FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT between LEHMAN BROTHERS BANK, FSB,
FLOW
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
between
▇▇▇▇▇▇
BROTHERS BANK, FSB,
PURCHASER
and
FIELDSTONE
MORTGAGE COMPANY,
SELLER
CONVENTIONAL,
FIXED AND ADJUSTABLE RATE, RESIDENTIAL MORTGAGE LOANS
Dated
as
of July 1, 2000
TABLE
OF CONTENTS
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Page
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SECTION
1.
|
DEFINITIONS.
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1
|
|
SECTION
2.
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CONVEYANCE
FROM SELLER TO PURCHASER.
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8
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SECTION
3.
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PURCHASE
PRICE.
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10
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SECTION
4.
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SERVICING
OF THE MORTGAGE LOANS.
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11
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SECTION
5.
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TRANSFER
OF SERVICING.
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11
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SECTION
6.
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REPRESENTATIONS,
WARRANTIES AND AGREEMENTS OF SELLER.
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14
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SECTION
7.
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REPRESENTATIONS
AND WARRANTIES REGARDING INDIVIDUAL MORTGAGE LOANS.
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16
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SECTION
8.
|
REMEDIES
FOR BREACH OF REPRESENTATIONS AND WARRANTIES; ADDITIONAL REPURCHASE
OBLIGATIONS.
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24
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SECTION
9.
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CLOSING.
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26
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SECTION
10.
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CLOSING
DOCUMENTS.
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27
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SECTION
11.
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MERGER
OR CONSOLIDATION OF THE SELLER.
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28
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SECTION
12.
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COSTS.
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29
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SECTION
13.
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PROTECTION
OF CONFIDENTIAL INFORMATION.
|
29
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SECTION
14.
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NOTICES.
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29
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SECTION
15.
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SEVERABILITY
CLAUSE.
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29
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SECTION
16.
|
COUNTERPARTS.
|
30
|
|
SECTION
17.
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PLACE
OF DELIVERY AND GOVERNING LAW.
|
30
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SECTION
18.
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FURTHER
AGREEMENTS.
|
30
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SECTION
19.
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INTENTION
OF THE PARTIES.
|
30
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SECTION
20.
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SUCCESSORS
AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
|
31
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SECTION
21.
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WAIVERS;
OTHER AGREEMENTS.
|
31
|
|
SECTION
22.
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EXHIBITS.
|
31
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SECTION
23.
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GENERAL
INTERPRETIVE PRINCIPLES.
|
31
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-
i
-
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SECTION
24.
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REPRODUCTION
OF DOCUMENTS.
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32
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SECTION
25.
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RECORDATION
OF ASSIGNMENTS OF MORTGAGE.
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32
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SECTION
26.
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NO
PERSONAL SOLICITATION.
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32
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EXHIBITS
|
EXHIBIT
A
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MORTGAGE
LOAN SCHEDULE
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|
EXHIBIT
B
|
CONTENTS
OF EACH MORTGAGE FILE
|
|
EXHIBIT
C
|
INTERIM
SERVICING AGREEMENT
|
|
EXHIBIT
D
|
FORM
OF SELLER’S OFFICER’S CERTIFICATE
|
|
EXHIBIT
E
|
FORM
OF OPINION OF COUNSEL TO THE SELLER
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EXHIBIT
F
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FORM
OF SECURITY RELEASE CERTIFICATION
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EXHIBIT
G
|
FORM
OF SECURITY RELEASE CERTIFICATION
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EXHIBIT
H
|
FORM
OF ASSIGNMENT AND ASSUMPTION AGREEMENT
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|
EXHIBIT
I
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CUSTODIAL
AGREEMENT
|
|
EXHIBIT
J
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
K
|
FORM
OF ASSIGNMENT OF CUSTODIAL AGREEMENT
|
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ii
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FLOW
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This
is a
Flow Mortgage Loan Purchase and Warranties Agreement (the “Agreement”),
dated
as of July 1, 2000, by and between ▇▇▇▇▇▇ Brothers Bank, FSB, having an office
at Eleven Madison Avenue, New York, New York 10010-3629 (the “Purchaser”)
and
Fieldstone Mortgage Company having an office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the “Seller”).
WHEREAS,
the Seller desires, from time to time, to sell to the Purchaser, and the
Purchaser desires, from time to time, to purchase from the Seller, certain
conventional adjustable and fixed rate residential first mortgage loans (the
“Mortgage
Loans”)
on a
servicing released basis as described herein, and which shall be delivered
as
whole loans;
WHEREAS,
each Mortgage Loan is secured by a mortgage, deed of trust or other security
instrument creating a first lien on a residential dwelling located in the
jurisdiction indicated on the applicable Mortgage Loan Schedule, which is
annexed hereto as Exhibit
A;
and
WHEREAS,
the Purchaser and the Seller wish to prescribe the manner of the conveyance,
servicing and control of the Mortgage Loans.
NOW,
THEREFORE, in consideration of the premises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller
agree
as follows:
SECTION
1. DEFINITIONS.
The
following terms are defined as follows (except as otherwise agreed in writing
by
the parties):
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type
as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property
is
located.
Agreement:
This
Flow Mortgage Loan Purchase and Warranties Agreement and all amendments hereof
and supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
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
Tax Service Contract Provider:
Any of
the following providers: Trans America.
Assignment
and Conveyance:
The
related Assignment and Conveyance, substantially in the form attached hereto
as
Exhibit
L.
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.
ARM:
A
Mortgage Loan, the Mortgage Interest Rate of which is adjusted from time
to
time.
BIF:
The
Bank Insurance Fund, or any successor thereto.
BPO:
A
broker’s price opinion obtained by the Purchaser.
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 are authorized or obligated
by
law or executive order to be closed.
Closing
Date:
The
related closing date as set forth on the related Purchase Price and Terms
Letter
and reflected on the related Assignment and Conveyance Agreement.
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.
Credit
Grade:
As
defined in the Underwriting Guidelines.
Custodial
Account:
The
separate trust account created and maintained pursuant to the Interim Servicing
Agreement.
Custodial
Agreement:
That
certain Custodial Agreement, dated as of September 1, 1999, by and between
the
Purchaser and U.S. Bank Trust National Association.
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
therein provided.
Cut-off
Date:
With
respect to any Closing Date, the date as set forth on the related Purchase
Price
and Terms Letter and reflected on the related Assignment and Conveyance
Agreement.
Deleted
Mortgage Loan:
A
Mortgage Loan which is repurchased or substituted with a Qualified Substitute
Mortgage Loan by the Seller in accordance with the terms of this
Agreement.
2
Determination
Date:
The
15th day of the month (or if such day is not a Business Day, the first Business
Day preceding such 15th day) in which the related Remittance Date
occurs.
Due
Date:
The day
of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace.
Due
Period:
With
respect to each Remittance Date, the period commencing on the second day
of the
month preceding the month of the Remittance Date and ending on the first
day of
the month of the Remittance Date.
Escrow
Account:
The
separate account created and maintained pursuant to the Interim Servicing
Agreement.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other document.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC:
The
Federal Home Loan Mortgage Corporation, or any successor thereto.
FNMA:
The
Federal National Mortgage Association, or any successor thereto.
Gross
Margin:
With
respect to each Mortgage Loan, the fixed percentage amount set forth in the
related Mortgage Note.
Group
of Mortgage Loans:
The
Mortgage Loans to be purchased by the Purchaser from the Seller on a particular
Closing Date.
Index:
The
rate per annum equal to the average of interbank offered rates for six month
U.S. dollar denominated deposits in the London Market (LIBOR) as published
by
The Wall Street Journal.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Interest
Rate Adjustment Date:
The
date on which an adjustment to the Mortgage Interest Rate with respect to
each
Mortgage Loan becomes effective.
Interim
Servicing Agreement:
The
agreement, attached as Exhibit
C
hereto
providing for the Seller to service the Mortgage Loans for an interim period
as
specified by the Interim Servicing Agreement.
3
Lifetime
Rate Cap:
The
provision of each Mortgage Note which provides for an absolute maximum Mortgage
Interest Rate thereunder.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee’s sale,
foreclosure sale or otherwise, or the sale of the related Mortgaged Property
if
the Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
Loan-to-Value
Ratio or LTV:
With
respect to any Mortgage Loan, the ratio of the outstanding principal amount
of
the Mortgage Loan as of the related Cut-off Date (unless otherwise indicated)
to
the lesser of (a) the Appraised Value of the Mortgaged Property and (b) if
the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property, expressed as a
percentage.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage
Loan.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first lien on an unsubordinated estate in fee simple in real property
securing the Mortgage Note.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit
B
annexed
hereto, and any additional documents required to be added to the Mortgage
File
pursuant to this Agreement.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note.
Mortgage
Loan:
An
individual Mortgage Loan which is the subject of this Agreement, each Mortgage
Loan originally sold and subject to this Agreement being identified on the
Mortgage Loan Schedule, which Mortgage Loan includes without limitation the
Mortgage File, the Monthly Payments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds, Prepayment Penalties,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan.
Mortgage
Loan Documents:
The
documents contained in the Mortgage File pertaining to each Mortgage
Loan.
4
Mortgage
Loan Schedule:
With
respect to each Group of Mortgage Loans purchased, a schedule of Mortgage
Loans
annexed hereto as Exhibit
A,
which
shall be delivered to the Purchaser at least three (3) Business Days prior
to
the related Closing Date, such schedule setting forth the following information
with respect to each Mortgage Loan: (1) the Seller’s Mortgage Loan identifying
number; (2) the Mortgagor’s name; (3) the street address of the Mortgaged
Property including the city, state and zip code; (4) a code indicating whether
the Mortgaged Property is a single family residence, a 2-4 family residence,
a
condominium unit or a unit in a planned unit development; (5) the original
months to maturity or the remaining months to maturity from the related Cut-off
Date, in any case based on the original amortization schedule, and if different,
the maturity expressed in the same manner but based on the actual amortization
schedule; (6) a code indicating whether the Mortgage Loan is an adjustable
rate,
fixed rate or balloon Mortgage Loan; (7) a code indicating whether the Mortgage
Loan is a first lien Mortgage Loan; (8) the Loan-to-Value Ratio at origination;
(9) the Mortgage Interest Rate as of the related Cut-off Date; (10) the first
payment date; (11) the stated maturity date; (12) the amount of the Monthly
Payment; (13) the next payment due date; (14) the original principal amount
of
the Mortgage Loan; (15) the principal balance of the Mortgage Loan as of
the
close of business on the related Cut-off Date, after deduction of payments
of
principal received on or before the related Cut-off Date; (16) a code indicating
the purpose of the Mortgage Loan; (17) a code indicating the occupancy status
of
the Mortgaged Property at origination; (18) the Index; (19) the next Interest
Rate Adjustment Date; (20) the next payment adjustment date; (21) the Gross
Margin; (22) the Mortgagor’s and co-Mortgagor’s FICO score and social security
numbers; (23) the maximum Mortgage Interest Rate under the terms of the Mortgage
Note; (24) the loan documentation type; (25) the debt to income ratio; (26)
the
Mortgagor’s age; (27) the co-Mortgagor’s age; (28) the Mortgagor’s gender; (29)
the co-Mortgagor’s gender; (30) the Mortgagor’s race; (31) the co-Mortgagor’s
race; (32) first time home buyer (y/n); (33) combined monthly income; (34)
combined housing expense; (35) year built and (36) Mortgagor marital status.
With respect to the Group of Mortgage Loans in the aggregate, each Mortgage
Loan
Schedule shall set forth the following information, as of the related Cut-off
Date: (1) the number of Mortgage Loans; (2) the current aggregate outstanding
principal balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; and (4) the weighted average maturity
of
the Mortgage Loans.
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
real property securing repayment of the debt evidenced by a Mortgage
Note.
Mortgagor:
The
obligor on a Mortgage Note.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or the President or a Vice President and by the Treasurer or the Secretary
or one of the Assistant Treasurers or Assistant Secretaries of the Seller,
and
delivered to the Purchaser as required by this Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Seller, reasonably
acceptable to the Purchaser.
Periodic
Rate Cap:
The
provision of each Mortgage Note which provides for an absolute maximum amount
by
which the Mortgage Interest Rate therein may increase on an Interest Rate
Adjustment Date above the Mortgage Interest Rate previously in
effect.
Person:
Any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof.
Pool
1
Mortgage Loan:
A
conventional one-to four family residential first lien ARM Mortgage Loan
which
is a 2/28 Mortgage Loan meaning that, after the initial two year period,
the
Mortgage Interest Rate payable by the Mortgagor is subject to adjustment
semi-annually in accordance with the related Mortgage Note.
5
Pool
2
Mortgage Loan:
A
conventional one-to four family residential first lien ARM Mortgage Loan
which
is a 3/27 Mortgage Loan meaning that, after the initial three year period,
the
Mortgage Interest Rate payable by the Mortgagor is subject to adjustment
semi-annually thereafter in accordance with the related Mortgage
Note.
Pool
3
Mortgage Loan:
Conventional one-to four family residential fixed rate, first lien Mortgage
Loans with original terms of up to 30 years. For the Pool 3 Mortgage Loans,
the
Mortgage Interest Rate payable by the Mortgagor is fixed for the life of
the
Mortgage and is subject to what is set forth in the related Mortgage
Note.
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as the
average rate under the “Money Rates” section of The Wall Street Journal.
Purchase
Price:
The
price paid on the related Closing Date by the Purchaser to the Seller in
exchange for the Mortgage Loans as calculated in Section 3 of this
Agreement.
Purchase
Price and Terms Letter:
With
respect to each Group of Mortgage Loans purchased hereunder, that certain
letter
agreement setting forth the general terms and conditions of the transaction
consummated herein and identifying the Mortgage Loans to be purchased
hereunder.
Purchaser:
▇▇▇▇▇▇
Brothers Bank, FSB, or its successor in interest or assigns or any successor
to
the Purchaser under this Agreement as herein provided.
Qualified
Appraiser:
An
appraiser, duly appointed by the Seller, who had no interest, direct or
indirect, in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation is not affected by the approval or disapproval of
the
Mortgage Loan, and such appraiser and the appraisal made by such appraiser
both
satisfy the requirements of Title XI of the Federal Institutions Reform,
Recovery and Enforcement Act of 1989 and the regulations promulgated thereunder,
all as in effect on the date the Mortgage Loan was originated.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business and approved as an
insurer by FNMA or FHLMC.
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by the Seller for a Deleted Mortgage
Loan which must, on the date of such substitution, (i) have an outstanding
principal balance, after deduction of all scheduled payments due in the month
of
substitution (or in the case of a substitution of more than one mortgage
loan
for a Deleted Mortgage Loan, an aggregate principal balance), not in excess
of
the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage
Interest Rate not less than and not more than 2% greater than the Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) have a Gross Margin not less than that of the
Deleted Mortgage Loan; (v) have a maximum Mortgage Interest Rate Cap not
less
than that of the Deleted Mortgage Loan; (vi) have a maximum periodic mortgage
Interest Rate Cap not less than that of the Deleted Mortgage Loan; (vii)
have a
Credit Grade equal to that of the Deleted Mortgage Loan and (viii) comply
with
each representation and warranty set forth in Section 6 and 7.
6
Remittance
Date:
The
15th day of each month (or if such day is not a Business Day, the Business
Day
immediately following such 15th day).
REO
Disposition Proceeds:
All
amounts received with respect to an REO disposition.
Repurchase
Price:
With
respect to any Mortgage Loan, a price equal to (i) the Stated Principal Balance
of the Mortgage Loan plus (ii) interest on such Stated Principal Balance
at the
Mortgage Interest Rate from the date on which interest has last been paid
and
distributed to the Purchaser to the date of repurchase, less amounts received,
if any, plus amounts advanced, if any, by any servicer, in respect of such
repurchased Mortgage Loan.
Seller:
Fieldstone Mortgage Company or its successor in interest or assigns or any
successor to the Seller under this Agreement as herein provided.
Servicer:
Seller
or its successor in interest or assigns under the Interim Servicing
Agreement.
