
Actual MI claim amount filed NUMBER(15,2) The amount of the claim that was filed
by the servicer with the PMI company.
------------------------------------------------------------------------------------------------------------------------------------
Actual discharge date DATE(MM/DD/YYYY) Actual date that the Discharge Order is
entered in the bankruptcy docket.
------------------------------------------------------------------------------------------------------------------------------------
Actual due date DATE(MM/DD/YYYY) Actual due date of the next outstanding
payment amount due from the mortgagor.
------------------------------------------------------------------------------------------------------------------------------------
Actual eviction complete DATE(MM/DD/YYYY) Actual date that the eviction
date proceedings are completed by local
counsel.
------------------------------------------------------------------------------------------------------------------------------------
Actual eviction start date DATE(MM/DD/YYYY) Actual date that the eviction
proceedings are commenced by local
counsel.
------------------------------------------------------------------------------------------------------------------------------------
Actual first legal date DATE(MM/DD/YYYY) Actual date that foreclosure counsel
filed the first legal action as defined
by state statute.
------------------------------------------------------------------------------------------------------------------------------------
Actual redemption end date DATE(MM/DD/YYYY) Actual date that the foreclosure
redemption period expires.
------------------------------------------------------------------------------------------------------------------------------------
Bankruptcy chapter VARCHAR2(2) 7= Chapter 7 filed 11= Chapter 11 filed Chapter of bankruptcy filed.
12= Chapter 12 filed 13= Chapter 13 filed
------------------------------------------------------------------------------------------------------------------------------------
Bankruptcy flag VARCHAR2(2) Y=Active Bankruptcy N=No Active Bankruptcy Servicer defined indicator that
identifies that the property is an asset
in an active bankruptcy case.
------------------------------------------------------------------------------------------------------------------------------------
Bankruptcy Case Number VARCHAR2(15) The court assigned case number of the
bankruptcy filed by a party with
interest in the property.
------------------------------------------------------------------------------------------------------------------------------------
MI claim amount paid NUMBER(15,2) The amount paid to the servicer by thE
PMI company as a result of submitting an
MI claim.
------------------------------------------------------------------------------------------------------------------------------------
N E-2
------------------------------------------------------------------------------------------------------------------------------------
Data Field Format Data Description
------------------------------------------------------------------------------------------------------------------------------------
MI claim funds received DATE(MM/DD/YYYY) Actual date that funds were received
date from the PMI company as a result of
transmitting an MI claim.
------------------------------------------------------------------------------------------------------------------------------------
Current loan amount NUMBER(10,2) Current unpaid principal balance of the
loan as of the date of reporting to
Aurora Master Servicing.
------------------------------------------------------------------------------------------------------------------------------------
Date FC sale scheduled DATE(MM/DD/YYYY) Date that the foreclosure sale is
scheduled to be held.
------------------------------------------------------------------------------------------------------------------------------------
Date relief/dismissal DATE(MM/DD/YYYY) Actual date that the dismissal or relief
granted from stay order is entered by the
bankruptcy court.
------------------------------------------------------------------------------------------------------------------------------------
Date REO offer accepted DATE(MM/DD/YYYY) Actual date of acceptance of an REO
offer.
------------------------------------------------------------------------------------------------------------------------------------
Date REO offer received DATE(MM/DD/YYYY) Actual date of receipt of an REO offer.
------------------------------------------------------------------------------------------------------------------------------------
Delinquency value NUMBER(10,2) Value obtained typically from a BPO
prior to foreclosure referral not
related to loss mitigation activity.
------------------------------------------------------------------------------------------------------------------------------------
Delinquency value source VARCHAR2(15) BPO= Broker's Price Opinion Name of vendor or management company
Appraisal=Appraisal that provided the delinquency valuation
amount.
------------------------------------------------------------------------------------------------------------------------------------
Delinquency value date DATE(MM/DD/YYYY) Date that the delinquency valuation
amount was completed by vendor or
property management company.
------------------------------------------------------------------------------------------------------------------------------------
Delinquency flag VARCHAR2(2) Y= 90+ delinq. Not in FC, Bky or Loss mit Servicer defined indicator that
N=Less than 90 days identifies that the loan is delinquent
but is not involved in loss mitigation,
foreclosure, bankruptcy or REO.
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure flag VARCHAR2(2) Y=Active foreclosure N=No active Servicer defined indicator that
identifies that the loan is involved in
foreclosureproceedings.
------------------------------------------------------------------------------------------------------------------------------------
Corporate expense balance NUMBER(10,2) Total of all cumulative expenses
advanced by the servicer for non-escrow
expenses such as but not limited to:
FC fees and costs, bankruptcy fees and
costs, property preservation and
property inspections.
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure attorney DATE(MM/DD/YYYY) Actual date that the loan was referred
referral date to local counsel to begin foreclosure
proceedings.
------------------------------------------------------------------------------------------------------------------------------------
E-3
------------------------------------------------------------------------------------------------------------------------------------
Data Field Format Data Description
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure valuation NUMBER(15,2) Value obtained during the foreclosure
amount process. Usually as a result of a BPO
and typically used to calculate the bid.
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure valuation date DATE(MM/DD/YYYY) Date that foreclosure valuation amount
was completed by vendor or property
management company.
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure valuation VARCHAR2(80) BPO= Broker's Price Opinion Appraisal=Appraisal Name of vendor or management company
source that provided the foreclosure valuation
amount.
------------------------------------------------------------------------------------------------------------------------------------
FHA 27011A transmitted DATE(MM/DD/YYYY) Actual date that the FHA 27011A claim
date was submitted to HUD.
------------------------------------------------------------------------------------------------------------------------------------
FHA 27011 B transmitted DATE(MM/DD/YYYY) Actual date that the FHA 27011B claim
date was submitted to HUD.
------------------------------------------------------------------------------------------------------------------------------------
VA LGC/ FHA Case VARCHAR2(15) Number that is assigned individually to
number the loan by either HUD or VA at the time
of origination. The number is located
on the Loan Guarantee Certificate (LGC)
or the Mortgage Insurance Certificate
(MIC).
------------------------------------------------------------------------------------------------------------------------------------
FHA Part A funds received DATE(MM/DD/YYYY) Actual date that funds were received
date from HUD as a result of transmitting the
27011A claim.
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure actual sale DATE(MM/DD/YYYY) Actual date that the foreclosure sale
date was held.
------------------------------------------------------------------------------------------------------------------------------------
Servicer loan number VARCHAR2(15) Individual number that uniquely
identifies loan as defined by servicer.
------------------------------------------------------------------------------------------------------------------------------------
Loan type VARCHAR2(2)1=FHA Residential 2=VA Residential Type of loan being serviced generally
3=Conventional w/o PMI 4=Commercial defined by the existence of certain
5=FHA Project 6=Conventional w/PMI types of insurance. (ie: FHA, VA,
7=HUD 235/265 8=Daily Simple Interest conventional insured, conventional
9=Farm Loan Loan uninsured, SBA, etc.)
S=Sub prime U=Unknown
------------------------------------------------------------------------------------------------------------------------------------
Loss mit approval date DATE(MM/DD/YYYY) The date determined that the servicer
and mortgagor agree to pursue a defined
loss mitigation alternative.
------------------------------------------------------------------------------------------------------------------------------------
Loss mit flag VARCHAR2(2) Y= Active loss mitigation N=No active loss Servicer defined indicator that
mitigation identifies that the loan is involved in
completing a loss mitigation
alternative.
