Servicing Agreement

OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, Depositor OPTION ONE MORTGAGE CORPORATION, Servicer HSBC BANK USA, NATIONAL ASSOCIATION, Trustee and WELLS FARGO BANK, N.A., Master Servicer, Trust Administrator and Custodian POOLING AND SERVICING AGREEMENT ...

 
 


OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
Depositor
 
 
OPTION ONE MORTGAGE CORPORATION,
Servicer
 
 
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee


and
 
 
WELLS FARGO BANK, N.A.,
Master Servicer, Trust Administrator and Custodian
 
 
 
 
Dated as of April 1, 2007
 
 
___________________________
 
 
Asset-Backed Certificates, Series 2007-HL1
 

 
 





Table of Contents

 
ARTICLE I DEFINITIONS 
 
 
SECTION 1.01.
Defined Terms.
 
 
SECTION 1.02.
Accounting.
 
 
SECTION 1.03.
Allocation of Certain Interest Shortfalls.
 
 
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES 
 
 
SECTION 2.01.
Conveyance of Mortgage Loans.
 
 
SECTION 2.02.
Acceptance by Trustee and the Trust Administrator.
 
 
SECTION 2.03.
Repurchase or Substitution of Mortgage Loans by the Originator or the Obligor.
 
 
SECTION 2.04.
Intentionally Omitted.
 
 
SECTION 2.05.
Representations, Warranties and Covenants of Servicer and the Master Servicer.
 
 
SECTION 2.06.
Representations and Warranties of the Depositor.
 
 
SECTION 2.07.
Issuance of Certificates.
 
 
SECTION 2.08.
Authorization to Enter into Interest Rate Swap Agreement.
 
 
SECTION 2.09.
Conveyance of REMIC Regular Interests and Acceptance of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC 5 and REMIC 6 by the Trustee; Issuance of Certificates.
 
 
SECTION 2.10.
Negative Covenants of the Trustee, the Trust Administrator and the Servicer.
 
 
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS 
 
 
SECTION 3.01.
Servicer to Act as Servicer.
 
 
SECTION 3.02.
Sub-Servicing Agreements Between Servicer and Sub-Servicers.
 
 
SECTION 3.03.
Successor Sub-Servicers.
 
 
SECTION 3.04.
Liability of the Servicer.
 
 
SECTION 3.05.
No Contractual Relationship Between Sub-Servicers and the Certificate Insurer, the Trust Administrator, the Trustee or Certificateholders.
 
 
SECTION 3.06.
Assumption or Termination of Sub-Servicing Agreements by the Master Servicer.
 
 
SECTION 3.07.
Collection of Certain Mortgage Loan Payments.
 
 
SECTION 3.08.
Sub-Servicing Accounts.
 
 
SECTION 3.09.
Collection of Taxes, Assessments and Similar Items; Servicing Accounts.
 
 
SECTION 3.10.
Collection Account and Distribution Account.
 
 
SECTION 3.11.
Withdrawals from the Collection Account and Distribution Account.
 
 
SECTION 3.12.
Investment of Funds in the Collection Account and the Distribution Account.
 
 
SECTION 3.13.
Rights of the Class C Certificateholder.
 
 
SECTION 3.14.
Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage.
 
 
SECTION 3.15.
Enforcement of Due-On-Sale Clauses; Assumption Agreements.
 
 
SECTION 3.16.
Realization Upon Defaulted Mortgage Loans.
 
 
SECTION 3.17.
Trustee to Cooperate; Release of Mortgage Files.
 
 
SECTION 3.18.
Servicing Compensation.
 
 
SECTION 3.19.
Reports to the Trust Administrator and the Certificate Insurer; Collection Account Statements.
 
 
SECTION 3.20.
Statement as to Compliance.
 
 
SECTION 3.21.
Assessment of Compliance and Attestation Report.
 
 
SECTION 3.22.
Access to Certain Documentation.
 
 
SECTION 3.23.
Title, Management and Disposition of REO Property.
 
 
SECTION 3.24.
Obligations of the Servicer in Respect of Prepayment Interest Shortfalls.
 
 
SECTION 3.25.
Reports Filed with Securities and Exchange Commission.
 
 
SECTION 3.26.
Obligations of the Servicer in Respect of Mortgage Rates and Monthly Payments.
 
 
SECTION 3.27.
Solicitations.
 
 
SECTION 3.28.
Late Remittance.
 
 
SECTION 3.29.
Advancing Facility.
 
 
SECTION 3.30.
Pool Policy; Claims Under the Pool Policy
 
 
ARTICLE IV FLOW OF FUNDS 
 
 
SECTION 4.01.
Distributions.
 
 
SECTION 4.02.
The Policy.
 
 
SECTION 4.03.
Statements.
 
 
SECTION 4.04.
Remittance Reports; Advances.
 
 
SECTION 4.05.
Net WAC Rate Carryover Reserve Account.
 
 
SECTION 4.06.
Distributions on the REMIC Regular Interests.
 
 
SECTION 4.07.
Allocation of Realized Losses.
 
 
SECTION 4.08.
Swap Account
 
 
SECTION 4.09.
Tax Treatment of Swap Payments and Swap Termination Payments
 
 
SECTION 4.10.
Swap Collateral Account
 
 
SECTION 4.11.
Rights and Obligations Under the Interest Rate Swap Agreement.
 
 
ARTICLE V THE CERTIFICATES 
 
 
SECTION 5.01.
The Certificates.
 
 
SECTION 5.02.
Registration of Transfer and Exchange of Certificates.
 
 
SECTION 5.03.
Mutilated, Destroyed, Lost or Stolen Certificates.
 
 
SECTION 5.04.
Persons Deemed Owners.
 
 
SECTION 5.05.
Appointment of Paying Agent.
 
 
ARTICLE VI THE SERVICER, THE MASTER SERVICER, THE DEPOSITOR AND THE CREDIT RISK MANAGER 
 
 
SECTION 6.01.
Liability of the Servicer, the Master Servicer and the Depositor.
 
 
SECTION 6.02.
Merger or Consolidation of, or Assumption of the Obligations of, the Servicer, the Master Servicer or the Depositor.
 
 
SECTION 6.03.
Limitation on Liability of the Servicer, the Master Servicer and Others.
 
 
SECTION 6.04.
Servicer Not to Resign.
 
 
SECTION 6.05.
Delegation of Duties.
 
 
SECTION 6.06.
Successor Master Servicer.
 
 
SECTION 6.07.
Inspection.
 
 
SECTION 6.08.
Credit Risk Manager.
 
 
SECTION 6.09.
Limitation Upon Liability of the Credit Risk Manager.
 
 
SECTION 6.10.
Removal of the Credit Risk Manager.
 
 
ARTICLE VII DEFAULT 
 
 
SECTION 7.01.
Master Servicer Events of Termination and Servicer Events of Termination.
 
 
SECTION 7.02.
Master Servicer or Trustee to Act; Appointment of Successor.
 
 
SECTION 7.03.
Reserved..
 
 
SECTION 7.04.
Reserved.
 
 
SECTION 7.05.
Survivability of Servicer and Master Servicer Liabilities.
 
 
SECTION 7.06.
Trustee to Act; Appointment of Successor Master Servicer.
 
 
SECTION 7.07.
Waiver of Defaults.
 
 
SECTION 7.08.
Notification to Certificateholders.
 
 
SECTION 7.09.
Survivability of Servicer and Master Servicer Liabilities.
 
 
ARTICLE VIII THE TRUSTEE and the trust administrator 
 
 
SECTION 8.01.
Duties of Trustee and the Trust Administrator.
 
 
SECTION 8.02.
Certain Matters Affecting the Trustee and the Trust Administrator.
 
 
SECTION 8.03.
Trustee and Trust Administrator Not Liable for Certificates or Mortgage Loans.
 
 
SECTION 8.04.
Trustee and Trust Administrator May Own Certificates.
 
 
SECTION 8.05.
Trust Administrator and Trustee Compensation and Expenses.
 
 
SECTION 8.06.
Eligibility Requirements for Trustee and Trust Administrator.
 
 
SECTION 8.07.
Resignation or Removal of Trustee or Trust Administrator.
 
 
SECTION 8.08.
Successor Trustee and Trust Administrator.
 
 
SECTION 8.09.
Merger or Consolidation of Trustee or Trust Administrator.
 
 
SECTION 8.10.
Appointment of Co-Trustee or Separate Trustee.
 
 
SECTION 8.11.
Limitation of Liability.
 
 
SECTION 8.12.
Trustee May Enforce Claims Without Possession of Certificates.
 
 
SECTION 8.13.
Suits for Enforcement.
 
 
SECTION 8.14.
Waiver of Bond Requirement.
 
 
SECTION 8.15.
Waiver of Inventory, Accounting and Appraisal Requirement.
 
 
ARTICLE IX REMIC ADMINISTRATION 
 
 
SECTION 9.01.
REMIC Administration.
 
 
SECTION 9.02.
Prohibited Transactions and Activities.
 
 
SECTION 9.03.
Indemnification with Respect to Certain Taxes and Loss of REMIC Status.
 
 
ARTICLE X TERMINATION 
 
 
SECTION 10.01.
Termination.
 
 
SECTION 10.02.
Additional Termination Requirements.
 
 
ARTICLE XI MISCELLANEOUS PROVISIONS 
 
 
SECTION 11.01.
Amendment.
 
 
SECTION 11.02.
Recordation of Agreement; Counterparts.
 
 
SECTION 11.03.
Limitation on Rights of Certificateholders.
 
 
SECTION 11.04.
Governing Law; Jurisdiction.
 
 
SECTION 11.05.
Notices.
 
 
SECTION 11.06.
Severability of Provisions.
 
 
SECTION 11.07.
Article and Section References.
 
 
SECTION 11.08.
Notice to the Rating Agencies and the Certificate Insurer.
 
 
SECTION 11.09.
Further Assurances.
 
 
SECTION 11.10.
Third Party Rights.
 
 
SECTION 11.11.
Benefits of Agreement.
 
 
SECTION 11.12.
Acts of Certificateholders.
 
 
SECTION 11.13.
No Petition.
 
 
SECTION 11.14.
Intention of the Parties and Interpretation.
 
 
ARTICLE XII ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS 
 
 
SECTION 12.01.
Master Servicer to Act as Master Servicer.
 
 
SECTION 12.02.
[Reserved].
 
 
SECTION 12.03.
Monitoring of the Servicers.
 
 
SECTION 12.04.
Fidelity Bond.
 
 
SECTION 12.05.
Power to Act; Procedures.
 
 
SECTION 12.06.
Due on Sale Clauses; Assumption Agreements.
 
 
SECTION 12.07.
[Reserved].
 
 
SECTION 12.08.
Documents, Records and Funds in Possession of Master Servicer to be Held for Trustee.
 
 
SECTION 12.09.
Compensation for the Master Servicer.
 
 
SECTION 12.10.
Obligations of the Master Servicer in Respect of Prepayment Interest Shortfalls.
 
 
SECTION 12.11.
Reserved.
 
 
SECTION 12.12.
Permitted Withdrawals and Transfers from the Distribution Account.
 
 
SECTION 12.13.
Survival of Indemnification.
 

EXHIBITS:
 
Exhibit A-1 Form of Class I-A-1 Certificates
Exhibit A-2 Form of Class II-A-1 Certificates
Exhibit A-3 Form of Class II-A-2 Certificates
Exhibit A-4 Form of Class II-A-3 Certificates
Exhibit A-5 Form of Class II-A-4 Certificates
Exhibit A-5 Form of Class C Certificates
Exhibit A-7 Form of Class P Certificates
Exhibit A-8 Form of Class R Certificates
Exhibit A-9 Form of Class R-X Certificates
Exhibit B Form of Pool Policy
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E Request for Release
Exhibit F-1 Form of Custodian’s Initial Certification
Exhibit F-2 Form of Custodian’s Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Loss Mitigation Procedures
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of Interest Rate Swap Agreement
Exhibit J Form of Investment Letter
Exhibit K Form of Residual Certificates Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Form of ERISA Representation Letter
Exhibit N Form of Swap Administration Agreement
Exhibit O Form of Remittance Report
Exhibit P Form of Financial Guaranty Insurance Policy
Exhibit Q [Reserved]
Exhibit R-1  Form of Certification to Be Provided by the Depositor with Form 10-K
Exhibit R-2 Form of Certification to Be Provided to Depositor by the Trust Administrator
Exhibit R-3 Form of Certification to Be Provided to the Depositor by the Master Servicer
Exhibit S Servicing Criteria to Be Addressed in Assessment of Compliance
Exhibit T Form 10-D, Form 8-K and Form 10-K Reporting Responsibility
Exhibit U Additional Disclosure Notification
 
Schedule I Prepayment Charge Schedule
 

 
 
This Pooling and Servicing Agreement is dated as of April 1, 2007 (the “Agreement”), among OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as depositor (the “Depositor”), OPTION ONE MORTGAGE CORPORATION, as Servicer (the “Servicer”), HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee (the “Trustee”) and WELLS FARGO BANK, N.A., as Master Servicer and Trust Administrator (the “Master Servicer” and the “Trust Administrator”, as applicable).
 
PRELIMINARY STATEMENT:
 
The Depositor intends to sell pass-through certificates (collectively, the “Certificates”), to be issued hereunder in multiple classes, which in the aggregate will evidence the entire beneficial ownership interest in the Trust Fund created hereunder. The Certificates will consist of twelve classes of certificates, designated as (i) the Class I-A-1 Certificates, (ii) the Class II-A-1 Certificates, (iii) the Class II-A-2 Certificates, (iv) the Class II-A-3 Certificates, (v) the Class II-A-4 Certificates, (vi) the Class C Certificates, (vii) the Class P Certificates, (viii) the Class R Certificates and (ix) the Class R-X Certificates.
 



REMIC 1
 
As provided herein, the Trustee shall elect to treat the segregated pool of assets consisting of the Mortgage Loans and certain other related assets subject to this Agreement (exclusive of the Net WAC Rate Carryover Reserve Account, any Servicer Prepayment Charge Payment Amounts, the Swap Account, the Supplemental Interest Trust and the Interest Rate Swap Agreement) as a REMIC for federal income tax purposes, and such segregated pool of assets shall be designated as “REMIC 1.” The Class R-1 Interest shall represent the sole class of “residual interests” in REMIC 1 for purposes of the REMIC Provisions (as defined herein). The following table irrevocably sets forth the designation, the Uncertificated REMIC 1 Pass-Through Rate, the initial Uncertificated Principal Balance and, for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC 1 Regular Interests (as defined herein). None of the REMIC 1 Regular Interests shall be certificated.
 
 
Designation
Uncertificated REMIC 1
Pass-Through Rate
Initial Certificate
Principal Balance
Assumed Final
Maturity Date(1)
I
(2)
$    156,488,564.28
February 2038
I-1-A
(2)
$        5,740,765.00
February 2038
I-1-B
(2)
$        5,740,765.00
February 2038
I-2-A
(2)
$        6,683,000.00
February 2038
I-2-B
(2)
$        6,683,000.00
February 2038
I-3-A
(2)
$        7,506,887.50
February 2038
I-3-B
(2)
$        7,506,887.50
February 2038
I-4-A
(2)
$        8,363,471.25
February 2038
I-4-B
(2)
$        8,363,471.25
February 2038
I-5-A
(2)
$        9,243,401.25
February 2038
I-5-B
(2)
$        9,243,401.25
February 2038
I-6-A
(2)
$        9,993,445.00
February 2038
I-6-B
(2)
$        9,993,445.00
February 2038
I-7-A
(2)
$      10,717,767.50
February 2038
I-7-B
(2)
$      10,717,767.50
February 2038
I-8-A
(2)
$      11,145,846.25
February 2038
I-8-B
(2)
$      11,145,846.25
February 2038
I-9-A
(2)
$        9,931,580.00
February 2038
I-9-B
(2)
$        9,931,580.00
February 2038
I-10-A
(2)
$        9,546,587.50
February 2038
I-10-B
(2)
$        9,546,587.50
February 2038
I-11-A
(2)
$        9,264,968.75
February 2038
I-11-B
(2)
$        9,264,968.75
February 2038
I-12-A
(2)
$        8,991,643.75
February 2038
I-12-B
(2)
$        8,991,643.75
February 2038
I-13-A
(2)
$        8,726,365.00
February 2038
I-13-B
(2)
$        8,726,365.00
February 2038
I-14-A
(2)
$        8,468,897.50
February 2038
I-14-B
(2)
$        8,468,897.50
February 2038
I-15-A
(2)
$        8,219,013.75
February 2038
I-15-B
(2)
$        8,219,013.75
February 2038
I-16-A
(2)
$        7,976,485.00
February 2038
I-16-B
(2)
$        7,976,485.00
February 2038
I-17-A
(2)
$        7,741,102.50
February 2038
I-17-B
(2)
$        7,741,102.50
February 2038
I-18-A
(2)
$        8,394,027.50
February 2038
I-18-B
(2)
$        8,394,027.50
February 2038
I-19-A
(2)
$        9,836,355.00
February 2038
I-19-B
(2)
$        9,836,355.00
February 2038
I-20-A
(2)
$      17,327,707.50
February 2038
I-20-B
(2)
$      17,327,707.50
February 2038
I-21-A
(2)
$      16,093,393.75
February 2038
I-21-B
(2)
$      16,093,393.75
February 2038
I-22-A
(2)
$      14,345,666.25
February 2038
I-22-B
(2)
$      14,345,666.25
February 2038
I-23-A
(2)
$      12,190,963.75
February 2038
I-23-B
(2)
$      12,190,963.75
February 2038
I-24-A
(2)
$        6,274,632.50
February 2038
I-24-B
(2)
$        6,274,632.50
February 2038
I-25-A
(2)
$        6,011,301.25
February 2038
I-25-B
(2)
$        6,011,301.25
February 2038
I-26-A
(2)
$        5,798,306.25
February 2038
I-26-B
(2)
$        5,798,306.25
February 2038
I-27-A
(2)
$        5,592,841.25
February 2038
I-27-B
(2)
$        5,592,841.25
February 2038
I-28-A
(2)
$        5,394,655.00
February 2038
I-28-B
(2)
$        5,394,655.00
February 2038
I-29-A
(2)
$        5,203,481.25
February 2038
I-29-B
(2)
$        5,203,481.25
February 2038
I-30-A
(2)
$        5,019,075.00
February 2038
I-30-B
(2)
$        5,019,075.00
February 2038
I-31-A
(2)
$        4,841,150.00
February 2038
I-31-B
(2)
$        4,841,150.00
February 2038
I-32-A
(2)
$        4,669,421.25
February 2038
I-32-B
(2)
$        4,669,421.25
February 2038
I-33-A
(2)
$        4,503,590.00
February 2038
I-33-B
(2)
$        4,503,590.00
February 2038
I-34-A
(2)
$        4,343,961.25
February 2038
I-34-B
(2)
$        4,343,961.25
February 2038
I-35-A
(2)
$        4,189,995.00
February 2038
I-35-B
(2)
$        4,189,995.00
February 2038
I-36-A
(2)
$        1,138,107.50
February 2038
I-36-B
(2)
$        1,138,107.50
February 2038
I-37-A
(2)
$        2,028,128.75
February 2038
I-37-B
(2)
$        2,028,128.75
February 2038
I-38-A
(2)
$        1,956,200.00
February 2038
I-38-B
(2)
$        1,956,200.00
February 2038
I-39-A
(2)
$        1,886,818.75
February 2038
I-39-B
(2)
$        1,886,818.75
February 2038
I-40-A
(2)
$        1,819,895.00
February 2038
I-40-B
(2)
$        1,819,895.00
February 2038
I-41-A
(2)
$        1,755,341.25
February 2038
I-41-B
(2)
$        1,755,341.25
February 2038
I-42-A
(2)
$        1,693,073.75
February 2038
I-42-B
(2)
$        1,693,073.75
February 2038
I-43-A
(2)
$        1,633,011.25
February 2038
I-43-B
(2)
$        1,633,011.25
February 2038
I-44-A
(2)
$        1,575,077.50
February 2038
I-44-B
(2)
$        1,575,077.50
February 2038
I-45-A
(2)
$        1,519,193.75
February 2038
I-45-B
(2)
$        1,519,193.75
February 2038
I-46-A
(2)
$        1,466,952.50
February 2038
I-46-B
(2)
$        1,466,952.50
February 2038
I-47-A
(2)
$        1,415,723.75
February 2038
I-47-B
(2)
$        1,415,723.75
February 2038
I-48-A
(2)
$        1,368,262.50
February 2038
I-48-B
(2)
$        1,368,262.50
February 2038
I-49-A
(2)
$        1,319,603.75
February 2038
I-49-B
(2)
$        1,319,603.75
February 2038
I-50-A
(2)
$        1,272,636.25
February 2038
I-50-B
(2)
$        1,272,636.25
February 2038
I-51-A
(2)
$        1,227,338.75
February 2038
I-51-B
(2)
$        1,227,338.75
February 2038
I-52-A
(2)
$        1,183,628.75
February 2038
I-52-B
(2)
$        1,183,628.75
February 2038
I-53-A
(2)
$        1,141,492.50
February 2038
I-53-B
(2)
$        1,141,492.50
February 2038
I-54-A
(2)
$        1,100,812.50
February 2038
I-54-B
(2)
$        1,100,812.50
February 2038
I-55-A
(2)
$        1,061,615.00
February 2038
I-55-B
(2)
$        1,061,615.00
February 2038
I-56-A
(2)
$        1,023,813.75
February 2038
I-56-B
(2)
$        1,023,813.75
February 2038
P
(2)
$                  100.00
February 2038
___________________
(1)
 
For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date in the month following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC 1 Regular Interest.
 
(2)
 
Calculated in accordance with the definition of “Uncertificated REMIC 1 Pass-Through Rate” herein.
 



REMIC 2
 
As provided herein, the Trustee shall make an election to treat the segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC 2.” The Class R-2 Interest will represent the sole class of “residual interests” in REMIC 2 for purposes of the REMIC Provisions under federal income tax law. The following table irrevocably sets forth the designation, the Uncertificated REMIC 2 Pass-Through Rate, the initial Uncertificated Principal Balance, and for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC 2 Regular Interests. None of the REMIC 2 Regular Interests will be certificated.
 
Designation
 
Uncertificated REMIC 2
Pass-Through Rate(2)
 
Initial Uncertificated
Principal Balance
 
Assumed Final
Maturity Date(1)
LTAA
 
Variable
 
$ 778,360,611.34
 
February 2038
LTIA1
 
Variable
 
$ 3,049,350.00
 
February 2038
LTIIA1
 
Variable
 
$ 1,933,790.00
 
February 2038
LTIIA2
 
Variable
 
$ 1,052,200.00
 
February 2038
LTIIA3
 
Variable
 
$ 415,590.00
 
February 2038
LTIIA4
 
Variable
 
$ 578,140.00
 
February 2038
LTZZ
 
Variable
 
$ 8,855,840.44
 
February 2038
LTP
 
Variable
 
$ 100.00
 
February 2038
LTIO
 
Variable
 
(3)
 
February 2038
___________________
(1)
For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations.
(2)
Calculated in accordance with the definition of “Uncertificated REMIC 2 Pass-Through Rate” herein.
(3)
REMIC 2 Regular Interest LTIO will not have an Uncertificated Principal Balance, but will accrue interest on its Uncertificated Notional Amount.


 
REMIC 3
 
As provided herein, the Trustee shall make an election to treat the segregated pool of assets consisting of the REMIC 2 Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC 3.” The Class R-3 Interest represents the sole class of “residual interests” in REMIC 3 for purposes of the REMIC Provisions.
 
The following table sets forth (or describes) the designation, Pass-Through Rate, Original Class Certificate Principal Balance, and for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each Class of Certificates that represents one or more of the “regular interests” in REMIC 3 created hereunder:
 
Designation
 
Pass-Through
Rate
 
Original Class
Certificate Principal
Balance
 
Assumed Final
Maturity Date(1)
 
Class I-A-1
   
Variable(2)
 
$
304,935,000
   
February 2038
 
Class II-A-1
   
Variable(2)
 
$
193,379,000
   
February 2038
 
Class II-A-2
   
Variable(2)
 
$
105,220,000
   
February 2038
 
Class II-A-3
   
Variable(2)
 
$
41,559,000
   
February 2038
 
Class II-A-4
   
Variable(2)
 
$
57,814,000
   
February 2038
 
Class C Interest
   
Variable(3)
 
$
91,338,521.78
   
February 2038
 
Class P Interest
   
N/A(4)
 
$
100.00
   
February 2038
 
Class SWAP-IO Interest
   
N/A(5)
 
 
N/A(5)
 
 
February 2038
 
__________________
(1)
For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations.
(2)
Calculated in accordance with the definition of “Pass-Through Rate” herein.
(3)
The Class C Interest will accrue interest at its variable Pass-Through Rate on the Notional Amount of the Class C Interest outstanding from time to time which shall equal the aggregate of the Uncertificated Principal Balances of the REMIC 2 Regular Interests (other than REMIC 2 Regular Interest LTP). The Class C Interest will not accrue interest on its Class Certificate Principal Balance.
(4)
The Class P Interest will not accrue interest.
(5)
The Class SWAP-IO Interest will not have a Pass-Through Rate or a Certificate Principal Balance, but will be entitled to 100% of amounts distributed on REMIC 2 Regular Interest LTIO.


 
REMIC 4
 
As provided herein, the Trustee shall make an election to treat the segregated pool of assets consisting of the Class C Interest as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC 4.” The Class R-4 Interest represents the sole class of “residual interests” in REMIC 4 for purposes of the REMIC Provisions under federal income tax law.
 
The following table sets forth (or describes) the designation, Pass-Through Rate, Original Class Certificate Principal Balance, and for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each Class of Certificates that represents one or more of the “regular interests” in REMIC 4 created hereunder:

Designation
 
Pass-Through
Rate
 
Original Class
Certificate Principal
Balance
 
Assumed Final
Maturity Date(1)
Class C
 
Variable(2)
 
$91,338,521.78
 
February 2038
__________________
(1)
For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations.
(2)
The Class C Certificates will receive 100% of amounts received in respect of the Class C Interest.


 
REMIC 5
 
As provided herein, the Trustee shall make an election to treat the segregated pool of assets consisting of the Class P Interest as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC 5.” The Class R-5 Interest represents the sole class of “residual interests” in REMIC 5 for purposes of the REMIC Provisions under federal income tax law.
 
The following table sets forth (or describes) the designation, Pass-Through Rate, Original Class Certificate Principal Balance, and for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each Class of Certificates that represents one or more of the “regular interests” in REMIC 5 created hereunder:
 
Designation
 
Pass-Through
Rate
 
Original Class
Certificate Principal
Balance
 
Latest Possible
Maturity Date (1)
Class P
 
Variable(2)
 
$100.00
 
February 2038
__________________
(1)
For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations.
(2)
The Class P Certificates will receive 100% of amounts received in respect of the Class P Interest.


 
REMIC 6
 
As provided herein, the Trustee shall make an election to treat the segregated pool of assets consisting of the Class SWAP-IO Interest as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC 6.” The Class R-6 Interest represents the sole class of “residual interests” in REMIC 6 for purposes of the REMIC Provisions under federal income tax law.
 
The following table sets forth (or describes) the designation, Pass-Through Rate, Original Class Certificate Principal Balance, and for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each Class of Certificates that represents one or more of the “regular interests” in REMIC 6 created hereunder, which will be uncertificated:

Designation
Pass-Through
Rate
Original Class
Certificate Principal
Balance
Latest Possible
Maturity Date (1)
SWAP-IO
Variable(2)
N/A
February 2038
__________________
(1)
For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations.
(2)
REMIC 6 Regular Interest SWAP-IO will receive 100% of amounts received in respect of the Class SWAP-IO Interest.


ARTICLE I
 
DEFINITIONS
 
SECTION 1.01.
Defined Terms.
 
Whenever used in this Agreement or in the Preliminary Statement, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article. Unless otherwise specified, all calculations in respect of interest on the Class C Certificates and all other calculations of interest described herein shall be made on the basis of a 360-day year consisting of twelve 30-day months and all calculations in respect of interest on the Class A Certificates shall be made on the basis of the actual number of days elapsed in the applicable Accrual Period and a 360-day year. The Class P Certificates and the Residual Certificates are not entitled to distributions in respect of interest and, accordingly, will not accrue interest.
 
“1933 Act”: The Securities Act of 1933, as amended.
 
“Accepted Master Servicing Practices”: With respect to any Mortgage Loan, as applicable, either (x) those customary mortgage loan master servicing practices of prudent mortgage servicing institutions that master service mortgage loans of the same type and quality as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, to the extent applicable to the Master Servicer (except in its capacity as successor to the Servicer), or (y) as provided in Section 12.01 hereof, but in no event below the standard set forth in clause (x).
 
“Account”: Any of the Collection Account, the Distribution Account, the Insurance Account, the Net WAC Rate Carryover Reserve Account, the Swap Account or the Swap Collateral Account.
 
“Accrual Period”: With respect to the Class C Certificates and each Distribution Date, the calendar month prior to the month of such Distribution Date. With respect to the Class A Certificates and each Distribution Date, the period commencing on the preceding Distribution Date (or in the case of the first such Accrual Period, commencing on the Closing Date) and ending on the day preceding the current Distribution Date.
 
“Additional Disclosure”: As defined in Section 3.25(a)(iv).
 
“Additional Form 10-D Disclosure”: As defined in Section 3.25(a)(i).
 
“Additional Form 10-K Disclosure”: As defined in Section 3.25(a)(iii).
 
“Adjustable-Rate Mortgage Loan”: A Mortgage Loan which provides at any period during the life of such loan for the adjustment of the Mortgage Rate payable in respect thereto. The Adjustable-Rate Mortgage Loans are identified as such on the Mortgage Loan Schedule.
 
“Adjustment Date”: With respect to each Adjustable-Rate Mortgage Loan, each adjustment date, on which the Mortgage Rate of such Mortgage Loan changes pursuant to the related Mortgage Note. The first Adjustment Date following the Cut-off Date as to each Adjustable-Rate Mortgage Loan is set forth in the Mortgage Loan Schedule.
 
 “Adjusted Net Maximum Mortgage Rate” With respect to any Distribution Date and any Mortgage Loan, a per annum rate equal to the applicable Maximum Mortgage Rate for such Mortgage Loan as of the first day of the month preceding the month in which the Distribution Date occurs (or the Cut-off Date with respect to the first Distribution Date) minus the sum of (i) the Servicing Fee Rate, (ii) the Administration Fee Rate and (iii) the Credit Risk Manager Fee Rate.
 