Servicing
File:
With
respect to each Mortgage Loan the file retained by the Seller consisting
of
originals of all documents in the Mortgage File, which are not delivered
to the
Purchaser or the Purchaser’s designee, and copies of the Mortgage Loan Documents
listed on Exhibit
B
hereto
Servicing
Rights:
Any and
all of the following: (a) any and all rights to service the Mortgage Loans;
(b)
any payments to or monies received by the Seller for servicing the Mortgage
Loans; (c) any late fees, penalties or similar payments with respect to the
Mortgage Loans; (d) all agreements or documents creating, defining or evidencing
any such servicing rights to the extent they relate to such servicing rights
and
all rights of the Seller thereunder; (e) Escrow Payments or other similar
payments with respect to the Mortgage Loans and any amounts actually collected
by the Seller with respect thereto; (f) all accounts and other rights to
payment
related to any of the property described in this paragraph; and (g) any and
all
documents, files, records, servicing files, servicing documents, servicing
records, data tapes, computer records, or other information pertaining to
the
Mortgage Loans or pertaining to the past, present or prospective servicing
of
the Mortgage Loans.
Stated
Principal Balance:
As to
each Mortgage Loan, (i) the principal balance of the Mortgage Loan at the
related Cut-off Date after giving effect to payments of principal received
on or
before such date, minus (ii) all amounts previously distributed to the Purchaser
with respect to the related Mortgage Loan representing payments or recoveries
of
principal or advances in lieu thereof.
Transfer
Date:
The
date on which the Purchaser, or its designee, shall receive the transfer
of
servicing responsibilities and begin to perform the servicing of the Mortgage
Loans, and the Seller shall cease all servicing responsibilities. The Transfer
Date shall occur on a date to be mutually agreed upon by the Seller and the
Purchaser.
7
Underwriting
Guidelines:
The
underwriting guidelines of the Seller, attached hereto as Exhibit
J.
The
parties intend hereby to set forth the terms and conditions upon which the
proposed transactions will be effected, and, in consideration of the premises
and the mutual agreements set forth herein, agree as follows:
SECTION
2. CONVEYANCE
FROM SELLER TO PURCHASER.
(a) Conveyance
of Mortgage Loans; Possession of Mortgage Files.
On
the
related Closing Date with respect to each Group of Mortgage Loans, the Seller,
simultaneously with the payment of the Purchase Price as defined in the Purchase
Price and Terms Letter, does hereby sell, transfer, assign, set over and
convey
to the Purchaser, without recourse, but subject to the terms of this Agreement,
all rights, title and interest of the Seller in and to the Mortgage Loans
in
such Group together with the Servicing Rights and Mortgage Files and all
rights
and obligations arising under the documents contained therein. Pursuant to
Section 2(c) hereof, the Seller has delivered each Mortgage File to the
Purchaser or its designee. The contents of each Servicing File required to
be
retained by the Seller or its designee to service the Mortgage Loans pursuant
to
the Interim Servicing Agreement and thus not delivered to the Purchaser are
and
shall be held in trust by the Seller or its designee for the benefit of
Purchaser as the owner thereof. The Seller’s or its designee’s possession of any
portion of the Servicing File is at the will of the Purchaser for the sole
purpose of facilitating servicing of the related Mortgage Loan pursuant to
the
Interim Servicing Agreement, and such retention and possession by the Seller
or
its designee shall be in a custodial capacity only. The ownership of each
Mortgage Note, Mortgage, and the contents of the Mortgage File and Servicing
File is vested in the Purchaser and the ownership of all records and documents
with respect to the related Mortgage Loan prepared by or which come into
the
possession of the Seller or its designee shall immediately vest in the Purchaser
and shall be retained and maintained, in trust, by the Seller or its designee
at
the will of the Purchaser in such custodial capacity only. The Servicing
File
retained by the Seller or its designee pursuant to the Interim Servicing
Agreement shall be segregated from the other books and records of the Seller
or
its designee and shall be appropriately marked to clearly reflect the sale
of
the related Mortgage Loan to the Purchaser. The Seller or its designee shall
release from its custody the contents of any Servicing File retained by it
only
in accordance with the Interim Servicing Agreement, except when such release
is
required in connection with a repurchase of any such Mortgage Loan pursuant
to
Section 8.
(b) Books
and Records.
Record
title to each Mortgage and the related Mortgage Note after recording shall
be in
the name of the Purchaser or as Purchaser shall designate. All rights arising
out of the Mortgage Loans including, but not limited to, all funds received
by
the Seller or its designee after the related Cut-off Date on or in connection
with a Mortgage Loan shall be vested in the Purchaser; provided, however,
that
all funds received on or in connection with a Mortgage Loan shall be received
and held by the Seller or its designee in trust for the benefit of the Purchaser
as the owner of the Mortgage Loans pursuant to the terms of the Interim
Servicing Agreement.
8
The
sale
of each Mortgage Loan shall be reflected on the Seller’s balance sheet and other
financial statements as a sale of assets by the Seller.
(c) Delivery
of Mortgage Loan Documents.
At
least
five (5) Business Days prior to the related Closing Date, the Seller shall
deliver to the Purchaser, or Purchaser’s designee, each of the following
documents for each Mortgage Loan:
(i) The
original Mortgage Note endorsed, “Pay to the order of ________________, without
recourse” and signed in the name of the Seller by an authorized officer. In the
event that the Mortgage Loan was acquired by the Seller in a merger, the
endorsement must be by “Fieldstone Mortgage Company, successor by merger to
[name of predecessor]”; and in the event that the Mortgage Loan was acquired or
originated by the Seller while doing business under another name, the
endorsement must be by “Fieldstone Mortgage Company, formerly known as [previous
name]”;
(ii) Original
recorded Mortgage, with evidence of recording information thereon except
for any
Mortgage which has been forwarded to the appropriate recorder’s office for
recordation and which has not been returned by such recording officer, in
which
case the Seller shall deliver and release to Purchaser a certified true copy
of
any such Mortgage so certified by the Seller with evidence of such Mortgage’s
delivery to the appropriate recorder’s office. In addition, the Seller shall
deliver and release to the Purchaser the original recorded Mortgage within
90
days after the related Closing Date. In the event that the Seller is unable
to
deliver the original recorded Mortgage within such time period due to a delay
caused by the public recording office, an extension of the date specified
above
may be requested from the Purchaser, which consent shall not be unreasonably
withheld;
(iii) Original
Assignment of Mortgage, in blank, which assignment shall be in form and
substance acceptable for recording but not recorded. In the event that the
Mortgage Loan was acquired by the Seller in a merger, the assignment must
be by
“Fieldstone Mortgage Company, successor by merger to [name of predecessor]”; and
in the event that the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the assignment must be by “Fieldstone
Mortgage Company, formerly known as [previous name]”;
(iv) Original
policy of title insurance, if available, or the Seller shall have delivered
and
released to the Purchaser the related binders. In addition, the Seller shall
deliver to the Purchaser the original policy of title insurance within 90
days
after the related Closing Date. In the event that the Seller is unable to
deliver the original policy of title insurance within such time period due
to a
delay caused by the title insurer, an extension of the date specified above
may
be requested from the Purchaser, which consent shall not be unreasonably
withheld. The policy must be properly endorsed, any necessary notices of
transfer must be forwarded and any other action required to be taken must
be
taken in order to fully protect, under the terms of the policy and applicable
law, Purchaser’s interest as first mortgagee;
9
(v) Original
of all assumption, extensions and modification agreements;
(vi) Original
recorded intermediate assignments of the Mortgage, including warehousing
assignments, if any; and
(vii) The
contents of the Mortgage File for each Mortgage Loan, not expressly stated
herein, and as set forth in Exhibit
B
hereto,
except such documents retained by the Seller pursuant to Section 2(a)
herein.
Pursuant
to the Custodial Agreement delivered to the Purchaser contemporaneously with
the
delivery of this Agreement, the Seller has delivered and released to the
Custodian those Mortgage Loan Documents listed in (i) - (vii) of this subsection
2(c) and as required by the Custodial Agreement with respect to each Mortgage
Loan a list of which is set forth in the Custodial Agreement.
The
Custodian has certified its receipt of all such Mortgage Loan Documents required
to be delivered pursuant to the Custodial Agreement, as evidenced by the
initial
certification of the Custodian in the form annexed to the Custodial Agreement.
The Purchaser shall be responsible for maintaining the Custodial Agreement
and
shall pay all fees and expenses of the Custodian.
The
Seller or its designee shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with the Interim Servicing Agreement
within one week of their execution, provided, however, that the Seller or
its
designee shall provide the Custodian with a certified true copy of any such
document submitted for recordation within one week of its execution, and
shall
provide the original of any document submitted for recordation or a copy
of such
document certified by the appropriate public recording office to be a true
and
complete copy of the original within sixty days of its submission for
recordation. In the event that the Seller is unable to deliver the original
recorded document within such time period due to a delay caused by the public
recording office, an extension of the date specified above may be requested
from
the Purchaser, which consent shall not be unreasonably withheld.
SECTION
3. PURCHASE
PRICE.
(a) The
Purchase Price for each Group of Mortgage Loans shall be the percentage of
par
as stated in the related Purchase Price and Terms Letter, multiplied by the
aggregate principal balance, as of the related Cut-off Date, of the Mortgage
Loans listed on the Mortgage Loan Schedule, after application of payments
of
principal
received on or before the related Cut-off Date. The initial principal amount
of
the Mortgage Loans shall be the aggregate principal balance of the Mortgage
Loans, so computed as of the related Cut-off Date.
10
In
addition to the Purchase Price as described above, the Purchaser shall pay
to
the Seller, at closing, accrued interest on the initial principal amount
of the
Mortgage Loans at the weighted average Mortgage Interest Rate, from the date
interest was last received on the Mortgage Loan through the day prior to
the
related Closing Date, inclusive.
(b) The
Purchase Price shall be paid on the related Closing Date by wire transfer
of
immediately available federal funds.
(c) The
Purchaser shall be entitled to (1) all principal received after the related
Cut-off Date, (2) all other recoveries of late charges, assumption fees or
other
charges collected after the related Cut-off Date, and (3) all payments of
interest on the Mortgage Loans at the Mortgage Interest Rate received after
the
related Cut-off Date. The principal balance of each Mortgage Loan as of the
related Cut-off Date is determined after application of payments of principal
received on or before the related Cut-off Date. All payments of principal
and
interest (minus interest at the servicing fee rate, pursuant to the Interim
Servicing Agreement) due on the first day of the month after the related
Cut-off
Date shall belong to the Purchaser.
SECTION
4. SERVICING
OF THE MORTGAGE LOANS.
The
Mortgage Loans have been sold by the Seller to the Purchaser on a servicing
released basis. Subject to, and upon the terms and conditions of this Agreement,
the Seller hereby sells, transfers, assigns and delivers to the Purchaser
the
Servicing Rights.
The
Purchaser shall retain the Seller or its designee as the contract servicer
of
the Mortgage Loans for an interim period pursuant to and in accordance with
the
terms and conditions contained in the Interim Servicing Agreement.
Pursuant
to the Interim Servicing Agreement, the Seller or its designee shall begin
servicing the Mortgage Loans on behalf of the Purchaser and shall be entitled
to
all servicing fees due the Seller or its designee as set forth in the Interim
Servicing Agreement. The Seller or its designee shall conduct such servicing
in
accordance with the terms of the Interim Servicing Agreement.
The
Seller or any designee of the Seller shall not waive any prepayment penalty
with
respect to any Mortgage Loan which contains a prepayment penalty which prepays
during the term of the penalty. If the Seller or its designee fails to collect
the prepayment penalty upon any prepayment of any Mortgage Loan which contains
a
prepayment penalty, the Seller shall pay the Purchaser an amount equal to
the
prepayment penalty which was not collected.
SECTION
5. TRANSFER
OF SERVICING.
On
each
Transfer Date, the Purchaser, or its designee, shall assume all servicing
responsibilities related to, and the Seller or its designee shall cease all
servicing responsibilities related to, the related Mortgage Loans. The Transfer
Date shall be the date set forth in the related Purchase Price and Terms
Letter.
On
or
prior to the related Transfer Date the Seller or its designee shall, at Seller’s
sole cost and expense take such steps as may be necessary or appropriate
to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
11
(a) Notice
to Mortgagors.
The
Seller or its designee shall mail to the Mortgagor of each Mortgage a letter
advising the Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee; in accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
National Affordable Housing Act of 1990 provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The
Seller
or its designee shall provide the Purchaser with copies of all such notices
no
later than the related Transfer Date.
(b) Notice
to Taxing Authorities and Insurance Companies.
The
Seller or its designee shall transmit to the applicable applicable tax services,
taxing authorities and insurance companies (including primary mortgage insurance
policy insurers, if applicable) and/or agents, notification of the transfer
of
the servicing to the Purchaser, or its designee, and instructions to deliver
all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller or its designee shall
provide the Purchaser with copies of all such notices no later than the related
Transfer Date.
(c) Delivery
of Servicing Records.
The
Seller or its designee shall forward to the Purchaser, or its designee, all
servicing records and the Servicing File in the Seller’s or its designee’s
possession relating to each Mortgage Loan including the information enumerated
in the Interim Servicing Agreement.
(d) Escrow
Payments.
The
Seller or its designee shall provide the Purchaser, or its designee, with
immediately available funds by wire transfer in the amount of the net Escrow
Payments and suspense balances and all loss draft balances associated with
the
Mortgage Loans. The Seller or its designee shall provide the Purchaser with
an
accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Seller
or its
designee shall wire transfer to the Purchaser the amount of any agency, trustee
or prepaid Mortgage Loan payments and all other similar amounts held by the
Seller or its designee.
(e) Payoffs
and Assumptions.
The
Seller or its designee shall provide to the Purchaser, or its designee, copies
of all assumption and payoff statements generated by the Seller or its designee
on the Mortgage Loans from the related Cut-off Date to the related Transfer
Date.
(f) Mortgage
Payments Received Prior to Transfer Date.
Prior
to the related Transfer Date all payments received by the Seller or its designee
on each Mortgage Loan shall be properly applied by the Seller or its designee
to
the account of the particular Mortgagor.
(g) Mortgage
Payments Received After Transfer Date.
The
amount of any Monthly Payments received by the Seller or its designee after
the
related Transfer Date shall be forwarded to the Purchaser or its designee
by
overnight mail on the date of receipt. The Seller or its designee shall notify
the Purchaser or its designee of the particulars of the payment, which
notification requirement shall be satisfied if the Seller or its designee
forwards with its payment sufficient information to permit appropriate
processing of the payment by the Purchaser or its designee. The Seller or
its
designee shall assume full responsibility for the necessary and appropriate
legal application
of Monthly Payments received by the Seller or its designee after the Transfer
Date with respect to Mortgage Loans then in foreclosure or bankruptcy; provided,
for purposes of this Agreement, necessary and appropriate legal application
of
such Monthly Payments shall include, but not be limited to, endorsement of
a
Monthly Payment to the Purchaser with the particulars of the payment such
as the
account number, dollar amount, date received and any special Mortgagor
application instructions.
12
(h) Misapplied
Payments.
Misapplied payments shall be processed as follows:
(i) All
parties shall cooperate in correcting misapplication errors;
(ii) The
party
receiving notice of a misapplied payment occurring prior to the related Transfer
Date and discovered after the related Transfer Date shall immediately notify
the
other party;
(iii) If
a
misapplied payment which occurred prior to the related Transfer Date cannot
be
identified and said misapplied payment has resulted in a shortage in a Custodial
Account or Escrow Account, the Seller shall be liable for the amount of such
shortage. The Seller shall reimburse the Purchaser for the amount of such
shortage within thirty (30) days after receipt of written demand therefor
from
the Purchaser;
(iv) If
a
misapplied payment which occurred prior to the related Transfer Date has
created
an improper Purchase Price as the result of an inaccurate outstanding principal
balance, a check shall be issued to the party shorted by the improper payment
application within five (5) Business Days after notice thereof by the other
party;
(v) Any
check
issued under the provisions of this Section 5(h) shall be accompanied by
a
statement indicating the corresponding Seller and/or the Purchaser Mortgage
Loan
identification number and an explanation of the allocation of any such
payments.