------------------------------------------------------------------------------------------------------------------------------------
E-4
------------------------------------------------------------------------------------------------------------------------------------
Data Field Format Data Description
------------------------------------------------------------------------------------------------------------------------------------
Loss mit removal date DATE(MM/DD/YYYY) The date that the mortgagor is denied
loss mitigation alternatives or the date
that the loss mitigation alternative is
completed resulting in a current or
liquidated loan.
------------------------------------------------------------------------------------------------------------------------------------
Loss mit type VARCHAR2(2) L= Loss Mitigation LT=Litigation pending The defined loss mitigation alternative
NP=Pending non-performing CH= Charge off identified on the loss mit approval
sale FB= Forbearance plan date.
DI=Deed in lieu PC=Partial claim
MO=Modification VA=VA refunding
SH=Short sale
------------------------------------------------------------------------------------------------------------------------------------
Loss mit value NUMBER(10,2) Value obtained typically from a BPO
prior to foreclosure sale intended to
aid in the completion of loss mitigation
activity.
------------------------------------------------------------------------------------------------------------------------------------
Loss mit value date DATE(MM/DD/YYYY) Name of vendor or management company
that provided the loss mitigation
valuation amount.
------------------------------------------------------------------------------------------------------------------------------------
Loss mit value source VARCHAR2(15) BPO= Broker's Price Opinion Appraisal=Appraisal Date that the loss mitigation valuation
amount was completed by vendor or
property management company.
------------------------------------------------------------------------------------------------------------------------------------
MI certificate number VARCHAR2(15) A number that is assigned individually
to the loan by the PMI company at the
time of origination. Similar to the VA
LGC/FHA Case Number in purpose.
------------------------------------------------------------------------------------------------------------------------------------
LPMI Cost NUMBER(7,7) The current premium paid to the PMI
company for Lender Paid Mortgage
Insurance.
------------------------------------------------------------------------------------------------------------------------------------
Occupancy status VARCHAR2(1) O=Owner occupied T=Tenant occupied The most recent status of the property
U=Unknown V=Vacant regarding who if anyone is occupying the
property. Typically a result of a
routine property inspection.
------------------------------------------------------------------------------------------------------------------------------------
First Vacancy date/ DATE(MM/DD/YYYY) The date that the most recent occupancy
Occupancy status date status was determined. Typically the
date of the most recent property
inspection.
------------------------------------------------------------------------------------------------------------------------------------
Original loan amount NUMBER(10,2) Amount of the contractual obligations
(ie: note and mortgage/deed of trust).
------------------------------------------------------------------------------------------------------------------------------------
Original value amount NUMBER(10,2) Appraised value of property as of
origination typically determined through
the appraisal process.
------------------------------------------------------------------------------------------------------------------------------------
E-5
------------------------------------------------------------------------------------------------------------------------------------
Data Field Format Data Description
------------------------------------------------------------------------------------------------------------------------------------
Origination date DATE(MM/DD/YYYY) Date that the contractual obligations
(ie: note and mortgage/deed of trust) of
the mortgagor was executed.
------------------------------------------------------------------------------------------------------------------------------------
FHA Part B funds received DATE(MM/DD/YYYY) Actual date that funds were received
date from HUD as a result of transmitting the
27011B claim.
------------------------------------------------------------------------------------------------------------------------------------
Post petition due date DATE(MM/DD/YYYY) The post petition due date of a loan
involved in a chapter 13 bankruptcy.
------------------------------------------------------------------------------------------------------------------------------------
Property condition VARCHAR2(2) 1=Excellent 2=Good Physical condition of the property as
3=Average 4-Fair most recently reported to the servicer
5=Poor 6=Very poor by vendor or property management
company.
------------------------------------------------------------------------------------------------------------------------------------
Property type VARCHAR2(2) 1=Single family 2=Townhouse Type of property secured by mortgage
3=Condo 4=Multifamily 5=Other such as: single family, 2-4 unit, etc.
6=Prefabricated B=Commercial C=Land only
7=Mobile home U=Unknown D=Farm
A=Church P=PUD R=Row house
O=Co-op M=Manufactured housing 24= 2-4 family
CT=Condotel MU=Mixed use
------------------------------------------------------------------------------------------------------------------------------------
Reason for default VARCHAR2(3) 001=Death of principal mtgr 02=Illness of Cause of delinquency is identified by
003=Illness of mtgr's family member principal mtgr mortgagor.
004=Death of mtgr's family member 005=Marital difficulties
006=Curtailment of income 007=Excessive obligations
008=Abandonment of property 009=Distant employee transfer
011=Property problem 012=Inability to sell property
013=Inability to rent property 014=Military service
015=Other 016=Unemployment
017=Business failure 019=Casualty loss
022=Energy-Environment costs 023= Servicing problems
026= Payment adjustment 027=Payment dispute
029=Transfer ownership pending 030=Fraud
031=Unable to contact borrower INC=Incarceration
------------------------------------------------------------------------------------------------------------------------------------
REO repaired value NUMBER(10,2) The projected value of the property that
is adjusted from the "as is" value
assuming necessary repairs have been
made to the property as determined by
the vendor/property management company.
------------------------------------------------------------------------------------------------------------------------------------
REO list price adjustment NUMBER(15,2) The most recent listing/pricing amount
amount as updated by the servicer for REO
properties.
----------------------------------------------------_-------------------------------------------------------------------------------
E-6
------------------------------------------------------------------------------------------------------------------------------------
Data Field Format Data Description
------------------------------------------------------------------------------------------------------------------------------------
REO list price adjustment DATE(MM/DD/YYYY) The most recent date that the servicer
date advised the agent to make an adjustment
to the REO listing price.
------------------------------------------------------------------------------------------------------------------------------------
REO value (as is) NUMBER(10,2) The value of the property without making
any repairs as determined by the vendor/
property management company.
------------------------------------------------------------------------------------------------------------------------------------
REO actual closing date DATE(MM/DD/YYYY) The actual date that the sale of the REO
property closed escrow.
------------------------------------------------------------------------------------------------------------------------------------
REO flag VARCHAR2(7) Y=Active REO N=No active REO Servicer defined indicator that
identifies that the property is now Real
Estate Owned.
------------------------------------------------------------------------------------------------------------------------------------
REO original list date DATE(MM/DD/YYYY) The initial/first date that the property
was listed with an agent as an REO.
------------------------------------------------------------------------------------------------------------------------------------
REO original list price NUMBER(15,2) The initial/first price that was used to
list the property with an agent as an
REO.
------------------------------------------------------------------------------------------------------------------------------------
REO net sales proceeds NUMBER(10,2) The actual REO sales price less closing
costs paid. The net sales proceeds are
identified within the HUD1 settlement
statement.
------------------------------------------------------------------------------------------------------------------------------------
REO sales price NUMBER(10,2) Actual sales price agreed upon by both
the purchaser and servicer as documented
on the HUD1 settlement statement.
------------------------------------------------------------------------------------------------------------------------------------
REO scheduled close date DATE(MM/DD/YYYY) The date that the sale of the REO
property is scheduled to close escrow.
------------------------------------------------------------------------------------------------------------------------------------
REO value date DATE(MM/DD/YYYY) Date that the vendor or management
company completed the valuation of the
property resulting in the REO value
(as is).
------------------------------------------------------------------------------------------------------------------------------------
REO value source VARCHAR2(15) BPO= Broker's Price Opinion Appraisal=Appraisal Name of vendor or management company
that provided the REO value (as is).
------------------------------------------------------------------------------------------------------------------------------------
Repay first due date DATE(MM/DD/YYYY) The due date of the first scheduled
payment due under a forbearance or
repayment plan agreed to by both the
mortgagor and servicer.
