Exhibit 99.13
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
GREENPOINT MORTGAGE FUNDING, INC.
Seller and Servicer
LUMINENT MORTGAGE CAPITAL, INC.
MAIA MORTGAGE FINANCE STATUTORY TRUST
MERCURY MORTGAGE FINANCE STATUTORY TRUST
Initial Purchaser
Dated as of October 1, 2006
First and Second Lien, Fixed and Adjustable Rate Mortgage Loans
TABLE OF CONTENTS
Page
----
SECTION 1. Definitions......................................................1
SECTION 2. Agreement to Purchase...........................................14
SECTION 3. Mortgage Loan Schedules.........................................14
SECTION 4. Purchase Price..................................................14
SECTION 5. Examination of Mortgage Files...................................14
SECTION 6. Conveyance from Seller to Initial Purchaser.....................15
Subsection 6.01. Conveyance of Mortgage Loans; Possession of
Servicing Files...............................15
Subsection 6.02. Books and Records.................................15
Subsection 6.03. Delivery of Mortgage Loan Documents...............15
SECTION 7. Representations, Warranties and Covenants of the Seller:
Remedies for Breach...........................17
Subsection 7.01. Representations and Warranties Respecting the
Seller........................................17
Subsection 7.02. Representations and Warranties Regarding
Individual Mortgage Loans.....................19
Subsection 7.03. Remedies for Breach of Representations and
Warranties....................................33
Subsection 7.04. Repurchase of Certain Mortgage Loans; Premium
Protection....................................35
Subsection 7.05. Protection of Consumer Information................36
SECTION 8. Closing.........................................................36
SECTION 9. Closing Documents...............................................37
SECTION 10. Costs...........................................................38
SECTION 11. Removal of Mortgage Loans from Inclusion under This Agreement
Upon a Whole Loan Transfer or a Pass-Through Transfer on One
or More Reconstitution Dates..................................39
SECTION 12. The Seller and the Servicer.....................................46
Subsection 12.01. Additional Indemnification by the Seller and the
Servicer......................................46
Subsection 12.02. Merger or Consolidation of the Seller and the
Servicer......................................47
Subsection 12.03. Limitation on Liability of the Seller, the
Servicer and Others...........................47
Subsection 12.04. Servicer Not to Resign............................48
Subsection 12.05. No Transfer of Servicing..........................48
SECTION 13. Default.........................................................48
Subsection 13.01. Events of Default.................................48
i
Subsection 13.02. Waiver of Defaults................................50
SECTION 14. Termination.....................................................50
SECTION 15. Successor to the Servicer.......................................50
SECTION 16. Financial Statements............................................51
SECTION 17. Mandatory Delivery: Grant of Security Interest..................52
SECTION 18. Notices.........................................................52
SECTION 19. Severability Clause.............................................53
SECTION 20. Counterparts....................................................53
SECTION 21. Governing Law...................................................53
SECTION 22. Intention of the Parties........................................53
SECTION 23. Successors and Assigns..........................................54
SECTION 24. Waivers.........................................................55
SECTION 25. Exhibits........................................................55
SECTION 26. Nonsolicitation.................................................55
SECTION 27. General Interpretive Principles.................................55
SECTION 28. Reproduction of Documents.......................................56
SECTION 29. Further Agreements..............................................56
SECTION 30. Third-Party Beneficiary.........................................56
SECTION 31. Entire Agreement................................................56
ii
EXHIBITS
--------
EXHIBIT 1 SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 2 FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 3 SECURITY RELEASE CERTIFICATION
EXHIBIT 4 ASSIGNMENT AND CONVEYANCE
EXHIBIT 5 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 6 CUSTODIAL AGREEMENT
EXHIBIT 7 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 8 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 9 SERVICING ADDENDUM
EXHIBIT 10 FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT 11 FORM OF INDEMNIFICATION AGREEMENT
EXHIBIT 12 FORM OF ANNUAL CERTIFICATION
EXHIBIT 13 MORTGAGE LOAN DOCUMENTS
EXHIBIT 14 UNDERWRITING GUIDELINES OF THE SELLER
EXHIBIT 15 SUMMARY OF REGULATION AB SERVICING CRITERIA
EXHIBIT 16 SUMMARY OF APPLICABLE REGULATION AB REQUIREMENTS
EXHIBIT 17 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
EXHIBIT 18 FORECLOSURE RIGHTS
SCHEDULE I MORTGAGE LOAN SCHEDULE
SCHEDULE II PREPAYMENT CHARGE SCHEDULE
iii
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is an MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT (the
"Agreement"), dated as of October 1, 2006, by and between Luminent Mortgage
Capital, Inc., Maia Mortgage Finance Statutory Trust and Mercury Mortgage
Finance Statutory Trust (collectively, the Purchasers and individually, as the
purchaser of any Mortgage Loan hereunder, the Purchaser), having an office at
One Commerce Square, 0000 Xxxxxx Xx., Xxxxx 0000, Xxxxxxxxxxx, XX 00000 (the
"Initial Purchaser", and the Initial Purchaser or the Person, if any, to which
the Initial Purchaser has assigned its rights and obligations hereunder as
Purchaser with respect to a Mortgage Loan, and each of their respective
successors and assigns, the "Purchaser"), GREENPOINT MORTGAGE FUNDING, INC.,
having an office at 000 Xxxx Xxxxxx Xxxxx, Xxxxxx, XX 00000 (the "Seller" and
"Servicer").
W I T N E S S E T H :
WHEREAS, the Seller desires to sell, from time to time, to a Purchaser, and
each Purchaser desires to purchase, from time to time, from the Seller, certain
conventional, fixed and adjustable rate residential first and second lien
mortgage loans, including the right to any Prepayment Charges payable by the
related Mortgagors as described herein, (the "Mortgage Loans") as described
herein on a servicing-retained basis, and which shall be delivered in groups of
whole loans on various dates as provided herein and in the related Confirmation
(each, a "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust or
other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule for
the related Mortgage Loan Package, which is to be annexed hereto on each Closing
Date as Schedule I;
WHEREAS, the Initial Purchaser, the Seller and the Servicer wish to
prescribe the manner of the conveyance, servicing and control of the Mortgage
Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the Seller, the
Purchaser desires to sell some or all of the Mortgage Loans to one or more
purchasers as a whole loan transfer in a whole loan or participation format or a
public or private mortgage-backed securities transaction;
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller agree
as follows:
SECTION 1. Definitions.
------------
For purposes of this Agreement the following capitalized terms shall have
the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices (including collection procedures) of prudent
mortgage banking institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property is
located, which are in general accordance with Xxxxxx Xxx servicing practices and
1
procedures for MBS pool mortgages, as defined in the Xxxxxx Mae Guides including
future updates, the terms of the Mortgage Loan Documents and all applicable
federal, state and local legal and regulatory requirements.
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for the
adjustment of the Mortgage Interest Rate payable in respect thereto.
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan, the
date set forth in the related Mortgage Note on which the Mortgage Interest Rate
on such Adjustable Rate Mortgage Loan is adjusted in accordance with the terms
of the related Mortgage Note.
Agreement: This Amended and Restated Master Mortgage Loan Purchase and
Servicing Agreement including all exhibits, schedules, amendments and
supplements hereto.
Alternative Title Product: A "short form" title policy issued pursuant to
Seller's Underwriting Guidelines in connection with a second lien Mortgage Loan
with a principal balance less than $200,000.
Appraised Value: With respect to any Mortgaged Property, the lesser of (i)
the value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of FNMA and FHLMC and the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989, and (ii) the
purchase price paid for the related Mortgaged Property by the Mortgagor with the
proceeds of the Mortgage Loan, provided, however, in the case of a Refinanced
Mortgage Loan, such value of the Mortgaged Property is based solely upon the
value determined by an appraisal made for the originator of such Refinanced
Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by an
appraiser who met the minimum requirements of FNMA and FHLMC and the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989.
Assignment and Conveyance: An assignment and conveyance of the Mortgage
Loans purchased on a Closing Date in the form annexed hereto as Exhibit 4.
Assignment of Mortgage: With respect to each Mortgage Loan which is not a
MERS Loan, an individual assignment of the Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to give record
notice of the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: A Mortgage Loan that provided on the date of
origination for an amortization schedule extending beyond its maturity date.
Balloon Payment: With respect to any Balloon Mortgage Loan as of any date
of determination, the Monthly Payment payable on the maturity of such Mortgage
Loan.
Business Day: Any day other than a Saturday or Sunday, or a day on which
banking and savings and loan institutions in the State of California or the
State of New York are authorized or obligated by law or executive order to be
closed.
Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of which were
in excess of the principal balance of any existing first mortgage on the related
2
Mortgaged Property and related closing costs, and were used to pay any such
existing first mortgage, related closing costs and subordinate mortgages on the
related Mortgaged Property.
Closing Date: The date or dates on which the Purchaser from time to time
shall purchase and the Seller from time to time shall sell to the Purchaser, the
Mortgage Loans listed on the related Mortgage Loan Schedule with respect to the
related Mortgage Loan Package.
Closing Documents: With respect to any Closing Date, the documents required
pursuant to Section 9.
Code: The Internal Revenue Code of 1986, or any successor statute thereto.
Combined Loan-to-Value Ratio or CLTV: With respect to any Mortgage Loan as
of any date of determination, the ratio on such date of the outstanding
principal amount of the Mortgage Loan and any other mortgage loan which is
secured by a lien on the related Mortgaged Property to the Appraised Value of
the Mortgaged Property.
Commission or SEC: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards, compensation and settlements in respect
of a taking of all or part of a Mortgaged Property by exercise of the power of
condemnation or the right of eminent domain.
Confirmation: With respect to any Mortgage Loan Package purchased and sold
on any Closing Date, the letter agreement among the Purchaser, the Servicer and
the Seller (including any exhibits, schedules and attachments thereto), setting
forth the terms and conditions of such transaction and describing the Mortgage
Loans to be purchased by the Purchaser on such Closing Date. A Confirmation may
relate to more than one Mortgage Loan Package to be purchased on one or more
Closing Dates hereunder.
Convertible Mortgage Loan: A Mortgage Loan that by its terms and subject to
certain conditions contained in the related Mortgage or Mortgage Note allows the
Mortgagor to convert the adjustable Mortgage Interest Rate on such Mortgage Loan
to a fixed Mortgage Interest Rate.
Custodial Account: The separate account or accounts, each of which shall be
an Eligible Account, created and maintained pursuant to this Agreement, which
shall be entitled GreenPoint Mortgage Funding, Inc. as servicer, in trust for
the Purchaser and various Mortgagors, Fixed and Adjustable Rate Mortgage Loans",
established at a financial institution acceptable to the Purchaser. Each
Custodial Account shall be an Eligible Account.
Custodial Agreement: The agreement governing the retention of the originals
of each Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage Loan
Documents, annexed hereto as Exhibit 6.
Custodian: The custodian under the Custodial Agreement, or its successor in
interest or assigns, or any successor to the Custodian under the Custodial
Agreement, as therein provided.
3
Cut-off Date: The first day of the month in which the related Closing Date
occurs.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Pass-Through Transfer.
Determination Date: With respect to each Distribution Date, the fifteenth
(15th) day of the calendar month in which such Distribution Date occurs or, if
such fifteenth (15th) day is not a Business Day, the Business Day immediately
preceding such fifteenth (15th) day.
Distribution Date: The eighteenth (18th) day of each month, commencing on
the eighteenth day of the month next following the month in which the related
Cut-off Date occurs, or if such eighteenth (18th) day is not a Business Day, the
first Business Day immediately preceding such eighteenth (18th) day.
Due Date: With respect to each Mortgage Loan, the day of the calendar month
on which each Monthly Payment is due on such Mortgage Loan (including the
Balloon Payment with respect to a Balloon Mortgage Loan), exclusive of any days
of grace.
Eligible Account: Either (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 A-1 by S&P or Prime-1 by Moody's (or a comparable rating if another rating
agency is specified by the Initial Purchaser by written notice to the Seller and
Servicer) 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 or (iii) a trust
account or accounts maintained with a federal or state chartered depository
institution or trust company acting in its fiduciary capacity. Eligible Accounts
may bear interest.
Escrow Account: The separate trust account or accounts created and
maintained pursuant to this Agreement which shall be entitled "GreenPoint
Mortgage Funding, Inc.", as servicer, in trust for the Purchaser and various
Mortgagors, Fixed and Adjustable Rate Mortgage Loans," established at a
financial institution acceptable to the Purchaser. Each Escrow Account shall be
an Eligible Account.
Escrow Payments: The amounts constituting ground rents, taxes, assessments,
water charges, sewer rents, Primary Insurance Policy premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the Mortgagee pursuant to the terms of any Mortgage Note or Mortgage.
Event of Default: Any one of the events enumerated in Subsection 14.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
4
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC: Xxxxxxx Mac or any successor thereto.
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
Seller pursuant to this Agreement), 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 the Servicer, of each Final
Recovery Determination.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term of
such Mortgage Loan.
Flood Zone Service Contract: A transferable contract maintained for the
Mortgaged Property with a nationally recognized flood zone service provider for
the purpose of obtaining the current flood zone status relating to such
Mortgaged Property.
FNMA: Xxxxxx Xxx or any successor thereto.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan Schedule that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the new
Mortgage Interest Rate for such Mortgage Loan.
HUD: The United States Department of Housing and Urban Development or any
successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the interest rate thereon.
Initial Closing Date: The Closing Date on which any Initial Purchaser
purchases and the Seller sells the first Mortgage Loan Package hereunder.
Initial Purchaser: Luminent Mortgage Capital, Inc., Maia Mortgage Finance
Statutory Trust and Mercury Mortgage Finance Statutory Trust, or any successor
or assign.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Liquidation Proceeds: Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received in connection with the liquidation of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or otherwise,
other than amounts received following the acquisition of REO Property.
5
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan as of any
date of determination, the ratio on such date of the outstanding principal
amount of the Mortgage Loan, to the Appraised Value of the Mortgaged Property.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the maximum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be increased on any Adjustment
Date.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number of Mortgage Loans registered with
MERS on the MERS(R) System.
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the minimum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be decreased on any Adjustment
Date.
MOM Loan: Any Mortgage Loan where MERS acts as the mortgagee of record of
such Mortgage Loan, solely as nominee for the originator of such Mortgage Loan
and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan, the scheduled combined
payment (including any Balloon Payment) of principal and interest payable by a
Mortgagor under the related Mortgage Note on each Due Date.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on Mortgaged Property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan referred
to in Exhibit 5 annexed hereto, and any additional documents required to be
added to the Mortgage File pursuant to this Agreement or the related
Confirmation.