(i) Books
and Records.
On the
related Transfer Date, the books, records and accounts of the Seller with
respect to the Mortgage Loans shall be in accordance with all applicable
Purchaser requirements.
(j) Reconciliation.
The
Seller or its designee shall, on or before the related Transfer Date, reconcile
principal balances and make any monetary adjustments required by the Purchaser.
Any such monetary adjustments will be transferred between the Seller or its
designee and the Purchaser as appropriate.
(k) IRS
Forms.
The
Seller or its designee shall prepare and file all IRS forms 1098, 1099 and
other
applicable forms and reports which are required to be filed with respect
to the
period prior to the related Transfer Date in relation to the servicing and
ownership of the Mortgage Loans. The Seller or its designee shall provide
copies
of such forms to the Purchaser upon request and shall reimburse the Purchaser
for any costs or penalties incurred by the Purchaser due to the Seller’s or its
designee’s failure to comply with this paragraph. The Purchaser or the
Purchaser’s designee shall prepare and file all such reports with respect to any
period commencing on or after the related Transfer Date.
13
(l) Tax
Service Contracts.
With
respect to each Mortgage Loan for which there is a tax service contract with
an
Approved Tax Service Contract Provider in effect on the related Transfer
Date,
the Seller shall assign such Tax Service Contract to the Purchaser or the
Purchaser’s designee. In the event that the Seller is unable to assign the Tax
Service Contract to the Purchaser or the Purchaser’s designee, the Seller shall
purchase a Tax Service Contract and assign the same to the Purchaser or the
Purchaser’s designee.
SECTION
6. REPRESENTATIONS,
WARRANTIES AND AGREEMENTS OF SELLER.
The
Seller, as a condition to the consummation of the transactions contemplated
hereby, hereby makes the following representations and warranties to the
Purchaser as of the related Closing Date:
(a) Due
Organization and Authority.
The
Seller is a Maryland corporation duly organized, validly existing and in
good
standing under the laws of Maryland and has all licenses necessary to carry
on
its business as now being conducted and is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if the laws
of such
state require licensing or qualification in order to conduct business of
the
type conducted by the Seller, and in any event the Seller is in compliance
with
the laws of any such state to the extent necessary to ensure the enforceability
of the related Mortgage Loan in accordance with the terms of this Agreement;
the
Seller has the full corporate power and authority to execute and deliver
this
Agreement and to perform in accordance herewith; the execution, delivery
and
performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Seller and the consummation
of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the
Seller;
and all requisite corporate action has been taken by the Seller to make this
Agreement valid and binding upon the Seller in accordance with its
terms;
(b) Ordinary
Course of Business.
The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Seller, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Seller pursuant
to
this Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(c) No
Conflicts.
Neither
the execution and delivery of this Agreement, the acquisition of the Mortgage
Loans by the Seller, 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 terms, conditions or provisions of the Seller’s charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller
is
now a party or by which it is bound, or constitute a default or result in
an
acceleration under any of the foregoing, or result in the violation of any
law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or impair the ability of the Purchaser to realize on the Mortgage
Loans, or impair the value of the Mortgage Loans;
14
(d) Ability
to Perform.
The
Seller does not believe, nor does it have any reason or cause to believe,
that
it cannot perform each and every covenant contained in this Agreement. The
Seller is solvent and the sale of the Mortgage Loans will not cause the Seller
to become insolvent. The sale of the Mortgage Loans is not undertaken with
the
intent to hinder, delay or defraud any of the Seller’s creditors;
(e) No
Litigation Pending.
There
is no action, suit, proceeding or investigation pending or threatened against
the Seller which, either in any one instance or in the aggregate, may result
in
any material adverse change in the business, operations, financial condition,
properties or assets of the Seller, or in any material impairment of the
right
or ability of the Seller to carry on its business substantially as now
conducted, or in any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the Mortgage Loans
or
of any action taken or to be taken in connection with the obligations of
the
Seller contemplated herein, or which would be likely to impair materially
the
ability of the Seller to perform under the terms of this Agreement;
(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 Seller
of or
compliance by the Seller with this Agreement or the Mortgage Loans, the delivery
of a portion of the Mortgage Files to the Custodian or the sale of the Mortgage
Loans to the Purchaser or the consummation of the transactions contemplated
by
this Agreement, or if required, such approval has been obtained prior to
the
related Closing Date;
(g) Selection
Process.
The
Mortgage Loans were not intentionally selected in a manner so as to affect
adversely the interests of the Purchaser;
(h) No
Untrue Information.
Neither
this Agreement nor any statement, report or other document furnished or to
be
furnished pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of fact or omits to state
a
fact necessary to make the statements contained therein not
misleading;
(i) Sale
Treatment.
The
Seller has determined that the disposition of the Mortgage Loans pursuant
to
this Agreement will be afforded sale treatment for accounting and tax purposes;
(j) No
Commissions to Third Parties.
The
Seller has not dealt with any broker or agent or anyone else who might be
entitled to a fee or commission in connection with this transaction other
than
the Purchaser;
(k) Pool
Characteristics.
The
Seller represents and warrants that each of the representations and warranties
contained in Exhibit 2 annexed to the related Assignment and Conveyance
Agreement is true and correct.
15
(l) Financial
Statements.
The
Seller has delivered to the Purchaser (i) financial statements as to its
last
two complete fiscal years and any later quarter ended more than 60 days prior
to
the execution of this Agreement and (ii)such other financial statements as
have
been requested by Purchaser. All such financial statements fairly present
the
pertinent results of operations and changes in financial position at the
end of
each such period of the Seller and its subsidiaries and have been prepared
in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as set forth in the notes thereto.
In
addition, the Seller has delivered information as to its loan gain and loss
experience as requested by the Purchaser, in each case with respect to mortgage
loans owned by it and such mortgage loans serviced for others during such
period, and all such information so delivered is true and correct in all
material respects. There has been no change in the business, operations,
financial condition, properties or assets of the Seller since the date of
the
Seller’s financial statements that would have a material adverse effect on its
ability to perform its obligations under this Agreement. The Seller has
completed any forms requested by the Purchaser in a timely manner and in
accordance with the provided instructions;
(m) Fair
Consideration.
The
consideration received by the Seller upon the sale of the Mortgage Loans
under
this Agreement constitutes fair consideration and reasonably equivalent value
for the Mortgage Loans;
(n) Net
Worth.
The
Seller has a net worth not less than the minimum net worth required by FNMA
and
FHLMC for an entity to qualify as (i) an FNMA and FHLMC approved seller and
(ii)
an FNMA and FHLMC approved servicer.
SECTION
7. REPRESENTATIONS
AND WARRANTIES REGARDING INDIVIDUAL MORTGAGE LOANS.
As
to
each Mortgage Loan, the Seller hereby represents and warrants to the Purchaser
that as of the related Closing Date:
(a) Mortgage
Loans as Described.
The
information set forth in the Mortgage Loan Schedule is complete, true and
correct;
(b) Payments
Current.
All
payments required to be made up to the related Closing Date for the Mortgage
Loan under the terms of the Mortgage Note have been made and credited. No
payment required under the Mortgage Loan is 30 days delinquent nor has any
payment under the Mortgage Loan been delinquent for more than 30 days at
any
time. The first Monthly Payment due after the Cut-off Date shall be made
with
respect to the Mortgage Loan on its Due Date or within the grace period,
all in
accordance with the terms of the related Mortgage Note;
(c) No
Outstanding Charges.
There
are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has
been
assessed but is not yet due and payable. The Seller has not advanced funds,
or
induced, solicited or knowingly received any advance of funds by a party
other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date
of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date
of the
first installment of principal and interest;
16
(d) Original
Terms Unmodified.
The
terms of the Mortgage Note and Mortgage have not been impaired, waived, altered
or modified in any respect, except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser and which
has
been delivered to the Purchaser. The substance of any such waiver, alteration
or
modification has been approved by the title insurer, to the extent required
by
the policy, and its terms are reflected on the Mortgage Loan Schedule. No
Mortgagor has been released, in whole or in part, except in connection with
an
assumption agreement approved the title insurer, to the extent required
by the policy, and which assumption agreement is part of the Mortgage Loan
File
delivered to the Purchaser and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No
Defenses.
The
Mortgage Loan is not subject to any right of rescission, set-off, counterclaim
or defense, including without limitation the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the
defense of usury, and no such right of rescission, set-off, counterclaim
or
defense has been asserted with respect thereto, and no Mortgagor was a debtor
in
any state or federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated;
(f) Hazard
Insurance.
Pursuant to the terms of the Mortgage, all buildings or other improvements
upon
the Mortgaged Property are insured by a generally acceptable insurer against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located pursuant to
insurance policies conforming to the requirements of FNMA and FHLMC. If upon
origination of the Mortgage Loan, the Mortgaged Property was in an area
identified in the Federal Register by the Federal Emergency Management Agency
as
having special flood hazards (and such flood insurance has been made available)
a flood insurance policy meeting the requirements of the current guidelines
of
the Federal Flood Insurance Administration is in effect which policy conforms
to
the requirements of FNMA and FHLMC. All individual insurance policies contain
a
standard mortgagee clause naming the Seller and its successors and assigns
as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates
the
Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor’s
cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such Mortgagor’s cost
and expense, and to seek reimbursement therefor from the Mortgagor. Where
required by state law or regulation, the Mortgagor has been given an opportunity
to choose the carrier of the required hazard insurance, provided the policy
is
not a “master” or “blanket” hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is
the
valid and binding obligation of the insurer, is in full force and effect,
and
will be in full force and effect and inure to the benefit of the Purchaser
upon
the consummation of the transactions contemplated by this Agreement. The
Seller
has not engaged in, and has no knowledge of the Mortgagor’s or any subservicer’s
having engaged in, any act or omission which would impair the coverage of
any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value
of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
17
(g) Compliance
with Applicable Laws.
Any and
all requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity or disclosure laws applicable
to the
Mortgage Loan have been complied with, and the Seller shall maintain in its
possession, available for the Purchaser’s inspection, and shall deliver to the
Purchaser on the Transfer Date, evidence of compliance with all such
requirements;
(h) No
Satisfaction of Mortgage.
The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in
whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission.
The
Seller has not waived the performance by the Mortgagor of any action, if
the
Mortgagor’s failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action
or
inaction by the Mortgagor;
(i) Location
and Type of Mortgaged Property.
The
Mortgaged Property is a fee simple property located in the state identified
in
the Mortgage Loan Schedule and consists of a single parcel of real property
with
a detached single family residence erected thereon, or a two- to four-family
dwelling, a townhouse, or an individual condominium unit in a condominium
project, or an individual unit in a planned unit development, provided, however,
that any condominium unit or planned unit development shall conform with
the
Underwriting Guidelines regarding such dwellings and that no residence or
dwelling is a mobile home. Except as set forth in the related Purchase Price
and
Terms Letter, no Mortgage Loan is secured by real property with a manufactured
dwelling thereon. No portion of the Mortgaged Property is used for commercial
purposes;
(j) Valid
First Lien.
The
Mortgage is a valid, subsisting enforceable and perfected first lien and
first
priority security interest on the Mortgaged Property, including all buildings
on
the Mortgaged Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at any time
with
respect to the foregoing. The lien of the Mortgage is subject only
to:
(1) the
lien
of current real property taxes and assessments not yet due and
payable;
(2) covenants,
conditions and restrictions, rights of way, easements and other matters of
the
public record as of the date of recording acceptable to mortgage lending
institutions generally and specifically referred to in the lender’s title
insurance policy delivered to the originator of the Mortgage Loan and (i)
referred to or to otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (ii) which do not adversely affect the appraised
value
of the Mortgaged Property set forth in such appraisal; and
(3) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property.
18
Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a
valid,
subsisting and enforceable first lien and first priority security interest
on
the property described therein and the Seller has full right to sell and
assign
the same to the Purchaser. The Mortgaged Property was not, as of the date
of
origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed
to
secure debt or other security instrument creating a lien subordinate to the
lien
of the Mortgage;
(k) Validity
of Mortgage Documents.
The
Mortgage Note and the Mortgage are genuine, and each is the legal, valid
and
binding obligation of the maker thereof enforceable in accordance with its
terms. All prepayment penalties with respect to the Mortgage Loans are legal,
valid and enforceable. Each Mortgage Loan that contains a prepayment penalty
provides that in the event such Mortgage Loan is in default, the amount of
the
prepayment penalty shall be included in the legal balance of the Mortgage
Loan,
and such provision is legal, valid and enforceable. All parties to the Mortgage
Note and the Mortgage and any other related agreement had legal capacity
to
enter into the Mortgage Loan and to execute and deliver the Mortgage Note
and
the Mortgage and any other related agreement, and the Mortgage Note and the
Mortgage and any other related agreement have been duly and properly executed
by
such parties. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material
fact
or omit to state a material fact required to be stated therein or necessary
to
make the information and statements therein not misleading. No fraud was
committed in connection with the origination of the Mortgage Loan. The Seller
has reviewed all of the documents constituting the Servicing File and has
made
such inquiries as it deems necessary to make and confirm the accuracy of
the
representations set forth herein;
(l) Full
Disbursement of Proceeds.
The
Mortgage Loan has been closed and the proceeds of the Mortgage Loan have
been
fully disbursed and there is no requirement for future advances thereunder,
and
any and all requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage Loan
and
the recording of the Mortgage were paid, and the Mortgagor is not entitled
to
any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(m) Ownership.
The
Seller is the sole owner of record and holder of the Mortgage Loan. The Mortgage
Loan is not assigned or pledged, and the Seller has good and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan therein
to
the Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with,
any
other party, to sell and assign each Mortgage Loan pursuant to this
Agreement;
(n) Doing
Business.
All
parties which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they
held
and disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the Mortgaged
Property is located, and (2) organized under the laws of such state, or (3)
qualified to do business in such state, or (4) federal savings and loan
associations or national banks having principal offices in such state, or
(5)
not doing business in such state;
19
(o) LTV
No
Mortgage Loan had at origination a loan to value ratio in excess of 100%.
(p) Title
Insurance.
The
Mortgage Loan is covered by an ALTA lender’s title insurance policy or other
generally acceptable form of policy of insurance acceptable to FNMA or FHLMC,
issued by a title insurer acceptable to FNMA or FHLMC and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
the Seller, its successors and assigns, as to the first priority lien of
the
Mortgage in the original principal amount of the Mortgage Loan and against
any
loss by reason of the invalidity or unenforceability of the lien resulting
from
the provisions of the Mortgage providing for adjustment in the Mortgage Interest
Rate and Monthly Payment, subject only to the exceptions contained in clauses
(1), (2) and (3) of paragraph (j) of this Section 7. Where required by state
law
or regulation, the Mortgagor has been given the opportunity to choose the
carrier of the required mortgage title insurance. Additionally, such lender’s
title insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein.
The
Seller is the sole insured of such lender’s title insurance policy, and such
lender’s title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender’s title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act
or
omission, anything which would impair the coverage of such lender’s title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or
will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No
Defaults.
There
is no default, breach, violation or event of acceleration existing under
the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event of acceleration, and neither the Seller
nor
its predecessors have waived any default, breach, violation or event of
acceleration;
(r) No
Mechanics’ Liens.
There
are no mechanics’ or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under the law could
give
rise to such liens) affecting the related Mortgaged Property which are or
may be
liens prior to, or equal or coordinate with, the lien of the related
Mortgage;
(s) Location
of Improvements; No Encroachments.
All
improvements which were considered in determining the Appraised Value of
the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being
part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;
20
(t) Origination:
Payment Terms.
