FLOW MORTGAGE LOAN SALE AND SERVICING AGREEMENT between BANK OF AMERICA, NATIONAL ASSOCIATION, as Seller and as Servicer, and RWT HOLDINGS, INC., as Purchaser July 1, 2006 Residential Mortgage Loans
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Exhibit
10.9
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Execution
Version
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FLOW
MORTGAGE LOAN SALE AND SERVICING AGREEMENT
between
BANK
OF
AMERICA, NATIONAL ASSOCIATION,
as
Seller
and as Servicer,
and
RWT
HOLDINGS, INC.,
as
Purchaser
July
1,
2006
Residential
Mortgage Loans
TABLE
OF
CONTENTS
Page
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SECTION
1. Definitions.
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1
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SECTION
2. Purchase and Conveyance.
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15
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SECTION
3. Mortgage Loan Schedule.
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15
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SECTION
4. Purchase Price.
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15
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SECTION
5. Examination of Mortgage Files.
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15
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SECTION
6. Delivery of Mortgage Loan Documents.
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15
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Subsection
6.01 Possession of Mortgage Files.
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15
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Subsection
6.02 Books and Records.
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15
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Subsection
6.03 Delivery of Mortgage Loan Documents.
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15
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SECTION
7. Representations, Warranties and Covenants; Remedies for
Breach.
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15
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Subsection
7.01 Representations and Warranties Regarding Individual Mortgage
Loans.
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15
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Subsection
7.02 Seller and Servicer Representations.
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15
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Subsection
7.03 Repurchase; Substitution.
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15
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Subsection
7.04 Repurchase of Mortgage Loans With Early Payment
Default.
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15
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Subsection
7.05 Purchase Price Protection.
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15
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SECTION
8. Closing.
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15
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Subsection
8.01 Closing Conditions.
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15
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Subsection
8.02 Closing Documents.
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15
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SECTION
9. [Reserved.]
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15
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SECTION
10. Costs.
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15
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SECTION
11. Administration and Servicing of Mortgage Loans.
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15
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Subsection
11.01 Servicer to Act as Servicer; Subservicing.
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15
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Subsection
11.02 Liquidation of Mortgage Loans.
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15
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Subsection
11.03 Collection of Mortgage Loan Payments.
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15
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Subsection
11.04 Establishment of Custodial Account; Deposits in Custodial
Account.
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15
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Subsection
11.05 Withdrawals From the Custodial Account.
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15
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Subsection
11.06 Establishment of Escrow Account; Deposits in Escrow
Account.
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15
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Subsection
11.07 Withdrawals From Escrow Account.
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15
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Subsection
11.08 Payment of Taxes, Insurance and Other Charges; Collections
Thereunder.
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15
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Subsection
11.09 Transfer of Accounts.
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15
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Subsection
11.10 Maintenance of Hazard Insurance.
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15
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Subsection
11.11 Maintenance of Primary Mortgage Insurance Policy;
Claims.
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15
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Subsection
11.12 Fidelity Bond; Errors and Omissions Insurance.
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15
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Subsection
11.13 Title, Management and Disposition of REO Property.
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15
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Subsection
11.14 Servicing Compensation.
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15
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Subsection
11.15 Distributions.
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15
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Subsection
11.16 Statements to the Purchaser.
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15
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Subsection
11.17 Advances by the Servicer.
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15
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Subsection
11.18 Assumption Agreements.
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15
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Subsection
11.19 Satisfaction of Mortgages and Release of Mortgage
Files.
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15
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Subsection
11.20 Servicer Shall Provide Access and Information as Reasonably
Required.
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15
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Subsection
11.21 Inspections.
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15
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Subsection
11.22 Restoration of Mortgaged Property.
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15
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Subsection
11.23 Fair Credit Reporting Act.
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15
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Page
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SECTION
12. The Servicer.
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15
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Subsection
12.01 Indemnification; Third Party Claims.
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15
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Subsection
12.02 Merger or Consolidation of the Servicer.
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15
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Subsection
12.03 Limitation on Liability of the Servicer and Others.
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15
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Subsection
12.04 Seller and Servicer Not to Resign.
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15
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Subsection
12.05 Liability for Failure to Deliver Servicing Files.
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15
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SECTION
13. Default.
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15
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Subsection
13.01 Events of Default.
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15
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Subsection
13.02 Waiver of Default.
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15
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SECTION
14. Termination.
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15
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Subsection
14.01 Termination.
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15
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Subsection
14.02 Successors to the Servicer.
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15
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SECTION
15. Notices.
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15
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SECTION
16. Severability Clause.
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15
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SECTION
17. No Partnership.
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15
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SECTION
18. Counterparts.
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15
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SECTION
19. Governing Law.
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15
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SECTION
20. Intention of the Parties.
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15
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SECTION
21. Waivers.
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15
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SECTION
22. Exhibits.
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15
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SECTION
23. General Interpretive Principles.
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15
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SECTION
24. Reproduction of Documents.
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15
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SECTION
25. Amendment.
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15
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SECTION
26. Confidentiality.
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15
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SECTION
27. Entire Agreement.
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15
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SECTION
28. Further Agreements.
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15
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SECTION
29. Successors and Assigns.
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15
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SECTION
30. Non-Solicitation.
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15
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SECTION
31. Protection of Consumer Information.
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15
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SECTION
32. Cooperation of the Company with a Reconstitution; Regulation
AB
Compliance.
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15
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ii
EXHIBITS
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EXHIBIT
1
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MORTGAGE
LOAN DOCUMENTS
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EXHIBIT
2
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CONTENTS
OF EACH MORTGAGE FILE
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EXHIBIT
3
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UNDERWRITING
GUIDELINES
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EXHIBIT
4
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[RESERVED]
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EXHIBIT
5
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FORM
OF MONTHLY REMITTANCE REPORT
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EXHIBIT
6
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FORM
OF TERM SHEET
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ADDENDUM
I
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REGULATION
AB COMPLIANCE ADDENDUM
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iii
FLOW
MORTGAGE LOAN SALE AND SERVICING AGREEMENT
THIS
FLOW
MORTGAGE LOAN SALE AND SERVICING AGREEMENT (the “Agreement”),
dated
July 1, 2006, is hereby executed by and between RWT HOLDINGS, INC., a
Delaware corporation,
as purchaser (the “Purchaser”),
and
BANK
OF
AMERICA, NATIONAL ASSOCIATION,
a
national banking association, as seller (the “Seller”)
and as
servicer (the “Servicer”).
WITNESSETH:
WHEREAS,
the Seller has agreed to sell from time to time to the Purchaser, and the
Purchaser has agreed to purchase from time to time from the Seller, certain
conventional, residential, first-lien mortgage loans (the “Mortgage
Loans”)
as
described herein on a servicing-retained basis, and which shall be delivered
as
whole loans as provided herein; and
WHEREAS,
the Mortgage Loans will be sold by the Seller and purchased by the Purchaser
as
pools or groups of whole loans, servicing retained (each, a “Mortgage
Loan Package”)
on the
various Closing Dates as provided herein; and
WHEREAS,
each of the Mortgage Loans will be 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 related Mortgage Loan Schedule which will
be
annexed to a Term Sheet (as defined herein) on the related Closing Date;
and
WHEREAS,
the Purchaser, the Seller and the Servicer 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, the Seller and
the
Servicer agree as follows:
SECTION
1. Definitions.
For
purposes of this Agreement, the following capitalized terms shall have the
respective meanings set forth below.
Adjustable
Rate Mortgage Loan:
A
Mortgage Loan purchased pursuant to this Agreement which provides for the
adjustment of the Mortgage Interest Rate payable in respect
thereto.
Adjustment
Date:
As to
each Adjustable Rate Mortgage Loan, the date on which the Mortgage Interest
Rate
is adjusted in accordance with the terms of the related Mortgage Note and
Mortgage.
Agency
Transfer:
As
defined in Section 32 of this Agreement.
Agreement:
This
Flow Mortgage Loan Sale and Servicing Agreement including all exhibits,
schedules, amendments and supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraised
Value:
With
respect to any Mortgaged Property, the lesser of (i) the value thereof as
determined by a Qualified Appraiser at the time of origination of the Mortgage
Loan, and (ii) the purchase price paid for the related Mortgaged Property by
the
Mortgagor with the proceeds of the Mortgage Loan; provided,
however,
that in
the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property
is
based solely upon the value determined by an appraisal made for the originator
of such Refinanced Mortgage Loan at the time of origination of such Refinanced
Mortgage Loan by a Qualified Appraiser.
Assignment
of Mortgage:
An
individual assignment of the Mortgage, notice of transfer or equivalent
instrument in recordable form, sufficient under the laws of the jurisdiction
in
which the related Mortgaged Property is located to give record notice of the
sale of the Mortgage to the Purchaser.
Assumed
Principal Balance:
As to
each Mortgage Loan as of any date of determination, (i) the principal
balance of the Mortgage Loan outstanding as of the Cut-off Date after
application of payments due on or before the Cut-off Date, whether or not
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the Mortgage Loan pursuant to Subsection 11.15 and representing
(a)
payments or other recoveries of principal or (b) advances of scheduled principal
payments made pursuant to Subsection 11.17.
Balloon
Mortgage Loan:
A
Mortgage Loan that provided on the date of origination for monthly payments
up
to but not including the maturity date based on an amortization extending beyond
its maturity date.
Balloon
Payment:
With
respect to any Balloon Mortgage Loan as of any date of determination, the final
payment payable on the maturity of such Mortgage Loan, which shall include
the
entire remaining principal balance.
Business
Day:
Any day
other than (i) a Saturday or a Sunday, or (ii) a legal holiday in the State
of
New York or the State of California, or (iii) a day on which banks in the State
of New York or the State of California are authorized or obligated by law or
executive order to be closed.
Closing
Date:
The
date or dates, set forth in the related Term Sheet, on which the Purchaser
will
purchase and the Seller will sell the Mortgage Loans identified
therein.
CLTA:
The
California Land Title Association or any other successor thereto.
Code:
The
Internal Revenue Code of 1986, as amended, or any successor statute
thereto.
Commission:
The
United States Securities and Exchange Commission.
Condemnation
Proceeds:
All
awards, compensation and settlements in respect of a taking (whether permanent
or temporary) of all or part of a Mortgaged Property by exercise of the power
of
condemnation or the right of eminent domain, to the extent not required to
be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
2
Consumer
Information:
Any
personally identifiable information in any form (written electronic or
otherwise) relating to a Mortgagor, including, but not limited to: a Mortgagor’s
name, address, telephone number, Mortgage Loan number, Mortgage Loan payment
history, delinquency status, insurance carrier or payment information, tax
amount or payment information; the fact that the Mortgagor has a relationship
with the Company or the originator of the related Mortgage Loan; and any other
non-public personally identifiable information.
Convertible
Mortgage Loan:
An
Adjustable Rate Mortgage Loan that by its terms and subject to certain
conditions allows the Mortgagor to convert the adjustable Mortgage Interest
Rate
thereon to a fixed Mortgage Interest Rate.
Cooperative
Corporation:
With
respect to any Cooperative Loan, the cooperative apartment corporation that
holds legal title to the related Cooperative Project and grants occupancy rights
to units therein to stockholders through Cooperative Leases or similar
arrangements.
Cooperative
Lease:
The
lease on a Cooperative Unit evidencing the possessory interest of the owner
of
the Cooperative Shares in such Cooperative Unit.
Cooperative
Loan:
A
Mortgage Loan that is secured by a first lien on and perfected security interest
in Cooperative Shares and the related Cooperative Lease granting exclusive
rights to occupy the related Cooperative Unit in the building owned by the
related Cooperative Corporation.
Cooperative
Project:
With
respect to any Cooperative Loan, all real property and improvements thereto
and
rights therein and thereto owned by a Cooperative Corporation including without
limitation the land, separate dwelling units and all common
elements.
Cooperative
Shares:
With
respect to any Cooperative Loan, the shares of stock issued by a Cooperative
Corporation and allocated to a Cooperative Unit and represented by a stock
certificate.
Cooperative
Unit:
With
respect to a Cooperative Loan, a specific unit in a Cooperative
Project.
Credit
Score: The
credit score for each Mortgage Loan shall be the minimum of two credit bureau
scores obtained at origination or such other time by the Seller. If two credit
bureau scores are obtained, the Credit Score will be the lower score. If three
credit bureau scores are obtained, the Credit Score will be the middle of the
three. When there is more than one applicant, the lowest of the applicants’
Credit Scores will be used. There is only one (1) score for any loan regardless
of the number of borrowers and/or applicants. The minimum Credit Score for
each
Mortgage Loan will be in accordance with the Seller’s Underwriting Standards (as
defined below).
Custodial
Account:
As
defined in Subsection 11.04.
Customary
Servicing Procedures:
With
respect to any Mortgage Loan, those mortgage servicing practices (including
collection procedures) of prudent mortgage banking institutions which service
mortgage loans of the same type as such Mortgage Loan in the jurisdiction where
the related Mortgaged Property is located, and which are in accordance with
Xxxxxx Xxx servicing practices and procedures, for MBS pool mortgages, as
defined in the Xxxxxx Mae Guides including future updates.
3
Cut-off
Date:
With
respect to each Mortgage Loan, the first day of the month of the related Closing
Date as set forth in the related Term Sheet.
Deleted
Mortgage Loan:
A
Mortgage Loan replaced or to be replaced with a Substitute Mortgage Loan in
accordance with this Agreement.
Determination
Date:
With
respect to each Remittance Date, the 15th day (or, if such 15th day is not
a
Business Day, the following Business Day) of the month in which such 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 beginning 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.
Eligible
Investments:
Any one or more of the following obligations or securities:
(i) direct
obligations of, and obligations fully guaranteed by the United States of America
or any agency or instrumentality of the United States of America the obligations
of which are backed by the full faith and credit of the United States of
America;
(ii) (a) demand
or
time deposits, federal funds or bankers' acceptances issued by any depository
institu-tion or trust company incorporated under the laws of the United States
of America or any state thereof and subject to supervision and examination
by
federal and/or state banking authorities, provided that the commercial paper
and/or the short-term deposit rating and/or the long-term unsecured debt
obligations or deposits of such depository institution or trust company at
the
time of such investment or contractual commitment providing for such investment
are rated in one of the two highest rating categories by each Rating Agency
and
(b) any other demand or time deposit or certificate of deposit that is
fully insured by the FDIC;
(iii) repurchase
obligations with a term not to exceed thirty (30) days and with respect to
(a) any security described in clause (i) above and entered into with
a depository institution or trust company (acting as principal) described in
clause (ii)(a) above;
(iv) securities
bearing interest or sold at a discount issued by any corporation incorporated
under the laws of the United States of America or any state thereof that are
rated in one of the two highest rating categories by each Rating Agency at
the
time of such in-vestment or contractual commitment providing for such
investment; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that investments
therein will cause the then outstanding principal amount of secur-ities issued
by such corporation and held as Eligible Investments to exceed 10% of the
aggregate outstand-ing principal balances of all of the Mortgage Loans and
Eligible Investments;
4
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obliga-tions payable on demand or on a specified date not
more
than one year after the date of issuance there-of) which are rated in one of
the
two highest rating categories by each Rating Agency at the time of such
investment;
(vi) any
other
demand, money market or time deposit, obligation, security or investment as
may
be acceptable to each Rating Agency as evidenced in writing by each Rating
Agency; and
(vii) any
money
market funds the collateral of which consists of obligations fully guaranteed
by
the United States of America or any agency or instru-ment-al-ity of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America (which may include repurchase obligations
secured by collateral described in clause (i)) and other securities and
which money market funds are rated in one of the two highest rating categories
by each Rating Agency.
provided,
however,
that no
instrument or security shall be an Eligible Investment if such instrument or
security evidences a right to receive only interest payments with respect to
the
obli-ga-tions underlying such instrument or if such security provides for
payment of both principal and interest with a yield to matur-ity in excess
of
120% of the yield to maturity at par or if such investment or security is
purchased at a price greater than par.
Escrow
Account:
As defined in Subsection 11.06.
Escrow
Payments:
The
amounts constituting ground rents, taxes, assessments, Primary Mortgage
Insurance Policy premiums, fire and hazard insurance premiums, flood insurance
premiums, condominium charges and other payments as may be required to be
escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any
Mortgage Note or Mortgage.
Event
of Default:
Any one of the conditions or circumstances enumerated in
Subsection 13.01.
Xxxxxx
Xxx:
The
entity formerly known as the Federal National Mortgage Association or any
successor thereto.
Xxxxxx
Mae Guides:
The
Xxxxxx Xxx Xxxxxxx’ Guide and the Xxxxxx Mae Servicers’ Guide and all amendments
or additions thereto in effect on and after the related Closing
Date.
FDIC:
The
Federal Deposit Insurance Corporation or any successor thereto.
Fidelity
Bond:
The
fidelity bond required to be obtained by the Servicer pursuant to
Subsection 11.12.
5
FIRREA:
The
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended
and in effect from time to time.
First
Remittance Date:
With
respect to each Mortgage Loan Package, the 18th day (or if such 18th day is
not
a Business Day, the first Business Day immediately preceding such 18th
day) of
the calendar month immediately following the Closing Date; provided, however,
if
the Transfer Date is not one (1) or more Business Days prior to the first day
of
such calendar month, such date will be the 18th day (or if such 18th day is
not
a Business Day, the first Business Day immediately preceding such 18th
day) of
the next succeeding calendar month.
Xxxxxxx
Mac:
The
entity formerly known as the Federal Home Loan Mortgage Corporation or any
successor thereto.
Xxxxxxx
Mac Guide:
The
Xxxxxxx Mac Single Family Seller/Servicer Guide and all amendments or additions
thereto in effect on and after the related Closing Date.
Full
Prepayment:
Any
payment of the entire principal balance of a Mortgage Loan which is received
in
advance of its scheduled Due Date and is not accompanied by an amount of
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment.
GAAP:
Generally accepted accounting principles consistently applied.
Gross
Margin:
With
respect to any Adjustable Rate Mortgage Loan, the fixed percentage amount set
forth in the related Mortgage Note and the Mortgage Loan Schedule that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note to determine the new Mortgage Interest Rate for such Mortgage
Loan.
HUD:
The
United States Department of Housing and Urban Development or any successor
thereto.
Index:
With
respect to any Adjustable Rate Mortgage Loan, the index identified on the
Mortgage Loan Schedule and set forth in the related Mortgage Note for the
purpose of calculating the Mortgage Interest Rate thereon.
Initial
Rate Cap:
With
respect to each Adjustable Rate Mortgage Loan and the initial Adjustment Date
therefor, a number of percentage points per annum that is set forth in the
Mortgage Loan Schedule and in the related Mortgage Note, which is the maximum
amount by which the Mortgage Interest Rate for such Adjustable Rate Mortgage
Loan may increase or decrease from the Mortgage Interest Rate in effect
immediately prior to such Adjustment Date.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
IO Adjustable
Rate Mortgage Loan:
An
Adjustable Rate Mortgage Loan with respect to which accrued interest only is
payable by a Mortgagor on each Due Date until the IO Conversion
Date.
6
IO Conversion
Date:
With
respect to an IO Adjustable Rate Mortgage Loan, the date that references the
end
of the “interest only period” applicable thereto.
Lifetime
Rate Cap:
As to
each Adjustable Rate Mortgage Loan, the maximum Mortgage Interest Rate which
shall be as permitted in accordance with the provisions of the related Mortgage
Note.
Liquidation
Proceeds:
The
proceeds received in connection with the liquidation of a defaulted Mortgage
Loan through trustee’s sale, foreclosure sale or otherwise, other than amounts
received following the acquisition of REO Property, Insurance Proceeds and
Condemnation Proceeds.
Loan-to-Value
Ratio:
With
respect to any Mortgage Loan as of any date of determination, the ratio,
expressed as a percentage, on such date of the outstanding principal balance
of
the Mortgage Loan, to the Appraised Value of the related Mortgaged
Property.
LTV:
Loan-to-Value Ratio.
Master
Servicer:
With
respect to any Securitization Transaction, the “master servicer,” if any,
identified in the related transaction documents.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS
Mortgage Loan:
Any
Mortgage Loan registered with MERS on the MERS System.
MERS
System:
The
system of recording transfers of mortgages electronically maintained by
MERS.
MIN:
The
Mortgage Identification Number for any MERS Mortgage Loan.
Minimum
Interest Rate:
With
respect to each Adjustable Rate Mortgage Loan, a rate that is set forth on
the
Mortgage Loan Schedule and in the related Mortgage Note and is the minimum
interest rate to which the Mortgage Interest Rate on such Mortgage Loan may
be
decreased.
Monthly
Payment:
The
scheduled monthly payment on a Mortgage Loan due on any Due Date allocable
to
principal and/or interest on such Mortgage Loan pursuant to the terms of the
related Mortgage Note.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note which
creates a first lien on an unsubordinated estate in fee simple in real property
securing the Mortgage Note; except that with respect to real property located
in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, the mortgage, deed of trust or other instrument
securing the Mortgage Note may secure and create a first lien upon a leasehold
estate of the Mortgagor.
7
Mortgage
File:
With
respect to each Mortgage Loan, the documents pertaining thereto specified in
Exhibit
2
to be
provided and any additional documents required to be added to the Mortgage
File
pursuant to this Agreement.
Mortgage
Interest Rate:
With
respect to each Mortgage Loan, the annual rate at which interest accrues on
such
Mortgage Loan from time to time in accordance with the provisions of the related
Mortgage Note, including, but not limited to, the limitations on such interest
rate imposed by the Initial Rate Cap, the Periodic Rate Cap, the Minimum
Interest Rate and the Lifetime Rate Cap, if any.
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
related Mortgage Loan Schedule, which Mortgage Loan includes without limitation
the Mortgage File, the Servicing File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds, any escrow accounts related to the Mortgage Loan
and
all other rights, benefits, proceeds and obligations arising from or in
connection with such Mortgage Loan, excluding replaced or repurchased mortgage
loans.
Mortgage
Loan Documents:
With
respect to any Mortgage Loan, the documents listed in Exhibit 1
hereto.
Mortgage
Loan Package:
The
pool or group of whole loans purchased on a Closing Date, as described in the
Mortgage Loan Schedule annexed to the related Term Sheet.
Mortgage
Loan Remittance Rate:
With
respect to any Mortgage Loan, the annual rate of interest payable to the
Purchaser, which shall be equal to the related Mortgage Interest Rate minus
the
related Servicing Fee Rate.
Mortgage
Loan Schedule:
The
schedule of Mortgage Loans prepared for each Closing Date, such schedule setting
forth the following information with respect to each Mortgage Loan:
(1) the
Company’s Mortgage Loan identifying number;
(2) the
Mortgagor’s 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 owner-occupied, a second home
or an
investor property;
(5) the
type
of residential property constituting the Mortgaged Property;
(6) the
original months to maturity or the remaining months to maturity from the 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;
(7) the
Appraised Value (including the purchase price of the Mortgaged Property, if
applicable) and Loan-to-Value Ratio at origination;
8
(8) the
Mortgage Interest Rate at origination and as of the Cut-off Date;
(9) the
Mortgage Loan origination date;
(10) the
actual interest paid through date;
(11) the
scheduled interest paid through date;
(12) the
stated maturity date of the Mortgage Loan;
(13) the
amount of the Monthly Payment at origination and as of the Cut-off
Date;
(14) the
original principal amount of the Mortgage Loan;
(15) the
Stated Principal Balance of the Mortgage Loan as of the Cut-off
Date;
(16) a
code
indicating the purpose of the Mortgage Loan (i.e., purchase, rate and term
refinance, equity take-out refinance);
(17) a
code
indicating the documentation style (i.e. full, alternative or
reduced);
(18) the
number of times during the twelve (12) month period preceding the Closing Date
that any Monthly Payment has been received thirty (30) or more days after its
Due Date;
(19) the
date
on which the first Monthly Payment is due subsequent to the origination
date;
(20) a
code
indicating whether or not the Mortgage Loan is insured as to payment defaults
by
a Primary Mortgage Insurance Policy; and, in the case of any Mortgage Loan
which
is insured as to payment defaults by a Primary Mortgage Insurance Policy, the
name of the provider of such Primary Mortgage Insurance Policy;
(21) a
code
indicating whether or not the Mortgage Loan is the subject of a Prepayment
Penalty as well as the terms of the Prepayment Penalty;
(22) the
Primary Mortgage Insurance Policy Certificate Number, if
applicable;
(23) the
Primary Mortgage Insurance Policy Coverage Percentage, if
applicable;
(24) a
code
indicating the Credit Score of the Mortgagor at the time of origination of
the
Mortgage Loan;
(25) a
code
indicating the credit grade and specific loan/underwriting program of each
Mortgage Loan as assigned by the Company pursuant to the Underwriting
Standards;
9
(26) with
respect to each Adjustable Rate Mortgage Loan, the first Adjustment Date and
the
Adjustment Date frequency;
(27) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(28) with
respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under
the
terms of the Mortgage Note;
(29) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Interest
Rate under the terms of the Mortgage Note;
(30) with
respect to each Adjustable Rate Mortgage Loan, the Initial Rate Cap and Periodic
Rate Cap;
(31) with
respect to each Adjustable Rate Mortgage Loan, the first Adjustment Date
immediately following origination and the Cut-off Date;
(32) with
respect to each Adjustable Rate Mortgage Loan, the Index;
(33) with
respect to each Adjustable Rate Mortgage Loan, a code indicating whether the
Mortgage Loan is a Convertible Mortgage Loan;
(34) the
loan
type (i.e. fixed, adjustable; 2/28, 3/27, 5/25, etc.);
(35) a
code
indicating whether the Mortgage Loan is a MERS Mortgage Loan and, if so, the
corresponding MIN;
(36) a
code
indicating if the Mortgage Loan is subject to a transferable life-of-loan real
estate tax service contract; and
(37) a
code
indicating if the Mortgage Loan is subject to a fully transferable life-of-loan
flood certification and contract with First American Flood Data
Services.