“Adjusted Net Mortgage Rate”: With respect to any Distribution Date and any Mortgage Loan (or the related REO Property) in the Trust Fund as of the close of business on the last day of the preceding prepayment period, a per annum rate of interest equal to the applicable Mortgage Rate for such Mortgage Loan as of the first day of the month preceding the month in which such Distribution Date occurs (or the Cut-off Date with respect to the first Distribution Date) minus the sum of (i) the Servicing Fee Rate, (ii) the Administration Fee Rate and (iii) the Credit Risk Manager Fee Rate.
 
“Administration Fee”: The amount payable to the Trust Administrator and the Master Servicer on each Distribution Date pursuant to Sections 8.05 and 12.09 as compensation for all services rendered by the Trust Administrator and the Master Servicer in the execution and administration of the trust created hereby and in the exercise and performance of any of the powers and duties of the Trust Administrator and the Master Servicer hereunder, which amount, with respect to the Mortgage Loans and REO Properties and for any calendar month, shall be equal to one-twelfth of the Administration Fee Rate (without regard to the words “per annum” in the definition thereof) multiplied by the Stated Principal Balance of the Mortgage Loans as of the first day of the related Due Period.
 
“Administration Fee Rate”: 0.0100% per annum.
 
“Advance”: As to any Mortgage Loan or REO Property, any advance made by the Servicer in respect of any Distribution Date pursuant to Section 4.04 or by the Master Servicer (in its capacity as successor servicer) or any other Servicer pursuant to Section 4.04.
 
“Advancing Facility”: As defined in Section 3.29 hereof.
 
“Advancing Person”: As defined in Section 3.29 hereof.
 
“Advance Reimbursement Amounts”: As defined in Section 3.29 hereof.
 
“Adverse REMIC Event”: As defined in Section 9.01(f) hereof.
 
“Affiliate”: With respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, “control” means the power to direct the management and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative to the foregoing.
 
“Agreement”: This Pooling and Servicing Agreement and all amendments hereof and supplements hereto.
 
“Assignment”: An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form (excepting therefrom, if applicable, the mortgage recordation information which has not been required pursuant to Section 2.01 hereof or returned by the applicable recorder’s office and if the assignment has been delivered in blank, the name of the Assignee), which is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect or record the sale of the Mortgage.
 
“Available Funds”: With respect to any Distribution Date, an amount equal to the excess of (i) the sum of (a) the aggregate of the related Monthly Payments received on or prior to the related Determination Date, including any Subsequent Recoveries, (b) Liquidation Proceeds, Insurance Proceeds, Principal Prepayments and other unscheduled recoveries of principal and interest in respect of the Mortgage Loans received during the related Prepayment Period, (c) the aggregate of any amounts received in respect of a related REO Property withdrawn from any REO Account and deposited in the Collection Account for such Distribution Date, (d) the aggregate of any amounts deposited in the Collection Account by the Servicer in respect of related Prepayment Interest Shortfalls for such Distribution Date, (e) the aggregate of any Advances made by the Servicer for such Distribution Date, (f) the aggregate of any related advances made by the Master Servicer as successor servicer for such Distribution Date pursuant to Section 7.02, (g) [reserved] (h) [reserved], (i) [reserved] and (j) the amount of any Prepayment Charges collected by the Servicer in connection with the full or partial prepayment of any of the Mortgage Loans and any Servicer Prepayment Charge Payment Amount over (ii) the sum of (a) amounts reimbursable or payable to the Servicer pursuant to Sections 3.11(ii) (iii), (iv), (vi) and (ix), amounts payable to the Credit Risk Manager pursuant to Section 4.01, amounts reimbursable or payable to the Master Servicer pursuant to Sections 12.09 and 12.12 and amounts reimbursable or payable to the Trust Administrator pursuant to Sections 3.11(i) and (ix), amounts deposited in the Collection Account or the Distribution Account pursuant to clauses (a) through (j) above, as the case may be, in error, (c) the amount of any Prepayment Charges collected by the Servicer in connection with the full or partial prepayment of any of the Mortgage Loans and any Servicer Prepayment Charge Payment Amount, (d) the Administration Fee payable from the Distribution Account pursuant to Section 8.05, (e) any Net Swap Payment or Swap Termination Payment owed to the Swap Provider but excluding any Swap Termination Payment owed to the Swap Provider resulting from a Swap Provider Trigger Event (after taking into account any upfront payment received from the counterparty to a replacement swap agreement), (f) [reserved], and (g) any indemnification payments or expense reimbursements made by the Trust Fund pursuant to Section 8.05 and without duplication, any amounts in respect of the items set forth in clauses (i)(a) and (i)(b) permitted hereunder to be retained by the Master Servicer to be withdrawn by the Master Servicer from the Distribution Account pursuant to Section 12.12.
 
“Avoided Payment”: With respect to the Class A Certificates, any payment of principal or interest previously distributed to a holder of a Class A Certificate by or on behalf of the Trust formed pursuant to the Agreement that is voided as a result of any Insolvency Proceeding (as defined in the Policy) and which is returned by a holder of Class A Certificates as required by a final, nonappealable order of a court of competent jurisdiction.
 
“Back-Up Certification”: As defined in Section 3.25(a)(ii).
 
“Balloon Mortgage Loan”: A Mortgage Loan that provides for the payment of the unamortized Stated Principal Balance of such Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is substantially greater than the preceding monthly payment.
 
“Balloon Payment”: A payment of the unamortized Stated Principal Balance of a Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is substantially greater than the preceding Monthly Payment.
 
“Bankruptcy Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended.
 
“Book-Entry Certificates”: Any of the Certificates that shall be registered in the name of the Depository or its nominee, the ownership of which is reflected on the books of the Depository or on the books of a Person maintaining an account with the Depository (directly, as a “Depository Participant”, or indirectly, as an indirect participant in accordance with the rules of the Depository and as described in Section 5.02 hereof). On the Closing Date, the Class A Certificates shall be Book-Entry Certificates.
 
“Business Day”: Any day other than a Saturday, a Sunday or a day on which the Certificate Insurer or banking or savings institutions in the State of Delaware, the State of New York, the State of Maryland, the State of California, the State of Minnesota, the Commonwealth of Pennsylvania, the State of Florida or any city in which the Corporate Trust Office of the Trustee or the Corporate Trust Office of the Trust Administrator is located are authorized or obligated by law or executive order to be closed.
 
“Certificate”: Any Regular Certificate or Residual Certificate.
 
“Certificateholder”: The Person in whose name a Certificate is registered in the Certificate Register, except that a Disqualified Organization or non-U.S. Person shall not be a Holder of a Residual Certificate for any purpose hereof and, solely for the purposes of giving any consent pursuant to this Agreement, any Certificate registered in the name of the Depositor, the Servicer or the Master Servicer or any Affiliate thereof shall be deemed not to be outstanding and the Voting Rights to which it is entitled shall not be taken into account in determining whether the requisite percentage of Voting Rights necessary to effect any such consent has been obtained, except as otherwise provided in Section 11.01. The Trust Administrator, the Trustee and the Certificate Insurer may conclusively rely upon a certificate of the Depositor, the Servicer or the Master Servicer in determining whether a Certificate is held by an Affiliate thereof. All references herein to “Certificateholders” shall reflect the rights of Certificate Owners as they may indirectly exercise such rights through the Depository and participating members thereof, except as otherwise specified herein; provided, however, that the Trust Administrator and the Trustee shall be required to recognize as a “Certificateholder” only the Person in whose name a Certificate is registered in the Certificate Register.
 
“Certificate Insurer”: XL Capital Assurance Inc., a monoline financial guaranty insurance company incorporated under the laws of the State of New York.
 
“Certificate Insurer Default”: The failure by the Certificate Insurer to make a payment required under the Policy in accordance with its terms.
 
“Certificate Insurer Premium Rate”: 0.2000% per annum.
 
“Certificate Margin”: With respect to each Class of Class A Certificates and for purposes of the Marker Rate and the Maximum LTZZ Uncertificated Interest Deferral Amount, the specified REMIC 2 Regular Interest, as follows:
 
         Certificate Margin
 Class    REMIC 2 Regular Interest    (1) (%)    (2) (%)
I-A-1
 
LTIIIA1
 
0.250%
 
0.500%
II-A-1
 
LTIIIA1
 
0.120%
 
0.240%
II-A-2
 
LTIIIA1
 
0.250%
 
0.500%
II-A-3
 
LTIIIA1
 
0.300%
 
0.600%
II-A-4
 
LTIIIA1
 
0.400%
 
0.800%
             
__________
 
(1)
For the Accrual Period for each Distribution Date on or prior to the Optional Termination Date.
 
(2)
For each other Accrual Period.

“Certificate Owner”: With respect to each Book-Entry Certificate, any beneficial owner thereof.
 
“Certificate Principal Balance”: With respect to any Class of Regular Certificates (other than the Class C Certificates) immediately prior to any Distribution Date, will be equal to the Initial Certificate Principal Balance thereof reduced by the sum of all amounts actually distributed in respect of principal of such Class. With respect to the Class C Certificates as of any date of determination, an amount equal to the excess, if any, of (A) the then aggregate Uncertificated Principal Balance of the REMIC 3 Regular Interests over (B) the then aggregate Certificate Principal Balances of the Class A Certificates and the Class P Certificates then outstanding.
 
“Certificate Register” and “Certificate Registrar”: The register maintained and registrar appointed pursuant to Section 5.02 hereof.
 
“Certification Parties”: As defined in Section 3.25(a)(ii).
 
“Certifying Person”: As defined in Section 3.25 (a)(ii).
 
“Class”: Collectively, Certificates which have the same priority of payment and bear the same class designation and the form of which is identical except for variation in the Percentage Interest evidenced thereby.
 
“Class A Certificateholder”: Any Holder of a Class A Certificate.
 
“Class A Certificates”: Any Class I-A-1 Certificate, Class II-A-1 Certificate, Class II-A-2 Certificate, Class II-A-3 Certificate or Class II-A-4 Certificate.
 
“Class A Principal Distribution Amount”: With respect to any Distribution Date, the sum of (i) the Group I Senior Principal Distribution Amount and (ii) the Group II Senior Principal Distribution Amount.
 
“Class I-A-1 Certificate”: Any one of the Class I-A-1 Certificates executed by the Trust Administrator, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-1, representing (i) a Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class II-A-1 Certificate”: Any one of the Class II-A-1 Certificates executed by the Trust Administrator, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-2, representing (i) a Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class II-A-2 Certificate”: Any one of the Class II-A-2 Certificates executed by the Trust Administrator, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-3, representing (i) a Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class II-A-3 Certificate”: Any one of the Class II-A-3 Certificates executed by the Trust Administrator, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-4, representing (i) a Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class II-A-4 Certificate”: Any one of the Class II-A-4 Certificates executed by the Trust Administrator, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-5, representing (i) a Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class C Certificate”: Any one of the Class C Certificates executed by the Trust Administrator, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-6, representing (i) a Regular Interest in REMIC 4, (ii) beneficial ownership of the Net WAC Rate Carryover Reserve Account and (iii) beneficial ownership of the Supplemental Interest Trust.
 
“Class C Interest”: An uncertificated interest in the Trust held by the Trustee on behalf of the Holders of the Class C Certificates, evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
 
“Class IO Distribution Amount”: As defined in Section 4.08 hereof. For purposes of clarity, the Class IO Distribution Amount for any Distribution Date shall equal the amount payable to the Swap Administrator on such Distribution Date in excess of the amount payable on the Class Swap-IO Interest on such Distribution Date, all as further provided in Section 4.08 hereof.
 
“Class Swap-IO Interest”: An uncertificated interest in the Trust Fund evidencing a Regular Interest in REMIC 3.
 
“Class P Certificate”: Any one of the Class P Certificates executed by the Trust Administrator, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-7, representing the right to distributions as set forth herein and therein and evidencing a regular interest in REMIC 5.
 
“Class P Interest”: An uncertificated interest in the Trust Fund held by the Trustee on behalf of the Holders of the Class P Certificates, evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
 
“Class R Certificate”: The Class R Certificate executed by the Trust Administrator, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-8 and evidencing the ownership of the Class R-1 Interest, the Class R-2 Interest and the Class R-3 Interest.
 
“Class R-X Certificate”: The Class R-X Certificate executed by the Trust Administrator, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-9 and evidencing the ownership of the Class R-4 Interest, the Class R-5 Interest and the Class R-6 Interest.
 
“Class R-1 Interest”: The uncertificated Residual Interest in REMIC 1.
 
“Class R-2 Interest”: The uncertificated Residual Interest in REMIC 2.
 
“Class R-3 Interest”: The uncertificated Residual Interest in REMIC 3.
 
“Class R-4 Interest”: The uncertificated Residual Interest in REMIC 4.
 
“Class R-5 Interest”: The uncertificated Residual Interest in REMIC 5.
 
“Class R-6 Interest”: The uncertificated Residual Interest in REMIC 6.
 
“Close of Business”: As used herein, with respect to any Business Day, 5:00 p.m. (New York time).
 
“Closing Date”: April 26, 2007.
 
“Code”: The Internal Revenue Code of 1986, as amended.
 
“Collection Account”: The segregated account or accounts created and maintained by the Servicer pursuant to Section 3.10(a), which shall be entitled “Wells Fargo Bank, N.A., as Trust Administrator, in trust for registered Holders of Option One Mortgage Loan Trust 2007-HL1, Asset-Backed Certificates, Series 2007-HL1,” and which must be an Eligible Account.
 
“Commission”: The U.S. Securities and Exchange Commission.
 
“Compensating Interest”: As defined in Section 3.24 hereof.
 
“Convertible Mortgage Loan”: Any Adjustable-Rate Mortgage Loan which allows the Mortgagor thereunder to convert the Mortgage Rate thereon to a fixed Mortgage Rate.
 
“Corporate Trust Office”: The principal corporate trust office of the Trustee or the Trust Administrator, as the case may be, at which at any particular time its corporate trust business in connection with this Agreement shall be administered, which office at the date of the execution of this instrument is located at (i) with respect to the Trustee, HSBC Bank USA, National Association, 452 Fifth Avenue, New York, NY 10018, Attention: Option One Series 2007-HL1, or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Servicer, the Certificate Insurer, the Master Servicer, the Originator, and the Trust Administrator, or (ii) with respect to the Trust Administrator, (A) for Certificate transfer and surrender purposes, Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Client Manager, Option One 2007-HL1 and (B) for all other purposes, Wells Fargo Bank, N.A., 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Corporate Trust Services—Option One 2007-HL1, or in each case, at such other address as the Trust Administrator may designate from time to time by notice to the Certificateholders, the Depositor, the Servicer, the Certificate Insurer, the Master Servicer, the Originator and the Trustee.
 
“Corresponding Certificate”: With respect to each REMIC 2 Regular Interest set forth below, the corresponding Regular Certificate set forth in the table below:
 

REMIC 2 Regular Interest
 
Regular Certificate
LTIA1
 
Class I-A-1
LTIIA1
 
Class II-A-1
LTIIA2
 
Class II-A-2
LTIIA3
 
Class II-A-3
LTIIA4
 
Class II-A-4
LTP
 
Class P

“Covered Mortgage Loan”: A Mortgage Loan covered by the Pool Policy.
 
“Credit Risk Management Agreement”: The Loan Performance Monitoring Agreement, dated April 26 2007, between the Servicer and the Credit Risk Manager.
 
“Credit Risk Manager”: OfficeTiger Global Real Estate Services, Inc.
 
“Credit Risk Manager Fee”: For any Distribution Date, the premium payable to the Credit Risk Manager at the Credit Risk Manager Fee Rate on the aggregate stated Principal Balance of the Mortgage Loans as of the first day of the related Due Period.
 
“Credit Risk Manager Fee Rate”: 0.0150% per annum.
 
“Cumulative Loss Servicer Termination Trigger”: For any Distribution Date, the aggregate amount of Realized Losses incurred since the Cut-off Date through the last day of the related Due Period (after reduction for all Subsequent Recoveries received from the Cut-off Date through the Prepayment Period) divided by the aggregate principal balance of the Mortgage Loans as of the Cut-off Date exceeds the applicable percentages set forth below with respect to such Distribution Date:
 
Distribution Date Occurring In
 
Percentage
May 2010 - April 2011
 
4.75% for the first month, plus 1/12 of 5.00% thereafter
May 2011 - April 2012
 
9.75% for the first month, plus 1/12 of 2.750% thereafter
May 2012 - April 2013
 
12.50% for the first month, plus 1/12 of 1.50% thereafter
May 2013 and thereafter
 
14.00%

 
“Custodian”: Wells Fargo Bank, N.A., as custodian of the Mortgage Files, and any successor thereto.
 
“Cut-off Date”: With respect to any Mortgage Loan, April 1, 2007. With respect to all Qualified Substitute Mortgage Loans, their respective dates of substitution. References herein to the “Cut-off Date,” when used with respect to more than one Mortgage Loan, shall be to the respective Cut-off Dates for such Mortgage Loans.
 
“Cut-off Date Principal Balance”: With respect to any Mortgage Loan, the unpaid principal balance thereof as of the Cut-off Date as applicable (or as of the applicable date of substitution with respect to a Qualified Substitute Mortgage Loan), after application of scheduled payments due thereon, whether or not received.
 
“Debt Service Reduction”: With respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction resulting from a Deficient Valuation.
 
“Default”: As defined in the Pool Policy.
 
“Deficiency Amount”: Has the meaning given to such term in the Policy.
 
“Deficient Valuation”: With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding principal balance of the Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.
 
“Definitive Certificates”: As defined in Section 5.02(c) hereof.
 
“Deleted Mortgage Loan”: A Mortgage Loan replaced or to be replaced by one or more Qualified Substitute Mortgage Loans.
 
“Delinquency Percentage”: For any Distribution Date, the percentage obtained by dividing (x) the aggregate Stated Principal Balance of Mortgage Loans (not including any Liquidated Mortgage Loan as of the end of the related Prepayment Period) Delinquent 60 days or more (including Mortgage Loans that are REO Properties, in foreclosure or in bankruptcy and that are also Delinquent 60 days or more) by (y) the aggregate Stated Principal Balance of the Mortgage Loans (not including any Liquidated Mortgage Loan as of the end of the related Prepayment Period), in each case, as of the last day of the previous calendar month.
 
“Delinquency Servicer Termination Trigger”: A Delinquency Servicer Termination Trigger will have occurred with respect to the Certificates on a Distribution Date if the Three Month Rolling Delinquency Percentage for the Mortgage Loans exceeds 30.00%.
 
“Delinquent”: Any Mortgage Loan, the Monthly Payment due on a Due Date which is not made by the Close of Business on the next scheduled Due Date for such Mortgage Loan. For example, a Mortgage Loan is 60 or more days Delinquent if the Monthly Payment due on a Due Date is not made by the Close of Business on the second scheduled Due Date after such Due Date.
 
“Depositor”: Option One Mortgage Acceptance Corporation, a Delaware corporation, or any successor in interest.
 
“Depository”: The initial Depository shall be The Depository Trust Company and upon request, Clearstream Banking Luxembourg and the Euroclear System, whose nominee is Cede & Co., or any other organization registered as a “clearing agency” pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The Depository shall initially be the registered Holder of the Book-Entry Certificates. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(3) of the Uniform Commercial Code of the State of New York.
 
“Depository Participant”: A broker, dealer, bank or other financial institution or other person for whom from time to time a Depository effects book-entry transfers and pledges of securities deposited with the Depository.
 
“Determination Date”: With respect to any Distribution Date, the 15th day of the calendar month in which such Distribution Date occurs or, if such 15th day is not a Business Day, the Business Day immediately preceding such 15th day.
 
“Directly Operate”: With respect to any REO Property, the furnishing or rendering of services to the tenants thereof, the management or operation of such REO Property, the holding of such REO Property primarily for sale to customers, the performance of any construction work thereon or any use of such REO Property in a trade or business conducted by the REMIC other than through an Independent Contractor; provided, however, that the Trustee (or the Servicer or the Master Servicer on behalf of the Trustee) shall not be considered to Directly Operate an REO Property solely because the Trustee (or the Servicer or the Master Servicer on behalf of the Trustee) establishes rental terms, chooses tenants, enters into or renews leases, deals with taxes and insurance, or makes decisions as to repairs or capital expenditures with respect to such REO Property.
 
“Disqualified Organization”: A “disqualified organization” under Section 860E of the Code, which as of the Closing Date is any of: (i) the United States, any state or political subdivision thereof, any foreign government, any international organization, or any agency or instrumentality of any of the foregoing, (ii) any organization (other than certain farmers cooperatives described in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code unless such organization is subject to the tax imposed by Section 511 of the Code, (iii) any organization described in Section 1381(a)(2)(C) of the Code, (iv) an “electing large partnership” within the meaning of Section 775 of the Code or (v) any other Person so designated by the Trust Administrator based upon an Opinion of Counsel provided by nationally recognized counsel to the Trust Administrator that the holding of an ownership interest in a Residual Certificate by such Person may cause any REMIC formed hereunder or any Person having an ownership interest in any Class of Certificates (other than such Person) to incur liability for any federal tax imposed under the Code that would not otherwise be imposed but for the transfer of an ownership interest in the Residual Certificate to such Person. A corporation will not be treated as an instrumentality of the United States or of any state or political subdivision thereof, if all of its activities are subject to tax and, a majority of its board of directors is not selected by a governmental unit. The terms “United States,” “state” and “international organizations” shall have the meanings set forth in Section 7701 of the Code.
 
“Distribution Account”: The segregated trust account or accounts created and maintained by the Trust Administrator pursuant to Section 3.10(b) which shall be entitled “Distribution Account, Wells Fargo Bank, N.A., as Trust Administrator on behalf of the Trustee, in trust for the registered Certificateholders of Option One Mortgage Loan Trust 2007-HL1, Asset-Backed Certificates, Series 2007-HL1” and which must be an Eligible Account.
 
“Distribution Date”: The 25th day of any calendar month, or if such 25th day is not a Business Day, the Business Day immediately following such 25th day, commencing in May 2007.
 
“Due Date”: With respect to each Mortgage Loan and any Distribution Date, the first day of the calendar month in which such Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was due (or, in the case of any Mortgage Loan under the terms of which the Monthly Payment for such Mortgage Loan was due on a day other than the first day of the calendar month in which such Distribution Date occurs, the day during the related Due Period on which such Monthly Payment was due), exclusive of any days of grace.
 
“Due Period”: With respect to any Distribution Date, the period commencing on the second day of the month preceding the month in which such Distribution Date occurs and ending on the first day of the month in which such Distribution Date occurs.
 
“Eligible Account”: Any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are rated P-1 by Moody’s, F-1 by Fitch and A-1+ by S&P (or comparable ratings if Moody’s, Fitch and S&P are not the Rating Agencies) at the time any amounts are held on deposit therein, (ii) an account or accounts the deposits in which are fully insured by the FDIC (to the limits established by such corporation), the uninsured deposits in which account are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Certificate Insurer, the Trustee, the Trust Administrator and to each Rating Agency, the Certificateholders will have a claim with respect to the funds in such account or a perfected first priority security interest against such collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution with which such account is maintained, (iii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution, national banking association or trust company acting in its fiduciary capacity, or (iv) an account otherwise (A) acceptable to each Rating Agency without reduction or withdrawal of their then current ratings of the Certificates (without regard to the Policy) as evidenced by a letter from each Rating Agency to the Trust Administrator, the Trustee and the Certificate Insurer and (B) acceptable to the Certificate Insurer. Eligible Accounts may bear interest.
 
“ERISA”: The Employee Retirement Income Security Act of 1974, as amended.
 
“Escrow Payments”: The amounts constituting ground rents, taxes, assessments, water rates, fire and hazard insurance premiums and other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to any Mortgage Loan.
 
“Estate in Real Property”: A fee simple estate in a parcel of real property.
 
“Estimated Swap Termination Payment”: As defined in the Interest Rate Swap Agreement.
 
“Excess Overcollateralized Amount”: With respect to the Class A Certificates and any Distribution Date, the excess, if any, of (i) the Overcollateralized Amount for such Distribution Date, assuming that 100% of the Principal Remittance Amount is applied as a principal payment on such Distribution Date over (ii) the Overcollateralization Target Amount for such Distribution Date.
 
“Exchange Act”: The Securities Exchange Act of 1934, as amended.
 
“Extra Principal Distribution Amount”: With respect to any Distribution Date, the lesser of (x) the Monthly Interest Distributable Amount payable on the Class C Certificates on such Distribution Date as reduced by Realized Losses allocated thereto with respect to such Distribution Date pursuant to Section 4.08 and (y) the Overcollateralization Deficiency Amount for such Distribution Date.
 
“Extraordinary Trust Fund Expense”: Any amounts reimbursable pursuant to Section 12.03 or Section 6.03, to the Master Servicer, Servicer, the Trustee or the Trust Administrator, or any director, officer, employee or agent of the Trustee or the Trust Administrator from the Trust Fund pursuant to Section 6.03, Section 8.05 or Section 10.01(c) and any amounts payable from the Distribution Account in respect of taxes pursuant to Section 10.01(g)(iii).
 
“Fannie Mae”: Federal National Mortgage Association or any successor thereto.
 
“FDIC”: Federal Deposit Insurance Corporation or any successor thereto.
 
“Fitch”: Fitch Ratings Inc., or its successor in interest.
 
“Final Recovery Determination”: With respect to any defaulted Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property purchased by the Originator or the Servicer pursuant to or as contemplated by Section 2.03 or 10.01), a determination made by the Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which the Servicer, in its reasonable good faith judgment, expects to be finally recoverable in respect thereof have been so recovered. The Servicer shall maintain records, prepared by a Servicing Officer, of each Final Recovery Determination made thereby. For the avoidance of doubt, the Final Recovery Determination shall be deemed made by the Servicer upon the sale of any REO Property.
 
“Fixed Swap Payment”: With respect to any Distribution Date, the amount calculated based on a fixed rate as set forth in the Interest Rate Swap Agreement.
 
“Floating Swap Payment”: With respect to any Distribution Date, a floating amount equal to the product of (i) Swap LIBOR, (ii) the related Notional Amount (as defined in the Interest Rate Swap Agreement), (iii) 250 and (iv) a fraction, the numerator of which is the actual number of days elapsed from and including the previous Floating Rate Payer Period End Date (as defined in the Interest Rate Swap Agreement) to but excluding the current Floating Rate Payer Period End Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Floating Rate Payer Period End Date), and the denominator of which is 360.
 
“Form 8-K Disclosure Information”: As defined in Section 3.25(a)(ii).
 
“Formula Rate”: For any Distribution Date and any Class of Class A Certificates, the lesser of (a) the sum of (i) LIBOR plus (ii) the related Certificate Margin and (b) the Maximum Cap Rate.
 
“Freddie Mac”: The Federal Home Loan Mortgage Corporation, or any successor thereto.
 
“Gross Margin”: With respect to each Adjustable-Rate Mortgage Loan, the fixed percentage set forth in the related Mortgage Note that is added to the Index on each Adjustment Date in accordance with the terms of the related Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
 
“Group I Allocation Percentage”: With respect to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is (i) the Group I Principal Remittance Amount for such Distribution Date, and the denominator of which is (ii) the Principal Remittance Amount for such Distribution Date.
 
“Group I Basic Principal Distribution Amount”: With respect to any Distribution Date, the excess of (i) the Group I Principal Remittance Amount for such Distribution Date over (ii) the Overcollateralization Release Amount, if any, for such Distribution Date multiplied by the Group I Allocation Percentage.
 
“Group I Certificates”: The Class I-A-1 Certificates.
 
“Group I Interest Remittance Amount”: With respect to any Distribution Date, that portion of the Available Funds for such Distribution Date attributable to interest received or advanced with respect to the Group I Mortgage Loans.
 
“Group I Mortgage Loan”: A Mortgage Loan assigned to Loan Group I. The aggregate principal balance of the Group I Mortgage Loans as of the Cut-off Date is equal to $344,560,379.72.
 
“Group I Overcollateralization Floor”: With respect to the Group I Certificates, $1,752,665.
 
“Group I Principal Distribution Amount”: With respect to any Distribution Date, that portion of the Available Funds equal to the sum of (i) the Group I Basic Principal Distribution Amount for such Distribution Date and (ii) the Extra Principal Distribution Amount for such Distribution Date multiplied by the Group I Allocation Percentage.
 
“Group I Principal Remittance Amount”: With respect to any Distribution Date, the sum of (i) each scheduled payment of principal collected or advanced on the Group I Mortgage Loans by the Servicer that were due during the related Due Period, (ii) the principal portion of all partial and full principal prepayments of the Group I Mortgage Loans received by the Servicer during the related Prepayment Period, (iii) the principal portion of all related Net Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds received during such Prepayment Period with respect to the Group I Mortgage Loans, (iv) that portion of the Purchase Price, representing principal of any repurchased Group I Mortgage Loan, deposited to the Collection Account during such Prepayment Period, (v) the principal portion of any related Substitution Adjustments deposited in the Collection Account during such Prepayment Period with respect to the Group I Mortgage Loans and (vi) on the Distribution Date on which the Trust Fund is to be terminated pursuant to Section 10.01, that portion of the Termination Price, in respect of principal on the Group I Mortgage.
 
“Group I Senior Principal Distribution Amount”: An amount, not less than zero, equal to the excess of (x) the aggregate Certificate Principal Balance of the Group I Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 72.00% and (ii) the aggregate Stated Principal Balance of the Group I Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Stated Principal Balance of the Group I Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Group I Overcollateralization Floor.
 
“Group II Allocation Percentage”: With respect to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is (i) the Group II Principal Remittance Amount for such Distribution Date, and the denominator of which is (ii) the Principal Remittance Amount for such Distribution Date.
 
“Group II Basic Principal Distribution Amount”: With respect to any Distribution Date, the excess of (i) the Group II Principal Remittance Amount for such Distribution Date over (ii) the Overcollateralization Release Amount, if any, for such Distribution Date multiplied by the Group II Allocation Percentage.
 
“Group II Certificates”: The Class II-A-1 Certificates, the Class II-A-2 Certificates, the Class II-A-3 Certificates and the Class II-A-4 Certificates.
 
“Group II Interest Remittance Amount”: With respect to any Distribution Date, that portion of the Available Funds for such Distribution Date attributable to interest received or advanced with respect to the Group II Mortgage Loans.
 
“Group II Mortgage Loan”: A Mortgage Loan assigned to Loan Group II. The aggregate principal balance of the Group II Mortgage Loans as of the Cut-off Date is equal to $449,685,242.06.
 
“Group II Overcollateralization Floor”: With respect to the Group II Certificates, $2,292,455.
 
“Group II Principal Distribution Amount”: With respect to any Distribution Date, that portion of the Available Funds equal to the sum of (i) the Group II Basic Principal Distribution Amount for such Distribution Date and (ii) the Extra Principal Distribution Amount for such Distribution Date multiplied by the Group II Allocation Percentage.
 