At the
time the Mortgage Loan was originated, the originator was a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to Sections 203
and
211 of the National Housing Act or a savings and loan association, a savings
bank, a commercial bank or similar banking institution which is supervised
and
examined by a Federal or State authority. With respect to Pool 3 Mortgage
Loans,
the Mortgage Interest Rate is the fixed interest rate set forth in the Mortgage
Note. With respect to Pool 1 and Pool 2 Mortgage Loans, the Mortgage Interest
Rate for each ARM Mortgage Loan is adjusted semi-annually (after the respective
initial period) on each Interest Rate Adjustment Date to equal the Index
plus
the Gross Margin, rounded up or down to the nearest 0.125%, subject to the
Periodic Rate Cap and the Lifetime Rate Cap. The Mortgage Note is payable
in
equal monthly installments of principal and interest sufficient to amortize
the
Mortgage Loan fully by the stated maturity date, over an original term of
not
more than thirty years from commencement of amortization;
(u) Customary
Provisions.
The
Mortgage contains customary and enforceable provisions such as to render
the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a
Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the
Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to the Mortgagor
which would interfere with the right to sell the Mortgaged Property at a
trustee’s sale or the right to foreclose the Mortgage subject to applicable
federal and state laws and judicial precedent with respect to bankruptcy
and
right of redemption;
(v) Conformance
with Underwriting Guidelines.
The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
in
effect at the time the Mortgage Loan was originated, a copy of which
Underwriting Guidelines are attached as Exhibit
J
hereto.
The Mortgage Note and Mortgage are on forms acceptable in the secondary
market.
(w) Occupancy
of the Mortgaged Property.
The
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use
and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(x) No
Additional Collateral.
The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in (j) above;
(y) Deeds
of Trust.
In the
event the Mortgage constitutes a deed of trust, a trustee, duly qualified
under
applicable law to serve as such, has been properly designated and currently
so
serves and is named in the Mortgage, and no fees or expenses are or will
become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor;
21
(z) Acceptable
Investment.
The
Seller and the Purchaser acknowledge that the Mortgage Loans are subprime
mortgage loans. The Seller has no knowledge of any additional circumstances
or
conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor
or the Mortgagor’s credit standing that can reasonably be expected to cause
private institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan;
(aa) Delivery
of Mortgage Documents.
The
Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered by the Seller under this Agreement have been delivered
to the Purchaser. The Seller is in possession of a complete, true and accurate
Mortgage File in compliance with Exhibit
B,
except
for such documents the originals of which have been delivered to the
Purchaser;
(bb) Condominiums/Planned
Unit Developments.
If the
Mortgaged Property is a condominium unit or a planned unit development (other
than a de minimus planned unit development) such condominium or planned unit
development project meets the eligibility requirements of the Underwriting
Guidelines and the representations and warranties required by the Underwriting
Guidelines with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;
(cc) Due
on
Sale.
The
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent
of
the Mortgagee thereunder;
(dd) Transfer
of Mortgage Loans.
The
Assignment of Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is
located;
(ee) No
Buydown Provisions; No Graduated Payments or Contingent
Interests.
The
Mortgage Loan does not contain provisions pursuant to which Monthly Payments
are
paid or partially paid with funds deposited in any separate account established
by the Seller, the Mortgagor or anyone on behalf of the Mortgagor, or paid
by
any source other than the Mortgagor nor does it contain any other similar
provisions currently in effect which may constitute a “buydown” provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest
feature;
(ff) Consolidation
of Future Advances.
Any
future advances made prior to the related Cut-off Date have been consolidated
with the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee’s consolidated interest or by
other title evidence acceptable to FNMA and FHLMC. The consolidated principal
amount does not exceed the original principal amount of the Mortgage
Loan;
22
(gg) Mortgaged
Property Undamaged.
There
is no proceeding pending or threatened for the total or partial condemnation
of
the Mortgaged Property. The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty
so as
to affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended;
(hh) Collection
Practices; Escrow Deposits; ARM Adjustments.
The
origination and collection practices used with respect to the Mortgage Loan
have
been in accordance with Accepted Servicing Practices and in all respects
in
compliance with all applicable laws and regulations. With respect to escrow
deposits and Escrow Payments, all such payments are in the possession of
the
Seller and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All Escrow
Payments have been collected in full compliance with state and federal law.
An
escrow of funds is not prohibited by applicable law and has been established
in
an amount sufficient to pay for every item which remains unpaid and which
has
been assessed but is not yet due and payable. No escrow deposits or Escrow
Payments or other charges or payments due the Seller have been capitalized
under
the Mortgage or the Mortgage Note. With respect to each ARM Mortgage Loan,
all
Mortgage Interest Rate adjustments have been made in strict compliance with
state and federal law and the terms of the related Mortgage Note. Any interest
required to be paid pursuant to state and local law has been properly paid
and
credited;
(ii) Appraisal.
The
Mortgage File contains an appraisal of the related Mortgage Property signed
prior to the approval of the Mortgage Loan application by a Qualified
Appraiser.
(jj) Soldiers’
and Sailors’ Relief Act.
The
Mortgagor has not notified the Seller, and the Seller has no knowledge of
any
relief requested or allowed to the Mortgagor under the Soldiers’ and Sailors’
Civil Relief Act of 1940;
(kk) Environmental
Matters.
The
Mortgaged Property is free from any and all toxic or hazardous substances
and
there exists no violation of any local, state or federal environmental law,
rule
or regulation. There is no pending action or proceeding directly involving
any
Mortgaged Property of which the Seller is aware in which compliance with
any
environmental law, rule or regulation is an issue; and to the best of the
Seller’s knowledge, nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation consisting a prerequisite
to
use and enjoyment of said property;
(ll) No
Construction Loans.
No
Mortgage Loan was made in connection with (i) the construction or rehabilitation
of a Mortgaged Property or (ii) facilitating the trade-in or exchange of
a
Mortgaged Property;
(mm) No
Denial of Insurance.
No
action, inaction, or event has occurred and no state of fact exists or has
existed that has resulted or will result in the exclusion from, denial of,
or
defense to coverage under any applicable pool insurance policy, special hazard
insurance policy, or bankruptcy bond, irrespective of the cause of such failure
of coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by the
Seller or any designee of the Seller or any corporation in which the Seller
or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;
23
(nn) Regarding
the Mortgagor.
The
Mortgagor is one or more natural persons and/or trustees for an Illinois
land
trust or a trustee under a “living trust” and such “living trust” is in
compliance with FNMA guidelines for such trusts; and
(oo) Mortgagor
Acknowledgment.
The
Mortgagor has executed a statement to the effect that the Mortgagor has received
all disclosure materials required by applicable law with respect to the making
of adjustable rate mortgage loans. The Seller shall maintain such statement
in
the Mortgage File.
(pp) Section
32 Mortgage Loans.
The
related Mortgagor has been provided with all disclosure materials required
by
Section 226.32 of the Federal Reserve Board Regulation Z with respect to
any
Mortgage Loans subject to such Section of the Federal Reserve Board Regulation
Z.
(qq) Amortization
and Convertibility.
No
Mortgage Loan in Pools 1 and 2 contains a negative amortization provision
or a
provision whereby the related Mortgagor can convert the related mortgage
loan to
a fixed rate instrument.
(rr) Tax
Service Contract
The
Seller has obtained a life of loan, transferable real estate Tax Service
Contract with an Approved Tax Service Contract Provider on each Mortgage
Loan
and such contract is assignable to the Purchaser;
SECTION
8. REMEDIES
FOR BREACH OF REPRESENTATIONS AND WARRANTIES; ADDITIONAL REPURCHASE
OBLIGATIONS.
(a) It
is
understood and agreed that the representations and warranties set forth in
Sections 6 and 7 shall survive the sale of the Mortgage Loans to the Purchaser
and the delivery of the Mortgage Loan Documents to the Purchaser and shall
inure
to the benefit of the Purchaser, notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment of Mortgage or the examination
or
failure to examine any Mortgage File. Upon discovery by either the Seller
or the
Purchaser of a breach of any of the foregoing representations and warranties
which materially and adversely affects the value of the Mortgage Loans or
the
interest of the Purchaser or which materially and adversely affects the
interests of Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan (in the
case
of any of the foregoing, a “Breach”),
the
party discovering such Breach shall give prompt written notice to the
other.
Within
60
days of the earlier of either discovery by or notice to the Seller of any
Breach
of a representation or warranty, the Seller shall use its best efforts promptly
to cure such Breach in all material respects and, if such Breach cannot be
cured, the Seller shall, at the Purchaser’s option, repurchase such Mortgage
Loan at the Repurchase Price. In the event that a Breach shall involve any
representation or warranty set forth in Section 6, and such Breach cannot
be
cured within 60 days of the earlier of either discovery by or notice to the
Seller of such Breach, all of the affected Mortgage Loans shall, at the
Purchaser’s option, be repurchased by the Seller at the Repurchase
Price.
24
However,
if the Breach shall involve a representation or warranty set forth in
Section 7 and the Seller discovers or receives notice of any such Breach
within 120 days of the related Closing Date, the Seller shall, at the
Purchaser’s option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a “Deleted
Mortgage Loan”)
and
substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided
that any such substitution shall be effected not later than 120 days after
the
related Closing Date. If the Seller has no Qualified Substitute Mortgage
Loan,
it shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan or Loans pursuant to the foregoing provisions of this Section 8 shall
be accomplished by direct remittance of the Repurchase Price to the Purchaser
or
in accordance with the Purchaser’s instructions.
At
the
time of repurchase or substitution, the Purchaser and the Seller shall arrange
for the reassignment of the Deleted Mortgage Loan to the Seller and the delivery
to the Seller of any documents held by the Custodian relating to the Deleted
Mortgage Loan. In the event of a repurchase or substitution, the Seller shall,
simultaneously with such reassignment, give written notice to the Purchaser
and
any servicer of the Mortgage Loans that such repurchase or substitution has
taken place, amend the Mortgage Loan Schedule to reflect the withdrawal of
the
Deleted Mortgage Loan from this Agreement, and, in the case of substitution,
identify a Qualified Substitute Mortgage Loan and amend the Mortgage Loan
Schedule to reflect the addition of such Qualified Substitute Mortgage Loan
to
this Agreement. In connection with any such substitution, the Seller shall
be
deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all
such
representations and warranties set forth in this Agreement shall be deemed
made
as of the date of such substitution. The Seller shall effect such substitution
by delivering to the Custodian for such Qualified Substitute Mortgage Loan
the
documents required by Section 2(c), with the Mortgage Note endorsed as required
by Section 2(c). No substitution will be made in any calendar month after
the
Determination Date for such month. The Seller shall remit directly to the
Purchaser or in accordance with the Purchaser’s instructions, the Monthly
Payment less the servicing fee due on such Qualified Substitute Mortgage
Loan or
Loans in the month following the date of such substitution. Monthly Payments
due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions
to
Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in
the month of substitution, and the Seller shall thereafter be entitled to
retain
all amounts subsequently received by the Seller in respect of such Deleted
Mortgage Loan.
For
any
month in which the Seller substitutes a Qualified Substitute Mortgage Loan
for a
Deleted Mortgage Loan, the Seller shall determine the amount (if any) by
which
the aggregate principal balance of all Qualified Substitute Mortgage Loans
as of
the date of substitution is less than the aggregate Stated Principal Balance
of
all Deleted Mortgage Loans (after application of scheduled principal payments
due in the month of substitution). The amount of such shortfall shall be
paid by
the Seller directly to the Purchaser or in accordance with the Purchaser’s
instructions, within two (2) Business Days of such substitution.
25
In
addition to such repurchase or substitution obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim,
demand,
defense or assertion based on or grounded upon, or resulting from, a Breach
of
the Seller representations and warranties contained in this Agreement. It
is
understood and agreed that the obligations of the Seller set forth in this
Section 8 to cure or repurchase a defective Mortgage Loan and to indemnify
the
Purchaser as provided in this Section 8 constitute the sole remedies of the
Purchaser respecting a Breach of the foregoing representations and warranties.
The Seller shall also indemnify the Purchaser and hold it harmless against
any
losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal
fees and related costs, judgments, and other costs and expenses resulting
from
any claim, demand, defense or assertion arising from any failure by the Seller
or any servicer of the Mortgage Loans to service the Mortgage Loans in
accordance with (i) Accepted Servicing Practices, (ii) all applicable laws,
(iii) the terms of the applicable Mortgage Note or (iv) the terms of any
applicable servicing agreement, in each case, which failure occurred prior
to
the related Closing Date.
Any
cause
of action against the Seller relating to or arising out of the Breach of
any
representations and warranties made in Sections 6 and 7 shall accrue as to
any
Mortgage Loan upon (x) discovery of such Breach by the Purchaser or notice
thereof by the Seller to the Purchaser, (y) failures by the Seller to cure
such
Breach or repurchase such Mortgage Loan as specified above, and (z) demand
upon
the Seller by the Purchaser for compliance with this Agreement.
(b) With
respect to any Mortgage Loan, if the related Mortgagor is delinquent with
respect to the Mortgage Loans’ first Monthly Payment due after the Cut-off Date
(a “First
Payment Default”),
the
Seller shall repurchase such Mortgage Loan from the Purchaser in accordance
with
Section 8(a) hereof.
From
the
related Closing Date until the date 30 days after the related Closing Date,
the
Purchaser shall have the right to review the Mortgage Files and obtain BPOs
on
the Mortgaged Properties relating to the Mortgage Loans purchased on the
related
Closing Date, with the results of such BPO reviews to be communicated to
the
Seller for a period up to 30 days after the related Closing Date. In addition,
the Purchaser shall have the right to reject any Mortgage Loan which in the
Purchaser’s sole determination (i) fails to conform to Underwriting Guidelines,
or (ii) the value of the Mortgaged Property pursuant to any BPO varies by
more
than plus or minus 10% from the lesser of (A) the original appraised value
of
the Mortgage Property or (B) the purchase price of the Mortgaged Property
as of
the date of origination. In the event that the Purchaser so rejects any Mortgage
Loan, the Seller shall repurchase the rejected Mortgage Loan in the manner
prescribed in Section 8(a) within 30 days from the date the Seller receives
notice from the Purchaser of the rejection of such Mortgage Loan. Any rejected
Mortgage Loan shall be removed from the terms of this Agreement.
SECTION
9. CLOSING.
Each
closing for the purchase and sale of the Mortgage Loans shall take place
on the
related Closing Date (a “Closing”).
At
the Purchaser’s option, each Closing shall be either: by telephone, confirmed by
letter or wire as the parties shall agree; or conducted in person, at such
place
as the parties shall agree.
26
Each
Closing shall be subject to each of the following conditions:
(a) all
of
the representations and warranties of the Seller and its designee under this
Agreement and under the Interim Servicing Agreement shall be true and correct
as
of the related Closing Date and no event shall have occurred which, with
notice
or the passage of time, would constitute a default under this Agreement or
an
Event of Default under the related Interim Servicing Agreement;
(b) the
Purchaser shall have received, or the Purchaser’s attorneys shall have received
in escrow, all Closing Documents as specified in Section 10 of this Agreement,
in such forms as are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required pursuant to the
respective terms thereof;
(c) the
Seller shall have delivered, at least three (3) Business Days prior to the
related Closing Date, a final Mortgage Loan Schedule for the related Group
of
Mortgage Loans;
(d) the
Seller shall have delivered and released to the Custodian pursuant to this
Agreement all documents required pursuant to the related Custodial Agreement;
and
(e) all
other
terms and conditions of this Agreement shall have been complied
with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on the
related Closing Date the Purchase Price, plus accrued interest pursuant to
Section 3 of this Agreement, by wire transfer of immediately available funds
to
the account designated by the Seller.
SECTION
10. CLOSING
DOCUMENTS.
(a) The
Closing Documents for the initial Closing shall consist of fully executed
originals of the following documents:
(i) this
Agreement;
(ii) the
related Purchase Price and Terms Letter;
(iii) each
of
the documents required to be delivered by the Seller pursuant to Section
2(c)
hereof;
(iv) the
related Mortgage Loan Schedule, with one copy to be attached to each counterpart
of this Agreement;
(v) an
Officer’s Certificate, in the form of Exhibit
D
hereto,
including all attachments thereto;
27
(vi) an
Opinion of Counsel of the Seller, in the form of Exhibit
E
hereto;
(vii) (i)
a
Security Release Certification, in the form of Exhibit
F
hereto
(for a Seller which is a member of the Federal Home Loan Bank System), executed
by the applicable
regional Federal Home Loan Bank and, (ii) if applicable, in the form of
Exhibit
G
hereto
executed
by any other person, as requested by the Purchaser, if any of the Mortgage
Loans
have at any time been subject to any security interest, pledge or hypothecation
for the benefit of such person and (iii) if applicable a certificate of the
Seller and an opinion of counsel of the Seller stating that the Mortgage
Loans
are not subject to any security interest, claim, pledge, hypothecation or
lien;
(viii) a
copy of
the Custodial Agreement between Purchaser as Owner and Servicer and U.S.