With
respect to the Mortgage Loans in the aggregate being acquired on a Closing
Date,
the Mortgage Loan Schedule shall set forth the following information, as of
the
Cut-off Date unless otherwise specified:
(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;
(4) the
weighted average original months to maturity of the Mortgage Loans and the
weighted average remaining months to maturity of the Mortgage
Loans.
10
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage
or, in the case of a Cooperative Loan, secured by the Cooperative Shares and
the
Cooperative Lease.
Mortgaged
Property:
The
Mortgagor’s real property securing repayment of a related Mortgage Note,
consisting of a fee simple interest in a single parcel of real property improved
by a Residential Dwelling.
Mortgagee:
The
mortgagee or beneficiary named in the Mortgage and the successors and assigns
of
such mortgagee or beneficiary.
Mortgagor:
The
obligor on a Mortgage Note, who is an owner of the Mortgaged Property and the
grantor or mortgagor named in the Mortgage and such grantor’s or mortgagor’s
successors in title to the Mortgaged Property.
NAIC:
The National
Association of Insurance Commissioners or any successor
organization.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
a President or a Vice President of the Person on behalf of whom such certificate
is being delivered.
Opinion
of Counsel:
A
written opinion of counsel, who may be salaried counsel for the Person on behalf
of whom the opinion is being given, reasonably acceptable to each Person to
whom
such opinion is addressed.
OTS:
The
Office of Thrift Supervision or any successor.
P&I
Advance:
As
defined in Subsection 11.17.
Partial
Prepayment:
Any
payment of principal on a Mortgage Loan, other than a Full Prepayment, which
is
received in advance of its scheduled Due Date and is not accompanied by an
amount of interest representing scheduled interest due on any date or dates
in
any month or months subsequent to the month of prepayment.
Periodic
Rate Cap:
As to
each Adjustable Rate Mortgage Loan, the maximum increase or decrease in the
Mortgage Interest Rate, on any Adjustment Date as provided in the related
Mortgage Note, if applicable.
Person:
An
individual, corporation, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pledge
Agreement:
The
specific agreement creating a first lien on and pledge of the Cooperative Shares
and the related Cooperative Lease securing a Cooperative Loan.
Prepayment
Penalty:
With
respect to each Mortgage Loan, the penalty if the Mortgagor prepays such
Mortgage Loan as provided in the related Mortgage Note or Mortgage.
11
Prepayment
Interest Shortfall:
As to
any Remittance Date and any Mortgage Loan, (a) if such Mortgage Loan was the
subject of a Full Prepayment during the related Principal Prepayment Period,
the
excess of one month’s interest (adjusted to the Mortgage Loan Remittance Rate)
on the Assumed Principal Balance of such Mortgage Loan outstanding immediately
prior to such prepayment, over the amount of interest (adjusted to the Mortgage
Loan Remittance Rate) actually paid by the Mortgagor in respect of such
Principal Prepayment Period, and (b) if such Mortgage Loan was the subject
of a
Partial Prepayment during the related Principal Prepayment Period, an amount
equal to the excess of one month’s interest at the Mortgage Loan Remittance Rate
on the amount of such Partial Prepayment, over the amount of interest actually
paid by the Mortgagor in respect of such Partial Prepayment during such
Principal Prepayment Period.
Primary
Mortgage Insurance Policy:
A
policy of primary mortgage guaranty insurance issued by a Qualified
Insurer.
Principal
Prepayment:
Any
full or partial payment or other recovery of principal on a Mortgage Loan which
is received in advance of its scheduled Due Date, including any Prepayment
Penalty or premium thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal
Prepayment Period:
As to
any Remittance Date, the calendar month preceding the calendar month in which
such Remittance Date occurs.
Purchase
Price:
The
price paid on the related Closing Date by the Purchaser to the Seller pursuant
to this Agreement in exchange for the Mortgage Loans included in the related
Mortgage Loan Package, as calculated pursuant to Section 4 and the related
Term
Sheet.
Purchase
Price Percentage:
For
each Mortgage Loan included in a Mortgage Loan Package, the percentage of par
set forth in the related Term Sheet that is used to calculate the Purchase
Price
of the Mortgage Loans included in such Mortgage Loan Package.
Purchaser:
The
Person listed as such in the initial paragraph of this Agreement, together
with
its successors and assigns as permitted under the terms of this
Agreement.
Qualified
Appraiser:
With
respect to each Mortgage Loan, an appraiser, duly appointed by the originator,
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 Xxxxxx Xxx
or
Xxxxxxx Mac and Title XI of FIRREA and the regulations promulgated thereunder,
all as in effect on the date the Mortgage Loan was originated.
Qualified
Insurer:
An
insurance company duly qualified as such under the laws of the states in which
the Mortgaged Properties are located, duly authorized and licensed in such
states to transact the applicable insurance business and to write the insurance
provided by the insurance policy issued by it, approved as an insurer by Xxxxxx
Mae and Xxxxxxx Mac.
12
Rating
Agencies:
Standard & Poor’s Ratings Services, a division of The XxXxxx- Xxxx
Companies, Inc., Xxxxx’x Investors Service, Inc., Fitch, Inc. or, in the event
that some or all ownership of the Mortgage Loans is evidenced by mortgage-backed
securities, the nationally recognized rating agencies issuing ratings with
respect to such securities, if any.
Reconstitution
Agreement:
The
agreement or agreements entered into by the Seller and the Purchaser and certain
third parties on the Reconstitution Date or Reconstitution Dates with respect
to
any or all of the Mortgage Loans serviced hereunder, in connection with a Whole
Loan Transfer or a Securitization Transaction as provided in Subsection
32.01.
Reconstitution
Date:
The
date or dates on which any or all of the Mortgage Loans serviced under this
Agreement shall be removed from this Agreement and reconstituted as part of
a
Whole Loan Transfer or Securitization Transaction pursuant to Section 32 hereof.
On such date, the Mortgage Loans transferred shall cease to be covered by this
Agreement and the Seller shall cease to service such Mortgage Loans under this
Agreement.
Record
Date:
The close of business of the last Business Day of the month preceding the month
of the related Remittance Date.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
Regulation
AB Compliance Addendum:
Addendum
I
attached
hereto and incorporated herein by reference thereto.
Refinanced
Mortgage Loan:
A
Mortgage Loan which was made to a Mortgagor who owned the Mortgaged Property
prior to the origination of such Mortgage Loan and the proceeds of which were
used in whole or part to satisfy an existing mortgage.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of
the Code.
Remittance
Date:
The
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately preceding such 18th
day) of
any month, beginning with the First Remittance Date with respect to each
Mortgage Loan Package.
REO
Disposition:
The
final sale by the Servicer or the Purchaser of an REO Property.
REO
Disposition
Proceeds:
All
amounts received with respect to an REO Disposition pursuant to
Subsection 11.13.
REO
Property:
A
Mortgaged Property acquired by the Servicer through foreclosure or deed in
lieu
of foreclosure, as described in Subsection 11.13.
13
Repurchase
Price:
With
respect to any Mortgage Loan, a price equal to (i) the product of the Purchase
Price Percentage and the Stated Principal Balance of the Mortgage Loan, plus,
(ii) interest on such outstanding principal balance at the related Mortgage
Loan
Remittance Rate from the last date through which interest was last paid and
distributed to the Purchaser to the last day of the month in which such
repurchase occurs, plus, (iii) reasonable and customary third party expenses
incurred in connection with the transfer of the Mortgage Loan being repurchased;
provided, however, that if at the time of repurchase the Servicer is not the
Seller or an affiliate of the Seller, the amount described in clause (ii)
shall be computed at the sum of (i) the Mortgage Loan Remittance Rate and
(ii) the Servicing Fee Rate.
Residential
Dwelling:
Any one
of the following: (i) a detached one-family dwelling, (ii) a detached
two- to four-family dwelling, (iii) a one-family dwelling unit in a condominium
project or (iv) a one-family dwelling in a planned unit development, none
of which is a cooperative, mobile or manufactured home.
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (1) a sale or other transfer of some or all of
the
Mortgage Loans directly or indirectly by the Purchaser to an issuing entity
in
connection with an issuance of publicly offered or privately placed, rated
or
unrated mortgage-backed securities or (2) an issuance of publicly offered or
privately placed, rated or unrated securities, the payments on which are
determined primarily by reference to one or more portfolios of residential
mortgage loans consisting, in whole or in part, of some or all of the Mortgage
Loans.
Seller:
Bank of
America, National Association, a national banking association, or its successor
in interest or any successor to the Seller under this Agreement appointed as
herein provided.
Servicer:
Bank of
America, National Association, a national banking association, or its successor
in interest or any successor to the Servicer under this Agreement appointed
as
herein provided.
Servicing
Advances:
All
customary, reasonable and necessary out-of-pocket costs and expenses incurred
in
the performance by the Servicer of its servicing obligations, including, but
not
limited to, the cost of (a) the preservation, restoration and protection of
the Mortgaged Property, (b) any enforcement or judicial proceedings,
including foreclosures, (c) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the Mortgage,
and (d) payments made by the Servicer with respect to a Mortgaged Property
pursuant to Subsection 11.08.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Purchaser shall
pay to the Servicer, which shall, for each month, be equal to one-twelfth of
the
product of the applicable Servicing Fee Rate and the Stated Principal Balance
of
such Mortgage Loan. Such fee shall be payable monthly, computed on the basis
of
the same principal amount and period respecting which any related interest
payment on a Mortgage Loan is computed. The obligation of the Purchaser to
pay
the Servicing Fee is limited to, and payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds and
other proceeds, to the extent permitted by Subsection 11.05) of related
Monthly Payments collected by the Servicer, or as otherwise provided under
Subsection 11.05.
14
Servicing
Fee Rate:
With
respect to each Mortgage Loan, the per annum rate set forth on the related
Mortgage Loan Schedule or if not specified thereon, in the related Term
Sheet.
Servicing
File:
With
respect to each Mortgage Loan, the documents pertaining thereto specified in
Exhibit
2
and
copies of all documents for such Mortgage Loan specified in Exhibit
1.
Servicing
Officer:
Any
officer of the Servicer involved in, or responsible for, the administration
and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished to the Purchaser by the Servicer, as such list may be amended
from time to time.
Stated
Principal Balance:
As to
each Mortgage Loan as to any date of determination, (i) the principal
balance of the Mortgage Loan as of the first day of the month for which such
calculation is being made after giving effect to the principal portion of any
Monthly Payments due on or before such date, whether or not received, as well
as
any Principal Prepayments received before such date, minus (ii) all amounts
previously distributed to the Purchaser with respect to the Mortgage Loan
representing payments or recoveries of principal, or advances in lieu
thereof.
Substitute
Mortgage Loan:
A
mortgage loan substituted by the Seller for a Deleted Mortgage Loan which must,
on the date of such substitution, be approved by the Purchaser and meet the
conditions described in Section 7.03(b) of this Agreement.
Term
Sheet:
With
respect to each Mortgage Loan and Mortgage Loan Package, the Term Sheet,
substantially in the form of Exhibit
6
attached
hereto, confirming the sale by Seller and the purchase by the Purchaser of
the
Mortgage Loan Package on the related Closing Date.
Transfer
Date:
The
date or dates, set forth in the related Term Sheet, on which the servicing
related provisions of this Agreement will become effective and the Servicer
will
begin servicing the Mortgage Loans for the benefit of the
Purchaser.
Underwriting
Guidelines:
As to
each Mortgage Loan Package, the written underwriting guidelines in effect as
of
the origination date of such Mortgage Loans, attached hereto as Exhibit
3,
as may
be updated and incorporated into Exhibit
3
from
time to time by attaching such updates to the Term Sheet.
Whole
Loan Transfer:
Any
sale or transfer by the Purchaser of some or all of the Mortgage Loans
(including an Agency Transfer), other than a Securitization Transaction.
SECTION
2. Purchase
and Conveyance.
The
Seller, in exchange for the payment of the applicable Purchase Price by the
Purchaser on the related Closing Date, receipt of which is hereby acknowledged,
hereby sells, transfers, assigns, sets over and conveys to the Purchaser,
without recourse, but subject to the terms of this Agreement, all of its rights,
title and interest in and to the Mortgage Loans in a Mortgage Loan Package
having a Stated Principal Balance in an amount as set forth in the related
Term
Sheet, or in such other amount as agreed by the Purchaser and the Seller as
evidenced by the actual aggregate principal balance of the Mortgage Loan Package
accepted by the Purchaser on the related Closing Date, together with the related
Mortgage Files and all rights and obligations arising under the documents
contained therein, other than the servicing rights to such Mortgage
Loans.
15
With
respect to each Mortgage Loan, the Purchaser shall own and be entitled to (1)
the principal portion of all Monthly Payments due after the related Cut-off
Date, (2) all other recoveries of principal collected after the related Cut-off
Date (provided, however, that the principal portion of all Monthly Payments
due
on or before the related Cut-off Date and collected by the Seller or any
successor servicer after the related Cut-off Date shall belong to the Seller),
and (3) all payments of interest on the Mortgage Loans (minus that portion
of
any such payment which is allocable to the period prior to the related Cut-off
Date). The Stated Principal Balance of each Mortgage Loan as of the related
Cut-off Date is determined after application of payments of principal due on
or
before the related Cut-off Date whether or not collected, together with any
unscheduled Principal Prepayments collected prior to the related Cut-off Date;
provided, however, that Monthly Payments for a Due Date beyond the Cut-off
Date
shall not be applied to reduce the principal balance. Such Monthly Payments
shall be the property of the Purchaser. The Seller shall remit any such Monthly
Payments to the Purchaser on the Remittance Date following collection
thereof.
SECTION
3. Mortgage
Loan Schedule.
The
Seller shall deliver the Mortgage Loan Schedule (which will be annexed to the
related Term Sheet) to the Purchaser at least two (2) Business Days prior
to the related
Closing
Date.
SECTION
4. Purchase
Price.
The
Purchase Price for the Mortgage Loans being acquired on a Closing Date shall
be
equal to the sum of (a) the product of (i) the Purchase Price Percentage stated
in the related Term Sheet (subject to adjustment as provided therein) and (ii)
the Stated Principal Balance of the Mortgage Loans listed on the related
Mortgage Loan Schedule, plus
(b) an
amount equal to accrued interest on the aggregate Stated Principal Balance
of
the Mortgage Loans at the weighted average Mortgage Interest Rate of such
Mortgage Loans from the related Cut-off Date through the day prior to the
related Closing Date, both inclusive (assuming 30/360) (the “Purchase
Price”).
If so
provided in the related Term Sheet, portions of the Mortgage Loans shall be
priced separately.
The
Purchase Price as set forth in the preceding paragraph for the Mortgage Loans
shall be paid on the related Closing Date by wire transfer of immediately
available funds.
SECTION
5. Examination
of Mortgage Files.
16
The
Seller shall, at the direction of the Purchaser, (a) deliver to the Purchaser
or
its designee in escrow, for examination with respect to each Mortgage Loan
to be
purchased on the related Closing Date, the related Mortgage File, or (b) make
the related Mortgage File available to the Purchaser for examination at the
Seller’s offices or such other location as shall otherwise be agreed upon by the
Purchaser and the Seller. The Seller shall make available to Purchaser the
Mortgage File in digital format on compact disks or DVD which shall include,
without limitation, imaged documents as required for Purchaser’s due diligence
review. Such examination may be made by the Purchaser or its designee at any
reasonable time before or after the related Closing Date. The Purchaser may,
at
its option and without notice to the Seller, purchase all or part of the
Mortgage Loan package without conducting any partial or complete examination.
The fact that the Purchaser has conducted or has determined not to conduct
any
partial or complete examination of the Mortgage Files shall not affect the
Purchaser’s (or any of its successors’) rights to demand repurchase or other
relief or remedy provided for in this Agreement.
SECTION
6. Delivery
of Mortgage Loan Documents.
Subsection
6.01 Possession
of Mortgage Files.
The
contents of each Mortgage File required to be retained by the Servicer to
service the Mortgage Loans pursuant to this Agreement and thus not delivered
to
the Purchaser or its designee are and shall be held in trust by the Servicer
for
the benefit of the Purchaser as the owner thereof. The Servicer’s possession of
any portion of each such Mortgage File is at the will of the Purchaser for
the
sole purpose of facilitating servicing of the Mortgage Loans pursuant to this
Agreement, and such retention and possession by the Servicer shall be in a
custodial capacity only. 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 Servicer shall immediately vest in
the
Purchaser and shall be retained and maintained, in trust, by the Servicer at
the
will of the Purchaser in such custodial capacity only. The Mortgage File
retained by the Servicer with respect to each Mortgage Loan pursuant to this
Agreement shall be appropriately identified in the Servicer’s computer system to
reflect clearly the ownership of such related Mortgage Loan by the Purchaser.
The Servicer shall release from its custody the contents of any Mortgage File
retained by it only in accordance with this Agreement, except when such release
is required in connection with a repurchase of any such Mortgage Loan pursuant
to Subsection 7.03 of this Agreement or if required under applicable law or
court order.
Subsection
6.02 Books
and Records.
The
sale
of each Mortgage Loan will be reflected on the Seller’s balance sheet and other
financial statements as a sale of assets by the Seller. The Seller shall
maintain a complete set of books and records for the Mortgage Loans sold by
it
which shall be appropriately identified in the Seller’s computer system to
clearly reflect the ownership of the Mortgage Loans by the
Purchaser.
In
addition to the foregoing, the Seller shall provide to any supervisory agents
or
examiners that regulate the Purchaser, including but not limited to, the OTS,
the FDIC and other similar entities, access, during normal business hours,
upon
reasonable advance notice to the Seller and without charge to the Seller or
such
supervisory agents or examiners, to any documentation regarding the Mortgage
Loans that may be required by any applicable regulator.
17
Subsection
6.03 Delivery
of Mortgage Loan Documents.
The
Seller shall deliver and release to the Purchaser or its designee the Mortgage
Loan Documents no later than four (4) Business Days prior to the related Closing
Date. If the Seller cannot deliver the original recorded Mortgage Loan Documents
on the related Closing Date, the Seller shall, promptly upon receipt thereof
and
in any case not later than 120 days from the Closing Date, deliver such original
recorded documents to the Purchaser or its designee (unless the Seller is
delayed in making such delivery by reason of the fact that such documents shall
not have been returned by the appropriate recording office). If delivery is
not
completed within 120 days of the related Closing Date solely because such
documents shall not have been returned by the appropriate recording office,
the
Seller shall deliver such document to Purchaser, or its designee, within such
time period as specified in a Seller’s Officer’s Certificate. In the event that
documents have not been received by the date specified in the Seller’s Officer’s
Certificate, a subsequent Seller’s Officer’s Certificate shall be delivered by
such date specified in the prior Seller’s Officer’s Certificate, stating a
revised date for receipt of documentation. The procedure shall be repeated
until
the documents have been received and delivered. The Seller shall use its best
efforts to effect delivery of all delayed recorded documents within 180 days
of
the related Closing Date. If delivery of all Mortgage Loan Documents with
respect to any Mortgage Loan is not completed within 360 days of the related
Closing Date then, at Purchaser’s option, the Seller shall repurchase such
Mortgage Loan in such manner set forth in Section 7.03.
Any
review by the Purchaser or its designee of the Mortgage Files shall in no way
alter or reduce the Seller’s obligations hereunder.
If
the Purchaser or its designee discovers any defect with respect to any document
constituting part of a Mortgage File, the Purchaser shall, or shall cause its
designee to, give written specification of such defect to the Seller and the
Seller shall cure or repurchase such Mortgage Loan in accordance with Section
7.03.
The
Seller shall forward to the Purchaser, or its designee, original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into within one week of their execution and shall also
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 five (5) days of its return from the
appropriate public recording office.
SECTION
7. Representations,
Warranties and Covenants; Remedies for Breach.
Subsection
7.01 Representations
and Warranties Regarding Individual Mortgage Loans.
The
Seller and, solely as specified below, the Servicer, hereby represent and
warrant to the Purchaser that, as to each Mortgage Loan, as of the related
Closing Date or such other date specified herein:
18
(a) The
information set forth in the Mortgage Loan Schedule annexed to the related
Term
Sheet and the information contained in the related electronic data file
delivered by the Seller to the Purchaser is true, correct and
complete.
(b) There
are
no defaults by the Seller, the Servicer or any prior originator in complying
with the terms of the Mortgage, and all taxes, ground rents, governmental
assessments, insurance premiums, leasehold payments, water, sewer and municipal
charges which previously became due and owing have been paid, or escrow funds
have been established in an amount sufficient to pay for every such escrowed
item which remains unpaid and which has been assessed but is not yet due and
payable.
(c) The
terms
of the Mortgage Note and the Mortgage have not been impaired, waived, altered
or
modified in any respect, except by written instruments which have been recorded
in the applicable public recording office required by law or if necessary to
maintain the lien priority of the Mortgage, and which have been delivered to
the
Purchaser; the substance of any such waiver, alteration or modification has
been
approved by the insurer under the Primary Mortgage Insurance Policy, if any,
and
by the title insurer, to the extent required by the related policy, and is
reflected on the related Mortgage Loan Schedule. No other instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by the insurer under the Primary Mortgage Insurance Policy, if any,
and
by the title insurer, to the extent required by the policy, and which assumption
agreement is a part of the Mortgage File and is reflected on the related
Mortgage Loan Schedule.
(d) The
Mortgage Note and the Mortgage are 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 and
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 the Mortgagor was not a
debtor in any state or federal bankruptcy or insolvency proceeding at the time
the Mortgage Loan was originated.
(e) All
buildings or other customarily insured improvements upon the Mortgaged Property
are insured by an insurer generally acceptable to Xxxxxx Xxx and to prudent
mortgage lending institutions against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Mae Guides as well
as
all additional requirements set forth herein, pursuant to an insurance policy
conforming to the requirements of Customary Servicing Procedures and providing
coverage in an amount equal to the lesser of (i) the full insurable value of
the
Mortgaged Property or (ii) the outstanding principal balance owing on the
Mortgage Loan, but in no event less than the minimum amount necessary to fully
compensate for any damage or loss on a replacement cost basis. All such
insurance policies are in full force and effect and contain a standard mortgagee
clause naming the originator of the Mortgage Loan, its successors and assigns
as
mortgagee and all premiums thereon have been paid. If the Mortgaged Property
is
in an area identified on a flood hazard map or flood insurance rate map issued
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 Insurance
Administration is in effect which policy conforms to the requirements of Xxxxxx
Xxx or Xxxxxxx Mac. Such flood insurance policy is in an amount representing
coverage not less than the least of (A) the outstanding principal balance of
the
Mortgage Loan, (B) the full insurable value of the related Mortgaged Property
and (C) the maximum amount of insurance which was available under the Flood
Disaster Protection Act of 1973, as amended. 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 all such insurance at the
Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor’s cost and expense and to seek reimbursement therefor from the
Mortgagor. Each such 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 purchase
of
the Mortgage Loans as contemplated by this Agreement. The Seller has not acted
or failed to act so as to impair the coverage of any such insurance policy
or
the validity, binding effect and enforceability thereof;
19
(f) 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, fair housing or disclosure laws
applicable to the origination and servicing of the Mortgage Loans have been
complied with. The Servicer maintains, and shall maintain, evidence of such
compliance as required by applicable law or regulation and shall make such
evidence available for inspection at the Servicer’s office during normal
business hours upon reasonable advance notice. No Mortgage Loan is (a) covered
by the Home Ownership and Equity Protection Act of 1994, as amended (“HOEPA”),
(b) a “high cost,” “threshold,” “covered,” “predatory,” “abusive,” “high risk
home” or similarly defined loan, including refinance loans, under any other
applicable law (or a similarly classified loan using different terminology
under
a law imposing heightened regulatory scrutiny or additional legal liability
for
residential mortgage loans having high interest rates, points and/or fees),
provided that any Mortgage Loan secured by a Mortgaged Property in Illinois
characterized as a “threshold” loan shall not be a “high cost” loan unless it is
characterized as “predatory” under applicable local law; the Seller has
implemented and conducted compliance procedures to determine if each Mortgage
Loan is “high-cost” home loan under the applicable laws and performed a review
of the disclosure provided to the related Mortgagor in accordance with such
laws
and the related Mortgage Note in order to determine that such Mortgage Loan,
if
subject to any such law, does not violate any such law or (c) a “High Cost Loan”
or “Covered Loan,” as defined in the then current Standard & Poor’s LEVELS®
Glossary, Appendix E.
(g) The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole
or in part (other than as to Principal Prepayments in full which may have been
received on or after the related Cut-off Date and prior to the related Closing
Date), 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 satisfaction, cancellation, subordination, rescission or
release. Neither the Seller nor the Servicer has 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, and neither the Seller nor the
Servicer has waived any default.