Mortgage Interest Rate: With respect to each Fixed Rate Mortgage Loan, the
fixed annual rate of interest provided for in the related Mortgage Note and,
with respect to each Adjustable Rate Mortgage Loan, the annual rate that
interest accrues on such Adjustable Rate Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each first or second lien, residential mortgage loan, sold,
assigned and transferred to the Purchaser pursuant to this Agreement and the
related Confirmation and identified on the Mortgage Loan Schedule annexed to
this Agreement on such Closing Date, which Mortgage Loan includes without
6
limitation the Mortgage File, the Monthly Payments, Prepayment Charges,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition
proceeds, and all other rights, benefits, proceeds and obligations arising from
or in connection with such Mortgage Loan.
Mortgage Loan Documents: The documents listed in Exhibit 13 hereto
pertaining to any Mortgage Loan.
Mortgage Loan Package: The Mortgage Loans listed on a Mortgage Loan
Schedule, delivered to the Custodian and the Purchaser at least five (5)
Business Days prior to the related Closing Date and attached to the related
Assignment and Conveyance on the related Closing Date.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package, the
schedule of Mortgage Loans to be annexed to the related Assignment and
Conveyance on the related Closing Date for the Mortgage Loan Package delivered
on such Closing Date in electronic form, such schedule setting forth the
following information with respect to each Mortgage Loan in the Mortgage Loan
Package: (1) the Seller's Mortgage Loan identifying number; (2) the Mortgagor's
first and last name; (3) the street address of the Mortgaged Property including
the state and zip code; (4) a code indicating whether the Mortgaged Property is
owner-occupied; (5) the type of Residential Dwelling constituting the Mortgaged
Property; (6) the original months to maturity; (7) the original date of the
Mortgage Loan and the remaining months to maturity from the Cut-off Date, based
on the original amortization schedule; (8) the Loan-to-Value Ratio or Combined
Loan-to-Value Ratio at origination; (9) the Mortgage Interest 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 as of 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 and with respect to second liens
the related first lien on the Mortgaged Property, if available; (16) the Stated
Principal Balance of the Mortgage Loan and with respect to second liens, the
original principal balance of the related first lien on the Mortgaged Property;
(17) with respect to each Adjustable Rate Mortgage Loan, the first Adjustment
Date; (18) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(19) a code indicating the purpose of the loan (i.e., purchase financing,
Rate/Term Refinancing, Cash-Out Refinancing); (20) with respect to each
Adjustable Rate Mortgage Loan, the Maximum Mortgage Interest Rate under the
terms of the Mortgage Note; (21) with respect to each Adjustable Rate Mortgage
Loan, the Minimum Mortgage Interest Rate under the terms of the Mortgage Note;
(22) the Mortgage Interest Rate at origination; (23) with respect to each
Adjustable Rate Mortgage Loan, the Periodic Rate Cap; (24) with respect to each
Adjustable Rate Mortgage Loan, the first Adjustment Date immediately following
the Cut-off Date; (25) with respect to each Adjustable Rate Mortgage Loan, the
Index; (26) the date on which the first Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date; (27) a code indicating the documentation style (i.e., full
(providing two years employment verification - 2 years W-2's and current pay
stub or 2 years 1040's for self employed borrowers), alternative or reduced);
(28) a code indicating whether the Mortgage Loan is an Adjustable Rate Mortgage
Loan or a Fixed Rate Mortgage Loan; (29) the Appraised Value of the Mortgaged
Property; (30) the sale price of the Mortgaged Property, if applicable; (31) a
code indicating whether the Mortgage Loan is subject to a Prepayment Charge or
7
penalty; (32) the term of any Prepayment Charge or penalty; (33) with respect to
each MERS Mortgage Loan, the related MIN; (34) a code indicating if the Mortgage
Loan is a Negative Amortization Mortgage Loan; (35) a code indicating if the
Mortgage Loan is an interest-only Mortgage Loan and, if so, the term of the
interest-only period of such Mortgage Loan; (36) a code indicating whether the
Mortgage Loan is a first or second lien; and (37) a code indicating whether the
Mortgage Loan is a Balloon Mortgage Loan and, if so, the term of the Balloon
Mortgage Loan and the amount of the Balloon Payment scheduled to be due at
maturity assuming no Principal Prepayments; (38) a code indicating whether a
borrower is a non-resident alien; (39) Reserved; (40) Reserved; (41) a code
indicating if the Mortgage Loan is subject to a Primary Insurance Policy, and if
so, the insurer. With respect to the Mortgage Loan Package in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
principal balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; and (4) the weighted average maturity of
the Mortgage Loans. Schedule I hereto shall be supplemented as of each Closing
Date to reflect the addition of the Mortgage Loan Schedule with respect to the
related Mortgage Loan Package.
Mortgage Note: The original executed note or other evidence of the Mortgage
Loan indebtedness of a Mortgagor.
Mortgaged Property: The Mortgagor's real property securing repayment of a
related Mortgage Note, consisting of a fee simple interest in a single parcel of
real property improved by a Residential Dwelling.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note, the owner of the Mortgaged
Property and the grantor or mortgagor named in the related Mortgage and such
grantor's or mortgagor's successor's in title to the Mortgaged Property.
Negative Amortization: With respect to each Negative Amortization Mortgage
Loan, that portion of interest accrued at the Mortgage Interest Rate in any
month that exceeds the Monthly Payment on the related Mortgage Loan for such
month and which, pursuant to the terms of the Mortgage Note, is added to the
principal balance of the Mortgage Loan.
Negative Amortization Mortgage Loan: Each Mortgage Loan that is identified
on the Mortgage Loan Schedule as a Mortgage Loan that may be subject to Negative
Amortization.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or a President or a Vice President and by the
Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Person on behalf of whom such certificate is being delivered.
Opinion of Counsel: A written opinion of counsel, who may be salaried
counsel for the Person on behalf of whom the opinion is being given, reasonably
acceptable to each Person to whom such opinion is addressed.
8
Pass-Through Transfer: Any transaction involving either (1) a sale or
transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.
Payment Adjustment Date: With respect to each Negative Amortization
Mortgage Loan, the date on which Monthly Payments shall be adjusted. A Payment
Adjustment Date with respect to a Negative Amortization Mortgage Loan shall
occur on each anniversary date of the first payment date for the Mortgage Loan.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan and
any Adjustment Date therefor, a number of percentage points per annum that is
set forth in the related Mortgage Loan Schedule and in the related Mortgage
Note, which is the maximum amount by which the Mortgage Interest Rate for such
Adjustable Rate Mortgage Loan may increase (without regard to the Maximum
Mortgage Interest Rate) or decrease (without regard to the Minimum Mortgage
Interest Rate) on such Adjustment Date from the Mortgage Interest Rate in effect
immediately prior to such Adjustment Date.
Person: An individual, corporation, limited liability company, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Prepayment Charge: With respect to any Mortgage Loan, any prepayment
penalty or premium thereon payable in connection with a Principal Prepayment on
such Mortgage Loan pursuant to the terms of the related Mortgage Note.
Primary Insurance Policy: A policy of primary mortgage guaranty insurance
issued by a Qualified Insurer.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Charge, which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the Purchaser
to the Seller pursuant to the related Confirmation in exchange for the Mortgage
Loans purchased on such Closing Date as calculated as provided in Section 4.
Purchaser: The Initial Purchaser or the Person, if any, to which the
Initial Purchaser has assigned its rights and obligations thereunder as
Purchaser with respect to a Mortgage Loan, and each of their respective
successors and assigns.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Seller, in accordance with underwriting
guidelines designated by the Seller ("Designated Guidelines") or guidelines that
9
do not vary materially from such Designated Guidelines; (ii) such Mortgage Loans
were in fact underwritten as described in clause (i) above and were acquired by
the Seller within 180 days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Seller in origination of mortgage loans of the same type as the Mortgage Loans
for the Seller's own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Seller on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage Loans were
acquired by the Seller, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Seller.
Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the Mortgaged Property is located, duly authorized
and licensed in such states to transact the applicable insurance business and to
write the insurance provided, and approved as an insurer by FNMA and FHLMC and
whose claims paying ability is rated in the two highest rating categories by the
nationally recognized rating agencies with respect to primary mortgage insurance
and in the two highest rating categories by Best's with respect to hazard and
flood insurance.
Qualified Substitute Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding 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 the Stated 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 Interest Rate not
less than (and not more than one percentage point in excess of) the Mortgage
Interest Rate of the Deleted Mortgage Loan, (iii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (iv) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (v) have a Loan-to-Value Ratio, and in the case of a
second lien Mortgage Loan, a Combined Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio or Combined
Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (vi) conform
to each representation and warranty set forth in Subsection 7.02 of this
Agreement, (vii) be the same type of mortgage loan (i.e. fixed or adjustable
rate with the same Gross Margin and Index as the Deleted Mortgage Loan) and
(viii) be covered under a Primary Insurance Policy if such Qualified Substitute
Mortgage Loan has a Loan-to-Value Ratio in excess of 80%. 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 Interest Rates described in clause
(ii) hereof shall be determined on the basis of weighted average Mortgage
Interest Rates and shall be satisfied as to each such mortgage loan, the terms
described in clause (iii) shall be determined on the basis of weighted average
remaining terms to maturity, the Loan-to-Value Ratios, and in the case of second
lien Mortgage Loans the Combined Loan-to-Value Ratios described in clause (v)
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 (vii) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.
10
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds of which
are not in excess of the existing first mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively to satisfy the
then existing first mortgage loan of the Mortgagor on the related Mortgaged
Property and to pay related closing costs.
Reconstitution: Any Pass-Through Transfer or Whole Loan Transfer.
Reconstitution Agreement: The agreement or agreements entered into by the
Seller, the Servicer and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
serviced hereunder, in connection with a Whole Loan Transfer or a Pass-Through
Transfer as provided in Section 12.
Reconstitution Date: The date or dates on which any or all of the Mortgage
Loans serviced under this Agreement shall be removed from this Agreement and
reconstituted as part of a Whole Loan Transfer or Pass-Through Transfer pursuant
to Section 12 hereof.
Record Date: With respect to each Distribution Date, the last Business Day
of the month immediately preceding the month in which such Distribution Date
occurs.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time
REMIC: A "real estate mortgage investment conduit within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to
REMICs, which appear in Sections 860A through 860G of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
REO Account: The separate trust account or accounts created and maintained
pursuant to this Agreement which shall be entitled "[SELLER], in trust for the
Purchaser, as of [date of acquisition of title], Fixed and Adjustable Rate
Mortgage Loans".
REO Disposition: The final sale by the Servicer of any REO Property.
REO Property: A Mortgaged Property acquired as a result of the liquidation
of a Mortgage Loan.
Repurchase Price: The Repurchase Price for any Mortgage Loan that is
required to be repurchased pursuant to Section 7.04 shall be equal to the sum of
(i) the product of the Stated Principal Balance of such Mortgage Loan times the
greater of (x) the Purchase Price percentage as stated in the related
11
Confirmation and (y) 100%, plus (ii) interest on such Stated Principal Balance
at the Mortgage Interest Rate from and including the last Due Date through which
interest has been paid by or on behalf of the Mortgagor to the day immediately
prior to the date of repurchase (unless the Mortgage Loan has been the subject
of a Pass-Through Transfer, in which case the measurement date for accrual of
interest on such Stated Principal Balance shall be the first day of the month
following the date of repurchase), less amounts received in respect of such
repurchased Mortgage Loan which are being held in the Custodial Account for
distribution in connection with such Mortgage Loan, plus (iii) any unreimbursed
servicing advances and monthly advances (including nonrecoverable monthly
advances) and any unpaid servicing fees allocable to such Mortgage Loan paid by
any party other than the Servicer, plus (iv) any costs and expenses incurred by
the Purchaser, the servicer, master servicer or any trustee in respect of the
breach or defect giving rise to the repurchase obligation including, without
limitation, any costs and damages incurred by any such party in connection with
any violation by any such Mortgage Loan of any predatory or abusive lending law.
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 FNMA eligible condominium project, or (iv) a detached
one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home.
Securities Act: The Securities Act of 1933, as amended.
Servicing Addendum: The terms and conditions attached hereto as Exhibit 9,
which will govern the servicing of the Mortgage Loans. Servicing Advances: All
customary, reasonable and necessary "out-of-pocket" costs and expenses incurred
by the Servicer in the performance of its servicing obligations, including, but
not limited to, the cost of (i) preservation, restoration and repair of a
Mortgaged Property, (ii) any enforcement or judicial proceedings with respect to
a Mortgage Loan, including foreclosure actions and (iii) the management and
liquidation of REO Property.
Servicing Criteria: As of any date of determination, the "servicing
criteria" set forth in Item 1122(d) of Regulation AB, or any amendments thereto,
a summary of the requirements of which as of the date hereof is attached hereto
as Exhibit 15 for convenience of reference only. In the event of a conflict or
inconsistency between the terms of Exhibit 15 and the text of Item 1122(d) of
Regulation AB, the text of Item 1122(d) of Regulation AB shall control.
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual
servicing fee the Purchaser shall pay to the Seller, which shall, for each
month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate and
(b) the unpaid principal balance of the Mortgage Loan. Such fee shall be payable
monthly, computed on the basis of the same principal amount and period
respectively which any related interest payment on a Mortgage Loan is computed.
The obligation of the Purchaser to pay the Servicing Fee is limited to, and
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds and other proceeds, to the extent permitted
by Section 11.05) of related Monthly Payment collected by the Seller, or as
otherwise proved under Section 11.05. Servicing Fee Rate: With respect to any
Mortgage Loan, the rate per annum set forth in the applicable Confirmation.
12
Servicing File: With respect to each Mortgage Loan, the file retained by
the Seller consisting of originals of all documents in the Mortgage File, which
are not delivered to the Purchaser, or the Custodian and copies of the Mortgage
Loan Documents set forth in Exhibit 13 hereto.
S&P: Standard & Poor's Ratings Group or its successor in interest.
Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of the Mortgage Loan as of the Cut-off
Date after giving effect to payments of principal received on or before such
date, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal, plus (iii) the cumulative amount of any Negative Amortization.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Servicer or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Sub-Servicing Agreement: The written contract between the Company and a
Subservicer relating to servicing and administration of certain Mortgage Loans
as provided in Section 11.30 of Exhibit 9 of this Agreement.
Tax Service Contract: A transferable contract maintained for the Mortgaged
Property with a tax service provider for the purpose of obtaining current
information from local taxing authorities relating to such Mortgaged Property.
Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Seller.
Underwriting Guidelines: The Seller's underwriting guidelines attached
hereto as Exhibit 14 as in effect with respect to the Mortgage Loans purchased
by Purchaser on the Initial Closing Date, as may be amended, supplemented or
modified from time to time thereafter with prior written notice to the Initial
Purchaser.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans, other than a Pass-Through Transfer.
13
SECTION 2. Agreement to Purchase.
----------------------
The Seller agrees to sell, and the Purchaser agrees to purchase, from
time-to-time, Mortgage Loans having an aggregate principal balance on the
related Cut-off Date in an amount as set forth in the related Confirmation, or
in such other amount as agreed by the Purchaser and the Seller as evidenced by
the actual aggregate principal balance of the Mortgage Loans accepted by the
Purchaser on the related Closing Date.