------------------------------------------------------------------------------------------------------------------------------------
Repay next due date DATE(MM/DD/YYYY) The due date of the next outstanding
payment due under a forbearance or
repayment plan agreed to by both the
mortgagor and servicer.
------------------------------------------------------------------------------------------------------------------------------------
E-7
------------------------------------------------------------------------------------------------------------------------------------
Data Field Format Data Description
------------------------------------------------------------------------------------------------------------------------------------
Repay plan DATE(MM/DD/YYYY) The servicer defined date upon which the
broken/reinstated/closed servicer considers that the plan is no
date longer in effect as a result of plan
completion or mortgagor's failure to
remit payments as scheduled.
------------------------------------------------------------------------------------------------------------------------------------
Repay plan created date DATE(MM/DD/YYYY) The date that both the mortgagor and
servicer agree to the terms of a
forbearance or repayment plan.
------------------------------------------------------------------------------------------------------------------------------------
SBO loan number NUMBER(9) Individual number that uniquely
identifies loan as defined by Aurora
Master Servicing.
------------------------------------------------------------------------------------------------------------------------------------
Escrow balance/advance NUMBER(10,2) The positive or negative account balance
balance that is dedicated to payment of hazard
insurance, property taxes, MI, etc.
(escrow items only)
------------------------------------------------------------------------------------------------------------------------------------
Title approval letter DATE(MM/DD/YYYY) The actual date that the title approval
received date was received as set forth in the HUD
title approval letter.
------------------------------------------------------------------------------------------------------------------------------------
Title package HUD/VA date DATE(MM/DD/YYYY) The actual date that the title package
was submitted to either HUD or VA.
------------------------------------------------------------------------------------------------------------------------------------
VA claim funds received date DATE(MM/DD/YYYY) The actual date that funds were received
by the servicer from the VA for the
expense claim submitted by the servicer.
------------------------------------------------------------------------------------------------------------------------------------
VA claim submitted date DATE(MM/DD/YYYY) The actual date that the expense claim
was submitted by the servicer to the VA.
------------------------------------------------------------------------------------------------------------------------------------
VA first funds received NUMBER(15,2) The amount of funds received by the
amount servicer from VA as a result of the
specified bid.
------------------------------------------------------------------------------------------------------------------------------------
VA first funds received DATE(MM/DD/YYYY) The date that the funds from the
date specified bid were received by the
servicer from the VA.
------------------------------------------------------------------------------------------------------------------------------------
VA XXX submitted date DATE(MM/DD/YYYY) Actual date that the Notice of Election
to Convey was submitted to the VA.
------------------------------------------------------------------------------------------------------------------------------------
Zip Code VARCHAR2(5) US postal zip code that corresponds to
property location.
------------------------------------------------------------------------------------------------------------------------------------
E-8
------------------------------------------------------------------------------------------------------------------------------------
Data Field Format Data Description
------------------------------------------------------------------------------------------------------------------------------------
FNMA Delinquency status code VARCHAR2(3) 09=Forbearance 17=Preforeclosure sale The code is electronically reported
24=Drug seizure 26=Refinance 27=Assumption to FNMA by the servicer that reflects
28=Modification 29=Charge-off 30=Third-party sale the current defaulted status of a
31=Probate 32=Military indulgence 43=Foreclosure loan. (ie: 65, 67, 43 or 44)
44=Deed-in-lieu 49=Assignment 61=Second lien
62=VA no-bid 63=VA Refund considerations
65-Ch. 7 bankruptcy 64=VA buydown
66=Ch. 11 bankruptcy 67=Ch. 13 bankruptcy
------------------------------------------------------------------------------------------------------------------------------------
FNMA delinquency reason VARCHAR2(3) 001=Death of principal mtgr 002=Illness of principal The code that is electronically
code 003=Illness of mtgr's family member 004=Death of mtgr's reported to FNMA by the servicer that
005=Marital difficulties family member describes the circumstance that
007=Excessive obligations 006=Curtailment of income appears to be the primary
009=Distant employee transfer 008=Abandonment of contributing factor to the
012=Inability to sell property property delinquency.
014=Military service 011=Property problem
016=Unemployment 013=Inability to rent
019=Casualty loss property
023= Servicing problems 015=Other
027=Payment dispute 017=Business failure
030=Fraud 022=Energy-Environment
INC=Incarceration costs
026=Payment adjustment
029=Transfer of ownership
pending
031=Unable to contact
borrower
------------------------------------------------------------------------------------------------------------------------------------
Suspense balance NUMBER(10,2) Money submitted to the servicer,
credited to the mortgagor's account
but not allocated to principal,
interest, escrow, etc.
------------------------------------------------------------------------------------------------------------------------------------
Restricted escrow balance NUMBER(10,2) Money held in escrow by the mortgage
company through completion of repairs
to property.
------------------------------------------------------------------------------------------------------------------------------------
Investor number NUMBER (10,2) Unique number assigned to a group of
loans in the servicing system.
------------------------------------------------------------------------------------------------------------------------------------
E-9
EXHIBIT F
[Reserved]
F-1 G-2
EXHIBIT G
FORM OF LIQUIDATION REPORT
Calculation of Realized Loss/Gain Form 332- Instruction Sheet
1. The numbers on the form correspond with the numbers listed below.
Liquidation and Acquisition Expenses:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced
is required.
2. The Total Interest Due less the aggregate amount of servicing fee that
would have been earned if all delinquent payments had been made as
agreed. For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of
the Mortgage Loan as calculated on a monthly basis. For documentation,
an Amortization Schedule from date of default through liquidation
breaking out the net interest and servicing fees advanced is required.
4-12. Complete as applicable. All line entries must be supported by copies
of appropriate statements, vouchers, receipts, bills, canceled checks,
etc., to document the expense. Entries not properly documented will
not be reimbursed to the Servicer.
13. The total of lines 1 through 12.
Credits:
14-21. Complete as applicable. All line entries must be supported by copies
of the appropriate claims forms, EOBs, HUD-1 and/or other proceeds
verification, statements, payment checks, etc. to document the credit.
If the Mortgage Loan is subject to a Bankruptcy Deficiency, the
difference between the Unpaid Principal Balance of the Note prior to
the Bankruptcy Deficiency and the Unpaid Principal Balance as reduced
by the Bankruptcy Deficiency should be input on line 20.
22. The total of lines 14 through 21.
Please note: For HUD/VA loans, use line (15) for Part A/Initial proceeds
and line (16) for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
23. The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis ( ).
G-1
Exhibit 3A: Calculation of Realized Loss/Gain Form 332
XXXXX FARGO BANK, N.A.
CALCULATION OF REALIZED LOSS/GAIN
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
------------------------ ---------------------- -------------------
Servicer Loan No. Servicer Name Servicer Address
------------------------- ---------------------- ----------------------
XXXXX FARGO BANK, N.A. Loan No._____________________________
Borrower's Name:________________________________________________________
Property Address:____________________________________________________________
Liquidation and Acquisition Expenses:
(1) Actual Unpaid Principal Balance of Mortgage Loan $ ______________(1)
(2) Interest accrued at Net Rate ________________(2)
(3) Accrued Servicing Fees ________________(3)
(4) Attorney's Fees ________________(4)
(5) Taxes ________________(5)
(6) Property Maintenance ________________(6)
(7) MI/Hazard Insurance Premiums ________________(7)
(8) Utility Expenses ________________(8)
(9) Appraisal/BPO ________________(9)
(10) Property Inspections ________________(10)
(11) FC Costs/Other Legal Expenses ________________(11)
(12) Other (itemize) $________________(12)
Cash for Keys________________________ ________________
HOA/Condo Fees_______________________ ________________
_____________________________________ ________________
_____________________________________ ________________
Total Expenses $ _______________(13)
Credits:
(14) Escrow Balance $ _______________(14)
(15) HIP Refund _______________ (15)
(16) Rental Receipts _______________ (16)
(17) Hazard Loss Proceeds _______________ (17)
(18) Primary Mortgage Insurance Proceeds _______________ (18)
(19) Pool Insurance Proceeds _______________ (19)
(20) Proceeds from Sale of Acquired Property _______________ (20)
(21) Other (itemize) _______________ (21)
_________________________________________ _______________
_________________________________________ _______________
Total Credits $_______________(22)
Total Realized Loss (or Amount of Gain) $_______________(23)
X-0
XXXXXXX X
XXXXXXXXXX XX COMPLIANCE ADDENDUM
ARTICLE I
DEFINED TERMS
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Agreement. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
Commission: The United States Securities and Exchange Commission.