20
(h) The
Mortgage is a valid, existing, perfected and enforceable first lien on the
Mortgaged Property, including all improvements on the Mortgaged Property, free
and clear of all adverse claims, liens and encumbrances having priority over
the
lien of the Mortgage, subject only to (i) the lien of current real property
taxes and assessments not yet due and payable, (ii) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record
as
of the date of recording being acceptable to mortgage lending institutions
generally and either (A) specifically referred to in the lender’s title
insurance policy delivered to the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged Property and (iii)
other matters to which like properties are commonly subject which do not
individually or in the aggregate 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. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with
the
Mortgage Loan establishes and creates a valid, existing and enforceable first
lien and first priority security interest on the property described therein
and
the Seller has the full right to sell and assign the same to the
Purchaser.
(i) The
Mortgage Note and the related Mortgage are original and genuine and each is
the
legal, valid and binding obligation of the maker thereof, enforceable in all
respects in accordance with its terms except as enforceability may be limited
by
(i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights
of
creditors and (ii) general principles of equity, whether enforcement is sought
in a proceeding in equity or at law and the Seller has taken all action
necessary to transfer such rights of enforceability to the
Purchaser.
(j) All
parties to the Mortgage Note and the Mortgage had the legal capacity to enter
into the Mortgage Loan and to execute and deliver the Mortgage Note and the
Mortgage, and the Mortgage Note and the Mortgage have been duly and properly
executed by such parties. Either the Mortgagor is a natural person or the
related co-borrower or guarantor is a natural person.
(k) The
proceeds of the Mortgage Loan have been fully disbursed to or for the account
of
the Mortgagor and there is no obligation for the Mortgagee to advance additional
funds 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 have been paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due to the
Mortgagee pursuant to the Mortgage Note or Mortgage.
(l) The
Seller and all other 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) in compliance with
any
and all applicable “doing business” and licensing requirements of the laws of
the state wherein the Mortgaged Property is located.
(m) The
Mortgage Loan is covered by an ALTA or CLTA lender’s title insurance policy,
acceptable to Xxxxxx Xxx or Xxxxxxx Mac, issued by a title insurer acceptable
to
Xxxxxx Mae or Xxxxxxx Mac and qualified to do business in the jurisdiction
where
the Mortgaged Property is located, insuring (subject to the exceptions contained
in (h)(i), (ii) and (iii) above) 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, with respect to any Adjustable Rate Mortgage Loan, 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 or Monthly Payment. The Seller and its successors and assigns
are
the sole insureds of such lender’s title insurance policy, and such lender’s
title insurance policy is in full force and effect and will be in full force
and
effect upon the consummation of the transactions contemplated by this Agreement
and will inure to the benefit of the Purchaser and its assigns without any
further act. No claims have been made under such lender’s title insurance
policy, and no prior holder of the Mortgage has done, by act or omission,
anything which would impair the coverage of such lender’s title insurance
policy. In connection with the issuance of such lender’s title insurance policy,
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.
21
(n) 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 permitting acceleration, and neither the
Seller nor the Servicer has waived any default, breach, violation or event
permitting acceleration.
(o) There
are
no mechanics’ or similar liens or claims filed for work, labor or material (and
no rights are outstanding that under law could give rise to such lien) affecting
the related Mortgaged Property which are or may be liens prior to, or equal
or
coordinate with, the lien of the related Mortgage.
(p) All
improvements which were considered in determining the Appraised Value of the
related 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.
(q) The
Mortgage Loan was originated by a commercial bank or similar banking institution
which is supervised and examined by a federal or state authority, or by a
mortgagee approved by the Secretary of HUD.
(r) Principal
payments on the Mortgage Loan commenced no more than sixty (60) days after
(i)
the IO Conversion Date, with respect to the IO Adjustable Rate Mortgage Loans
and (ii) the proceeds of the Mortgage Loan were disbursed, with respect to
all
Mortgage Loans other than IO Adjustable Rate Mortgage Loans. The Mortgage Loans
identified on the related Mortgage Loan Schedule have an original term to
maturity of not more than (i) twenty-five (25) years with respect to the IO
Adjustable Rate Mortgage Loans and (ii) thirty (30) years with respect to all
other Mortgage Loans, with interest payable in arrears on the first day of
the
month. As to each Adjustable Rate Mortgage Loan, on each applicable Adjustment
Date, the Mortgage Interest Rate will be adjusted to equal the sum of the Index
plus the applicable Gross Margin, rounded up or down as provided in the Mortgage
Note; provided, however, that the Mortgage Interest Rate will not increase
or
decrease by more than the Initial Rate Cap on the first Adjustment Date or
the
Periodic Rate Cap on any subsequent Adjustment Date, if applicable, and will
in
no event exceed the Lifetime Rate Cap. Each Mortgage Note evidencing a Mortgage
Loan other than an Adjustable Rate Mortgage Loan requires a Monthly Payment
which is sufficient to amortize the original principal balance fully over the
original term thereof and to pay interest at the related Mortgage Interest
Rate.
Each Mortgage Note evidencing an Adjustable Rate Mortgage Loan requires a
Monthly Payment which is sufficient (after the IO Conversion Date, with respect
to the IO Adjustable Rate Mortgage Loans) (i) during the period prior to the
first adjustment to the Mortgage Interest Rate, to amortize the original
principal balance fully over the remaining term thereof and to pay interest
at
the related Mortgage Interest Rate, and (ii) during the period following each
Adjustment Date, to amortize the outstanding principal balance fully as of
the
first day of such period over the then remaining term of such Mortgage Note
and
to pay interest at the related Mortgage Interest Rate. No Mortgage Note
evidencing an Adjustable Rate Mortgage Loan permits negative amortization.
Interest on the Mortgage Note is calculated on the basis of a 360-day year
consisting of twelve 30-day months. No Mortgage Loan provides for interest
payable on a simple interest basis. No Mortgage Loan provides for an increase
in
the related Mortgage Interest Rate upon the occurrence of a default under the
terms of the related Mortgage Note. No IO Adjustable Rate Mortgage Loan has
an
interest only period in excess of ten (10) years.
22
(s) There
is
no proceeding pending or, to the Seller’s knowledge, threatened for the total or
partial condemnation of the Mortgaged Property and such property is in good
repair and 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.
(t) The
Mortgage and related Mortgage Note contain 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. To the
best of the Seller’s knowledge, following the date of origination of the
Mortgage Loan, the Mortgaged Property has not been subject to any bankruptcy
proceeding or foreclosure proceeding and the Mortgagor has not filed for
protection under applicable bankruptcy laws. There is no homestead or other
exemption or right available to the Mortgagor or any other person which would
interfere with the right to sell the Mortgaged Property at a trustee’s sale or
the right to foreclose the Mortgage.
(u) The
Mortgage Note and Mortgage are on forms acceptable to Xxxxxx Xxx or Xxxxxxx
Mac.
(v) The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the corresponding Mortgage on the Mortgaged Property and the security
interest of any applicable security agreement or chattel mortgage referred
to in
(h) above.
(w) The
Mortgage File contains an appraisal of the related Mortgaged Property, in a
form
acceptable to Xxxxxx Mae or Xxxxxxx Mac and such appraisal complies with the
requirements of FIRREA, and was made and signed, prior to the approval of the
Mortgage Loan application, by a Qualified Appraiser.
23
(x) 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.
(y) The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation, balloon payment or other contingent
interest feature, nor does it contain any “buydown” provision which is currently
in effect.
(z) 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.
(aa) The
Mortgagor has received all disclosure materials required by applicable law
with
respect to the making of mortgage loans of the same type as the Mortgage Loan
and rescission materials required by applicable law if the Mortgage Loan is
a
Refinanced Mortgage Loan and has acknowledged receipt of such materials to
the
extent required by applicable law and such documents will remain in the Mortgage
File.
(bb) No
Mortgage Loan has an LTV at origination in excess of 95%. Each Mortgage Loan
with an LTV at origination in excess of 80% will be subject to a Primary
Mortgage Insurance Policy, issued by an insurer acceptable to Xxxxxx Mae or
Xxxxxxx Mac at the time of origination, which insures that portion of the
Mortgage Loan in excess of the portion of the Appraised Value of the Mortgaged
Property as required by Xxxxxx Mae. All provisions of such Primary Mortgage
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. Any Mortgage
subject to any such Primary Mortgage Insurance Policy obligates the Mortgagor
thereunder to maintain such insurance and to pay all premiums and charges in
connection therewith at least until the LTV of such Mortgage Loan is reduced
to
less than 80%. The Mortgage Interest Rate for the Mortgage Loan does not include
any such insurance premium. No Mortgage Loan requires payment of such premiums,
in whole or in part, by the Purchaser.
(cc) 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,
have been made or obtained from the appropriate authorities and no improvement
located on or part of the Mortgaged Property is in violation of any zoning
law
or regulation.
(dd) 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) All
payments required to be made prior to the related Cut-off Date for such Mortgage
Loan under the terms of the Mortgage Note have been made, the Mortgage Loan
has
not been dishonored, there are no material defaults under the terms of the
Mortgage Loan; no Mortgage Loan has been more than thirty (30) days delinquent
in the twelve month period immediately prior to the related Cut-off Date and
no
Mortgage Loan will be more than thirty (30) days delinquent as of the related
Transfer Date.
24
(ff) None
of
the Seller, the Servicer or any prior originator or servicer has advanced funds,
or induced, solicited or knowingly received any advance from any party other
than the Mortgagor, directly or indirectly, for the payment of any amount due
under the Mortgage Loan.
(gg) With
respect to each Mortgage Loan, the Seller is in possession of a complete
Mortgage File except for the documents which have been delivered to the
Purchaser or which have been submitted for recording and not yet
returned.
(hh) Immediately
prior to the payment of the related Purchase Price, the Seller was the sole
owner and holder of the Mortgage Loans and the indebtedness evidenced by the
Mortgage Note. The Mortgage Loans, including the Mortgage Note and the Mortgage,
were not assigned or pledged by the Seller and the Seller had good and
marketable title thereto, and the Seller had full right to transfer and sell
the
Mortgage Loans to the Purchaser free and clear of any encumbrance, participation
interest, lien, equity, pledge, claim or security interest and had full right
and authority subject to no interest or participation in, or agreement with
any
other party to sell or otherwise transfer the Mortgage Loans. Following the
sale
of the Mortgage Loans, the Purchaser will own such Mortgage Loan free and clear
of any encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest. The Seller intends to relinquish all rights to monitor,
possess and control the Mortgage Loan except in connection with the servicing
of
the Mortgage Loan by the Servicer as set forth in this Agreement. After the
related Closing Date, neither the Seller nor the Servicer will have any right
to
modify or alter the terms of the sale of the Mortgage Loans and neither the
Seller nor the Servicer will have any obligation or right to repurchase the
Mortgage Loans, except as provided in this Agreement or as otherwise agreed
to
by the Seller, the Servicer and the Purchaser.
(ii) 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 Xxxxxx Xxx and Xxxxxxx Mac.
The consolidated principal amount does not exceed the original principal amount
of the Mortgage Loan.
(jj) The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
in
effect at the time of origination with exceptions thereto exercised in a
reasonable manner.
(kk) The
Mortgaged Property is located in the state identified in the related Mortgage
Loan Schedule and consists of a parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit, or an individual unit in a planned unit
development; provided, however, that any condominium project or planned unit
development generally conforms with the Underwriting Guidelines regarding such
dwellings, and no residence or dwelling is a mobile home, manufactured dwelling
or cooperative.
25
(ll) If
the
Mortgaged Property is a condominium unit or a planned unit development (other
than a de minimis planned unit development) such condominium or planned unit
development project meets Xxxxxx Xxx or Xxxxxxx Mac eligibility requirements
for
sale to Xxxxxx Mae or Xxxxxxx Mac, as the case may be, or is located in a
condominium or planned unit development project which has received Xxxxxx Mae
or
Xxxxxxx Mac project approval or as to which Xxxxxx Mae’s and Xxxxxxx Mac’s
eligibility requirements have been waived.
(mm) The
Seller used no adverse selection procedures in selecting the Mortgage Loan
from
among the outstanding first-lien, residential mortgage loans owned by it which
were available for inclusion in the Mortgage Loans.
(nn) Each
Mortgage Loan is a “qualified mortgage” within Section 860G(a)(3) of the
Code.
(oo) With
respect to each Mortgage where a lost note affidavit has been delivered in
place
of the related Mortgage Note, the related Mortgage Note is no longer in
existence.
(pp) No
fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to the Mortgage Loan has taken place on the part of the Seller, the
Servicer or any originator or servicer or the Mortgagor or on the part of any
other party involved in the origination of the Mortgage Loan.
(qq) The
origination practices used by the Seller and the collection and servicing
practices used by the Servicer with respect to each Mortgage Loan have been
in
all respects legal, proper, prudent and customary in the mortgage origination
and servicing industry and the collection and servicing practices used by the
Servicer have been acceptable to Xxxxxx Mae and Xxxxxxx Mac.
(rr) The
Mortgagor is not in bankruptcy and is not insolvent and no Mortgagor was a
debtor in any state or federal bankruptcy or insolvency proceeding at the time
the Mortgage Loan was originated and the Mortgaged Property has not been subject
to any bankruptcy or foreclosure proceedings.
(ss) Neither
the Seller nor the Servicer have any knowledge of any circumstances or condition
with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor’s credit standing that could reasonably be expected to cause investors
to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage
Loan to become delinquent or materially adversely affect the value or the
marketability of the Mortgage Loan.
(tt) The
Mortgagor has not notified the Seller or the Servicer, and neither the Seller
nor the Servicer has knowledge of any relief requested by the Mortgagor under
the Servicemembers Civil Relief Act, as amended, or any similar state or local
laws.
26
(uu) 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.
(vv) 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 or the Servicer is aware in which
compliance with any environmental law, rule or regulation is an issue and
nothing further remains to be done to satisfy in full all requirements of each
such law, rule or regulation constituting a prerequisite to use and enjoyment
of
said property.
(ww) No
action, inaction, or event has occurred and no state of affairs exists or has
existed that has resulted or will result in the exclusion from, denial of,
or
defense to coverage under any applicable special hazard insurance policy,
Primary Mortgage 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 the Servicer or any designee of the Seller or the
Servicer or any corporation in which the Seller, the Servicer or any officer,
director, or employee of the Seller or the Servicer had a financial interest
at
the time of placement of such insurance.
(xx) With
respect to any ground lease to which a Mortgaged Property may be subject: (A)
the Mortgagor is the owner of a valid and subsisting leasehold interest under
such ground lease; (B) such ground lease is in full force and effect, unmodified
and not supplemented by any writing or otherwise; (C) all rent, additional
rent
and other charges reserved therein have been fully paid to the extent payable
as
of the related Closing Date; (D) the Mortgagor enjoys the quiet and peaceful
possession of the leasehold estate; (E) the Mortgagor is not in default under
any of the terms of such ground lease, and there are no circumstances which,
with the passage of time or the giving of notice, or both, would result in
a
default under such ground lease; (F) the lessor under such ground lease is
not
in default under any of the terms or provisions of such ground lease on the
part
of the lessor to be observed or performed; (G) the lessor under such ground
lease has satisfied any repair or construction obligations due as of the related
Closing Date pursuant to the terms of such ground lease; (H) the execution,
delivery and performance of the Mortgage do not require the consent (other
than
those consents which have been obtained and are in full force and effect) under,
and will not contravene any provision of or cause a default under, such ground
lease; (I) the term of such lease does not terminate earlier than the maturity
date of the Mortgage Note; (J) the ground lease is assignable or transferable;
(K) the ground lease does not provide for termination of the lease in the event
of lessee’s default without the mortgagee being entitled to receive written
notice of, and a reasonable opportunity to cure the default; (L) the ground
lease permits the mortgaging of the related Mortgaged Property; (M) the ground
lease protects the mortgagee’s interests in the event of a property
condemnation; and (N) the use of leasehold estates for residential properties
is
a widely accepted practice in the jurisdiction in which the Mortgaged Property
is located.
(yy) Each
Mortgage Loan originated in the state of Texas pursuant to Article XVI, Section
50(a)(6) of the Texas Constitution (a “Texas Refinance Loan”) has been
originated in compliance with the provisions of Article XVI, Section 50(a)(6) of
the Texas Constitution, Texas Civil Statutes and the Texas Finance Code. If
the
Mortgage Loan was originated in Texas, it is not a cash-out
refinancing.
27
(zz) All
of
the terms of the related Mortgage Note pertaining to interest adjustments,
payment adjustments and adjustments of the outstanding principal balance, if
any, are enforceable and such adjustments on such Mortgage Loan have been made
properly and in accordance with the provisions of such Mortgage
Loan.
(aaa) No
Mortgage Loan is subject to nullification pursuant to Executive Order 13224
(the
“Executive Order”) or the regulations promulgated by the Office of Foreign
Assets Control of the United States Department of the Treasury (the “OFAC
Regulations”) or in violation of the Executive Order or the OFAC Regulations,
and no Mortgagor is subject to the provisions of such Executive Order or the
OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC
Regulations.
(bbb) All
information on the Mortgage Loan Schedule and electronic data file delivered
to
the Purchaser regarding the Prepayment Penalty is complete and accurate in
all
material respects and each Prepayment Penalty is permissible and enforceable
in
accordance with its terms under applicable law. Prepayment Penalties on the
Mortgage Loans are applicable to prepayments resulting from both refinancings
and sales of the related Mortgaged Properties and the terms of such Prepayment
Penalties do not provide for a waiver or release (i.e., “holidays”) during the
term of the Prepayment Penalty. No Mortgage Loan provides for the payment of
a
Prepayment Penalty beyond the three-year term following the origination of
the
Mortgage Loan. With respect to any Mortgage Loan that contains a provision
permitting imposition of a Prepayment Penalty: (i) prior to the Mortgage Loan’s
origination, the Mortgagor agreed to such Prepayment Penalty in exchange for
a
monetary benefit, including, but not limited to, a rate or fee reduction, (ii)
prior to the Mortgage Loan’s origination, the Mortgagor was offered the choice
of another mortgage product that did not require payment of such a premium,
(iii) the Prepayment Penalty is disclosed to the Mortgagor in the loan documents
pursuant to applicable state and federal law, and (iv) notwithstanding any
state
or federal law to the contrary, the Seller shall not impose such Prepayment
Penalty in any instance when the mortgage debt is accelerated as the result
of
the Mortgagor’s default in making the Monthly Payments.
(ccc) As
to
each consumer report (as defined in the Fair Credit Reporting Act, Public Law
91-508) or other credit information furnished by the Seller or the Servicer
to
the Purchaser, the Seller and the Servicer have full right and authority and
are
not precluded by law or contract from furnishing such information to the
Purchaser and the Purchaser is not precluded from furnishing the same to any
subsequent or prospective purchaser of such Mortgage Loan. The Seller shall
hold
the Purchaser harmless from any and all damages, losses, costs and expenses
(including attorney’s fees) arising from disclosure of credit information in
connection with the purchase and sale of Mortgage Loans.
(ddd) There
is
no action, suit, proceeding or investigation pending or, to the knowledge of
the
Seller or the Servicer, threatened that is related to the Mortgage Loan and
likely to affect materially and adversely the servicing of such Mortgage
Loan.
28
(eee) With
respect to escrow deposits and payments that the Servicer is entitled to
collect, all such payments are in the possession of, or under the control of
the
Servicer, 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
and
the provisions of the related Mortgage Note and Mortgage. As to any Mortgage
Loan that is the subject of an escrow, escrow of funds is not prohibited by
applicable law and has been established in an amount sufficient to pay for
every
escrowed item that remains unpaid and has been assessed but is not yet due
and
payable. No escrow deposits or other charges or payments due under the Mortgage
Note have been capitalized under any Mortgage or the related Mortgage
Note.
Subsection
7.02 Seller
and Servicer Representations.
The
Seller and the Servicer hereby represent and warrant to the Purchaser that,
as
to itself as of the related Closing Date:
(a) It
is a
national banking association, duly organized, validly existing, and in good
standing under the laws of the United States and has all licenses necessary
to
carry on its business as now being conducted and is licensed, qualified and
in
good standing in the states where the Mortgaged Property is located if the
laws
of such state require licensing or qualification in order to conduct business
of
the type conducted by it. It is an approved seller/servicer in good standing
of
conventional residential mortgage loans for Xxxxxx Mae or Xxxxxxx Mac and is
a
HUD-approved mortgagee under Section 203 of the National Housing Act. It
has 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 it and the consummation of the transactions contemplated
hereby have been duly and validly authorized. This Agreement, assuming due
authorization, execution and delivery by the Purchaser, evidences the legal,
valid, binding and enforceable obligation of it, subject to applicable law
except as enforceability may be limited by (i) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar laws
affecting the enforcement of the rights of creditors and (ii) general
principles of equity, whether enforcement is sought in a proceeding in equity
or
at law. All requisite corporate action has been taken by it to make this
Agreement valid and binding upon it in accordance with the terms of this
Agreement.
(b) No
consent, approval, authorization or order is required for the transactions
contemplated by this Agreement from any court, governmental agency or body,
or
federal or state regulatory authority having jurisdiction over it or, if
required, such consent, approval, authorization or order has been or will,
prior
to the related Closing Date, be obtained.
(c) The
consummation of the transactions contemplated by this Agreement are in its
ordinary course of business and will not result in the breach of any term or
provision of its articles of association or by-laws or result in the breach
of
any term or provision of, or conflict with or constitute a default under or
result in the acceleration of any obligation under, any agreement, indenture
or
loan or credit agreement or other instrument to which it or its property is
subject, or result in the violation of any law, rule, regulation, order,
judgment or decree to which it or its property is subject.
29
(d) Its
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
pursuant to this Agreement are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction.
(e) There
is
no action, suit, proceeding or investigation pending or, to its best knowledge,
threatened against it which, either individually or in the aggregate, would
result in any material adverse change in its business, operations, financial
condition, properties or assets, or in any material impairment of its right
or
ability to carry on its business substantially as now conducted 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 its obligations contemplated
herein, or which would materially impair its ability to perform under the terms
of this Agreement.
(f) To
the
best of the Seller’s knowledge, the Seller is not in material default under any
agreement, contract, instrument or indenture to which the Seller is a party
or
by which it (or any of its assets) is bound, which default would have a material
adverse effect on the ability of the Seller to perform under this Agreement,
nor, to the best of the Seller’s knowledge, has any event occurred which, with
the giving of notice, the lapse of time or both, would constitute a default
under any such agreement, contract, instrument or indenture and have a material
adverse effect on the ability of the Seller to perform its obligations under
this Agreement.
(g) It
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.
(h) It
acknowledges and agrees that the Servicing Fee shall be treated by the Servicer,
for accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement.
(i) It
has
determined that the disposition of the Mortgage Loans pursuant to this Agreement
will be afforded sale treatment for accounting and tax purposes.
(j) It
is
solvent and the sale of the Mortgage Loans will not cause it to become
insolvent. The sale of the Mortgage Loans is not undertaken with the intent
to
hinder, delay or defraud any of its creditors.
(k) It
has
not dealt with any broker, investment banker, agent or other person that may
be
entitled to any commission or compensation in connection with the sale of the
Mortgage Loans.
(l) To
the
best of the Seller’s knowledge, neither this Agreement nor any statement, report
or other agreement, document or instrument furnished or to be furnished pursuant
to this Agreement contains any materially untrue statement of fact or omits
to
state a fact necessary to make the statements contained therein not
misleading.
30
Subsection
7.03 Repurchase;
Substitution.
(a) It
is
understood and agreed that the representations and warranties set forth in
Sections 7.01 and 7.02 shall survive the sale of the Mortgage Loans and delivery
of the Mortgage File to the Purchaser, or its designee, and shall inure to
the
benefit of the Purchaser, notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment or the examination, or lack
of
examination, of any Mortgage Loan Document. With respect to the representations
and warranties contained in Section 7.02 that are made to the best of Seller’s
knowledge after reasonable inquiry and investigation, if it is discovered by
either the Seller or the Purchaser that the substance of such representation
and
warranty is inaccurate and such inaccuracy materially and adversely affects
the
value of the related Mortgage Loan, the Purchaser shall be entitled to all
the
remedies to which it would be entitled for a breach of representation or
warranty, including, without limitation, the repurchase requirements contained
herein, notwithstanding Seller’s lack of knowledge with respect to the
inaccuracy at the time the representation or warranty was made. Upon discovery
by the Seller, the Servicer 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 in any Mortgage Loan,
the
party discovering such breach shall give prompt written notice to the other.
The
Seller shall have a period of sixty (60) days from the earlier of its discovery
or its receipt of notice of any such breach within which to correct or cure
such
breach. The Seller hereby covenants and agrees that if any such breach is not
corrected or cured within such sixty (60) day period, the Seller shall, at
the
Purchaser’s option either repurchase such Mortgage Loan at the Repurchase Price
or substitute a mortgage loan for the defective Mortgage Loan as provided below.
In the event that any such breach shall involve any representation or warranty
set forth in Section 7.02, and such breach is not cured within sixty (60) days
of the earlier of either discovery by or notice to the Seller of such breach,
all Mortgage Loans shall, at the option of the Purchaser, be repurchased by
the
Seller at the Repurchase Price. Any such repurchase shall be accomplished by
wire transfer of the amount of the Repurchase Price to an account designated
by
the Purchaser.