Bank
Trust National Association (the “Custodian”)
dated
as of September 1, 1999 (the “Custodial
Agreement”);
(ix) an
Assignment and Assumption of Purchaser’s rights as Initial Servicer under the
Custodial Agreement to the Seller, as such rights relate to the Mortgage
Loans
being sold by Seller to Purchaser on such Closing Date (the “Custodial
Assignment and Assumption”)
in the
form of Exhibit
K
hereto;
(x) a
copy of
the Interim Servicing Agreement between Seller and Servicer;
(xi) the
initial certification of the related Mortgage Loans by the
Custodian;
(xii) an
Escrow
Agreement between Seller and Purchaser and a mutually acceptable third party
who
would act as escrow agent for this purchase transaction;
(xiii) a
Certificate or other evidence of merger or change of name, signed or stamped
by
the applicable regulatory authority, if any of the related Mortgage Loans
were
acquired by the Seller by merger or acquired or originated by the Seller
while
conducting business under a name other than its present name.
(b) The
Closing Documents for each subsequent Closing shall consist of fully executed
originals of the following documents:
(i) each
of
the documents required to be delivered by the Seller pursuant to Section
2(c)
hereof;
(ii) the
related Mortgage Loan Schedule, with one copy to be attached to each counterpart
of this Agreement;
(iii) the
initial certification of the related Mortgage Loans by the Custodian;
(iv) (i)
a
Security Release Certification, in the form of Exhibit
F
hereto
(for a Seller which is a member of the Federal Home Loan Bank System), executed
by the applicable regional Federal Home Loan Bank and, (ii) if applicable,
in
the form of Exhibit
G
hereto
executed by any other person, as requested by the Purchaser, if any of the
Mortgage Loans have at any time been subject to any security interest, pledge
or
hypothecation for the benefit of such person and (iii) if applicable a
certificate of the Seller and an opinion of counsel of the Seller stating
that
the Mortgage Loans are not subject to any security interest, claim, pledge,
hypothecation or lien;
28
(v) an
Assignment and Assumption of Purchaser’s rights as Initial Servicer under the
Custodial Agreement to the Seller, as such rights relate to the Mortgage
Loans
being sold by Seller to Purchaser on such Closing Date (the “Custodial
Assignment and Assumption”)
in the
form of Exhibit
K
hereto;
(vi) an
Assignment and Conveyance, in the form of Exhibit
L
hereto.
(vii) a
Certificate or other evidence of merger or change of name, signed or stamped
by
the applicable regulatory authority, if any of the related Mortgage Loans
were
acquired by the Seller by merger or acquired or originated by the Seller
while
conducting business under a name other than its present name.
The
Seller shall bear the risk of loss of the Closing Documents until such time
as
they are received by the Purchaser or its attorneys.
SECTION
11. MERGER
OR CONSOLIDATION OF THE SELLER.
The
Seller will keep in full effect its existence, rights and franchises as a
corporation under the laws of the state of its incorporation except as permitted
herein, and will obtain and preserve its qualification to do business as
a
foreign corporation in each jurisdiction in which such qualification is or
shall
be necessary to protect the validity and enforceability of this Agreement,
or
any of the Mortgage Loans and to perform its duties under this
Agreement.
Any
Person into which the Seller may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Seller
shall
be a party, or any Person succeeding to the business of the Seller, shall
be the
successor of the Seller hereunder, without the execution or filing of any
paper
or any further act on the part of any of the parties hereto, anything herein
to
the contrary notwithstanding; provided however, that the successor or surviving
Person shall have a net worth not less than the minimum level required by
FNMA
and FHLMC for an entity to qualify as (i) an FNMA and FHLMC approved seller
and
(ii) an FNMA and FHLMC approved servicer.
SECTION
12. COSTS.
The
Purchaser shall pay any commissions due its salesmen and the legal fees and
expenses of its attorneys. All other costs and expenses incurred in connection
with the transfer and delivery of the Mortgage Loans, including recording
fees
for the Assignments of Mortgages, if the Purchaser elects to record them,
fees
for title policy endorsements and continuations and the Seller’s attorney’s
fees, shall be paid by the Seller.
SECTION
13. PROTECTION
OF CONFIDENTIAL INFORMATION.
The
Seller shall keep confidential and shall not divulge to any party, without
the
Purchaser’s prior written consent, the Purchase Price paid by the Purchaser for
any Group of Mortgage Loans, except to the extent that it is appropriate
for the
Seller to do so in working with legal counsel, auditors, taxing authorities
or
other governmental agencies.
29
SECTION
14. NOTICES.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address shown on the first page hereof, or such other address
as
may hereafter be furnished to the other party by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on
the
date delivered to or received at the premises of the addressee (as evidenced,
in
the case of registered or certified mail, by the date noted on the return
receipt).
SECTION
15. SEVERABILITY
CLAUSE.
Any
part,
provision, representation or warranty of this Agreement that is prohibited
or
that is held to be void or unenforceable shall be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation or warranty of this
Agreement that is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability
in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law that prohibits
or renders void or unenforceable any provision hereof. If the invalidity
of any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement,
the
parties shall negotiate, in good-faith, to develop a structure, the economic
effect of which is as close as possible to the economic effect of this
Agreement, without regard to such invalidity.
SECTION
16. COUNTERPARTS.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts
shall
constitute one and the same instrument.
SECTION
17. PLACE
OF DELIVERY AND GOVERNING LAW.
This
Agreement shall be deemed in effect when a fully executed counterpart thereof
is
received by the Purchaser in the State of New York and shall be deemed to
have
been made in the State of New York. The 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
the
laws of the State of New York, except to the extent preempted by Federal
law.
30
SECTION
18. FURTHER
AGREEMENTS.
The
Purchaser and the Seller each agree 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.
Without
limiting the generality of the foregoing, the Seller shall cooperate with
the
Purchaser in connection with the initial resales of the Mortgage Loans by
the
Purchaser. In that connection, the Seller shall provide to the Purchaser:
(i)
any and all information and appropriate verification of information, whether
through letters of its auditors and counsel or otherwise, as the Purchaser
shall
reasonably request; and (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Seller as are reasonably believed necessary
by the Purchaser in connection with such resales. The requirement of the
Seller
pursuant to (ii) above shall terminate on the related Closing Date. Prior
to
incurring any out-of-pocket expenses pursuant to this paragraph, the Seller
shall notify the Purchaser in writing of the estimated amount of such expense.
The Purchaser shall reimburse the Seller for any such expense following its
receipt of appropriate details thereof.
SECTION
19. INTENTION
OF THE PARTIES.
It
is the
intention of the parties that the Purchaser is purchasing, and the Seller
is
selling, 100% ownership interest in the Mortgage Loans and not a debt instrument
of the Seller or another security. Accordingly, the parties hereto each intend
to treat the transaction for Federal income tax purposes as a sale by the
Seller, and a purchase by the Purchaser, of the Mortgage Loans. Moreover,
the
arrangement under which the Mortgage Loans are held shall be consistent with
classification of such arrangement as a grantor trust in the event it is
not
found to represent direct ownership of the Mortgage Loans. The Purchaser
shall
have the right to review the Mortgage Loans and the related Mortgage Loan
Files
to determine the characteristics of the Mortgage Loans which shall affect
the
Federal income tax consequences of owning the Mortgage Loans and the Seller
shall cooperate with all reasonable requests made by the Purchaser in the
course
of such review.
SECTION
20. SUCCESSORS
AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective successors and assigns of the
Seller
and the Purchaser. This Agreement shall not be assigned, pledged or hypothecated
by Seller to a third party without the prior written consent of the
Purchaser.
No
transfer of a Mortgage Loan may be made unless such transfer is in compliance
with the terms hereof. For the purposes of this Agreement, the Seller shall
be
under no obligation to deal with any person with respect to this agreement
or
the Mortgage Loans unless the books and records show such person as the owner
of
the Mortgage Loan. The Purchaser may, subject to the terms of this Agreement,
sell 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
Seller unless such transferee shall agree in writing to be bound by the terms
of
this Agreement and an original counterpart of the instrument of transfer
and an
assignment and assumption of this Agreement in the form of Exhibit
H
hereto
executed by the transferee shall have been delivered to the Seller. The
Purchaser also shall advise the Seller of the transfer. Upon receipt of notice
of the transfer, the Seller shall ▇▇▇▇ its books and records to reflect the
ownership of the Mortgage Loans of such assignee, and shall release the previous
Purchaser from its obligations hereunder with respect to the Mortgage Loans
sold
or transferred.
31
SECTION
21. WAIVERS;
OTHER AGREEMENTS.
No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
22. EXHIBITS.
The
exhibits to this Agreement are hereby incorporated and made a part hereof
and
are an integral part of this Agreement.
SECTION
23. 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 generally accepted accounting principles;
(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.
32
SECTION
24. 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.
SECTION
25. 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 their comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at
the
Seller’s expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option.
SECTION
26. NO
PERSONAL SOLICITATION.
From
and
after the related Closing Date, the Seller hereby 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 on the Seller’s behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
It is understood and agreed that all rights and benefits relating to the
solicitation of any Mortgagors and the attendant rights, title and interest
in
and to the list of such Mortgagors and data relating to their Mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant hereto on the related Closing Date and the Seller shall take no
action
to undermine these rights and benefits. Notwithstanding the foregoing, it
is
understood and agreed that offers to refinance a Mortgage Loan made within
30
days following receipt by the Seller of a pay-off request from the Mortgagor
and
promotions undertaken by the Seller or any affiliate of the Seller which
are
directed to the general public at large, including, without limitation, mass
mailing based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this Section
26.
33
IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be
signed hereto by their respective officers thereunto duly authorized as of
the
date first above written.
▇▇▇▇▇▇
BROTHERS BANK, FSB
(Purchaser)
By:
____________________________
Name:
Title:
FIELDSTONE
MORTGAGE COMPANY
(Seller)
By:
/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Vice President
On
the
_____ day of ____________, 200_ before me, a Notary Public in and for said
State, personally appeared ____________, known to me to be ______________
of
▇▇▇▇▇▇ Brothers Bank, FSB, the corporation that executed the within instrument
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
___________________________________
Notary
Public
My
Commission expires _____________
|
STATE
OF _____________
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF ___________
|
)
|
On
the
_____ day of _______________, 200_ before me, a Notary Public in and for
said
State, personally appeared ____________, known to me to be _____________
of
_______________________, the corporation that executed the within instrument
and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
___________________________________
Notary
Public
My
Commission expires _____________
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
A-1
EXHIBIT
B
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser
and
any prospective Purchaser, and which shall be delivered to the Purchaser
pursuant to Section 2 of the Purchase Agreement to which this Exhibit is
attached (the “Agreement”):
|
1.
|
The
original Mortgage Note bearing all intervening endorsements, endorsed
“Pay
to the order of _________ without recourse” and signed in the name of the
Seller by an authorized officer.
|
|
2.
|
The
original of any guarantee executed in connection with the Mortgage
Note.
|
|
3.
|
The
original Mortgage, with evidence of recording thereon. If in connection
with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered
the original Mortgage with evidence of recording thereon on or
prior to
the related Closing Date because of a delay caused by the public
recording
office where such Mortgage has been delivered for recordation or
because
such Mortgage has been lost or because such public recording office
retains the original recorded Mortgage, the Seller shall deliver
or cause
to be delivered to the Purchaser, a photocopy of such Mortgage,
together
with (i) in the case of a delay caused by the public recording
office, an
Officer’s Certificate of the Seller stating that such Mortgage has been
dispatched to the appropriate public recording office for recordation
and
that the original recorded Mortgage or a copy of such Mortgage
certified
by such public recording office to be a true and complete copy
of the
original recorded Mortgage will be promptly delivered to the Purchaser
upon receipt thereof by the Seller; or (ii) in the case of a Mortgage
where a public recording office retains the original recorded Mortgage
or
in the case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original
recorded
Mortgage.
|
|
4.
|
The
originals of all assumption, modification, consolidation or extension
agreements, with evidence of recording
thereon.
|
|
5.
|
The
original Assignment of Mortgage for each Mortgage Loan, in blank,
in form
and substance acceptable for
recording.
|
B-1
|
6.
|
Originals
of all intervening assignments of the Mortgage with evidence of
recording
thereon, or if any such intervening assignment has not been returned
from
the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to the Purchaser,
a
photocopy of such intervening assignment, together with (i) in
the case of
a delay caused by the public recording office, an Officer’s Certificate of
the Seller stating that such intervening assignment of mortgage
has been
dispatched to the appropriate public recording office for recordation
and
that such original recorded intervening assignment of mortgage
or a copy
of such intervening assignment of mortgage certified by the appropriate
public recording office to be a true and complete copy of the original
recorded intervening assignment of mortgage will be promptly delivered
to
the Purchaser upon receipt thereof by the Seller; or (ii) in the
case of
an intervening assignment where a public recording office retains
the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such
public
recording office to be a true and complete copy of the original
recorded
intervening assignment.
|
|
7.
|
The
original mortgagee policy of title
insurance.
|
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8.
|
Any
security agreement, chattel mortgage or equivalent executed in
connection
with the Mortgage.
|
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9.
|
The
original hazard insurance policy and, if required by law, flood
insurance
policy, in accordance with Section 7(f) of the
Agreement.
|
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10.
|
Residential
loan application.
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11.
|
Mortgage
Loan closing statement.
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|
12.
|
Verification
of employment and income except for Mortgage Loans originated under
a
Limited Documentation Program.
|
|
13.
|
Verification
of acceptable evidence of source and amount of
downpayment.
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14.
|
Credit
report on the Mortgagor.
|
|
15.
|
Residential
appraisal report.
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|
16.
|
Photograph
of the Mortgaged Property.
|
|
17.
|
Survey
of the Mortgaged Property, if any.
|
|
18.
|
Copy
of each instrument necessary to complete identification of any
exception
set forth in the exception schedule in the title policy, i.e.,
map or
plat, restrictions, easements, sewer agreements, home association
declarations, etc.
|
|
19.
|
All
required disclosure statements.
|
|
20.
|
If
available, termite report, structural engineer’s report, water potability
and septic certification.
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21.
|
Sales
contract.
|
B-2
|
22.
|
Tax
receipts, insurance premium receipts, ledger sheets, payment history
from
date of origination, insurance claim files, correspondence, current
and
historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained
in a
mortgage loan file and which are required to document the Mortgage
Loan or
to service the Mortgage Loan.
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23.
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Amortization
schedule.
|
In
the
event an Officer’s Certificate of the Seller is delivered to the Purchaser
because of a delay caused by the public recording office in returning any
recorded document, the Seller shall deliver to the Purchaser, within 90 days
of
the related Closing Date, an Officer’s Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, and (iv)
specify the date the applicable recorded document will be delivered to Custodian
the applicable recorded document by the date specified in (iv) above. An
extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld.