SECTION 3. Mortgage Loan Schedules.
------------------------
The Seller shall deliver the Mortgage Loan Schedule for a Mortgage Loan
Package to be purchased on a particular Closing Date to the Purchaser at least
five (5) Business Days prior to the related Closing Date.
SECTION 4. Purchase Price.
--------------
The Purchase Price for each Mortgage Loan listed on the related Mortgage
Loan Schedule shall be the percentage of par as stated in the related
Confirmation (subject to adjustment as provided therein), multiplied by its
Stated Principal Balance as of the related Cut-off Date. If so provided in the
related Confirmation, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Initial Purchaser
shall pay to the Seller, at closing, accrued interest on the Stated Principal
Balance of each Mortgage Loan as of the related Cut-off Date at its Mortgage
Interest Rate, net of the Servicing Fee, from the related Cut-off Date through
the day prior to the related Closing Date, both inclusive.
The Purchaser shall own and be entitled to receive with respect to each
Mortgage Loan purchased, (1) all recoveries of principal collected after the
related Cut-off Date, (2) all payments of interest on the Mortgage Loans net of
the Servicing Fee; and (3) all Prepayment Charges on the Mortgage Loans
collected on or after the Cut-Off Date.
SECTION 5. Examination of Mortgage Files.
------------------------------
In addition to the rights granted to the Initial Purchaser under the
related Confirmation to underwrite the Mortgage Loans and review the Mortgage
Files prior to the Closing Date, prior to the related Closing Date, the Seller,
or Servicer, as applicable, shall, at the Purchaser's option (a) deliver to the
Custodian in escrow, for examination with respect to each Mortgage Loan to be
purchased on such Closing Date, the related Mortgage File, including the
Assignment of Mortgage, pertaining to each Mortgage Loan, or (b) make the
related Mortgage File available to the Initial Purchaser for examination at the
Seller's offices or such other location as shall otherwise be agreed upon by the
Initial Purchaser and the Seller. Such examination may be made by the Initial
Purchaser or its designee at any reasonable time before or after the related
Closing Date. If the Initial Purchaser makes such examination prior to the
related Closing Date and identifies any Mortgage Loans that do not conform to
the terms of the related Confirmation or the Underwriting Guidelines, such
Mortgage Loans may, at the Initial Purchaser's option, be rejected for purchase
by the Initial Purchaser. If not purchased by the Initial Purchaser, such
Mortgage Loans shall be deleted from the related Mortgage Loan Schedule. The
Initial Purchaser may, at its option and without notice to the Seller, purchase
all or part of any Mortgage Loan Package without conducting any partial or
14
complete examination. The fact that the Initial Purchaser has conducted or has
determined not to conduct any partial or complete examination of the Mortgage
Files shall not affect the Initial Purchaser's (or any of its successors')
rights to demand repurchase or other relief or remedy provided for in this
Agreement.
SECTION 6. Conveyance from Seller to Initial Purchaser.
-------------------------------------------
Subsection 6.01. Conveyance of Mortgage Loans; Possession of Servicing
-----------------------------------------------------
Files.
------
The Seller, simultaneously with the payment of the Purchase Price, shall
execute and deliver to the Initial Purchaser an Assignment and Conveyance with
respect to the related Mortgage Loan Package in the form attached hereto as
Exhibit 4. The Servicing File retained by the Servicer with respect to each
Mortgage Loan pursuant to this Agreement shall be appropriately identified in
the Servicer's computer system to reflect clearly the sale of such related
Mortgage Loan to the Purchaser. The Purchaser shall be entitled to receive all
Prepayment Charges required to be paid by a Mortgagor under the terms of any
Mortgage Loan. The Servicer shall release from its custody the contents of any
Servicing File retained by it only in accordance with this Agreement, except
when such release is required in connection with a repurchase of any such
Mortgage Loan pursuant to Subsection 7.03 or 7.04.
Subsection 6.02. Books and Records.
-----------------
Record title to each Mortgage and the related Mortgage Note as of the
related Closing Date shall be in the name of the Seller, the Servicer, the
Purchaser, the Custodian or one or more designees of the Purchaser, as the
Purchaser shall designate. Notwithstanding the foregoing, beneficial ownership
of each Mortgage and the related Mortgage Note shall be vested solely in the
Purchaser or the appropriate designee of the Purchaser, as the case may be. All
rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller after the related Cut-off Date on or in connection
with a Mortgage Loan as provided in Section 4 shall be vested in the Purchaser
or one or more designees of the Purchaser; provided, however, that all such
funds received on or in connection with a Mortgage Loan as provided in Section 4
shall be received and held by the Seller in trust for the benefit of the
Purchaser or the assignee of the Purchaser, as the case may be, as the owner of
the Mortgage Loans pursuant to the terms of this Agreement.
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of the Mortgage
Loans by the Seller and not a pledge of the Mortgage Loans by the Seller to the
Purchaser to secure a debt or other obligation of the Seller. Consequently, the
sale of each Mortgage Loan shall be reflected as a sale on the Seller's business
records, tax returns and financial statements.
Subsection 6.03. Delivery of Mortgage Loan Documents.
-----------------------------------
The Seller or Servicer, as applicable, shall from time to time in
connection with each Closing Date, at least five (5) Business Days prior to such
Closing Date, deliver and release to the Custodian those Mortgage Loan Documents
set forth on Exhibit 13 hereto with respect to each Mortgage Loan to be
15
purchased and sold on the related Closing Date and set forth on the related
Mortgage Loan Schedule delivered with such Mortgage Loan Documents.
The Servicer shall provide to each of the Purchaser and the Custodian a
notice containing a list of authorized servicing officers (each, an "Authorized
Representative") for the purpose of giving and receiving notices, requests and
instructions and delivering certificates and documents in connection with this
Agreement. Such notice shall contain the specimen signature for each Authorized
Representative. From time to time, the Servicer may, by delivering to the others
a revised notice, change the information previously given pursuant to this
Section, but each of the parties hereto shall be entitled to rely conclusively
on the then current notice until receipt of a superseding notice.
The Custodian shall certify its receipt of all such Mortgage Loan Documents
required to be delivered pursuant to this Agreement for the related Closing
Date, as evidenced by the Trust Receipt and Initial Certification of the
Custodian in the form annexed to the Custodial Agreement. The Servicer shall be
responsible for maintaining the Custodial Agreement. The fees and expenses of
the Custodian shall be paid by the Seller.
The Seller 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 Seller 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 one
hundred twenty (120) days of its submission for recordation. If such document
has not been received after such 120 day period, the Seller shall deliver an
officer's certificate to the Purchaser certifying that such failure was due
solely to (i) the failure of the applicable recorder's office to return such
document sent for recording or (ii) the failure of the title insurer to issue
and deliver the original mortgagee title policy; provided that in any event,
Seller shall cause such document to be delivered to Purchaser within six months
of its submission for recordation or at the Purchaser's option, Seller shall
repurchase such Mortgage Loan from the Purchaser within two (2) Business Days of
request at the Repurchase Price.
Subsection 6.04 Quality Control Procedures.
---------------------------
The Seller shall have an internal quality control program that verifies, on
a regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The program shall
include evaluating and monitoring the overall quality of the Seller's loan
production and the servicing activities of the Seller. The program is to ensure
that the Mortgage Loans are originated and serviced in accordance with Accepted
Servicing Standards and the Underwriting Guidelines; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
16
SECTION 7. Representations, Warranties and Covenants of the Seller:
--------------------------------------------------------------
Remedies for Breach.
-------------------
Subsection 7.01. Representations and Warranties Respecting the Seller.
----------------------------------------------------
(a) The Seller represents, warrants and covenants to the Initial Purchaser
and to any subsequent Purchaser as of the Initial Closing Date and each
subsequent Closing Date or as of such date specifically provided herein or in
the applicable Assignment and Conveyance:
(i) The Seller is a corporation duly organized, validly existing and
in good standing under the laws of New York. The Seller has all licenses
necessary to carry out its business as now being conducted, and is licensed
and qualified to transact business in and is in good standing under the
laws of each state in which any Mortgaged Property is located or is
otherwise exempt under applicable law from such licensing or qualification
or is otherwise not required under applicable law to effect such licensing
or qualification and no demand for such licensing or qualification has been
made upon the Seller by any such state, and in any event the Seller is in
compliance with the laws of any such state to the extent necessary to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of this Agreement. No licenses
or approvals obtained by the Seller have been suspended or revoked by any
court, administrative agency, arbitrator or governmental body and no
proceedings are pending which might result in such suspension or
revocation;
(ii) The Seller has the full power and authority to hold each Mortgage
Loan, to sell each Mortgage Loan, and to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this
Agreement. The Seller 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 Purchaser, constitutes a legal, valid and binding
obligation of the Seller, enforceable against it in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency or reorganization;
(iii) The execution and delivery of this Agreement by the Seller and
the performance of and compliance with the terms of this Agreement will not
violate the Seller's articles of incorporation or by-laws or constitute a
default under or result in a breach or acceleration of, any material
contract, agreement or other instrument to which the Seller is a party or
which may be applicable to the Seller or its assets;
(iv) The Seller is not in violation of, and the execution and delivery
of this Agreement by the Seller and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to,
any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction over the Seller
or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or
the operation of the Seller or its assets or might have consequences that
would materially and adversely affect the performance of its obligations
and duties hereunder;
(v) The Seller is an approved seller/servicer for FNMA and FHLMC in
good standing and is a HUD approved mortgagee pursuant to Section 203 of
17
the National Housing Act. No event has occurred, including but not limited
to a change in insurance coverage, which would make the Seller unable to
comply with FNMA, FHLMC or HUD eligibility requirements or which would
require notification to FNMA, FHLMC or HUD;
(vi) The Seller does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in
this Agreement;
(vii) The Mortgage Note, the Mortgage, the Assignment of Mortgage and
any other documents required to be delivered with respect to each Mortgage
Loan pursuant to this Agreement, have been delivered to the Custodian all
in compliance with the specific requirements of this Agreement. With
respect to each Mortgage Loan, the Seller is in possession of a complete
Mortgage File in compliance with Exhibit 5, except for such documents as
have been delivered to the Custodian;
(viii) Immediately prior to the payment of the Purchase Price for each
Mortgage Loan, the Seller was the owner of record of the related Mortgage
and the indebtedness evidenced by the related Mortgage Note and upon the
payment of the Purchase Price by the Purchaser, in the event that the
Seller retains record title, the Seller shall retain such record title to
each Mortgage, each related Mortgage Note and the related Mortgage Files
with respect thereto in trust for the Purchaser as the owner thereof and
only for the purpose of servicing and/or supervising the servicing of each
Mortgage Loan;
(ix) There are no actions or proceedings against, or investigations
of, the Seller before any court, administrative agency or other tribunal
(A) that might prohibit its entering into this Agreement, (B) seeking to
prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement;
(x) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the 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 related Closing Date;
(xi) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
by the Seller pursuant to this Agreement are not subject to the bulk
transfer or any similar statutory provisions;
(xii) The transfer of the Mortgage Loans shall be treated as a sale on
the books and records of the Seller, and the Seller has determined that,
and will treat, the disposition of the Mortgage Loans pursuant to this
Agreement for tax and accounting purposes as a sale. The Seller shall
maintain a complete set of books and records for each Mortgage Loan which
shall be clearly marked to reflect the ownership of each Mortgage Loan by
the Purchaser;
18
(xiii) The consideration received by the Seller upon the sale of the
Mortgage Loans constitutes fair consideration and reasonably equivalent
value for such Mortgage Loans;
(xiv) The Seller is solvent and will not be rendered insolvent by the
consummation of the transactions contemplated hereby. The Seller is not
transferring any Mortgage Loan with any intent to hinder, delay or defraud
any of its creditors;
(xv) The information delivered by the Seller to the Purchaser with
respect to the Seller's loan loss, foreclosure and delinquency experience
for the twelve (12) months immediately preceding the Initial Closing Date
on mortgage loans underwritten to the same standards as the Mortgage Loans
and covering mortgaged properties similar to the Mortgaged Properties, is
true and correct in all material respects;
(xvi) Neither this Agreement nor any written statement, report or
other document prepared and furnished or to be prepared and furnished by
the Seller pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading;
(xvii) The Seller will comply in all material respects with the rules
and procedures of MERS in connection with the servicing of the Mortgage
Loans that are registered with MERS; and
(xviii) The Seller has not dealt with any broker, investment banker,
agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans.
Subsection 7.02. Representations and Warranties Regarding
---------------------------------------------
Individual Mortgage Loans.