(b) If
the Seller is required to repurchase any Mortgage Loan pursuant to this
Subsection 7.03 as a result of a breach of any of the representations and
warranties set forth in Subsection 7.01, the Seller may, with the Purchaser’s
prior consent, within two (2) years from the related Closing Date, remove such
defective Mortgage Loan from the terms of this Agreement and substitute another
mortgage loan for such defective Mortgage Loan, in lieu of repurchasing such
defective Mortgage Loan. Any Substitute Mortgage Loan shall (a) have a principal
balance at the time of substitution not in excess of the principal balance
of
the Deleted Mortgage Loan (the amount of any difference, plus one month’s
interest thereon at the Mortgage Loan Remittance Rate borne by the Deleted
Mortgage Loan, being paid by the Seller and deemed to be a Principal Prepayment
to an account designated by the Purchaser), (b) have a Mortgage Interest Rate
not less than, and not more than one percentage point greater than, the Mortgage
Interest Rate of the Deleted Mortgage Loan, (c) have a remaining term to stated
maturity not later than, and not more than one year less than, the remaining
term to stated maturity of the Deleted Mortgage Loan, (d) be, in the reasonable
determination of the Purchaser, of the same type, quality and character
(including location of the Mortgaged Property) as the Deleted Mortgage Loan
as
if the breach had not occurred, (e) have a Loan-to-Value Ratio at origination
no
greater than that of the Deleted Mortgage Loan, (f) have the same lien priority
as that of the Deleted Mortgage Loan and (g) be, in the reasonable determination
of the Purchaser, in material compliance with the representations and warranties
contained in this Agreement and described in Subsection 7.01 as of the date
of
substitution.
31
(c) The
Seller shall amend the related Mortgage Loan Schedule to reflect the withdrawal
of the Deleted Mortgage Loan from this Agreement and the substitution of such
substitute Mortgage Loan therefore. Upon such amendment, the Purchaser shall
review the Mortgage File delivered to it relating to the substitute Mortgage
Loan. The Monthly Payment on a substitute Mortgage Loan due on the Due Date
in
the month of substitution shall be the property of the Seller and the Monthly
Payment on the Deleted Mortgage Loan for which the substitution is made due
on
such date shall be the property of the Purchaser.
(d) It
is understood and agreed that the obligation of the Seller set forth in this
Subsection 7.03 to cure, repurchase or substitute for a defective Mortgage
Loan,
and to indemnify Purchaser pursuant to Subsection 12.01, constitutes the sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties. If the Seller fails to repurchase or substitute for a defective
Mortgage Loan in accordance with this Subsection 7.03, or fails to cure a
defective Mortgage Loan to Purchaser’s reasonable satisfaction in accordance
with this Subsection 7.03, or to indemnify Purchaser pursuant to Subsection
12.01, that failure shall be an Event of Default and the Purchaser shall be
entitled to pursue all available remedies. No provision of this paragraph shall
affect the rights of the Purchaser to terminate this Agreement for cause, as
set
forth in Subsections 13.01 and 14.01.
(e) Any
cause of action against the Seller or the Servicer, as applicable, relating
to
or arising out of the breach of any representations and warranties made in
Subsections 7.01 and 7.02 shall accrue as to any Mortgage Loan upon (i) notice
thereof by the Purchaser to the Seller or the Servicer, as applicable, (ii)
failure by the Seller or the Servicer, as applicable, to cure such breach or
repurchase such Mortgage Loan as specified above, and (iii) demand upon the
Seller or the Servicer, as applicable, by the Purchaser for compliance with
this
Agreement.
(f) In
the event that any Mortgage Loan is held by a REMIC, notwithstanding any
contrary provision of this Agreement, with respect to any Mortgage Loan that
is
not in default or as to which no default is imminent, Purchaser may, in
connection with any repurchase or substitution of a defective Mortgage Loan
pursuant to this Subsection 7.03, require that the Seller deliver, at the
Seller’s expense, an Opinion of Counsel to the effect that such repurchase or
substitution will not (i) result in the imposition of taxes on “prohibited
transactions” of such REMIC (as defined in Section 860F of the Code) or
otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to qualify
as a REMIC at any time.
Subsection
7.04 Repurchase
of Mortgage Loans With Early Payment Default.
If
a
Monthly Payment becomes one (1) or more scheduled Monthly Payments delinquent
at
any time on or prior to the first day of the second calendar month following
the
related Closing Date (or such other date set forth in the related Term Sheet),
then the Seller, at the Purchaser’s option, shall (a) promptly repurchase the
related Mortgage Loan from the Purchaser in accordance with the procedures
set
forth in Subsection 7.03 hereof, however, any such repurchase shall be made
at
the Repurchase Price, (b) indemnify the Purchaser in accordance with Subsection
12.01 hereof, or (c) substitute a mortgage loan acceptable to the Purchaser
in
accordance with Subsection 7.03 hereof.
32
Subsection
7.05 Purchase
Price Protection.
With
respect to any Mortgage Loan that prepays in full on or prior to the last day
of
the third full month following the related Closing Date (or such other date
set
forth in the related Term Sheet, the Seller shall reimburse the Purchaser an
amount equal to the product of (a) the amount by which Purchase Price Percentage
paid by the Purchaser to the Seller for such Mortgage Loan exceeds 100% and
(b)
the outstanding principal balance of the Mortgage Loan as of the Cut-off Date.
Such payment shall be made within thirty (30) days of such payoff.
SECTION
8. Closing.
Subsection
8.01 Closing
Conditions.
The
closing for the purchase and sale of each Mortgage Loan Package shall take
place
on the respective Closing Date. The closing shall be either by telephone,
confirmed by letter or wire as the parties hereto shall agree, or conducted
in
person, at such place as the parties hereto shall agree.
The
closing for each Mortgage Loan Package shall be subject to the satisfaction
of
each of the following conditions:
(a) the
Seller shall have delivered to the Purchaser the related Mortgage Loan Schedule
and an electronic data file containing information on a loan-level
basis;
(b) all
of
the representations and warranties of the Seller under this Agreement shall
be
true and correct as of the related Closing Date (or, with respect to Subsection
7.01, such other date specified therein) in all material respects and no default
shall have occurred hereunder which, with notice or the passage of time or
both,
would constitute an Event of Default hereunder;
(c) the
Purchaser shall have received from the custodian an initial certification with
respect to its receipt of the Mortgage Loan Documents for the related Mortgage
Loans;
(d) the
Purchaser shall have received originals of the related Term Sheet executed
by
the Seller and a funding memorandum setting forth the Purchase Price(s), and
the
accrued interest thereon, for the Mortgage Loan Package; and
(e) all
other
terms and conditions of this Agreement and the related Term Sheet to be
satisfied by the Seller shall have been complied with in all material
respects.
Upon
satisfaction of the foregoing conditions, the Purchaser shall pay to the Seller
on such Closing Date the Purchase Price for the related Mortgage Loan Package,
plus accrued interest pursuant to Section 4 of this Agreement.
33
Subsection
8.02 Closing
Documents.
(a) On
or
before the initial Closing Date, the Seller shall submit to the Purchaser fully
executed originals of the following documents:
(i) this
Agreement, in four counterparts;
(ii) if
requested by the Purchaser, a Custodial Account Letter Agreement;
(iii) if
requested by the Purchaser, an Escrow Account Letter Agreement; and
(b) On
or
before each Closing Date, the Seller shall submit to the Purchaser fully
executed originals of the following documents:
(i) the
related Term Sheet;
(ii) the
related Mortgage Loan Schedule;
(iii) the
Purchaser shall have received from its custodian an initial certification with
respect to its receipt of the Mortgage Loan Documents for the related Mortgage
Loans;
(iv) a
certificate or other evidence of merger or change of name, signed or stamped
by
the applicable regulatory authority, if any of the 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, if applicable.
SECTION
9. [Reserved.]
SECTION
10. Costs.
The
Seller and the Servicer shall pay any commissions due their salespeople and
the
legal fees and expenses of their attorneys. The Purchaser shall pay the cost
of
delivering the Mortgage Files to the Purchaser or its designee, the cost of
recording the Assignments of Mortgage, any custodial fees incurred in connection
with the release of any Mortgage Loan Documents as may be required by the
servicing activities hereunder and all other costs and expenses incurred in
connection with the sale of the Mortgage Loans by the Seller to the Purchaser,
including without limitation the Purchaser’s attorneys’ fees. The Seller shall
pay the cost of delivering the Mortgage Loan Documents to the Purchaser or
its
designee for each related Closing Date.
SECTION
11. Administration
and Servicing of Mortgage Loans.
Subsection
11.01 Servicer
to Act as Servicer; Subservicing.
Effective
as of each related Transfer Date, the Servicer, as an independent contractor,
shall service and administer the Mortgage Loans in accordance with this
Agreement and Customary Servicing Procedures and the terms of the Mortgage
Notes
and Mortgages, and shall have full power and authority, acting alone or through
subservicers or agents, to do or cause to be done any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable and consistent with the terms of this Agreement. With
respect to each Mortgage Loan Package, the related Mortgage Loans shall be
serviced on an interim basis by a servicer to be chosen by the Purchaser, the
Servicer shall have no obligations or duties or liabilities hereunder or
otherwise with respect to the servicing of such Mortgage Loans prior to the
related Transfer Date; provided, however, the Servicer shall be entitled to
the
Servicing Fees with respect to such Mortgage Loan Package as of the related
Closing Date. The Purchaser and the Servicer agree to direct payment of such
Servicing Fees, net of any fees agreed to by the Purchaser and the Servicer due
to any servicer or subservicer of the related Mortgage Loans for the period
from
the Closing Date to the Transfer Date, to the Servicer at the time of any
related remittance for such period on such Mortgage Loans. The Servicer may
perform its servicing responsibilities through agents or independent
contractors, but shall not thereby be released from any of its responsibilities
hereunder. Notwithstanding anything to the contrary, the Servicer may delegate
any of its duties under this Agreement to one or more of its affiliates without
regard to any of the requirements of this section; provided, however,
that
the
Servicer shall not be released from any of its responsibilities hereunder by
virtue of such delegation. The Mortgage Loans may be subserviced by one or
more
unaffiliated subservicers on behalf of the Servicer provided each subservicer
is
a Xxxxxx Xxx approved seller/servicer or a Xxxxxxx Mac approved seller/servicer
in good standing, and no event has occurred, including but not limited to a
change in insurance coverage, that would make it unable to comply with the
eligibility for seller/servicers imposed by Xxxxxx Xxx or Xxxxxxx Mac, or which
would require notification to Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall
pay
all fees and expenses of the subservicer from its own funds (provided that
any
such expenditures that would constitute Servicing Advances if made by the
Servicer hereunder shall be reimbursable to the Servicer as Servicing Advances),
and the subservicer’s fee shall not exceed the Servicing Fee.
34
At
the
cost and expense of the Servicer, without any right of reimbursement from the
Custodial Account, the Servicer shall be entitled to terminate the rights and
responsibilities of a subservicer and arrange for any servicing responsibilities
to be performed by a successor subservicer meeting the requirements in the
preceding paragraph; provided,
however,
that
nothing contained herein shall be deemed to prevent or prohibit the Servicer,
at
the Servicer’s option, from electing to service the related Mortgage Loans
itself. If the Servicer’s responsibilities and duties under this Agreement are
terminated and if requested to do so by the Purchaser, the Servicer shall at
its
own cost and expense terminate the rights and responsibilities of the
subservicer as soon as is reasonably possible. The Servicer shall pay all fees,
expenses or penalties necessary in order to terminate the rights and
responsibilities of the subservicer from the Servicer’s own funds without
reimbursement from the Purchaser.
The
Servicer shall be entitled to enter into an agreement with the subservicer
for
indemnification of the Servicer by the subservicer and nothing contained in
this
Agreement shall be deemed to limit or modify such indemnification.
Any
subservicing agreement and any other transactions or services relating to the
Mortgage Loans involving the subservicer shall be deemed to be between the
subservicer and Servicer alone, and the Purchaser shall have no obligations,
duties or liabilities with respect to the subservicer including no obligation,
duty or liability of the Purchaser to pay the subservicer’s fees and expenses.
For purposes of distributions and advances by the Servicer pursuant to this
Agreement, the Servicer shall be deemed to have received a payment on a Mortgage
Loan when the subservicer has received such payment.
35
Consistent
with the terms of this Agreement, and subject to the REMIC Provisions if the
Mortgage Loans have been transferred to a REMIC, the Servicer may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any
Mortgagor; provided,
however,
that (unless the Mortgagor is in default with respect to the Mortgage Loan,
or
such default is, in the judgment of the Servicer, imminent, and the Servicer
has
the consent of the Purchaser) the Servicer shall not enter into any payment
plan
or agreement to modify payments with a Mortgagor lasting more than six (6)
months or permit any modification with respect to any Mortgage Loan that would
change
the Mortgage Interest Rate, the Lifetime Rate Cap (if applicable), the Initial
Rate Cap (if applicable), the Periodic Rate Cap (if applicable) or the Gross
Margin (if applicable), defer
or forgive the payment of any principal or interest, change the outstanding
principal amount (except for actual payments of principal), make any future
advances or extend the final maturity date with respect to such Mortgage Loan,
or accept substitute or additional collateral or release any collateral for
such
Mortgage Loan. Without limiting the generality of the foregoing, the Servicer
in
its own name or acting through subservicers or agents is hereby authorized
and
empowered by the Purchaser when the Servicer believes it appropriate and
reasonable in its best judgment, to execute and deliver, on behalf of itself
or
the Purchaser, all instruments of satisfaction or cancellation, or of partial
or
full release, discharge and all other comparable instruments, with respect
to
the Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Purchaser pursuant to the provisions of
Subsection 11.13.
The
Purchaser shall furnish to the Servicer any powers of attorney and other
documents reasonably necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties under this Agreement.
Whether
in connection with the foreclosure of a Mortgage Loan or otherwise, the Servicer
shall from its own funds make all necessary and proper Servicing Advances;
provided, however, that the Servicer is not required to make a Servicing Advance
unless the Servicer determines in the exercise of its good faith judgment that
such Servicing Advance would ultimately be recoverable from REO Disposition
Proceeds, Insurance Proceeds or Condemnation Proceeds (with respect to each
of
which the Servicer shall have the priority described in Subsection 11.05 for
purposes of withdrawals from the Custodial Account). Any Servicing Advance
in
excess of $15,000 shall be made only with the written approval of the
Purchaser.
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Servicer has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Purchaser otherwise requests
an environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector at the
Purchaser’s expense. Upon completion of the inspection, the Servicer shall
promptly provide the Purchaser with a written report of the environmental
inspection. In the event (a) the environmental inspection report indicates
that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure
or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all reasonable costs associated with such foreclosure or acceptance of
a
deed in lieu of foreclosure and any related environmental clean up costs, as
applicable, from the related Liquidation Proceeds, or if the Liquidation
Proceeds are insufficient fully to reimburse the Servicer, the Servicer shall
be
entitled to be reimbursed from amounts in the Custodial Account pursuant to
Subsection 11.05 hereof. In the event the Purchaser directs the Servicer not
to
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the
Servicer shall be reimbursed for all Servicing Advances made with respect to
the
related Mortgaged Property from the Custodial Account pursuant to Subsection
11.05 hereof.
36
Subsection
11.02 Liquidation
of Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan is not paid when the same
becomes due and payable, or in the event the Mortgagor fails to perform any
other covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Servicer shall take such action as
it
shall deem to be in the best interest of the Purchaser. In the event that any
payment due under any Mortgage Loan remains delinquent for a period of
ninety (90) days or more, the Servicer shall commence foreclosure
proceedings in accordance with Customary Servicing Procedures and the guidelines
set forth by Xxxxxx Xxx or Xxxxxxx Mac and FHA or VA, as applicable. In such
connection, the Servicer shall from its own funds make all necessary and proper
Servicing Advances. If the portion of any Liquidation Proceeds allocable as
a
recovery of interest on any Mortgage Loan is less than the full amount of
accrued and unpaid interest on such Mortgage Loan as of the date such proceeds
are received, then the applicable Servicing Fees with respect to such Mortgage
Loan shall be paid first and any amounts remaining thereafter shall be
distributed to the Purchaser.
Subsection
11.03 Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, the Servicer will proceed diligently, in accordance with this
Agreement, to collect all payments due under each of the Mortgage Loans when
the
same shall become due and payable. Further, the Servicer will in accordance
with
Customary Servicing Procedures ascertain and estimate taxes, assessments, fire
and hazard insurance premiums, premiums for Primary Mortgage Insurance Policies,
and all other charges that, as provided in any Mortgage, will become due and
payable to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and
payable.
Subsection
11.04 Establishment
of Custodial Account; Deposits in Custodial Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts
(collectively, the “Custodial
Account”),
titled “Bank of America, National Association, in trust for RWT Holdings, Inc.
as Purchaser of Mortgage Loans and various Mortgagors.” Such Custodial Account
shall be established with a commercial bank, a savings bank or a savings and
loan association (which may be a depository affiliate of the Servicer) which
meets the guidelines set forth by Xxxxxx Mae or Xxxxxxx Mac as an eligible
depository institution for custodial accounts. The Custodial Account shall
initially be established and maintained at Bank of America, National
Association, or any successor thereto, and shall not be transferred to any
other
depository institution without the Purchaser’s approval, which shall not
unreasonably be withheld. In any case, the Custodial Account shall be insured
by
the FDIC in a manner which shall provide maximum available insurance thereunder
and which may be drawn on by the Servicer.
37
The
Servicer shall deposit in the Custodial Account on a daily basis, and retain
therein the following payments and collections received or made by it subsequent
to the related Cut-off Date (other than in respect of principal and interest
on
the Mortgage Loans due on or before the related Cut-off Date):
(a) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
(b) all
payments on account of interest on the Mortgage Loans adjusted to the related
Mortgage Loan Remittance Rate;
(c) all
Liquidation Proceeds;
(d) all
proceeds received by the Servicer under any title insurance policy, hazard
insurance policy, Primary Mortgage Insurance Policy or other insurance policy
other than proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor
in
accordance with Customary Servicing Procedures;
(e) all
awards or settlements in respect of condemnation proceedings or eminent domain
affecting any Mortgaged Property which are not released to the Mortgagor in
accordance with Customary Servicing Procedures;
(f) any
amount required to be deposited in the Custodial Account pursuant to
Subsections 11.15, 11.17 and 11.19;
(g) any
amount required to be deposited by the Servicer in connection with any REO
Property pursuant to Subsection 11.13;
(h) all
amounts required to be deposited by the Servicer in connection with shortfalls
in principal amount of Substitute Mortgage Loans pursuant to
Subsection 7.03;
(i) with
respect to each Full Prepayment and each Partial Prepayment, an amount (to
be
paid by the Servicer out of its own funds) equal to the Prepayment Interest
Shortfall; provided,
however,
that the
Servicer’s aggregate obligations under this paragraph for any month shall be
limited to the total amount of Servicing Fees actually received with respect
to
the Mortgage Loans by the Servicer during such month; and
(j) amounts
required to be deposited by the Servicer in connection with the deductible
clause of any hazard insurance policy.
38
The
foregoing requirements for deposit in the Custodial Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges, assumption fees
and
other ancillary fees need not be deposited by the Servicer in the Custodial
Account.
The
Servicer may invest the funds in the Custodial Account in Eligible Investments
designated in the name of the Servicer for the benefit of the Purchaser, which
shall mature not later than the Business Day next preceding the Remittance
Date
next following the date of such investment (except that (A) any investment
in the institution with which the Custodial Account is maintained may mature
on
such Remittance Date and (B) any other investment may mature on such
Remittance Date if the Servicer shall advance funds on such Remittance Date,
pending receipt thereof to the extent necessary to make distributions to the
Purchaser) and shall not be sold or disposed of prior to maturity.
Notwithstanding anything to the contrary herein and above, all income and gain
realized from any such investment shall be for the benefit of the Servicer
and
shall be subject to withdrawal by the Servicer. The amount of any losses
incurred in respect of any such investments shall be deposited in the Custodial
Account by the Servicer out of its own funds immediately as
realized.
Subsection
11.05 Withdrawals
From the Custodial Account.
The
Servicer shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(a) to
make
payments to the Purchaser in the amounts and in the manner provided for in
Subsection 11.15;
(b) to
reimburse itself for P&I Advances, the Servicer’s right to reimburse itself
pursuant to this subclause (b) with respect to any Mortgage Loan being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Servicer from the
Mortgagor or otherwise relating to the Mortgage Loan, it being understood that,
in the case of any such reimbursement, the Servicer’s right thereto shall be
prior to the rights of the Purchaser with respect to such Mortgage Loan, except
that, where the Seller is required to repurchase a Mortgage Loan, pursuant
to
Subsection 7.03, the Servicer’s right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price pursuant
to
Subsection 7.03, and all other amounts required to be paid to the Purchaser
with respect to such Mortgage Loan;
(c) to
reimburse itself for any unpaid Servicing Fees and for unreimbursed Servicing
Advances, the Servicer’s right to reimburse itself pursuant to this
subclause (c) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other
amounts as may be collected by the Servicer from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of any
such
reimbursement, the Servicer’s right thereto shall be prior to the rights of the
Purchaser unless the Seller is required to repurchase a Mortgage Loan pursuant
to Subsection 7.03, or Seller is required to pay the Prepayment Interest
Shortfall pursuant to Subsection 11.15, in which case the Servicer’s right to
such reimbursement shall be subsequent to the payment to the Purchaser of the
related Repurchase Price pursuant to Subsection 7.03, or Seller is required
to pay Prepayment Interest Shortfall pursuant to Subsection 11.15, and all
other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loan;
39
(d) to
reimburse itself for unreimbursed Servicing Advances and for xxxxxxxxxxxx
X&X Advances, to the extent that such amounts are nonrecoverable (as
certified by the Servicer to the Purchaser in an Officer’s Certificate) by the
Servicer pursuant to subclause (b) or (c) above, provided that the Mortgage
Loan for which such advances were made is not required to be repurchased by
a
Seller pursuant to Subsection 7.03;
(e) to
reimburse itself for expenses incurred by and reimbursable to it pursuant to
Subsection 12.01;
(f) to
withdraw amounts to make P&I Advances in accordance with
Subsection 11.17;
(g) to
pay to
itself any interest earned or any investment earnings on funds deposited in
the
Custodial Account, net of any losses on such investments;
(h) to
withdraw any amounts inadvertently deposited in the Custodial Account;
and
(i) to
clear
and terminate the Custodial Account upon the termination of this
Agreement.
Upon
request, the Servicer will provide the Purchaser with copies of reasonably
acceptable invoices or other documentation relating to Servicing Advances that
have been reimbursed from the Custodial Account.
Subsection
11.06 Establishment
of Escrow Account; Deposits in Escrow Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan which constitute Escrow Payments separate and apart from
any
of its own funds and general assets and shall establish and maintain one or
more
Escrow Accounts (collectively, the “Escrow
Account”),
titled “Bank of America, National Association, in trust for RWT Holdings, Inc.
as Purchaser of Mortgage Loans and various Mortgagors.” The Escrow Account shall
be established with a commercial bank, a savings bank or a savings and loan
association (which may be a depository affiliate of Servicer), which meets
the
guidelines set forth by Xxxxxx Xxx or Xxxxxxx Mac as an eligible institution
for
escrow accounts. The Escrow Account shall initially be established and
maintained at Bank of America, National Association, or any successor thereto,
and shall not be transferred to any other depository institution without the
Purchaser’s approval, which shall not unreasonably be withheld. In any case, the
Escrow Account shall be insured by the FDIC in a manner which shall provide
maximum available insurance thereunder and which may be drawn on by the
Servicer.
The
Servicer shall deposit in the Escrow Account on a daily basis, and retain
therein: (a) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement and (b) all amounts representing proceeds
of any hazard insurance policy which are to be applied to the restoration or
repair of any Mortgaged Property. The Servicer shall make withdrawals therefrom
only in accordance with Subsection 11.07 hereof. As part of its servicing
duties, the Servicer shall pay to the Mortgagors interest on funds in the Escrow
Account, to the extent required by law.
40
Subsection
11.07 Withdrawals
From Escrow Account.
Withdrawals
from the Escrow Account shall be made by the Servicer only (a) to effect
timely payments of ground rents, taxes, assessments, premiums for Primary
Mortgage Insurance Policies, fire and hazard insurance premiums or other items
constituting Escrow Payments for the related Mortgage, (b) to reimburse the
Servicer for any Servicing Advance made by Servicer pursuant to
Subsection 11.08 hereof with respect to a related Mortgage Loan,
(c) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Mortgage Loan, (d) for
transfer to the Custodial Account upon default of a Mortgagor or in accordance
with the terms of the related Mortgage Loan and if permitted by applicable
law,
(e) for application to restore or repair of the Mortgaged Property,
(f) to pay to the Mortgagor, to the extent required by law, any interest
paid on the funds deposited in the Escrow Account, (g) to pay to itself any
interest earned on funds deposited in the Escrow Account (and not required
to be
paid to the Mortgagor), (h) to the extent permitted under the terms of the
related Mortgage Note and applicable law, to pay late fees with respect to
any
Monthly Payment which is received after the applicable grace period, (i) to
withdraw suspense payments that are deposited into the Escrow Account,
(j) to withdraw any amounts inadvertently deposited in the Escrow Account
or (k) to clear and terminate the Escrow Account upon the termination of
this Agreement.
Subsection
11.08 Payment
of Taxes, Insurance and Other Charges; Collections Thereunder.