“Group II Principal Remittance Amount”: With respect to any Distribution Date, the sum of (i) each scheduled payment of principal collected or advanced on the Group II Mortgage Loans by the Servicer that were due during the related Due Period, (ii) the principal portion of all partial and full principal prepayments of the Group II Mortgage Loans received by the Servicer during the related Prepayment Period, (iii) the principal portion of all related Net Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds received during such Prepayment Period with respect to the Group II Mortgage Loans, (iv) that portion of the Purchase Price, representing principal of any repurchased Group II Mortgage Loan, deposited to the Collection Account during such Prepayment Period, (v) the principal portion of any related Substitution Adjustments deposited in the Collection Account during such Prepayment Period with respect to the Group II Mortgage Loans and (vi) on the Distribution Date on which the Trust Fund is to be terminated pursuant to Section 10.01, that portion of the Termination Price, in respect of principal on the Group II Mortgage Loans.
 
“Group II Senior Principal Distribution Amount”: An amount, not less than zero, equal to the excess of (x) the Certificate Principal Balance of the Group II Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 72.00% and (ii) the aggregate Stated Principal Balance of the Group II Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the positive difference, if any, of the aggregate Stated Principal Balance of the Group II Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus the Group II Overcollateralization Floor.
 
“Holder”: See “Certificateholder.”
 
“Indenture”: An indenture relating to the issuance of notes secured by the Class C Certificates, the Class P Certificates and/or Residual Certificates (or any portion thereof).
 
“Independent”: When used with respect to any specified Person, any such Person who (a) is in fact independent of the Depositor, the Servicer or the Master Servicer and their respective Affiliates, (b) does not have any direct financial interest in or any material indirect financial interest in the Depositor or the Servicer or any Affiliate thereof, and (c) is not connected with the Depositor or the Servicer or any Affiliate thereof as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions; provided, however, that a Person shall not fail to be Independent of the Depositor or the Servicer or any Affiliate thereof merely because such Person is the beneficial owner of 1% or less of any class of securities issued by the Depositor or the Servicer or any Affiliate thereof, as the case may be.
 
“Independent Contractor”: Either (i) any Person (other than the Servicer or the Master Servicer) that would be an “independent contractor” with respect to any of the REMICs created hereunder within the meaning of Section 856(d)(3) of the Code if such REMIC were a real estate investment trust (except that the ownership tests set forth in that section shall be considered to be met by any Person that owns, directly or indirectly, 35% or more of any Class of Certificates), so long as each such REMIC does not receive or derive any income from such Person and provided that the relationship between such Person and such REMIC is at arm’s length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the Servicer and the Master Servicer) if the Trust Administrator has received an Opinion of Counsel for the benefit of the Trustee and the Trust Administrator to the effect that the taking of any action in respect of any REO Property by such Person, subject to any conditions therein specified, that is otherwise herein contemplated to be taken by an Independent Contractor will not cause such REO Property to cease to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code (determined without regard to the exception applicable for purposes of Section 860D(a) of the Code), or cause any income realized in respect of such REO Property to fail to qualify as Rents from Real Property.
 
“Index”: With respect to each Adjustable-Rate Mortgage Loan and each related Adjustment Date, the index as specified in the related Mortgage Note.
 
“Initial Certificate Principal Balance”: With respect to any Regular Certificate, the amount designated “Initial Certificate Principal Balance” on the face thereof.
 
“Insurance Account”: The account or accounts created and maintained pursuant to Section 4.02.
 
“Insurance Agreement”: The insurance and indemnity agreement, dated as of April 26, 2007, among the Certificate Insurer, Option One Mortgage Corporation, the Depositor and the Trust Administrator.
 
“Insurance Proceeds”: Proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage Loan (including the Pool Policy), to the extent such proceeds are received by the Servicer and are not to be applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the procedures that the Servicer would follow in servicing mortgage loans held for its own account, subject to the terms and conditions of the related Mortgage Note and Mortgage.
 
“Insured Amount”: With respect to any Distribution Date, the Deficiency Amount for such Distribution Date.
 
“Insured Payments”: As defined in the Policy.
 
“Interest Determination Date”: With respect to the Class A Certificates and each related Accrual Period, the second LIBOR Business Day preceding the commencement of such Accrual Period.
 
“Interest Rate Swap Agreement”: The interest rate swap agreement, dated the Closing Date, between the Supplemental Interest Trust Trustee and the Swap Provider, including any schedule, confirmations, credit support annex or other credit support document relating thereto, and attached hereto as Exhibit I.
 
“Late Collections”: With respect to any Mortgage Loan, all amounts received subsequent to the Determination Date immediately following any related Due Period, whether as late payments of Monthly Payments or as Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries or otherwise, which represent late payments or collections of principal and/or interest due (without regard to any acceleration of payments under the related Mortgage and Mortgage Note) but delinquent on a contractual basis for such Due Period and not previously recovered.
 
“Latest Possible Maturity Date”: As to each Class of Certificates, the date set forth as such in the Preliminary Statement.
 
“Late Payment Rate”: With respect to the Policy, the lesser of (a) the greater of (i) the prime rate as published in the Wall Street Journal (or if no such rate is published thereby, in a publication selected by the Insurer) (any change in such rate of interest to be effective on the date such change is published) plus 2%, and (ii) the then applicable rate of interest on the Insured Certificates and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days for any Distribution Date.
 
“LIBOR”: With respect to each Accrual Period for the Class A Certificates, the rate determined by the Trust Administrator on the related Interest Determination Date on the basis of the London interbank offered rate for one-month United States dollar deposits, as such rate appears on the Reuters Screen LIBOR01 Page, as of 11:00 a.m. (London time) on such Interest Determination Date. If such rate does not appear on Reuters Screen LIBOR01 Page, the rate for such Interest Determination Date will be determined on the basis of the offered rates of the Reference Banks for one-month United States dollar deposits, as of 11:00 a.m. (London time) on such Interest Determination Date. The Trust Administrator will request the principal London office of each of the Reference Banks to provide a quotation of its rate. On such Interest Determination Date, LIBOR for the related Accrual Period for the Class A Certificates will be established by the Trust Administrator as follows:
 
(i) If on such Interest Determination Date two or more Reference Banks provide such offered quotations, LIBOR for the related Accrual Period shall be the arithmetic mean of such offered quotations (rounded upwards if necessary to the nearest whole multiple of 1/16 of 1%); and
 
(ii) If on such Interest Determination Date fewer than two Reference Banks provide such offered quotations, LIBOR for the related Accrual Period shall be the higher of (i) LIBOR as determined on the previous Interest Determination Date and (ii) the Reserve Interest Rate.
 
“LIBOR Business Day”: Any day on which banks in London, England and The City of New York are open and conducting transactions in foreign currency and exchange.
 
“Liquidated Mortgage Loan”: As to any Distribution Date, any Mortgage Loan in respect of which the Servicer has determined, in accordance with the servicing procedures specified herein, as of the end of the related Prepayment Period, that all Liquidation Proceeds which it expects to recover with respect to the liquidation of the Mortgage Loan or disposition of the related REO Property have been recovered.
 
“Liquidation Event”: With respect to any Mortgage Loan, any of the following events: (i) such Mortgage Loan is paid in full, (ii) a Final Recovery Determination is made as to such Mortgage Loan or (iii) such Mortgage Loan is removed from the Trust Fund by reason of its being purchased, sold or replaced pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to any REO Property, either of the following events: (i) a Final Recovery Determination is made as to such REO Property or (ii) such REO Property is removed from the Trust Fund by reason of its being sold or purchased pursuant to Section 3.23 or Section 10.01.
 
“Liquidation Proceeds”: The amount (other than amounts received in respect of the rental of any REO Property prior to REO Disposition) received by the Servicer in connection with (i) the taking of all or a part of a Mortgaged Property by exercise of the power of eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan by means of a trustee’s sale, foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03, Section 3.23 or Section 10.01.
 
“Loan-to-Value Ratio”: As of any date and as to any Mortgage Loan, the fraction, expressed as a percentage, the numerator of which is the Principal Balance of the Mortgage Loan and the denominator of which is the Value of the related Mortgaged Property.
 
“Loan Group”: Loan Group I or Loan Group II, as the context requires.
 
“Loan Group I”: The group of Mortgage Loans with original principal balances that conform to Freddie Mac guidelines identified in the Mortgage Loan Schedule as having been assigned to Loan Group I.
 
“Loan Group II”: The group of Mortgage Loans with original principal balances that may or may not conform to Freddie Mac guidelines identified in the Mortgage Loan Schedule as having been assigned to Loan Group II.
 
“Loss Mitigation Procedures”: The policies and procedures set forth in Exhibit G hereto relating to the realization on delinquent Mortgage Loans.
 
“Losses”: As defined in Section 9.03.
 
“Lost Note Affidavit”: With respect to any Mortgage Loan as to which the original Mortgage Note has been permanently lost, misplaced or destroyed and has not been replaced, an affidavit from the Originator certifying that the original Mortgage Note has been lost, misplaced or destroyed (together with a copy of the related Mortgage Note) and indemnifying the Trust against any loss, cost or liability resulting from the failure to deliver the original Mortgage Note in the form of Exhibit H hereto.
 
“Majority Certificateholders”: The Holders of Certificates evidencing at least 51% of the Voting Rights.
 
“Marker Rate”: With respect to the Class C Interest and any Distribution Date, a per annum rate equal to two (2) times the weighted average of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 2 Regular Interest LTIA1, REMIC 2 Regular Interest LTIIA1, REMIC 2 Regular Interest LTIIA2, REMIC 2 Regular Interest LTIIA3, REMIC 2 Regular Interest LTIIA4 and REMIC 2 Regular Interest LTZZ, with the rates on such REMIC 2 Regular Interests (other than REMIC 2 Regular Interest LTZZ) subject to a cap equal to lesser of (i) LIBOR plus the related Certificate Margin and (ii) the Net WAC Rate for the purpose of this calculation; and with the rate on REMIC 2 Regular Interest LTZZ subject to a cap of zero for the purpose of this calculation; provided, however, that for this purpose, calculations of the Uncertificated REMIC 2 Pass-Through Rate and the related caps with respect to each such REMIC 2 Regular Interest shall be multiplied by a fraction, the numerator of which is the actual number of days in the Accrual Period and the denominator of which is 30.
 
“Master Servicer”: As of the Closing Date, Wells Fargo Bank, N.A. and thereafter, its respective successors in interest who meet the qualifications of the Master Servicer under this Agreement or any successor appointed hereunder. The Master Servicer and the Trust Administrator shall at all times be the same Person.
 
“Master Servicer Event of Termination”: One or more of the events described in Section 7.01(c).
 
“Master Servicing Compensation”: The meaning specified in Section 12.09.
 
“Master Servicing Transfer Costs”: Shall mean all reasonable out-of-pocket costs and expenses incurred by the Trustee in connection with the transfer of master servicing from a predecessor master servicer, including, without limitation, any reasonable costs or expenses associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data as may be required by the Trustee (or other successor master servicer) to correct any errors or insufficiencies in the servicing data or otherwise to enable the Trustee (or other successor master servicer) to master service the Mortgage Loans properly and effectively.
 
“Maximum Cap Rate”: With respect to each Distribution Date and the Class A Certificates, a per annum rate (subject to adjustment based on the actual number of days elapsed in the related Accrual Period) equal to the weighted average of the Adjusted Net Maximum Mortgage Rates of the Mortgage Loans (weighted based on the principal balance of each Mortgage Loan) as of the first day of the related Due Period or, in the case of the first Distribution Date, the Cut-off Date, (adjusted, except in the case of the first Distribution Date, to reflect unscheduled principal payments made thereafter during the Prepayment Period that includes such first day of the related Due Period) minus (i) the Swap Expense Fee Rate and (ii) the Certificate Insurer Premium Rate multiplied by a fraction, the numerator of which is the aggregate Certificate Principal Balance of the Class A Certificates and the denominator of which is the aggregate Principal Balance of the Mortgage Loans as of the first day of the related Due Period or, in the case of the first Distribution Date, the Cut-off Date (adjusted, except in the case of the first Distribution Date, to reflect unscheduled principal payments made thereafter during the Prepayment Period that includes such first day of the related Due Period) plus (4) an amount, expressed as a per annum rate equal to the product of (x) the Net Swap Payment made by the Swap Provider on such Distribution Date divided by the aggregate outstanding Principal Balance of the Mortgage Loans as of the first day of the related Due Period or, in the case of the first Distribution Date, the Cut-off Date (adjusted, except in the case of the first Distribution Date, to reflect unscheduled principal payments made thereafter during the Prepayment Period that includes such first day of the related Due Period) and (y) 12. 
 
“Maximum LTZZ Uncertificated Accrued Interest Deferral Amount”: With respect to any Distribution Date, the excess of (i) accrued interest at the Uncertificated REMIC 2 Pass-Through Rate applicable to REMIC 2 Regular Interest LTZZ for such Distribution Date on a balance equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LTZZ minus the REMIC 2 Overcollateralization Amount, in each case for such Distribution Date, over (ii) Uncertificated Interest on REMIC 2 Regular Interest LTIA1, REMIC 2 Regular Interest LTIIA1, REMIC 2 Regular Interest LTIIA2, REMIC 2 Regular Interest LTIIA3 and REMIC 2 Regular Interest LTIIA4 for such Distribution Date, with the rate on each such REMIC 2 Regular Interest subject to a cap equal to the lesser of (i) LIBOR plus the related Certificate Margin and (ii) the related Net WAC Rate provided, however, that solely for this purpose, calculations of the Uncertificated REMIC 2 Pass-Through Rate and the related caps with respect to each such REMIC 2 Regular Interest shall be multiplied by a fraction, the numerator of which is the actual number of days in the Accrual Period and the denominator of which is 30.
 
“Maximum Mortgage Rate”: With respect to each Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the maximum Mortgage Rate thereunder.
 
“Minimum Mortgage Rate”: With respect to each Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the minimum Mortgage Rate thereunder.
 
“Monthly Interest Distributable Amount”: With respect to any Class of Class A Certificates, the Class C Certificates and any Distribution Date the amount of interest accrued during the related Accrual Period at the related Pass-Through Rate on the Certificate Principal Balance (or Notional Amount in the case of the Class C Certificates) of such Class immediately prior to such Distribution Date, reduced by any Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls as allocated to such Certificate as provided in Section 1.03 and based on its respective entitlements to interest irrespective of any Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution Date).
 
“Monthly Payment”: With respect to any Mortgage Loan, the scheduled monthly payment of principal and interest on such Mortgage Loan which is payable by the related Mortgagor from time to time under the related Mortgage Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction in the amount of interest collectible from the related Mortgagor pursuant to the Relief Act; (b) without giving effect to any extension granted or agreed to by the Servicer pursuant to Section 3.01; and (c) on the assumption that all other amounts, if any, due under such Mortgage Loan are paid when due.
 
“Monthly Statement”: As defined in Section 4.03(a) hereof.
 
“Moody’s”: Moody’s Investors Service, Inc. or its successor in interest.
 
“Mortgage”: The mortgage, deed of trust or other instrument creating a first lien on, or first priority security interest in, a Mortgaged Property securing a Mortgage Note.
 
“Mortgage File”: The mortgage documents listed in Section 2.01 pertaining to a particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to this Agreement.
 
“Mortgage Loan”: Each mortgage loan transferred and assigned to the Trustee pursuant to Section 2.01, Section 2.03(d) or Section 2.08 as from time to time held as a part of the Trust Fund, the Mortgage Loans so held being identified in the Mortgage Loan Schedule.
 
“Mortgage Loan Purchase Agreement”: The agreement among the Originator, the Sellers and the Depositor, regarding the transfer of the Mortgage Loans by the Sellers to or at the direction of the Depositor, substantially in the form attached hereto as Exhibit C.
 
“Mortgage Loan Schedule”: As of any date, the list of Mortgage Loans included in REMIC 2 on such date, separately identifying the Group I Mortgage Loans and the Group II Mortgage Loans, attached hereto as Exhibit D. The Mortgage Loan Schedule shall be prepared by the Originator and shall set forth the following information with respect to each Mortgage Loan, as applicable:
 
(1)
the Mortgage Loan identifying number;
 
(2)
[reserved];
 
(3)
the state and zip code of the Mortgaged Property;
 
 
(4)
a code indicating whether the Mortgaged Property was represented by the borrower, at the time of origination, as being owner-occupied;
 
(5)
the type of Residential Dwelling constituting the Mortgaged Property;
 
(6)
the original months to maturity;
 
 
(7)
the stated remaining months to maturity from the Cut-off Date based on the original amortization schedule;
 
(8)
the Loan-to-Value Ratio at origination;
 
 
(9)
the Mortgage Rate in effect immediately following the Cut-off Date;
 
 
(10)
the date on which the first Monthly Payment was due on the Mortgage Loan;
 
(11)
the stated maturity date;
 
(12)
the amount of the Monthly Payment at origination;
 
 
(13)
the amount of the Monthly Payment due on the first Due Date after the Cut-off Date;
 
 
(14)
the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance;
 
(15)
the original principal amount of the Mortgage Loan;
 
 
(16)
the Stated Principal Balance of the Mortgage Loan as of the Close of Business on the Cut-off Date;
 
 
(17)
a code indicating the purpose of the Mortgage Loan (i.e., purchase financing, rate/term refinancing, cash-out refinancing);
 
(18)
the Mortgage Rate at origination;
 
 
(19)
a code indicating the documentation program (i.e., full documentation, limited documentation, stated income documentation);
 
(20)
the risk grade;
 
(21)
the Value of the Mortgaged Property;
 
(22)
the sale price of the Mortgaged Property, if applicable;
 
 
(23)
the actual unpaid principal balance of the Mortgage Loan as of the Cut-off Date;
 
(24)
the type and term of the related Prepayment Charge;
 
(25)
the rounding code;
 
(26)
the program code;
 
(27)
a code indicating the lien priority for Mortgage Loans;
 
 
(28)
the credit score (“FICO”) of such Mortgage Loan;
 
 
(29)
with respect to each Adjustable-Rate Mortgage Loan, the Minimum Mortgage Rate;
 
 
(30)
with respect to each Adjustable-Rate Mortgage Loan, the Maximum Mortgage Rate;
 
(31)
with respect to each Adjustable-Rate Mortgage Loan, the Gross Margin;
 
 
(32)
with respect to each Adjustable-Rate Mortgage Loan, the next Adjustment Date;
 
 
(33)
with respect to each Adjustable-Rate Mortgage Loan, the Periodic Rate Cap;
 
(34)
the total amount of points and fees charged such Mortgage Loan; and
 
 
(35)
a code indicating that such Mortgage Loan a Covered Mortgage Loan.
 
The Mortgage Loan Schedule shall set forth the following information, with respect to the Mortgage Loans in the aggregate and for each Loan Group as of the Cut-off Date: (1) the number of Mortgage Loans (separately identifying the number of Fixed-Rate Mortgage Loans and the number of Adjustable-Rate Mortgage Loans); (2) the current Stated Principal Balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans and (4) the weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule shall be amended from time to time by the Originator in accordance with the provisions of this Agreement. With respect to any Qualified Substitute Mortgage Loan, the Cut-off Date shall refer to the related Cut-off Date for such Mortgage Loan, determined in accordance with the definition of Cut-off Date herein.
 
“Mortgage Note”: The original executed note or other evidence of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
 
“Mortgage Pool”: The pool of Mortgage Loans, identified on Exhibit D from time to time, and any REO Properties acquired in respect thereof.
 
“Mortgage Rate”: With respect to each Fixed Rate Mortgage Loan, the rate set forth in the related Mortgage Note. With respect to each Adjustable Rate 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, which rate (A) as of any date of determination until the first Adjustment Date following the Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any date of determination thereafter shall be the rate as adjusted on the most recent Adjustment Date, to equal the sum, rounded to the next highest or nearest 0.125% (as provided in the Mortgage Note), of the Index, determined as set forth in the related Mortgage Note, plus the related Gross Margin subject to the limitations set forth in the related Mortgage Note. With respect to each Mortgage Loan that becomes an REO Property, as of any date of determination, the annual rate determined in accordance with the immediately preceding sentence as of the date such Mortgage Loan became an REO Property.
 
“Mortgaged Property”: The underlying property securing a Mortgage Loan, including any REO Property, consisting of an Estate in Real Property improved by a Residential Dwelling.
 
“Mortgagor”: The obligor on a Mortgage Note.
 
“Net Liquidation Proceeds”: With respect to any Liquidated Mortgage Loan or any other disposition of related Mortgaged Property (including REO Property) the related Liquidation Proceeds and Insurance Proceeds net of Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid servicing fees received and retained in connection with the liquidation of such Mortgage Loan or Mortgaged Property.
 
“Net Monthly Excess Cashflow”: With respect to each Distribution Date, the sum of (a) any Overcollateralization Release Amount for such Distribution Date and (b) the excess of (x) Available Funds for such Distribution Date over (y) the sum for such Distribution Date of (A) the Monthly Interest Distributable Amounts for the Class A Certificates, (B) the Unpaid Interest Shortfall Amounts for the Class A Certificates, (C) the Principal Remittance Amount and (D) the premiums and reimbursements distributable to the Certificate Insurer.
 
“Net Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property), as of any date of determination, a per annum rate of interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus the Servicing Fee Rate.
 
“Net Swap Payment”: In the case of payments made by the Trust, the excess, if any, of (x) the Fixed Swap Payment over (y) the Floating Swap Payment, and in the case of payments made by the Swap Provider, the excess, if any, of (x) the Floating Swap Payment over (y) the Fixed Swap Payment. In each case, the Net Swap Payment shall not be less than zero.
 
“Net Prepayment Interest Shortfall”: With respect to any Distribution Date, the excess, if any, of any Prepayment Interest Shortfalls for such date over the related Compensating Interest.
 
“Net WAC Rate”: With respect to the Class A Certificates and any Distribution Date, a per annum rate (subject to adjustment based on the actual number of days elapsed in the related Accrual Period) equal to (1) the weighted average of the Adjusted Net Mortgage Rates of the Mortgage Loans (weighted based on the principal balance of each Mortgage Loan as of the first day of the related Due Period  or, in the case of the first Distribution Date, the Cut-off Date, adjusted, except in the case of the first Distribution Date, to reflect unscheduled principal payments made thereafter during the Prepayment Period that includes such first day of the related Due Period) minus the sum of (1) the Swap Expense Fee Rate and (2) the Certificate Insurer Premium Rate multiplied by a fraction, the numerator of which is the Certificate Principal Balance of the Offered Certificates and the denominator of which is the aggregate Principal Balance of the Mortgage Loans as of the first day of the related Due Period (after taking into account principal prepayments received during the related Prepayment Period that includes such first day). For federal income tax purposes, such rate shall be a rate per annum (adjusted for the actual number of days elapsed in the related Accrual Period) equal to the weighted average of the Uncertificated REMIC 2 Pass-Through Rate on the REMIC 2 Regular Interest LTIO, weighted on the basis of the Uncertificated Principal Balance of each such REMIC 2 Regular Interest.
 
“Net WAC Rate Carryover Amount”: With respect to any Class of Class A Certificates and any Distribution Date, the sum of (A) the positive excess of (i) the amount of interest that would have accrued on such Class of Certificates for such Distribution Date calculated at the related Pass-Through Rate had it not been limited by the Net WAC Rate over (ii) the amount of interest accrued on such Class of Certificates at the related Net WAC Rate for such Distribution Date and (B) the related Net WAC Rate Carryover Amount for the previous Distribution Date not previously paid, together with interest thereon at a rate equal to the related Pass-Through Rate without regard to the Net WAC Rate, in each case for such Distribution Date and for such related Accrual Period.
 
“Net WAC Rate Carryover Reserve Account”: The reserve account established and maintained pursuant to Section 4.05.
 
“New Lease”: Any lease of REO Property entered into on behalf of the Trust, including any lease renewed or extended on behalf of the Trust if the Trust has the right to renegotiate the terms of such lease.
 
“Nonrecoverable Advance”: Any Advance or Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Servicer or the Master Servicer, as applicable, will not be ultimately recoverable from Late Collections, Insurance Proceeds, Liquidation Proceeds or condemnation proceeds on such Mortgage Loan or REO Property as provided herein.
 
“Notional Amount”: Immediately prior to any Distribution Date, with respect to the Class C Interest, the aggregate of the Uncertificated Principal Balances of the REMIC 2 Regular Interests (other than REMIC 2 Regular Interest LTIO and REMIC 2 Regular Interest LTP).
 
“Obligor”: Option One Mortgage Capital Corporation, a Delaware corporation, or its successor in interest.
 
“Offered Certificates”: The Class A Certificates offered to the public pursuant to the Prospectus Supplement.
 
“Officers’ Certificate”: A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a vice president (however denominated), and by the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries or Servicing Officers of the Servicer, the Master Servicer, the Originator, the Trustee, the Trust Administrator or the Depositor, as applicable.
 
“OTS Method”: As defined in Section 4.03(a) hereof.
 
“Opinion of Counsel”: A written opinion of counsel, who may, without limitation, be a salaried counsel for the Depositor, the Servicer or the Master Servicer, acceptable to the Trustee, if such opinion is delivered to the Trustee, or acceptable to the Trust Administrator, if such opinion is delivered to the Trust Administrator, and the Certificate Insurer, except that any opinion of counsel relating to (a) the qualification of any REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of Independent counsel.
 
“Optional Termination Date”: The first Distribution Date on which the Servicer or the Certificate Insurer may opt to terminate the Trust Fund pursuant to Section 10.01.
 
“Original Class Certificate Principal Balance”: With respect to the Class A Certificates, the Class C Interest, the Class C Certificates, the Class P Interest and the Class P Certificates, the corresponding amounts set forth opposite such Class above in the Preliminary Statement.
 
“Originator”: Option One Mortgage Corporation, a California corporation, or its successor in interest, in its capacity as originator under the Mortgage Loan Purchase Agreement.
 
“Overcollateralization Deficiency Amount”: With respect to any Distribution Date, the amount, if any, by which the Overcollateralization Target Amount exceeds the Overcollateralized Amount on such Distribution Date (after giving effect to distributions in respect of the Group I Basic Principal Distribution Amount and the Group II Basic Principal Distribution Amount.
 
“Overcollateralization Release Amount”: With respect to any Distribution Date, the lesser of (x) the Principal Remittance Amount for such Distribution Date and (y) the Excess Overcollateralized Amount.
 
“Overcollateralization Target Amount”: With respect to the Distribution Date in May 2007 an amount equal to 11.50%. With respect to the Distribution Date after the Distribution Date in May 2007 and prior to the Stepdown Date an amount equal to 14.00% of the aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date. With respect to any Distribution Date, on or after the Stepdown Date, the lesser of the amount set forth in the preceding sentence and 28.00% of the aggregate Stated Principal Balance of the Mortgage Loans for the related Distribution Date, subject to a floor equal to the Overcollateralization Floor; provided however, if a Trigger Event is in effect on the related Distribution Date, the Overcollateralization Target Amount will be the Overcollateralization Target Amount for the previous Distribution Date. Notwithstanding the foregoing, on and after any Distribution Date following the reduction of the aggregate Certificate Principal Balance of the Class A Certificates to zero, the Overcollateralization Target Amount shall be zero.
 
“Overcollateralized Amount”: For any Distribution Date, an amount equal to (i) the sum of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus (ii) the aggregate Certificate Principal Balance of the Class A Certificates and the Class P Certificates as of such Distribution Date (after giving effect to distributions to be made on such Distribution Date).
 
“Ownership Interest”: As to any Certificate, any ownership or security interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee.
 
“Pass-Through Rate”: With respect to any Class of Class A Certificates and any Distribution Date, the lesser of the sum of (x) the Formula Rate for such Distribution Date and (y) the Maximum Cap Rate for such Distribution Date.
 
With respect to the Class C Interest and any Distribution Date, a per annum rate equal to the percentage equivalent of a fraction, the numerator of which is (x) the sum of (i) 100% of the interest on REMIC 2 Regular Interest LTP and (ii) interest on the Uncertificated Principal Balance of each REMIC 2 Regular Interest listed in clause (y) at a rate equal to the related Uncertificated REMIC 2 Pass-Through Rate minus the Marker Rate and the denominator of which is (y) the aggregate Uncertificated Principal Balance of REMIC 2 Regular Interests LTAA, LTIA1, LTIIA1, LTIIA2, LTIIA3, LTIIA4 and LTZZ.
 
With respect to the Class C Certificates, 100% of the interest distributable to the Class C Interest, expressed as a per annum rate on its Notional Amount.
 
With respect to the Class Swap-IO Interest, the Class Swap IO Interest shall not have a Pass-Through Rate, but interest for such Regular Interest and each Distribution Date shall be an amount equal to 100% of the amounts distributable to REMIC 2 Regular Interest LTIO for such Distribution Date.
 
REMIC 6 Regular Interest SWAP-IO shall not have a Pass-Through Rate, but interest for such Regular Interest and each Distribution Date shall be an amount equal to 100% of the amounts distributable to the Class SWAP-IO Interest for such Distribution Date.
 
The Class P Certificates, Class R Certificates and Class R-X Certificates will not accrue interest and therefore will not have a Pass-Through Rate.
 
“Paying Agent”: Any paying agent appointed pursuant to Section 5.05.
 
“Percentage Interest”: With respect to any Certificate (other than a Residual Certificate), a fraction, expressed as a percentage, the numerator of which is the Initial Certificate Principal Balance or Notional Amount represented by such Certificate and the denominator of which is the Original Class Certificate Principal Balance or initial Notional Amount of the related Class. With respect to a Residual Certificate, the portion of the Class evidenced thereby, expressed as a percentage, as stated on the face of such Certificate; provided, however, that the sum of all such percentages for each such Class totals 100%.
 
“Periodic Rate Cap”: With respect to each Adjustable-Rate Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth in the related Mortgage Note, which is the maximum amount by which the Mortgage Rate for such Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage Rate in effect immediately prior to such Adjustment Date.
 