Servicer Information: As defined in Section 2.07(a).
Exchange Act: The Securities Exchange Act of 1934, as amended.
Master Servicer: With respect to any Securitization Transaction, the "master
servicer," if any, identified in the related transaction documents.
Public Securitization Transaction. Any transaction involving either 91) a sale
or other transfer of some or all of he Mortgage Loans directly or indirectly to
an issuing entity in connection with an issuance of publicly offered
mortgage-backed securities or (2) an issuance of publicly offered securities,
the payments on which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in part, of
some or all of the Mortgage Loans.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17
C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
Securities Act: The Securities Act of 1933, as amended.
Servicer: As defined in Section 2.03(c).
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Static Pool Information: Static pool information as described in Item
1l05(a)(l)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person determined by the
Servicer that is not responsible for the overall servicing (as "servicing" is
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commonly understood by participants in the mortgage-backed securities market) of
Mortgage Loans but performs one or more discrete functions identified in Item
l122(d) of Regulation AB (including, without limitation, Instruction 2 thereof)
with respect to Mortgage Loans in any Reconstitution Agreement under the
direction or authority of the Servicer or a Subservicer.
Subservicer: Any Person determined by the Servicer that services Mortgage Loans
on behalf of the Servicer or any Subservicer and is responsible for the
performance (whether directly or through Subservicers or Subcontractors) of a
substantial portion of the material servicing functions required to be performed
by the Servicer under any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
ARTICLE II
COMPLIANCE WITH REGULATION AB
Section 2.01. Intent of the Parties; Reasonableness.
The Purchaser and the Servicer acknowledge and agree that the purpose of
Article II of this Reg AB Addendum is to facilitate compliance by the Purchaser
and any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its terms
only to offerings of asset-backed securities that are registered under the
Securities Act, the Servicer acknowledges that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. Except to the extent set forth in the
Regulation AB Addendum, references in this Regulation AB Addendum to compliance
with Regulation AB include provision of comparable disclosure in private
offerings.
None of the Purchaser, any Master Servicer nor the Depositor shall exercise
its right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance with
the Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). The Servicer acknowledges
that interpretations of the requirements of Regulation AB may change over time
and agrees to reasonably amend this Agreement to comply with requests made by
the Purchaser, any Master Servicer or any Depositor in good faith for delivery
of information under these provisions on the basis of evolving interpretations
of Regulation AB.
The Purchaser (including any of its assignees or designees), the Master
Servicer and the Depositor shall reasonably cooperate with the Servicer by
providing timely notice of requests for information under these provisions and
by reasonably limiting such requests to information required, in the Purchaser's
reasonable judgment, to comply with this Regulation AB.
Section 2.02. Additional Representations and Warranties of the Servicer.
(a) In connection with a Securitization Transaction, the Servicer
represents to the Purchaser, to any Master Servicer and to any Depositor, as of
the date on which information is first provided to the Purchaser, any Master
Servicer or any Depositor under Section 2.03 that, except as disclosed in
writing to the Purchaser, such Master Servicer or such Depositor prior to such
date: (i) the Servicer is not aware and has not received notice that any
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default, early amortization or other performance triggering event has occurred
as to any other securitization due to any act or failure to act of the Servicer;
(ii) the Servicer has not been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application of a
servicing performance test or trigger; (iii) no material noncompliance with the
applicable Servicing Criteria with respect to other securitizations of
residential mortgage loans involving the Servicer as servicer has been disclosed
or reported by the Servicer; (iv) no material changes to the Servicer's policies
or procedures with respect to the servicing function it will perform under the
related Reconstitution Agreement for mortgage loans of a type similar to the
Mortgage Loans have occurred during the three-year period immediately preceding
the related Securitization Transaction; (v) there are no aspects of the
Servicer's financial condition that could have a material adverse effect on the
performance by the Servicer of its servicing obligations under this Agreement or
any Reconstitution Agreement; (vi) there are no material legal proceedings
pending or known to be contemplated by governmental authorities against the
Servicer or any Subservicer; and (vii) there are no affiliations, relationships
or transactions relating to the Servicer or any Subservicer with respect to any
Securitization Transaction and any party thereto identified in writing in the
related Reconstitution Agreement of a type described in Item 1119 of Regulation
AB.
(b) If so requested by the Purchaser, any Master Servicer or any Depositor
on any date following the date on which information is first provided to the
Purchaser, any Master Servicer or any Depositor under Section 2.03, the Servicer
shall endeavor within five Business Days but in no event later than ten
following such request, to confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or, if
any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Section 2.03. Information to Be Provided by the Servicer.
In connection with any Securitization Transaction, the Servicer shall (i)
within ten Business Days following request by the Purchaser or any Depositor,
provide to the Purchaser and such Depositor (or, as applicable, cause each
Subservicer to provide), in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, the information and materials
specified in paragraphs (a), (d) and (e) of this Section, and (ii) as promptly
as practicable following notice to or discovery by the Servicer, provide to the
Purchaser and any Depositor (in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor) the information specified in
paragraph (b) of this Section.
(a) If so requested by the Purchaser or any Depositor, the Servicer shall
provide such information regarding the Servicer, as servicer of the Mortgage
Loans, and each Subservicer (each of the Servicer and each Subservicer, for
purposes of this paragraph, a "Servicer"), as is requested for the purpose of
compliance with Items 1108, 1117 and 1119 of Regulation AB. Such information
shall include:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's
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experience in servicing assets of any type as well as a more detailed
discussion of the Servicer's experience in, and procedures for, the
servicing function it will perform under the Agreement and any
Reconstitution Agreements; information regarding the size, composition and
growth of the Servicer's portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the
Servicer that may be material, in the good faith judgment of the Purchaser
or any Depositor, to any analysis of the servicing of the Mortgage Loans or
the related asset-backed securities, as applicable, including, without
limitation:
(1) whether any prior securitizations of mortgage loans of a type
similar to the Mortgage Loans involving the Servicer have defaulted or
experienced an early amortization or other performance triggering
event because of servicing during the three-year period immediately
preceding the related Securitization Transaction;
(2) the extent of outsourcing the Servicer utilizes;
(3) whether there has been previous disclosure of material
noncompliance with the applicable servicing criteria with respect to
other securitizations of residential mortgage loans involving the
Servicer as a servicer during the three-year period immediately
preceding the related Securitization Transaction;
(4) whether the Servicer has been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing
default or to application of a servicing performance test or trigger;
and
(5) such other information as the Purchaser or any Depositor may
reasonably request for the purpose of compliance with Item 1108(b)(2)
of Regulation AB, which information shall be identified in any
applicable Reconstitution Agreement;
(C) a description of any material changes during the three-year period
immediately preceding the related Securitization Transaction to the
Servicer's policies or procedures with respect to the servicing function it
will perform under the Agreement and any Reconstitution Agreements for
mortgage loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial condition, to the
extent that there is a material risk that an adverse financial event or
circumstance involving the Servicer could have a material adverse effect on
the performance by the Servicer of its servicing obligations under the
Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period immediately preceding
the related Securitization Transaction, which may be limited to a statement
by an authorized officer of the Servicer to the effect that the Servicer
has made all advances required to be made on residential mortgage loans
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serviced by it during such period, or, if such statement would not be
accurate, information regarding the percentage and type of advances not
made as required, and the reasons for such failure to advance;
(F) a description of the Servicer's processes and procedures designed
to address any special or unique factors involved in servicing loans of a
similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through
liquidation of mortgaged properties, sale of defaulted mortgage loans or
workouts; and
(H) information as to how the Servicer defines or determines
delinquencies and chargeoffs, including the effect of any grace period,
re-aging, restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience;
(I) a description of any material legal proceedings pending or known
to be contemplated by governmental authorities against the Servicer; and
(J) a description of any affiliation (of a type described in Item 1119
of Regulation AB) between the Servicer and any of the following parties to
a Securitization Transaction, as such parties are identified to the
Servicer by the Purchaser or any Depositor in writing in advance of such
Securitization Transaction and in the Reconstitution Agreement:
(1) any servicer;
(2) any trustee;
(3) any originator;
(4) any significant obligor;
(5) any enhancement or support provider; and
(6) any other material transaction party.