--------------------------
The Seller hereby represents and warrants to the Initial Purchaser and to
any subsequent Purchaser that, as to each Mortgage Loan, as of the related
Closing Date for such Mortgage Loan:
(i) The information set forth in the related Mortgage Loan Schedule
and the mortgage loan data delivered to the Purchaser is complete, true and
correct;
(ii) The Mortgage Loan is in compliance with all requirements set
forth in the related Confirmation, and the characteristics of the related
Mortgage Loan Package as set forth in the related Confirmation are true and
correct;
(iii) All payments required to be made up to the close of business on
the Closing Date for such Mortgage Loan under the terms of the Mortgage
Note have been made; the Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds from a party other
than the owner of the related Mortgaged Property, directly or indirectly,
for the payment of any amount required by the Mortgage Note or Mortgage; no
Mortgage Loan is thirty (30) or more days delinquent as of the Closing Date
19
and there has been no delinquency, exclusive of any period of grace, in any
payment by the Mortgagor thereunder since the origination of the Mortgage
Loan;
(iv) There are no delinquent taxes, ground rents, water charges, sewer
rents, assessments, insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding charges
affecting the related Mortgaged Property;
(v) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if
necessary to maintain the lien priority of the Mortgage, and which have
been delivered to the Custodian; the substance of any such waiver,
alteration or modification has been approved by the insurer under the
Primary Insurance Policy, if any, and has been approved by the title
insurer, to the extent required by the related policy, and is reflected on
the related Mortgage Loan Schedule. No instrument of waiver, alteration or
modification has been executed, and no Mortgagor has been released, in
whole or in part, except in connection with an assumption agreement
approved by the insurer under the Primary Insurance Policy, if any, and by
the title insurer, to the extent required by the policy, and which
assumption agreement has been delivered to the Custodian and the terms of
which are reflected in the related Mortgage Loan Schedule;
(vi) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and
the Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no
such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto. Each Prepayment Charge or penalty with
respect to any Mortgage Loan is permissible, enforceable and collectible
under applicable federal, state and local law;
(vii) All buildings upon the Mortgaged Property are insured by an
insurer acceptable to FNMA and FHLMC against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where
the Mortgaged Property is located, pursuant to insurance polices provide
coverage in an amount not less than the greatest of (i) 100% of the
replacement cost of all improvements to the Mortgaged Property, (ii) either
(A) the outstanding principal balance of the Mortgage Loan with respect to
each first lien Mortgage Loan or (B) with respect to each second lien
Mortgage Loan, the sum of the outstanding principal balance of the related
first lien mortgage loan and the outstanding principal balance of the
second lien Mortgage Loan, (iii) the amount necessary to avoid the
operation of any co-insurance provisions with respect to the Mortgaged
Property, and consistent with the amount that would have been required as
of the date of origination in accordance with the Underwriting Guidelines,
or (iv) 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. All such insurance policies contain a standard mortgagee clause
naming the Servicer, its successors and assigns as mortgagee and all
premiums thereon have been paid. If the Mortgaged Property is in an area
20
identified on a Flood Hazard Map or Flood Insurance Rate Map issued by the
Federal Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available) a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to the requirements of
FNMA an FHLMC. The Mortgage obligates the Mortgagor thereunder to maintain
all such insurance at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
maintain such insurance at Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;
(viii) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate
settlement procedures, predatory and abusive lending, consumer credit
protection, equal credit opportunity, fair housing or disclosure laws
applicable to the origination and servicing of mortgage loans of a type
similar to the Mortgage Loans and applicable to any Prepayment Charge
associated with the Mortgage Loans at origination have been complied with;
(ix) The Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;
(x) The Mortgage (including any Negative Amortization which may arise
thereunder) is a valid, existing and enforceable (A) first lien and first
priority security interest with respect to each Mortgage Loan which is
indicated by the Seller to be a first lien (as reflected on the Mortgage
Loan Schedule), or (B) second lien and second priority security interest
with respect to each Mortgage Loan which is indicated by the Seller to be a
second lien (as reflected on the Mortgage Loan Schedule), in either case,
on the Mortgaged Property, including all improvements on the Mortgaged
Property subject only to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of the public
record as of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan and which
do not adversely affect the Appraised Value of the Mortgaged Property, (c)
with respect to each Mortgage Loan which is indicated by the Seller to be a
second lien Mortgage Loan (as reflected on the Mortgage Loan Schedule) a
first lien on the Mortgaged Property; and (d) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan establishes and creates
a valid, existing and enforceable first or second lien and first or second
priority security interest (in each case, as indicated on the Mortgage Loan
Schedule) on the property described therein and the Seller has full right
to sell and assign the same to the Purchaser. The Mortgaged Property was
not, as of the date of origination of the Mortgage Loan, subject to a
mortgage, deed of trust, deed to secure debt or other security instrument
creating a lien subordinate to the lien of the Mortgage;
21
(xi) The Mortgage Note and the related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms;
(xii) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have
been duly and properly executed by such parties. The Mortgagor is a natural
person; (xiii) The proceeds of the Mortgage Loan have been fully disbursed
to or for the account of the Mortgagor and there is no obligation for the
Mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvement and as
to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Mortgage Loan
and the recording of the Mortgage have been paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due to the Mortgagee pursuant
to the Mortgage Note or Mortgage;
(xiv) The Seller is the sole legal, beneficial and equitable owner of
the Mortgage Note and the Mortgage and has full right to transfer and sell
the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest;
(xv) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) in
compliance with any and all applicable "doing business" and licensing
requirements of the laws of the state wherein the Mortgaged Property is
located;
(xvi) Each first lien Mortgage Loan and second lien Mortgage Loan that
is originated in conjunction with the related first lien Mortgage Loan is
covered by an American Land Title Association ("ALTA") lender's title
insurance policy (which, in the case of an Adjustable Rate Mortgage Loan
has an adjustable rate mortgage endorsement in the form of ALTA 6.0 or 6.1)
acceptable to Xxxxxx Xxx and Xxxxxxx Mac, issued by a title insurer
acceptable to Xxxxxx Mae and Xxxxxxx Mac and qualified to do business in
the jurisdiction where the Mortgaged Property is located, insuring (subject
to the exceptions contained in (x)(a) and (b), and with respect to any
second lien Mortgage Loan (c), above) the Seller, its successors and
assigns as to the first or second priority lien (as indicated on the
Mortgage Loan Schedule) of the Mortgage in the original principal amount of
the Mortgage Loan (including, if the Mortgage Loan provides for Negative
Amortization, the maximum amount of Negative Amortization in accordance
with the Mortgage) and, with respect to any Adjustable Rate Mortgage Loan,
against any loss by reason of the invalidity or unenforceability of the
lien resulting from the provisions of the Mortgage providing for adjustment
in the Mortgage Interest Rate and Monthly Payment and Negative Amortization
provisions of the Mortgage Note. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress to and from the
Mortgaged Property, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller is the sole insured of such
22
lender's title insurance policy, and such lender's title insurance policy
is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims
have been made under such lender's title insurance policy, and no prior
holder of the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy. Each second lien Mortgage Loan that was not originated in
conjunction with the related first lien Mortgage Loan is covered by an
Alternative Title Product.
(xvii) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration, and the Seller has not waived any default, breach, violation
or event of acceleration. With respect to each second lien Mortgage Loan
(i) the first lien mortgage loan is in full force and effect, (ii) there is
no default, breach, violation or event of acceleration existing under such
first lien mortgage or the related mortgage note, (iii) no event which,
with the passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach, violation or event of
acceleration thereunder, (iv) either (A) the first lien mortgage contains a
provision which allows or (B) applicable law requires, the mortgagee under
the second lien Mortgage Loan to receive notice of, and affords such
mortgagee an opportunity to cure any default by payment in full or
otherwise under the first lien mortgage, (v) the related first lien does
not provide for or permit negative amortization under such first lien
Mortgage Loan, and (vi) either no consent for the Mortgage Loan is required
by the holder of the first lien or such consent has been obtained and is
contained in the Mortgage File;
(xviii) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with,
the lien of the related Mortgage;
(xix) All improvements which were considered in determining the
Appraised Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property.
No improvement located on or being part of the Mortgaged Property is in
violation of any applicable zoning law or regulation, subdivision law or
ordinance;
(xx) The Mortgage Loan was originated by the Seller, a Qualified
Correspondent or by a savings and loan association, a savings bank, a
commercial bank or similar banking institution which is supervised and
examined by a federal or state authority, or by a mortgagee approved as
such by the Secretary of HUD;
(xxi) Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Interest Rate. With respect to
each Mortgage Loan which is not a Negative Amortization Loan, the Mortgage
Note is payable on the first day of each month in Monthly Payments, which,
23
in the case of a Fixed Rate Mortgage Loan, are sufficient to fully amortize
the original principal balance over the original term thereof (other than
with respect to a Mortgage Loan identified on the related Mortgage Loan
Schedule as an interest-only Mortgage Loan during the interest-only period
or a Mortgage Loan which is identified on the related Mortgage Loan
Schedule as a Balloon Mortgage Loan) and to pay interest at the related
Mortgage Interest Rate, and, in the case of an Adjustable Rate Mortgage
Loan, are changed on each Adjustment Date, and in any case, are sufficient
to fully amortize the original principal balance over the original term
thereof (other than with respect to a Mortgage Loan identified on the
related Mortgage Loan Schedule as an interest-only Mortgage Loan during the
interest-only period or a Mortgage Loan which is identified on the related
Mortgage Loan Schedule as a Balloon Mortgage Loan) and to pay interest at
the related Mortgage Interest Rate. With respect to each Negative
Amortization Mortgage Loan, the related Mortgage Note requires a Monthly
Payment which is sufficient during the period following each Payment
Adjustment Date, to fully amortize the outstanding principal balance as of
the first day of such period (including any Negative Amortization) over the
then remaining term of such Mortgage Note and to pay interest at the
related Mortgage Interest Rate; provided, that the Monthly Payment shall
not increase to an amount that exceeds 107.5% of the amount of the Monthly
Payment that was due immediately prior to the Payment Adjustment Date;
provided, further, that the payment adjustment cap shall not be applicable
with respect to the adjustment made to the Monthly Payment that occurs in a
year in which the Mortgage Loan has been outstanding for a multiple of five
(5) years and in any such year the Monthly Payment shall be adjusted to
fully amortize the Mortgage Loan over the remaining term. With respect to
each Mortgage Loan identified on the Mortgage Loan Schedule as an
interest-only Mortgage Loan, the interest-only period shall not exceed ten
(10) years (or such other period specified on the Mortgage Loan Schedule)
and following the expiration of such interest-only period, the remaining
Monthly Payments shall be sufficient to fully amortize the original
principal balance over the remaining term of the Mortgage Loan and to pay
interest at the related Mortgage Interest Rate. With respect to each
Balloon Mortgage Loan, the Mortgage Note requires a monthly payment which
is sufficient to fully amortize the original principal balance over the
original term thereof and to pay interest at the related Mortgage Interest
Rate and requires a final Monthly Payment substantially greater than the
preceding monthly payment which is sufficient to repay the remaining unpaid
principal balance of the Balloon Mortgage Loan at the Due Date of such
monthly payment. The Index for each Adjustable Rate Mortgage Loan is as set
forth on the Mortgage Loan Schedule. No Mortgage Loan is a Convertible
Mortgage Loan. No Balloon Mortgage Loan has an original stated maturity of
less than seven (7) years;
(xxii) The origination, servicing and collection practices used with
respect to each Mortgage Note and Mortgage including, without limitation,
the establishment, maintenance and servicing of the Escrow Accounts and
Escrow Payments, if any, since origination, have been in all respects
legal, proper, prudent and customary in the mortgage origination and
servicing industry. The Mortgage Loan has been serviced by the Seller and
any predecessor servicer in accordance with the terms of the Mortgage Note
and Accepted Servicing Practices. With respect to escrow deposits and
Escrow Payments, if any, all such payments are in the possession of, or
under the control of, the Seller and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof
have not been made. No escrow deposits or Escrow Payments or other charges
24
or payments due the Seller have been capitalized under any Mortgage or the
related Mortgage Note and no such escrow deposits or Escrow Payments are
being held by the Seller for any work on a Mortgaged Property which has not
been completed;
(xxiii) The Mortgaged Property is free of damage and waste and there
is no proceeding pending for the total or partial condemnation thereof;
(xxiv) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property
of the benefits of the security provided thereby, including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(b) otherwise by judicial foreclosure. The Mortgaged Property has not been
subject to any bankruptcy proceeding or foreclosure proceeding and the
Mortgagor has not filed for protection under applicable bankruptcy laws.
There is no homestead or other exemption available to the Mortgagor which
would interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage. The Mortgagor has
not notified the Seller and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Servicemembers' Civil
Relief Act;
(xxv) The Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines in effect at the time the Mortgage Loan was
originated, which underwriting guidelines are generally acceptable to
prudent lenders in the secondary mortgage market; and the Mortgage Note and
Mortgage are on forms acceptable to FNMA and FHLMC;
(xxvi) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;
(xxvii) The Mortgage File contains an appraisal of the related
Mortgaged Property which satisfied the standards of FNMA and FHLMC, was on
appraisal form 1004 or form 2055, and if applicable, with an interior
inspection and was made and signed, prior to the approval of the Mortgage
Loan application, by a qualified appraiser, duly appointed by the Seller,
who had no interest, direct or indirect in the Mortgaged Property or in any
loan made on the security thereof, whose compensation is not affected by
the approval or disapproval of the Mortgage Loan and who met the minimum
qualifications of FNMA and FHLMC. Each appraisal of the Mortgage Loan was
made in accordance with the relevant provisions of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989;
(xxviii) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage,
and no fees or expenses are or will become payable by the Purchaser to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
25
(xxix) Except as set forth in the related Commitment Letter, no
Mortgage Loan contains provisions pursuant to which Monthly Payments are
(a) paid or partially paid with funds deposited in any separate account
established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains
any other similar provisions which may constitute a "buydown" provision.