“Permitted Investments”: Any one or more of the following obligations or securities acquired at a purchase price of not greater than par, regardless of whether issued or managed by the Depositor, the Servicer, the Master Servicer, the Trustee, the Trust Administrator or any of their respective Affiliates or for which an Affiliate of the Trust Administrator serves as an advisor:
 
(i) direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality thereof, provided such obligations are backed by the full faith and credit of the United States;
 
(ii) (A) demand and time deposits in, certificates of deposit of, bankers’ acceptances issued by or federal funds sold by any depository institution or trust company (including the Trustee or its agent acting in their respective commercial capacities) incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state authorities, so long as, at the time of such investment or contractual commitment providing for such investment, such depository institution or trust company (or, if the only Rating Agency is S&P, in the case of the principal depository institution in a depository institution holding company, debt obligations of the depository institution holding company) or its ultimate parent has a short-term uninsured debt rating in the highest available rating category of Fitch, Moody’s and S&P and provided that each such investment has an original maturity of no more than 365 days; and provided further that, if the only Rating Agency is S&P and if the depository or trust company is a principal subsidiary of a bank holding company and the debt obligations of such subsidiary are not separately rated, the applicable rating shall be that of the bank holding company; and, provided further that, if the original maturity of such short-term obligations of a domestic branch of a foreign depository institution or trust company shall exceed 30 days, the short-term rating of such institution shall be A-1+ in the case of S&P if S&P is the Rating Agency; and (B) any other demand or time deposit or deposit which is fully insured by the FDIC;
 
(iii) repurchase obligations with a term not to exceed 30 days with respect to any security described in clause (i) above and entered into with a depository institution or trust company (acting as principal) rated A-1+ by S&P, A2 or higher by Moody’s and F-1+ or higher by Fitch provided, however, that collateral transferred pursuant to such repurchase obligation must be of the type described in clause (i) above and must (A) be valued daily at current market prices plus accrued interest, (B) pursuant to such valuation, be equal, at all times, to 105% of the cash transferred by the Trust Administrator in exchange for such collateral and (C) be delivered to the Trust Administrator or, if the Trust Administrator is supplying the collateral, an agent for the Trust Administrator, in such a manner as to accomplish perfection of a security interest in the collateral by possession of certificated securities;
 
(iv) securities bearing interest or sold at a discount that are issued by any corporation incorporated under the laws of the United States of America or any State thereof and that are rated by a Rating Agency in its highest long-term unsecured rating category at the time of such investment or contractual commitment providing for such investment;
 
(v) commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than 30 days after the date of acquisition thereof) that is rated by a Rating Agency in its highest short-term unsecured debt rating available at the time of such investment;
 
(vi) units of money market funds, including those managed or advised by the Trust Administrator or its Affiliates, that have been rated, if so rated, “AAAm” by S&P, “AAA” by Fitch and “Aaa” by Moody’s; and
 
(vii) if previously confirmed in writing to the Trustee and the Trust Administrator, any other demand, money market or time deposit, or any other obligation, security or investment, as may be acceptable to the Rating Agencies and the Certificate Insurer in writing as a permitted investment of funds backing securities having ratings equivalent to its highest initial rating of the Class A Certificates;
 
provided, that no instrument described hereunder shall evidence either the right to receive (a) only interest with respect to the obligations underlying such instrument or (b) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provide a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations.
 
“Permitted Transferee”: Any transferee of a Residual Certificate other than a Disqualified Organization or a non-U.S. Person.
 
“Person”: Any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
 
“Plan”: Any employee benefit plan or certain other retirement plans and arrangements, including individual retirement accounts and annuities, Keogh plans and bank collective investment funds and insurance company general or separate accounts in which such plans, accounts or arrangements are invested, that are subject to ERISA or Section 4975 of the Code.
 
“Policy”: The financial guaranty insurance policy (policy # CA03705A) relating to the Class A Certificates dated the Closing Date and issued by the Certificate Insurer for the benefit of the Holders of the Class A Certificates.
 
“Pool Insurer”: Radian Guaranty Inc., a Pennsylvania corporation and stock mortgage insurance company, or any permitted successor thereof, as issuer of the Pool Policy.

“Pool Policy”: The mortgage pool insurance policy (policy number #07-273042) dated the Closing Date and issued by the Pool Insurer.

“Pool Balance”: As of any date of determination, the aggregate Stated Principal Balance of the Mortgage Loans in both Loan Groups as of such date.
 
“Premium”: The non-refundable premium payable in respect of the Policy, which shall be payable on each Distribution Date, an amount equal to the product of (A) the Certificate Insurer Premium Rate and (B) the aggregate outstanding Certificate Principal Balance of the Class A Certificates on the immediately preceding Distribution Date after giving effect to any payments of principal made on such immediately preceding Distribution Date, other than any such distribution related to an unreimbursed Insured Payment made under the Policy and (C) the number of days from and including the immediate Distribution Date to but excluding such Distribution Date divided by 360.
 
“Prepayment Assumption”: As defined in the Prospectus Supplement.
 
“Prepayment Charge”: With respect to any Mortgage Loan, the charges, fees, penalties or premiums, if any, due in connection with a full or partial prepayment of such Mortgage Loan in accordance with the terms thereof (other than any Servicer Prepayment Charge Payment Amount).
 
“Prepayment Charge Schedule”: As of any date, the list of Prepayment Charges on the Mortgage Loans included in the Trust Fund on such date, attached hereto as Schedule I (including the prepayment charge summary attached thereto). The Prepayment Charge Schedule shall be prepared by the Servicer (in its capacity as Originator) and set forth the following information with respect to each Prepayment Charge:
 
 
(i)
the Mortgage Loan identifying number;
 
 
(ii)
a code indicating the type of Prepayment Charge;
 
 
(iii)
the state of origination of the related Mortgage Loan;
 
 
(iv)
the date on which the first monthly payment was due on the related Mortgage Loan;
 
 
(v)
the term of the related Prepayment Charge; and
 
 
(vi)
the principal balance of the related Mortgage Loan as of the Cut-off Date.
 
The Prepayment Charge Schedule shall be amended from time to time by the Servicer in accordance with the provisions of this Agreement and a copy of such amended Prepayment Charge Schedule shall be furnished by the Servicer to the Trustee.
 
“Prepayment Interest Excess”: With respect to any Distribution Date, for each Mortgage Loan that was the subject of a Principal Prepayment in full during the portion of the related Prepayment Period occurring between the first day and the Determination Date of the calendar month in which such Distribution Date occurs, an amount equal to interest (to the extent received) at the applicable Net Mortgage Rate on the amount of such Principal Prepayment for the number of days commencing on the first day of the calendar month in which such Distribution Date occurs and ending on the date on which such prepayment is so applied.
 
“Prepayment Interest Shortfall”: With respect to any Distribution Date, for each Mortgage Loan that was the subject of a Principal Prepayment in full during the portion of the related Prepayment Period occurring between the first day of the related Prepayment Period and the last day of the calendar month preceding the month in which such Distribution Date occurs, an amount equal to one month’s interest on the Mortgage Loan less any payments made by the Mortgagor. The obligations of the Servicer in respect of any Prepayment Interest Shortfall are set forth in Section 3.24.
 
“Prepayment Period”: With respect to any Distribution Date, the period commencing on the day after the Determination Date in the calendar month preceding the calendar month in which such Distribution Date occurs (or, in the case of the first Distribution Date, commencing on April 1, 2007) and ending on the Determination Date of the calendar month in which such Distribution Date occurs.
 
“Principal Balance”: As to any Mortgage Loan other than a Liquidated Mortgage Loan, and any day, the related Cut-off Date Principal Balance, minus all collections credited against the Principal Balance of any such Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal Balance of the related Mortgage Loan as of the final recovery of related Liquidation Proceeds and a Principal Balance of zero thereafter. As to any REO Property and any day, the Principal Balance of the related Mortgage Loan immediately prior to such Mortgage Loan becoming REO Property minus any REO Principal Amortization received with respect thereto on or prior to such day.
 
“Principal Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due Date and which is not accompanied by an amount of interest representing the full amount of scheduled interest due on any Due Date in any month or months subsequent to the month of prepayment.
 
“Principal Remittance Amount”: With respect to any Distribution Date, the sum of (i) the Group I Principal Remittance Amount and (ii) the Group II Principal Remittance Amount.
 
“Prospectus Supplement”: That certain Prospectus Supplement dated April 17, 2007 relating to the public offering of the Offered Certificates.
 
“Purchase Price”: With respect to any Mortgage Loan or REO Property to be purchased pursuant to or as contemplated by Section 2.03, and as confirmed by an Officers’ Certificate from the Servicer to the Trustee, an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof as of the date of purchase, (ii) in the case of (x) a Mortgage Loan, accrued interest on such Stated Principal Balance at the applicable Mortgage Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or an advance by the Servicer, which payment or advance had as of the date of purchase been distributed pursuant to Section 4.01, through the end of the calendar month in which the purchase is to be effected, and (y) an REO Property, the sum of (1) accrued interest on such Stated Principal Balance at the applicable Mortgage Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or an advance by the Servicer through the end of the calendar month immediately preceding the calendar month in which such REO Property was acquired, plus (2) REO Imputed Interest for such REO Property for each calendar month commencing with the calendar month in which such REO Property was acquired and ending with the calendar month in which such purchase is to be effected, net of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had been distributed as or to cover REO Imputed Interest pursuant to Section 4.04, (iii) any unreimbursed Servicing Advances and Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from the Collection Account in respect of such Mortgage Loan or REO Property pursuant to Section 3.23 and (v) in the case of a Mortgage Loan required to be purchased pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the Servicer, the Certificate Insurer, the Master Servicer, the Trust Administrator or the Trustee in respect of the breach or defect giving rise to the purchase obligation including any costs and damages incurred by the Trust in connection with any violation by such loan of any predatory or abusive lending law.
 
“Qualified Insurer”: Any insurance company acceptable to Fannie Mae.
 
“Qualified Substitute Mortgage Loan”: A mortgage loan substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement or the Mortgage Loan Purchase Agreement which must, on the date of such substitution, (i) have an outstanding principal balance (or in the case of a substitution of more than one mortgage loan for a Deleted Mortgage Loan, an aggregate Principal Balance), after application of all scheduled payments of principal and interest due during or prior to the month of substitution, not in excess of, and not more than 5% less than, the outstanding principal balance of the Deleted Mortgage Loan as of the Due Date in the calendar month during which the substitution occurs, (ii) have a Mortgage Rate not less than (and not more than one percentage point in excess of) the Mortgage Rate of the Deleted Mortgage Loan, (iii) if the Qualified Substitute Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) if the Qualified Substitute Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) if the Qualified Substitute Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a Gross Margin equal to or greater than the Gross Margin of the Deleted Mortgage Loan, (vi) if the Qualified Substitute Mortgage Loan is an Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than two months later than the next Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term to maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan, (viii) be current as of the date of substitution, (ix) have a Loan-to-Value Ratio as of the date of substitution equal to or lower than the Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (x) have a risk grading determined by the Originator at least equal to the risk grading assigned on the Deleted Mortgage Loan, (xi) have been underwritten or reunderwritten by the Originator in accordance with the same underwriting criteria and guidelines as the Deleted Mortgage Loan, (xii) have a Prepayment Charge provision at least equal to the Prepayment Charge provision of the Deleted Mortgage Loan, (xiii) conform to each representation and warranty set forth in Section 3.01 of the Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan, (xiv) have the same Due Date as the Deleted Mortgage Loan, (xv) [reserved] and (xvi) not be a Convertible Mortgage Loan unless that Deleted Mortgage Loan was a Convertible Mortgage Loan. In the event that one or more mortgage loans are substituted for one or more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be determined on the basis of aggregate Principal Balances, the Mortgage Rates described in clauses (ii) through (vi) hereof shall be satisfied for each such mortgage loan, the risk gradings described in clause (x) hereof shall be satisfied as to each such mortgage loan, the terms described in clause (vii) hereof shall be determined on the basis of weighted average remaining term to maturity (provided that no such mortgage loan may have a remaining term to maturity longer than the Deleted Mortgage Loan), the Loan-to-Value Ratios described in clause (ix) hereof shall be satisfied as to each such mortgage loan and, except to the extent otherwise provided in this sentence, the representations and warranties described in clause (xii) hereof must be satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.
 
“Rating Agency or Rating Agencies”: Moody’s and S&P or their successors. If such agencies or their successors are no longer in existence, “Rating Agencies” shall be such nationally recognized statistical rating agencies, or other comparable Persons, designated by the Depositor and acceptable to the Certificate Insurer, notice of which designation shall be given to the Trustee, the Trust Administrator and the Master Servicer.
 
“Realized Loss”: With respect to any Liquidated Mortgage Loan, the amount of loss realized equal to the portion of the Stated Principal Balance remaining unpaid after application of all Net Liquidation Proceeds in respect of such Mortgage Loan.
 
“Record Date”: With respect to (i) the Class P Certificates, the Class C Certificates and the Residual Certificates, the Close of Business on the last Business Day of the calendar month preceding the month in which the related Distribution Date occurs and (ii) with respect to the Class A Certificates, the Close of Business on the Business Day immediately preceding the related Distribution Date; provided, however, that following the date on which Definitive Certificates for a Class A Certificate are available pursuant to Section 5.02, the Record Date for such Certificates shall be the Close of Business on the last Business Day of the calendar month preceding the month in which the related Distribution Date occurs.
 
“Relevant Servicing Criteria”: The Servicing Criteria applicable to the various parties, as set forth on Exhibit S attached hereto. For clarification purposes, multiple parties can have responsibility for the same Relevant Servicing Criteria.
 
“Reference Banks”: Those banks (i) with an established place of business in London, England, (ii) not controlling, under the control of or under common control with the Depositor, the Originator, the Master Servicer or the Servicer or any affiliate thereof and (iii) which have been designated as such by the Trust Administrator, after consultation with the Depositor; provided, however, that if fewer than two of such banks provide a LIBOR rate, then any leading banks selected by the Trust Administrator, after consultation with the Depositor which are engaged in transactions in United States dollar deposits in the international Eurocurrency market.
 
“Regular Certificate”: Any of the Class A Certificates, Class C Certificates or Class P Certificates.
 
“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. 1,506-1,631 (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.
 
“Reimbursement Amount”: Has the meaning given to the term “Insurer Reimbursement” in the Policy.
 
“Relief Act”: The Servicemembers Civil Relief Act.
 
“Relief Act Interest Shortfall”: With respect to any Distribution Date, for any Mortgage Loan with respect to which there has been a reduction in the amount of interest collectible thereon for the most recently ended Due Period as a result of the application of the Relief Act or any similar state or local law, the amount by which (i) interest collectible on such Mortgage Loan during such Due Period is less than (ii) one month’s interest on the Stated Principal Balance of such Mortgage Loan at the Mortgage Rate for such Mortgage Loan before giving effect to the application of the Relief Act.
 
“REMIC”: A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.
 
“REMIC 1”: The segregated pool of assets subject hereto, constituting the primary trust created hereby and to be administered hereunder, with respect to which a REMIC election is to be made consisting of: (i) such Mortgage Loans as from time to time are subject to this Agreement, together with the Mortgage Files relating thereto, and together with all collections thereon and proceeds thereof, (ii) any REO Property, together with all collections thereon and proceeds thereof, (iii) the Trustee’s rights with respect to the Mortgage Loans under all insurance policies, including the Pool Policy, required to be maintained pursuant to this Agreement and any proceeds thereof, (iv) the Depositor’s rights under the Mortgage Loan Purchase Agreement or the Assignment Agreements, if any, (including any security interest created thereby) and (v) the Collection Account, the Distribution Account (subject to the last sentence of this definition) and any REO Account and such assets that are deposited therein from time to time and any investments thereof, together with any and all income, proceeds and payments with respect thereto. Notwithstanding the foregoing, however, a REMIC election will not be made with respect to the Net WAC Rate Carryover Reserve Account, the Swap Account, the Supplemental Interest Trust, the Interest Rate Swap Agreement or any Servicer Prepayment Charge Payment Amounts.
 
“REMIC 1 Regular Interest”: Any of the separate non-certificated beneficial ownership interests in REMIC 1 issued hereunder and designated as a “regular interest” in REMIC 1. Each REMIC 1 Regular Interest shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto.
 
“REMIC 2”: The segregated pool of assets consisting of all of the REMIC 1 Regular Interests conveyed in trust to the Trustee, for the benefit of REMIC 3, as holder of the REMIC 2 Regular Interests and the Class R Certificate (in respect of the Class R-2 Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.
 
“REMIC 2 Interest Loss Allocation Amount”: With respect to any Distribution Date, an amount equal to (a) the product of (i) the sum of the aggregate Stated Principal Balance of the Mortgage Loans and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LTAA minus the Marker Rate, divided by (b) 12.
 
“REMIC 2 Marker Allocation Percentage”: 50% of any amount payable or loss attributable from the Mortgage Loans, which shall be allocated to REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTIA1, REMIC 2 Regular Interest LTIIA1, REMIC 2 REMIC 2 Regular Interest LTIIA2, REMIC 2 Regular Interest LTIIA3, REMIC 2 Regular Interest LTIIA4 and REMIC 2 Regular Interest LTZZ.
 
“REMIC 2 Overcollateralization Target Amount”: 0.50% of the Overcollateralization Target Amount.
 
“REMIC 2 Overcollateralized Amount”: With respect to any date of determination, (i) 0.50% of the aggregate Uncertificated Principal Balance of the REMIC 2 Regular Interests (other than REMIC 2 Regular Interest LTP) minus (ii) the aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest LTIA1, REMIC 2 Regular Interest LTIIA1, REMIC 2 Regular Interest LTIIA2, REMIC 2 Regular Interest LTIIA3 and REMIC 2 Regular Interest LTIIA4, in each case as of such date of determination.
 
“REMIC 2 Principal Loss Allocation Amount”: With respect to any Distribution Date, an amount equal to (a) the product of (i) 50% of the sum of the aggregate Stated Principal Balance of the Mortgage Loans and related REO Properties then outstanding and (ii) 1 minus a fraction, the numerator of which is two times the aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest LTIA1, REMIC 2 Regular Interest LTIIA1, REMIC 2 Regular Interest LTIIA2, REMIC 2 Regular Interest LTIIA3, REMIC 2 Regular Interest LTIIA4 and the denominator of which is the aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest LTIA1, REMIC 2 Regular Interest LTIIA1, REMIC 2 Regular Interest LTIIA2, REMIC 2 Regular Interest LTIIA3, REMIC 2 Regular Interest LTIIA4 and REMIC 3 Regular Interest LTZZ.
 
“REMIC 2 Regular Interests”: One of the separate non-certificated beneficial ownership interests in REMIC 2 issued hereunder and designated as a Regular Interest in REMIC 2. Each REMIC 2 Regular Interest shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal (other than REMIC 2 Regular Interest LTIO), subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto. The following is a list of each of the REMIC 2 Regular Interests: REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTIA1, REMIC 2 Regular Interest LTIIA1, REMIC 2 Regular Interest LTIIA2, REMIC 2 Regular Interest LTIIA3, REMIC 2 Regular Interest LTIIA4 REMIC 2 Regular Interest LTZZ, REMIC 2 Regular Interest LT-XX, REMIC 2 Regular Interest LTP and REMIC 2 Regular Interest LTIO, each of which is a separate non-certificated beneficial ownership interests in REMIC 2.
 
“REMIC 3”: The segregated pool of assets consisting of all of the REMIC 2 Regular Interests conveyed in trust to the Trustee, for the benefit of the Holders of the Regular Certificates and the Class R Certificate (in respect of the Class R-3 Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.
 
“REMIC 3 Regular Interests”: Any Class A Certificate, Class C Interest, Class P Interest or Class SWAP-IO Interest.
 
“REMIC 4”: The segregated pool of assets consisting of the Class C Interest conveyed in trust to the Trustee, for the benefit of the Holders of the Class C Certificates and the Class R-X Certificates (in respect of the Class R-4 Interest), pursuant to Section 2.07, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.
 
“REMIC 5”: The segregated pool of assets consisting of the Class P Interest conveyed in trust to the Trustee, for the benefit of the Holders of the Class P Certificates and the Class R-X Certificates (in respect of the Class R-5 Interest), pursuant to Section 2.07, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.
 
“REMIC 6”: The segregated pool of assets consisting of the Class SWAP-IO Interest conveyed in trust to the Trustee, for the benefit of the Holders of REMIC 6 Regular Interest SWAP-IO and the Class R-X Certificate (in respect of the Class R-6 Interest), pursuant to Section 2.07, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.
 
“REMIC 6 Regular Interest”: REMIC 6 Regular Interest SWAP-IO.
 
“REMIC 6 Regular Interest SWAP-IO”: The non-certificated beneficial ownership interest in REMIC 6 issued hereunder and designated as a Regular Interest in REMIC 6. REMIC 6 Regular Interest SWAP-IO shall be entitled to 100% of amounts distributed in respect of The Class SWAP-IO Interest.
 
“REMIC Provisions”: Provisions of the federal income tax law relating to real estate mortgage investment conduits which appear at Section 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and regulations and rulings promulgated thereunder, as the foregoing may be in effect from time to time.
 
“REMIC Regular Interests”: The REMIC 1 Regular Interests, REMIC 2 Regular Interests, the Class C Interest, Class P Interest or Class SWAP-IO Interest.
 
“Remittance Report”: A report prepared by the Servicer and delivered to the Master Servicer and the Trust Administrator pursuant to Section 4.04.
 
“Rents from Real Property”: With respect to any REO Property, gross income of the character described in Section 856(d) of the Code.
 
“REO Account”: The account or accounts maintained by the Servicer in respect of an REO Property pursuant to Section 3.23.
 
“REO Disposition”: The sale or other disposition of an REO Property on behalf of the Trust Fund.
 
“REO Imputed Interest”: As to any REO Property, for any calendar month during which such REO Property was at any time part of the Trust Fund, one month’s interest at the applicable Net Mortgage Rate on the Stated Principal Balance of such REO Property (or, in the case of the first such calendar month, of the related Mortgage Loan if appropriate) as of the Close of Business on the Distribution Date in such calendar month.
 
“REO Principal Amortization”: With respect to any REO Property, for any calendar month, the excess, if any, of (a) the aggregate of all amounts received in respect of such REO Property during such calendar month, whether in the form of rental income, sale proceeds (including, without limitation, that portion of the Termination Price paid in connection with a purchase of all of the Mortgage Loans and REO Properties pursuant to Section 10.01 that is allocable to such REO Property) or otherwise, net of any portion of such amounts (i) payable pursuant to Section 3.23 in respect of the proper operation, management and maintenance of such REO Property or (ii) payable or reimbursable to the Servicer or the Master Servicer (in its capacity as successor Servicer) pursuant to Section 3.23 for unpaid Servicing Fees in respect of the related Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of such REO Property or the related Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property for such calendar month.
 
“REO Property”: A Mortgaged Property acquired by the Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as described in Section 3.23.
 
“Reportable Event”: As defined in Section 3.25(a)(ii).
 
“Request for Release”: A release signed by a Servicing Officer, in the form of Exhibit E attached hereto.
 
“Reserve Interest Rate”: With respect to any Interest Determination Date, the rate per annum that the Trust Administrator determines to be either (i) the arithmetic mean (rounded upwards if necessary to the nearest whole multiple of 1/16 of 1%) of the one-month United States dollar lending rates which banks in The City of New York selected by the Depositor are quoting on the relevant Interest Determination Date to the principal London offices of leading banks in the London interbank market or (ii) in the event that the Trust Administrator can determine no such arithmetic mean, in the case of any Interest Determination Date after the initial Interest Determination Date, the lowest one-month United States dollar lending rate which such New York banks selected by the Depositor are quoting on such Interest Determination Date to leading European banks.
 
“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 Fannie Mae eligible condominium project, (iv) a manufactured home, or (v) a detached one-family dwelling in a planned unit development, none of which is a mobile home.
 
“Residual Certificate”: Any Class R Certificates or Class R-X Certificates.
 
“Residual Interest”: The sole class of “residual interests” in a REMIC within the meaning of Section 860G(a)(2) of the Code.
 
“Responsible Officer”: When used with respect to the Trust Administrator, the Chairman or Vice Chairman of the Board of Directors or trustees, the Chairman or Vice Chairman of the Executive or Standing Committee of the Board of Directors or trustees, the President, any vice president, any assistant vice president, the Secretary, any assistant secretary, the Treasurer, any assistant treasurer, the Cashier, any assistant cashier, any trust officer or assistant trust officer, the Controller and any assistant controller or any other officer of the Trust Administrator, as applicable, customarily performing functions similar to those performed by any of the above designated officers in each case, having direct responsibility for the administration of this Agreement, and, with respect to a particular matter, to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject. When used with respect to the Trustee, any officer in the corporate trust department or similar group of the Trustee with direct responsibility for the administration of this Agreement and also, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject.
 
“S&P”: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or its successor in interest.
 
“Sarbanes-Oxley Act”: The Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission promulgated thereunder (including any published interpretations thereof by the Commission’s staff).
 
“Sarbanes-Oxley Certification”: As defined in Section 3.25(a)(iii).
 
“Seller”: Any one or all of: (i) Option One Mortgage Corporation, a California corporation, (ii) Option One Mortgage Capital Corporation, a Delaware corporation, or (iii) Option One Owner Trust 2001-1A, Option One Owner Trust 2001-2, Option One Owner Trust 2002-3, Option One Owner Trust 2003-4, Option One Owner Trust 2003-5, Option One Owner Trust 2005-6, Option One Owner Trust 2005-7, Option One Owner Trust 2005-8, Option One Owner Trust 2005-9 and/or Option One Owner Trust 2005-5A, each a Delaware statutory trust.
 
“Senior Credit Enhancement Percentage”: For any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the aggregate Certificate Principal Balance of the Class C Certificates, and the denominator of which is the aggregate Stated Principal Balance of the Mortgage Loans, calculated prior to taking into account payments of principal on the Mortgage Loans and distribution of the Group I Principal Distribution Amount and the Group II Principal Distribution Amount to the Holders of the Certificates then entitled to distributions of principal on such Distribution Date.
 
“Servicer”: Option One Mortgage Corporation, a California corporation, or any successor servicer appointed as herein provided, in its capacity as Servicer hereunder.
 
“Servicer Affiliate”: A Person (i) controlling, controlled by or under common control with the Servicer or which is 50% or more owned by the Servicer and (ii) which is qualified to service residential mortgage loans.
 
“Servicer Event of Termination”: One or more of the events described in Section 7.01(a).
 
“Servicer Optional Purchase Delinquency Trigger”: A Servicer Optional Purchase Delinquency Trigger has occurred with respect to a Distribution Date if the Delinquency Percentage exceeds 24.00%.
 
“Servicer Prepayment Charge Payment Amount”: The amounts payable by the Servicer in respect of any Prepayment Charges pursuant to Section 2.05 or Section 3.01.
 
“Servicer Remittance Date”: With respect to any Distribution Date, the Business Day prior to such Distribution Date.
 
“Servicing Account”: The account or accounts created and maintained pursuant to Section 3.09.
 
“Servicing Advances”: All customary, reasonable and necessary “out of pocket” costs and expenses other than Advances (including reasonable attorneys’ fees and expenses) incurred by the Servicer in the performance of its servicing obligations, including, but not limited to, the cost of (i) the preservation, restoration, inspection and protection of the Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures, (iii) the management and liquidation of the REO Property and (iv) compliance with the obligations under Sections 3.01, 3.09, 3.16, and 3.23.
 
“Servicing Criteria”: As set forth in Exhibit S hereto.
 
“Servicing Fee”: With respect to each Mortgage Loan and for any calendar month, an amount equal to one month’s interest (or in the event of any payment of interest which accompanies a Principal Prepayment in full or in part made by the Mortgagor during such calendar month, interest for the number of days covered by such payment of interest) at the Servicing Fee Rate on the same principal amount on which interest on such Mortgage Loan accrues for such calendar month. A portion of such Servicing Fee may be retained by any Sub-Servicer as its servicing compensation.
 
“Servicing Fee Rate”: 0.30% per annum for the first 10 Due Periods, 0.40% per annum for the 11th through 30th Due Periods and 0.65% per annum for all Due Periods thereafter.
 
“Servicing Function Participant”: Any party “participating in the servicing function” within the meaning of Item 1122 of Regulation AB.
 
“Servicing Officer”: Any employee or officer of the Servicer involved in, or responsible for, the administration and servicing of Mortgage Loans, whose name and specimen signature appear on a list of servicing officers furnished by the Servicer to the Master Servicer, the Trust Administrator, the Trustee, the Certificate Insurer and the Depositor on the Closing Date, as such list may from time to time be amended. With respect to the Master Servicer, any officer of the Master Servicer involved in or responsible for, the administration and master servicing of the Mortgage Loans whose name appears on a list of master servicing officers furnished by the Master Servicer to the Trustee, the Certificate Insurer, the Trust Administrator and the Depositor upon request, as such list may from time to time be amended.
 
“Servicing Rights Pledgee”: One or more lenders, selected by the Servicer, to which the Servicer may pledge and assign all of its right, title and interest in, to and under this Agreement, including Wells Fargo Bank, N.A. as the representative of certain lenders.
 
“Servicing Transfer Costs”: All reasonable out-of-pocket costs and expenses incurred by the Trustee or the Master Servicer in connection with the transfer of servicing from a predecessor servicer, including, without limitation, any reasonable costs or expenses associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data as may be required by the Trustee or the Master Servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the Trustee or the Master Servicer to service the Mortgage Loans properly and effectively.
 
“Significance Percentage”: The percentage equivalent of a fraction, the numerator of which is (I) the present value (such calculation of present value using the two-year swaps rate made available at Bloomberg Financial Markets, L.P.) of the aggregate amount payable under the Interest Rate Swap Agreement (assuming that one-month LIBOR for each remaining Calculation Period (as defined in the Interest Rate Swap Agreement) beginning with the Calculation Period immediately following the related Distribution Date is equal to the sum of (a) the one-month LIBOR rate for each remaining Calculation Period made available at Bloomberg Financial Markets, L.P. by taking the following steps: (1) typing in the following keystrokes: fwcv <go>, us <go>, 3 <go>; (2) the Forwards shall be set to “1-Mo”; (3) the Intervals shall be set to “1-Mo”; and (4) the Points shall be set to equal the remaining term of the Interest Rate Swap Agreement in months and the Trust Administrator shall click <go> (provided that the Depositor shall notify the Trust Administrator in writing of any changes to such keystrokes), (b) the percentage equivalent of a fraction, the numerator of which is 5.00% and the denominator of which is the initial number of Distribution Dates on which the Trust Administrator is entitled to receive payments under the Interest Rate Swap Agreement (the “Add-On Amount”) and (c) the Add-On Amount for each previous period) and the denominator of which is (II) the aggregate Certificate Principal Balance of the Class A Certificates on such Distribution Date (after giving effect to all distributions on such Distribution Date).
 
“Special Servicer Trigger Event”: As defined in Section 3.13.
 
“Startup Day”: As defined in Section 9.01(b) hereof.
 