provided, in the event of a conflict between the obligations contained in this
subsection (a) and the requirements of Regulation AB, the requirements of
Regulation AB shall control.
(b) For the purpose of satisfying the reporting obligations under the
Exchange Act with respect to any class of asset-backed securities, the Servicer
shall (or shall cause each Subservicer to) (i) in a commercially reasonable
manner notify the Purchaser, any Master Servicer and the Depositor in writing of
(A) any material legal proceedings pending or known to be contemplated by
governmental authorities involving the Servicer or any Subservicer, and (B) any
affiliations (of a type described in Item 1119 of Regulation AB) that develop
following the closing date of a Securitization Transaction between the Servicer,
any Subservicer and any of the parties specified in clause (D) of paragraph (a)
of this Section (and any other parties identified in writing by the requesting
party) with respect to such Securitization Transaction, (ii) provide to the
Purchaser and any Depositor a description of such proceedings or affiliations
identified in clauses (A) or (B) of this paragraph.
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(c) As a condition to the succession to the Servicer or any Subservicer as
servicer or subservicer under the Agreement or any Reconstitution Agreement by
any Person (i) into which the Servicer or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Servicer or
any Subservicer, the Servicer shall provide to the Purchaser, any Master
Servicer, and the Depositor, at least 15 calendar days prior to the effective
date of such succession or appointment, (x) written notice of such succession or
appointment and (y) in writing and in form and substance reasonably satisfactory
to the Purchaser and such Depositor, all information reasonably requested by the
Purchaser, any Master Servicer or the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to any class of
asset-backed securities.
(d) In addition to such information as the Servicer, as servicer, is
obligated to provide pursuant to other provisions of the Agreement, not later
than ten days prior to the deadline for the filing of any distribution report on
Form 10-D in respect of any Securitization Transaction that includes any of the
Mortgage Loans serviced by the Servicer or any Subservicer, the Servicer or such
Subservicer, as applicable, shall, to the extent the Servicer or such
Subservicer has knowledge, provide to the Master Servicer notice of the
occurrence of any of the following events along with all information, data, and
materials related thereto as may be required to be included in the related
distribution report on Form 10-D (as specified in the provisions of Regulation
AB referenced below):
(i) any material modifications, extensions or waivers of pool asset
terms, fees, penalties or payments during the distribution period or that
have cumulatively become material over time (Item 1121(a)(11) of Regulation
AB); and
(ii) material breaches of pool asset representations or warranties or
transaction covenants (Item 1121(a)(12) of Regulation AB).
(e) Upon request, the Servicer shall provide to the Purchaser, any Master
Servicer and any Depositor, evidence of the authorization of the person signing
any certification or statement.
Section 2.04. Servicer Compliance Statement.
On or before March 15 of each calendar year, commencing in 2007, the
Servicer shall deliver to the Purchaser, any Master Servicer and any Depositor a
statement of compliance addressed to the Purchaser, such Master Servicer and
such Depositor and signed by an authorized officer of the Servicer, to the
effect that (i) a review of the Servicer's activities during the immediately
preceding calendar year (or applicable portion thereof) and of its performance
under the Agreement and any applicable Reconstitution Agreement during such
period has been made under such officer's supervision, and (ii) to the best of
such officers' knowledge, based on such review, the Servicer has fulfilled all
of its obligations under the Agreement and any applicable Reconstitution
Agreement in all material respects throughout such calendar year (or applicable
portion thereof) or, if there has been a failure to fulfill any such obligation
in any material respect, specifically identifying each such failure known to
such officer and the nature and the status thereof.
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Section 2.05. Report on Assessment of Compliance and Attestation.
(a) In connection with any Public Securitization Transaction, on or before
March 15 of each calendar year, commencing in 2007, the Servicer shall:
(i) deliver to the Purchaser, any Master Servicer and any Depositor a
report (in form and substance reasonably satisfactory to the Purchaser,
such Master Servicer and such Depositor) regarding the Servicer's
assessment of compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed
to the Purchaser, such Master Servicer and such Depositor and signed by an
authorized officer of the Servicer, and shall address each of the
"Applicable Servicing Criteria" specified on Exhibit B hereto;
(ii) deliver to the Purchaser, any Master Servicer and any Depositor a
report of a registered public accounting firm reasonably acceptable to the
Purchaser, such Master Servicer and such Depositor that attests to, and
reports on, the assessment of compliance made by the Servicer and delivered
pursuant to the preceding paragraph. Such attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act;
(iii) cause each Subservicer, and each Subcontractor determined by the
Servicer pursuant to Section 2.06(b) to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB and deliver to
the Purchaser, any Master Servicer and any Depositor an assessment of
compliance and accountants' attestation as and when provided in paragraphs
(a) and (b) of this Section; and
(b) In connection with any Public Securitization Transaction, on or before
March 15 of the year following the closing of the Securitization Transaction,
and on or before March 15 in each subsequent calendar year if so advised by the
Purchaser, the Depositor or the Master Servicer, the Servicer shall deliver, and
cause each Subservicer and Subcontractor described in clause (iii) to provide,
to the Person that will be responsible for signing the certification (a
"Sarbanes Certification") required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on
behalf of an asset-backed issuer with respect to a Securitization Transaction a
certification, signed by an authorized signatory of the Servicer, in the form
attached hereto as Exhibit A.
The Servicer acknowledges that the parties identified in clause (a)(iv) above
may rely on the certification provided by the Servicer pursuant to such clause
in signing a Sarbanes Certification and filing such with the Commission. Neither
the Purchaser nor any Depositor will request delivery of a certification under
clause (a)(iv) above unless a Depositor is required under the Exchange Act to
file an annual report on Form 10-K with respect to an issuing entity whose asset
pool includes Mortgage Loans.
(c) Each assessment of compliance provided by a Subservicer pursuant to
Section 2.05(a)(iii) shall address each of the Servicing Criteria specified in
Exhibit B hereto. An assessment of compliance provided by a Subcontractor
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pursuant to Section 2.05(a)(iii) need not address any elements of the Servicing
Criteria other than those specified by the Servicer pursuant to Section 2.06.