The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage
Loan does not have a shared appreciation or other contingent interest
feature;
(xxx) The Mortgagor has executed a statement to the effect that the
Mortgagor has received all disclosure materials required by applicable law
with respect to the making of fixed rate mortgage loans in the case of
Fixed Rate Mortgage Loans, and adjustable rate mortgage loans in the case
of Adjustable Rate Mortgage Loans and rescission materials with respect to
Refinanced Mortgage Loans, and such statement is and will remain in the
Mortgage File;
(xxxi) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating
the trade-in or exchange of a Mortgaged Property;
(xxxii) The Seller has no knowledge of any circumstances or condition
with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause the
Mortgage Loan to be an unacceptable investment, or cause the Mortgage Loan
to become delinquent or adversely affect the value of the Mortgage Loan;
(xxxiii) No Mortgage Loan had an LTV or CLTV at origination in excess
of 100%. Each Mortgage Loan with an LTV at origination in excess of 80% is
and will be subject to a Primary Insurance Policy, issued by a Qualified
Insurer, which insures that portion of the Mortgage Loan in excess of the
portion of the Appraised Value of the Mortgaged Property as required by
Xxxxxx Xxx. With respect to any Mortgage Loan which allows Negative
Amortization, such Primary Insurance Policy contains provisions to cover
the potential Negative Amortization of such Mortgage Loan. All provisions
of such Primary Insurance Policy have been and are being complied with,
such policy is in full force and effect, and all premiums due thereunder
have been paid. Any Mortgage subject to any such Primary Insurance Policy
obligates the Mortgagor thereunder to maintain such insurance and to pay
all premiums and charges in connection therewith. The Mortgage Interest
Rate for the Mortgage Loan does not include any such insurance premium. No
Mortgage Loan is subject to a lender paid primary mortgage insurance
policy;
(xxxiv) The Mortgaged Property is lawfully occupied under applicable
law; all inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy, have been made or obtained from the
appropriate authorities;
(xxxv) No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place on the
part of any person, including without limitation the Mortgagor, any
26
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;
(xxxvi) The Assignment of Mortgage is in recordable form, except for
the name of the assignee which is blank, and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is
located;
(xxxvii) Any principal advances made to the Mortgagor prior to the
Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the
Mortgage securing the consolidated principal amount is expressly insured as
having first or second (as indicated on the Mortgage Loan Schedule) lien
priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable
to FNMA or FHLMC. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan plus any Negative
Amortization;
(xxxviii) If the Residential Dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit
development project meets the eligibility requirements of the Underwriting
Guidelines, FNMA and FHLMC;
(xxxix) The source of the down payment with respect to each Mortgage
Loan has been fully verified by the Seller, where applicable;
(xl) Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(xli) The Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards
including, without limitation, asbestos, and neither the Seller nor the
related Mortgagor, has received any notice of any violation or potential
violation of such law;
(xlii) The Seller shall, at its own expense, cause each Mortgage to be
covered by a Tax Service Contract which is assignable to the Purchaser or
its designee; provided however, that if the Seller fails to purchase such
Tax Service Contract, the Seller shall be required to reimburse the
Purchaser for all costs and expenses incurred by the Purchaser in
connection with the purchase of any such Tax Service Contract;
(xliii) Each Mortgage Loan is covered by a Flood Zone Service Contract
which is assignable to the Purchaser or its designee or, for each Mortgage
Loan not covered by such Flood Zone Service Contract, the Seller agrees to
purchase such Flood Zone Service Contract;
(xliv) No Mortgage Loan is (a)(1) subject to the provisions of the
Homeownership and Equity Protection Act of 1994 as amended ("HOEPA") or (2)
has an APR or total points and fees that are equal to or exceeds the HOEPA
thresholds (as defined in 12 CFR 226.32 (a)(1)(i) and (ii)), (b) a "high
cost" mortgage loan, "covered" mortgage loan, "high risk home" mortgage
27
loan, or "predatory" mortgage loan or any other comparable term, no matter
how defined under any federal, state or local law, (c) subject to any
comparable federal, state or local statutes or regulations, or any other
statute or regulation providing for heightened regulatory scrutiny or
assignee liability to holders of such mortgage loans, or (d) a High Cost
Loan or Covered Loan, as applicable (as such terms are defined in the
current Standard & Poor's LEVELS(R) Glossary Revised, Appendix E);
(xlv) No predatory, abusive, or deceptive lending practices, including
but not limited to, the extension of credit to a Mortgagor without regard
for the Mortgagor's ability to repay the Mortgage Loan and the extension of
credit to a Mortgagor which has no apparent benefit to the Mortgagor, were
employed in connection with the origination of the Mortgage Loan. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of the Xxxxxx Mae Guides;
(xlvi) The debt-to-income ratio of the related Mortgagor was not
greater than 60% at the origination of the related Mortgage Loan;
(xlvii) No Mortgagor was required to purchase any credit insurance
product (e.g., life, mortgage, disability, accident, unemployment or health
insurance product) or debt cancellation agreement as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid single
premium credit insurance policy (e.g., life, mortgage, disability,
accident, unemployment or health insurance product) or debt cancellation
agreement in connection with the origination of the Mortgage Loan. No
proceeds from any Mortgage Loan were used to purchase single premium credit
insurance policies or debt cancellation agreements as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(xlviii) The Mortgage Loans were not selected from the outstanding
one- to four-family mortgage loans in the Seller's portfolio as to which
the representations and warranties set forth in this Agreement could be
made at the related Closing Date in a manner so as to affect adversely the
interests of the Purchaser;
(xlix) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage
Loan in the event that the Mortgaged Property is sold or transferred
without the prior written consent of the mortgagee thereunder;
(l) The Mortgage Loan complies with all applicable consumer credit
statutes and regulations;
(li) The information set forth in the Mortgage Loan Schedule as to
Prepayment Charges is complete, true and correct in all material respects
and each Prepayment Charge is permissible, enforceable and collectable in
accordance with its terms upon the Mortgagor's full and voluntary principal
payment under applicable law;
28
(lii) The Mortgage Loan was not prepaid in full prior to the Closing
Date and the Seller has not received notification from a Mortgagor that a
prepayment in full shall be made after the Closing Date;
(liii) No Mortgage Loan is secured by cooperative housing, commercial
property or mixed use property;
(liv) Each Mortgage Loan is eligible for sale in the secondary market
or for inclusion in a Pass-Through Transaction without unreasonable credit
enhancement;
(lv) Except as set forth on the related Mortgage Loan Schedule, none
of the Mortgage Loans are subject to a Prepayment Charge. With respect to
any Mortgage Loan that contains a provision permitting imposition of a
premium upon a prepayment prior to maturity: (a) the Mortgage Loan provides
some benefit to the Mortgagor (e.g. a rate or fee reduction) in exchange
for accepting such Prepayment Charge; (b) the Prepayment Charge was
adequately disclosed to the Mortgagor pursuant to applicable state and
federal law; and (c) such Prepayment Charge shall not be imposed in any
instance where the Mortgage Loan is accelerated or paid off in connection
with the workout of a delinquent Mortgage or due to the Mortgagor's
default, notwithstanding that the terms of the Mortgage Loan or state or
federal law might permit the imposition of such Prepayment Charge;
(lvi) The Seller has complied with all applicable anti-money
laundering laws and regulations, including without limitation the USA
Patriot Act of 2001 (collectively, the "Anti-Money Laundering Laws"); the
Seller has established an anti-money laundering compliance program as
required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for
purposes of the Anti-Money Laundering Laws, including with respect to the
legitimacy of the applicable Mortgagor and the origin of the assets used by
the said Mortgagor to purchase the Mortgaged Property, and maintains, and
will maintain, sufficient information to identify the applicable Mortgagor
for purposes of the Anti-Money Laundering Laws. No Mortgage Loan is subject
to nullification pursuant to Executive Order 13224 (the "Executive Order")
or the regulations promulgated by the Office of Foreign Assets Control of
the United States Department of the Treasury (the "OFAC Regulations") or in
violation of the Executive Order or the OFAC Regulations, and no Mortgagor
is subject to the provisions of such Executive Order or the OFAC
Regulations nor listed as a "blocked person" for purposes of the OFAC
Regulations;
(lvii) No Mortgagor was encouraged or required to select a Mortgage
Loan product offered by the Mortgage Loan's originator which is a higher
cost product designed for less creditworthy borrowers, unless at the time
of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into account credit history and debt to income ratios for a lower cost
credit product then offered by the Mortgage Loan's originator or any
affiliate of the Mortgage Loan's originator;
(lviii) The methodology used in underwriting the extension of credit
for each Mortgage Loan employs objective mathematical principles which
relate the Mortgagor's income, assets, liabilities and/or credit history to
the proposed payment and such underwriting methodology does not rely on the
extent of the Mortgagor's equity in the collateral as the principal
29
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination
(application/approval) the Mortgagor had a reasonable ability to make
timely payments on the Mortgage Loan;
(lix) With respect to each Mortgage Loan, the Seller has fully and
accurately furnished complete information (i.e., favorable and unfavorable)
on the related borrower credit files to Equifax, Experian and Trans Union
Credit Information Company, in accordance with the Fair Credit Reporting
Act and its implementing regulations, on a monthly basis and, for each
Mortgage Loan, the Seller will furnish, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information on its borrower credit files to Equifax, Experian, and Trans
Union Credit Information Company, on a monthly basis;
(lx) All points and fees related to each Mortgage Loan were disclosed
in writing to the related Borrower in accordance with applicable state and
federal laws and regulations;
(lxi) The Seller will transmit full-file credit reporting data for
each Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and for
each Mortgage Loan, Seller agrees it shall report one of the following
statuses each month as follows: new origination, current, delinquent (30-,
60-, 90-days, etc.), foreclosed, or charged-off;
(lxii) With respect to any Mortgage Loan which is secured by
manufactured housing, if such Mortgage Loans are permitted hereunder, such
Mortgage Loan satisfies the requirements for inclusion in residential
mortgage backed securities transactions rated by Standard & Poor's Ratings
Services and such manufactured housing will be the principal residence of
the Mortgagor upon the origination of the Mortgage Loan. With respect to
any second lien Mortgage Loan, such lien is on a one- to four-family
residence that is (or will be) the principal residence of the Mortgagor
upon the origination of the second lien Mortgage Loan;
(lxiii) Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(lxiv) No Mortgage Loan is secured by real property or secured by a
manufactured home located in the state of Georgia unless (x) such Mortgage
Loan was originated prior to October 1, 2002 or after March 6, 2003, or (y)
the property securing the Mortgage Loan is not, nor will be, occupied by
the Mortgagor as the Mortgagor's principal dwelling. No Mortgage Loan is a
"High Cost Home Loan" as defined in the Georgia Fair Lending Act, as
amended (the "Georgia Act"). Each Mortgage Loan that is a "Home Loan" under
the Georgia Act complies with all applicable provisions of the Georgia Act.
No Mortgage Loan secured by owner occupied real property or an owner
occupied manufactured home located in the State of Georgia was originated
(or modified) on or after October 1, 2002 through and including March 6,
2003;
(lxv) No Mortgage Loan is a "High-Cost" loan as defined under the New
York Banking Law Section 6-1, effective as of April 1, 2003;
30
(lxvi) No Mortgage Loan (a) is secured by property located in the
State of New York; (b) had an unpaid principal balance at origination of
$300,000 or less, and (c) has an application date on or after April 1,
2003, the terms of which Mortgage Loan equal or exceed either the APR or
the points and fees threshold for "high-cost home loans", as defined in
Section 6-1 of the New York State Banking Law;
(lxvii) No Mortgage Loan is a "High Cost Home Loan" as defined in the
Arkansas Home Loan Protection Act effective July 16, 2003 (Act 1340 or
2003);
(lxviii) No Mortgage Loan is a "High Cost Home Loan" as defined in the
Kentucky high-cost loan statute effective June 24, 2003 (Ky. Rev. Stat.
Section 360.100);
(lxix) No Mortgage Loan secured by property located in the State of
Nevada is a "home loan" as defined in the Nevada Assembly Xxxx No. 284;
(lxx) No Mortgage Loan is a "manufactured housing loan" or "home
improvement home loan" pursuant to the New Jersey Home Ownership Act. No
Mortgage Loan is a "High-Cost Home Loan" or a refinanced "Covered Home
Loan," in each case, as defined in the New Jersey Home Ownership Act
effective November 27, 2003 (N.J.S.A. 46;10B-22 et seq.);
(lxxi) No Mortgage Loan is a subsection 10 mortgage under the Oklahoma
Home Ownership and Equity protection Act;
(lxxii) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
New Mexico Home Loan Protection Act effective January 1, 2004 (N.M. Stat.
Xxx. xx.xx. 58-21A-1 et seq.);
(lxxiii) No Mortgage Loan is a "High-Risk Home Loan" as defined in the
Illinois High-Risk Home Loan Act effective January 1, 2004 (815 Ill. Comp.
Stat. 137/1 et seq.);
(lxxiv) No Loan that is secured by property located within the State
of Maine meets the definition of a (i) "high-rate, high-fee" mortgage loan
under Article VIII, Title 9-A of the Maine Consumer Credit Code or (ii)
"High-Cost Home Loan" as defined under the Maine House Xxxx 383 X.X. 494,
effective as of September 13, 2003;
(lxxv) With respect to any Loan for which a mortgage loan application
was submitted by the Mortgagor after April 1, 2004, no such Loan secured by
Mortgaged Property in the State of Illinois which has a Loan Interest Rate
in excess of 8.0% per annum has lender-imposed fees (or other charges) in
excess of 3.0% of the original principal balance of the Loan;
(lxxvi) No Mortgage Loan is a "High Cost Home Mortgage Loan" as
defined in the Massachusetts Predatory Home Loan Practices Act, effective
November 7, 2004 (Mass. Xxx. Laws Ch. 183C). No Mortgage Loan secured by a
Mortgaged Property located in the Commonwealth of Massachusetts was made to
pay off or refinance an existing loan or other debt of the related borrower
(as the term "borrower" is defined in the regulations promulgated by the
Massachusetts Secretary of State in connection with Massachusetts House
31
Xxxx 4880 (2004)) unless either (1) (a) the related Mortgage Interest Rate
(that would be effective once the introductory rate expires, with respect
to Adjustable Rate Mortgage Loans) did or would not exceed by more than
2.25% the yield on United States Treasury securities having comparable
periods of maturity to the maturity of the related Mortgage Loan as of the
fifteenth day of the month immediately preceding the month in which the
application for the extension of credit was received by the related lender
or (b) the Mortgage Loan is an "open-end home loan" (as such term is used
in the Massachusetts House Xxxx 4880 (2004)) and the related Mortgage Note
provides that the related Mortgage Interest Rate may not exceed at any time
the Prime rate index as published in The Wall Street Journal plus a margin
of one percent, or (2) such Mortgage Loan is in the "borrower's interest,"
as documented by a "borrower's interest worksheet" for the particular
Mortgage Loan, which worksheet incorporates the factors set forth in
Massachusetts House Xxxx 4880 (2004) and the regulations promulgated
thereunder for determining "borrower's interest," and otherwise complies in
all material respects with the laws of the Commonwealth of Massachusetts;
(lxxvii) No Loan is a "High Cost Home Loan" as defined by the Indiana
Home Loan Practices Act, effective January 1, 2005 (Ind. Code Xxx. xx.xx.
24-9-1 et seq.);
(lxxviii) The Mortgagor has not made or caused to be made any payment
in the nature of an "average" or "yield spread premium" to a mortgage
broker or a like Person which has not been fully disclosed to the
Mortgagor;
(lxxix) The sale or transfer of the Mortgage Loan by the Seller
complies with all applicable federal, state, and local laws, rules, and
regulations governing such sale or transfer, including, without limitation,
the Fair and Accurate Credit Transactions Act ("FACT Act") and the Fair
Credit Reporting Act, each as may be amended from time to time, and the
Seller has not received any actual or constructive notice of any identity
theft, fraud, or other misrepresentation in connection with such Mortgage
Loan or any party thereto;
(lxxx) With respect to each MOM Loan, a MIN has been assigned by MERS
and such MIN is accurately provided on the Mortgage Loan Schedule. The
related Assignment of Mortgage to MERS has been duly and properly recorded,
or has been delivered for recording to the applicable recording office;
(lxxxi) With respect to each MOM Loan, Seller has not received any
notice of liens or legal actions with respect to such Mortgage Loan and no
such notices have been electronically posted by MERS;
(lxxxii) With respect to each Mortgage Loan, (i) if the related first
lien provides for negative amortization, the CLTV was calculated at the
maximum principal balance of such first lien that could result upon
application of such negative amortization feature, and (ii) either no
consent for the Mortgage Loan is required by the holder of the first lien
or such consent has been obtained and is contained in the Mortgage File;
and
(lxxxiii) No Mortgagor agreed to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan
transaction.
32
(lxxxiv) No Mortgage Loan is subject to mandatory arbitration;
(lxxxv) No Mortgage Loan is secured by a lien on a "condo hotel;"
(lxxxvi) The Mortgaged Property consists of a contiguous parcel of
real property with a detached single family residence erected thereon, or a
two-to four-family dwelling, or an individual condominium unit in a
condominium project, or an individual unit in a planned unit development.
None of the Mortgaged Properties are manufactured homes, log homes, mobile
homes, geodesic domes or other unique property types. No Mortgage Loan
finances builder inventory.
(lxxxvii) If the Mortgage Loan is secured by a long-term residential
lease, (i) the lessor under the lease holds a fee simple interest in the
land; (ii) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent
and the acquisition by the holder of the Mortgage of the rights of the
lessee upon foreclosure or assignment in lieu of foreclosure or provide the
holder of the Mortgage with substantially similar protections; (iii) the
terms of such lease do not (A) allow the termination thereof upon the
lessee's default without the holder of the Mortgage being entitled to
receive written notice of, and opportunity to cure, such default, (B) allow
the termination of the lease in the event of damage or destruction as long
as the Mortgage is in existence, (C) prohibit the holder of the Mortgage
from being insured (or receiving proceeds of insurance) under the hazard
insurance policy or policies relating to the Mortgaged Property (D) permit
any increase in the rent other than pre-established increases set forth in
the lease, (E) the original term of such lease is not less than the term of
the related Mortgage; (F) the term of such lease does not terminate earlier
than five years after the maturity date of the Mortgage Note, and (G) the
Mortgaged Property is located in a jurisdiction in which the use of
leasehold estates in transferring ownership in residential properties is a
widely accepted practice.