B-3
EXHIBIT
C
INTERIM
SERVICING AGREEMENT
C-1
EXHIBIT
D
SELLER’S
OFFICER’S CERTIFICATE
I,
____________________, hereby certify that I am the duly elected [Vice] President
of Fieldstone Mortgage Company, a [state] chartered institution organized
under
the laws of the [state of ____________], (the “Company”) and further as
follows:
|
1.
|
Attached
hereto as Exhibit 1 is a true, correct and complete copy of the
charter of
the Company which is in full force and effect on the date hereof
and which
has been in effect without amendment, waiver, rescission or modification.
|
|
2.
|
Attached
hereto as Exhibit 2 is a true, correct and complete copy of the
bylaws of
the Company which are in effect on the date hereof and which have
been in
effect without amendment, waiver, rescission or
modification.
|
|
3.
|
Attached
hereto as Exhibit 3 is an original certificate of good standing
of the
Company issued within ten days of the date hereof, and no event
has
occurred since the date thereof which would impair such
standing.
|
|
4.
|
Attached
hereto as Exhibit 4 is a true, correct and complete copy of the
corporate
resolutions of the Board of Directors of the Company authorizing
the
Company to execute and deliver the Flow Mortgage Loan Purchase
and
Warranties Agreement, Group No. 2000-1 dated July 1, 2000 by and
between
the Company and ▇▇▇▇▇▇ Brothers Bank, FSB (the “Purchaser”)
(the “Purchase
Agreement”),
the Interim Servicing Agreement, Group 2000-1, dated July 1, 2000,
by and
between the Company and the Purchaser and to endorse the Mortgage
Notes
and execute the Assignments of Mortgages by original signature,
and such
resolutions are in effect on the date hereof and have been in effect
without amendment, waiver, rescission or modification.
|
|
5.
|
Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Company of or compliance by the Company with
the
Purchase Agreement, the Interim Servicing Agreement, the sale of
the
mortgage loans or the consummation of the transactions contemplated
by the
agreements; or (ii) any required consent, approval, authorization
or order
has been obtained by the Company.
|
|
6.
|
Neither
the consummation of the transactions contemplated by, nor the fulfillment
of the terms of the Purchase Agreement and the Interim Servicing
Agreement
conflicts or will conflict with or results or will result in a
breach of
or constitutes or will constitute a default under the charter or
by-laws
of the Company, the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound
or to
which it is subject, or any statute or order, rule, regulations,
writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is
bound.
|
D-1
|
7.
|
There
is no action, suit, proceeding or investigation pending or, to
the best of
my knowledge, threatened against the Company which, in my judgment,
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 Company or in any material impairment
of the
right or ability of the Company to carry on its business substantially
as
now conducted or in any material liability on the part of the Company
or
which would draw into question the validity of the Purchase Agreement
and
the Interim Servicing Agreement, or the mortgage loans or of any
action
taken or to be taken in connection with the transactions contemplated
hereby, or which would be likely to impair materially the ability
of the
Company to perform under the terms of the Purchase Agreement and
the
Interim Servicing Agreement.
|
|
8.
|
Each
person listed on Exhibit 5 attached hereto who, as an officer or
representative of the Company, signed (a) the Purchase Agreement,
(b) the
Interim Servicing Agreement, and (c) any other document delivered
prior
hereto or on the date hereof in connection with any purchase described
in
the agreements set forth above was, at the respective times of
such
signing and delivery, and is now, a duly elected or appointed,
qualified
and acting officer or representative of the Company, who holds
the office
set forth opposite his or her name on Exhibit 5, and the signatures
of
such persons appearing on such documents are their genuine
signatures.
|
|
9.
|
The
Company is duly authorized to engage in the transactions described
and
contemplated in the Purchase Agreement and the Interim Servicing
Agreement.
|
|
10.
|
The
Mortgage Loans are not subject to any security interest, claim,
pledge,
hypothecation or lien.
|
D-2
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.
|
Dated:
|
By:
|
|||
|
[Seal]
|
Name:
|
|||
|
Title:
[Vice] President
|
||||
I,
________________________, an [Assistant] Secretary of Fieldstone Mortgage
Company, hereby certify that ____________ is the duly elected, qualified
and
acting [Vice] President of the Company and that the signature appearing above
is
[her] [his] genuine signature.
IN
WITNESS WHEREOF, I have hereunto signed my name.
|
Dated:
|
By:
|
|||
|
[Seal]
|
Name:
|
|||
|
Title:
[Vice] President
|
||||
D-3
EXHIBIT
5
to
Company’s
Officer’s Certificate
|
Name
|
Title
|
Signature
|
D-4
EXHIBIT
E
FORM
OF OPINION OF COUNSEL TO THE SELLER
(date)
▇▇▇▇▇▇
Brothers Bank, FSB
3
World
Financial ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear
Sirs:
You
have
requested [our] [my] opinion, as [Assistant] General Counsel to Fieldstone
Mortgage Company (the “Company”), with respect to certain matters in connection
with the sale by the Company of the Mortgage Loans pursuant to that certain
Flow
Mortgage Loan Purchase and Warranties Agreement by and between the Company
and
▇▇▇▇▇▇ Brothers Bank, FSB (the “Purchaser”), Group No. 2000-1 dated as of July
1, 2000, (the “Purchase Agreement”) and that certain Interim Servicing
Agreement, by and between the Company and the Purchaser, dated as of July
1,
2000, which sale is in the form of whole loans. Capitalized terms not otherwise
defined herein have the meanings set forth in the Purchase. [We] [I] have
examined the following documents:
|
1.
|
the
Purchase Agreement;
|
| 2. |
the
Interim Servicing Agreement;
|
|
2.
|
the
form of Assignment of Mortgage;
|
|
3.
|
the
form of endorsement of the Mortgage Notes;
and
|
|
4.
|
such
other documents, records and papers as we have deemed necessary
and
relevant as a basis for this
opinion.
|
To
the
extent [we] [I] have deemed necessary and proper, [we] [I] have relied
upon the
representations and warranties of the Company contained in the Agreements.
[We]
[I] have assumed the authenticity of all documents submitted to [us] [me]
as
originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to the originals of all documents.
E-1
Based
upon the foregoing, it is [our] [my] opinion that:
|
1.
|
The
Company is a [type of entity] duly organized, validly existing
and in good
standing under the laws of the [United States] and is qualified
to
transact business in, and is in good standing under, the laws
of [the
state of incorporation].
|
|
2.
|
The
Company has the power to engage in the transactions contemplated
by the
Agreements and all requisite power, authority and legal right
to execute
and deliver the Agreements, and to perform and observe the terms
and
conditions of such Agreements
|
|
3.
|
[Each
of] the Agreements has been duly authorized, executed and delivered
by the
Company and is a legal, valid and binding agreement enforceable
in
accordance with its respective terms against the Company, subject
to
bankruptcy laws and other similar laws of general application
affecting
rights of creditors and subject to the application of the rules
of equity,
including those respecting the availability of specific performance,
none
of which will materially interfere with the realization of the
benefits
provided thereunder or with the Purchaser’s ownership of the Mortgage
Loans.
|
|
4.
|
The
Company has been duly authorized to allow any of its officers
to execute
any and all documents by original signature in order to complete
the
transactions contemplated by the Agreements and by original signature
in
order to execute the endorsements to the Mortgage Notes and the
Assignments of Mortgages, and the original signature of the officer
at the
Company executing the endorsements to the Mortgage Notes and
the
Assignments of Mortgages represents the legal and valid signature
of said
officer of the Company.
|
|
5.
|
Either
(i) no consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by the Company of or compliance by the Company with
the
Purchase Agreement, the Interim Servicing Agreement, or the sale
of the
Mortgage Loans or the consummation of the transactions contemplated
by the
Agreements; or (ii) any required consent, approval, authorization
or order
has been obtained by the Company.
|
|
6.
|
Neither
the consummation of the transactions contemplated by, nor the
fulfillment
of the terms of, the Agreements conflicts or will conflict with
or results
or will result in a breach of or constitutes or will constitute
a default
under the charter or by-laws of the Company, the terms of any
indenture or
other agreement or instrument to which the Company is a party
or by which
it is bound or to which it is subject, or violates any statute
or order,
rule, regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject
or by which
it is bound.
|
E-2
|
7.
|
There
is no action, suit, proceeding or investigation pending or, to
the best of
[our] [my] knowledge, threatened against the Company which, in
[our] [my]
judgment, 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 Company or in any material
impairment of the right or ability of the Company to carry on
its business
substantially as now conducted or in any material liability on
the part of
the Company or which would draw into question the validity of
the
Agreements, or the Mortgage Loans or of any action taken or to
be taken in
connection with the transactions contemplated thereby, or which
would be
likely to impair materially the ability of the Company to perform
under
the terms of the Agreements.
|
|
8.
|
The
sale of each Mortgage Note and Mortgage as and in the manner
contemplated
by the Agreements is sufficient to fully transfer to the Purchaser
all
right, title and interest of the Company thereto as noteholder
and
mortgagee.
|
|
9.
|
The
Mortgages have been duly assigned and the Mortgage Notes have
been duly
endorsed as provided in the Agreements. The Assignments of Mortgage
are in
recordable form, except for the insertion of the name of the
assignee, and
upon the name of the assignee being inserted, are acceptable
for recording
under the laws of the state where each related Mortgaged Property
is
located. The endorsement of the Mortgage Notes, the delivery
to the
Purchaser, or its designee, of the Assignments of Mortgage, and
the
delivery of the original endorsed Mortgage Notes to the Purchaser,
or its
designee, are sufficient to permit the Purchaser to avail itself
of all
protection available under applicable law against the claims
of any
present or future creditors of the Company, and are sufficient
to prevent
any other sale, transfer, assignment, pledge or hypothecation
of the
Mortgages and the Mortgage Notes by the Company from being
enforceable.
|
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which
you
initially and directly resell the Mortgage Loans may rely on this opinion
as if
it were addressed to them as of its date.
Very
truly yours,
_________________________
[Name]
[Assistant]
General Counsel
E-3
EXHIBIT
F
SECURITY
RELEASE CERTIFICATION
___________________,
199_
Federal
Home Loan Bank of
______(the
“Association”)
_____________________________
_____________________________
_____________________________
Attention:
_____________________
_____________________________
|
Re:
|
Notice
of Sale and Release of Collateral
|
Dear
Sirs:
This
letter serves as notice that Fieldstone Mortgage Company, a corporation,
organized pursuant to the laws of [the state of incorporation] (the “Company”)
has committed to sell to ▇▇▇▇▇▇ Brothers Bank, FSB, under a Flow Mortgage
Loan
Purchase and Warranties Agreement, dated as of July 1, 2000, certain mortgage
loans originated by the Association. The Company warrants that the mortgage
loans to be sold to ▇▇▇▇▇▇ Brothers Bank, FSB, are in addition to and beyond
any
collateral required to secure advances made by the Association to the
Company.
The
Company acknowledges that the mortgage loans to be sold to ▇▇▇▇▇▇ Brothers
Bank,
FSB all not be used as additional or substitute collateral for advances
made by
the Association. ▇▇▇▇▇▇ Brothers Bank, FSB understands that the balance
of the
Company’s mortgage loan portfolio may be used as collateral or additional
collateral for advances made by the Association, and confirms that it has
no
interest therein.
F-1
Execution
of this letter by the Association shall constitute a full and complete
release
of any security interest, claim, or lien which the Association may have
against
the mortgage loans to be sold to ▇▇▇▇▇▇ Brothers Bank, FSB.
Very
truly yours,
FIELDSTONE
MORTGAGE COMPANY
By:
________________________
Name:
Title:
Date:
Acknowledged
and approved:
FEDERAL
HOME LOAN BANK OF
_______________________________
By:
____________________________
Name:
Title:
Date:
F-2
EXHIBIT
G
SECURITY
RELEASE CERTIFICATION
I.
Release
of Security Interest
The
financial institution named below hereby relinquishes any and all right, title
and interest it may have in all Mortgage Loans to be purchased by ▇▇▇▇▇▇
Brothers Bank, FSB from the Company named below pursuant to that certain Flow
Mortgage Loan Purchase and Warranties Agreement, dated as of July 1, 2000,
and
certifies that all notes, mortgages, assignments and other documents in its
possession relating to such Mortgage Loans have been delivered and released
to
the Company named below or its designees, as of the date and time of the sale
of
such Mortgage Loans to ▇▇▇▇▇▇ Brothers Bank, FSB.
Name
and
Address of Financial Institution
__________________________________________
(name)
__________________________________________
(Address)
By:
_____________________________________________
G-1
II.
Certification
of Release
The
Company named below hereby certifies to ▇▇▇▇▇▇ Brothers Bank, FSB hat, as of
the
date and time of the sale of the above-mentioned Mortgage Loans to ▇▇▇▇▇▇
Brothers Bank, FSB, the security interests in the Mortgage Loans released by
the
above-named financial institution comprise all security interests relating
to or
affecting any and all such Mortgage Loans. The Company warrants that, as of
such
time, there are and will be no other security interests affecting any or all
of
such Mortgage Loans.
FIELDSTONE
MORTGAGE COMPANY
By:
_________________________________
Name:
Date:
G-2
FORM
OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT
AND ASSUMPTION AGREEMENT, dated __________
__,
200_, between __________________________________, a ___________________
corporation (“Assignor”) and ________________________________, a
__________________ corporation (“Assignee”):
For
and
in consideration of the sum of TEN DOLLARS ($10.00) and other valuable
consideration the receipt and sufficiency of which hereby are acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
The
Assignor hereby grants, transfers and assigns to Assignee, as Purchaser, all
of
the right, title and interest of Assignor under that certain Flow Mortgage
Loan
Purchase and Warranties Agreement, Conventional Residential Fixed and Adjustable
Rate Mortgage Loans, Group 2000-1 (the “Purchase Agreement”) dated as of July 1,
2000 by and between ▇▇▇▇▇▇ Brothers Bank, FSB (the “Purchaser”), and Fieldstone
Mortgage Company (the “Seller”) and that certain Interim Servicing Agreement,
(the “Interim Servicing Agreement”, collectively, the “Agreements”) dated as of
as of July 1, 2000 (the “Agreement”)
between Seller and the Purchaser;
1. 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 received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Seller with respect to the
Agreements or the Mortgage Loans;
c. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Agreements, including without
limitation, the transfer of the servicing obligations under the Purchase
Agreement. The Assignor has no knowledge of, and has not received notice of,
any
waivers under or amendments or other modifications of, or assignments of rights
or obligations under, the Agreements; and
d. 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 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 “33 Act”) or which would render the
disposition of the Mortgage Loans a violation of Section 5 of the 33 Act or
require registration pursuant thereto.
H-1
2. That
Assignee warrants and represents to, and covenants with, the Assignor and the
Seller pursuant to the Agreements that:
a. The
Assignee agrees to be bound, as Purchaser, by all of the terms, covenants and
conditions of the Agreements, the Mortgage Loans, and from and after the date
hereof, the Assignee assumes for the benefit of each of the Seller and the
Assignor all of the Assignor’s obligations as Purchaser thereunder;
b. The
Assignee understands that the Mortgage Loans have not been registered under
the
33 Act or the securities laws of any state;
c. The
purchase price being paid by the Assignee for the Mortgage Loans is in excess
of
$250,000 and will be paid by cash remittance of the full purchase price within
60 days of the sale;
d. The
Assignee is acquiring the Mortgage Loans for investment for its own account
only
and not for any other person;
e. The
Assignee considers itself a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
f. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Seller;
g. Neither
the Assignee 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 which would
constitute a distribution of the Mortgage Loans under the ‘33 Act or which would
render the disposition of the Mortgage Loans a violation of Section 5 of the
‘33
Act or require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner with respect
to the Mortgage Loans; and
h. Either:
(1) the Assignee is not an employee benefit plan (“Plan”) within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) or a plan (also “Plan”) within the meaning of section 4975(e)(1) of
the Internal Revenue Code of 1986 (“Code”), and the Assignee is not directly or
indirectly purchasing the Mortgage Loans on behalf of, investment manager of,
as
named fiduciary of, as Trustee of, or with assets of, a Plan; or (2) the
Assignee’s purchase of the Mortgage Loans will not result in a prohibited
transaction under section 406 of ERISA or section 4975 of the Code.