“Stated Principal Balance”: With respect to any Mortgage Loan: (a) as of any date of determination up to but not including the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan would be distributed, the outstanding principal balance of such Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule, minus the sum of (i) the principal portion of each Monthly Payment due on a Due Date subsequent to the Cut-off Date), to the extent received from the Mortgagor or advanced by the Servicer and distributed pursuant to Section 4.01 on or before such date of determination, (ii) all Principal Prepayments received after the Cut-off Date, to the extent distributed pursuant to Section 4.01 on or before such date of determination, (iii) all Liquidation Proceeds and Insurance Proceeds to the extent distributed pursuant to Section 4.01 on or before such date of determination, and (iv) any Realized Loss incurred with respect thereto as a result of a Deficient Valuation made during or prior to the Due Period for the most recent Distribution Date coinciding with or preceding such date of determination; and (b) as of any date of determination coinciding with or subsequent to the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan would be distributed, zero. With respect to any REO Property: (a) as of any date of determination up to but not including the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such REO Property would be distributed, an amount (not less than zero) equal to the Stated Principal Balance of the related Mortgage Loan as of the date on which such REO Property was acquired on behalf of the Trust Fund, minus the aggregate amount of REO Principal Amortization in respect of such REO Property for all previously ended calendar months, to the extent distributed pursuant to Section 4.01 on or before such date of determination; and (b) as of any date of determination coinciding with or subsequent to the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such REO Property would be distributed, zero.
 
“Stepdown Date”: The later to occur of (i) the Distribution Date occurring in May 2010 and (ii) the first Distribution Date on which the Senior Credit Enhancement Percentage (calculated for this purpose only after taking into account distributions of principal on the Mortgage Loans and distribution of the Group I Principal Distribution Amount and the Group II Principal Distribution Amount to the Certificates then entitled to distributions of principal on such Distribution Date) is equal to or greater than 28.00%.
 
“Subcontractor”: Any vendor, subcontractor or other Person that is not responsible for the overall servicing of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of the Servicer (or a Sub-Servicer of any Servicer), the Master Servicer, the Trustee, the Custodian or the Trust Administrator.
 
“Subsequent Recoveries”: As of any Distribution Date, unexpected amounts received by the Servicer or the Master Servicer (net of any related expenses permitted to be reimbursed pursuant to Section 3.10) specifically related to a Mortgage Loan that was the subject of a liquidation or an REO Disposition prior to the related Prepayment Period that resulted in a Realized Loss.
 
“Sub-Servicer”: Any Person with which the Servicer has entered into a Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer pursuant to Section 3.02.
 
“Sub-Servicing Account”: An account established by a Sub-Servicer which meets the requirements set forth in Section 3.08 and is otherwise acceptable to the applicable Servicer.
 
“Sub-Servicing Agreement”: The written contract between the Servicer and a Sub-Servicer relating to servicing and administration of certain Mortgage Loans as provided in Section 3.02.
 
“Substitution Adjustment”: As defined in Section 2.03(d) hereof.
 
“Supplemental Interest Trust”: As defined in Section 4.08(a).
 
“Supplemental Interest Trust Trustee”: Wells Fargo Bank, N.A., a national banking association, not in its individual capacity but solely in its capacity as supplemental interest trust trustee, or any successor trustee appointed as herein provided.
 
“Swap Account”: The account or accounts created and maintained pursuant to Section 4.08. The Swap Account must be an Eligible Account.
 
“Swap Administration Agreement”: As defined in Section 4.08(b).
 
“Swap Administrator”: Wells Fargo Bank, N.A., a national banking association, or its successor in interest, or any successor swap administrator appointed pursuant to the Swap Administration Agreement.
 
“Swap Collateral Account”: As defined in Section 4.10.
 
“Swap Credit Support Annex”: The credit support annex, dated the Closing Date, between the Supplemental Interest Trust Trustee on behalf of the Supplement Interest Trust and the Interest Rate Swap Provider, which is annexed to and forms part of the Interest Rate Swap Agreement.
 
“Swap Custodian”: As defined in Section 4.10.
 
“Swap Expense Rate”: For any Distribution Date, a fraction, expressed as a percentage, the numerator of which is the product of twelve multiplied by the amount of any Net Swap Payment and Swap Termination Payment (other than a Swap Termination Payment resulting from a Swap Provider Trigger Event) made to the Swap Provider, and the denominator of which is the Certificate Principal Balance of the Class A Certificates immediately prior to such Distribution Date.
 
“Swap Interest Shortfall Amount”: Any shortfall of interest with respect to any Class of Certificates resulting from the application of the Net WAC Rate due to a discrepancy between the Uncertificated Notional Amount of the Class Swap-IO Interest and the scheduled notional amount pursuant to the Interest Rate Swap Agreement.
 
“Swap LIBOR”: A per annum rate equal to the floating rate payable by the Swap Provider under the Interest Rate Swap Agreement.
 
“Swap Provider”: The swap provider under the Interest Rate Swap Agreement. Initially, the swap provider shall be Bear Stearns Financial Products Inc.
 
“Swap Provider Trigger Event”: Any of (i) an Event of Default under the Interest Rate Swap Agreement with respect to which the Swap Provider is a Defaulting Party (as defined in the Interest Rate Swap Agreement), (ii) a Termination Event under the Interest Rate Swap Agreement with respect to which the Swap Provider is the sole Affected Party (as defined in the Interest Rate Swap Agreement) or (iii) an Additional Termination Event under the Interest Rate Swap Agreement with respect to which the Swap Provider is the sole Affected Party.
 
“Swap Termination Payment”: The payment due to either party under the Interest Rate Swap Agreement upon the early termination of the Interest Rate Swap Agreement.
 
“Tax Matters Person”: The tax matters person appointed pursuant to Section 9.01(e) hereof.
 
“Tax Prepayment Assumption”: The prepayment assumption provided by the Depositor and as disclosed in the Prospectus Supplement.
 
“Tax Returns”: The federal income tax return on Internal Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed by the Trust Administrator on behalf of each REMIC, together with any and all other information reports or returns that may be required to be furnished to the Certificateholders or filed with the Internal Revenue Service or any other governmental taxing authority under any applicable provisions of federal, state or local tax laws.
 
“Termination Price”: As defined in Section 10.01(a) hereof.
 
“Terminator”: As defined in Section 10.01 hereof.
 
“Three Month Rolling Delinquency Percentage”: With respect to the Mortgage Loans and any Distribution Date, the average for the three most recent calendar months of the fraction, expressed as a percentage, the numerator of which is (x) the sum (without duplication) of the aggregate of the Stated Principal Balances of all Mortgage Loans that are (i) 60 or more days Delinquent, (ii) in bankruptcy and 60 or more days Delinquent, (iii) in foreclosure and 60 or more days Delinquent or (iv) REO Properties, and the denominator of which is (y) the sum of the Stated Principal Balances of the Mortgage Loans, in the case of both (x) and (y), as of the Close of Business on the last Business Day of each of the three most recent calendar months.
 
“Trigger Event”: A Trigger Event is in effect with respect to any Distribution Date on or after the Stepdown Date if:
 
(a)    the Delinquency Percentage exceeds 25.00%; or
 
(b)    the aggregate amount of Realized Losses incurred since the Cut-off Date through the last day of the related Due Period (after reduction for all Subsequent Recoveries received from the Cut-off Date through the Prepayment Period) divided by the aggregate principal balance of the Mortgage Loans as of the Cut-off Date exceeds the applicable percentages set forth below with respect to such Distribution Date:
 
Distribution Date Occurring In
 
Percentage
May 2010 - April 2011
 
3.95% for the first month, plus 1/12 of 4.85% thereafter
May 2011 - April 2012
 
8.80% for the first month, plus 1/12 of 2.70% thereafter
May 2012 - April 2013
 
11.50% for the first month, plus 1/12 of 1.50% thereafter
May 2013 and thereafter
 
13.00%

“Trust”: Option One Mortgage Loan Trust 2007-HL1, the trust created hereunder.
 
“Trust Administrator”: Wells Fargo Bank, N.A. or any successor in interest, or any successor trust administrator appointed as herein provided.
 
“Trust Fund”: All of the assets of the Trust, which the trust created hereunder consisting of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC 5, REMIC 6, the Net WAC Rate Carryover Reserve Account, the Servicer Prepayment Charge Payment Amounts, distributions made to the Trust Administrator by the Swap Administrator under the Swap Administration Agreement, the Swap Account, the Supplemental Interest Trust and the Interest Rate Swap Agreement.
 
“Trust REMIC”: Each of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC 5 and REMIC 6.
 
“Trustee”: HSBC Bank USA, National Association, a national banking association, or any successor trustee appointed as herein provided.
 
“Uncertificated Accrued Interest”: With respect to each REMIC Regular Interest on each Distribution Date, an amount equal to one month’s interest at the related Uncertificated Pass-Through Rate on the Uncertificated Principal Balance of such REMIC Regular Interest. In each case, Uncertificated Accrued Interest will be reduced by any Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls (allocated to such REMIC Regular Interests based on their respective entitlements to interest irrespective of any Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution Date).
 
“Uncertificated Notional Amount”: With respect to REMIC 2 Regular Interest LTIO and each Distribution Date listed below, the aggregate Uncertificated Principal Balance of the REMIC 1 Regular Interests ending with the designation “A” listed below:
 
Distribution Date
 
REMIC 1 Regular Interests
1 and 2
 
I-1-A through I-56-A
3
 
I-2-A through I-56-A
4
 
I-3-A through I-56-A
5
 
I-4-A through I-56-A
6
 
I-5-A through I-56-A
7
 
I-6-A through I-56-A
8
 
I-7-A through I-56-A
9
 
I-8-A through I-56-A
10
 
I-9-A through I-56-A
11
 
I-10-A through I-56-A
12
 
I-11-A through I-56-A
13
 
I-12-A through I-56-A
14
 
I-13-A through I-56-A
15
 
I-14-A through I-56-A
16
 
I-15-A through I-56-A
17
 
I-16-A through I-56-A
18
 
I-17-A through I-56-A
19
 
I-18-A through I-56-A
20
 
I-19-A through I-56-A
21
 
I-20-A through I-56-A
22
 
I-21-A through I-56-A
23
 
I-22-A through I-56-A
24
 
I-23-A through I-56-A
25
 
I-24-A through I-56-A
26
 
I-25-A through I-56-A
27
 
I-26-A through I-56-A
28
 
I-27-A through I-56-A
29
 
I-28-A through I-56-A
30
 
I-29-A through I-56-A
31
 
I-30-A through I-56-A
32
 
I-31-A through I-56-A
33
 
I-32-A through I-56-A
34
 
I-33-A through I-56-A
35
 
I-34-A through I-56-A
36
 
I-35-A through I-56-A
37 through 46
 
I-36-A through I-56-A
47
 
I-37-A through I-56-A
48
 
I-39-A through I-56-A
49
 
I-39-A through I-56-A
50
 
I-40-A through I-56-A
51
 
I-41-A through I-56-A
52
 
I-42-A through I-56-A
53
 
I-43-A through I-56-A
54
 
I-44-A through I-56-A
55
 
I-45-A through I-56-A
56
 
I-46-A through I-56-A
57
 
I-47-A through I-56-A
58
 
I-48-A through I-56-A
59
 
I-49-A through I-56-A
60
 
I-50-A through I-56-A
61
 
I-51-A through I-56-A
62
 
I-52-A through I-56-A
63
 
I-53-A through I-56-A
64
 
I-54-A through I-56-A
65
 
I-55-A and I-56-A
66
 
I-56-A
thereafter
 
$0.00

With respect to the Class SWAP-IO Interest and any Distribution Date, an amount equal to the Uncertificated Notional Amount of the REMIC 2 Regular Interest LTIO.
 
“Uncertificated Pass-Through Rate”: The Uncertificated REMIC 1 Pass-Through Rate or Uncertificated REMIC 2 Pass-Through Rate.
 
“Uncertificated Principal Balance”: With respect to each REMIC Regular Interest (other than REMIC 2 Regular Interest LTIO), the amount of such REMIC Regular Interest outstanding as of any date of determination. As of the Closing Date, the Uncertificated Principal Balance of each REMIC Regular Interest (other than REMIC 2 Regular Interest LTIO) shall equal the amount set forth in the Preliminary Statement hereto as its initial Uncertificated Principal Balance. On each Distribution Date, the Uncertificated Principal Balance of each REMIC Regular Interest shall be reduced by all distributions of principal made on such REMIC Regular Interest on such Distribution Date pursuant to Section 4.08 and, if and to the extent necessary and appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section 4.08, and the Uncertificated Principal Balances of REMIC 2 Regular Interest LTZZ shall be increased by interest deferrals as provided in Section 4.08. The Uncertificated Principal Balance of each REMIC Regular Interest shall never be less than zero. With respect to the Class C Interest, as of any date of determination, an amount equal to the excess, if any, of (A) the then aggregate Uncertificated Principal Balance of the REMIC 2 Regular Interest over (B) the then aggregate Certificate Principal Balance of the Class A Certificates and the Class P Interest then outstanding.
 
“Uncertificated REMIC 1 Pass-Through Rate”: With respect to REMIC 1 Regular Interest I, a per annum rate equal to the weighted average Net Mortgage Rate. With respect to each REMIC 1 Regular Interest ending with the designation “A”, a per annum rate equal to the weighted average Net Mortgage Rate multiplied by 2, subject to a maximum rate of 10.30%. With respect to each REMIC 1 Regular Interest ending with the designation “B”, the greater of (x) a per annum rate equal to the excess, if any, of (i) 2 multiplied by the weighted average Net Mortgage Rate over (ii) 10.30% and (y) 0.00%. 
 
“Uncertificated REMIC 2 Pass-Through Rate”: With respect to REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTIA1, REMIC 2 Regular Interest LTIIA1, REMIC 2 Regular Interest LTIIA2, REMIC 2 Regular Interest LTIIA3, REMIC 2 Regular Interest LTIIA4, and REMIC 2 Regular Interest LTZZ and REMIC 2 Regular Interest LTP, a per annum rate (but not less than zero) equal to the weighted average of (w) with respect to REMIC 1 Regular Interest I and REMIC 1 Regular Interest LTP, the Uncertificated REMIC 1 Pass-Through Rate for such REMIC 1 Regular Interest for each such Distribution Date, (x) with respect to REMIC 1 Regular Interests ending with the designation “B”, the weighted average of the Uncertificated REMIC 1 Pass-Through Rates for such REMIC 1 Regular Interests, weighted on the basis of the Uncertificated Principal Balance of such REMIC 1 Regular Interests for each such Distribution Date and (y) with respect to REMIC 1 Regular Interests ending with the designation “A”, for each Distribution Date listed below, the weighted average of the rates listed below for each such REMIC 1 Regular Interest listed below, weighted on the basis of the Uncertificated Principal Balance of each such REMIC 1 Regular Interest for each such Distribution Date:
 
Distribution Date
 
REMIC 1 Regular Interest
 
Rate
1
 
I-1-A through I-56-A
 
Uncertificated REMIC 1 Pass-Through Rate
2n
 
I-1-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
3
 
I-2-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A
 
Uncertificated REMIC 1 Pass-Through Rate
4
 
I-3-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A and I-2-A
 
Uncertificated REMIC 1 Pass-Through Rate
5
 
I-4-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-3-A
 
Uncertificated REMIC 1 Pass-Through Rate
6
 
I-5-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-4-A
 
Uncertificated REMIC 1 Pass-Through Rate
7
 
I-6-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-5-A
 
Uncertificated REMIC 1 Pass-Through Rate
8
 
I-7-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-6-A
 
Uncertificated REMIC 1 Pass-Through Rate
9
 
I-8-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-7-A
 
Uncertificated REMIC 1 Pass-Through Rate
10
 
I-9-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-8-A
 
Uncertificated REMIC 1 Pass-Through Rate
11
 
I-10-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-9-A
 
Uncertificated REMIC 1 Pass-Through Rate
12
 
I-11-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-10-A
 
Uncertificated REMIC 1 Pass-Through Rate
13
 
I-12-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-11-A
 
Uncertificated REMIC 1 Pass-Through Rate
14
 
I-13-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-12-A
 
Uncertificated REMIC 1 Pass-Through Rate
15
 
I-14-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-13-A
 
Uncertificated REMIC 1 Pass-Through Rate
16
 
I-15-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-14-A
 
Uncertificated REMIC 1 Pass-Through Rate
17
 
I-16-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-15-A
 
Uncertificated REMIC 1 Pass-Through Rate
18
 
I-17-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-16-A
 
Uncertificated REMIC 1 Pass-Through Rate
19
 
I-18-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-17-A
 
Uncertificated REMIC 1 Pass-Through Rate
20
 
I-19-A and I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-18-A
 
Uncertificated REMIC 1 Pass-Through Rate
21
 
I-20-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-19-A
 
Uncertificated REMIC 1 Pass-Through Rate
22
 
I-21-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-20-A
 
Uncertificated REMIC 1 Pass-Through Rate
23
 
I-22-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A
 
Uncertificated REMIC 1 Pass-Through Rate
24
 
I-23-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-22-A
 
Uncertificated REMIC 1 Pass-Through Rate
25
 
I-24-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-23-A
 
Uncertificated REMIC 1 Pass-Through Rate
26
 
I-25-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-24-A
 
Uncertificated REMIC 1 Pass-Through Rate
27
 
I-26-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-25-A
 
Uncertificated REMIC 1 Pass-Through Rate
28
 
I-27-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-26-A
 
Uncertificated REMIC 1 Pass-Through Rate
29
 
I-28-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-27-A
 
Uncertificated REMIC 1 Pass-Through Rate
30
 
I-29-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-28-A
 
Uncertificated REMIC 1 Pass-Through Rate
31
 
I-30-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-29-A
 
Uncertificated REMIC 1 Pass-Through Rate
32
 
I-31-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-30-A
 
Uncertificated REMIC 1 Pass-Through Rate
33
 
I-32-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-31-A
 
Uncertificated REMIC 1 Pass-Through Rate
34
 
I-33-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-32-A
 
Uncertificated REMIC 1 Pass-Through Rate
35
 
I-34-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-33-A
 
Uncertificated REMIC 1 Pass-Through Rate
36
 
I-35-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-34-A
 
Uncertificated REMIC 1 Pass-Through Rate
37th through 46th
 
I-36-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-35-A
 
Uncertificated REMIC 1 Pass-Through Rate
47
 
I-37-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-36-A
 
Uncertificated REMIC 1 Pass-Through Rate
48
 
I-38-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-37-A
 
Uncertificated REMIC 1 Pass-Through Rate
49
 
I-39-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-38-A
 
Uncertificated REMIC 1 Pass-Through Rate
50
 
I-40-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-39-A
 
Uncertificated REMIC 1 Pass-Through Rate
51
 
I-41-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
       
Uncertificated REMIC 1 Pass-Through Rate
52
 
I-42-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-41-A
 
Uncertificated REMIC 1 Pass-Through Rate
53
 
I-43-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A and I-42-A
 
Uncertificated REMIC 1 Pass-Through Rate
54
 
I-44-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-43-A
 
Uncertificated REMIC 1 Pass-Through Rate
55
 
I-45-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-44-A
 
Uncertificated REMIC 1 Pass-Through Rate
56
 
I-46-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-45-A
 
Uncertificated REMIC 1 Pass-Through Rate
57
 
I-47-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-46-A
 
Uncertificated REMIC 1 Pass-Through Rate
58
 
I-48-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-47-A
 
Uncertificated REMIC 1 Pass-Through Rate
59
 
I-49-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-48-A
 
Uncertificated REMIC 1 Pass-Through Rate
60
 
I-50-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-49-A
 
Uncertificated REMIC 1 Pass-Through Rate
61
 
I-51-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-50-A
 
Uncertificated REMIC 1 Pass-Through Rate
62
 
I-52-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-51-A
 
Uncertificated REMIC 1 Pass-Through Rate
63
 
I-53-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-52-A
 
Uncertificated REMIC 1 Pass-Through Rate
64
 
I-54-A through I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-53-A
 
Uncertificated REMIC 1 Pass-Through Rate
65
 
I-55-A and I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-54-A
 
Uncertificated REMIC 1 Pass-Through Rate
66
 
I-56-A
 
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
   
I-1-A through I-55-A
 
Uncertificated REMIC 1 Pass-Through Rate
thereafter
 
I-1-A through I-56-A
 
Uncertificated REMIC 1 Pass-Through Rate

“Underwriters”: Each of Banc of America Securities LLC, Greenwich Capital Markets, Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Lehman Brothers Inc. and H&R Block Financial Advisors, Inc.
 
“Uninsured Cause”: Any cause of damage to a Mortgaged Property such that the complete restoration of such property is not fully reimbursable by the hazard insurance policies required to be maintained pursuant to Section 3.14.
 
“United States Person” or “U.S. Person”: A citizen or resident of the United States, a corporation, partnership (or other entity treated as a corporation or partnership for United States federal income tax purposes) created or organized in, or under the laws of, the United States, any state thereof, or the District of Columbia (except in the case of a partnership, to the extent provided in Treasury regulations) provided that, for purposes solely of the restrictions on the transfer of Residual Certificates, no partnership or other entity treated as a partnership for United States federal income tax purposes shall be treated as a United States Person unless all persons that own an interest in such partnership either directly or through any entity that is not a corporation for United States federal income tax purposes are required by the applicable operative agreement to be United States Persons, or an estate the income of which from sources without the United States is includible in gross income for United States federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States, or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust. The term “United States” shall have the meaning set forth in Section 7701 of the Code or successor provisions.
 
“Unpaid Interest Shortfall Amount”: With respect to the Class A Certificates and (i) the first Distribution Date, zero, and (ii) any Distribution Date after the first Distribution Date, the amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable Amount for such Class for the immediately preceding Distribution Date and (2) the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for such preceding Distribution Date exceeds (b) the aggregate amount distributed on such Class in respect of interest pursuant to clause (a) of this definition on such preceding Distribution Date, plus interest on the amount of interest due but not paid on the Certificates of such Class on such preceding Distribution Date, to the extent permitted by law, at the Pass-Through Rate for such Class for the related Accrual Period.
 
“Value”: With respect to any Mortgage Loan, and the related Mortgaged Property, the lesser of:
 
 
(i)
with respect to a Mortgage Loan the proceeds of which were used to purchase the related mortgaged property, the lesser of (x) the appraised value of such mortgaged property based on an appraisal made for the originator by an independent fee appraiser at the time of the origination of the related Mortgage Loan; provided however, that in accordance with Option One Underwriting Guidelines, such value may be reduced to reflect the results of a review appraisal and (y) the sales price of such mortgaged property at such time of origination; and
 
 
(ii)
with respect to a Mortgage Loan the proceeds of which were used to refinance an existing Mortgage Loan, the appraised value of such mortgaged property based on an appraisal made for the originator by an independent fee appraiser at the time of the origination of the related Mortgage Loan; provided however, that in accordance with Option One Underwriting Guidelines, such value may be reduced to reflect the results of a review appraisal.
 
“Voting Rights”: The portion of the voting rights of all of the Certificates which is allocated to any Certificate. At all times the Class A Certificates and the Class C Certificates shall have 98% of the Voting Rights (allocated among the Holders of the Class A Certificates and the Class C Certificates in proportion to the then outstanding Certificate Principal Balances of their respective Certificates), the Class P Certificates shall have 1% of the Voting Rights and the Residual Certificates shall have 1% of the Voting Rights. The Voting Rights allocated to any Class of Certificates (other than the Class P Certificates and the Residual Certificates) shall be allocated among all Holders of each such Class in proportion to the outstanding Certificate Principal Balance or Notional Amount of such Certificates and the Voting Rights allocated to the Class P Certificates and the Residual Certificates shall be allocated among all Holders of each such Class in proportion to such Holders’ respective Percentage Interest; provided, however, that when none of the Regular Certificates are outstanding, 100% of the Voting Rights shall be allocated among Holders of the Residual Certificates in accordance with such Holders’ respective Percentage Interests in the Certificates of such Class. Notwithstanding the foregoing, the Voting Rights of the Class A Certificates shall be held by the Certificate Insurer (so long as no Certificate Insurer Default exists).
 
SECTION 1.02.
Accounting.
 
Unless otherwise specified herein, for the purpose of any definition or calculation, whenever amounts are required to be netted, subtracted or added or any distributions are taken into account such definition or calculation and any related definitions or calculations shall be determined without duplication of such functions.
 
SECTION 1.03.
Allocation of Certain Interest Shortfalls.
 
For purposes of calculating the amount of the Monthly Interest Distributable Amount for each of the Class A Certificates and the Class C Certificates for any Distribution Date, (1) the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated first, among the Class C Certificates on a pro rata basis based on, and to the extent of, one month’s interest at the then applicable Pass-Through Rate on the Notional Amount of each such Certificate and, thereafter, among the Class A Certificates on a pro rata basis based on, and to the extent of, one month’s interest at the then applicable respective Pass-Through Rate on the respective Certificate Principal Balance of each such Certificate and (2) the aggregate amount of any Realized Losses and Net WAC Rate Carryover Amounts incurred for any Distribution Date shall be allocated among the Class C Certificates on a pro rata basis based on, and to the extent of, one month’s interest at the then applicable Pass-Through Rate on the Notional Amount of each such Certificate after the allocation thereto in clause (1).
 
For purposes of calculating the amount of Uncertificated Accrued Interest for the REMIC 1 Regular Interests for any Distribution Date the aggregate amount of any Net Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated first, to REMIC 1 Regular Interest I and to the REMIC 1 Regular Interests ending with the designation “B”, pro rata based on, and to the extent of, one month’s interest at the then applicable respective Uncertificated REMIC 1 Pass-Through Rates on the respective Uncertificated Principal Balances of each such REMIC 1 Regular Interest, and then, to REMIC 1 Regular Interests ending with the designation “A”, pro rata based on, and to the extent of, one month’s interest at the then applicable respective Uncertificated REMIC 1 Pass-Through Rates on the respective Uncertificated Principal Balances of each such REMIC 1 Regular Interest.
 
For purposes of calculating the amount of Uncertificated Accrued Interest for the REMIC 2 Regular Interests for any Distribution Date:
 
The REMIC 2 Marker Allocation Percentage of the aggregate amount of any Net Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated among REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTIA1, REMIC 2 Regular Interest LTIIA1, REMIC 2 Regular Interest LTIIA2, REMIC 2 Regular Interest LTIIA3, REMIC 2 Regular Interest LTIIA4 and REMIC 2 Regular Interest LTZZ, pro rata based on, and to the extent of, one month’s interest at the then applicable respective Uncertificated REMIC 1 Pass-Through Rate on the respective Uncertificated Principal Balance of each such REMIC 1 Regular Interest.
 
ARTICLE II  
 
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
 
SECTION 2.01.
Conveyance of Mortgage Loans.
 
The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse for the benefit of the Certificateholders all the right, title and interest of the Depositor, including any security interest therein for the benefit of the Depositor, in and to (i) each Mortgage Loan identified on the Mortgage Loan Schedule, including the related Cut-off Date Principal Balance, all interest accruing thereon on and after the Cut-off Date and all collections in respect of interest and principal due after the Cut-off Date; (ii) property which secured each such Mortgage Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance policies (including the Pool Policy) in respect of the Mortgage Loans; (iv) the rights of the Depositor under the Mortgage Loan Purchase Agreement, (v) all other assets included or to be included in the Trust Fund, (vi) payments made to the Trust Administrator by the Swap Administrator under the Swap Administration Agreement and the Swap Account and (vii) all proceeds of any of the foregoing. Such assignment includes all interest and principal due and collected by the Depositor or the Servicer after the Cut-off Date with respect to the Mortgage Loans.
 
In connection with such transfer and assignment, the Depositor, does hereby deliver to, and deposit with the Custodian (on behalf of the Trustee), the following documents or instruments with respect to each Mortgage Loan so transferred and assigned and the Originator, on behalf of the Depositor:
 
(i)  the original Mortgage Note, endorsed either (A) in blank, in which case the Trustee shall cause the endorsement to be completed or (B) in the following form: “Pay to the order of HSBC Bank USA, National Association. as Trustee, without recourse”, or with respect to any lost Mortgage Note, an original Lost Note Affidavit stating that the original mortgage note was lost, misplaced or destroyed, together with a copy of the related mortgage note; provided, however, that such substitutions of Lost Note Affidavits for original Mortgage Notes may occur only with respect to Mortgage Loans, the aggregate Cut-off Date Principal Balance, as applicable, of which is less than or equal to 1.00% of the Pool Balance as of the Cut-off Date;
 
(ii)  the original Mortgage with evidence of recording thereon, and the original recorded power of attorney, if the Mortgage was executed pursuant to a power of attorney, with evidence of recording thereon;
 
(iii)  an original Assignment. The Mortgage shall be assigned either (A) in blank or (B) to “HSBC Bank USA, National Association., as Trustee, without recourse”;
 
(iv)  an original of any intervening assignment of Mortgage showing a complete chain of assignments;
 
(v)  the original or a certified copy of lender’s title insurance policy; and
 
(vi)  the original or copies of each assumption, modification, written assurance or substitution agreement, if any.
 
The Trust Administrator agrees to execute and deliver (or cause the Custodian to execute and deliver) to the Depositor and the Certificate Insurer on or prior to the Closing Date an acknowledgment of receipt of the original Mortgage Note (with any exceptions noted), substantially in the form attached as Exhibit F-3 hereto.
 
If any of the documents referred to in Section 2.01(ii), (iii) or (iv) above has as of the Closing Date been submitted for recording but either (x) has not been returned from the applicable public recording office or (y) has been lost or such public recording office has retained the original of such document, the obligations of the Depositor to deliver such documents shall be deemed to be satisfied upon (1) delivery to the Custodian no later than the Closing Date, of a copy of each such document certified by the Servicer, in its capacity as Originator, in the case of (x) above or the applicable public recording office in the case of (y) above to be a true and complete copy of the original that was submitted for recording and (2) if such copy is certified by the Servicer, in its capacity as Originator, delivery to the Custodian, promptly upon receipt thereof of either the original or a copy of such document certified by the applicable public recording office to be a true and complete copy of the original. If the original lender’s title insurance policy, or a certified copy thereof, was not delivered pursuant to Section 2.01(v) above, the Servicer, in its capacity as Originator, shall deliver or cause to be delivered to the Custodian, the original or a copy of a written commitment or interim binder or preliminary report of title issued by the title insurance or escrow company or an original attorney’s opinion of title, with the original or a certified copy thereof to be delivered to the Custodian, promptly upon receipt thereof. The Servicer or the Depositor shall deliver or cause to be delivered to the Custodian promptly upon receipt thereof any other documents constituting a part of a Mortgage File received with respect to any Mortgage Loan, including, but not limited to, any original documents evidencing an assumption or modification of any Mortgage Loan.
 
Upon discovery or receipt of notice of any materially defective document in, or that a document is missing from, a Mortgage File, the Servicer, in its capacity as Originator, shall have 120 days to cure such defect or deliver such missing document to the Custodian. If the Originator does not cure such defect or deliver such missing document within such time period, the Servicer, in its capacity as Originator, shall either repurchase or substitute for such Mortgage Loan in accordance with Section 2.03.
 