(lxxxviii) All of the terms of the related Mortgage Note pertaining to
interest adjustments, payment adjustments and adjustments of the
outstanding principal balance, if any, are enforceable and such adjustments
on such Mortgage Loan have been made properly and in accordance with the
provisions of such Mortgage Loan, including any required notices, and such
adjustments do not and will not affect the priority of the Mortgage lien.
(lxxxix) For each fixed-rate Mortgage Loan, the Mortgage contains an
enforceable provision, to the extent not prohibited by federal law as of
the date of such Mortgage, for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent
of the mortgagee thereunder.
Subsection 7.03. Remedies for Breach of Representations and Warranties.
------------------------------------------------------
It is understood and agreed that the representations and warranties set
forth in Subsections 7.01 and 7.02 shall survive the sale of the Mortgage Loans
to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or lack of examination of any Mortgage
33
File. Upon discovery by the Seller of a breach of any of the foregoing
representations and warranties which materially and adversely affects the value
of the Mortgage Loans or the interest of the Purchaser (or which materially and
adversely affects the value of a Mortgage Loan or the interests of the Purchaser
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan), or in the event that any Mortgagor
fails to make the first payment due to the Purchaser following the Closing Date,
the Seller shall give prompt written notice to the Purchaser.
Within sixty (60) days of the earlier of either discovery by the Seller, or
notice to the Seller, of any breach of a representation or warranty which
materially and adversely affects the value of a Mortgage Loan or the Mortgage
Loans or the Purchaser's interest in a Mortgage Loan or the Mortgage Loans, the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price. In
the event that a breach shall involve any representation or warranty set forth
in Subsection 7.01 and such breach cannot be cured within 60 days of the earlier
of either discovery by or notice to the Seller of such breach, all of the
Mortgage Loans shall, at the Purchaser's option, be repurchased by the Seller at
the Repurchase Price. The Seller shall, at the request of the Purchaser and
assuming that Seller has a Qualified Substitute Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, remove such Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage Loan or Loans; provided
that such substitution shall be effected not later than 120 days after the
related Closing Date. If the Seller has no Qualified Substitute Mortgage Loan,
it shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan(s) pursuant to the foregoing provisions of this Subsection 7.03 shall occur
on a date designated by the Purchaser and shall be accomplished by deposit in
the Custodial Account of the amount of the Repurchase Price for distribution to
the Purchaser on the next scheduled Distribution Date.
At the time of repurchase of any deficient Mortgage Loan, the Purchaser and
the Seller shall arrange for the reassignment of the repurchased Mortgage Loan
to the Seller and the delivery to the Seller of any documents held by the
Custodian relating to the repurchased Mortgage Loan. In the event the Repurchase
Price is deposited in the Custodial Account, the Seller shall, simultaneously
with such deposit, give written notice to the Purchaser that such deposit has
taken place. Upon such repurchase the related Mortgage Loan Schedule shall be
amended to reflect the withdrawal of the repurchased Mortgage Loan from this
Agreement.
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser for such Qualified Substitute
Mortgage Loan or Loans the Mortgage Note, the Mortgage, the Assignment of
Mortgage and such other documents and agreements as are set forth in Exhibit 13
hereto, with the Mortgage Note endorsed as required therein. The Seller shall
deposit in the Custodial Account the Monthly Payment less the Servicing Fee due
on such Qualified Substitute Mortgage Loan or Loans in the month following the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution will be retained by the
Seller. For the month of substitution, distributions to the Purchaser will
include the Monthly Payment due on such Deleted Mortgage Loan in the month of
substitution, and the Seller shall thereafter be entitled to retain all amounts
subsequently received by the Seller in respect of such Deleted Mortgage Loan.
The Seller shall give written notice to the Purchaser that such substitution has
34
taken place and 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. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of
this Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the covenants, representations and warranties set forth in
Subsections 7.01 and 7.02.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller
will determine the amount (if any) by which the aggregate principal balance of
all such Qualified Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (after application of scheduled principal payments due in the month of
substitution). An amount equal to the product of the amount of such shortfall
multiplied by the Repurchase Price shall be distributed by the Seller in the
month of substitution pursuant to the Servicing Addendum. Accordingly, on the
date of such substitution, the Seller will deposit from its own funds into the
Custodial Account an amount equal to such amount.
It is understood and agreed that the obligations of the Seller set forth in
this Subsection 7.03 to cure, substitute for or repurchase a defective Mortgage
Loan constitute the sole remedies of the Initial Purchaser and any subsequent
Purchaser respecting a breach of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of the
breach of any representations and warranties made in Subsections 7.01 or 7.02
shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Purchaser or notice thereof by the Seller to the Purchaser, and (ii) demand upon
the Seller by the Purchaser for compliance with the relevant provisions of this
Agreement, which demand shall be made by the Purchaser within ninety days of the
discovery of such breach by the Purchaser.
In addition to the foregoing, in the event that a breach of any
representation of the Seller materially and adversely affects the interests of
the Purchaser in any Prepayment Charge or the collectability of such Prepayment
Charge, the Seller shall pay the amount of the scheduled Prepayment Charge to
the Purchaser upon the payoff of any related Mortgage Loan.
Subsection 7.04. Repurchase of Certain Mortgage Loans; Premium
---------------------------------------------
Protection.
-----------
(a) In the event that (i) the first Due Date for a Mortgage Loan is prior
to the Cut-off Date and the initial Monthly Payment is not made by the related
Mortgagor within thirty (30) days of such Due Date or (ii) the first Monthly
Payment on any Mortgage Loan due following the Cut-off Date is not made by the
related Mortgagor within thirty (30) days of the related Due Date, then, in each
such case, the Seller shall repurchase the affected Mortgage Loans at the
Repurchase Price within sixty (60) Business Days following receipt of notice
from the Purchaser of such payment default. The Seller shall notify the
Purchaser of any such default under this Subsection 7.04(a) within thirty (30)
days of any such Mortgage Loan becoming thirty (30) days delinquent. The
Seller's obligation to repurchase such Mortgage Loan shall be conditioned upon
the Purchaser providing written notice to the Seller within 90 days of such
payment default.
35
(b) In the event that any Mortgage Loan prepays-in-full within three (3)
months following the related CZlosing Date, Seller shall remit to the Initial
Purchaser within thirty (30) Business Days following receipt of notice from the
Initial Purchaser of a prepayment-in-full, an amount equal to the product of (i)
the excess of (A) the percentage of par as stated in the related Confirmation as
the purchase price percentage (subject to adjustment as provided therein) over
(B) 100%, times (ii) the outstanding principal balance of such Mortgage Loan as
of the Cut-off Date. Such obligation to the Initial Purchaser shall survive any
sale or assignment of the Mortgage Loans by the Initial Purchaser to any third
party and shall be independently enforceable by the Initial Purchaser. The
Seller's obligation to remit premium shall be conditioned upon the Purchaser
providing written notice to the Seller within 90 days of such prepayment.
(c) In the event that any Mortgage Loan is repurchased pursuant to Section
7.03 or 7.04(a), in addition to its obligations under Section 7.03 and 7.04(a),
Seller shall remit to the Initial Purchaser an amount equal to the product of
(i) the excess of (A) the percentage of par as stated in the related
Confirmation as the purchase price percentage (subject to adjustment as provided
therein) over (B) 100%, times (ii) the outstanding principal balance of such
Mortgage Loan as of the date of repurchase. Such obligation to the Initial
Purchaser shall survive any sale or assignment of the Mortgage Loans by the
Initial Purchaser to any third party and shall be independently enforceable by
the Initial Purchaser.
Subsection 7.05. Protection of Consumer Information.
----------------------------------
Both the Purchaser and the Company (i) shall comply with any applicable
laws and regulations regarding the privacy and security of Consumer Information,
(ii) shall not use Consumer Information in any manner inconsistent with any
applicable laws and regulations regarding the privacy and security of Consumer
Information, (iii) shall not disclose Consumer Information to third parties
except at the specific written direction of the Company, (iv) shall maintain
adequate physical, technical and administrative safeguards to protect Consumer
Information from unauthorized access, and (v) shall immediately notify the
Company of any actual or suspected breach of the confidentiality of Consumer
Information.
SECTION 8. Closing.
-------
The closing for each Mortgage Loan Package shall take place on the related
Closing Date. At the Purchaser's option, the closing shall be either: by
telephone, confirmed by letter or wire as the parties shall agree, or conducted
in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on each Closing Date
shall be subject to each of the following conditions:
(a) all of the representations and warranties of the Seller under this
Agreement shall be true and correct in all material respects as of the related
Closing Date and no event shall have occurred which, with reasonable notice to
the Seller, or the passage of time, would constitute a default under this
Agreement;
(b) the Initial Purchaser shall have received, or the Initial Purchaser's
attorneys shall have received in escrow, all Closing Documents as specified in
36
Section 9, in such forms as are agreed upon and acceptable to the Purchaser,
duly executed by all signatories other than the Purchaser as required pursuant
to the terms hereof;
(c) the Seller shall have delivered and released to the Custodian all
documents required pursuant to this Agreement; and
(d) all other terms and conditions of this Agreement shall have been
complied with.
Subject to the foregoing conditions, the Initial Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4, by wire transfer of immediately available funds to the
account designated by the Seller.
SECTION 9. Closing Documents.
------------------
(a) On or before the Initial Closing Date, the Seller or Servicer, as
applicable, shall submit to the Initial Purchaser fully executed originals of
the following documents:
1. this Agreement, in four counterparts;
2. a Custodial Account Letter Agreement in the form attached as
Exhibit 7 hereto;
3. as Escrow Account Letter Agreement in the form attached as Exhibit
8 hereto;
4. a Seller's Officer's Certificate, in the form of Exhibit 1-A
hereto, including all attachments thereto;
5. an Servicer's Officer's Certificate, in the form of Exhibit 1-B
hereto, including all attachments thereto;
6. an Opinion of Counsel to the Seller and Servicer, in the form of
Exhibit 2 hereto; and
7. the Underwriting Guidelines.
(b) The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. the related Confirmation;
2. the related Mortgage Loan Schedule;
3. a Custodian's Trust Receipt and Initial Certification, as required
under the Custodial Agreement, in a form acceptable to the Initial
Purchaser;
4. an Officer's Certificate, in the form of Exhibit 1-A hereto,
including all attachments thereto;
37
5. an Servicer's Officer's Certificate, in the form of Exhibit 1-B
hereto, including all attachments thereto;
6. if requested by the Initial Purchaser, an Opinion of Counsel to the
Seller, in the form of Exhibit 2 hereto;
7. a Security Release Certification, in the form of Exhibit 3 hereto
executed by any Person, as requested by the Initial Purchaser, if any of
the Mortgage Loans has at any time been subject to any security interest,
pledge or hypothecation for the benefit of such Person;
8. a certificate or other evidence of merger or change of name, signed
or stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the Seller by merger or acquired or originated by
the Seller while conducting business under a name other than its present
name, if applicable;
9. any modifications, amendments or supplements to the Underwriting
Guidelines following the Initial Closing Date; and
10. an Assignment and Conveyance in the form of Exhibit 4 hereto; and
11. In addition, to the extent that the Underwriting Guidelines are
modified, amended or supplemented at any time following the Initial Closing
Date, the Seller shall notify the Purchaser of such change and provide the
Purchaser a copy in both electronic and hard copy of such modification,
amendment or supplement no later than five (5) Business Days following the
effective date of such modification, amendment or supplement.
SECTION 10. Costs.
-----
The Purchaser shall pay any commissions due its salesmen, recording fees
and the legal fees and expenses of its attorneys. All other costs and expenses
incurred in connection with the transfer and delivery of the Mortgage Loans,
including without limitation, fees for title policy endorsements and
continuations and the Seller's attorney's fees, shall be paid by the Seller.
SECTION 11. Servicer's Servicing Obligations.
---------------------------------
The Seller, as independent contract servicer, shall service and administer
the Mortgage Loans directly or through one or more Subservicers, in accordance
with the terms and provisions set forth in the Servicing Addendum attached as
Exhibit 9, which Servicing Addendum is incorporated herein by reference. In
addition, with respect to any Mortgage Loan that is not subject to an assignable
"life of loan" Flood Zone Service Contract or Tax Service Contract as of the
related Closing Date, the Servicer shall pay the cost incurred by the Purchaser
or its designee to obtain such a contract.
38
SECTION 12. Removal of Mortgage Loans from Inclusion under This Agreement
--------------------------------------------------------------
Upon a Whole Loan Transfer or a Pass-Through Transfer on One
--------------------------------------------------------------
or More Reconstitution Dates.
-----------------------------
The Seller and the Initial Purchaser agree that with respect to some or all
of the Mortgage Loans, the Initial Purchaser may effect either:
(1) one or more Whole Loan Transfers; and/or
(2) one or more Pass-Through Transfers.
A. Whole Loan Transfers or Pass-Through Transfers. With respect to each
Whole Loan Transfer or Pass-Through Transfer, as the case may be, entered into
by the Initial Purchaser, the Seller agrees:
(1) to cooperate fully with the Purchaser an any prospective
purchaser with respect to all reasonable requests and due
diligence procedures including participating in meetings with
rating agencies, bond insurers and such other parties as the
Purchaser shall designate and participating in meetings with
prospective purchasers of the Mortgage Loans or interests therein
and providing information reasonably requested by such
purchasers;
(2) to execute all Reconstitution Agreements, including, without
limitation, an Assignment, Assumption and Recognition Agreement
in the form attached hereto as Exhibit 10 and an Indemnification
Agreement in the form attached hereto as Exhibit 11, provided
that each of the Seller and the Purchaser is given an opportunity
to review and reasonably negotiate in good faith the content of
such documents not specifically referenced or provided for
herein;
(3) to comply with the Foreclosure Rights provisions set forth in
Exhibit 18;
(4) with respect to any Whole Loan Transfer or Pass-Through Transfer,
the Seller shall make as of the Reconstitution Date (i) the
representations and warranties contained in this Agreement
regarding the Seller and the Mortgage Loans, (ii) such other
reasonable and mutually agreeable representations, warranties and
covenants which in form and substance conform to the
representations and warranties in this Agreement and to secondary
market standards for securities backed by mortgage loans similar
to the Mortgage Loans, (iii) such reasonable and mutually
agreeable provisions with regard to servicing responsibilities,
investor reporting, segregation and deposit of principal and
interest payments, custody of the Mortgage Loans, (iv) such other
covenants as may reasonably be required by the Purchaser and (v)
such other representations and warranties and covenants as may be
required by one or more nationally recognized rating agencies for
"AAA" rated mortgage pass-through transactions, modified to the
extent necessary to accurately reflect the pool statistics of the
Mortgage Loans as of the date of such Whole Loan Transfer or
39
Pass-Through Transfer and any events or circumstances existing
subsequent to the related Closing Date(s);
(5) to deliver to the Purchaser, and to any Person designated by the
Purchaser, such legal documents and in-house Opinions of Counsel
as are customarily delivered by originators or servicers, as the
case may be, and reasonably determined by the Purchaser to be
necessary in connection with Whole Loan Transfers or Pass-Through
Transfers, as the case may be, such in-house Opinions of Counsel
for a Pass-Through Transfer to be in the form reasonably
acceptable to the Purchaser, it being understood that the cost of
any opinions of outside special counsel that may be required for
a Whole Loan Transfer or Pass-Through Transfer, as the case may
be, shall be the responsibility of the Purchaser;
(6) in the event that the Mortgage Loans become subject to a
Pass-Through Transfer, the Seller agrees to service the Mortgage
Loans on a scheduled/scheduled basis, or actual/actual basis as
agreed to by the Seller and Purchaser, including, if applicable,
making advances of delinquent scheduled payments of principal and
interest through liquidation (unless deemed by Seller likely to
be non-recoverable) and paying compensating interest with respect
to prepayment interest shortfalls (to the extent of the monthly
servicing fee payable thereto).