Section 2.06. Use of Subservicers and Subcontractors.
The Servicer shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Servicer as servicer under
the Agreement or any Reconstitution Agreement unless the Servicer complies with
the provisions of paragraph (a) of this Section. The Servicer shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Servicer as servicer under the Agreement
or any Reconstitution Agreement unless the Servicer complies with the provisions
of paragraph (b) of this Section.
(a) It shall not be necessary for the Servicer to seek the consent of the
Purchaser, any Master Servicer or any Depositor to the utilization of any
Subservicer. In connection with a Public Securitization Transaction the Servicer
shall cause any Subservicer used by the Servicer (or by any Subservicer) for the
benefit of the Purchaser and any Depositor to comply with the provisions of this
Section and with Sections 2.02, 2.03( c), (e), (f) and (g), 2.04, 2.05 and 2.07
of this Reg AB Addendum to the same extent as if such Subservicer were the
Servicer, and to provide the information required with respect to such
Subservicer under Section 2.03(d) of this Reg AB Addendum. The Servicer shall be
responsible for obtaining from each Subservicer and delivering to the Purchaser
and any Depositor any servicer compliance statement required to be delivered by
such Subservicer under Section 2.04, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section 2.05 and
any certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 2.05 as and
when required to be delivered.
(b) It shall not be necessary for the Servicer to seek the consent of the
Purchaser, any Master Servicer or any Depositor to the utilization of any
Subcontractor. The Servicer shall promptly upon request provide to the
Purchaser, any Master Servicer and any Depositor (or any designee of the
Depositor, such as an administrator) a written description (in form and
substance satisfactory to the Purchaser, such Depositor and such Master
Servicer) of the role and function of each Subcontractor utilized by the
Servicer or any Subservicer, specifying (i) the identity of each such
Subcontractor and (ii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (i) of this paragraph.
In connection with a Public Securitization Transaction, as a condition to
the utilization of any Subcontractor, the Servicer shall cause any such
Subcontractor used by the Servicer (or by any Subservicer) for the benefit of
the Purchaser and any Depositor to comply with the provisions of Sections 2.05
and 2.07 of this Reg AB Addendum to the same extent as if such Subcontractor
were the Servicer. The Servicer shall be responsible for obtaining from each
Subcontractor and delivering to the Purchaser and any Depositor any assessment
of compliance and attestation and the other certifications required to be
delivered by such Subservicer and such Subcontractor under Section 2.05, in each
case as and when required to be delivered.
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Section 2.07. Indemnification; Remedies.
(a) The Servicer shall indemnify the Purchaser, each affiliate of the
Purchaser that has entered into the applicable Reconstitution Agreement, and
each of the following parties participating in a Securitization Transaction, to
the extent identified in such Reconstitution Agreement: each sponsor and issuing
entity; each Person (including, but not limited to, any Master Servicer if
applicable) responsible for the preparation, execution or filing of any report
required to be filed with the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to Rule 13a-14(d) or
Rule 15d-14(d) under the Exchange Act with respect to such Securitization
Transaction; each broker dealer acting as underwriter, placement agent or
initial purchaser, each Person who controls any of such parties or the Depositor
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act); and the respective present and former directors, officers and
employees of each of the foregoing and of the Depositor (each, an "Indemnified
Party"), and shall hold each of them harmless from and against any claims,
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification, data,
accountants' letter or other material provided under this Article II by or
on behalf of the Servicer, or provided under this Article II by or on
behalf of any Subservicer or Subcontractor (collectively, the "Servicer
Information"), or (B) the omission or alleged omission to state in the
Servicer Information a material fact required to be stated in the Servicer
Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this paragraph shall
be construed solely by reference to the Servicer Information and not to any
other information communicated in connection with a sale or purchase of
securities, without regard to whether the Servicer Information or any
portion thereof is presented together with or separately from such other
information;
(ii) any material breach by the Servicer of its obligations under this
Article II, including particularly any failure by the Servicer, any
Subservicer or any Subcontractor to deliver any information, report,
certification, accountants' letter or other material when and as required
under this Article II, including any failure by the Servicer to identify
pursuant to Section 2.06(b) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB;
(iii) any breach by the Servicer of a representation or warranty set
forth in Section 2.02(a) or in a writing furnished pursuant to Section
2.02(b) and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured by
such closing date, or any breach by the Servicer of a representation or
warranty in a writing furnished pursuant to Section 2.02(b) to the extent
made as of a date subsequent to such closing date; or
(iv) the negligence, bad faith or willful misconduct of the Servicer
in connection with its performance under this Article II.
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provided, for claims of an alleged untrue statement of fact or alleged omission,
the Purchaser shall not enter into any settlement of any such claim without the
consent of Servicer, which consent shall not be unreasonably withheld and that
the Servicer shall not be subject to the indemnification provisions of this
clause (a) if such claims are made without merit or not in good faith; provided,
further, that in no event shall the Servicer be liable for any indirect,
incidental, special exemplary or consequential damages.
In the case of any failure of performance described in clause (a)(ii) of
this Section, the Servicer shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Servicer,
any Subservicer or any Subcontractor.
(b) (i) Any failure by the Servicer, any Subservicer or any Subcontractor
to deliver any information, report, certification, accountants' letter or other
material when and as required under this Article II, or any breach by the
Servicer of a representation or warranty set forth in Section 2.02(a) or in a
writing furnished pursuant to Section 2.02(b) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by the Servicer of a
representation or warranty in a writing furnished pursuant to Section 2.02(b) to
the extent made as of a date subsequent to such closing date and which, except
as provided in clause (ii) of this paragraph, continues unremedied for three
Business Days after the date on which such information, report, certification
was required to be delivered, shall constitute an Event of Default with respect
to the Servicer under the Agreement and the applicable Reconstitution Agreement,
and shall entitle the Purchaser or any Depositor, as applicable, in its sole
discretion to terminate the rights and obligations of the Servicer as servicer
under the Agreement and/or such applicable Reconstitution Agreement without
payment (notwithstanding anything in this Agreement or any applicable
Reconstitution Agreement to the contrary) of any compensation to the Servicer
(and if the Servicer is servicing any of the Mortgage Loans in a Securitization
Transaction, appoint a successor servicer reasonably acceptable to any Master
Servicer for such Securitization Transaction) other than Servicing Fees and
related compensation already earned and the reimbursement of Monthly Advances
and Servicing Advances; provided that to the extent that any provision of the
Agreement and/or such applicable Reconstitution Agreement expressly provides for
the survival of certain rights or obligations following termination of the
Servicer as servicer, such provision shall be given effect.
(ii) Any failure by the Servicer, any Subservicer or any Subcontractor
to deliver any information, report, certification or accountants' letter
when and as required under Section 2.04 or 2.05, including any failure by
the Servicer to identify pursuant to Section 2.06(b) any Subcontractor
"participating in the servicing function" within the meaning of Item 1122
of Regulation AB, shall immediately and automatically, without notice or
grace period, constitute an Event of Default with respect to the Servicer
under the Agreement and any applicable Reconstitution Agreement, and shall
entitle the Purchaser, any Master Servicer or any Depositor, as applicable,
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in its sole discretion to terminate the rights and obligations of the
Servicer as servicer under the Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement to the contrary) of any compensation to the Servicer (other than
Servicing Fees and related compensation already earned and the
reimbursement of Monthly Advances and Servicing Advances); provided that to
the extent that any provision of the Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain
rights or obligations following termination of the Servicer as servicer,
such provision shall be given effect.