The Depositor (at the expense of the Servicer, in its capacity as Originator) shall cause the Assignments which were delivered in blank to be completed and shall cause all Assignments referred to in Section 2.01(iii) hereof and, to the extent necessary, in Section 2.01(iv) hereof to be recorded. The Depositor shall be required to deliver such Assignments for recording within 90 days of the Closing Date. Notwithstanding the foregoing, however, for administrative convenience and facilitation of servicing and to reduce closing costs, the Assignments of Mortgage shall not be required to be submitted for recording (except with respect to any Mortgage Loan located in Maryland) unless the Trust Administrator and the Depositor receive notice that such failure to record would result in a withdrawal or a downgrading by any Rating Agency of the rating on any Class of Certificates; provided, however, each Assignment shall be submitted for recording by the Depositor in the manner described above, at no expense to the Trust Fund or Trustee, upon the earliest to occur of: (i) reasonable direction by Holders of Certificates entitled to at least 25% of the Voting Rights with the consent of the Certificate Insurer, (ii) the occurrence of a Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Servicer, (iv) the occurrence of a servicing transfer as described in Section 7.02 hereof, (v) if the Originator is not the Servicer and with respect to any one Assignment the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage, (vi) any Mortgage Loan that is 90 days or more Delinquent and such recordation would be necessary to facilitate conversion of the Mortgaged Property in accordance with Section 3.16 and (vii) reasonable direction by the Certificate Insurer. Upon (a) receipt of written notice from the Custodian that recording of the Assignments is required pursuant to one or more of the conditions (excluding (v) and (vi) above) set forth in the preceding sentence or (b) upon the occurrence of condition (v) or (vi) in the preceding sentence, the Depositor shall be required to deliver such Assignments for recording as provided above, promptly and in any event within 30 days following receipt of such notice. Notwithstanding the foregoing, if the Originator fails to pay the cost of recording the Assignments, such expense will be paid by the Custodian and the Custodian shall be reimbursed for such expenses by the Trust. To the extent not previously delivered to the Trustee by the Depositor, the Depositor shall furnish the Custodian, or its designated agent, with a copy of each Assignment submitted for recording. In the event that any such Assignment is lost or returned unrecorded because of a defect therein, the Depositor shall promptly have a substitute Assignment prepared or have such defect cured, as the case may be, and thereafter cause each such Assignment to be duly recorded.
 
The Depositor herewith delivers to the Custodian and Trust Administrator an executed copy of the Mortgage Loan Purchase Agreement and delivers to the Trust Administrator the Pool Policy.
 
In addition, on or prior to the Closing Date, the Depositor shall cause the Certificate Insurer to deliver the Policy to the Custodian.
 
The Servicer shall forward to the Custodian original documents evidencing an assumption, modification, consolidation or extension of any Mortgage Loan entered into in accordance with this Agreement within two weeks of their execution; provided, however, that the Servicer shall provide the Custodian with a certified true copy of any such document submitted for recordation within two weeks of its execution, and shall provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office to be a true and complete copy of the original within 365 days of its submission for recordation. In the event that the Servicer cannot provide a copy of such document certified by the public recording office within such 365 day period, an Officers’ Certificate of the Servicer which shall (A) identify the recorded document, (B) state that the recorded document has not been delivered to the Custodian due solely to a delay caused by the public recording office, (C) state the amount of time generally required by the applicable recording office to record and return a document submitted for recordation, if known and (D) specify the date the applicable recorded document is expected to be delivered to the Custodian, and, upon receipt of a copy of such document certified by the public recording office, the Servicer shall immediately deliver such document to the Custodian. In the event the appropriate public recording office will not certify as to the accuracy of such document, the Servicer shall deliver a copy of such document certified by an officer of the Servicer to be a true and complete copy of the original to the Custodian.
 
The parties hereto understand and agree that it is not intended that any mortgage loan be included in the Trust that is a high-cost home loan as defined by the HOEPA or any other applicable predatory or abusive lending laws. Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge that the functions of the Trustee with respect to the custody, acceptance, inspection and release of Mortgage Files, including but not limited to certain insurance policies and documents contemplated by this Agreement, and preparation and delivery of the certifications shall be performed by the Custodian pursuant to the terms and conditions of this Agreement.
 
SECTION 2.02.
Acceptance by Trustee and the Trust Administrator.
 
The Trustee acknowledges the receipt of the Pool Policy and, subject to the provisions of Section 2.01 and subject to the review described below and any exceptions noted on the exception report described in the next paragraph below, the Trustee acknowledges receipt of the documents referred to in Section 2.01 above and all other assets included in the definition of “Trust Fund” and declares that it holds and will hold such documents and the other documents delivered to it constituting a Mortgage File, and that it holds or will hold all such assets and such other assets included in the definition of “Trust Fund” in trust for the exclusive use and benefit of all present and future Certificateholders and the Certificate Insurer.
 
The Trust Administrator acknowledges receipt of the Policy.
 
The Trust Administrator (or the Custodian on behalf of the Trust Administrator) agrees, for the benefit of the Certificateholders and the Certificate Insurer, to review, or that it has reviewed pursuant to Section 2.01 (or to cause the Custodian to review or that it has caused the Custodian to have reviewed) each Mortgage File on or prior to the Closing Date, with respect to each Mortgage Loan (or, with respect to any document delivered after the Startup Day, within 45 days of receipt and with respect to any Qualified Substitute Mortgage Loan, within 45 days after the assignment thereof). The Custodian further agrees, for the benefit of the Certificateholders and the Certificate Insurer, to certify to the Depositor and the Servicer in substantially the form attached hereto as Exhibit F-1, within 45 days after the Closing Date, with respect to each Mortgage Loan (or, with respect to any document delivered after the Startup Day, within 45 days of receipt and with respect to any Qualified Substitute Mortgage, within 45 days after the assignment thereof) that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in the exception report annexed thereto as not being covered by such certification), (i) all documents required to be delivered to it pursuant Section 2.01 of this Agreement are in its possession, (ii) such documents have been reviewed by it and have not been mutilated, damaged or torn and relate to such Mortgage Loan and (iii) based on its examination and only as to the foregoing, the information set forth in the Mortgage Loan Schedule that corresponds to items (1) and (2) of the Mortgage Loan Schedule accurately reflects information set forth in the Mortgage File. It is herein acknowledged that, in conducting such review, the Trust Administrator (or the Custodian, as applicable) is under no duty or obligation to inspect, review or examine any such documents, instruments, certificates or other papers to determine that they are genuine, enforceable, or appropriate for the represented purpose or that they have actually been recorded or that they are other than what they purport to be on their face.
 
Prior to the first anniversary date of this Agreement the Custodian shall deliver (or cause the Custodian to deliver) to the Depositor, the Trustee, the Servicer, the Master Servicer and the Certificate Insurer a final certification in the form annexed hereto as Exhibit F-2 evidencing the completeness of the Mortgage Files, with any applicable exceptions noted thereon.
 
If in the process of reviewing the Mortgage Files and making or preparing, as the case may be, the certifications referred to above, the Trust Administrator (or the Custodian, as applicable) finds any document or documents constituting a part of a Mortgage File to be missing or defective in any material respect, at the conclusion of its review the Trust Administrator (or the Custodian on behalf of the Trust Administrator) shall so notify the Originator, the Depositor, the Trust Administrator, the Trustee, the Master Servicer, the Certificate Insurer and the Servicer. In addition, upon the discovery by the Originator, the Depositor, the Certificate Insurer, the Master Servicer, or the Servicer (or upon receipt by the Trust Administrator of written notification of such breach) of a breach of any of the representations and warranties made by the Originator in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which materially adversely affects such Mortgage Loan or the interests of the related Certificateholders in such Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties to this Agreement and the Certificate Insurer.
 
The Depositor, the Trust Administrator and the Trustee intend that the assignment and transfer herein contemplated constitute a sale of the Mortgage Loans, the related Mortgage Notes and the related documents, conveying good title thereto free and clear of any liens and encumbrances, from the Depositor to the Trustee in trust for the benefit of the Certificateholders and the Certificate Insurer and that such property not be part of the Depositor’s estate or property of the Depositor in the event of any insolvency by the Depositor. In the event that such conveyance is deemed to be, or to be made as security for, a loan, the parties intend that the Depositor shall be deemed to have granted and does hereby grant to the Trustee a first priority perfected security interest in all of the Depositor’s right, title and interest in and to the Mortgage Loans, the related Mortgage Notes and the related documents, and that this Agreement shall constitute a security agreement under applicable law.
 
SECTION 2.03.
Repurchase or Substitution of Mortgage Loans by the Originator or the Obligor.
 
(a)  Upon discovery or receipt of written notice of any materially defective document in, or that a document is missing from, a Mortgage File or of the breach by the Originator or the Obligor of any representation, warranty or covenant under the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which materially adversely affects the value of such Mortgage Loan or the interest therein of the Certificateholders or the Certificate Insurer, the Trustee shall promptly notify the Originator, the Certificate Insurer, the Obligor, the Master Servicer, the Trust Administrator and the Servicer of such defect, missing document or breach and request that the Originator or the Obligor, as applicable and as set forth in the Mortgage Loan Purchase Agreement, deliver such missing document or cure such defect or breach within 120 days from the date the Originator or the Obligor, as applicable, was notified of such missing document, defect or breach, and if the Originator or the Obligor, as applicable, does not deliver such missing document or cure such defect or breach in all material respects during such period, the Trustee shall enforce the Originator’s or the Obligor’s obligation under the Mortgage Loan Purchase Agreement and cause the Originator or the Obligor, as applicable, to repurchase such Mortgage Loan from the Trust Fund at the Purchase Price on or prior to the Determination Date following the expiration of such 120 day period (subject to Section 2.03(e)). The Purchase Price for the repurchased Mortgage Loan shall be deposited in the Collection Account, and the Trustee, upon receipt of written certification from the Servicer of such deposit, shall cause the Custodian to release to the Originator or the Obligor, as applicable, the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Originator or the Obligor, as applicable, shall furnish to it and as shall be necessary to vest in the Originator or the Obligor, as applicable, any Mortgage Loan released pursuant hereto and neither the Trustee nor the Custodian shall have any further responsibility with regard to such Mortgage File (it being understood that the Trustee shall have no responsibility for determining the sufficiency of such assignment for its intended purpose). In lieu of repurchasing any such Mortgage Loan as provided above, the Originator or the Obligor, as applicable, may cause such Mortgage Loan to be removed from the Trust Fund (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans in the manner and subject to the limitations set forth in Section 2.03(d). It is understood and agreed that the obligation of the Originator or the Obligor, as applicable, to cure or to repurchase (or to substitute for) any Mortgage Loan as to which a document is missing, a material defect in a constituent document exists or as to which such a breach has occurred and is continuing shall constitute the sole remedy against the Originator or the Obligor, as applicable, respecting such omission, defect or breach available to the Trustee on behalf of the Certificateholders and the Certificate Insurer.
 
(b)  Within 90 days of the earlier of discovery by the Depositor or receipt of notice by the Depositor of the breach of any representation, warranty or covenant of the Depositor set forth in Section 2.06 which materially and adversely affects the interests of the Certificateholders or the Certificate Insurer in any Mortgage Loan, the Depositor shall cure such breach in all material respects.
 
(c)  Within 90 days of the earlier of discovery by the Servicer or receipt of notice by the Servicer of the breach of any representation, warranty or covenant of the Servicer set forth in Section 2.05 which materially and adversely affects the interests of the Certificateholders or the Certificate Insurer in any Mortgage Loan, the Servicer shall cure such breach in all material respects.
 
(d)  Any substitution of Qualified Substitute Mortgage Loans for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected prior to the last Business Day that is within two years after the Closing Date. As to any Deleted Mortgage Loan for which the Originator or the Obligor, as applicable, substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected by the Originator or the Obligor, as applicable, delivering to the Custodian, for such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage and the Assignment to the Custodian, and such other documents and agreements, with all necessary endorsements thereon, as are required by Section 2.01, together with an Officers’ Certificate providing that each such Qualified Substitute Mortgage Loan satisfies the definition thereof and specifying the Substitution Adjustment (as described below), if any, in connection with such substitution. The Trustee (or the Custodian on behalf of the Trustee), shall acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans and, within ten Business Days thereafter, shall review such documents as specified in Section 2.02 and deliver to the Servicer and the Certificate Insurer, with respect to such Qualified Substitute Mortgage Loan or Loans, a certification substantially in the form attached hereto as Exhibit F-1, with any applicable exceptions noted thereon. Within one year of the date of substitution, the Trustee (or the Custodian on behalf of the Trustee) shall deliver to the Servicer, the Trustee and the Certificate Insurer a certification substantially in the form of Exhibit F-2 hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution are not part of the Trust Fund and will be retained by the Originator or the Obligor, as applicable. For the month of substitution, distributions to Certificateholders will reflect the collections and recoveries in respect of such Deleted Mortgage Loan in the Due Period preceding the month of substitution and the Originator or the Obligor, as applicable, shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Mortgage Loan. The Originator or the Obligor, as applicable, shall give or cause to be given written notice to the Certificateholders and the Certificate Insurer that such substitution has taken place, shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the Certificate Insurer, the Master Servicer, the Trust Administrator, the Trustee and the Custodian. Upon such substitution by the Originator or the Obligor, as applicable, such Qualified Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be subject in all respects to the terms of this Agreement and the Mortgage Loan Purchase Agreement, including all applicable representations and warranties thereof included in the Mortgage Loan Purchase Agreement as of the date of substitution.
 
For any month in which the Originator or the Obligor, as applicable, substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will determine the amount (the “Substitution Adjustment”), if any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the aggregate, as to each such Qualified Substitute Mortgage Loan, of the principal balance thereof as of the date of substitution, together with one month’s interest on such principal balance at the applicable Net Mortgage Rate. On the date of such substitution, the Originator or the Obligor, as applicable, will deliver or cause to be delivered to the Servicer for deposit in the Collection Account an amount equal to the Substitution Adjustment, if any, and the Trustee (or the Custodian on behalf of the Trustee), upon receipt of the related Qualified Substitute Mortgage Loan or Loans and certification by the Servicer of such deposit, shall release to the Originator or the Obligor, as applicable, the related Mortgage File or Files and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Originator or the Obligor, as applicable, shall deliver to it and as shall be necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
 
In addition, the Originator or the Obligor, as applicable, shall obtain at its own expense and deliver to the Trustee, the Trust Administrator and the Certificate Insurer an Opinion of Counsel to the effect that such substitution will not cause (a) any federal tax to be imposed on the Trust Fund, including without limitation, any federal tax imposed on “prohibited transactions” under Section 860F(a)(l) of the Code or on “contributions after the startup date” under Section 860G(d)(l) of the Code or (b) any REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding. If such Opinion of Counsel cannot be delivered, then such substitution may only be effected at such time as the required Opinion of Counsel can be given.
 
Upon discovery by the Originator, the Master Servicer, the Servicer, the Certificate Insurer or the Trust Administrator that any Mortgage Loan does not constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall within two Business Days give written notice thereof to the other parties. In connection therewith, the Originator, the Obligor or the Depositor, as the case may be, shall repurchase or, subject to the limitations set forth in Section 2.03(d), substitute one or more Qualified Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the earlier of discovery or receipt of such notice with respect to such affected Mortgage Loan. Such repurchase or substitution shall be made (i) by the Originator or the Obligor, as applicable, if the affected Mortgage Loan’s status as a non-qualified mortgage is or results from a breach of any representation, warranty or covenant made by the Originator or the Obligor under the Mortgage Loan Purchase Agreement or (ii) the Depositor, if the affected Mortgage Loan’s status as a non-qualified mortgage is a breach of any representation or warranty of the Depositor set forth in Section 2.06, or if its status as a non-qualified mortgage is a breach of no representation or warranty. Any such repurchase or substitution shall be made in the same manner as set forth in Section 2.03(a), if made by the Originator or the Obligor, or Section 2.03(b), if made by the Depositor. The Trustee shall reconvey to the Depositor or the Originator or the Obligor, as the case may be, the Mortgage Loan to be released pursuant hereto in the same manner, and on the same terms and conditions, as it would a Mortgage Loan repurchased for breach of a representation or warranty.
 
SECTION 2.04.
Intentionally Omitted.
 
SECTION 2.05.
Representations, Warranties and Covenants of Servicer and the Master Servicer.
 
(a)  The Servicer hereby represents, warrants and covenants to the Trust Administrator and the Trustee, for the benefit of each of the Trustee, the Trust Administrator, the Certificate Insurer and the Certificateholders and to the Depositor that as of the Closing Date or as of such date specifically provided herein:
 
(i)  The Servicer is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its formation 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 the Servicer or to ensure the enforceability or validity of each Mortgage Loan; the Servicer has the power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by the Servicer and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of the Servicer, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally; and all requisite corporate action has been taken by the Servicer to make this Agreement valid and binding upon the Servicer in accordance with its terms;
 
(ii)  The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Servicer and will not result in the breach of any term or provision of the charter or by-laws of the Servicer 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 the Servicer or its property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Servicer or its property is subject;
 
(iii)  The execution and delivery of this Agreement by the Servicer and the performance and compliance with its obligations and covenants hereunder do not require the consent or approval of any governmental authority or, if such consent or approval is required, it has been obtained;
 
(iv)  This Agreement, and all documents and instruments contemplated hereby which are executed and delivered by the Servicer, constitute and will constitute valid, legal and binding obligations of the Servicer, enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by applicable bankruptcy laws and general principles of equity;
 
(v)  [Reserved];
 
(vi)  The Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;
 
(vii)  There is no action, suit, proceeding or investigation pending or, to its knowledge, threatened against the Servicer that, either individually or in the aggregate, (A) may result in any change in the business, operations, financial condition, properties or assets of the Servicer that might prohibit or materially and adversely affect the performance by the Servicer of its obligations under, or validity or enforceability of, this Agreement, or (B) may result in any material impairment of the right or ability of the Servicer to carry on its business substantially as now conducted, or (C) may result in any material liability on the part of the Servicer, or (D) would draw into question the validity or enforceability of this Agreement or of any action taken or to be taken in connection with the obligations of the Servicer contemplated herein, or (E) would otherwise be likely to impair materially the ability of the Servicer to perform under the terms of this Agreement;
 
(viii)  Neither this Agreement nor any information, certificate of an officer, statement furnished in writing or report delivered to the Trustee by the Servicer in connection with the transactions contemplated hereby contains any untrue statement of a material fact;
 
(ix)  The Servicer covenants that its computer and other systems used in servicing the Mortgage Loans operate in a manner such that the Servicer can service the Mortgage Loans in accordance with the terms of this Agreement;
 
(x)  The information set forth in the Prepayment Charge Schedule (including the Prepayment Charge Summary attached thereto) is complete, true and correct in all material respects on the date or dates when such information is furnished and each Prepayment Charge is permissible and enforceable in accordance with its terms (except to the extent that the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws affecting creditor’s rights generally or the collectability thereof may be limited due to acceleration in connection with a foreclosure) under applicable federal, state and local law;
 
(xi)  The Servicer will not waive any Prepayment Charge unless it is waived in accordance with the standard set forth in Section 3.01; and
 
(xii)  The Servicer has accurately and fully reported, and will continue to accurately and fully report, its borrower credit files to each of the credit repositories in a timely manner.
 
It is understood and agreed that the representations, warranties and covenants set forth in this Section 2.05 shall survive delivery of the Mortgage Files to the Trustee or to the Custodian on its behalf and shall inure to the benefit of the Trustee, the Trust Administrator, the Depositor, the Certificate Insurer and the Certificateholders. Upon discovery by any of the Depositor, The Trust Administrator, the Certificate Insurer, the Servicer, the Originator or the Trustee of a breach of any of the foregoing representations, warranties and covenants which materially and adversely affects the value of any Mortgage Loan, Prepayment Charge or the interests therein of the Certificateholders or the Certificate Insurer, the party discovering such breach shall give prompt written notice (but in no event later than two Business Days following such discovery) to the Servicer, the Trust Administrator, the Originator, the Certificate Insurer and the Trustee. Notwithstanding the foregoing, within 90 days of the earlier of discovery by the Servicer or receipt of notice by the Servicer of the breach of the representation or covenant of the Servicer (in its capacity as Originator) set forth in Sections 2.05(x) or 2.05(xi) above which materially and adversely affects the interests of the Holders of the Class P Certificates in any Prepayment Charge, the Servicer shall remedy such breach as follows: (a) if the representation made by the Servicer (in its capacity as Originator) in Section 2.05(x) above is breached and a Principal Prepayment has occurred in the applicable Prepayment Period or if a change of law subsequent to the Closing Date limits the enforceability of a Prepayment Charge (other than in the circumstances provided in Section 2.05(x) above), the Servicer (in its capacity as Originator) must pay the amount of the scheduled Prepayment Charge, for the benefit of the Holders of the Class P Certificates, by depositing such amount into the Collection Account, net of any amount previously collected by the Servicer and paid by the Servicer, for the benefit of the Holders of the Class P Certificates, in respect of such Prepayment Charge; and (b) if any of the covenants made by the Servicer in Section 2.05(xi) above is breached, the Servicer must pay the amount of such waived Prepayment Charge, for the benefit of the Holders of the Class P Certificates, by depositing such amount into the Collection Account. The foregoing shall not, however, limit any remedies available to the Certificateholders, the Depositor, the Trust Administrator, the Certificate Insurer or the Trustee on behalf of the Certificateholders and the Certificate Insurer, pursuant to the Mortgage Loan Purchase Agreement signed by the Servicer in its capacity as Originator, respecting a breach of the representations, warranties and covenants of the Servicer in its capacity as Originator contained in the Mortgage Loan Purchase Agreement.
 
(b)  The Master Servicer hereby represents, warrants and covenants to the Trustee, for the benefit of each of the Trustee, the Certificateholders, the Certificate Insurer and to the Servicer and the Depositor that as of the Closing Date or as of such date specifically provided herein:
 
(i)  The Master Servicer is a national banking association duly formed, validly existing and in good standing under the laws of the United States of America and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Master Servicer;
 
(ii)  The Master Servicer has the full power and authority to conduct its business as presently conducted by it and to execute, deliver and perform, and to enter into and consummate, all transactions contemplated by this Agreement. The Master Servicer has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement, assuming due authorization, execution and delivery by the Depositor and the Trustee, constitutes a legal, valid and binding obligation of the Master Servicer, enforceable against it in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity;
 
(iii)  The execution and delivery of this Agreement by the Master Servicer, the consummation by the Master Servicer of any other of the transactions herein contemplated, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Master Servicer and will not (A) result in a breach of any term or provision of charter and by-laws of the Master Servicer or (B) conflict with, result in a breach, violation or acceleration of, or result in a default under, the terms of any other material agreement or instrument to which the Master Servicer is a party or by which it may be bound, or any statute, order or regulation applicable to the Master Servicer of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Master Servicer; and the Master Servicer is not a party to, bound by, or in breach or violation of any indenture or other agreement or instrument, or subject to or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it, which materially and adversely affects or, to the Master Servicer’s knowledge, would in the future materially and adversely affect, the ability of the Master Servicer to perform its obligations under this Agreement;
 
(iv)  The Master Servicer or an Affiliate thereof is an approved seller/servicer for Fannie Mae or Freddie Mac in good standing and is a HUD approved mortgagee pursuant to Section 203 of the National Housing Act;
 
(v)  The Master Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant made by it and contained in this Agreement;
 
(vi)  No litigation is pending against the Master Servicer that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of the Master Servicer to perform any of its other obligations hereunder in accordance with the terms hereof;
 
(vii)  There are no actions or proceedings against, or investigations known to it of, the Master Servicer before any court, administrative or other tribunal (A) that might prohibit its entering into this Agreement, (B) seeking to prevent the consummation of the transactions contemplated by this Agreement or (C) that might prohibit or materially and adversely affect the performance by the Master Servicer of its obligations under, or validity or enforceability of, this Agreement; and
 
(viii)  No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Master Servicer of, or compliance by the Master Servicer with, this Agreement or the consummation of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations or orders, if any, that have been obtained prior to the Closing Date.
 
It is understood and agreed that the representations, warranties and covenants set forth in this Section 2.05 shall survive delivery of the Mortgage Files to the Trust Administrator, the Trustee or the Custodian, as applicable and shall inure to the benefit of the Trustee, the Depositor, the Certificate Insurer and the Certificateholders. Upon discovery by any of the Depositor, the Servicer, the Master Servicer, the Certificate Insurer or the Trustee of a breach of any of the foregoing representations, warranties and covenants which materially and adversely affects the value of any Mortgage Loan or the interests therein of the Certificateholders or the Certificate Insurer, the party discovering such breach shall give prompt written notice (but in no event later than two Business Days following such discovery) to other parties to this Agreement and the Certificate Insurer.
 
SECTION 2.06.
Representations and Warranties of the Depositor.
 
The Depositor represents and warrants to the Trust and the Trustee on behalf of the Certificateholders and the Certificate Insurer as follows:
 
(i)  This Agreement constitutes a legal, valid and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity);
 
(ii)  Immediately prior to the sale and assignment by the Depositor to the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor had good and marketable title to each Mortgage Loan (insofar as such title was conveyed to it by the Seller) subject to no prior lien, claim, participation interest, mortgage, security interest, pledge, charge or other encumbrance or other interest of any nature;
 
(iii)  As of the Closing Date, the Depositor has transferred all right, title and interest in the Mortgage Loans to the Trustee on behalf of the Trust;
 
(iv)  The Depositor has not transferred the Mortgage Loans to the Trustee on behalf of the Trust with any intent to hinder, delay or defraud any of its creditors;
 
(v)  The Depositor has been duly incorporated and is validly existing as a corporation in good standing under the laws of Delaware, with full corporate power and authority to own its assets and conduct its business as presently being conducted;
 
(vi)  The Depositor is not in violation of its articles of incorporation or by-laws or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Depositor is a party or by which it or its properties may be bound, which default might result in any material adverse changes in the financial condition, earnings, affairs or business of the Depositor or which might materially and adversely affect the properties or assets, taken as a whole, of the Depositor;
 
(vii)  The execution, delivery and performance of this Agreement by the Depositor, and the consummation of the transactions contemplated thereby, do not and will not result in a material breach or violation of any of the terms or provisions of, or, to the knowledge of the Depositor, constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Depositor is a party or by which the Depositor is bound or to which any of the property or assets of the Depositor is subject, nor will such actions result in any violation of the provisions of the articles of incorporation or by-laws of the Depositor or, to the best of the Depositor’s knowledge without independent investigation, any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Depositor or any of its properties or assets (except for such conflicts, breaches, violations and defaults as would not have a material adverse effect on the ability of the Depositor to perform its obligations under this Agreement);
 
(viii)  To the best of the Depositor’s knowledge without any independent investigation, no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body of the United States or any other jurisdiction is required for the issuance of the Certificates, or the consummation by the Depositor of the other transactions contemplated by this Agreement, except such consents, approvals, authorizations, registrations or qualifications as (a) may be required under State securities or Blue Sky laws, (b) have been previously obtained or (c) the failure of which to obtain would not have a material adverse effect on the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement;
 
(ix)  There are no actions, proceedings or investigations pending before or, to the Depositor’s knowledge, threatened by any court, administrative agency or other tribunal to which the Depositor is a party or of which any of its properties is the subject: (a) which if determined adversely to the Depositor would have a material adverse effect on the business, results of operations or financial condition of the Depositor; (b) asserting the invalidity of this Agreement or the Certificates; (c) seeking to prevent the issuance of the Certificates or the consummation by the Depositor of any of the transactions contemplated by this Agreement, as the case may be; or (d) which might materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement; and
 
(x)  The beneficial owner of the payments made under the Interest Rate Swap Agreement is either (i) a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations) for United States federal income tax purposes or (ii) a “non-U.S. branch of a foreign person” as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations (the “Regulations”) for United States federal income tax purposes, and it is a “foreign person” as that term is used in section 1.6041-4(a)(4) of the Regulations for United States federal income tax purposes. As of the Closing Date, Option One Mortgage Capital Corporation is the beneficial owner of the payments made under the Interest Rate Swap Agreement.
 
SECTION 2.07.
Issuance of Certificates.
 
The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery to it (or the Custodian, on the Trustee’s behalf) of the Mortgage Files, subject to the provisions of Sections 2.01 and 2.02, together with the assignment to it of all other assets included in the Trust Fund, receipt of which is hereby acknowledged. Concurrently with such assignment and delivery and in exchange therefor, the Trust Administrator, pursuant to the written request of the Depositor executed by an officer of the Depositor, has executed, authenticated and delivered to or upon the order of the Depositor, the Certificates in authorized denominations. The interests evidenced by the Certificates, constitute the entire beneficial ownership interest in the Trust Fund.
 
SECTION 2.08.
Authorization to Enter into Interest Rate Swap Agreement.
 
The Trust Administrator, not in its individual capacity but solely in its separate capacity as Supplemental Interest Trust Trustee, is hereby directed to exercise the rights, perform the obligations, and make any representations to be exercised, performed, or made by the Supplemental Interest Trust Trustee, as described herein. The Supplemental Interest Trust Trustee is hereby directed to execute and deliver the Interest Rate Swap Agreement on behalf of Party B (as defined therein) and to exercise the rights, perform the obligations, and make the representations of Party B thereunder, solely in its capacity as Supplemental Interest Trust Trustee on behalf of Party B (as defined therein) and not in its individual capacity. The Servicer, the Depositor and the Certificateholders (by acceptance of their Certificates) acknowledge and agree that (i) the Supplemental Interest Trust Trustee shall execute and deliver the Interest Rate Swap Agreement on behalf of Party B (as defined therein), (ii) the Supplemental Interest Trust Trustee shall exercise the rights, perform the obligations, and make the representations of Party B thereunder, solely in its capacity as Supplemental Interest Trust Trustee on behalf of Party B (as defined therein) and not in its individual capacity and (iii) the Swap Administrator shall also be entitled to exercise the rights and be obligated to perform the obligations of Party B under the Interest Rate Swap Agreement.

Every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Trust Administrator shall apply to the Supplemental Interest Trust Trustee’s execution of the Interest Rate Swap Agreement, and the performance of its duties and satisfaction of its obligations thereunder.

Every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Swap Administrator shall apply to the Swap Administrator’s performance of its duties and satisfaction of its obligations under the Interest Rate Swap Agreement.

SECTION 2.09.
Conveyance of REMIC Regular Interests and Acceptance of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC 5 and REMIC 6 by the Trustee; Issuance of Certificates.
 