H-2
IN
WITNESS WHEREOF, the parties have caused this Assignment and Assumption
Agreement to be executed by their duly authorized officers as of the date first
above written.
|
Assignor
|
Assignee
|
|||
|
By:
|
By:
|
|||
|
Its:
|
Its:
|
|||
|
Taxpayer
Identification
No.
|
Taxpayer
Identification
No.
|
H-3
EXHIBIT
I
CUSTODIAL
AGREEMENT
I-1
EXHIBIT
J
UNDERWRITING
GUIDELINES
J-1
EXHIBIT
K
FORM
OF CUSTODIAL ASSIGNMENT AND ASSUMPTION
ASSIGNMENT
AND ASSUMPTION AGREEMENT, dated as of _____, 2000, by and between ▇▇▇▇▇▇
Brothers Bank, FSB, having its offices at 3 World Financial Center, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“Assignor”) and Fieldstone Mortgage Company, having an
office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(“Assignee”):
For
and
in consideration of the sum of TEN DOLLARS ($10.00) and other valuable
consideration the receipt and sufficiency of which hereby are acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree
as
follows:
1. The
Assignor hereby grants, transfers and assigns to Assignee, all of the right,
title and interest of Assignor, as initial Servicer (the “Initial Servicer”)
with respect to the mortgage loans identified on Exhibit A hereto (the “Mortgage
Loans”) under that certain Custodial Agreement, dated as of September 1, 1999,
known as U.S. Bank Trust National Association (the “Custodian”).
The
Assignor specifically reserves any and all right, title and interest and
all
obligations of the “Owner” under the Agreement and of the Assignor with respect
to any mortgage loans subject to the Agreement which are not the Mortgage
Loans
set forth on Exhibit A hereto and are not the subject of this Assignment
and
Assumption Agreement.
2. The
Assignor warrants and represents to, and covenants with, the Assignee that
with
respect to the Mortgage Loans:
a. The
Assignor is assigning its interest as Initial Servicer under the Agreement
for
the sole purpose of permitting the Assignee as servicer of the Mortgage Loans,
to act as Servicer under the Agreement; and
b. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Agreement. The Assignor has no knowledge
of, and has not received notice of, any defaults, waivers under or amendments
or
other modifications of, or assignments of rights or obligations under the
Agreement.
3. The
Assignee warrants and represents to, and covenants with, the Assignor and
the
Custodian pursuant to the Agreement that the Assignee agrees to be bound
by all
of the terms, covenants and conditions of the Agreement relating to the Initial
Servicer applicable after the related Closing Date, and from and after the
related Closing Date, the Assignee assumes for the benefit of the Assignor
all
of the Assignor's obligations as Initial Servicer thereunder.
4. Nothing
herein shall obligate the Assignee to pay any of the fees and expenses of
the
Custodian, which shall remain the sole obligation of the Assignor, nor shall
the
Assignee make or be obligated to make any representation and warranties
regarding the Mortgage Loans in this Assignment and Assumption Agreement
or the
Agreement. All expenses incurred by the Custodian, at the request of the
Assignee, which are not contemplated by the Custodial Agreement or that certain
Interim Servicing Agreement dated July 1, 2000 between Assignor and Assignee
and
which are not approved by the Assignor shall be paid the Assignee.
K-1
5. With
respect to the Mortgage Loans, by acknowledging below, the Custodian hereby
agrees that it will honor a request of release made by the Assignee on a
form
acceptable to FNMA in lieu of the form attached to the Custodial Agreement
as
Exhibit 3 thereto.
K-2
IN
WITNESS WHEREOF, the parties have caused this Assignment and Assumption
Agreement to be executed by their duly authorized officers as of the date
first
above written.
▇▇▇▇▇▇
BROTHERS BANK, FSB
(Assignor)
By:
______________________________
Name:
____________________________
Title:
_____________________________
FIELDSTONE
MORTGAGE COMPANY
(Assignee)
By:
______________________________
Name:
____________________________
Title:
_____________________________
Acknowledged
And Agreed:
U.S.
BANK
TRUST NATIONAL ASSOCIATION
(Custodian)
By:
______________________________
Name:
____________________________
Title:
_____________________________
K-3
EXHIBIT
L
ASSIGNMENT
AND CONVEYANCE
On
this______ day of ________, 200_, Fieldstone Mortgage Company, as the Seller,
under that certain Flow Mortgage Loan Purchase and Warranties Agreement,
dated
as of July 1, 2000 (the “Agreement”)
does
hereby sell, transfer, assign, set over and convey to ▇▇▇▇▇▇ Brothers Bank,
FSB,
as Purchaser under the Agreement, without recourse, but subject to the terms
of
the Agreement all rights, title and interest of the Seller in and to the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto, together
with the related Mortgage Files and all rights and obligations arising under
the
documents contained therein. Pursuant to Section 2 of the Agreement, the
Seller
has delivered to the Custodian the documents for each Mortgage Loan to be
purchased as set forth in the Agreement. The ownership of each Mortgage Note,
Mortgage, and the contents of each Mortgage File is vested in the Purchaser
and
the ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Seller shall
immediately vest in the Purchaser and shall be delivered promptly by the
Seller
to the Purchaser.
The
Seller confirms to the Purchaser that the representations and warranties
set
forth in Section 6 of the Agreement and Exhibit
2
attached
hereto with respect to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto, and the representations and warranties in Section 6 of the
Agreement and Exhibit
2
attached
hereto with respect to the Seller are true and correct as of the date
hereof.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreement.
Fieldstone
Mortgage Company
Seller
By:
______________________________
Name:
____________________________
Title:
_____________________________
L-1
EXHIBIT
1
MORTGAGE
LOAN SCHEDULE
EXHIBIT
2
The
Seller hereby represents and warrants to the Purchaser, as to each Mortgage
Loan, that as of ___________, 2000 or as of such other date specifically
provided therein:
(a) Pool
Characteristics.
(i) With
respect to all Mortgage Loans:
With
respect to the aggregate unpaid principal balance of the Mortgage Loans (1)
at
least ___% of the Mortgage Loans have full documentation; (2) no more than
___%
of the Mortgage Loans have documentation which is lacking income verification;
and (3) no more than ___% of the Mortgage Loans have documentation which
is
lacking income and asset verification. With respect to the aggregate unpaid
principal balance of the Mortgage Loans at the time of origination, (a) no
more
than ___% of the Mortgaged Properties were owner-occupied second homes, (b)
no
more than ___% of the Mortgaged Properties were investor properties and (c)
at
least ___% of the Mortgaged Properties were owner-occupied primary residences.
With respect to the aggregate unpaid principal balance of the Mortgage Loans,
(a) no more than ___% are “cash-out” refinance mortgage loans, (b) no more than
___% are rate and term refinance mortgage loans and (c) at least ___% are
purchase mortgage loans. With
respect to the aggregate unpaid principal balance of Mortgage Loans, the
Mortgaged Properties are located as follows: (i) ___% of the Mortgaged
Properties are located in California; (ii) ___% of the Mortgaged Properties
are
located in Illinois; (iii) ___% of the Mortgaged Properties are located in
Colorado; and (iv) the remaining Mortgaged Properties are geographically
dispersed. With respect to the aggregate outstanding principal balance of
all
the Mortgage Loans, (a) no more than ___% of the Mortgage Loans are secured
by
real property improved by a manufactured home
(ii) With
respect to the Pool 1 Mortgage Loans
The
weighted average initial periodic gross Mortgage Interest Rate cap on the
Mortgage Loans as of the related Cut-off Date was ___%. The weighted average
lifetime Mortgage Interest Rate cap on the Mortgage Loans as of the related
Cut-off Date was ___%. The maximum Mortgage Interest Rate on the Mortgage
Loans
as of the related Cut-off Date was ___%. The minimum Mortgage Interest Rate
on
the Mortgage Loans as of the related Cut-off Date was ___%. After the initial
two year period, the Mortgage Interest Rate payable by the Mortgagor is subject
to adjustment at the times and in the amounts as are set forth in the related
Mortgage Note. The Mortgage Loans have a weighted average remaining term
of ___
months. The weighted average FICO Score of the Pool 1 Mortgage Loans is ___.
The
weighted average loan to value ratio of Pool 1 Mortgage Loans is
___%.
(iii) With
respect to the Pool 2 Mortgage Loans
The
weighted average initial periodic gross Mortgage Interest Rate cap on the
Mortgage Loans as of the related Cut-off Date was ___%. The weighted average
lifetime Mortgage Interest Rate cap on the Mortgage Loans as of the related
Cut-off Date was ___%. The maximum Mortgage Interest Rate on the Mortgage
Loans
as of the related Cut-off Date was ___%. The minimum Mortgage Interest Rate
on
the Mortgage Loans as of the related Cut-off Date was ___%. After the initial
three year period, the Mortgage Interest Rate payable by the Mortgagor is
subject to adjustment at the time and in the amounts as are set forth in
the
related Mortgage Note. The Mortgage Loans have a weighted average remaining
term
of ___ months. The weighted average FICO Score of the Pool 2 Mortgage Loans
is
___. The weighted average loan to value ratio of Pool 2 Mortgage Loans is
___%.
(iv) With
respect to the Pool 3 Mortgage Loans
The
Mortgage Loans have a weighted average remaining term of ___ months. The
minimum
Mortgage Interest Rate on the Mortgage Loans as of the related Cut-off Date
was
___%. The weighted average FICO Score of the Pool 3 Mortgage Loans is ___.
The
weighted average loan to value ratio of Pool 3 Mortgage Loans is
___%.;
(b) Mortgage
Loan Prepayment Penalties.
The
Pool 1 Mortgage Loans have a weighted average prepayment penalty term of
___
months. With respect to the aggregate unpaid principal balance of the Pool
1
Mortgage Loans ___% have prepayment penalties and ___% have no prepayment
penalty. The Pool 2 Mortgage Loans have a weighted average prepayment penalty
term of ___ months. With respect to the aggregate unpaid principal balance
of
the Pool 2 Mortgage Loans ___% have prepayment penalties and ___% have no
prepayment penalty. The Pool 3 Mortgage Loans have a weighted average prepayment
penalty term of ___ months. With respect to the aggregate unpaid principal
balance of the Pool 3 Mortgage Loans ___% have prepayment penalties and ___%
have no prepayment penalty.
(c) Mortgage
Loan Credit Grades
With
respect to the aggregate unpaid principal balance of all the Pool 1 Mortgage
Loans, the Mortgage Loans have the following Credit Grades: (i) ___% of the
Mortgage Loans are Credit Grade A; (ii) ___% of the Mortgage Loans are Credit
Grade A-; (iii) ___% of the Mortgage Loans are Credit Grade B; (iv) ___%
of the
Mortgage Loans are Credit Grade C; (v) ___% of the Mortgage Loans are Credit
Grade D. With respect to the aggregate unpaid principal balance of all the
Pool
2 Mortgage Loans, the Mortgage Loans have the following Credit Grades: (i)
___%
of the Mortgage Loans are Credit Grade A; (ii) ___% of the Mortgage Loans
are
Credit Grade A-; (iii) ___% of the Mortgage Loans are Credit Grade B; (iv)
___%
of the Mortgage Loans are Credit C; (v) ___% of the Mortgage Loans are Credit
D.
With respect to the aggregate unpaid principal balance of all the Pool 3
Mortgage Loans, the Mortgage Loans have the following Credit Grades: (i)
___% of
the Mortgage Loans are Credit Grade A; (ii) ___% of the Mortgage Loans are
Credit Grade A-; (iii) ___% of the Mortgage Loans are Credit Grade B; (iv)
___%
of the Mortgage Loans are Credit Grade C; (v) ___% of the Mortgage Loans
are
Credit Grade D.
AMENDMENT
NO. 1
TO
THE
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This
is
Amendment No. 1 (the “Amendment
No. 1”),
dated
as of July 20, 2001 (the “Amendment
Date”),
by
and between ▇▇▇▇▇▇ Brothers Bank, FSB (the “Purchaser”), and
Fieldstone Mortgage Company (the “Seller”)
to
that certain Flow Mortgage Loan Purchase and Warranties Agreement dated
as of
July 1, 2000 by and between the Seller and the Purchaser (the “Existing
Purchase Agreement”).
W
I T N E
S S E T H
WHEREAS,
the Seller and the Purchaser have agreed, subject to the terms and conditions
of
this Amendment No. 1 that the Existing Purchase Agreement be amended to
reflect
certain agreed upon revisions to the terms of the Existing Purchase
Agreement.
Accordingly,
the Seller and the Purchaser hereby agree, in consideration of the mutual
premises and mutual obligations set forth herein, that solely with respect
to
the Group of Mortgage Loans to be purchased on the date hereof, the Existing
Purchase Agreement is hereby amended as follows:
|
1.
|
Notwithstanding
anything set forth in the Existing Purchase Agreement, the Purchaser
shall
hold back a portion of the Purchase Price to be paid on the related
Closing Date, which will be paid to the Seller upon the satisfactory
completion of the Purchaser’s due diligence in accordance with the
Purchase Price and Terms Letter dated as of July 10, 2001, by
and between
the Seller and the Purchaser.
|
|
2.
|
Section
8(b) of the Existing Purchase Agreement is hereby amended by
deleting it
in its entirety and replacing it with the following
language:
|
(b)
With
respect to any Mortgage Loan, if the related Mortgagor does not make the
first
Monthly Payment due after the related Closing Date on or before its Due
Date,
and the related Mortgagor does not make the first and second Monthly Payments
due after the related Closing Date on or before the Due Date of such second
payment (a “First
Payment Default”),
the
Seller shall repurchase such Mortgage Loan from the Purchaser in accordance
with
Section 8(a) hereof.
|
3.
|
Section
9(c) of the Existing Purchase Agreement is hereby amended by
deleting it
in its entirety and replacing it with the following
language:
|
(c)
the
Seller shall have delivered, at least four (4) Business Days prior to the
related Closing Date, a final Mortgage Loan Schedule for the related Group
of
Mortgage Loans;
|
4.
|
Section
12 of the Existing Purchase Agreement is hereby amended by deleting
it in
its entirety and replacing it with the following
language:
|
The
Purchaser shall pay any commissions due its salesmen and legal fees and
expenses
of its attorneys. The costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans, including recording fees,
fees for
title policy endorsements and continuations, and fees or costs associated
with
terminating any Prior Servicer, shall be paid for by the Seller. A fee
of $25.00
per Mortgage Loan will be deducted from the Purchase Price proceeds to
cover
costs for recording and tracking the Assignment of Mortgage from Seller
to
Purchaser or Purchasers designee.
|
5.
|
Second
Lien Mortgage Loans.
Solely with respect to the Second Lien Mortgage Loans (as defined
below),
the Existing Purchase Agreement is hereby
amended:
|
|
(a)
|
Notwithstanding
anything set forth in the Existing Purchase Agreement, the Purchaser
shall
purchase certain Mortgage Loans secured by a second lien on the
related
Mortgaged Property, as set forth on Exhibit
A
hereto (the “Second
Lien Mortgage Loans”).
|
|
(b)
|
Section
1 of the Existing Purchase Agreement is hereby amended by adding
the
following definition:
|
Combined
Loan-to-Value Ratio or CLTV:
With
respect to any Second Lien Mortgage Loan, the sum of the original principal
balance of such Mortgage Loan and the outstanding principal balance of
any
related first lien as of the date of origination of the Mortgage Loan,
divided
by the Appraised Value of the Mortgaged Property as of the origination
date.
|
(c)
|
Section
1 of the Existing Purchase Agreement is hereby amended by deleting
the
existing definition of “Mortgage” in its entirety and replacing it with
the following language:
|
Mortgage:
The
mortgage, deed of trust or other instrument creating a first or second
lien on
the Mortgaged Property securing the Mortgage Note.
|
(d)
|
Section
1 of the Existing Purchase Agreement is hereby amended by adding
the
following fields to the definition of Mortgage Loan
Schedule:
|
(1)
a
code indicating whether the Mortgage Loan is secured by a first or second
lien;
(2) if the Mortgage Loan is a Second Lien Mortgage Loan, the principal
balance
of the related first lien at the time of the origination of the first lien;
(3)
with respect to each Second Lien Mortgage Loan, the CLTV;
|
(e)
|
Section
7 of the Existing Purchase Agreement is hereby amended by deleting
the
Section 7(j), (o), (p) and (gg) in their entirety and replacing
them with
the following language:
|
(j) Valid
First or Second Lien.