Neither the Purchaser, any Master Servicer nor any Depositor shall be
entitled to terminate the rights and obligations of the Servicer pursuant
to this subparagraph (b)(ii) if a failure of the Servicer to identify a
Subcontractor "participating in the servicing function" within the meaning
of Item 1122 of Regulation AB was attributable solely to the role or
functions of such Subcontractor with respect to mortgage loans other than
the Mortgage Loans.
(iii) The Servicer shall promptly reimburse the Purchaser (or any
designee of the Purchaser, such as a master servicer) and any Depositor, as
applicable, for all reasonable expenses incurred by the Purchaser (or such
designee identified in the related Reconstitution Agreement) or such
Depositor, as such are incurred, in connection with the termination of the
Servicer as servicer and the transfer of servicing of the Mortgage Loans to
a successor servicer. The provisions of this paragraph shall not limit
whatever rights the Purchaser or any Depositor may have under other
provisions of the Agreement and/or any applicable Reconstitution Agreement
or otherwise, whether in equity or at law, such as an action for damages,
specific performance or injunctive relief.
(c) The Purchaser shall indemnify the Seller, each Person who controls the
Servicer (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act); and the respective present and former directors, officers
and employees of each of the foregoing (each, a "Seller Indemnified Party"), and
shall hold each of them harmless from and against any claims, losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them sustain
arising out of or based upon (1) (a) any untrue statement of a material fact
contained or alleged to be contained in any offering materials related to a
Securitization Transaction, including without limitation the registration
statement, prospectus, prospectus supplement, any private placement memorandum,
any offering circular, any computational materials, and any amendments or
supplements to the foregoing (collectively, the "Securitization Materials") or
(b) the omission or alleged omission to state in the Securitization Materials a
material fact required to be stated in the Securitization Materials or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is other
than a statement or omission arising out of, resulting from, or based upon the
Seller Information and (2) the negligence, bad faith or willful misconduct of
any party to the Securitization Transaction other then the Seller. This
indemnification shall survive the termination of this Agreement or the
termination of any part to this Agreement.
H-11
(d) If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the indemnifying party
agrees that it shall contribute to the amount paid or payable by such
Indemnified Party as a result of any claims, losses, damages or liabilities
incurred by such Indemnified Party in such proportion as is appropriate to
reflect the relative fault of such Indemnified Party on the one hand and the
indemnifying party on the other.
(e) The indemnification provided for herein shall survive the termination
of this Agreement or the termination of any party to this Agreement.
Section 2.08. Third-Party Beneficiary.
For purposes of this Article II and any related provisions thereto, each
Master Servicer shall be considered a third-party beneficiary of this Agreement,
entitled to all the rights and benefits hereof as if it were a direct party to
this Agreement.
H-12
EXHIBIT A
TO REGULATION AB COMPLIANCE ADDENDUM
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ]
(the "Agreement"), among [IDENTIFY PARTIES]
I, ________________________________, the _____________________ of [NAME OF
SERVICER] (the "Servicer"), certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers, with
the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Servicer's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the "Servicing
Criteria"), provided in accordance with Rules 13a-18 and 15d-18 under Securities
Exchange Act of 1934, as amended (the "Exchange Act") and Item 1122 of
Regulation AB (the "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the "Attestation
Report"), and all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans by the Servicer
during 200[ ] that were delivered by the Servicer to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee] pursuant to the Agreement
(collectively, the "Servicer Servicing Information");
(2) Based on my knowledge, the Servicer Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Servicer Servicing Information;
(3) Based on my knowledge, all of the Servicer Servicing Information
required to be provided by the Servicer under the Agreement has been provided to
the [Depositor] [Master Servicer] [Securities Administrator] [Trustee];
(4) I am responsible for reviewing the activities performed by the Servicer
as servicer under the Agreement, and based on my knowledge and the compliance
review conducted in preparing the Compliance Statement and except as disclosed
in the Compliance Statement, the Servicing Assessment or the Attestation Report,
the Servicer has fulfilled its obligations under the Agreement in all material
respects; and
(5) The Compliance Statement required to be delivered by the Servicer
pursuant to this Agreement, and the Servicing Assessment and Attestation Report
required to be provided by the Servicer and by any Subservicer and Subcontractor
pursuant to the Agreement, have been provided to the [Depositor] [Master
Servicer]. Any material instances of noncompliance described in such reports
have been disclosed to the [Depositor] [Master Servicer]. Any material instance
of noncompliance with the Servicing Criteria has been disclosed in such reports.
H-13
Date: __________________________
By: __________________________
Name:
Title:
X-00
XXXXXXX X
TO REGULATION AB COMPLIANCE ADDENDUM
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Servicer] [Name of
Subservicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria";
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Applicable
Servicing
Servicing Criteria Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
----------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance or X
other triggers and events of default in accordance with the transaction
agreements.
1122(d)(1)(i)
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1122(d)(1)(ii) If any material servicing activities are outsourced to third parties, X
policies and procedures are instituted to monitor the third party's
performance and compliance with such servicing activities.
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1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up N/A
servicer for the mortgage loans are maintained.
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1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the X
party participating in the servicing function throughout the reporting
period in the amount of coverage required by and otherwise in accordance
with the terms of the transaction agreements.
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Cash Collection and Administration
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1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate custodial X
bank accounts and related bank clearing accounts no more than two
business days following receipt, or such other number of days specified
in the transaction agreements.
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1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to an X
investor are made only by authorized personnel.
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1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or X
distributions, and any interest or other fees charged for such advances,
are made, reviewed and approved as specified in the transaction
agreements.
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1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve accounts
or accounts established as a form of overcollateralization, are
separately maintained (e.g., with respect to commingling of cash) as set X
forth in the transaction agreements.
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H-15
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Applicable
Servicing
Servicing Criteria Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured depository X
institution as set forth in the transaction agreements. For purposes of
this criterion, "federally insured depository institution" with respect
to a foreign financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1 (b)(1) of the Securities
Exchange Act.
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1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. X
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1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed X
securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30 calendar days after the
bank statement cutoff date, or such other number of days specified in
the transaction agreements; (C) reviewed and approved by someone other
than the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items are
resolved within 90 calendar days of their original identification,
or such other number of days specified in the transaction agreements.
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Investor Remittances and Reporting
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the Commission, X
are maintained in accordance with the transaction agreements and
applicable Commission requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms
set forth in the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the transaction
agreements; (C) are filed with the Commission as required by its rules
and regulations; and (D) agree with investors' or the trustee's records
as to the total unpaid principal balance and number of mortgage loans
serviced by the Servicer.
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1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance with X
timeframes, distribution priority and other terms set forth in the
transaction agreements.
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1122(d)(3)(iii) Disbursements made to an investor are posted within two business days to
the Servicer's investor records, or such other number of days specified X
in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with X
cancelled checks, or other form of payment, or custodial bank statements.
----------------------------------------------------------------------------------------------------------------------
H-16
----------------------------------------------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
Pool Asset Administration
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required by X
the transaction agreements or related mortgage loan documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by the X
transaction agreements
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, X
reviewed and approved in accordance with any conditions or requirements
in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in accordance X
with the related mortgage loan documents are posted to the Servicer's
obligor records maintained no more than two business days after receipt,
or such other number of days specified in the transaction agreements,
and allocated to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the X
Servicer's records with respect to an obligor's unpaid principal balance.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's mortgage X
loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction
agreements and related pool asset documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements
established by the transaction agreements.