(7) in connection with any Pass-Through Transfer, to deliver to the
Purchaser within 5 Business Days after request by the Purchaser,
the information with respect to the Seller (as originator) and
each Third-Party Originator of the Mortgage Loans as required
under Item 1110(a) and (b) of Regulation AB, a summary of the
requirements of which has of the date hereof is attached hereto
as Exhibit 16 for convenience of reference only, as determined by
Purchaser in its sole discretion. If requested by the Purchaser,
this will include information about the applicable
credit-granting or underwriting criteria;
Notwithstanding the preceding sentence, the Company shall not be required
to provide Static Pool Information regarding cumulative losses with respect to
any mortgage loans originated prior to January 1, 2006, if such information is
unknown or unavailable to the Company without unreasonable effort or expense;
provided however, that the Company will provide a certificate to the Purchaser
or any Depositor showing that such information is not available without
unreasonable effort or expense
(8) within 5 business days after request by the Purchaser, the Seller
shall provide (or, as applicable, cause each Third-Party
Originator to provide) Static Pool Information with respect to
the mortgage loans (of a similar type as the Mortgage Loans, as
reasonably identified by the Purchaser as provided below)
[serviced by the Seller or any Third Party Originator] originated
by (i) the Seller, if the Seller is an originator of Mortgage
Loans (including as an acquirer of Mortgage Loans from a
Qualified Correspondent), and/or (ii) each Third-Party
40
Originator. Such Static Pool Information shall be prepared by the
Seller (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) and (c) of Regulation AB; provided, however, the
Seller shall not be required to provide Static Pool Information
regarding cumulative losses with respect to any mortgage loans
originated prior to January 1, 2006, if such information is
unknown or unavailable to the Seller without unreasonable effort
or expense; provided however, that the Seller will provide a
certificate to the Purchaser or any Depositor showing that such
information is not available without unreasonable effort or
expense. To the extent that there is reasonably available to the
Seller (or Third-Party Originator) Static Pool Information with
respect to more than one mortgage loan type, the Purchaser or any
Depositor shall be entitled to specify whether some or all of
such information shall be provided pursuant to this paragraph.
The content of such Static Pool Information may be in the form
customarily provided by the Seller, and need not be customized
for the Purchaser or any Depositor. Such Static Pool Information
for each vintage origination year or prior securitized pool, as
applicable, shall be presented in increments no less frequently
than quarterly over the life of the mortgage loans included in
the vintage origination year or prior securitized pool. The most
recent periodic increment must be as of a date no later than 135
days prior to the date of the prospectus or other offering
document in which the Static Pool Information is to be included
or incorporated by reference. The Static Pool Information shall
be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document
format (pdf) file, or other such electronic format reasonably
required by the Purchaser or the Depositor, as applicable. With
respect to those Mortgage Loans that were sold to the Purchaser
pursuant to this Agreement, the Purchaser shall, to the extent
consistent with then-current industry practice, cause the
Servicer of another party to be obligated to provide information,
in the form customarily provided by such servicer or other party
(which need not be customized for Seller) with reapect to the
Mortgage Loans reasonably necessary for the Seller to comply with
its obligations under Regulation AB, including, without
limitation, providing the Seller Static Pool Information;
(9) to deliver to the Purchaser within 5 Business Days after request
by the Purchaser, information with respect to the Seller (as
servicer) as required by Item 1108(b) and (c) of the Regulation
AB as determined by the Purchaser in its sole discretion. In the
event that the Seller has delegated any servicing
responsibilities with respect to the Mortgage Loans to a
subservicer, the Seller shall provide the information required
pursuant to this clause with respect to the subservicer;
(10) in connection with any Pass-Through Transfer, to deliver to
the Purchaser within 5 Business Days after request by the
Purchaser,
41
(a) information regarding any legal proceedings pending (or known to be
contemplated) against the Seller (as originator) and Seller (as servicer) and
each other originator of the Mortgage Loans and each Subservicer as required by
Item 1117 of Regulation AB, a summary of the requirements of which as of the
date hereof is attached hereto as Exhibit 16 for convenience of reference only,
as determined by Purchaser in its sole discretion,
(b) information regarding affiliations with respect to the Seller (as
originator) and Seller (as servicer) and each other originator of the Mortgage
Loans and each Subservicer as required by Item 1119(a) of Regulation AB, a
summary of the requirements of which as of the date hereof is attached hereto as
Exhibit 16 for convenience of reference only, as determined by Purchaser in its
sole discretion, and
(c) information regarding relationships and transactions with respect to
the Seller (as originator) and Seller (as servicer) and each other originator of
the Mortgage Loans and each Subservicer as required by Item 1119(b) and (c) of
Regulation AB, a summary of the requirements of which as of the date hereof is
attached hereto as Exhibit 16 for convenience of reference only, as determined
by Purchaser in its sole discretion;
(11) if so requested by the Purchaser, the Seller shall provide (or,
as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any
additional incremental expense associated with delivery pursuant
to this Agreement), such statements and agreed-upon procedures
letters of certified public accountants reasonably acceptable to
the Purchaser or Depositor, as applicable, pertaining to Static
Pool Information relating to prior securitized pools for
securitizations closed on or after January 1, 2006 or, in the
case of Static Pool Information with respect to the Seller's or
Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, or to any financial
information included in any other disclosure provided under this
Section 12, as the Purchaser or such Depositor shall reasonably
request. Such statements and letters shall be addressed to and be
for the benefit of such parties as the Purchaser or such
Depositor shall designate, which may include, by way of example,
any Sponsor, any Depositor and any broker dealer acting as
underwriter, placement agent or initial purchaser with respect to
a Pass-Through Transfer. Any such statement or letter may take
the form of a standard, generally applicable document accompanied
by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor;
(12) in the event the Seller acts as servicer in connection with any
Pass-Through Transfer of the Mortgage Loans, to deliver to the
Purchaser or its designee on or before March 1 of each fiscal
year beginning in 2007, (a) a report (an "Assessment of
Compliance") reasonably satisfactory to the Purchaser regarding
the Servicer's, or any subservicer's, if applicable, assessment
of compliance with the Servicing Criteria during the preceding
fiscal year as required by Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB and (b) a report (an
"Attestation Report") by a registered public accounting firm that
attests to, and reports on, the Assessment of Compliance made by
42
Servicer or any subservicer, if applicable, as required by Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of
Regulation AB, which Attestation Report must be made in
accordance with standards for attestation reports issued or
adopted by the Public Company Accounting Oversight Board;
(13) The Servicer will deliver to the Purchaser, not later than March
1 of each fiscal year, beginning in 2007, an Officers'
Certificate (an "Annual Statement of Compliance") stating, as to
each signatory thereof, that (i) a review of the activities of
the Servicer during the preceding year and of performance under
this Agreement or other applicable servicing agreement has been
made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement or other
applicable servicing agreement in all material respects
throughout such year, or, if there has been a failure to fulfill
any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof.
Such Annual Statement of Compliance shall contain no restrictions
or limitations on its use. Copies of such statement shall be
provided by the Servicer to the Purchaser upon request and by the
Purchaser to any Person identified as a prospective purchaser of
the Mortgage Loans. The Purchaser shall notify the Servicer prior
to providing any such copies. In the event that the Servicer has
delegated any servicing responsibilities with respect to the
Mortgage Loans to a Subservicer, the Servicer shall deliver an
officer's certificate of the Subservicer as described above as to
each Subservicer as and when required with respect to the
Servicer;
(14) With respect to any Mortgage Loans that are subject to a
Pass-Through Transfer or other securitization transaction, by
March 1 of each calendar year, beginning in 2007, an officer of
the Servicer shall execute and deliver an Officer's Certificate
(an "Annual Certification") to the Purchaser, any master servicer
which is master servicing loans in connection with such
transaction (a "Master Servicer") and any related depositor (a
"Depositor") for the benefit of each such entity and such
entity's affiliates and the officers, directors and agents of any
such entity and such entity's affiliates, in the form attached
hereto as Exhibit 12. Such Officer's Certificate shall not be
provided to any other Person unless the Purchaser first notifies
the Servicer of its intention to do so. In the event that the
Servicer has delegated any servicing responsibilities with
respect to the Mortgage Loans to a Subservicer, the Servicer
shall deliver an officers' certificate of the Subservicer as
described above as to each Subservicer as and when required with
respect to the Servicer;
(15) As of the date of each Pass-Through Transfer, and except as has
been otherwise disclosed to the Purchaser, any Master Servicer or
any Depositor, the Servicer represents, warrants and covenants to
the Purchaser, any Master Servicer or any Depositor that,: (1) no
43
default or servicing related performance trigger has occurred as
to any other securitization due to any act or failure to act of
the Servicer; (2) no material noncompliance with applicable
servicing criteria as to any other securitization has been
disclosed or reported by the Servicer; (3) the Servicer has not
been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to
application of a servicing performance test or trigger; (4) no
material changes to the Servicer's servicing policies and
procedures for similar loans has occurred in the preceding three
years; (5) there are no aspects of the Servicer's financial
condition that could have a material adverse impact on the
performance by the Servicer of its obligations hereunder; (6)
there are no legal proceedings pending, or known to be
contemplated by governmental authorities, against the Servicer
that could be material to investors in the securities issued in
such Pass-Through Transfer; and (7) there are no affiliations,
relationships or transactions relating to the Servicer of a type
that are described under Item 1119 of Regulation AB;
(16) If so requested by the Purchaser, Depositor or any Master
Servicer on any date following the date on which information is
first provided to the Purchaser, any Depositor or any Master
Servicer, the Servicer shall, within five Business Days following
such request, confirm in writing the accuracy of the
representations and warranties set forth in clause (14) above or,
if any such representation and warranty is not accurate as of the
date of such request, provide reasonably adequate disclosure of
the pertinent facts, in writing, to the requesting party; and
(17) As of the date of each Pass-Through Transfer, the Seller and
Servicer hereby represent, warrant and covenant to the Purchaser
that the Seller/Servicer Information provided pursuant to Section
12 does not include any untrue statement of a material fact and
does not omit to state a material fact required to be stated in
the Seller/Servicer Information or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
Promptly following notice or discovery of a material error in Static Pool
Information provided pursuant to clause (7) above (including an omission to
include therein information required to be provided pursuant to clause (7)
above), the Seller shall provide corrected Static Pool Information to the
Purchaser or any Depositor, as applicable, in the same format in which Static
Pool Information was previously provided to such party by the Seller.
If so requested by the Purchaser or any Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act with respect to any
class of asset-backed securities, the Seller or Servicer shall (or shall cause
each Subservicer and Third-Party Originator to: (i) notify the Purchaser and any
Depositor in writing of (A) any material litigation or governmental proceedings
pending against the Seller, Servicer, any Subservicer or any Third-Party
Originator and (B) any affiliations or relationships that develop following the
closing date of a Pass-Through Transfer between the Seller, Servicer, any
Subservicer or any Third-Party Originator and any of the parties specified in
clause (7) of Section 12A(14) and any other parties identified in writing by the
44
requesting party) with respect to such Pass-Through Transfer, and (ii) provide
to the Purchaser and any Depositor a description of such proceedings,
affiliations or relationships.
As a condition to the succession to the Servicer or any Subservicer as
servicer or subservicer under this Agreement or any Reconstitution Agreement by
any Person (i) into which the Servicer or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Servicer or
any Subservicer, the Servicer shall provide to the Purchaser and any Depositor,
at least 15 calendar days prior to the effective date of such succession or
appointment, (x) written notice to the Purchaser and any Depositor of such
succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, all information
reasonably requested by the Purchaser or any Depositor in order to comply with
its reporting obligation under Item 6.02 of Form 8-K with respect to any class
of asset-backed securities.
In the event of a conflict or inconsistency between the terms of Exhibit 16
and the text of the applicable Item of Regulation AB as cited in this Section
12, the text of Regulation AB, its adopting release and other public statements
of the SEC shall control.
B. Indemnification with Respect to Regulation AB. The Seller shall
indemnify the Purchaser, each affiliate of the Purchaser, and each of the
following parties participating in a Pass-Through Transfer: each sponsor and
issuing entity; each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Pass-Through Transfer, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Pass-Through Transfer; each broker dealer acting as underwriter, placement agent
or initial purchaser, each Person who controls any of such parties or the
Depositor (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act); and the respective present and former directors, officers,
employees and agents of each of the foregoing and of the Depositor, and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any written information, written report, certification,
accountants' letter or other material provided under this Section 12 by or
on behalf of the Seller or Servicer, or provided under this Section 12 by
or on behalf of any Subservicer, Subcontractor or Third-Party Originator
(collectively, the "Seller/Servicer Information"), or (B) the omission or
alleged omission to state in the Seller/Servicer Information a material
fact required to be stated in the Seller/Servicer Information or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be construed solely
by reference to the Seller/Servicer Information and not to any other
information communicated in connection with a sale or purchase of
securities, without regard to whether the Seller/Servicer Information or
any portion thereof is presented together with or separately from such
other information;
45
(ii) any failure by the Seller, Servicer, any Subservicer, any
Subcontractor or any Third-Party Originator to deliver any information,
report, certification, accountants' letter or other material when and as
required under this Section 12, including any failure by the Servicer to
identify pursuant to Section 11.30 any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB; or
(iii) any breach by the Servicer of a representation or warranty set
forth in Section 12A(14) or in a writing furnished pursuant to Section
12A(15) and made as of a date prior to the closing date of the related
Pass-Through Transfer, to the extent that such breach is not cured by such
closing date, or any breach by the Servicer of a representation or warranty
in a writing furnished pursuant to Section 12A(15) to the extent made as of
a date subsequent to such closing date.