The
Mortgage is a valid, subsisting enforceable and perfected first or second
lien
and first priority security interest on the Mortgaged Property, including
all
buildings on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems located in or
annexed
to such buildings, and all additions, alterations and replacements made
at any
time with respect to the foregoing. The lien of the Mortgage is subject
only
to:
(1)
the
lien of current real property taxes and assessments not yet due and
payable;
(2)
covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording acceptable to
mortgage
lending institutions generally and specifically referred to in the lender’s
title insurance policy delivered to the originator of the Mortgage Loan
and (i)
referred to or to otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (ii) which do not adversely affect the appraised
value
of the Mortgaged Property set forth in such appraisal; and
(3)
other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
the
Mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property.
(4) with
respect to each Second Lien Mortgage a prior mortgage lien on the Mortgaged
Property.
Any
security agreement, chattel mortgage or equivalent document related to
and
delivered in connection with the Mortgage Loan establishes and creates
a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan,
in
either case, on the property described therein and the Seller has full
right to
sell and assign the same to the Purchaser. The Mortgaged Property was not,
as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed
of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;
(o)
Title
Insurance.
The
Mortgage Loan is covered by an ALTA lender’s title insurance policy or other
generally acceptable form of policy of insurance acceptable to ▇▇▇▇▇▇ ▇▇▇
or
▇▇▇▇▇▇▇ Mac, issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac
and qualified to do business in the jurisdiction where the Mortgaged Property
is
located, insuring the Seller, its successors and assigns, as to the first
or
second priority lien of the Mortgage in the original principal amount of
the
Mortgage Loan , and against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment in the Mortgage Interest Rate and Monthly Payment,
subject only to the exceptions contained in and clauses (1), (2), and (3),
and
with respect to each Second Lien Mortgage Loan clause (4) of paragraph
(j) of
this Section 7. Where required by state law or regulation, the Mortgagor
has
been given the opportunity to choose the carrier of the required mortgage
title
insurance. Additionally, such lender’s title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller is the sole insured of such
lender’s title insurance policy, and such lender’s title insurance policy is in
full force and effect and will be in force and effect upon the consummation
of
the transactions contemplated by this Agreement. No claims have been made
under
such lender’s title insurance policy, and no prior holder of the Mortgage,
including the Seller, has done, by act or omission, anything which would
impair
the coverage of such lender’s title insurance policy including without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized
by any
attorney, firm or other person or entity, and no such unlawful items have
been
received, retained or realized by the Seller;
(p)
No
Defaults.
There
is no default, breach, violation or event of acceleration existing under
the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event of acceleration, and neither the Seller
nor
its predecessors have waived any default, breach, violation or event of
acceleration. With respect to each Second Lien Mortgage Loan, (i) the prior
mortgage is in full force and effect, (ii) there is no default, breach,
violation or event of acceleration existing under such prior mortgage or
the
related mortgage note, (iii) no event which, with the passage of time or
with
notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event of acceleration thereunder, and either
(A)
the prior mortgage contains a provision which allows or (B) applicable
law
requires, the mortgagee under the Second Lien Mortgage Loan to receive
notice
of, and affords such mortgagee an opportunity to cure any default by payment
in
full or otherwise under the prior mortgage;
(gg)
Collection
Practices; Escrow Deposits; ARM Adjustments.
The
origination and collection practices used with respect to the Mortgage
Loan have
been in accordance with Accepted Servicing Practices and in all respects
in
compliance with all applicable laws and regulations. With respect to escrow
deposits and Escrow Payments (other than with respect to Second Lien Mortgage
Loans for which the mortgagee under the prior mortgage lien is collecting
Escrow
Payments), all such payments are in the possession of the Seller and there
exist
no deficiencies in connection therewith for which customary arrangements
for
repayment thereof have not been made. All Escrow Payments have been collected
in
full compliance with state and federal law. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to pay
for
every item which remains unpaid and which has been assessed but is not
yet due
and payable. No escrow deposits or Escrow Payments or other charges or
payments
due the Seller have been capitalized under the Mortgage or the Mortgage
Note.
With respect to each ARM Mortgage Loan, all Mortgage Interest Rate adjustments
have been made in strict compliance with state and federal law and the
terms of
the related Mortgage Note. Any interest required to be paid pursuant to
state
and local law has been properly paid and credited;
|
(f)
|
Section
7 of the Existing Purchase Agreement is hereby amended by adding
the
following as Sections 7(rr) and
7(ss):
|
(rr)
Consent.
Either
(a) no consent for the Second Lien Mortgage Loan is required by the holder
of
the related first lien or (b) such consent has been obtained and is contained
in
the Mortgage File.;
(ss)
CLTV.
No
Second Lien Mortgage Loan has a CLTV in excess of 100%;
|
6.
|
Effective
Date.
This Amendment shall become effective on the date (the “Amendment
Effective Date”)
on which the following conditions precedent shall have been
satisfied:
|
|
(a)
|
On
the Amendment Effective Date, the Purchaser shall have received
the
following, each of which shall be satisfactory to the
Purchaser:
|
|
(i)
|
this
Amendment, executed and delivered by a duly authorized officer
of the
Seller and the Purchaser;
|
|
(ii)
|
such
other documents as the Purchaser or counsel to the Purchaser
may
reasonably request.
|
|
(b)
|
On
the Amendment Effective Date, (i) the Seller shall be in compliance
with
all the representations and warranties set forth in Section 6
of the
Existing Purchase Agreement, as amended by this Amendment No.
1, on its
part to be observed or performed, (ii) no default shall have
occurred and
be continuing on such date.
|
|
7.
|
Except
as expressly amended and modified by this Amendment, the Existing
Purchase
Agreement shall continue to be, and shall remain, in full force
and effect
in accordance with its terms.
|
|
8.
|
This
Amendment No. 1 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.
|
|
9.
|
This
Amendment No. 1 may be executed in one or more counterparts and
by
different parties hereto on separate counterparts, each of which,
when so
executed, shall constitute one and the same
agreement.
|
|
10.
|
This
Amendment No. 1 shall inure to the benefit of and be binding
upon the
Purchaser and the Sellers under the Existing Purchase Agreement,
and their
respective successors and permitted
assigns.
|
[Signatures
Commence on Following Page]
IN
WITNESS WHEREOF, the parties have caused their names to be signed hereto
by
their respective officers thereunto duly authorized as of the day and year
first
above written.
▇▇▇▇▇▇
BROTHERS BANK, FSB
Purchaser
By:____________________________
Name:__________________________
Title:___________________________
FIELDSTONE
MORTGAGE COMPANY
Seller
By:____________________________
Name:__________________________
Title:___________________________
EXHIBIT
A
SECOND
LIEN MORTGAGE LOANS
AMENDMENT
NO. 2
TO
THE
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This
is
Amendment No. 2 (the “Amendment
No. 2”),
dated
as of October 31, 2002 (the “Amendment
Date”),
by
and between ▇▇▇▇▇▇ Brothers Bank, FSB (the “Purchaser”), and
Fieldstone Mortgage Company (the “Seller”)
to
that certain Flow Mortgage Loan Purchase and Warranties Agreement dated
as of
July 1, 2000 by and between the Seller and the Purchaser, as amended by
that
certain Amendment No. 1 to the Mortgage Loan Purchase and Warranties Agreement,
dated as of July 20, 2001 (the “Existing
Purchase Agreement”).
W
I T N E
S S E T H
WHEREAS,
the Seller and the Purchaser have agreed, subject to the terms and conditions
of
this Amendment No. 2 that the Existing Purchase Agreement be amended to
reflect
certain agreed upon revisions to the terms of the Existing Purchase
Agreement.
Accordingly,
the Seller and the Purchaser hereby agree, in consideration of the mutual
premises and mutual obligations set forth herein, that the Existing Purchase
Agreement is hereby amended as follows:
|
1.
|
Section
7(pp) of the Existing Purchase Agreement is hereby amended by
deleting the
section in its entirety and replacing it with the following
language:
|
(pp) Predatory
Lending Regulations; High Cost Loans.
None of
the Mortgage Loans are classified as (a) "high cost" loans under the Home
Ownership and Equity Protection Act of 1994 or (b) "high cost," "threshold,"
"covered" or "predatory" loans under any applicable state, federal or local
law.
|
2.
|
Section
7 of the Existing Purchase Agreement is hereby amended by adding
the
following language as new Section 7(tt) and (uu)
:
|
(tt) Credit
Reporting.
For
each Mortgage Loan, the Seller or its designee has accurately and fully
furnished, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on its borrower credit files
to
each of the following credit repositories: Equifax Credit Information Services,
Inc., Trans Union, LLC and Experian Information Solution, Inc., on a monthly
basis.
(uu)
Single
Premium Credit Life Insurance.
None of
the proceeds of the Mortgage Loan were used to finance single-premium credit
life insurance policies.
|
3.
|
Effective
Date.
This Amendment shall become effective on the date (the “Amendment
Effective Date”)
on which the following conditions precedent shall have been
satisfied:
|
|
(a)
|
On
the Amendment Effective Date, the Purchaser shall have received
the
following, each of which shall be satisfactory to the
Purchaser:
|
|
(i)
|
this
Amendment, executed and delivered by a duly authorized officer
of the
Seller and the Purchaser;
|
|
(ii)
|
such
other documents as the Purchaser or counsel to the Purchaser
may
reasonably request.
|
|
(b)
|
On
the Amendment Effective Date, (i) the Seller shall be in compliance
with
all the representations and warranties set forth in Section 6
of the
Existing Purchase Agreement, as amended by this Amendment No.
2, on its
part to be observed or performed, (ii) no default shall have
occurred and
be continuing on such date.
|
|
4.
|
Except
as expressly amended and modified by this Amendment, the Existing
Purchase
Agreement shall continue to be, and shall remain, in full force
and effect
in accordance with its terms.
|
|
5.
|
This
Amendment No. 2 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.
|
|
6.
|
This
Amendment No. 2 may be executed in one or more counterparts and
by
different parties hereto on separate counterparts, each of which,
when so
executed, shall constitute one and the same
agreement.
|
|
7.
|
This
Amendment No. 2 shall inure to the benefit of and be binding
upon the
Purchaser and the Sellers under the Existing Purchase Agreement,
and their
respective successors and permitted
assigns.
|
[Signatures
Commence on Following Page]
IN
WITNESS WHEREOF, the parties have caused their names to be signed hereto
by
their respective officers thereunto duly authorized as of the day and year
first
above written.
▇▇▇▇▇▇
BROTHERS BANK, FSB
Purchaser
By:____________________________
Name:__________________________
Title:___________________________
FIELDSTONE
MORTGAGE COMPANY
Seller
By:____________________________
Name:__________________________
Title:___________________________
AMENDMENT
REG AB TO THE FLOW MORTGAGE LOAN PURCHASE AGREEMENT
This
is
Amendment Reg AB (the "Amendment
Reg AB"), dated
as
of September 8,
2005
(the "Amendment
Date"),
by and
between ▇▇▇▇▇▇ Brothers Bank, FSB (the "Purchaser"), and
Fieldstone Mortgage Company (the "Seller") to
that
certain Flow Mortgage Loan
Purchase Agreement dated as of July 1, 2000 and amended as of July 1, 2001
and
October 31,
2002
by and between the Seller and the Purchaser, (as amended, modified or
supplemented) the
"Existing
Purchase Agreement", as
amended by this Amendment Reg AB, the "Purchase Agreement").
WITNESSETH
WHEREAS,
the Seller and the Purchaser have agreed, subject to the terms and conditions
of this Amendment Reg AB that the Existing Purchase Agreement be amended
to
reflect
certain agreed upon revisions to the terms of the Existing Purchase
Agreement.
Accordingly,
the Seller and the Purchaser hereby agree, in consideration of the mutual
premises and mutual obligations set forth herein, that the Existing Purchase
Agreement is hereby amended as follows:
1. The
Existing Purchase Agreement is hereby amended by adding the following
definitions in
their
proper alphabetical order:
Commission:
The
United States Securities and Exchange Commission.
Regulation
AB: Regulation
AB of the Securities Act of 1933, as amended from time
to
time.
Securities
Act:
The
federal Securities Act of 1933, as amended.
Securities
Exchange Act: The
federal Securities Exchange Act of 1934, as amended.
Static
Pool Information:
Information set forth in Item 1105(a) of Regulation AB.
2. The
Existing Purchase Agreement is hereby amended by adding the following
provisions:
"In
the
event that the Purchaser sells certain Mortgage Loans into Securitization
Transfers,
the Seller agrees to deliver to Purchaser and any prospective purchaser
within
three (3)
days
after request by Purchaser or prospective purchaser, information, in form
and
substance satisfactory
to Purchaser and such prospective purchaser, with respect to each originator
of
the Mortgage
Loans (x) reasonably requested by the Purchaser or (y) required by Item
1110 of
Regulation AB, which as of the date hereof requires the following information:
(a) the originator's
form of organization; and (b) a description of the originator's origination
program and
how
long the originator has been engaged in originating residential mortgage
loans,
which description
must include a discussion of the originator's experience in originating
mortgage
loans
of
the same type as the Mortgage Loans and information regarding the size
and
composition
of the originator's origination portfolio as well as information that may
be
material, in
the good faith judgment of the Purchaser, to an analysis of the performance
of
the Mortgage Loans,
such as the originators' credit-granting or underwriting criteria for mortgage
loans of the same
type
as the Mortgage Loans; and to deliver to the Purchaser and any prospective
purchaser within
three (3) Business Days after request by Purchaser, Static Pool Information
with
respect to
those
mortgage loans that were originated by the originator of the Mortgage Loans
and
which are
of
the same type as the Mortgage Loans, which as of the date hereof require
Static
Pool Information
regarding delinquencies, cumulative losses and prepayments by vintage
origination year
or
prior securitized pools, as applicable. A vintage origination year represents
mortgage loans
originated during the same year. Such Static Pool Information shall be
for the
prior five years
or
for so long as the originator has been originating (in the case of data
by
vintage origination
year) or securitizing (in the case of data by prior securitized pools)
such
mortgage loans,
if
originating for less than five years. The Static Pool Information for each
vintage origination
year or prior securitized pool, as applicable, shall be presented in monthly
increments over
the
life of the mortgage loans included in the vintage origination year or
prior
securitized pool.
The
Seller shall indemnify the Purchaser, each affiliate of the Purchaser and
each
underwriter as placement
agent participating in the Securitization Transfer and each Person who
controls
the Purchaser
or such affiliate and their respective present and former directors, officers,
employees and
agents, and hold each of them harmless from and against any losses, damages,
penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and
any other
costs, fees and expenses that each of them may sustain arising out of or
based
upon any untrue statement or alleged
untrue statement of a material fact contained in the information pursuant
to the
preceding
paragraph
set forth in any offering document prepared in connection with any
Securitization Transfer.
For purposes of the previous sentence, "Purchaser" shall mean the Person
then
acting as
the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers"
under this Agreement."
3.
Except
as
expressly amended and modified by this Amendment Reg AB, the Existing
Purchase
Agreement shall continue to be, and shall remain, in full force and effect
in
accordance with
its
terms. In the event of a conflict between this Amendment Reg AB and any
other
document
or agreement, including without limitation the Existing Servicing Agreement,
this Amendment
Reg AB shall control.
4.
This
Amendment Reg AB 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.
5.
This
Amendment Reg AB may be executed in one or more counterparts and by different
parties hereto on separate counterparts, each of which, when so executed,
shall
constitute one and
the
same agreement.
7.
This
Amendment Reg AB shall inure to the benefit of and be binding upon the
Purchaser
and
the
Seller under the Existing Purchase Agreement, and their respective successors
and permitted
assigns.
[Signatures
Commence on Following Page]
2
IN
WITNESS WHEREOF, the parties have caused their names to be signed hereto
by
their respective officers thereunto duly authorized as of the day and year
first
above written.
▇▇▇▇▇▇
BROTHERS BANK, FSB Purchaser
By:____________________________
Name:__________________________
Title:___________________________
FIELDSTONE
MORTGAGE COMPANY
By:____________________________
Name:__________________________
Title:___________________________
3