With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments and other charges
which are or may become a lien upon the Mortgaged Property and the status of
premiums for Primary Mortgage Insurance Policies and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of
such
charges (including renewal premiums) and shall effect payment thereof prior
to
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of
the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Servicer in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage. To the extent that a Mortgage does not provide for Escrow
Payments, the Servicer shall determine that any such payments are made by the
Mortgagor. The Servicer assumes full responsibility for the timely payment
of
all such bills and shall effect timely payments of all such bills irrespective
of each Mortgagor’s faithful performance in the payment of same or the making of
the Escrow Payments and shall make Servicing Advances to effect such payments,
subject to its ability to recover such Servicing Advances pursuant to
Subsections 11.05(c), 11.05(d) and 11.07(b). No costs incurred by the
Servicer or subservicers in effecting the payment of taxes and assessments
on
the Mortgaged Properties shall, for the purpose of calculating remittances
to
the Purchaser, be added to the amount owing under the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so permit.
41
Subsection
11.09 Transfer
of Accounts.
The
Servicer may transfer the Custodial Account or the Escrow Account to a different
depository institution. Such transfer shall be made only upon providing written
notice to the Purchaser.
Subsection
11.10 Maintenance
of Hazard Insurance.
The
Servicer shall cause to be maintained for each Mortgage Loan fire and hazard
insurance with extended coverage customary in the area where the Mortgaged
Property is located by an insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac and
FHA or VA, as applicable, in an amount which is at least equal to the lesser
of
(a) the full insurable value of the Mortgaged Property or (b) the
greater of (i) the outstanding principal balance owing on the Mortgage Loan
and (ii) an amount such that the proceeds of such insurance shall be
sufficient to avoid the application to the Mortgagor or loss payee of any
coinsurance clause under the policy. If the Mortgaged Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency
as
a special flood hazard area (and such flood insurance has been made available)
the Servicer will cause to be maintained a flood insurance policy meeting the
requirements of the National Flood Insurance Program, in an amount representing
coverage not less than the lesser of (A) the minimum amount required under
the terms of the coverage to compensate for any damage or loss to the Mortgaged
Property on a replacement-cost basis (or the outstanding principal balance
of
the Mortgage Loan if replacement-cost basis is not available) or (B) the
maximum amount of insurance available under the National Flood Insurance
Program. The Servicer shall also maintain on REO Property fire and hazard
insurance with extended coverage in an amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the National
Flood Insurance Program, flood insurance in an amount required above. Any
amounts collected by the Servicer under any such policies (other than amounts
to
be deposited in the Escrow Account and applied to the restoration or repair
of
the property subject to the related Mortgage or property acquired in liquidation
of the Mortgage Loan, or to be released to the Mortgagor in accordance with
Customary Servicing Procedures) shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Subsection 11.05. It is understood and
agreed that no earthquake or other additional insurance need be required by
the
Servicer of any Mortgagor or maintained on REO Property other than pursuant
to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. All policies required hereunder shall
be endorsed with standard mortgagee clauses with loss payable to Servicer,
and
shall provide for at least thirty (30) days prior written notice of any
cancellation, reduction in amount or material change in coverage to the
Servicer. The Servicer shall not interfere with the Mortgagor’s freedom of
choice in selecting either its insurance carrier or agent; provided,
however,
that the
Servicer shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to Xxxxxx Mae or Xxxxxxx Mac and FHA or
VA,
as applicable, and are licensed to do business in the state wherein the property
subject to the policy is located.
The
hazard insurance policies for each Mortgage Loan secured by a unit in a
condominium development or planned unit development shall be maintained with
respect to such Mortgage Loan and the related development in a manner which
is
consistent with Xxxxxx Mae or Xxxxxxx Mac requirements and FHA or VA
requirements, as applicable.
42
Subsection
11.11 Maintenance
of Primary Mortgage Insurance Policy; Claims.
With
respect to each Mortgage Loan with a LTV in excess of 80%, the Servicer shall,
without any cost to the Purchaser, maintain or cause the Mortgagor to maintain
in full force and effect a Primary Mortgage Insurance Policy insuring the
portion over 78% (or such other percentage in conformance with then current
Xxxxxx Mae requirements until terminated pursuant to the Homeowners Protection
Act of 1988, 12 USC § 4901, et seq. or any other applicable federal, state or
local law or regulation. In the event that such Primary Mortgage Insurance
Policy shall be terminated other than as required by law, the Servicer shall
obtain from another insurer a comparable replacement policy, with a total
coverage equal to the remaining coverage of such terminated Primary Mortgage
Insurance Policy. If the insurer shall cease to be a qualified insurer, the
Servicer shall obtain from another qualified insurer a replacement Primary
Mortgage Insurance Policy. The Servicer shall not take any action which would
result in noncoverage under any applicable Primary Mortgage Insurance Policy
of
any loss which, but for the actions of the Servicer would have been covered
thereunder. In connection with any assumption or substitution agreement entered
into or to be entered into pursuant to Subsection 11.18, the Servicer shall
promptly notify the insurer under the related Primary Mortgage Insurance Policy,
if any, of such assumption or substitution of liability in accordance with
the
terms of such Primary Mortgage Insurance Policy and shall take all actions
which
may be required by such insurer as a condition to the continuation of coverage
under such Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance
Policy is terminated as a result of such assumption or substitution of
liability, the Servicer shall obtain a replacement Primary Mortgage Insurance
Policy as provided above.
In
connection with its activities as servicer, the Servicer agrees to prepare
and
present or to assist the Purchaser in preparing and presenting, on behalf of
itself and the Purchaser, claims to the insurer under any Primary Mortgage
Insurance Policy in a timely fashion in accordance with the terms of such
Primary Mortgage Insurance Policy and, in this regard, to take such action
as
shall be necessary to permit recovery under any Primary Mortgage Insurance
Policy respecting a defaulted Mortgage Loan. Pursuant to Subsection 11.06,
any amounts collected by the Servicer under any Primary Mortgage Insurance
Policy shall be deposited in the Escrow Account, subject to withdrawal pursuant
to Subsection 11.07.
Subsection
11.12 Fidelity
Bond; Errors and Omissions Insurance.
The
Servicer shall maintain, at its own expense, a blanket Fidelity Bond and an
errors and omissions insurance policy, with broad coverage on all officers,
employees or other persons acting in any capacity requiring such persons to
handle funds, money, documents or papers relating to the Mortgage Loans. These
policies must insure the Servicer against losses resulting from fraud, theft,
errors, omissions, negligence, dishonest or fraudulent acts committed by the
Servicer’s personnel, any employees of outside firms that provide data
processing services for the Servicer, and temporary contract employees or
student interns. The Fidelity Bond shall also protect and insure the Servicer
against losses in connection with the release or satisfaction of a Mortgage
Loan
without having obtained payment in full of the indebtedness secured thereby.
No
provision of this Subsection 11.12 requiring such Fidelity Bond and errors
and omissions insurance shall diminish or relieve the Servicer from its duties
and obligations as set forth in this Agreement. The minimum coverage under
any
such Fidelity Bond and insurance policy shall be at least equal to the
corresponding amounts required by FHA or VA, Xxxxxx Xxx in the Xxxxxx Mae Guides
or by Xxxxxxx Mac in the Xxxxxxx Mac Guide, as amended or restated from time
to
time, as applicable, or in an amount as may be permitted to the Servicer by
express waiver of FHA or VA and Xxxxxx Xxx or Xxxxxxx Mac, as applicable. Upon
request of the Purchaser, the Servicer shall cause to be delivered to the
Purchaser a certified true copy of such Fidelity Bond or a certificate
evidencing the same with a statement that the Servicer shall endeavor to provide
written notice to the Purchaser thirty (30) days prior to modification or any
material change.
43
Subsection
11.13 Title,
Management and Disposition of REO Property.
(a) Subject
to Subsection 11.02, in the event that title to the Mortgaged Property is
acquired in foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be taken in the name of the Purchaser or its
nominee.
(b) The
Purchaser, by giving notice to the Servicer, may elect to manage and dispose
of
all REO Property acquired pursuant to this Agreement by itself. If the Purchaser
so elects, the Purchaser shall assume control of REO Property at the time of
its
acquisition and the Servicer shall forward the related Mortgage File to the
Purchaser as soon as is practicable. Promptly upon assumption of control of
any
REO Property, the Purchaser shall reimburse any related Servicing Advances
or
other expenses incurred by the Servicer with respect to that REO
Property.
(c) If
the
Purchaser has not informed the Servicer that it will manage REO Property, the
provisions of this Subsection 11.13(c) shall apply. The Servicer shall
cause to be deposited on a daily basis in the Custodial Account all revenues
received with respect to the conservation of the related REO Property. The
Servicer shall make distributions as required on each Remittance Date to the
Purchaser of the net cash flow from the REO Property (which shall equal the
revenues from such REO Property net of the expenses described above and of
any
reserves reasonably required from time to time to be maintained to satisfy
anticipated liabilities for such expenses).
The
disposition of REO Property shall be carried out by the Servicer, subject to
Subsection 11.01. The Purchaser shall pay the Servicer a fee of 1.5% of the
sales price for such REO Property for services associated with managing the
REO
Property through its disposition. Upon the request of the Purchaser, and at
the
Purchaser’s expense, the Servicer shall cause an appraisal of the REO Property
to be performed for the Purchaser.
The
Servicer shall either itself or through an agent selected by the Servicer,
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for
its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. Any disbursement in excess of $15,000 shall
be
made only with the written approval of the Purchaser. The Servicer shall deduct
such costs from the proceeds of the sale of the REO Property (providing
documentary evidence of such costs) and shall not withdraw funds to cover such
costs from the Custodial Account.
44
Subsection
11.14 Servicing
Compensation.
As
compensation for its services hereunder and subject to Subsection 11.15, the
Servicer shall be entitled to retain the Servicing Fee from interest payments
actually collected on the Mortgage Loans. Additional servicing compensation
in
the form of assumption fees, late payment charges, prepayment penalties, fees
related to the disposition of REO Property and other ancillary income shall
be
retained by the Servicer to the extent not required to be deposited in the
Custodial Account. The Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided for herein.
The Servicing Fee shall not be reduced by the amount of any guarantee fee
payable to FHA or VA.
Subsection
11.15 Distributions.
On
each
Remittance Date the Servicer shall remit by wire transfer of immediately
available funds to the account designated in writing by the Purchaser of record
on the preceding Record Date (a) all amounts credited to the Custodial
Account at the close of business on the related Determination Date, net of
charges against or withdrawals from the Custodial Account pursuant to
Subsection 11.05(b) through (h), plus (b) all amounts, if any, which
the Servicer is obligated to distribute pursuant to Subsection 11.17, minus
(c) any amounts attributable to Principal Prepayments received after the
end of the calendar month preceding the month in which the Remittance Date
occurs, minus (d) any amounts attributable to Monthly Payments collected
but due on a Due Date or Due Dates subsequent to the first day of the month
in
which the Remittance Date occurs.
Not
later
than each Remittance Date, the Seller shall from its own funds deposit in the
Custodial Account an amount equal to the aggregate Prepayment Interest Shortfall
due to either Partial Prepayment or Full Prepayment, if any, existing in respect
of the related Principal Prepayment Period.
With
respect to any remittance received by the Purchaser after the Business Day
on
which such payment was due, the Servicer shall pay to the Purchaser interest
on
any such late payment at an annual rate equal to the rate of interest as is
publicly announced from time to time at its principal office by Bank of America,
National Association, or its successor, as its prime lending rate, adjusted
as
of the date of each change, plus two percent (2%), but in no event greater
than the maximum amount permitted by applicable law. Such interest shall be
paid
by the Servicer to the Purchaser on the date such late payment is made and
shall
cover the period commencing with the Business Day on which such payment was
due
and ending with the Business Day immediately preceding the Business Day on
which
such payment is made, both inclusive. The payment by the Servicer of any such
interest shall not be deemed an extension of time for payment or a waiver of
any
Event of Default by the Servicer.
Subsection
11.16 Statements
to the Purchaser.
Not
later
than five (5) days prior to each related Remittance Date, the Servicer shall
forward to the Purchaser in an electronic format a statement, substantially
in
the form of Exhibit
5
and
certified by a Servicing Officer, setting forth on a loan-by-loan basis:
(a) the amount of the distribution made on such Remittance Date which is
allocable to principal and allocable to interest; (b) the amount of
servicing compensation received by the Servicer during the prior calendar month;
and (c) the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the preceding month. Such statement shall also include
information regarding delinquencies on Mortgage Loans, indicating the number
and
aggregate principal amount of Mortgage Loans which are either one (1),
two (2) or three (3) or more months delinquent. The Servicer shall
submit to the Purchaser monthly a liquidation report with respect to each
Mortgaged Property sold in a foreclosure sale as of the related Record Date
and
not previously reported. Such liquidation report shall be incorporated into
the
remittance report delivered to Purchaser in the form of Exhibit 5
hereto.
The Servicer shall also provide such information as set forth above to the
Purchaser in electronic form in the Servicer’s standard format, a copy of which
has been provided by the Servicer.
45
The
Servicer shall prepare and file any and all tax returns, information statements
or other filings required to be delivered to any governmental taxing authority,
the Mortgagor or to the Purchaser pursuant to any applicable law with respect
to
the Mortgage Loans and the transactions contemplated hereby. In addition, the
Servicer shall provide the Purchaser with such information concerning the
Mortgage Loans as is necessary for such Purchaser to prepare federal income
tax
returns as the Purchaser may reasonably request from time to time.
Subsection
11.17 Advances
by the Servicer.
On
the
Business Day immediately preceding each related Remittance Date, the Servicer
shall either (a) deposit in the Custodial Account from its own funds an
amount equal to the aggregate amount of all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close
of
business on the immediately preceding Determination Date (each such advance,
a
“P&I
Advance”),
(b) cause to be made an appropriate entry in the records of the Custodial
Account that amounts held for future distribution have been, as permitted by
this Subsection 11.17, used by the Servicer in discharge of any such
P&I Advance or (c) make P&I Advances in the form of any combination
of (a) or (b) aggregating the total amount of advances to be made. Any amounts
held for future distribution and so used shall be replaced by the Servicer
by
deposit in the Custodial Account on or before any future Remittance Date if
funds in the Custodial Account on such Remittance Date shall be less than
payments to the Purchaser required to be made on such Remittance Date. The
Servicer’s obligation to make P&I Advances as to any Mortgage Loan will
continue through the last Monthly Payment due prior to the payment in full
of a
Mortgage Loan, or through the last related Remittance Date prior to the
Remittance Date for the distribution of all other payments or recoveries
(including proceeds under any title, hazard or other insurance policy, or
condemnation awards) with respect to a Mortgage Loan; provided,
however,
that
such obligation shall cease if the Servicer, in its good faith judgment,
determines that such P&I Advances would not be recoverable pursuant to
Subsection 11.05(d). The determination by the Servicer that a P&I
Advance, if made, would be nonrecoverable, shall be evidenced by an Officer’s
Certificate of the Servicer, delivered to the Purchaser, which details the
reasons for such determination. The Servicer shall not have any obligation
to
advance amounts in respect of shortfalls relating to the Servicemembers Civil
Relief Act and similar state and local laws.
46
Subsection
11.18 Assumption
Agreements.
The
Servicer will use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note; provided
that,
subject to the Purchaser’s prior approval, the Servicer shall permit such
assumption if so required in accordance with the terms of the Mortgage or the
Mortgage Note. When the Mortgaged Property has been conveyed by the Mortgagor
prior to payment in full of the Mortgage Loan, the Servicer will, to the extent
it has knowledge of such conveyance, exercise its rights to accelerate the
maturity of such Mortgage Loan under the “due-on-sale” clause applicable
thereto; provided,
however,
the
Servicer will not exercise such rights if prohibited by law from doing so or
if
the exercise of such rights would impair or threaten to impair any recovery
under the related Primary Mortgage Insurance Policy, if any. In connection
with
any such assumption, the outstanding principal amount, the Monthly Payment,
the
Mortgage Interest Rate, the Lifetime Rate Cap (if applicable), the Gross Margin
(if applicable), the Initial Rate Cap (if applicable) or the Periodic Rate
Cap
(if applicable) of the related Mortgage Note shall not be changed, and the
term
of the Mortgage Loan will not be increased or decreased. If an assumption is
allowed pursuant to this Subsection 11.18, the Servicer with the prior
consent of the issuer of the Primary Mortgage Insurance Policy, if any, is
authorized to enter into a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is
released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage
Note.
Subsection
11.19 Satisfaction
of Mortgages and Release of Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Servicer will obtain the portion of the Mortgage File that
is
in the possession of the Purchaser or its designee, prepare and process any
required satisfaction or release of the Mortgage and notify the Purchaser in
accordance with the provisions of this Agreement. The Purchaser agrees to
deliver to the Servicer (or cause to be delivered to the Servicer) the original
Mortgage Note for any Mortgage Loan not later than five (5) Business Days
following its receipt of a notice from the Servicer that such a payment in
full
has been received or that a notification has been received that such a payment
in full shall be made. Such Mortgage Note shall be held by the Servicer, in
trust, for the purpose of canceling such Mortgage Note and delivering the
canceled Mortgage Note to the Mortgagor in a timely manner as and to the extent
provided under any applicable federal or state law.
In
the
event the Servicer grants a satisfaction or release of a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage, the
Servicer shall remit to the Purchaser the Stated Principal Balance of the
related Mortgage Loan by deposit thereof in the Custodial Account. The Fidelity
Bond shall insure the Servicer against any loss it may sustain with respect
to
any Mortgage Loan not satisfied in accordance with the procedures set forth
herein.
47
Subsection
11.20 Servicer
Shall Provide Access and Information as Reasonably Required.
The
Servicer shall provide to the Purchaser, and for any Purchaser insured by FDIC
or NAIC, the supervisory agents and examiners of FDIC and OTS or NAIC, access
to
any documentation regarding the Mortgage Loans which may be required by
applicable regulations. Such access shall be afforded without charge, but only
upon reasonable request, during normal business hours and at the offices of
the
Servicer.
In
addition, the Servicer shall furnish upon request by the Purchaser, during
the
term of this Agreement, such periodic, special or other reports or information,
whether or not provided for herein, as shall be necessary, reasonable and
appropriate with respect to the purposes of this Agreement and applicable
regulations. All such reports or information shall be provided by and in
accordance with all reasonable instructions and directions the Purchaser may
require. The Servicer agrees to execute and deliver all such instruments and
take all such action as the Purchaser, from time to time, may reasonably request
in order to effectuate the purposes and to carry out the terms of this
Agreement.
Subsection
11.21 Inspections.
The
Servicer shall inspect the Mortgaged Property as often deemed necessary by
the
Servicer to assure itself that the value of the Mortgaged Property is being
preserved. In addition, if any Mortgage Loan is more than ninety (90) days
delinquent, the Servicer shall, upon written request of the Purchaser, inspect
the Mortgaged Property and shall conduct subsequent inspections in accordance
with Customary Servicing Procedures or as may be required by the primary
mortgage guaranty insurer. The Servicer shall keep written report of each such
inspection and shall provide a copy of such inspection to the Purchaser upon
the
request of the Purchaser.
Subsection
11.22 Restoration
of Mortgaged Property.
The
Servicer need not obtain the approval of the Purchaser prior to releasing any
Insurance Proceeds
or
Condemnation Proceeds to the Mortgagor to be applied to the restoration or
repair of the Mortgaged Property if such release is in accordance with Customary
Servicing Procedures. For claims greater than $15,000, at a minimum, the
Servicer shall comply with the following conditions in connection with any
such
release of Insurance Proceeds or Condemnation Proceeds:
(a) the
Servicer shall receive satisfactory independent verification of completion
of
repairs and issuance of any required approvals with respect
thereto;
(b) the
Servicer shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens;
(c) the
Servicer shall verify that the Mortgage Loan is not in default; and
48
(d) pending
repairs or restoration, the Servicer shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
If
the
Purchaser is named as an additional loss payee, the Servicer is hereby empowered
to endorse any loss draft issued
in
respect of such a claim in the name of the Purchaser.
Subsection
11.23 Fair
Credit Reporting Act.
The
Servicer, in its capacity as servicer for each Mortgage Loan, agrees to fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly
basis.
SECTION
12. The
Servicer.
Subsection
12.01 Indemnification;
Third Party Claims.
(a) The
Servicer agrees to indemnify and hold harmless the Purchaser against any and
all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that the Purchaser may sustain
in any way related to the failure of the Servicer to service the Mortgage Loans
in compliance with the terms of this Agreement.
(b) The
Servicer shall immediately notify the Purchaser if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, and the Servicer
shall assume (with the written consent of the Purchaser) the defense of any
such
claim and pay all expenses in connection therewith, including counsel fees.
If
the Servicer has assumed the defense of the Purchaser, the Servicer shall
provide the Purchaser with a written report of all expenses and advances
incurred by the Servicer pursuant to this Subsection 12.01 and the
Purchaser shall promptly reimburse the Servicer for all amounts advanced by
it
pursuant to the preceding sentence except when the claim in any way relates
to
the failure of the Servicer to service the Mortgage Loans in accordance with
the
terms of this Agreement.
Subsection
12.02 Merger
or Consolidation of the Servicer.
The
Servicer will keep in full effect its existence, rights and franchises as a
national banking association, and will obtain and preserve its qualification
to
do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement or any
of
the Mortgage Loans and to perform its duties under this Agreement.
Any
Person into which the Servicer may be merged or consolidated, or any entity
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to substantially all of the business
of the Servicer (whether or not related to loan servicing), shall be the
successor of the Servicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
49
Subsection
12.03 Limitation
on Liability of the Servicer and Others.
The
duties and obligations of the Servicer shall be determined solely by the express
provisions of this Agreement, the Servicer shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Servicer. Neither the Servicer nor any of the directors,
officers, employees or agents of the Servicer shall be under any liability
to
the Purchaser for any action taken or for refraining from the taking of any
action in accordance with Customary Servicing Procedures and otherwise in good
faith pursuant to this Agreement or for errors in judgment; provided,
however,
that
this provision shall not protect the Servicer against any liability resulting
from any breach of any representation or warranty made herein, or from any
liability specifically imposed on the Servicer herein; and, provided
further,
that
this provision shall not protect the Servicer against any liability that would
otherwise be imposed by reason of the willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard
of
the obligations or duties hereunder. The Servicer and any director, officer,
employee or agent of the Servicer may rely on any document of any kind which
it
in good faith reasonably believes to be genuine and to have been adopted or
signed by the proper authorities respecting any matters arising hereunder.
Subject to the terms of Subsection 12.01, the Servicer shall have no
obligation to appear with respect to, prosecute or defend any legal action
which
is not incidental to the Servicer’s duty to service the Mortgage Loans in
accordance with this Agreement.
Subsection
12.04 Seller
and Servicer Not to Resign.
Neither
the Seller nor the Servicer shall assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer or the Seller, as the case may be, and the Purchaser or upon the
determination that the Servicer’s duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Servicer. Any
such determination permitting the unilateral resignation of the Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Purchaser,
which Opinion of Counsel shall be in form and substance acceptable to the
Purchaser. No such resignation or assignment shall become effective until a
successor has assumed the Servicer’s responsibilities and obligations hereunder
in accordance with Subsection 14.02.
Subsection
12.05 Liability
for Failure to Deliver Servicing Files.
The
Servicer shall have no liability for any failure to carry out its servicing
responsibilities hereunder which is directly caused by the failure of a prior
owner of the related Mortgage Loans to deliver to the Servicer the Servicing
Files (or portions thereof) necessary to service such Mortgage Loans in material
compliance with the Customary Servicing Procedures or this Agreement.
SECTION
13. Default.
Subsection
13.01 Events
of Default.
In
case
one or more of the following Events of Default by the Servicer shall occur
and
be continuing:
50
(a) any
failure by the Servicer to remit to the Purchaser any payment required to be
made under the terms of this Agreement which continues unremedied for a period
of two (2) Business Days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Purchaser;
(b) failure
by the Servicer to duly observe or perform, in any material respect, any other
covenants, obligations or agreements of the Servicer as set forth in this
Agreement which failure continues unremedied for a period of thirty (30)
days after the date on which written notice of such failure, requiring the
same
to be remedied, shall have been given to the Servicer by the
Purchaser;
(c) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
bankruptcy, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force, undischarged or unstayed for a period of sixty (60)
days;
(d) the
Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of
assets and liabilities or similar proceedings of or relating to the Servicer
or
relating to all or substantially all of the Servicer’s property;
(e) the
Servicer shall admit in writing its inability to pay its debts as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations;
(f) the
Servicer shall cease to be qualified to do business under the laws of any state
in which a Mortgaged Property is located, but only to the extent such
qualification is necessary to ensure the enforceability of each Mortgage Loan
and to perform the Servicer’s obligations under this Agreement; or
(g) the
Servicer shall fail to meet the servicer eligibility qualifications of Xxxxxx
Xxx or the Servicer shall fail to meet the servicer eligibility qualifications
of Xxxxxxx Mac;
then,
and in each and every such case, so long as an Event of Default shall not have
been remedied, the Purchaser, by notice in writing to the Servicer, may, in
addition to whatever rights the Purchaser may have at law or equity to damages,
including injunctive relief and specific performance, commence termination
of
all the rights and obligations of the Servicer under this Agreement and in
and
to the Mortgage Loans and the proceeds thereof. Upon receipt by the Servicer
of
such written notice from the Purchaser stating that they intend to terminate
the
Servicer as a result of such Event of Default, all authority and power of the
Servicer under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Subsection 14.02. Upon written request from the Purchaser, the Servicer
shall prepare, execute and deliver to a successor any and all documents and
other instruments, place in such successor’s possession all Mortgage Files and
do or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, including, but not limited
to, the transfer and endorsement or assignment of the Mortgage Loans and related
documents to the successor at the Servicer’s sole expense. The Servicer agrees
to cooperate with the Purchaser and such successor in effecting the termination
of the Servicer’s responsibilities and rights hereunder, including, without
limitation, the transfer to such successor for administration by it of all
amounts which shall at the time be credited by the Servicer to the Custodial
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.