(a)  The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the assets described in the definition of REMIC 1 for the benefit of the holders of the REMIC 1 Regular Interests (which are uncertificated) and the Class R Certificates (in respect of the Class R-1 Interest). The Trustee acknowledges receipt of the assets described in the definition of REMIC 1 and declares that it holds and will hold the same in trust for the exclusive use and benefit of the holders of the REMIC 1 Regular Interests and the Class R Certificates (in respect of the Class R-1 Interest). The interests evidenced by the Class R-1 Interest, together with the REMIC 1 Regular Interests, constitute the entire beneficial ownership interest in REMIC 1.
 
(b)  The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to REMIC 1 Regular Interests for the benefit of the holders of the REMIC 2 Regular Interests (which are uncertificated) and the Class R Certificates (in respect of the Class R-2 Interest). The Trustee acknowledges receipt of the assets described in the definition of REMIC 2 and declares that it holds and will hold the same in trust for the exclusive use and benefit of the holders of the REMIC 2 Regular Interests and the Class R Certificates (in respect of the Class R-2 Interest). The interests evidenced by the Class R-2 Interest, together with the REMIC 2 Regular Interests, constitute the entire beneficial ownership interest in REMIC 2.
 
(c)  The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the REMIC 2 Regular Interests (which are uncertificated) for the benefit of the Holders of the REMIC 3 Regular Interests and the Class R Certificates (in respect of the Class R-3 Interest). The Trustee acknowledges receipt of the REMIC 2 Regular Interests and declares that it holds and will hold the same in trust for the exclusive use and benefit of the Holders of the REMIC 3 Regular Certificates, the Class C Interest, Class P Interest and Class SWAP-IO Interest and the Class R Certificates (in respect of the Class R-3 Interest). The interests evidenced by the Class R-3 Interest, together with the REMIC 3 Regular Certificates, the Class C Interest, Class P Interest and Class SWAP-IO Interest, constitute the entire beneficial ownership interest in REMIC 3.
 
(d)  The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the Class C Interest (which is uncertificated) for the benefit of the Holders of the Class C Certificates and the Class R-X Certificates (in respect of the Class R-4 Interest). The Trustee acknowledges receipt of the Class C Interest and declares that it holds and will hold the same in trust for the exclusive use and benefit of the Holders of the Class C Certificates and the Class R-X Certificates (in respect of the Class R-4 Interest). The interests evidenced by the Class R-4 Interest, together with the Class C Certificates, constitute the entire beneficial ownership interest in REMIC 4.
 
(e)   The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the Class P Interest (which is uncertificated) for the benefit of the Holders of the Class P Certificates and the Class R-X Certificates (in respect of the Class R-5 Interest). The Trustee acknowledges receipt of the Class P Interest and declares that it holds and will hold the same in trust for the exclusive use and benefit of the Holders of the Class P Certificates and the Class R-X Certificates (in respect of the Class R-5 Interest). The interests evidenced by the Class R-5 Interest, together with the Class P Certificates, constitute the entire beneficial ownership interest in REMIC 5.
 
(f)  The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the Class SWAP-IO Interest (which is uncertificated) for the benefit of the Holders of REMIC 6 Regular Interest SWAP-IO and the Class R-X Certificates (in respect of the Class R-6 Interest). The Trustee acknowledges receipt of the Class SWAP-IO Interest and declares that it holds and will hold the same in trust for the exclusive use and benefit of the Holders of REMIC 6 Regular Interest SWAP-IO and the Class R-X Certificates (in respect of the Class R-6 Interest). The interests evidenced by the Class R-6 Interest, together with REMIC 6 Regular Interest SWAP-IO, constitute the entire beneficial ownership interest in REMIC 6.
 
(g)  Concurrently with (i) the assignment and delivery to the Trustee of REMIC 1 and the acceptance by the Trustee thereof, pursuant to Section 2.01 and Section 2.02, (ii) the assignment and delivery to the Trustee of REMIC 2 (including the Residual Interest therein represented by the Class R-2 Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.09(b), (iii) the assignment and delivery to the Trustee of REMIC 3 (including the Residual Interest therein represented by the Class R-3 Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.09(c), (iv) the assignment and delivery to the Trustee of REMIC 4 (including the Residual Interest therein represented by the Class R-4 Interest), and the acceptance by the Trustee thereof, pursuant to Section 2.09(d), (v) the assignment and delivery to the Trustee of REMIC 5 (including the Residual Interest therein represented by the Class R-5 Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.09(e) and (vi) the assignment and delivery to the Trustee of REMIC 6 (including the Residual Interest therein represented by the Class R-6 Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.09(f), the Trust Administrator, pursuant to the written request of the Depositor executed by an officer of the Depositor, has executed, authenticated and delivered to or upon the order of the Depositor, (A) the Class R Certificates in authorized denominations evidencing the Class R-1 Interest, Class R-2 Interest and the Class R-3 Interest and (B) the Class R-X Certificates in authorized denominations evidencing the Class R-4 Interest, the Class R-5 Interest and the Class R-6 Interest.
 
SECTION 2.10.
Negative Covenants of the Trustee, the Trust Administrator and the Servicer.
 
Except as otherwise expressly permitted by this Agreement, the Trustee, the Trust Administrator and the Servicer shall not cause the Trust Fund to:
 
(i)  sell, transfer, exchange or otherwise dispose of any of the assets of the Trust Fund;
 
(ii)  dissolve or liquidate the Trust Fund in whole or in part;
 
(iii)  engage, directly or indirectly, in any business other than that arising out of the issuance of the Certificates, and the actions contemplated or required to be performed under this Agreement;
 
(iv)  incur, create or assume any indebtedness for borrowed money;
 
(v)  voluntarily file a petition for bankruptcy, reorganization, assignment for the benefit of creditors or similar proceeding; or
 
(vi)  merge, convert or consolidate with any other Person.
 
ARTICLE III  
 
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
 
SECTION 3.01.
Servicer to Act as Servicer.
 
The Servicer shall service and administer the Mortgage Loans on behalf of the Trust and in the best interests of and for the benefit of the Certificateholders and the Certificate Insurer (as determined by the Servicer in its reasonable judgment) in accordance with the terms of this Agreement and the Mortgage Loans and, to the extent consistent with such terms, in the same manner in which it services and administers similar mortgage loans for its own portfolio, giving due consideration to customary and usual standards of practice of mortgage lenders and loan servicers administering similar mortgage loans but without regard to:
 
(A)  any relationship that the Servicer, any Sub-Servicer or any Affiliate of the Servicer or any Sub-Servicer may have with the related Mortgagor;
 
(B)  the ownership or non-ownership of any Certificate by the Servicer or any Affiliate of the Servicer;
 
(C)  the Servicer’s obligation to make Advances or Servicing Advances; or
 
(D)  the Servicer’s or any Sub-Servicer’s right to receive compensation for its services hereunder or with respect to any particular transaction.
 
To the extent consistent with the foregoing, the Servicer (a) shall seek the timely and complete recovery of principal and interest on the Mortgage Notes and (b) shall waive (or permit a Sub-Servicer to waive) a Prepayment Charge only under the following circumstances: (i) such waiver is standard and customary in servicing similar Mortgage Loans and (ii) either (A) such waiver relates to a default or a reasonably foreseeable default and would, in the reasonable judgment of the Servicer, maximize recovery of total proceeds taking into account the value of such Prepayment Charge and the related Mortgage Loan or (B) such waiver is made in connection with a refinancing of the related Mortgage Loan unrelated to a default or a reasonably foreseeable default where (x) the related Mortgagor has stated to the Servicer or an applicable Sub-Servicer an intention to refinance the related Mortgage Loan and (y) the Servicer has concluded in its reasonable judgment that the waiver of such Prepayment Charge would induce such mortgagor to refinance with the Servicer; provided, however, that the Servicer shall waive no more than 5.00% of the Prepayment Charges (by number of Prepayment Charges) set forth on the Prepayment Charge Schedule in accordance with clause (ii)(B) above. If a Prepayment Charge is waived as permitted by meeting the standards described in clauses (i) and (ii)(B) above, then the Servicer is required to pay the amount of such waived Prepayment Charge, for the benefit of the Holders of the Class P Certificates, by depositing such amount into the Collection Account together with and at the time that the amount prepaid on the related Mortgage Loan is required to be deposited into the Collection Account. Notwithstanding any other provisions of this Agreement, any payments made by the Servicer in respect of any waived Prepayment Charges pursuant to clauses (i) and (ii)(B) above shall be deemed to be paid outside of the Trust Fund. Subject only to the above-described servicing standards and the terms of this Agreement and of the Mortgage Loans, the Servicer shall have full power and authority, acting alone or through Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all things in connection with such servicing and administration which it may deem necessary or desirable. Without limiting the generality of the foregoing, the Servicer in its own name or in the name of a Sub-Servicer is hereby authorized and empowered by the Trustee when the Servicer believes it appropriate in its best judgment in accordance with the servicing standards set forth above, to execute and deliver, on behalf of the Certificateholders, the Certificate Insurer and the Trustee, and upon notice to the Trustee, any and all instruments of satisfaction or cancellation, or of partial or full release or 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 Trustee, Certificateholders and Certificate Insurer; provided, that the Servicer will not release any Mortgagor without the prior consent of the Pool Insurer and the Certificate Insurer. The Servicer shall service and administer the Mortgage Loans in accordance with applicable state and federal law and shall provide to the Mortgagors any reports required to be provided to them thereby. The Servicer shall also comply in the performance of this Agreement with all reasonable rules and requirements of each insurer under any standard hazard insurance policy. Subject to Section 3.17, within 15 days of the Closing Date, the Trustee shall execute, at the written request of the Servicer, and furnish to the Servicer and any Sub-Servicer any special or limited powers of attorney (reasonably acceptable to the Trustee) for each county in which a Mortgaged Property is located and other documents necessary or appropriate to enable the Servicer or any Sub-Servicer to carry out their servicing and administrative duties hereunder; provided, such limited powers of attorney or other documents shall be prepared by the Servicer and submitted to the Trustee for execution. The Trustee shall not be liable for the actions of the Servicer or any Sub-Servicers under such powers of attorney.
 
Subject to Section 3.09 hereof, in accordance with the standards of the preceding paragraph, the Servicer shall advance or cause to be advanced funds as necessary for the purpose of effecting the payment of taxes and assessments on the Mortgaged Properties, which advances shall be Servicing Advances reimbursable in the first instance from related collections from the Mortgagors pursuant to Section 3.09, and further as provided in Section 3.11. Any cost incurred by the Servicer or by Sub-Servicers in effecting the payment of taxes and assessments on a Mortgaged Property shall not, for the purpose of calculating distributions to Certificateholders, be added to the unpaid principal balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit. In addition, but without duplication, the Servicer will make the advances contemplated by Section 10A of the Pool Policy.
 
Notwithstanding anything in this Agreement to the contrary, the Servicer may not make any future advances with respect to a Mortgage Loan (except as provided in Section 4.04) and the Servicer shall not (i) permit any modification with respect to any Mortgage Loan that would change the Mortgage Rate, reduce or increase the Principal Balance (except for reductions resulting from actual payments of principal) or change the final maturity date on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in default with respect to the Mortgage Loan or such default is, in the judgment of the Servicer, reasonably foreseeable) or (ii) permit any modification, waiver or amendment of any term of any Mortgage Loan that would both (A) effect an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury regulations promulgated thereunder) and (B) cause any REMIC created hereunder to fail to qualify as a REMIC under the Code or the imposition of any tax on “prohibited transactions” or “contributions after the startup date” under the REMIC Provisions.
 
SECTION 3.02.
Sub-Servicing Agreements Between Servicer and Sub-Servicers.
 
(a)  The Servicer may enter into Sub-Servicing Agreements with Sub-Servicers for the servicing and administration of the Mortgage Loans; provided, however, that (i) such agreements would not result in a withdrawal or a downgrading by any Rating Agency of the rating on any Class of Certificates and (ii) the Certificate Insurer shall have consented to such Sub-Servicing Agreement and to the extent any Sub-Servicing Agreement constitutes a “sale or transfer” of servicing within the meaning of Section 5E of the Pool Policy, the Pool Insurer shall have consented to such Sub-Servicing Agreement. The Trust Administrator is hereby authorized to acknowledge, at the request of the Servicer, any Sub-Servicing Agreement that meets the requirements applicable to Sub-Servicing Agreements set forth in this Agreement and that is otherwise permitted under this Agreement.
 
Each Sub-Servicer shall be (i) authorized to transact business in the state or states where the related Mortgaged Properties it is to service are situated, if and to the extent required by applicable law to enable the Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing Agreement and (ii) a Freddie Mac or Fannie Mae approved mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer requirements conforming to the provisions set forth in Section 3.08 and provide for servicing of the Mortgage Loans consistent with the terms of this Agreement. The Servicer will examine each Sub-Servicing Agreement and will be familiar with the terms thereof. The terms of any Sub-Servicing Agreement will not be inconsistent with any of the provisions of this Agreement. The Servicer and the Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements or enter into different forms of Sub-Servicing Agreements; provided, however, that any such amendments or different forms shall be consistent with and not violate the provisions of this Agreement, and that no such amendment or different form shall be made or entered into which could be reasonably expected to be materially adverse to the interests of the Certificateholders without the consent of the Certificate Insurer or the Holders of Certificates entitled to at least 66% of the Voting Rights; provided, further, that the consent of the Holders of Certificates entitled to at least 66% of the Voting Rights shall not be required (i) to cure any ambiguity or defect in a Sub-Servicing Agreement, (ii) to correct, modify or supplement any provisions of a Sub-Servicing Agreement, or (iii) to make any other provisions with respect to matters or questions arising under a Sub-Servicing Agreement, which, in each case, shall not be inconsistent with the provisions of this Agreement. Any variation without the consent of the Certificate Insurer and the Holders of Certificates entitled to at least 66% of the Voting Rights from the provisions set forth in Section 3.08 relating to insurance or priority requirements of Sub-Servicing Accounts, or credits and charges to the Sub-Servicing Accounts or the timing and amount of remittances by the Sub-Servicers to the Servicer, are conclusively deemed to be inconsistent with this Agreement and therefore prohibited. The Servicer shall deliver to the Certificate Insurer, the Trust Administrator, the Trustee and the Master Servicer copies of all Sub-Servicing Agreements, and any amendments or modifications thereof, promptly upon the Servicer’s execution and delivery of such instruments.
 
(b)  As part of its servicing activities hereunder, the Servicer, for the benefit of the Trustee, the Certificateholders and the Certificate Insurer, shall enforce the obligations of each Sub-Servicer under the related Sub-Servicing Agreement and of the Originator and the Obligor under the Mortgage Loan Purchase Agreement, including, without limitation, any obligation to make advances in respect of delinquent payments as required by a Sub-Servicing Agreement, or to purchase a Mortgage Loan on account of missing or defective documentation or on account of a breach of a representation, warranty or covenant, as described in Section 2.03(a). Such enforcement, including, without limitation, the legal prosecution of claims, termination of Sub-Servicing Agreements, and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans. The Servicer shall pay the costs of such enforcement at its own expense, and shall be reimbursed therefor only (i) from a general recovery resulting from such enforcement, to the extent, if any, that such recovery exceeds all amounts due in respect of the related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or attorneys’ fees against the party against whom such enforcement is directed. Enforcement of the Mortgage Loan Purchase Agreement against the Originator and the Obligor shall be effected by the Servicer to the extent it is not the Originator, and otherwise by the Master Servicer in accordance with the foregoing provisions of this paragraph.
 
SECTION 3.03.
Successor Sub-Servicers.
 
The Servicer, with the consent of the Certificate Insurer, shall be entitled to terminate any Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in accordance with the terms and conditions of such Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed simultaneously by the Servicer without any act or deed on the part of such Sub-Servicer or the Servicer, and the Servicer either shall service directly the related Mortgage Loans or shall enter into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under Section 3.02.
 
Any Sub-Servicing Agreement shall include the provision that such agreement may be immediately terminated by the Servicer, the Master Servicer (if the Master Servicer is acting as successor servicer) or the Certificate Insurer without the payment of any fees, in accordance with the terms of this Agreement, in the event that the Master Servicer (or the Trustee, if such party is then acting as successor servicer) shall, for any reason, no longer be the Servicer (including termination due to a Servicer Event of Termination).
 
SECTION 3.04.
Liability of the Servicer.
 
Notwithstanding any Sub-Servicing Agreement or the provisions of this Agreement relating to agreements or arrangements between the Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise, the Servicer shall remain obligated and primarily liable to the Trustee, the Certificateholders and the Certificate Insurer for the servicing and administering of the Mortgage Loans in accordance with the provisions of Section 3.01 without diminution of such obligation or liability by virtue of such Sub-Servicing Agreements or arrangements or by virtue of indemnification from the Sub-Servicer and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Mortgage Loans. The Servicer shall be entitled to enter into any agreement with a Sub-Servicer for indemnification of the Servicer by such Sub-Servicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.
 
SECTION 3.05.
No Contractual Relationship Between Sub-Servicers and the Certificate Insurer, the Trust Administrator, the Trustee or Certificateholders.
 
Any Sub-Servicing Agreement that may be entered into and any transactions or services relating to the Mortgage Loans involving a Sub-Servicer in its capacity as such shall be deemed to be between the Sub-Servicer and the Servicer alone, and the Trustee, the Master Servicer, the Trust Administrator, the Certificate Insurer or Certificateholders shall not be deemed parties thereto and shall have no claims, rights, obligations, duties or liabilities with respect to the Sub-Servicer except as set forth in Section 3.06. The Servicer shall be solely liable for all fees owed by it to any Sub-Servicer, irrespective of whether the Servicer’s compensation pursuant to this Agreement is sufficient to pay such fees.
 
SECTION 3.06.
Assumption or Termination of Sub-Servicing Agreements by the Master Servicer.
 
In the event the Servicer shall for any reason no longer be the servicer (including by reason of the occurrence of a Servicer Event of Termination), the Master Servicer (or another master servicer appointed pursuant to Section 7.02) shall thereupon assume all of the rights and obligations of the Servicer under each Sub-Servicing Agreement that the Servicer may have entered into, unless the Master Servicer elects to terminate any Sub-Servicing Agreement in accordance with its terms as provided in Section 3.03. Upon such assumption, the Master Servicer (or the successor master servicer appointed pursuant to Section 7.02) shall be deemed, subject to Section 3.03, to have assumed all of the departing Servicer’s interest therein and to have replaced the departing Servicer as a party to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing Agreement had been assigned to the assuming party, except that (i) the departing Servicer shall not thereby be relieved of any liability or obligations under any Sub-Servicing Agreement that arose before it ceased to be the Servicer and (ii) neither the Trust Administrator nor any successor servicer shall be deemed to have assumed any liability or obligation of the Servicer that arose before the Servicer ceased to be the Servicer.
 
The Servicer at its expense shall, upon request of the Master Servicer, deliver to the assuming party all documents and records relating to each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an accounting of amounts collected and held by or on behalf of it, and otherwise use its best efforts to effect the orderly and efficient transfer of the Sub-Servicing Agreements to the assuming party. All Servicing Transfer Costs shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs, and if such predecessor Servicer defaults in its obligation to pay such costs, such costs shall be paid by the successor servicer (in which case the successor servicer shall be entitled to reimbursement therefor from the assets of the Trust).
 
SECTION 3.07.
Collection of Certain Mortgage Loan Payments.
 
The Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Mortgage Loans, and shall, to the extent such procedures shall be consistent with this Agreement and the terms and provisions of any applicable insurance policies (including the Pool Policy), follow such collection procedures as it would follow with respect to mortgage loans comparable to the Mortgage Loans and held for its own account. Consistent with the foregoing, the Servicer may in its discretion (i) waive any late payment charge or, if applicable, any penalty interest, or (ii) extend the due dates for the Monthly Payments due on a Mortgage Note for a period of not greater than 180 days; provided, however, that any extension pursuant to clause (ii) above shall not affect the amortization schedule of any Mortgage Loan for purposes of any computation hereunder, except as provided below. In the event of any such arrangement pursuant to clause (ii) above, the Servicer shall make timely Advances on such Mortgage Loan during such extension pursuant to Section 4.04 and in accordance with the amortization schedule of such Mortgage Loan without modification thereof by reason of such arrangement.
 
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default or, in the judgment of the Servicer, such default is reasonably foreseeable, the Servicer, consistent with the standards set forth in Section 3.01, may also waive, modify or vary any term of such Mortgage Loan (including modifications that would change the Mortgage Rate, forgive the payment of principal or interest, capitalize the interest portion of past due Monthly Payments and outstanding Servicing Advances, or extend the final maturity date of such Mortgage Loan), accept payment from the related Mortgagor of an amount less than the Stated Principal Balance in final satisfaction of such Mortgage Loan, or consent to the postponement of strict compliance with any such term or otherwise grant indulgence to any Mortgagor (any and all such waivers, modifications, variances, forgiveness of principal or interest, postponements, or indulgences collectively referred to herein as “forbearance”), provided, however, that in no event shall the Servicer grant any such forbearance (other than as permitted by the second sentence of this Section) with respect to any one Mortgage Loan more than once in any 12 month period or more than three times over the life of such Mortgage Loan, provided, further, that in determining which course of action permitted by this sentence it shall pursue, the Servicer shall adhere to the Loss Mitigation Procedures and provided, further, that the prior written consent of the Certificate Insurer shall be required for any modification, waiver or amendment if the aggregate number of outstanding Mortgage Loans which have been modified, waived or amended exceeds 5% of the number of Mortgage Loans as of the Cut-off Date and provided, finally, that the Servicer shall not modify any Mortgage Loan without the prior consent of the Pool Insurer if it would violate Section 5A of the Pool Policy. The Servicer’s analysis supporting any forbearance and the conclusion that any forbearance meets the standards of Section 3.01 and the Loss Mitigation Procedures shall be reflected in writing in the Mortgage File and shall be provided to the Certificate Insurer upon request.
 
SECTION 3.08.
Sub-Servicing Accounts.
 
In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to establish and maintain one or more accounts (collectively, the “Sub-Servicing Account”). The Sub-Servicing Account shall be an Eligible Account and shall comply with all requirements of this Agreement relating to the Collection Account. The Sub-Servicer shall deposit in the clearing account in which it customarily deposits payments and collections on mortgage loans in connection with its mortgage loan servicing activities on a daily basis, and in no event more than one Business Day after the Sub-Servicer’s receipt thereof, all proceeds of Mortgage Loans received by the Sub-Servicer less its servicing compensation to the extent permitted by the Sub-Servicing Agreement, and shall thereafter deposit such amounts in the Sub-Servicing Account, in no event more than two Business Days after the receipt of such amounts. The Sub-Servicer shall thereafter deposit such proceeds in the Collection Account or remit such proceeds to the Servicer for deposit in the Collection Account not later than two Business Days after the deposit of such amounts in the Sub-Servicing Account. For purposes of this Agreement, the Servicer shall be deemed to have received payments on the Mortgage Loans when the Sub-Servicer receives such payments.
 
SECTION 3.09.
Collection of Taxes, Assessments and Similar Items; Servicing Accounts.
 
The Servicer shall establish and maintain, or cause to be established and maintained, one or more accounts (the “Servicing Accounts”), into which all Escrow Payments shall be deposited and retained. Servicing Accounts shall be Eligible Accounts. The Servicer shall deposit in the clearing account in which it customarily deposits payments and collections on mortgage loans in connection with its mortgage loan servicing activities on a daily basis, and in no event more than one Business Day after the Servicer’s receipt thereof, all Escrow Payments collected on account of the Mortgage Loans and shall thereafter deposit such Escrow Payments in the Servicing Accounts, in no event more than two Business Days after the deposit of such funds in the clearing account. All Escrow Payments are collected on account of the Mortgage Loans for the purpose of effecting the timely payment of any items as required under the terms of this Agreement. Withdrawals of amounts from a Servicing Account may be made only to (i) effect payment of taxes, assessments, hazard insurance premiums, and comparable items in a manner and at a time that assures that the lien priority of the Mortgage is not jeopardized (or, with respect to the payment of taxes, in a manner and at a time that avoids the loss of the Mortgaged Property due to a tax sale or the foreclosure as a result of a tax lien); (ii) reimburse the Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing Agreement) out of related collections for any Servicing Advances made pursuant to Section 3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to hazard insurance); (iii) refund to Mortgagors any sums as may be determined to be overages; (iv) pay interest to the Servicer or, if required and as described below, to Mortgagors on balances in the Servicing Account; or (v) clear and terminate the Servicing Account at the termination of the Servicer’s obligations and responsibilities in respect of the Mortgage Loans under this Agreement in accordance with Article X. In the event the Servicer deposits in a Servicing Account any amount not required to be deposited therein, it may at any time withdraw such amount from such Servicing Account, any provision herein to the contrary notwithstanding. The Servicer will be responsible for the administration of the Servicing Accounts and will be obligated to make Servicing Advances to such accounts when and as necessary to avoid the lapse of insurance coverage on the Mortgaged Property, or which the Servicer knows, or in the exercise of the required standard of care of the Servicer hereunder should know, is necessary to avoid the loss of the Mortgaged Property due to a tax sale or the foreclosure as a result of a tax lien. If any such payment has not been made and the Servicer receives notice of a tax lien with respect to the Mortgage being imposed, the Servicer shall, within 10 business days of such notice, advance or cause to be advanced funds necessary to discharge such lien on the Mortgaged Property. As part of its servicing duties, the Servicer or Sub-Servicers shall pay to the Mortgagors interest on funds in the Servicing Accounts, to the extent required by law and, to the extent that interest earned on funds in the Servicing Accounts is insufficient, to pay such interest from its or their own funds, without any reimbursement therefor. The Servicer may pay to itself any excess interest on funds in the Servicing Accounts, to the extent such action is in conformity with the Servicing Standard, is permitted by law and such amounts are not required to be paid to Mortgagors or used for any of the other purposes set forth above.
 
SECTION 3.10.
Collection Account and Distribution Account.
 
(a)  On behalf of the Trust Fund, the Servicer shall establish and maintain, or cause to be established and maintained, one or more accounts (such account or accounts, the “Collection Account”), held in trust for the benefit of the Trustee, the Certificateholders and the Certificate Insurer. On behalf of the Trust Fund, the Servicer shall deposit or cause to be deposited in the clearing account in which it customarily deposits payments and collections on mortgage loans in connection with its mortgage loan servicing activities on a daily basis, and in no event more than one Business Day after the Servicer’s receipt thereof, and shall thereafter deposit in the Collection Account, in no event more than two Business Days after the deposit of such funds in the clearing account, as and when received or as otherwise required hereunder, the following payments and collections received or made by it subsequent to the Cut-off Date (other than in respect of principal or interest on the Mortgage Loans due on or before the Cut-off Date) or payments (other than Principal Prepayments) received by it on or prior to the Cut-off Date but allocable to a Due Period subsequent thereto:
 
(i)  all payments on account of principal, including Principal Prepayments (but not Prepayment Charges), on the Mortgage Loans;
 
(ii)  all payments on account of interest (net of the related Servicing Fee) on each Mortgage Loan;
 
(iii)  all Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and condemnation proceeds (other than proceeds collected in respect of any particular REO Property and amounts paid in connection with a purchase of Mortgage Loans and REO Properties pursuant to Section 10.01);
 
(iv)  any amounts required to be deposited pursuant to Section 3.12 in connection with any losses realized on Permitted Investments with respect to funds held in the Collection Account;
 
(v)  any amounts required to be deposited by the Servicer pursuant to the second paragraph of Section 3.14(a) in respect of any blanket policy deductibles;
 
(vi)  all proceeds of any Mortgage Loan repurchased or purchased in accordance with Section 2.03 or Section 10.01;
 
(vii)  all amounts required to be deposited in connection with Substitution Adjustments pursuant to Section 2.03;
 
(viii)  all Prepayment Charges collected by the Servicer and any Servicer Prepayment Charge Payment Amounts in connection with the Principal Prepayment of any of the Mortgage Loans; and
 
(ix)  without duplication, all payments of claims under the Pool Policy.
 
The foregoing requirements for deposit in the Collection Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of Servicing Fees, late payment charges, assumption fees, insufficient funds charges and ancillary income (other than Prepayment Charges) need not be deposited by the Servicer in the Collection Account and may be retained by the Servicer as additional compensation. In the event the Servicer shall deposit in the Collection Account any amount not required to be deposited therein, it may at any time withdraw such amount from the Collection Account, any provision herein to the contrary notwithstanding.
 
(b)  On behalf of the Trust Fund, the Trust Administrator shall establish and maintain one or more accounts (such account or accounts, the “Distribution Account”), held in Trust for the benefit of the Trustee, the Certificateholders and the Certificate Insurer. The Distribution Account shall be an Eligible Account. The Trust Administrator will deposit into the Distribution Account the following amounts:
 
(i)  Any amounts remitted to the Trust Administrator by the Servicer from the Collection Account or the related Custodial Account;
 
(ii)  Any Advances received from the Servicer, or made by the Master Servicer or (if the Master Servicer is the Servicer) the Trustee (in each case in its capacity as successor servicer), and any payments of Compensating Interest received from the Servicer or made by the Master Servicer (unless, in the case of the Master Servicer, such amounts are deposited by the Master Servicer directly into the Distribution Account);
 
(iii)  Any Insurance Proceeds or Net Liquidation Proceeds received by or on behalf of the Master Servicer or which were not deposited in the Collection Account;
 
(iv)  Any amounts required to be deposited with respect to losses on investments of deposits in the Distribution Account; and
 
(v)  Any other amounts received by or on behalf of the Master Servicer and required to be deposited in the Distribution Account pursuant to this Agreement.
 
All amounts deposited into the Distribution Account shall be held by the Trust Administrator in the name of the Trustee in Trust for the benefit of the Certificateholders and the Certificate Insurer in accordance with the terms and provisions of this Agreement. The requirements for crediting the Distribution Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of (A) late payment charges or assumption, tax service, statement account or payoff, substitution, satisfaction, release and other like fees and charges and (B) the items enumerated in Section 12.12(a) (with respect the clearing and termination of the Distribution Account and with respect to amounts deposited in error), in Section 12.12(b) or in clauses (i), (ii), (iii) and (iv), (v) of Section 12.12(c), need not be credited by the Master Servicer to the Distribution Account. In the event that the Master Servicer shall deposit or cause to be deposited into the Distribution Account any amount not required to be credited thereto, the Trust Administrator shall promptly transfer such amount to the Master Servicer, any provision herein to the contrary notwithstanding.
 
(c)  Funds in the Collection Account and the Distribution Account may be invested in Permitted Investments in accordance with the provisions set forth in Section 3.12. The Servicer shall give notice to the Trust Administrator, the Certificate Insurer and the Master Servicer of the location of the Collection Account maintained by it when established and prior to any change thereof. The Trust Administrator shall give notice to the Certificate Insurer, the Servicer, the Master Servicer, the Trustee and the Depositor of the location of the Distribution Account when established and prior to any change thereof.
 