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1122(d)(4)(viii) Records documenting collection efforts are maintained during the period X
a mortgage loan is delinquent in accordance with the transaction
agreements. Such records are maintained on at least a monthly basis, or
such other period specified in the transaction agreements, and
describe the entity's activities in monitoring delinquent mortgage loans
including, for example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary (e.g., illness or
unemployment).
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H-17
----------------------------------------------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage loans with X
variable rates are computed based on the related mortgage loan documents.
-------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow X
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or such
other period specified in the transaction agreements; (B) interest on
such funds is paid, or credited, to obligors in accordance with
applicable mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full repayment of
the related mortgage loans, or such other number of days specified
in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance X
payments) are made on or before the related penalty or expiration dates,
as indicated on the appropriate bills or notices for such payments,
provided that such support has been received by the servicer at least 30
calendar days prior to these dates, or such other number of days
specified in the transaction agreements.
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1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made on X
behalf of an obligor are paid from the servicer's funds and not charged
to the obligor, unless the late payment was due to the obligor's error
or omission.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two X
business days to the obligor's records maintained by the servicer, or
such other number of days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized and X
recorded in accordance with the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Item 1114(a)(1) N/A
through (3) or Item 1115 of Regulation AB, is maintained as set forth in
the transaction agreements.
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H-18
EXHIBIT I
SPECIAL FORECLOSURE RIGHTS PROVISIONS
1. The Servicer shall include in its monthly servicing reports pursuant to
Section 5.02 a code indicating the date that each Mortgage Loan was paid
through, and each Mortgage Loan that is in foreclosure or similar
proceedings.
2. Within five Business Days of its receipt of the monthly servicing report
with respect to any Mortgage Loan that is indicated to be 90 days past due
(based upon the "paid through" date), the holder of all the outstanding
securities of the most subordinated class of securities (the
"Securityholder") shall notify both the Servicer and Master Servicer if it
objects to foreclosure proceedings.
3. If the Securityholder does not object pursuant to section 2 above, the
Servicer shall continue to service the Mortgage Loan in accordance with the
provisions of the Servicing Agreement (as reconstituted).
4. If the Securityholder timely and affirmatively objects pursuant to section
2 above, then the Securityholder shall instruct the Master Servicer (with a
copy to the Servicer) to hire three appraisal firms selected by the Master
Servicer in its reasonable discretion, to compute the fair value of the
Mortgaged Property securing the related Mortgage Loan utilizing the Xxxxxx
Xxx Form 2055 Exterior-Only Inspection Residential Appraisal Report (each
such appraisal-firm computation, a "Fair Value Price"), in each case no
later than 30 days from the date of such Securityholder objection. The
Securityholder will provide the Master Servicer with contact information
for no fewer than five local appraisal firms within five Business Days
after receiving such instruction. All costs relating to the computation of
the Fair Value Prices shall be for the account of the Securityholder and
shall be paid by the Securityholder at the time that such Mortgage Loan is
purchased by the Securityholder.
(a) If the Master Servicer shall have received three Fair Value Prices
by the expiration of such 30-day period, then the Securityholder shall, no
later than five Business Days after the expiration of such 30-day period,
purchase such Mortgage Loan for an amount equal to the lesser of (i) the
unpaid principal balance of the related Mortgage Loan (the "Unpaid
Principal Balance") and (ii) the average of such three Fair Value Prices
respectively determined by such appraisal firms; and shall deliver such
amount to the Servicer against the assignment of the related Mortgage Loan
and the delivery of the related documents on the purchase date.
(b) If the Master Servicer shall not have received three Fair Value
Prices by the end of the 30-day period set forth above, then:
(1) If the Master Servicer shall have received only two Fair
Value Prices by the end of such 30-day period, then the Master
Servicer shall determine, in its reasonable discretion, the fair value
I-1
of the Mortgaged Property and other collateral relating to such
Mortgage Loan (such fair value, the "Master Servicer's Fair Value
Price") and the Securityholder shall, no later than five Business Days
after the expiration of such 30-day period, purchase such Mortgage
Loan for an amount equal to the least of (1) the Unpaid Principal
Balance thereof, (2) the average of such Fair Value Prices determined
by such appraisal firms and (3) the Master Servicer's Fair Value
Price; and shall deliver such amount to the Servicer against the
assignment of the related Mortgage Loan and the delivery of the
related documents on the purchase date.
(2) If the Master Servicer shall have received only one Fair
Value Price by the end of such 30-day period, then the Master Servicer
will determine the Master Servicer's Fair Value Price of the Mortgaged
Property related to such Mortgage Loan and the Securityholder shall,
no later than five Business Days after the expiration of such 30-day
period, purchase such Mortgage Loan for an amount equal to the least
of (1) the Unpaid Principal Balance thereof, (2) the Fair Value Price
determined by such appraisal firm and (3) the Master Servicer's Fair
Value Price; and shall deliver such amount to the Servicer against the
assignment of the related Mortgage Loan and the delivery of the
related documents on the purchase date.
(3) If the Master Servicer shall not have received any such Fair
Value Prices by the end of such 30-day period, then the Master
Servicer will determine the Master Servicer's Fair Value Price of the
Mortgaged Property related to such Mortgage Loan and the
Securityholder shall, no later than five Business Days after the
expiration of such 30-day period, purchase such Mortgage Loan for an
amount equal to the lesser of (1) the Unpaid Principal Balance thereof
and (2) the Master Servicer's Fair Value Price; and shall deliver such
amount to the Servicer against the assignment of the related Mortgage
Loan and the delivery of the related documents on the purchase date.
(4) If the Master Servicer has not received three Fair Value
Prices by the end of such 30-day period, it shall continue for the
next 30 days to try to obtain three Fair Value Prices. Upon the
earlier of the date that it obtains the three Fair Value Prices, or
the end of the 30-day extension, the Master Servicer shall recalculate
the price payable pursuant to this Exhibit and, within five Business
Days thereafter, (i) the Securityholder shall pay the Servicer the
positive difference between the recalculated purchase price, and the
price actually paid by it, or (ii) the Servicer shall refund to the
Securityholder the positive difference between the purchase price
actually paid by the Securityholder, and the recalculated purchase
price.
5. If the Securityholder shall fail to purchase a Mortgage Loan following its
objection pursuant to section 2 above, it shall forfeit any right to
purchase such Mortgage Loan or direct any proceedings with respect thereto.
I-2
6. Any notice, confirmation, instruction or objection pursuant to sections 1
or 2 above may be delivered via facsimile or other written or electronic
communication as the parties hereto and the Securityholder may agree to
from time to time.
7. For the avoidance of doubt, the Securityholder's rights set forth in this
Exhibit are intended to provide the Securityholder, for so long as it has
not forfeited its right under section 4 hereof as set forth in section 4
above, with the unilateral right to control foreclosure decisions in
respect of delinquent and defaulted Mortgage Loans, and certain exclusive
purchase rights so as to maximize the recovery value on delinquent and
defaulted Mortgage Loans.
8. In the event that the Securityholder purchases any Mortgage Loan pursuant
to this Exhibit, the Servicer and the Securityholder will work together in
good faith to take any and all actions necessary to effect such purchase,
including, but not limited to, the preparation and execution of any
endorsements or assignments of the Mortgage Loan documents, all at the
expense of the Securityholder.
9. The Master Servicer shall promptly deliver any written notices that it
receives under this Exhibit to the Securityholder, and shall provide copies
of each Fair Value Price appraisal and Master Servicer's Fair Value Price
with respect to any Mortgage Loan to the Servicer.
10. The Master Servicer shall provide copies of each Fair Value Price and any
written supporting materials it receives to any securities insurer within
ten days of receipt of such items by the Master Servicer.
I-3