51
Subsection
13.02 Waiver
of Default.
The
Purchaser may waive any default by the Servicer in the performance of its
obligations hereunder and its consequences. Upon any waiver of a past default,
such default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement.
No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereto except to the extent expressly so waived.
SECTION
14. Termination.
Subsection
14.01 Termination.
The
respective obligations and responsibilities of the Servicer, as servicer, shall
terminate upon (a) the distribution to the Purchaser of the final payment
or liquidation with respect to the last Mortgage Loan (or advances of same
by
the Servicer) or (b) the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure with respect to the last Mortgage
Loan and the remittance of all funds due hereunder. Upon written request from
the Purchaser in connection with any such termination, the Servicer shall
prepare, execute and deliver, any and all documents and other instruments,
place
in the Purchaser’s possession all Mortgage Files, and do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of
termination, whether to complete the transfer and endorsement or assignment
of
the Mortgage Loans and related documents, or otherwise, at the Purchaser’s sole
expense. The Servicer agrees to cooperate with the Purchaser and such successor
in effecting the termination of the Servicer’s responsibilities and rights
hereunder as servicer, including, without limitation, the transfer to such
successor for administration by it of all cash amounts which shall at the time
be credited by the Servicer to the Custodial Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
Subsection
14.02 Successors
to the Servicer.
Prior
to
the termination of the Servicer’s responsibilities and duties under this
Agreement pursuant to Subsections 12.04, 13.01 or 14.01, the Purchaser
shall, (a) succeed to and assume all of the Servicer’s responsibilities,
rights, duties and obligations under this Agreement or (b) appoint a
successor which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
upon such termination. In connection with such appointment and assumption,
the
Purchaser may make such arrangements for the compensation of such successor
out
of payments on Mortgage Loans as it and such successor shall agree. In the
event
that the Servicer’s duties, responsibilities and liabilities under this
Agreement shall be terminated pursuant to the aforementioned Subsections, the
Servicer shall discharge such duties and responsibilities during the period
from
the date it acquires knowledge of such termination until the effective date
thereof with the same degree of diligence and prudence which it is obligated
to
exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of its successor. The
resignation or removal of the Servicer pursuant to the aforementioned
Subsections shall not become effective until a successor shall be appointed
pursuant to this Subsection and shall in no event relieve the Seller of the
representations and warranties made pursuant to Subsections 7.01 and 7.02
and the remedies available to the Purchaser under Subsection 7.03, it being
understood and agreed that the provisions of such Subsections 7.01 and 7.02
shall be applicable to the Seller notwithstanding any such resignation or
termination of the Servicer, or the termination of this Agreement.
52
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Servicer and to the Purchaser an instrument accepting such appointment,
whereupon such successor shall become fully vested with all the rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer, with
like
effect as if originally named as a party to this Agreement. Any termination
or
resignation of the Servicer or this Agreement pursuant to
Subsections 12.04, 13.01 or 14.01 shall not affect any claims that the
Purchaser may have against the Servicer arising prior to any such termination
or
resignation.
The
Servicer shall promptly deliver to the successor the funds in the Custodial
Account and Escrow Account and all Mortgage Files and related documents and
statements held by it hereunder and the Servicer shall account for all funds
and
shall execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitively vest in the successor
all
such rights, powers, duties, responsibilities, obligations and liabilities
of
the Servicer.
Upon
a
successor’s acceptance of appointment as such, the Servicer shall notify by mail
the Purchaser of such appointment.
SECTION
15. 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 as follows:
(a) if
to the
Purchaser:
RWT
Holdings, Inc.
Xxx
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx
Xxxxxx, XX 00000
Attention:
Xxxxx
X.
Xxxxxxx
Phone: (000)
000-0000
Facsimile:
(000) 000-0000
(b) if
to the
Seller:
Bank
of America, National Association
53
000
Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Attention:
Secondary Marketing Manager
(c) if
to the
Servicer:
Bank
of America, National Association
000
Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxxxxx 00000
Attention:
Servicing Manager
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
16. Severability
Clause.
Any
part,
provision, representation or warranty of this Agreement which is prohibited
or
which is held to be void or unenforceable shall be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation or warranty of this
Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of
any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION
17. No
Partnership.
Nothing
herein contained shall be deemed or construed to create a co-partnership or
joint venture between the parties hereto and the services of the Servicer shall
be rendered as an independent contractor and not as agent for the
Purchaser.
SECTION
18. 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.
54
SECTION
19. Governing
Law.
EXCEPT
TO THE EXTENT PREEMPTED BY FEDERAL LAW, 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, WITHOUT REGARD TO THE CONFLICTS OF LAWS
PROVISIONS OF NEW YORK OR ANY OTHER JURISDICTION.
SECTION
20. Intention
of the Parties.
It
is the
intention of the parties that the Purchaser is purchasing, and the Seller is
selling, 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. The Purchaser shall have the right to review
the Mortgage Loans and the related Mortgage 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.
It
is not
the intention of the parties that such conveyances be deemed a pledge thereof.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Seller or if for any other reason
this
Agreement is held or deemed to create a security interest in either such assets,
then (a) this Agreement shall be deemed to be a security agreement within
the meaning of the Uniform Commercial Code of the State of New York and
(b) the conveyances provided for in this Agreement shall be deemed to be an
assignment and a grant by the Seller to the Purchaser of a security interest
in
all of the assets transferred, whether now owned or hereafter
acquired.
SECTION
21. Waivers.
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:
55
(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) reference
to a Subsection without further reference to a Section is a reference to such
Subsection as contained in the same Section in which the reference appears,
and
this rule shall also apply to Paragraphs and other subdivisions;
(e) the
words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
SECTION
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 hereto
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 hereto
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. Amendment.
This
Agreement may be amended from time to time by the Purchaser, the Seller and
the
Servicer by written agreement signed by the parties hereto.
SECTION
26. Confidentiality.
Each
of the Purchaser, the Seller and the Servicer shall employ proper procedures
and
standards designed to maintain the confidential nature of the terms of this
Agreement, except to the extent (a) the disclosure of which is reasonably
believed by such party to be required in connection with regulatory requirements
or other legal requirements relating to its affairs; (b) disclosed to any
one or more of such party’s employees, officers, directors, agents, attorneys or
accountants who would have access to the contents of this Agreement and such
data and information in the normal course of the performance of such person’s
duties for such party, to the extent such party has procedures in effect to
inform such person of the confidential nature thereof; (c) that is
disclosed in a prospectus, prospectus supplement or private placement memorandum
relating to a Securitization Transaction
of
the Mortgage Loans by the Purchaser (or an affiliate assignee thereof) or to
any
person in connection with the resale or proposed resale of all or a portion
of
the Mortgage Loans by such party in accordance with the terms of this Agreement;
and (d) that is reasonably believed by such party to be necessary for the
enforcement of such party’s rights under this Agreement.
56
SECTION
27. Entire
Agreement.
This
Agreement constitutes the entire agreement and understanding relating to the
subject matter hereof between the parties hereto and any prior oral or written
agreements between them shall be deemed to have merged herewith.
SECTION
28. Further
Agreements.
The
Seller, the Servicer and the Purchaser each agree to execute and deliver to
the
other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of
this
Agreement.
SECTION
29. Successors
and Assigns.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
initial Purchaser, the Seller and the Servicer, and the respective successors
and assigns of the Purchaser, the Seller and the Servicer. The initial Purchaser
and any subsequent purchasers may assign this Agreement to any Person to whom
any Mortgage Loan is transferred pursuant to a sale or financing upon prior
written notice to the Servicer in accordance with the following paragraph;
provided,
however,
that
except in connection with Securitizations, as to which no such quantitative
limitation shall apply, the Servicer shall not be required to service the
Mortgage Loans for more than three (3) Persons for assignees of RWT
Holdings, Inc. or its respective affiliates at any time and shall not recognize
any assignment of this Agreement to the extent that following such assignment
more than such number of Persons would be purchasers hereunder. As used herein,
the trust formed in connection with a Securitization shall be deemed to
constitute a single “Person.” Upon any such assignment and written notice
thereof to the Servicer, the Person to whom such assignment is made shall
succeed to all rights and obligations of the Purchaser under this Agreement
to
the extent of the related Mortgage Loan or Mortgage Loans and this Agreement,
to
the extent of the related Mortgage Loan or Mortgage Loans, shall be deemed
to be
a separate and distinct agreement between the Servicer and such purchaser,
and a
separate and distinct agreement between the Servicer and each other purchaser
to
the extent of the other related Mortgage Loan or Mortgage Loans.
At
least
five (5) Business Days prior to the end of the month preceding the date
upon which the first remittance is to be made to an assignee of the Purchaser,
the Purchaser shall provide to the Servicer written notice of any assignment
setting forth: (a) the Servicer’s applicable Mortgage Loan identifying
number for each of the Mortgage Loans affected by such assignment; (b) the
aggregate scheduled transfer balance of such Mortgage Loans; and (c) the
full name, address and wiring instructions of the assignee and the name and
telephone number of an individual representative for such assignee, to whom
the
Servicer should: (i) send remittances; (ii) send any notices required
by or provided for in this Agreement; and (iii) deliver any legal documents
relating to the Mortgage Loans (including, but not limited to, contents of
any
Mortgage File obtained after the effective date of any assignment).
57
If
the
Purchaser has not provided the notice of assignment required by this
Section 29, the Servicer shall not be required to treat any other Person as
a “Purchaser” hereunder and may continue to treat the Purchaser which purports
to assign the Agreement as the “Purchaser” for all purposes of this
Agreement.
SECTION
30. Non-Solicitation.
From
and
after the Closing Date, the Seller, the Servicer and any of their respective
affiliates 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 its behalf, to personally, by telephone or mail, solicit a
Mortgagor under any Mortgage Loan for the purpose of refinancing 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 Closing Date and none of the Seller, the Servicer or
any
of their respective affiliates shall take any action to undermine these rights
and benefits.
Notwithstanding
the foregoing, it is understood and agreed that the Seller, the Servicer or
any
of their respective affiliates:
(a) may
advertise its availability for handling refinancings of mortgages in its
portfolio, including the promotion of terms it has available for such
refinancings, through the sending of letters or promotional material, so long
as
it does not specifically target Mortgagors and so long as such promotional
material either is sent to the mortgagors for all of the mortgages in the
A-quality servicing portfolio of the Seller, the Servicer and any of their
affiliates (those it owns as well as those serviced for others) or sent to
all
of the mortgagors who have specific types of mortgages (such as FHA, VA,
conventional fixed-rate or conventional adjustable-rate, or sent to those
mortgagors whose mortgages fall within specific interest rate
ranges;
(b) may
provide pay-off information and otherwise cooperate with individual mortgagors
who contact it about prepaying their mortgages by advising them of refinancing
terms and streamlined origination arrangements that are available;
and
(c) may
offer
to refinance a Mortgage Loan made within thirty (30) days following receipt
by it of a pay-off request from the related Mortgagor.
58
Promotions
undertaken by the Seller or the Servicer or by any affiliate of the Seller
or
the Servicer 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 30.
SECTION
31. Protection
of Consumer Information.
Each
party agrees that it (i) shall comply with any applicable laws and regulations
regarding the privacy and security of Consumer Information, (ii) shall not
use
Consumer Information in any manner inconsistent with any applicable laws and
regulations regarding the privacy and security of Consumer Information, (iii)
shall not disclose Consumer Information to third parties except at the specific
written direction of the Seller or the Servicer, (iv) shall maintain adequate
physical, technical and administrative safeguards to protect Consumer
Information from unauthorized access and (v) shall immediately notify the Seller
of any actual or suspected breach of the confidentiality of Consumer
Information.
SECTION
32. Cooperation
of the Company with a Reconstitution; Regulation AB Compliance.
The
Seller acknowledges and the Purchaser agrees that with respect to some or all
of
the Mortgage Loans, the Purchaser may effect either:
(1) one
or
more Whole Loan Transfers; and
(2) one
or
more Securitizations;
provided,
however, that no more than three (3) persons shall be assignees of the
Purchaser’s interest in this Agreement with respect to a given Mortgage Loan
Package.
The
Seller shall cooperate with the Purchaser in connection with any Whole Loan
Transfer contemplated by the Purchaser pursuant to this Section. In connection
therewith, the Purchaser shall deliver any Reconstitution Agreement or other
document related to the Whole Loan Transfer to the Seller at least fifteen
(15)
days prior to such transfer and the Seller shall execute any Reconstitution
Agreement which contains servicing provisions substantially similar to those
herein or otherwise reasonably acceptable to the Purchaser and the Seller and
which restates the representations and warranties contained in Subsection 7.01
as of the related Closing Date (except to the extent any such representation
or
warranty is not accurate on such date) and Subsection 7.02 herein as of the
Reconstitution Date. Any prospective assignees of the Purchaser who have entered
into a commitment to purchase any of the Mortgage Loans in a Whole Loan Transfer
may review and underwrite the Seller’s servicing and origination operations,
upon reasonable prior notice to the Seller, and the Seller shall cooperate
with
such review and underwriting to the extent such prospective assignees request
information or documents that are available and can be produced without
unreasonable expense or effort. Subject to any applicable laws, the Seller
shall
make the Mortgage Files related to the Mortgage Loans held by the Seller
available at the Seller’s principal operations center for review by any such
prospective assignees during normal business hours upon reasonable prior notice
to the Seller (in no event fewer than five (5) Business Days’ prior notice). The
Seller may, in its sole discretion, require that such prospective assignees
sign
a confidentiality agreement with respect to such information disclosed to the
prospective assignee which is not available to the public at large and a release
agreement with respect to its activities on the Seller’s premises. The Purchaser
hereby agrees to reimburse the Seller for reasonable “out-of-pocket” expenses
incurred by the Seller that relate to such Whole Loan Transfer, including
without limitation reimbursement for the amount which reasonably reflects time
and effort expended by the Seller in connection therewith.
59
In
order
to facilitate compliance with Regulation AB promulgated under the Securities
Act, the Servicer and the Purchaser agree to comply with the provisions of
the
Regulation AB Compliance Addendum attached hereto as Addendum
I.
All
Mortgage Loans not sold or transferred pursuant to a Whole Loan Transfer or
Securitization shall be subject to this Agreement and shall continue to be
serviced in accordance with the terms of this Agreement and with respect thereto
this Agreement shall remain in full force and effect. It is understood and
agreed by the Purchaser and the Servicer that the right to effectuate such
Whole
Loan Transfer or Securitization as contemplated by this Section 32 is
limited to the Purchaser.
[SIGNATURES
ON FOLLOWING PAGE]
60
IN
WITNESS WHEREOF, the parties have caused their names to be signed hereto by
their respective officers thereunto duly authorized on the date first above
written.
RWT
HOLDINGS, INC.,
as
Purchaser
By: _______________________________________
Name:
Title:
BANK
OF AMERICA, NATIONAL ASSOCIATION,
as
Seller and as Servicer
By: _______________________________________
Name:
Title:
[Flow
Mortgage Loan Sale and Servicing Agreement, dated July 1, 2006]
EXHIBIT
1
MORTGAGE
LOAN DOCUMENTS
With
respect to each Mortgage Loan, the Mortgage Loan Documents shall consist of
the
following:
(a) the
original Mortgage Note bearing all intervening endorsements, endorsed in blank
and signed in the name of the Seller by an officer thereof or, if the original
Mortgage Note has been lost or destroyed, a lost note affidavit;
(a) the
original Assignment of Mortgage with assignee’s name left blank;
(b) the
original of any guarantee executed in connection with the Mortgage
Note;
(c) the
original Mortgage with evidence of recording thereon, or if any such mortgage
has not been returned from the applicable recording office or has been lost,
or
if such public recording office retains the original recorded mortgage, a
photocopy of such mortgage certified by the Seller to be a true and complete
copy of the original recorded mortgage;
(d) the
originals of all assumption, modification, consolidation or extension
agreements, if any, with evidence of recording thereon;
(e) the
originals of all intervening assignments of mortgage with evidence of recording
thereon, or if any such intervening assignment of mortgage 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, a
photocopy of such intervening assignment of mortgage, certified by the Seller
to
be a true and complete copy of the original recorded intervening assignment
of
mortgage;
(f) the
original mortgagee title insurance policy including an Environmental Protection
Agency Endorsement and, with respect to any Adjustable Rate Mortgage Loan,
an
adjustable-rate endorsement;
(g) the
original of any security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage; and
(h) a
copy of
any applicable power of attorney.
1-1
EXHIBIT
2
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, unless otherwise disclosed to the Purchaser on the data tape,
which shall be available for inspection by the Purchaser and which shall be
retained by the Servicer or delivered to the Purchaser:
(a) Copies
of
the Mortgage Loan Documents.
(i) Residential
loan application.
(j) Mortgage
Loan closing statement.
(k) Verification
of employment and income, if required.
(l) Verification
of acceptable evidence of source and amount of down payment.
(m) Credit
report on Mortgagor, in a form acceptable to either Xxxxxx Xxx or Xxxxxxx
Mac.
(n) Residential
appraisal report.
(o) Photograph
of the Mortgaged Property.
(p) Survey
of
the Mortgaged Property, unless a survey is not required by the title
insurer.
(q) 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, home owner association declarations, etc.
(r) Copies
of
all required disclosure statements.
(s) If
applicable, termite report, structural engineer’s report, water potability and
septic certification.
(t) Sales
contract, if applicable.
(u) The
Primary Mortgage Insurance policy or certificate of insurance or electronic
notation of the existence of such policy, where required pursuant to the
Agreement.
(v) Evidence
of electronic notation of the hazard insurance policy, and, if required by
law,
evidence of the flood insurance policy.
(a)
2-1
EXHIBIT
3
UNDERWRITING
GUIDELINES
[ON
FILE WITH THE PURCHASER]
3-1
EXHIBIT
4
[Reserved]
4-1
EXHIBIT
5
FORM
OF MONTHLY REMITTANCE REPORT
5-1
EXHIBIT
6
FORM
OF TERM SHEET
CLOSING
DATE:
This
Term
Sheet (this “Term Sheet”), dated as of _______ (the “Closing Date”), confirms
the sale by Bank of America, National Association (the “Seller”) to RWT
Holdings, Inc. (the “Purchaser”), and the purchase by the Purchaser from the
Seller, of the first lien residential mortgage loans on a servicing retained
basis described on the Mortgage Loan Schedule attached as Schedule I hereto
(the
“Mortgage Loans”), pursuant to the terms of the Flow Mortgage Loan Sale and
Servicing Agreement (the “Flow Sale and Servicing Agreement”), dated as of July
1, 2006, by and between the Purchaser and the Seller. Capitalized terms that
are
used herein but are not defined herein shall have the respective meanings set
forth in the Flow Sale and Servicing Agreement.
For
good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Seller does hereby bargain, sell, convey, assign and transfer
to Purchaser without recourse, except as provided in the Flow Sale and Servicing
Agreement, and on a servicing retained basis, all right, title and interest
of
the Seller in and to each of the Mortgage Loans, together with all documents
maintained as part of the related Mortgage Files, all Mortgaged Properties
which
secure any Mortgage Loan but are acquired by foreclosure, deed in lieu of
foreclosure after the Cut-off Date or otherwise, all payments of principal
and
interest received on the Mortgage Loans after the Cut-off Date, all other
unscheduled collections collected in respect of the Mortgage Loans after the
Cut-off Date, and all proceeds of the foregoing, subject, however, to the rights
of the Seller under the Flow Sale and Servicing Agreement.
The
Seller has delivered to the Purchaser or its designee prior to the date hereof
the documents with respect to each Mortgage Loan required to be delivered under
the Flow Sale and Servicing Agreement.
For
purposes of the Mortgage Loans sold pursuant to this Term Sheet, certain terms
shall be as set forth below:
|
Stated
Principal Balance:
|
$_______________________
|
|
Closing
Date:
|
_______________________
|
|
Transfer
Date:
|
_______________________
|
|
Cut-off
Date:
|
_______________________
|
|
Purchase
Price Percentage:
|
________%
|
|
Servicing
Fee Rate:
|
________%
|
6-1
In
WITNESS WHEREOF, the parties hereto, by the hands of their duly authorized
officers, execute this Term Sheet as of the Closing Date referred to above.
|
RWT
HOLDINGS, INC.
as
Purchaser
|
BANK
OF AMERICA, NATIONAL ASSOCIATION
as
Seller
|
|
|
By:
|
By:
|
|
|
Name:
|
Name:
|
|
|
Its:
|
Its:
|
|
6-2
ADDENDUM
I
REGULATION
AB COMPLIANCE ADDENDUM
TO
FLOW SALE AND SERVICING AGREEMENT
(Servicing-retained)
SECTION
1. DEFINED
TERMS
Capitalized
terms used but not defined herein shall have the meanings assigned to such
terms
in the Agreement. The following terms shall have the meanings set forth below,
unless the context clearly indicates otherwise:
Commission:
The
United States Securities and Exchange Commission.
Company
Information:
As
defined in Section 2.07(a).
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
Master
Servicer:
With
respect to any Securitization Transaction, the “master servicer,” if any,
identified in the related transaction documents.
Qualified
Correspondent:
Any
Person from which the Company purchased Mortgage Loans, provided that this
term
shall not include the Purchaser or an affiliate of the Purchaser and provided
further that the following conditions are satisfied: (i) such Mortgage Loans
were originated pursuant to an agreement between the Company and such Person
that contemplated that such Person would underwrite mortgage loans from time
to
time, for sale to the Company, in accordance with underwriting guidelines
designated by the Company (“Designated Guidelines”) or guidelines that do not
vary materially from such Designated Guidelines; (ii) such Mortgage Loans were
in fact underwritten as described in clause (i) above and were acquired by
the
Company within 180 days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Company in origination of mortgage loans of the same type as the Mortgage Loans
for the Company’s own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Company on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Company; and (iv) the Company employed, at the time such Mortgage Loans were
acquired by the Company, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage
loans
properly applied the underwriting criteria designated by the Company.
I-1
Reconstitution
Agreement:
The
agreement or agreements entered into by the Company and the Purchaser and/or
certain third parties on the Reconstitution Date or Dates with respect to any
or
all of the Mortgage Loans serviced hereunder, in connection with a Whole Loan
Transfer or Securitization Transaction.
Regulation
AB:
Subpart
229.1100 — Asset Backed Securities (Rgulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Releast No.
33-8518, 70 Fed. Reg. 1,505, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (1) a sale or other transfer of some or all of
the
Mortgage Loans directly or indirectly by the Purchaser to an issuing entity
in
connection with an issuance of publicly offered or privately placed, rated
or
unrated mortgage-backed securities or (2) an issuance of publicly offered or
privately placed, rated or unrated securities, the payments on which are
determined primarily by reference to one or more portfolios of residential
mortgage loans consisting, in whole or in part, of some or all of the Mortgage
Loans.
Servicer:
As
defined in Section 2.03(c).
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB for which the
Company is responsible in its capacity as Servicer as identified on Exhibit
B
hereto, provided that such Exhibit B may be amended from time to time to reflect
changes in Regulation AB.
Sponsor:
With
respect to any Securitization Transaction, the Person identified in writing
to
the Company by the Purchaser as sponsor for such Securitization Transaction.
Static
Pool Information:
Static
pool information as described in Item 1l05(a)(l)-(3) and 1105(c) of Regulation
AB.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item l122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Company or a Subservicer,
provided that this term shall not include the Purchaser, an affiliate of the
Purchaser or originators of Mortgage Loans acquired by the Company from the
Purchaser or an affiliate of the Purchaser.
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Company or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
identified in Item 1122(d) of Regulation AB that are required to be performed
by
the Company under this Agreement or any Reconstitution Agreement, provided
that
this term shall not include the Purchaser, an affiliate of the Purchaser or
originators of Mortgage Loans acquired by the Company from the Purchaser or
an
affiliate of the Purchaser.
I-2
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Company, provided that this term shall not include originators
of Mortgage Loans acquired by the Company from the Purchaser or an affiliate
of
the Purchaser.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans (including an Agency
Transfer), other than a Securitization Transaction.
SECTION
2. COMPLIANCE
WITH REGULATION AB
Subsection
2.01 Intent
of the Parties; Reasonableness.
The
Purchaser and the Company acknowledge and agree that the purpose of this Reg
AB
Addendum is to facilitate compliance by the Purchaser and any Depositor with
the
provisions of Regulation AB and related rules and regulations of the Commission
and that the provisions of this Reg AB Addendum shall be applicable to all
Mortgage Loans included in a Securitization Transaction closing on or after
January 1, 2006, regardless whether the Mortgage Loans were purchased by the
Purchaser from the Company prior to the date hereof. Although Regulation AB
is
applicable by its terms only to offerings of asset-backed securities that are
registered under the Securities Act, the Company acknowledges that investors
in
privately offered securities may require that the Purchaser or any Depositor
provide comparable disclosure in unregistered offerings. References in this
Reg
AB Addendum to compliance with Regulation AB include provision of comparable
disclosure in private offerings.