(d)  Funds held in the Collection Account at any time may be delivered by the Servicer to the Trust Administrator for deposit in an account (which may be the Distribution Account and must satisfy the standards for the Distribution Account as set forth in the definition thereof) and for all purposes of this Agreement shall be deemed to be a part of the Collection Account; provided, however, that the Trust Administrator shall have the sole authority to withdraw any funds held pursuant to this subsection (d). In the event the Servicer shall deliver to the Trust Administrator for deposit in the Distribution Account any amount not required to be deposited therein, it may at any time request that the Trust Administrator withdraw such amount from the Distribution Account and remit to it any such amount, any provision herein to the contrary notwithstanding. In addition, the Servicer, with respect to items (i) through (iv) below, shall deliver to the Trust Administrator from time to time for deposit, and the Trust Administrator, with respect to items (i) through (iv) below, shall so deposit, in the Distribution Account:
 
(i)  any Advances, as required pursuant to Section 4.04;
 
(ii)  any amounts required to be deposited pursuant to Section 3.23(d) or (f) in connection with any REO Property;
 
(iii)  any amounts to be paid in connection with a purchase of Mortgage Loans and REO Properties pursuant to Section 10.01;
 
(iv)  any Compensating Interest to be deposited pursuant to Section 3.24 in connection with any Prepayment Interest Shortfall; and
 
(v)  any amounts required to be paid to the Trust Administrator pursuant to the Agreement, including, but not limited to Section 3.06, Section 3.26 and Section 7.02.
 
(e)  [Reserved].
 
(f)  The Servicer shall deposit in the Collection Account any amounts required to be deposited pursuant to Section 3.12(b) in connection with losses realized on Permitted Investments with respect to funds held in the Collection Account.
 
SECTION 3.11.
Withdrawals from the Collection Account and Distribution Account.
 
The Servicer shall, from time to time, make withdrawals from the Collection Account for any of the following purposes or as described in Section 4.04:
 
(i)  to remit to the Trust Administrator on the Servicer Remittance Date for deposit in the Distribution Account the amounts required to be so remitted pursuant to Section 3.10(b) or permitted to be so remitted pursuant to the first sentence of Section 3.10(d);
 
(ii)  subject to Section 3.16(d), to reimburse the Servicer or Master Servicer for (a) any unreimbursed Advances to the extent of amounts received which represent Late Collections (net of the related Servicing Fees) of Monthly Payments or Liquidation Proceeds and Insurance Proceeds on Mortgage Loans with respect to which such Advances were made in accordance with the provisions of Section 4.04; (b) any unreimbursed Advances with respect to the final liquidation of a Mortgage Loan that are Nonrecoverable Advances, but only to the extent that Late Collections, including, Liquidation Proceeds and Insurance Proceeds received with respect to such Mortgage Loan are insufficient to reimburse the Servicer for such unreimbursed Advances; or (c) subject to Section 4.04(b), any unreimbursed Advances to the extent of funds held in the Collection Account for future distribution that were not included in Available Funds for the preceding Distribution Date;
 
(iii)  subject to Section 3.16(d), to pay the Servicer or any Sub-Servicer (a) any unpaid Servicing Fees, but only to the extent of the interest portion of any Late Collections, including Liquidation Proceeds, Insurance Proceeds and condemnation proceeds received with respect to such Mortgage Loan, (b) any unreimbursed Servicing Advances with respect to each Mortgage Loan, but only to the extent of any Late Collections, including, Liquidation Proceeds, Insurance Proceeds and condemnation proceeds received with respect to such Mortgage Loan, (c) any Servicing Fees with respect to the final liquidation of a Mortgage Loan, but only to the extent that Late Collections, including, Liquidation Proceeds and Insurance Proceeds received with respect to such Mortgage Loans are insufficient to pay the Servicer or any Sub-Servicer for unpaid Servicing Fees, and (d) any Servicing Advances with respect to the final liquidation of a Mortgage Loan that are Nonrecoverable Advances, but only to the extent that Late Collections, including, Liquidation Proceeds and Insurance Proceeds received with respect to such Mortgage Loan are insufficient to reimburse the Servicer or any Sub-Servicer for Servicing Advances;
 
(iv)  to pay to the Servicer as servicing compensation (in addition to the Servicing Fee) on the Servicer Remittance Date any interest or investment income earned on funds deposited in the Collection Account;
 
(v)  to pay to the Originator, or the Obligor, as applicable, with respect to each Mortgage Loan that has previously been purchased or replaced pursuant to Section 2.03 or Section 3.16(c) all amounts received thereon subsequent to the date of purchase or substitution, as the case may be;
 
(vi)  to reimburse the Servicer or Master Servicer for any Advance or Servicing Advance previously made which the Servicer or Master Servicer has determined to be a Nonrecoverable Advance in accordance with the provisions of Section 4.04;
 
(vii)  to pay, or to reimburse the Servicer or Master Servicer for Servicing Advances in respect of, expenses incurred in connection with any Mortgage Loan pursuant to Section 3.16(b);
 
(viii)  to reimburse the Master Servicer for expenses incurred by or reimbursable to the Master Servicer pursuant to Section 6.03;
 
(ix)  to reimburse the Trust Administrator, Certificate Insurer, the Servicer (if the Servicer is not an Affiliate of the Originator), the Master Servicer or the Trustee, as the case may be, for enforcement expenses reasonably incurred in respect of the breach or defect giving rise to the purchase obligation under Section 2.03 of this Agreement that were included in the Purchase Price of the Mortgage Loan, including any expenses arising out of the enforcement of the purchase obligation;
 
(x)  to pay itself any Prepayment Interest Excess;
 
(xi)  to clear and terminate the Collection Account pursuant to Section 10.01.
 
The foregoing requirements for withdrawal from the Collection Account shall be exclusive. In the event the Servicer shall deposit in the Collection Account any amount not required to be deposited therein, it may at any time withdraw such amount from the Collection Account, any provision herein to the contrary notwithstanding.
 
The Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from the Collection Account, to the extent held by or on behalf of it, pursuant to subclauses (ii), (iii), (v), (vi), (ix) and (x) above. The Servicer shall provide written notification to the Certificate Insurer and the Trust Administrator, on or prior to the next succeeding Servicer Remittance Date, upon making any withdrawals from the Collection Account pursuant to subclause (vi) above; provided that an Officers’ Certificate in the form described under Section 4.04(d) shall suffice for such written notification to the Trust Administrator in respect hereof.
 
SECTION 3.12.
Investment of Funds in the Collection Account and the Distribution Account.
 
(a)  The Servicer may direct any depository institution maintaining the Collection Account to invest the funds on deposit in such accounts, and the Trust Administrator may invest the funds on deposit in the Distribution Account (each such account, for the purposes of this Section 3.12 an “Investment Account”). All investments pursuant to this Section 3.12 shall be in one or more Permitted Investments bearing interest or sold at a discount, and maturing, unless payable on demand, (i) no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, if a Person other than the Trust Administrator is the obligor thereon or if such investment is managed or advised by a Person other than the Trust Administrator or an Affiliate of the Trust Administrator, and (ii) no later than the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, if the Trust Administrator is the obligor thereon or if such investment is managed or advised by the Trust Administrator or any Affiliate. All such Permitted Investments shall be held to maturity, unless payable on demand. Any investment of funds in an Investment Account shall be made in the name of the Trust Administrator (in its capacity as such), or in the name of a nominee of the Trust Administrator. The Trust Administrator shall be entitled to sole possession (except with respect to investment direction of funds held in the Collection Account and any income and gain realized thereon) over each such investment, and any certificate or other instrument evidencing any such investment shall be delivered directly to the Trust Administrator or its agent, together with any document of transfer necessary to transfer title to such investment to the Trust Administrator or its nominee. In the event amounts on deposit in an Investment Account are at any time invested in a Permitted Investment payable on demand, the Trust Administrator shall:
 
 
(x)
consistent with any notice required to be given thereunder, demand that payment thereon be made on the last day such Permitted Investment may otherwise mature hereunder in an amount equal to the lesser of (1) all amounts then payable thereunder and (2) the amount required to be withdrawn on such date; and
 
 
(y)
demand payment of all amounts due thereunder promptly upon determination by a Responsible Officer of the Trust Administrator that such Permitted Investment would not constitute a Permitted Investment in respect of funds thereafter on deposit in the Investment Account.
 
(b)  All income and gain realized from the investment of funds deposited in the Collection Account and any REO Account held by or on behalf of the Servicer shall be for the benefit of the Servicer and shall be subject to its withdrawal in accordance with Section 3.11 or Section 3.23, as applicable. The Servicer shall deposit in the Collection Account or any REO Account, as applicable, the amount of any loss of principal incurred in respect of any such Permitted Investment made with funds in such account immediately upon realization of such loss.
 
(c)  All income and gain realized from the investment of funds deposited in the Distribution Account shall be for the benefit of the Trust Administrator. The Trust Administrator shall deposit in the Distribution Account the amount of any loss of principal incurred in respect of any such Permitted Investment made with funds in such accounts immediately upon realization of such loss.
 
(d)  Except as otherwise expressly provided in this Agreement, if any default occurs in the making of a payment due under any Permitted Investment, or if a default occurs in any other performance required under any Permitted Investment, the Trust Administrator may and, subject to Section 8.01 and Section 8.02(a)(v), upon the request of the Certificate Insurer or the Holders of Certificates representing more than 50% of the Voting Rights allocated to any Class of Certificates, shall take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate proceedings.
 
SECTION 3.13.
Rights of the Class C Certificateholder.
 
(a)  Notwithstanding anything to the contrary contained in this Agreement, (i) the majority Holder of the Class C Certificates (as long as such majority Holder is not the Servicer or an Affiliate of the Servicer or if the Class C Certificates are secured by an Indenture, as long as the Servicer or an Affiliate of the Servicer is not the majority equity holder in such transaction) with the prior written consent of the Certificate Insurer or if the majority Holder of the Class C Certificates does not exercise such right then the Certificate Insurer shall have the right (with the consent of the Servicing Rights Pledgee and the Pool Insurer) to direct the Master Servicer to appoint a qualified successor servicer who will act as successor in all respects to the Servicer in the event of a Servicer Event of Termination pursuant to Article VII and (ii) the majority Holder of the Class C Certificates (as long as such majority Holder is not the Servicer or an Affiliate of the Servicer or if the Class C Certificates are secured by an Indenture, as long as the Servicer or an Affiliate of the Servicer is not the majority equity holder in such transaction) with the prior written consent of the Certificate Insurer and the Pool Insurer shall have the right to direct the Servicer to transfer the servicing of any Mortgage Loans Delinquent 120 days or more to a special servicer in the event of a Special Servicer Trigger Event, for so long as the appointment of such special servicer (i) shall not cause a downgrade or withdrawal of the ratings on the Class A Certificates, (ii) shall meet the eligibility requirements of a servicer under Section 7.02 and (iii) shall service in accordance with the terms of this Agreement. A special servicer shall be entitled to the Servicing Fee for the Mortgage Loans serviced by it and any excess fees due to such special servicer shall be paid by the majority Holder of the Class C Certificates.
 
A Special Servicer Trigger Event (“Special Servicer Trigger Event”) shall be in effect with respect to any Distribution Date if:
 
(a) the Servicer’s primary servicer rating for the servicing of residential mortgage loans is reduced by more than one full level or withdrawn, in each case by at least two of the Rating Agencies; or
 
(b) the Delinquency Percentage exceeds 30.00%; or
 
(c) the aggregate amount of Realized Losses incurred since the Cut-off Date through the last day of the related Due Period (after reduction for all Subsequent Recoveries received from the Cut-off Date through the Prepayment Period) divided by the aggregate principal balance of the Mortgage Loans as of the Cut-off Date exceeds 4.00% with respect to such Distribution Date.
 
SECTION 3.14.
Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage.
 
(a)  The Servicer shall cause to be maintained for each Mortgage Loan hazard insurance with extended coverage on the Mortgaged Property in an amount which is at least equal to the lesser of (i) the current Principal Balance of such Mortgage Loan and (ii) the amount necessary to fully compensate for any damage or loss to the improvements that are a part of such property on a replacement cost basis, in each case in an amount not less than such amount as is necessary to avoid the application of any coinsurance clause contained in the related hazard insurance policy. The Servicer shall also cause to be maintained hazard insurance with extended coverage on each REO Property in an amount which is at least equal to the lesser of (i) the maximum insurable value of the improvements which are a part of such property and (ii) the outstanding Principal Balance of the related Mortgage Loan at the time it became an REO Property. The Servicer will comply in the performance of this Agreement with all reasonable rules and requirements of each insurer under any such hazard policies. Any amounts to be collected by the Servicer under any such policies (other than amounts to be applied to the restoration or repair of the property subject to the related Mortgage or amounts to be released to the Mortgagor in accordance with the procedures that the Servicer would follow in servicing loans held for its own account, subject to the terms and conditions of the related Mortgage and Mortgage Note) shall be deposited in the Collection Account, subject to withdrawal pursuant to Section 3.11, if received in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to Section 3.23, if received in respect of an REO Property. Any cost incurred by the Servicer in maintaining any such insurance shall not, for the purpose of calculating distributions to Certificateholders and the Certificate Insurer, be added to the unpaid Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit. It is understood and agreed that no earthquake or other additional insurance is to be required of any Mortgagor other than pursuant to such applicable laws and regulations as shall at any time be in force and as shall require such additional insurance. If the Mortgaged Property or REO Property is at any time in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards and flood insurance has been made available, the Servicer will cause to be maintained a flood insurance policy in respect thereof. Such flood insurance shall be in an amount equal to the lesser of (i) the unpaid Principal Balance of the related Mortgage Loan and (ii) the maximum amount of such insurance available for the related Mortgaged Property under the national flood insurance program (assuming that the area in which such Mortgaged Property is located is participating in such program).
 
In the event that the Servicer shall obtain and maintain a blanket policy with an insurer having a General Policy Rating of B:III or better in Best’s Key Rating Guide (or such other rating that is comparable to such rating) insuring against hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied its obligations as set forth in the first two sentences of this Section 3.14, it being understood and agreed that such policy may contain a deductible clause, in which case the Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy complying with the first two sentences of this Section 3.14, and there shall have been one or more losses which would have been covered by such policy, deposit to the Collection Account from its own funds the amount not otherwise payable under the blanket policy because of such deductible clause. In connection with its activities as administrator and servicer of the Mortgage Loans, the Servicer agrees to prepare and present, on behalf of itself, the Trustee, the Trust Administrator, the Master Servicer, the Certificateholders and the Certificate Insurer, claims under any such blanket policy in a timely fashion in accordance with the terms of such policy.
 
(b)  The Servicer shall keep in force during the term of this Agreement a policy or policies of insurance covering errors and omissions for failure in the performance of the Servicer’s obligations under this Agreement, which policy or policies shall be in such form and amount that would meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of the Mortgage Loans, unless the Servicer has obtained a waiver of such requirements from Fannie Mae or Freddie Mac. The Servicer shall provide the Trustee, the Trust Administrator, the Master Servicer and the Certificate Insurer, upon request, with copies of such insurance policies and fidelity bond. The Servicer shall also maintain a fidelity bond in the form and amount that would meet the requirements of Fannie Mae or Freddie Mac, unless the Servicer has obtained a waiver of such requirements from Fannie Mae or Freddie Mac. The Servicer shall be deemed to have complied with this provision if an Affiliate of the Servicer has such errors and omissions and fidelity bond coverage and, by the terms of such insurance policy or fidelity bond, the coverage afforded thereunder extends to the Servicer. Any such errors and omissions policy and fidelity bond shall by its terms not be cancelable without thirty days’ prior written notice to the Trustee, the Trust Administrator, the Master Servicer and the Certificate Insurer. The Servicer shall also cause each Sub-Servicer to maintain a policy of insurance covering errors and omissions and a fidelity bond which would meet such requirements and shall provide to the Master Servicer evidence of the authorization of the person signing any certification, statement, financial information and reports or such other information related to any Sub-Servicer or to the Servicer’s or such Sub-Servicer’s performance hereunder.
 
SECTION 3.15.
Enforcement of Due-On-Sale Clauses; Assumption Agreements.
 
The Servicer will, to the extent it has knowledge of any conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by absolute conveyance or by contract of sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan under the “due-on-sale” clause, if any, applicable thereto; provided, however, that the Servicer shall not be required to take such action if in its sole business judgment the Servicer believes it is not in the best interests of the Trust Fund and shall not exercise any such rights if prohibited by law from doing so. If the Servicer reasonably believes it is unable under applicable law to enforce such “due-on-sale” clause, or if any of the other conditions set forth in the proviso to the preceding sentence apply, the Servicer will enter into an assumption and modification agreement from or with the person to whom such property has been conveyed or is proposed to be conveyed, pursuant to which such person becomes liable under the Mortgage Note and, to the extent permitted by applicable state law, the Mortgagor remains liable thereon. The Servicer is also authorized to enter into a substitution of liability agreement with such person, pursuant to which the original Mortgagor is released from liability and such person is substituted as the Mortgagor and becomes liable under the Mortgage Note, provided that no such substitution shall be effective unless such person satisfies the underwriting criteria of the Servicer and has a credit risk rating at least equal to that of the original Mortgagor. In connection with any assumption or substitution, the Servicer shall apply such underwriting standards and follow such practices and procedures as shall be normal and usual in its general mortgage servicing activities and as it applies to other mortgage loans owned solely by it. The Servicer shall not take or enter into any assumption and modification agreement, however, unless (to the extent practicable in the circumstances) it shall have received confirmation, in writing, of the continued effectiveness of any applicable hazard insurance policy, nor will the Servicer permit any assumption of liability for a Mortgage Loan without the prior consent of the Pool Insurer. Any fee collected by the Servicer in respect of an assumption, modification or substitution of liability agreement shall be retained by the Servicer as additional servicing compensation. In connection with any such assumption, no material term of the Mortgage Note (including but not limited to the related Mortgage Rate and the amount of the Monthly Payment) may be amended or modified, except as otherwise required pursuant to the terms thereof. The Servicer shall notify the Trustee, the Master Servicer and the Trust Administrator that any such substitution, modification or assumption agreement has been completed by forwarding to the Custodian the executed original of such substitution, modification or assumption agreement, which document shall be added to the related Mortgage File and shall, for all purposes, be considered a part of such Mortgage File to the same extent as all other documents and instruments constituting a part thereof.
 
Notwithstanding the foregoing paragraph or any other provision of this Agreement, the Servicer shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any assumption which the Servicer may be restricted by law from preventing, for any reason whatever. For purposes of this Section 3.15, the term “assumption” is deemed to also include a sale (of the Mortgaged Property) subject to the Mortgage that is not accompanied by an assumption or substitution of liability agreement.
 
SECTION 3.16.
Realization Upon Defaulted Mortgage Loans.
 
(a)  The Servicer shall use its best efforts, in as practical a time frame as possible and consistent with Servicing Standard, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.07. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings; provided, however, that such costs and expenses will be recoverable as Servicing Advances by the Servicer as contemplated in Section 3.11 and Section 3.23. The foregoing is subject to the provision that, in any case in which a Mortgaged Property shall have suffered damage from an Uninsured Cause, the Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion that such restoration will increase the proceeds of liquidation of the related Mortgage Loan after reimbursement to itself for such expenses.
 
(b)  Notwithstanding the foregoing provisions of this Section 3.16 or any other provision of this Agreement, with respect to any Mortgage Loan as to which the Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Servicer shall not, on behalf of the Trustee, either (i) obtain title to such Mortgaged Property as a result of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any other action with respect to, such Mortgaged Property, if, as a result of any such action, the Trustee, the Trust Fund, the Trust Administrator, Certificateholders or the Certificate Insurer would be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of such Mortgaged Property within the meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the Servicer has also previously determined, based on its reasonable judgment and a report prepared by a Person who regularly conducts environmental audits using customary industry standards, that:
 
(1) such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Trust Fund to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and
 
(2) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund to take such actions with respect to the affected Mortgaged Property.
 
Notwithstanding the foregoing, if such environmental audit reveals, or if the Servicer has actual knowledge or notice, that such Mortgaged Property contains such wastes or substances, the Servicer shall not foreclose or accept a deed in lieu of foreclosure without the prior written consent of the Certificate Insurer.
 
The cost of the environmental audit report contemplated by this Section 3.16 shall be advanced by the Servicer, subject to the Servicer’s right to be reimbursed therefor from the Collection Account as provided in Section 3.11(vii), such right of reimbursement being prior to the rights of Certificateholders to receive any amount in the Collection Account received in respect of the affected Mortgage Loan or other Mortgage Loans.
 
If the Servicer determines, as described above, that it is in the best economic interest of the Trust Fund to take such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, or to take such action with respect to the containment, clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes or petroleum-based materials affecting any such Mortgaged Property, then the Servicer shall take such action as it deems to be in the best economic interest of the Trust Fund; provided that any amounts disbursed by the Servicer pursuant to this Section 3.16(b) shall constitute Servicing Advances, subject to Section 4.04(d). The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Servicer, subject to the Servicer’s right to be reimbursed therefor from the Collection Account as provided in Section 3.11(iii) and (a)(vii), such right of reimbursement being prior to the rights of Certificateholders to receive any amount in the Collection Account received in respect of the affected Mortgage Loan or other Mortgage Loans.
 
(c)  (i)  The Certificate Insurer may, at its option, purchase a Mortgage Loan which has become 90 or more days delinquent or for which the Servicer has accepted a deed in lieu of foreclosure. Prior to purchase pursuant to this Section 3.16(c)(i), the Servicer shall be required to continue to make Advances pursuant to Section 4.04. The Certificate Insurer shall not use any procedure in selecting Mortgage Loans to be repurchased which is materially adverse to the interests of the Certificateholders. The Certificate Insurer shall purchase such delinquent Mortgage Loan at a price equal to the Purchase Price of such Mortgage Loan. Any such purchase of a Mortgage Loan pursuant to this Section 3.16(c)(i) shall be accomplished by remittance to the Servicer for deposit in the Collection Account of the amount of the Purchase Price. The Trustee shall immediately effectuate the conveyance of such delinquent Mortgage Loan to the Certificate Insurer to the extent necessary, including the prompt delivery of all documentation to the Certificate Insurer.
 
(ii)  If the Servicer Optional Purchase Delinquency Trigger has been met, the Servicer may with the consent of the Certificate Insurer, at its option, purchase a Mortgage Loan which has become 90 or more days delinquent or for which the Servicer has accepted a deed in lieu of foreclosure. Prior to purchase pursuant to this Section 3.16(c)(ii), the Servicer shall be required to continue to make Advances pursuant to Section 4.04. The Servicer shall purchase such delinquent Mortgage Loan at a price equal to the Purchase Price of such Mortgage Loan. Any such purchase of a Mortgage Loan pursuant to this Section 3.16(c)(ii) shall be accomplished by deposit in the Collection Account of the amount of the Purchase Price. The Trustee shall immediately effectuate the conveyance of such delinquent Mortgage Loan to the Servicer to the extent necessary, including the prompt delivery of all documentation to the Servicer.
 
Notwithstanding the foregoing: (A) the Servicer shall have the option to purchase pursuant to this Section 3.16(c)(ii) only such delinquent Mortgage Loans having an aggregate Stated Principal Balance such that, if such delinquent Mortgage Loans were not in the Trust, the Servicer Optional Purchase Delinquency Trigger would not be met; (B) if the Servicer purchases any delinquent Mortgage Loans pursuant to this Section 3.16(c)(ii), it must purchase Mortgage Loans that are delinquent the greatest number of days before it may purchase any that are delinquent any fewer number of days; (C) if the Servicer purchases some but not all Mortgage Loans that are delinquent any given number of days, it must purchase Mortgage Loans having the same delinquency status in the order of lowest Stated Principal Balance to highest Stated Principal Balance; (D) the Servicer may at any time relinquish its rights to purchase delinquent Mortgage Loans pursuant to this Section 3.16(C)(ii) in writing delivered to the Trustee and the Certificate Insurer, and from and after the taking of such action by the Servicer, the provisions of this Section 3.16(c)(ii) shall no longer be of any force or effect.
 
(d)  Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds, Liquidation Proceeds or condemnation proceeds, in respect of any Mortgage Loan, will be applied in the following order of priority: first, to unpaid Servicing Fees; second, to reimburse the Servicer or any Sub-Servicer for any related unreimbursed Servicing Advances pursuant to Section 3.11(iii) and Advances pursuant to Section 3.11(ii); third, to accrued and unpaid interest on the Mortgage Loan, to the date of the Final Recovery Determination, or to the Due Date prior to the Distribution Date on which such amounts are to be distributed if not in connection with a Final Recovery Determination; and fourth, as a recovery of principal of the Mortgage Loan. The portion of the recovery so allocated to unpaid Servicing Fees shall be reimbursed to the Servicer or any Sub-Servicer pursuant to Section 3.11(iii).
 
SECTION 3.17.
Trustee to Cooperate; Release of Mortgage Files.
 
(a)  Upon the payment in full of any Mortgage Loan, or the receipt by the Servicer of a notification that payment in full shall be escrowed in a manner customary for such purposes, the Servicer shall deliver to the Custodian on behalf of the Trustee, in written (with two executed copies) or electronic format, a Request for Release in the form of Exhibit E (which certification shall include a statement to the effect that all amounts received or to be received in connection with such payment which are required to be deposited in the Collection Account pursuant to Section 3.10 have been or will be so deposited) signed by a Servicing Officer (or in a mutually agreeable electronic format that will, in lieu of a signature on its face, originate from a Servicing Officer) and shall request delivery to it of the Mortgage File. Upon receipt of such certification and request, the Custodian on behalf of the Trustee shall, within three Business Days, release and send by overnight mail, at the expense of the Servicer, the related Mortgage File to the Servicer. No expenses incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Collection Account or the Distribution Account.
 
(b)  From time to time and as appropriate for the servicing or foreclosure of any Mortgage Loan, including, for this purpose, collection under any insurance policy relating to the Mortgage Loans, the Custodian shall, upon any request made by or on behalf of the Servicer and delivery to the Trustee and Custodian, in written (with two executed copies) or electronic format, of a Request for Release in the form of Exhibit E signed by a Servicing Officer (or in a mutually agreeable electronic format that will, in lieu of a signature on its face, originate from a Servicing Officer), release the related Mortgage File to the Servicer within three Business Days, and the Trustee shall, at the direction of the Servicer, execute such documents as shall be necessary to the prosecution of any such proceedings. Such Request for Release shall obligate the Servicer to return each and every document previously requested from the Mortgage File to the Custodian when the need therefor by the Servicer no longer exists, unless the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been deposited in the Collection Account or the Mortgage File or such document has been delivered to an attorney, or to a public trustee or other public official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Servicer has delivered, or caused to be delivered, to the Trustee and Custodian an additional Request for Release certifying as to such liquidation or action or proceedings. Upon the request of the Trustee, Custodian or the Certificate Insurer, the Servicer shall provide notice to the Trustee and the Certificate Insurer of the name and address of the Person to which such Mortgage File or such document was delivered and the purpose or purposes of such delivery. Upon receipt of a Request for Release, in written (with two executed copies) or electronic format, from a Servicing Officer stating that such Mortgage Loan was liquidated and that all amounts received or to be received in connection with such liquidation that are required to be deposited into the Collection Account have been so deposited, or that such Mortgage Loan has become an REO Property, such Mortgage Loan shall be released by the Custodian to the Servicer or its designee.
 
(c)  Upon written certification of a Servicing Officer, the Trustee shall execute and deliver to the Servicer or the Sub-Servicer, as the case may be, and upon the request of the Certificate Insurer the Servicer shall deliver or cause to be delivered to the Certificate Insurer copies of, any court pleadings, requests for trustee’s sale or other documents necessary to the foreclosure or trustee’s sale in respect of a Mortgaged Property or to any legal action brought to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or rights provided by the Mortgage Note or Mortgage or otherwise available at law or in equity. Each such certification shall include a request that such pleadings or documents be executed by the Trustee and a statement as to the reason such documents or pleadings are required and that the execution and delivery thereof by the Trustee will not invalidate or otherwise affect the lien of the Mortgage, except for the termination of such a lien upon completion of the foreclosure or trustee’s sale.
 
SECTION 3.18.
Servicing Compensation.
 
As compensation for the activities of the Servicer hereunder, the Servicer shall be entitled to the Servicing Fee with respect to each Mortgage Loan payable solely from payments of interest in respect of such Mortgage Loan, subject to Section 3.24. In addition, the Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance Proceeds, Liquidation Proceeds or condemnation proceeds to the extent permitted by Section 3.11(iii) and out of amounts derived from the operation and sale of an REO Property to the extent permitted by Section 3.23. Except as provided in Section 3.29, the right to receive the Servicing Fee may not be transferred in whole or in part except in connection with the transfer of all of the Servicer’s responsibilities and obligations under this Agreement; provided, however, that the Servicer may pay from the Servicing Fee any amounts due to a Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under Section 3.02.
 
Additional servicing compensation in the form of assumption fees, late payment charges, insufficient funds charges, ancillary income or otherwise (other than Prepayment Charges) shall be retained by the Servicer only to the extent such fees or charges are received by the Servicer. The Servicer shall also be entitled pursuant to Section 3.11(iv) to withdraw from the Collection Account and pursuant to Section 3.23(b) to withdraw from any REO Account, as additional servicing compensation, interest or other income earned on deposits therein, subject to Section 3.12 and Section 3.24. The Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder (including premiums for the insurance required by Section 3.14, to the extent such premiums are not paid by the related Mortgagors or by a Sub-Servicer and servicing compensation of each Sub-Servicer) and shall not be entitled to reimbursement therefor except as specifically provided herein.
 
The Servicer shall be entitled to any Prepayment Interest Excess, which it may withdraw from the Collection Account pursuant to Section 3.11(ix).
 
SECTION 3.19.
Reports to the Trust Administrator and the Certificate Insurer; Collection Account Statements.
 
Not later than ten days after each Distribution Date, the Servicer shall forward to the Certificate Insurer and, upon request, to the Trust Administrator, the Master Servicer and the Depositor the most current available bank statement for the Collection Account. Copies of such statement shall be provided by the Trust Administrator to any Certificateholder and to any Person identified to the Trust Administrator as a prospective transferee of a Certificate, upon request at the expense of the requesting party, provided such statement is delivered by the Servicer to the Trust Administrator.
 
SECTION 3.20.
Statement as to Compliance.
 
Each of the Servicer, the Master Servicer and the Trust Administrator shall deliver (or otherwise make available) (and each of the Servicer, the Master Servicer and the Trust Administrator shall cause any Servicing Function Participant engaged by it to deliver) to the Depositor and the Certificate Insurer, not later than March 15th of each calendar year beginning in 2008, an Officers’ Certificate (an “Annual Statement of Compliance”) stating, a