Neither
the Purchaser nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder (or
the
provision in a private offering of disclosure comparable to that required under
the Securities Act). The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agrees to comply with reasonable requests made by the Purchaser, any Master
Servicer or any Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Company shall cooperate
fully with the Purchaser and any Master Servicer to deliver to the Purchaser
(including any of its assignees or designees) and one of any Master Servicer
or
any Depositor (as requested), any and all statements, reports, certifications,
records and any other information necessary in the good faith determination
of
the Purchaser or any Depositor to permit the Purchaser, such Master Servicer
or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Company, any Subservicer, any Third-Party
Originator and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Purchaser, the Master Servicer or any Depositor
to be
necessary in order to effect such compliance.
I-3
The
Purchaser and the Company also acknowledge and agree that Section
2.02(a)(i)-(v), Section 2.03(c), (e) and (f), Section 2.04, Section 2.05 and
Section 2.06 of this Reg AB Addendum shall only be applicable with respect
to
any Mortgage Loan if the Company (or Subservicer, if any) services such Mortgage
Loan for a period following the closing date of a related Securitization
Transaction.
For
purposes of this Reg AB Addendum, the term “Purchaser” shall refer to
RWT
Holdings, Inc.
and its
successors in interest and assigns. In addition, any notice or request that
must
be “in writing” or “written” may be made by electronic mail.
Subsection
2.02 Additional
Representations and Warranties of the Company.
(a) The
Company shall be deemed to represent to the Purchaser, to any Master Servicer
and to any Depositor, as of the date on which information is first provided
to
the Purchaser, any Master Servicer or any Depositor under Section 2.03 that,
except as disclosed in writing to the Purchaser, such Master Servicer or such
Depositor prior to such date: (i) the Company is not aware and has not received
notice that any default, early amortization or other performance triggering
event with respect to the Company has occurred as to any other securitization
due to any act or failure to act of the Company; (ii) the Company has not been
terminated as servicer in a residential mortgage loan securitization, either
due
to a servicing default or to application of a servicing performance test or
trigger; (iii) no material noncompliance with the Servicing Criteria with
respect to other securitizations of residential mortgage loans involving the
Company as servicer has been disclosed or reported by the Company; (iv) no
material changes to the Company’s policies or procedures with respect to the
servicing function it will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Company’s financial
condition that are reasonably expected to have a material adverse effect on
the
performance by the Company of its servicing obligations under this Agreement
or
any Reconstitution Agreement; (vi) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Company, any
Subservicer or any Third-Party Originator; and (vii) there are no affiliations,
relationships or transactions relating to the Company, any Subservicer or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified in writing to the Company by the related Depositor
of a
type described in Item 1119 of Regulation AB.
(b) If
so
requested in writing by the Purchaser, any Master Servicer or any Depositor
on
any date following the date on which information is first provided to the
Purchaser, any Master Servicer or any Depositor under Section 2.03, the Company
shall use its best efforts to confirm in writing within five (5) Business Days,
but in no event later than ten (10) Business Days, following such request the
accuracy of the representations and warranties set forth in paragraph (a) of
this Section or, if any such representation and warranty is not accurate as
of
the date of such request, provide within five (5) Business Days, but in no
event
later than ten (10) Business Days, reasonably adequate disclosure of the
pertinent facts, in writing, to the requesting party.
I-4
Subsection
2.03 Information
to Be Provided by the Company.
In
connection with any Securitization Transaction, the Company shall use its best
efforts to (i) within five (5) Business Days, but in no event later than ten
(10) Business Days, following written request by the Purchaser or any Depositor,
provide to the Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator and each Subservicer to provide), in writing and in
form
and substance reasonably satisfactory to the Purchaser and such Depositor,
the
information and materials specified in paragraphs (a), (b), (c) and (f) of
this
Section, and (ii) as promptly as practicable following notice to or discovery
by
the Company, provide to the Purchaser and any Depositor (in writing and in
form
and substance reasonably satisfactory to the Purchaser and such Depositor)
the
information specified in paragraph (d) of this Section.
(a) If
so
requested in writing by the Purchaser or any Depositor, the Company shall
provide such information regarding (i) the Company, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, and (iii) as applicable,
each Subservicer, as is requested for the purpose of compliance with Items
1103(a)(l), 1105, 1110, 1117 and 1119 of Regulation AB. Such information shall
include, at a minimum:
(A) the
originator’s form of organization;
(B) a
description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage loans, which description
shall include a discussion of the originator’s experience in originating
mortgage loans of a similar type as the Mortgage Loans; information regarding
the size and composition of the originator’s origination portfolio; and
information that may be material, in the good faith judgment of the Purchaser
or
any Depositor, to an analysis of the performance of the Mortgage Loans,
including the originators’ credit-granting or underwriting criteria for mortgage
loans of similar type(s) as the Mortgage Loans and such other information as
the
Purchaser or any Depositor may reasonably request for the purpose of compliance
with Item 1110(b)(2) of Regulation AB;
(C) a
description of any legal or governmental proceedings pending (or known to be
contemplated) against the Company, each Third-Party Originator and each
Subservicer that would be material to securityholders; and
(D) a
description of any affiliation or relationship between the Company, each
Third-Party Originator, each Subservicer and any of the following parties to
a
Securitization Transaction, as such parties are identified to the Company by
the
Purchaser or any Depositor in writing in advance of such Securitization
Transaction:
(1) the
sponsor;
(2) the
depositor;
(3) the
issuing entity;
(4) any
servicer;
(5) any
trustee;
(6) any
originator;
(7) any
significant obligor;
(8) any
enhancement or support provider; and
I-5
(9) any
other
material transaction party.
(b) If
so
requested in writing by the Purchaser or any Depositor, the Company shall
provide (or, as applicable, cause each Third-Party Originator to provide) Static
Pool Information solely with respect to securitized pools of mortgage loans
(of
a similar type as the Mortgage Loans, as reasonably identified by the Purchaser
as provided below) that were included in securitizations that closed during
the
five (5) years preceding the closing date of the related Securitization
Transaction and for which Banc of America Mortgage Securities, Inc. was the
depositor. Such Static Pool Information shall be prepared by the Company (or
Third-Party Originator) on the basis of its reasonable, good faith
interpretation of the requirements of Item 1105(a)(3) of Regulation AB. To
the
extent that there is reasonably available to the Company (or Third-Party
Originator) Static Pool Information with respect to more than one mortgage
loan
type, the Purchaser or any Depositor shall be entitled to specify whether some
or all of such information shall be provided pursuant to this paragraph. The
content of such Static Pool Information may be in the form customarily provided
by the Company, and need not be customized for the Purchaser or any Depositor.
Such Static Pool Information for each prior securitized pool shall be presented
in increments no less frequently than quarterly over the life of the mortgage
loans included in such prior securitized pool. The most recent periodic
increment must be as of a date no later than 135 days prior to the date of
the
prospectus or other offering document in which the Static Pool Information
is to
be included or incorporated by reference. The Static Pool Information shall
be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor,
as
applicable.
Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an omission
to include therein information required to be provided pursuant to such
paragraph) during the applicable offering period for the securities, the Company
shall provide corrected Static Pool Information to the Purchaser or any
Depositor, as applicable, in the same format in which Static Pool Information
was previously provided to such party by the Company.
If
so
requested in writing by the Purchaser or any Depositor, the Company shall
provide (or, as applicable, cause each Third-Party Originator to provide),
at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Reg AB Addendum), such
statements and agreed-upon procedures letters of certified public accountants
reasonably acceptable to the Purchaser or Depositor, as applicable, pertaining
to Static Pool Information relating to securitizations closed on or after
January 1, 2006, as the Purchaser or such Depositor shall reasonably request.
Such statements and letters shall be addressed to and be for the benefit of
such
parties as the Purchaser or such Depositor shall designate, which may include,
by way of example, any Sponsor, any Depositor and any broker dealer acting
as
underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction. Any such statement or letter may take the form
of a
standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
I-6
(c) If
so
requested in writing by the Purchaser or any Depositor, the Company shall
provide such information regarding the Company, as servicer of the Mortgage
Loans, and each Subservicer (each of the Company and each Subservicer, for
purposes of this paragraph, a “Servicer”), as is requested for the purpose of
compliance with Item 1108, 1117 and 1119 of Regulation AB. Such information
shall include, at a minimum:
(A) the
Servicer’s form of organization;
(B) a
description of how long the Servicer has been servicing residential mortgage
loans; a general discussion of the Servicer’s experience in servicing assets of
any type as well as a more detailed discussion of the Servicer’s experience in,
and procedures for, the servicing function it will perform under the Agreement
and any Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer’s portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the Servicer
that may be material, in the good faith judgment of the Purchaser or any
Depositor, to any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without limitation:
(1) whether
any prior securitizations of mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing by the Servicer
during the three-year period immediately preceding the related Securitization
Transaction;
(2) the
extent of outsourcing the Servicer utilizes;
(3) whether
there has been previous disclosure of material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential mortgage
loans involving the Servicer as a servicer during the three-year period
immediately preceding the related Securitization Transaction;
(4) whether
the Servicer has been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; and
(5) such
other information as the Purchaser or any Depositor may reasonably request
for
the purpose of compliance with Item 1108(b)(2) of Regulation AB;
(C) a
description of any material changes during the three-year period immediately
preceding the related Securitization Transaction to the Servicer’s policies or
procedures with respect to the servicing function it will perform under the
Agreement and any Reconstitution Agreements for mortgage loans of a type similar
to the Mortgage Loans;
(D) information
regarding the Servicer’s financial condition, to the extent that there is a
material risk that an adverse financial event or circumstance involving the
Servicer could have a material adverse effect on the performance by the Company
of its servicing obligations under the Agreement or any Reconstitution
Agreement;
I-7
(E) information
regarding advances made by the Servicer on the Mortgage Loans and the Servicer’s
overall servicing portfolio of residential mortgage loans for the three-year
period immediately preceding the related Securitization Transaction, which
may
be limited to a statement by an authorized officer of the Servicer to the effect
that the Servicer has made all advances required to be made on residential
mortgage loans serviced by it during such period, or, if such statement would
not be accurate, information regarding the percentage and type of advances
not
made as required, and the reasons for such failure to advance;
(F) a
description of the Servicer’s processes and procedures designed to address any
special or unique factors involved in servicing loans of a similar type as
the
Mortgage Loans;
(G) a
description of the Servicer’s processes for handling delinquencies, losses,
bankruptcies and recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts; and
(H) information
as to how the Servicer defines or determines delinquencies and charge-offs,
including the effect of any grace period, re-aging, restructuring, partial
payments considered current or other practices with respect to delinquency
and
loss experience.
(I) a
description of any legal or governmental proceedings pending (or known to be
contemplated) against the Servicer that would be material to securityholders;
and
(J) a
description of any affiliation or relationship between the Servicer and any
of
the following parties to a Securitization Transaction, as such parties are
identified to the Servicer by the Purchaser or any Depositor in writing in
advance of a Securitization Transaction.
(1) the
sponsor;
(2) the
depositor;
(3) the
issuing entity;
(4) any
servicer;
(5) any
trustee;
(6) any
originator;
(7) any
significant obligor;
(8) any
enhancement or support provider; and
(9)
any
other
material transaction party.
(d) For
the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, for so long as the Depositor
is
required to file reports under the Exchange Act with respect to a Securitization
Transaction, the Company shall (or shall cause each Subservicer and Third-Party
Originator to) (i) provide prompt notice to the Purchaser, any Master Servicer
and any Depositor in writing of (A) any litigation or governmental proceedings
pending against the Company, any Subservicer or any Third-Party Originator
that
would be material to securityholders and (B) any affiliations or relationships
that develop following the closing date of a Securitization Transaction between
the Company, any Subservicer or any Third-Party Originator and any of the
parties specified in clause (D) of paragraph (a) of this Section (and any other
parties identified in writing by the requesting party) with respect to such
Securitization Transaction, but only to the extent that such affiliations or
relationships do not include the Purchaser, Depositor or any of their respective
affiliates as a party, (C) any Event of Default of which it is aware or has
received notice under the terms of the Agreement or any Reconstitution
Agreement, (D) any merger or consolidation where the Company is not the
surviving entity or sale of substantially all of the assets of the Company,
and
(E) the Company’s entry into an agreement with a Subservicer to perform or
assist in the performance of any of the Company’s obligations under the
Agreement or any Reconstitution Agreement and (ii) provide to the Purchaser
and
any Depositor a description of such proceedings, affiliations or relationships.
I-8
(e) As
a
condition to the succession to the Company or any Subservicer as servicer or
subservicer under the Agreement or any Reconstitution Agreement by any Person
(i) into which the Company or such Subservicer may be merged or consolidated,
or
(ii) which may be appointed as a successor to the Company or any Subservicer,
the Company shall provide to the Purchaser, any Master Servicer and any
Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Purchaser and any Depositor
of such succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, all information
reasonably requested in writing by the Purchaser or any Depositor in order
to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to
any class of asset-backed securities.
(f) In
addition to such information as the Company, as servicer, is obligated to
provide pursuant to other provisions of the Agreement, not later than ten (10)
days prior to the deadline for the filing of any distribution report on Form
10-D in respect of any Securitization Transaction that includes any of the
Mortgage Loans serviced by the Company or any Subservicer, the Company or such
Subservicer, as applicable, shall, to the extent the Company or such Subservicer
has knowledge, provide to the party responsible for filing such report
(including, if applicable, the Master Servicer) notice of the occurrence of
any
of the following events along with all information, data and materials related
thereto and reasonably available to it as may be required to be included in
the
related distribution report on Form 10-D (as specified in the provisions of
Regulation AB referenced below):
(i) any
modifications, extensions or waivers of pool asset terms, fees, penalties or
payments during the distribution period or that have cumulatively become
material over time (Item 1121(a)(11) of Regulation AB) that would be material
to
the securityholders;
(ii) breaches
of pool asset representations or warranties or transaction covenants (Item
1121(a)(12) of Regulation AB) that would be material to the securityholders;
and
(iii) information
regarding new asset-backed securities issuances backed by the same pool assets,
any pool asset changes (such as additions, substitutions or repurchases), and
any changes in origination, underwriting or other criteria for acquisition
or
selection of pool assets (Item 1121(a)(14) of Regulation AB) that would be
material to the securityholders.
I-9
(g) The
Company shall provide to the Purchaser, any Master Servicer and any Depositor,
upon written request, evidence of the authorization of the person signing any
certification or statement, copies of Fidelity Bond Insurance and Errors and
Omissions Insurance policy evidence, publicly available financial information
and reports, and, to the extent material to securityholders, such other
information related to the Company or any Subservicer of the Company’s or such
Subservicer’s performance hereunder.
Subsection
2.04 Servicer
Compliance Statement.
On
or
before March 5th of each calendar year when the Depositor is required to file
reports under the Exchange Act with respect to the related Securitization
Transaction, commencing in 2007, the Company shall deliver to the Purchaser
and
any Master Servicer, or any Depositor if a Master Servicer has not been
identified for the related Securitization Transaction, a statement of compliance
addressed to such parties and signed by an authorized officer of the Company,
to
the effect that (i) a review of the Company’s activities during the immediately
preceding calendar year (or applicable portion thereof) and of its performance
under the Agreement and any applicable Reconstitution Agreement during such
period has been made under such officer’s supervision, and (ii) to the best of
such officers’ knowledge, based on such review, the Company has fulfilled all of
its obligations under the Agreement and any applicable Reconstitution Agreement
in all material respects throughout such calendar year (or applicable portion
thereof) or, if there has been a failure to fulfill any such obligation in
any
material respect, specifically identifying each such failure known to such
officer and the nature and the status thereof.
Subsection
2.05 Report
on Assessment of Compliance and Attestation.
(a) On
or
before March 5th of
each
calendar year when the Depositor is required to file reports under the Exchange
Act with respect to the related Securitization Transaction, commencing in 2007,
the Company shall:
(i) deliver
to the Purchaser and any Master Servicer, or any Depositor if a Master Servicer
has not been identified for the related Securitization Transaction, a report
(in
form and substance reasonably satisfactory to such parties) regarding the
Company’s assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18
of the Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to such parties and signed by an authorized officer of the Company,
and shall address each of the “Applicable Servicing Criteria” specified on
Exhibit B hereto;
(ii) deliver
to the Purchaser and any Master Servicer, or any Depositor if a Master Servicer
has not been identified for the related Securitization Transaction, a report
of
a registered public accounting firm reasonably acceptable to such parties that
attests to, and reports on, the assessment of compliance made by the Company
and
delivered pursuant to the preceding paragraph. Such attestation shall be in
accordance with Rules 1ȭ02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act;
I-10
(iii) cause
each Subservicer, and each Subcontractor determined by the Company pursuant
to
Section 2.06(b) to be “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, to deliver to the Purchaser and any
Master Servicer, or any Depositor if a Master Servicer has not been identified
for the related Securitization Transaction, an assessment of compliance and
accountants’ attestation as and when provided in paragraphs (a) and (b) of this
Section; and
(iv) deliver,
and cause each Subservicer, and each Subcontractor determined by the Company
pursuant to Section 2.06(b) to be “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, to deliver, to the Purchaser
and any Master Servicer, or any Depositor if a Master Servicer has not been
identified for the related Securitization Transaction, and any other Person
that
will be responsible for signing the certification (a “Sarbanes Certification”)
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant
to
Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a certification, signed
by
the appropriate officer of the Company, in the form attached hereto as Exhibit
A.
The
Company acknowledges that the parties identified in clause (a)(iv) above may
rely on the certification provided by the Company pursuant to such clause in
signing a Sarbanes Certification and filing such with the Commission. Neither
the Purchaser nor any Depositor will request delivery of a certification under
clause (a)(iv) above unless a Depositor is required under the Exchange Act
to
file an annual report on Form 10-K with respect to an issuing entity whose
asset
pool includes Mortgage Loans.
(b) Each
assessment of compliance provided by a Subservicer pursuant to Section
2.05(a)(iii) shall address each of the Servicing Criteria specified on
substantially Exhibit B hereto or, in the case of a Subservicer subsequently
appointed as such, on or prior to the date of such appointment. An assessment
of
compliance provided by a Subcontractor pursuant to Section 2.05(a)(iii) need
not
address any elements of the Servicing Criteria other than those specified by
the
Company pursuant to Section 2.06.
Subsection
2.06 Use
of
Subservicers and Subcontractors.
The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company as servicer under the Agreement
or
any Reconstitution Agreement unless the Company complies with the provisions
of
paragraph (a) of this Section. The Company shall not hire or otherwise utilize
the services of any Subcontractor, and shall not authorize any Subservicer
to
hire or otherwise utilize the services of any Subcontractor, to fulfill any
of
the obligations of the Company as servicer under the Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (b) of this Section.
(a) It
shall
not be necessary for the Company to seek the consent of the Purchaser, any
Master Servicer or any Depositor to the utilization of any Subservicer. The
Company shall cause any Subservicer used by the Company (or by any Subservicer)
for the benefit of the Purchaser and any Depositor to comply with the provisions
of this Section and with Sections 2.02, 2.03(c), (e), (f) and (g), 2.04, 2.05
and 2.07 of this Reg AB Addendum to the same extent as if such Subservicer
were
the Company, and to provide the information required with respect to such
Subservicer under Section 2.03(d) of this Reg AB Addendum. The Company shall
be
responsible for obtaining from each Subservicer and delivering to the Purchaser
and any Depositor any servicer compliance statement required to be delivered
by
such Subservicer under Section 2.04, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section 2.05
and
any certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 2.05 as and
when required to be delivered.
I-11
(b) It
shall
not be necessary for the Company to seek the consent of the Purchaser, any
Master Servicer or any Depositor to the utilization of any Subcontractor. The
Company shall promptly upon written request provide to the Purchaser and any
Master Servicer, or any Depositor (or any designee of the Depositor, such as
an
administrator) if a Master Servicer has not been identified for the related
Securitization Transaction, a written description (in form and substance
reasonably satisfactory to such parties) of the role and function of each
Subcontractor utilized by the Company or any Subservicer, specifying (i) the
identity of each such Subcontractor, (ii) which (if any) of such Subcontractors
are “participating in the servicing function” within the meaning of Item 1122 of
Regulation AB and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
(c) As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 2.05 and 2.07 of this Reg
AB
Addendum to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance
and
attestation required to be delivered by such Subcontractor under Section 2.05,
in each case as and when required to be delivered.
Subsection
2.07 Indemnification;
Remedies.
The
Company shall indemnify the Purchaser, each affiliate of the Purchaser, and
each
of the following parties participating in a Securitization Transaction: each
Sponsor; each issuing entity; each Person (including, but not limited to, any
Master Servicer if applicable) responsible for the preparation, execution or
filing of any report required to be filed with the Commission with respect
to
such Securitization Transaction, or for execution of a certification pursuant
to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction; each broker dealer acting as underwriter, placement
agent or initial purchaser, each Person who controls any of such parties or
the
Depositor (within the meaning of Section 15 of the Securities Act and Section
20
of the Exchange Act); and the respective present and former directors, officers,
employees, agents and affiliates of each of the foregoing and of the Depositor
(each, an “Indemnified Party”), and shall hold each of them harmless from and
against any claims, losses, damages, penalties, fines, forfeitures, legal fees
and expenses and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based upon:
I-12
(a) (A)
any
untrue statement of a material fact contained or alleged to be contained in
any
information, report, certification, accountants’ letter or other material
provided in written or electronic format under this Article II by or on behalf
of the Company, or provided under this Article II by or on behalf of any
Subservicer, Subcontractor or Third-Party Originator (collectively, the “Company
Information”), or (B) the omission or alleged omission to state in the Company
Information a material fact required to be stated in the Company Information
or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by way
of
clarification, that clause (B) of this paragraph shall be construed solely
by
reference to the Company Information and not to any other information
communicated in connection with a sale or purchase of securities, without regard
to whether the Company Information or any portion thereof is presented together
with or separately from such other information;
(b) any
breach by the Company of its obligations under this Article II, including
particularly any failure by the Company, any Subservicer, any Subcontractor
or
any Third-Party Originator to deliver any information, report, certification,
accountants’ letter or other material when and as required under this Article
II, including any failure by the Company to identify pursuant to Section 2.06(b)
any Subcontractor “participating in the servicing function” within the meaning
of Item 1122 of Regulation AB;
(c) any
breach by the Company of a representation or warranty set forth in Section
2.02(a) or in a writing furnished pursuant to Section 2.02(b) and made as of
a
date prior to the closing date of the related Securitization Transaction, to
the
extent that such breach is not cured by such closing date, or any breach by
the
Company of a representation or warranty in a writing furnished pursuant to
Section 2.02(b) to the extent made as of a date subsequent to such closing
date,
or
(d) the
negligence, bad faith or willful misconduct of the Company in connection with
its performance under this Article II.
If
the
indemnification provided for herein is unavailable or insufficient to hold
harmless an Indemnified Party, then the Company agrees that it shall contribute
to the amount paid or payable by such Indemnified Party as a result of any
claims, losses, damages or liabilities incurred by such Indemnified Party in
such proportion as is appropriate to reflect the relative fault of such
Indemnified Party on the one hand and the Company on the other.
In
the
case of any failure of performance described in clause (a)(ii) of this Section,
the Company shall promptly reimburse the Purchaser, any Depositor, as
applicable, and each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Company, any Subservicer,
any
Subcontractor or any Third-Party Originator.
I-13
(e) This
indemnification shall survive the termination of the Agreement or the
termination of any party to the Agreement.
(i) Any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under this Article II, or any
breach by the Company of a representation or warranty set forth in Section
2.02(a) or in a writing furnished pursuant to Section 2.02(b) and made as of
a
date prior to the closing date of the related Securitization Transaction, to
the
extent that such breach is not cured by such closing date, or any breach by
the
Company of a representation or warranty in a writing furnished pursuant to
Section 2.02(b) to the extent made as of a date subsequent to such closing
date,
shall, except as provided in clause (ii) of this paragraph, immediately and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Company under the Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations
of
the Company as servicer under the Agreement and/or any applicable Reconstitution
Agreement without payment (notwithstanding anything in the Agreement or any
applicable Reconstitution Agreement to the contrary) of any compensation to
the
Company (and, if the Company is servicing any of the Mortgage Loans in a
Securitization Transaction, appoint a successor servicer reasonably acceptable
to any Master Servicer for such Securitization Transaction); provided that
to
the extent that any provision of the Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
(ii) Any
failure by the Company, any Subservicer or any Subcontractor to deliver any
information, report, certification or accountants’ letter when and as required
under Section 2.04 or 2.05, including (except as provided below) any failure
by
the Company to identify pursuant to Section 2.06(b) any Subcontractor
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, which continues unremedied for ten (10) calendar days after
the
date on which such information, report, certification or accountants’ letter was
required to be delivered shall constitute an Event of Default with respect
to
the Company under the Agreement and any applicable Reconstitution Agreement,
and
shall entitle the Purchaser, any Master Servicer or any Depositor, as
applicable, in its sole discretion to terminate the rights and obligations
of
the Company as servicer under the Agreement and/or any applicable Reconstitution
Agreement without payment (notwithstanding anything in this Agreement to the
contrary) of any compensation to the Company; provided that to the extent that
any provision of the Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or obligations following
termination of the Company as servicer, such provision shall be given effect.
Neither
the Purchaser nor any Depositor shall be entitled to terminate the rights and
obligations of the Company pursuant to this subparagraph (b)(ii) if a failure
of
the Company to identify a Subcontractor “participating in the servicing
function” within the meaning of Items 1122 of Regulation AB was attributable
solely to the role or functions of such Subcontractor with respect to mortgage
loans other than the Mortgage Loans.
I-14
(f) The
Company shall promptly reimburse the Purchaser (or any designee of the
Purchaser), any Master Servicer and any Depositor, as applicable, for all
reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the Mortgage Loans to
a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of the
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance or
injunctive relief.
Subsection
2.08 Third-party
Beneficiary.
For
purposes of this Reg AB Addendum and any related provisions thereto, each Master
Servicer shall be considered a third-party beneficiary of the Agreement,
entitled to all the rights and benefits hereof as if it were a direct party
to
the Agreement.
I-15
EXHIBIT
A
FORM
OF
ANNUAL CERTIFICATION
Re:
The
[
]
agreement dated as of [ ],
200[ ]
(the “Agreement”), among
[IDENTIFY
PARTIES]
I,
________________________________, the _____________________ of Bank of America,
National Association, certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers,
with
the knowledge and intent that they will rely upon this certification, that:
(1)
I
have
reviewed the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the “Compliance Statement”), the report on
assessment of the Company’s compliance with the servicing criteria set forth in
Item 1122(d) of Regulation AB and identified as the responsibility of the
Company on Exhibit B to the Regulation AB Compliance Addendum to the Agreement
(the “Servicing Criteria”), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item
1122 of Regulation AB (the “Servicing Assessment”), the registered public
accounting firm’s attestation report provided in accordance with Rules 13a-18
and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the
“Attestation Report”), and all servicing reports, officer’s certificates and
other information relating to the servicing of the Mortgage Loans by the Company
during 200[ ] that were delivered by the Company to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee] pursuant to the Agreement
(collectively, the “Company Servicing Information”);
(2)
Based
on
my knowledge, the Company Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances under
which such statements were made, not misleading with respect to the period
of
time covered by the Company Servicing Information;
(3)
Based
on
my knowledge, all of the Company Servicing Information required to be provided
by the Company under the Agreement has been provided to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee];
(4)
I
am
responsible for reviewing the activities performed by the Company as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the
Compliance Statement, the Servicing Assessment or the Attestation Report, the
Company has fulfilled its obligations under the Agreement in all material
respects; and
(5)
The
Compliance Statement required to be delivered by the Company pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Company and by any Subservicer or Subcontractor pursuant to
the
Agreement, have been provided to the [Depositor] [Master Servicer]. Any material
instances of noncompliance described in such reports have been disclosed to
the
[Depositor] [Master Servicer]. Any material instance of noncompliance with
the
Servicing Criteria has been disclosed in such reports.
I-16
Date:
By: ___________________________________
Name:
Title:
I-17
EXHIBIT
B
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by [the Company] [Name of Subservicer]
shall address, at a minimum, the criteria identified as below as “Applicable
Servicing Criteria”;
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
General
Servicing Considerations
|
||
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction agreements.
|
x
|
|
|
1122(d)(1)(i)
|
||
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
x
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
|
x
|
|
Cash
Collection and Administration
|
||
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial
bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
|
x
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
x
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction agreements.
|
x
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
x
|
I-18
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
x
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
||
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction
agreements;
(C) reviewed and approved by someone other than the person who
prepared
the reconciliation; and (D) contain explanations for reconciling
items.
These reconciling items are resolved within 90 calendar days of
their
original identification, or such other number of
days
specified in the transaction agreements.
|
x
|
|
|
Investor
Remittances and Reporting
|
|||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the Servicer.
|
x
|
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
x
|
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
x
|
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
x
|
|
I-19
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
Pool
Asset Administration
|
|||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the
transaction
agreements or related mortgage loan documents.
|
x
|
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
x
|
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
|
x
|
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow)
in
accordance
with the related mortgage loan documents.
|
x
|
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
x
|
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor’s mortgage loans (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
x
|
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
x
|
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
x
|
|
I-20
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan documents.
|
x
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid,
or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the Mortgage Loans,
or such
other number of days specified in the transaction agreements.
|
x
|
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
x
|
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
x
|
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
x
|
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
x
|
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements.
|
||
I-21
[BANK
OF
AMERICA, NATIONAL ASSOCIATION]
[NAME
OF
SUBSERVICER]
Date:
____________________________________
By:
Name:
Title:
I-22
BANK
OF AMERICA - SEQUOIA TO TRUSTEE
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT
For
Flow
Mortgage Loan Sale and Servicing Agreement
THIS
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated as of August 30, 2007
(the “Assignment”), is entered into among Sequoia Residential Funding, Inc. (the
“Assignor”), Bank of America, National Association, as the servicer (the
“Servicer”), and HSBC Bank USA, National Association ("HSBC Bank") as Trustee
under a Pooling and Servicing Agreement dated as of August 1, 2007 (the “Pooling
and Servicing Agreement”), among the Assignor, as Depositor, HSBC Bank (in such
Trustee capacity, the “Assignee”) and Xxxxx Fargo Bank, N. A., as Master
Servicer and Securities Administrator.
RECITALS
WHEREAS,
RWT Holdings, Inc. ("RWT") and the Servicer have entered into a certain Flow
Mortgage Loan Sale and Servicing Agreement, dated as of July 1, 2006 (the "Flow
Sale and Servicing Agreement"), and the Servicer is currently servicing certain
mortgage loans (the “Mortgage Loans”) under the Flow Sale and Servicing
Agreement; and
WHEREAS,
RWT has previously sold, assigned and transferred all of its right, title and
interest in certain of the Mortgage Loans (the “Specified Mortgage Loans”) which
are listed on the mortgage loan schedule attached as Exhibit
I
hereto
(the “Specified Mortgage Loan Schedule”) and its rights under the Flow Sale and
Servicing Agreement with respect to the Specified Mortgage Loans to Assignor;
and
WHEREAS,
the Assignor has agreed to sell, assign and transfer to Assignee all of its
right, title and interest in the Specified Mortgage Loans and its right under
the Flow Sale and Servicing Agreement with respect to the Specified Mortgage
Loans; and
WHEREAS,
the parties hereto have agreed that the Specified Mortgage Loans shall be
subject to the terms of this Assignment.
NOW,
THEREFORE, in consideration of the mutual promises contained herein and other
good and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties agree as follows:
1. Assignment
and Assumption.
(a) Effective
on and as of the date hereof, the Assignor hereby pledges, assigns and transfers
to the Assignee all of its right, title and interest in the Specified Mortgage
Loans and all of its rights (but none of the Purchaser’s obligations) provided
under the Flow Sale and Servicing Agreement to the extent relating to the
Specified Mortgage Loans, the Assignee hereby accepts such assignment from
the
Assignor, and the Servicer hereby acknowledges such assignment and
assumption.
X-00
XXXX
XX XXXXXXX - SEQUOIA TO
TRUSTEE
(b) Effective
on and as of the date hereof, the Assignor represents and warrants to the
Assignee that the Assignor has not taken any action that would serve to impair
or encumber the Assignee’s interest in the Specified Mortgage Loans since the
date of the Assignor’s acquisition of the Specified Mortgage Loans.
I-24
2. Recognition
of the Assignee.
From
and
after the date hereof, subject to Section 3 below, the Servicer shall recognize
the Assignee as the holder of the rights and benefits of the Purchaser with
respect to the Specified Mortgage Loans and the Servicer will service the
Specified Mortgage Loans for the Assignee as if the Assignee and the Servicer
had entered into a separate servicing agreement for the servicing of the
Specified Mortgage Loans in the form of the Flow Sale and Servicing Agreement
(as amended hereby) with the Assignee as the Purchaser thereunder, the terms
of
which Flow Sale and Servicing Agreement are incorporated herein by reference
and
amended hereby. It is the intention of the parties hereto that this Assignment
will be a separate and distinct agreement, and the entire agreement, between
the
parties hereto to the extent of the Specified Mortgage Loans and shall be
binding upon and for the benefit of the respective successors and assigns of
the
parties hereto.
3. Assignor’s
Continuing Rights and Responsibilities.
Notwithstanding
Sections 1 and 2 above, the parties hereto agree that the Assignor rather than
the Assignee shall have the ongoing rights to take action and the
responsibilities of the Purchaser under the following sections of the Flow
Sale
and Servicing Agreement:
Flow
Sale and Servicing Agreement:
|
Section
|
Matter
|
|
7.03,
1st,
2nd
and 3rd
¶'s
|
(a)
Repurchase; Substitution.
|
|
11.01,
5th,
6th,
7th
and 8th¶'s
|
(b) Servicer
to Act as Servicer; Subservicing.
|
|
11.02
|
(c) Liquidation
of Mortgage Loans.
|
|
11.13(c)
|
(d) Title,
Management and Disposition of REO Property.
|
|
11.20
|
(e) Servicer
Shall Provide Access and Information as
Reasonably
Required.
|
|
12.01
|
(f) Indemnification;
Third-Party Claims.
|
|
12.04
|
(g) Seller
and Servicer Not to Resign.
|
|
32
|
(h)
Cooperation of the Company with a Reconstitution; Regulation AB
Compliance.
|
I-25
In
addition, the Servicer agrees to furnish to the Assignor as well the Master
Servicer copies of reports, notices, statements and other communications
required to be delivered by the Servicer pursuant to any of the sections of
the
Flow Sale and Servicing Agreement referred to above and under the following
sections, at the times therein specified:
Flow
Sale and Servicing Agreement:
|
Section
|
|
|
11.09
|
(a) Transfer
of Accounts.
|
|
11.16
|
(b) Statements
to the Purchaser.
|
|
Subsection
2.04
of
Addendum I
|
(c) Servicer
Compliance Statement.
|
|
Subsection
2.05
of
Addendum I
|
(d) Report
on Assessment of Compliance and Attestation.
|
4. Amendment
to the Flow Sale and Servicing Agreement.
The
Flow
Sale and Servicing Agreement are hereby amended as set forth in Appendix
A
hereto
with respect to the Specified Mortgage Loans.
5. Representations
and Warranties.
|
(a)
|
Each
of the parties hereto represents and warrants that it is duly and
legally
authorized to enter into this Assignment.
|
|
(b)
|
Each
of the parties hereto represents and warrants that this Assignment
has
been duly authorized, executed and delivered by it and (assuming
due
authorization, execution and delivery thereof by each of the other
parties
hereto) constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except as such enforcement
may be
limited by bankruptcy, insolvency, reorganization or other similar
laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (regardless of whether such enforcement is considered
in a proceeding in equity or at
law).
|
I-26
6. Continuing
Effect.
Except
as
contemplated hereby, the Flow Sale and Servicing Agreement shall remain in
full
force and effect in accordance with their terms. This Assignment constitutes
a
Reconstitution Agreement as contemplated in Section 32 of the Flow Sale and
Servicing Agreement and the Reconstitution Date shall be the date hereof with
respect to the Specified Mortgage Loans listed on Exhibit
I
on the
date hereof.
7. Governing
Law.
This
Assignment and the rights and obligations hereunder shall be governed by and
construed in accordance with the internal laws of the State of New
York.
8. Notices.
Any
notices or other communications permitted or required under the Flow Sale and
Servicing Agreement to be made to the Assignor and Assignee shall be made in
accordance with the terms of the Flow Sale and Servicing Agreement and shall
be
sent to the Assignor and Assignee as follows:
Sequoia
Residential Funding, Inc.
Xxx
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx
Xxxxxx, XX 00000
HSBC
Bank
USA, National Association
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Corporate Trust and Loan Agency
or
to
such other address as may hereafter be furnished by the Assignor or Assignee
to
the other parties in accordance with the provisions of the Flow Sale and
Servicing Agreement.
9. Counterparts.
This
Assignment may be executed in counterparts, each of which when so executed
shall
be deemed to be an original and all of which when taken together shall
constitute one and the same instrument.
10. Definitions.
Any
capitalized term used but not defined in this Assignment has the same meaning
as
in the Flow Sale and Servicing Agreement.
I-27
11. Master
Servicer.
The
Servicer hereby acknowledges that the Assignee has appointed Xxxxx Fargo Bank,
N. A. (the “Master Servicer”) to act as master servicer and securities
administrator under the Pooling and Servicing Agreement and hereby agrees to
treat all inquiries, instructions, authorizations and other communications
from
the Master Servicer as if the same had been received from the Assignee. The
Master Servicer, acting on behalf of the Assignee, shall have the rights of
the
Assignee as the Purchaser under the Flow Sale and Servicing Agreement to enforce
the obligations of the Servicer thereunder. Any notices or other communications
permitted or required under the Flow Sale and Servicing Agreement to be made
to
the Assignee shall be made in accordance with the terms of the Flow Sale and
Servicing Agreement and shall be sent to the Master Servicer at the following
address:
Xxxxx
Fargo Bank, N. A.
X.X.
Xxx 00
Xxxxxxxx,
Xxxxxxxx 00000
(or,
for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx
00000)
Attention:
Sequoia Mortgage Trust 2007-4
or
to
such other address as may hereafter be furnished by the Master Servicer to
Servicer. Any such notices or other communications permitted or required under
the Flow Sale and Servicing Agreement may be delivered in electronic format
unless manual signature is required in which case a hard copy of such report
or
communication shall be required.
The
Servicer further acknowledges that the Assignor has engaged the Master Servicer
to provide certain default administration and that the Master Servicer, acting
as agent of the Assignor, may exercise any of the rights of the Purchaser
retained by the Assignor in Section 3 above.
The
Servicer shall make all distributions under the Flow Sale and Servicing
Agreement, as they relate to the Specified Mortgage Loans, to the Master
Servicer by wire transfer of immediately funds to:
Xxxxx
Fargo Bank, NA
San
Francisco, CA
ABA#
000-000-000
Acct#
0000000000
Acct
Name: SAS Clearing
FFC:
53173800
I-28
12. Successors
and Assigns.
Upon
a
transfer of the Specified Mortgage Loans by the Assignee (other than in respect
of repurchases pursuant to Section 6.03 or Section 7.03 of the Flow Sale and
Servicing Agreement) to a buyer (“buyer”), such transfer shall constitute a
Reconstitution subject to the terms of Section 32 of the Flow Sale and Servicing
Agreement. Upon the closing of such transfer, the rights and obligations of
Purchaser retained by the Assignor pursuant to this Assignment shall
automatically terminate and the buyer shall be deemed to possess all of the
rights and obligations of Purchaser under the Flow Sale and Servicing Agreement,
provided,
however,
that the
Assignor shall remain liable for any obligations as Purchaser arising from
or
attributable to the period from the date hereof to the closing date of such
transfer.
[remainder
of page intentionally left blank]
I-29
IN
WITNESS WHEREOF, the parties hereto have executed this Assignment the day and
year first above written.
ASSIGNOR:
SEQUOIA
RESIDENTIAL FUNDING, INC.
By:
Name:
Title:
ASSIGNEE:
HSBC
BANK
USA, NATIONAL
ASSOCIATION
By:
Name:
Title:
SERVICER:
BANK
OF
AMERICA, NATIONAL ASSOCIATION
By:
Name:
Title:
I-30
EXHIBIT
I
APPENDIX
A
MODIFICATIONS
TO THE FLOW SALE AND SERVICING AGREEMENT
1. The
definition of “Business Day” in Section 1 of the Agreement is hereby deleted in
its entirety and replaced with the following:
“Business
Day:
Any day other than (i) a Saturday or a Sunday, or (ii) a legal holiday in the
State of New York, or the State of California, or the State of Maryland or
the
State of Minnesota, or (iii) a day on which banks in the State of New York,
or
the State of California, or the State of Maryland or the State of Minnesota
are
authorized or obligated by law or executive order to be closed.”
2. The
definition of “Closing Date” is hereby revised to read as follows:
"Closing
Date:
August
30, 2007, except with respect to the first paragraph of Section 2, Section
3,
Section 4, Subsection 6.01, Subsection 6.03, Section 7.01 and the Term
Sheet(s)."
3. The
definition of “Cut-off Date” is hereby revised to read as follows:
"Cut-off
Date:
August
1, 2007, except with respect to the first paragraph of Section 2, Section 3,
Section 4, Subsection 6.01, Subsection 6.03, Section 7.01 and the Term
Sheet(s)."
4. The
definition of “First Remittance Date” is hereby revised to read as
follows:
"First
Remittance Date:
September 18, 2007."
5. Subsection
11.01 is revised to add the following sentence at then end of the fifth
paragraph:
"Notwithstanding
anything to the contrary in the this Agreement, the Servicer shall not make
or
permit any modification, waiver or amendment of any term of a Mortgage Loan
that
could cause any REMIC holding such Mortgage Loan to fail to qualify as a REMIC
or result in the imposition of any tax under Section 860F(a) or 860G(d) of
the
Code on any REMIC holding such Mortgage Loan."
6. Subsection
11.04, first sentence of the first paragraph is revised to read as
follows:
"The
Servicer shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan separate and apart
from any of its own funds and general assets and shall establish and maintain
one or more Collection Accounts (collectively, the “Collection Account”), titled
“HSBC Bank USA, National Association, in trust for the holders of Sequoia
Mortgage Trust 2007-4 Mortgage Pass-Through Certificates.”
7. The
following is added at the end of the last paragraph of Subsection
11.04:
“Notwithstanding
anything to the contrary in this Agreement, for all Eligible Investments rated
at least "A1/A+"(short/long) that have terms greater than 60 days, in the event
of a downgrade of such Eligible Investment below "A1" (or "A+" if no short
term
rating) Servicer agrees to remove such Eligible Investment within 60 days of
such downgrade. Servicer acknowledges and agrees that Servicer shall bear any
losses incurred with respect to removal of such Eligible Investment following
such a downgrade and that any losses shall be immediately deposited by the
Servicer in the Custodial Account, as appropriate, out of the Servicer’s own
funds, with no right to reimbursement therefore.”
7. Notwithstanding
anything to the contrary in the Flow Sale and Servicing Agreement, any Custodial
Accounts established by the Servicer pursuant to Subsection 11.04 of the Flow
Sale and Servicing Agreement shall qualify as Eligible Accounts as defined
in
the Pooling and Servicing Agreement.
8. Subsection
11.13 is revised to add the following paragraphs at the end of the
section:
"The
REO
Property must be sold within three years following the end of the calendar
year
of the date of acquisition if a REMIC election has been made with respect to
the
arrangement under which the Mortgage Loans and REO Property are held, unless
(i)
the Purchaser shall have been supplied with an Opinion of Counsel (at the
Servicer's expense) to the effect that the holding by the related trust of
such
Mortgaged Property subsequent to such three-year period (and specifying the
period beyond such three-year period for which the Mortgaged Property may be
held) will not result in the imposition of taxes on "prohibited transactions"
of
the related trust as defined in Section 860F of the Code, or cause the related
REMIC to fail to qualify as a REMIC, in which case the related trust may
continue to hold such Mortgaged Property (subject to any conditions contained
in
such Opinion of Counsel), or (ii) the Purchaser (at the Servicer's expense)
or
the Servicer shall have applied for, prior to the expiration of such three-year
period, an extension of such three-year period in the manner contemplated by
Section 856(e)(3) of the Code, in which case the three-year period shall be
extended by the applicable period. If a period longer than three years is
permitted under the foregoing sentence and is necessary to sell any REO
Property, the Servicer shall report monthly to the Purchaser as to progress
being made in selling such REO Property.
Notwithstanding
any other provision of this Agreement, if a REMIC election has been made, no
Mortgaged Property held by a REMIC shall be rented (or allowed to continue
to be
rented) or otherwise used for the production of income by or on behalf of the
related trust or sold in such a manner or pursuant to any terms that would
(i)
cause such Mortgaged Property to fail to qualify at any time as "foreclosure
property" within a meaning of Section 860G(a)(8) of the Code, (ii) subject
to
the related trust to the imposition of any federal or state income taxes on
"net
income from foreclosure property" with respect to such Mortgaged Property within
the meaning of Section 860G(c) of the Code, or (iii) cause the sale of such
Mortgaged Property to result in the receipt by the related trust or any income
from non-permitted assets as described in Section 860F(a) (2)(B) of the Code,
unless the Servicer has agreed to indemnify and hold harmless the related trust
with respect to the imposition of any such taxes."
9. Subsection
11.16, first sentence of the first paragraph is revised to read as
follows:
"Not
later than the tenth (10th) day of each month, the Servicer shall forward to
the
Purchaser in an electronic format statements, in substantially the same forms
as, and providing the information described in, Exhibit
7
hereto;
or as otherwise mutually agreed to by Servicer and the Master
Servicer"
10. The
Flow
Sale and Servicing Agreement is modified by adding a new Subsection 11.24 which
reads as follows:
"Subsection
11.24 Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Servicer shall not take any
action, cause the REMIC to take any action or fail to take (or fail to cause
to
be taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited
to
the tax on "prohibited transactions" as defined in Section 860F(a)(2) of the
Code and the tax on "contribution" to a REMIC set forth in Section 860G(d)
of
the Code unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such actions) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax."
EXHIBIT
7
FORM
OF MONTHLY REPORTS
|
Standard
File Layout - Master Servicing
|
|||
|
Column
Name
|
Description
|
Decimal
|
Format
Comment
|
|
SER_INVESTOR_NBR
|
A
value assigned by the Servicer to define a group of loans.
|
|
Text
up to 20 digits
|
|
LOAN_NBR
|
A
unique identifier assigned to each loan by the investor.
|
|
Text
up to 10 digits
|
|
SERVICER_LOAN_NBR
|
A
unique number assigned to a loan by the Servicer. This may be different
than the LOAN_NBR.
|
|
Text
up to 10 digits
|
|
SCHED_PAY_AMT
|
Scheduled
monthly principal and scheduled interest payment that a borrower
is
expected to pay, P&I constant.
|
2
|
No
commas(,) or dollar signs ($)
|
|
NOTE_INT_RATE
|
The
loan interest rate as reported by the Servicer.
|
4
|
Max
length of 6
|
|
NET_INT_RATE
|
The
loan gross interest rate less the service fee rate as reported by
the
Servicer.
|
4
|
Max
length of 6
|
|
SERV_FEE_RATE
|
The
servicer's fee rate for a loan as reported by the Servicer.
|
4
|
Max
length of 6
|
|
SERV_FEE_AMT
|
The
servicer's fee amount for a loan as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
|
NEW_PAY_AMT
|
The
new loan payment amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
|
NEW_LOAN_RATE
|
The
new loan rate as reported by the Servicer.
|
4
|
Max
length of 6
|
|
ARM_INDEX_RATE
|
The
index the Servicer is using to calculate a forecasted
rate.
|
4
|
Max
length of 6
|
|
ACTL_BEG_PRIN_BAL
|
The
borrower's actual principal balance at the beginning of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
|
ACTL_END_PRIN_BAL
|
The
borrower's actual principal balance at the end of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
|
BORR_NEXT_PAY_DUE_DATE
|
The
date at the end of processing cycle that the borrower's next payment
is
due to the Servicer, as reported by Servicer.
|
|
MM/DD/YYYY
|
|
SERV_CURT_AMT_1
|
The
first curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
|
SERV_CURT_DATE_1
|
The
curtailment date associated with the first curtailment amount.
|
|
MM/DD/YYYY
|
|
CURT_ADJ_
AMT_1
|
The
curtailment interest on the first curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
|
SERV_CURT_AMT_2
|
The
second curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
|
SERV_CURT_DATE_2
|
The
curtailment date associated with the second curtailment
amount.
|
|
MM/DD/YYYY
|
|
CURT_ADJ_
AMT_2
|
The
curtailment interest on the second curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
|
SERV_CURT_AMT_3
|
The
third curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
|
SERV_CURT_DATE_3
|
The
curtailment date associated with the third curtailment
amount.
|
|
MM/DD/YYYY
|
|
CURT_ADJ_AMT_3
|
The
curtailment interest on the third curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
|
PIF_AMT
|
The
loan "paid in full" amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
|
PIF_DATE
|
The
paid in full date as reported by the Servicer.
|
|
MM/DD/YYYY
|
|
|
|
|
Action
Code Key: 15=Bankruptcy, 30=Foreclosure, , 60=PIF, 63=Substitution,
65=Repurchase,70=REO
|
|
ACTION_CODE
|
The
standard FNMA numeric code used to indicate the default/delinquent
status
of a particular loan.
|
||
|
INT_ADJ_AMT
|
The
amount of the interest adjustment as reported by the
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
|
SOLDIER_SAILOR_ADJ_AMT
|
The
Soldier and Sailor Adjustment amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
|
NON_ADV_LOAN_AMT
|
The
Non Recoverable Loan Amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
|
LOAN_LOSS_AMT
|
The
amount the Servicer is passing as a loss, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
|
SCHED_BEG_PRIN_BAL
|
The
scheduled outstanding principal amount due at the beginning of the
cycle
date to be passed through to investors.
|
2
|
No
commas(,) or dollar signs ($)
|
|
SCHED_END_PRIN_BAL
|
The
scheduled principal balance due to investors at the end of a processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
|
SCHED_PRIN_AMT
|
The
scheduled principal amount as reported by the Servicer for the current
cycle -- only applicable for Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
|
SCHED_NET_INT
|