In the case of any failure of performance described in clause (a)(ii) of
this Subsection, the Seller shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Seller,
any Subservicer, any Subcontractor or any Third-Party Originator.
The Purchaser shall indemnify the Seller and the respective present and
former directors, officers and employees of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon: (A) any untrue statement of a material fact contained in any
offering materials related to a Securitization Transaction, including without
limitation the registration statement, prospectus, prospectus supplement, any
private placement memorandum, any offering circular, any computational
materials, and any amendments or supplements to the foregoing (collectively, the
"Securitization Materials") or (B) the omission to state in the Securitization
Materials a material fact required to be stated in the Securitization Materials
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but only to the extent
that such untrue statement or omission is other than a statement or omission
arising out of, resulting from, or based upon the Seller Information.
SECTION 13. The Seller and the Servicer.
----------------------------
Subsection 13.01. Additional Indemnification by the Seller and the
------------------------------------------------
Servicer.
---------
In addition to the indemnification provided in Subsection 7.03, the Seller
and the Servicer shall indemnify the Initial Purchaser and any subsequent
Purchaser and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that the Initial
Purchaser and any subsequent Purchaser may sustain in any way related to the
failure of the Seller or the Servicer to perform its obligations under this
Agreement including but not limited to its obligation to service and administer
the Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 12.
46
Subsection 13.02. Merger or Consolidation of the Seller and the Servicer.
------------------------------------------------------
The Seller and the Servicer shall each keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation except as permitted herein, and shall obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans, and to enable the
Seller and the Servicer to perform its duties under this Agreement.
Any Person into which the Seller or the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Seller or the Servicer shall be a party, or any
Person succeeding to the business of the Seller or the Servicer, shall be the
successor of the Seller or the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall be (i) an institution whose deposits are
insured by FDIC or a company whose business is the origination and servicing of
mortgage loans, (ii) have a GAAP net worth of not less than $25,000,000 and
(iii) be a FNMA or FHLMC approved seller/servicer and shall satisfy any
requirements of Section 16 with respect to the qualifications of a successor to
the Seller.
Subsection 13.03. Limitation on Liability of the Seller, the Servicer
---------------------------------------------------
and Others.
----------
Neither the Seller, the Servicer nor any of the officers, employees or
agents of the Seller or the Servicer shall be under any liability to the
Purchaser for any action taken or for refraining from the taking of any action
in good faith in connection with the servicing of the Mortgage Loans pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Seller or the Servicer or any such person
against any breach of warranties or representations made herein, or failure to
perform its obligations in strict compliance with any standard of care set forth
in this Agreement, or any liability which would otherwise be imposed by reason
of any breach of the terms and conditions of this Agreement. The Seller, the
Servicer and any officer, employee or agent of the Seller or the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Seller and
the Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its obligation to sell or duty to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may result in its incurring any expenses or liability; provided,
however, that the Seller or the Servicer may, with the consent of the Purchaser,
undertake any such action which it may deem necessary or desirable in respect to
this Agreement and the rights and duties of the parties hereto. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities for which the Purchaser shall
be liable, the Seller and the Servicer shall be entitled to reimbursement
therefor from the Purchaser upon written demand except when such expenses, costs
and liabilities are subject to the Seller's or the Servicer's indemnification
under Subsections 7.03 or 13.01.
47
Subsection 13.04. Servicer Not to Resign.
----------------------
The Servicer shall not assign this Agreement or resign from the obligations
and duties hereby imposed on it except by mutual consent of the Servicer and the
Purchaser or upon the determination that its servicing duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by
the Servicer in which event the Servicer may resign as servicer. Any such
determination permitting the resignation of the Servicer as servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Purchaser
which Opinion of Counsel shall be in form and substance acceptable to the
Purchaser and which shall be provided at the cost of the Servicer. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided in
Section 16.
Subsection 13.05. No Transfer of Servicing.
------------------------
The Servicer acknowledges that the Purchaser has acted in reliance upon the
Servicer's independent status, the adequacy of its servicing facilities, plan,
personnel, records and procedures, its integrity, reputation and financial
standing and the continuance thereof. Without in any way limiting the generality
of this Section, the Servicer shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Purchaser, which
consent will not be unreasonably withheld.
SECTION 14. Default.
-------
Subsection 14.01. Events of Default.
-----------------
In case one or more of the following Events of Default by the Servicer
shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day after the date upon which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Purchaser; or
(ii) failure on the part of the Seller or the Servicer duly to observe
or perform in any material respect any other of the covenants or agreements
on the part of the Seller or the Servicer set forth in this Agreement which
continues unremedied for a period of thirty days (except that such number
of days shall be fifteen in the case of a failure to pay any premium for
any insurance policy required to be maintained under this Agreement) after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller or the Servicer by the
Purchaser or by the Custodian; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
48
of assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, shall have been entered against the Seller or
the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of sixty days; or
(iv) the Seller or the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Seller or the Servicer or of or relating
to all or substantially all of its property; or
(v) the Seller or the Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment
of its obligations; or
(vi) failure by the or the Servicer to be in material compliance with
the "doing business" or licensing laws of any jurisdiction where a
Mortgaged Property is located; or
(vii) the Servicer ceases at any point to meet the qualifications of
either a FNMA or FHLMC seller/servicer, or the Servicer is not eligible to
act as servicer or master servicer for mortgage loans subject to
residential mortgage backed securities transactions rated by any nationally
recognized rating agency or is eligible to act as such only with enhanced
credit support, or the Seller's credit rating is reduced by any nationally
recognized rating agency to below average or worst; or
(viii) the Servicer attempts to assign its right to servicing
compensation hereunder or the Seller or the Servicer attempts, without the
consent of the Purchaser, to sell or otherwise dispose of all or
substantially all of its property or assets or to assign this Agreement or
the servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof; or
(ix) the Servicer fails to duly perform, within the required time
period, its obligations under Sections 11.23, 11.24, 11.29 or 11.30 of the
Servicing Addendum, which failure continues unremedied for a period of
three (3) days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
any party to this Agreement or by any master servicer responsible for
master servicing the Mortgage Loans pursuant to a securitization of such
Mortgage Loans.
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Purchaser, by notice in writing to the Seller or the
Servicer, as applicable, may, in addition to whatever rights the Purchaser may
have at law or equity to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the Servicer as
servicer under this Agreement. On or after the receipt by the Seller or the
Servicer , as applicable of such written notice, all authority and power of the
Servicer to service the Mortgage Loans under this Agreement shall on the date
set forth in such notice pass to and be vested in the successor appointed
pursuant to Section 16.
49
Subsection 14.02. Waiver of Defaults.
------------------
The Purchaser may waive any default by the Seller in the performance of its
obligations hereunder and its consequences. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
SECTION 15. Termination.
------------
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Seller and the Purchaser in writing.
SECTION 16. Successor to the Servicer.
--------------------------
Prior to termination of Servicer's responsibilities and duties under this
Agreement pursuant to Section 12, 14 or 15, the Purchaser shall (i) succeed to
and assume all of the Servicer's responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer as servicer under this Agreement. In connection with
such appointment and assumption, the Purchaser may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree. In the event that the Servicer's duties,
responsibilities and liabilities as servicer under this Agreement should be
terminated pursuant to the aforementioned Sections, the Servicer shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of the Purchaser or such successor. The
termination of the Servicer as Servicer pursuant to the aforementioned Sections
shall not become effective until a successor shall be appointed pursuant to this
Section 16 and shall in no event relieve the Seller and the Servicer of the
representations and warranties made pursuant to Subsections 7.01 and 7.02 and
the remedies available to the Purchaser under Subsection 7.03 or 7.04, it being
understood and agreed that the provisions of such Subsections 7.01, 7.02 and
7.03 and 7.04 shall be applicable to the Seller and Servicer notwithstanding any
such resignation or termination of the Servicer, or the termination of this
Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer and to the Purchaser an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement
provided, however, that such successor shall not assume, and Servicer shall
indemnify such successor for, any and all liabilities arising out of the
50
Servicer's acts as servicer. Any termination of the Servicer as servicer
pursuant to Section 12, 14 or 15 shall not affect any claims that the Purchaser
may have against the Servicer arising prior to any such termination or
resignation or remedies with respect to such claims.
The Servicer shall timely deliver to the successor the funds in the
Custodial Account, REO Account and the Escrow Account and the Mortgage Files and
related documents and statements held by it hereunder and the Servicer shall
account for all funds. The Servicer shall execute and deliver such instruments
and do such other things all as may reasonably be required to more fully and
definitely vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer as servicer. The
successor shall make arrangements as it may deem appropriate to reimburse the
Servicer for amounts the Servicer actually expended as servicer pursuant to this
Agreement which the successor is entitled to retain hereunder and which would
otherwise have been recovered by the Servicer pursuant to this Agreement but for
the appointment of the successor servicer.
SECTION 17. Financial Statements.
---------------------
The Seller understands that in connection with the Purchaser's marketing of
the Mortgage Loans, the Purchaser shall make available to prospective purchasers
the Seller's financial statements for the most recently completed three fiscal
years respecting which such statements are available. The Seller also shall make
available any comparable interim statements to the extent any such statements
have been prepared by the Seller (and are available upon request to members or
stockholders of the Seller or the public at large). The Seller, if it has not
already done so, agrees to furnish promptly to the Purchaser copies of the
statements specified above. The Seller also shall make available information on
its servicing performance with respect to mortgage loans serviced for others,
including delinquency ratios.
The Seller also agrees to allow access to knowledgeable financial,
accounting, origination and servicing officers of the Seller for the purpose of
answering questions asked by any prospective purchaser regarding recent
developments affecting the Seller, its loan origination or servicing practices
or the financial statements of the Seller.
SECTION 18. Mandatory Delivery: Grant of Security Interest.
----------------------------------------------
The sale and delivery of each Mortgage Loan on or before the related
Closing Date is mandatory from and after the date of the execution of the
related Confirmation, it being specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Initial Purchaser for the
losses and damages incurred by the Initial Purchaser (including damages to
prospective purchasers of the Mortgage Loans) in the event of the Seller's
failure to deliver each of the related Mortgage Loans or one or more Mortgage
Loans otherwise acceptable to the Initial Purchaser on or before the related
Closing Date. The Seller hereby grants to the Initial Purchaser a lien on and a
continuing security interest in each Mortgage Loan and each document and
instrument evidencing each such Mortgage Loan to secure the performance by the
Seller of its obligation hereunder, and the Seller agrees that it holds such
Mortgage Loans in custody for the Initial Purchaser subject to the Initial
Purchaser's (i) right to reject any Mortgage Loan under the terms of this
Agreement and the related Confirmation, and (ii) obligation to pay the related
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
51
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 19. Notices.
-------
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed, by registered or certified
mail, return receipt requested, or, if by other means, when received by the
other party at the address as follows:
(i) if to the Purchaser:
One Commerce Square
0000 Xxxxxx Xx., Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
(ii) if to the Seller or Servicer:
GreenPoint Mortgage 000 Xxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxx
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 20. Severability Clause.
--------------------
Any part, provision, representation or warranty of this Agreement that is
prohibited or which is held to be void or unenforceable shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law that prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
52
SECTION 21. Counterparts.
-------------
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 22. Governing Law.
--------------
The Agreement shall be construed in accordance with the laws of the State
of New York without regard to any conflicts of law provisions and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the laws of the State of New York, except to the extent
preempted by Federal law.
SECTION 23. Intention of the Parties.
-------------------------
It is the intention of the parties that the Initial Purchaser is
purchasing, and the Seller is selling, the Mortgage Loans and not a debt
instrument of the Seller or another security. Accordingly, the parties hereto
each intend to treat the transaction for Federal income tax purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Initial Purchaser shall have the right to review the Mortgage Loans and the
related Mortgage Loan Files to determine the characteristics of the Mortgage
Loans which shall affect the Federal income tax consequences of owning the
Mortgage Loans and the Seller shall cooperate with all reasonable requests made
by the Initial Purchaser in the course of such review.
In addition, the Purchaser, Seller and Servicer acknowledge and agree that
the purpose of Subsections 11.29, 11.30 and 12(6)-(16) of this Agreement is to
facilitate compliance by the Purchaser and any Depositor with the provisions of
Regulation AB and related rules and regulations of the Commission. Although
Regulation AB is applicable by its terms only to offerings of asset-backed
securities that are registered under the Securities Act, the Seller and Servicer
acknowledge that investors in privately offered securities may require that the
Purchaser or any Depositor provide comparable disclosure in unregistered
offerings. References in this Agreement to compliance with Regulation AB include
provision of comparable disclosure in private offerings. Neither the Purchaser
nor any Depositor shall exercise its right to request delivery of information or
other performance under these provisions other than in good faith, or for
purposes other than compliance with the Securities Act, the Exchange Act and, in
each case, the rules and regulations of the Commission thereunder (or the
provision in a private offering of disclosure comparable to that required under
the Securities Act) and the Xxxxxxxx-Xxxxx Act. The Seller and Servicer
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Purchaser, any Master Servicer or any Depositor in good
faith for delivery of information under these provisions on the basis of
established and evolving interpretations of Regulation AB. In connection with
any Pass-Through Transfer, the Seller and Servicer shall cooperate fully with
the Purchaser and any Master Servicer to deliver to the Purchaser (including any
of its assignees or designees), any Master Servicer and any Depositor, any and
all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Purchaser, the Master Servicer
or any Depositor to permit the Purchaser, such Master Servicer or such Depositor
to comply with the provisions of Regulation AB, together with such disclosures
relating to the Seller, Servicer, any Subservicer, any Third-Party Originator
53
and the Mortgage Loans, or the servicing of the Mortgage Loans, reasonably
believed by the Purchaser or any Depositor to be necessary in order to effect
such compliance.
SECTION 24. Successors and Assigns.
-----------------------
This Agreement shall bind and inure to the benefit of and be enforceable by
the Seller, the Servicer and the Purchaser and the respective successors and
assigns of the Seller, the Servicer and the Purchaser. The Purchaser may assign
this Agreement to any Person to whom any Mortgage Loan is transferred whether
pursuant to a sale or financing and to any Person to whom the servicing or
master servicing of any Mortgage Loan is sold or transferred. Upon any such
assignment, the Person to whom such assignment is made shall succeed to all
rights and obligations of the Purchaser under this Agreement to the extent of
the related Mortgage Loan or Mortgage Loans and this Agreement, to the extent of
the related Mortgage Loan or Loans, shall be deemed to be a separate and
distinct Agreement between the Seller, the Servicer and such Purchaser, and a
separate and distinct Agreement between the Seller, the Servicer and each other
Purchaser to the extent of the other related Mortgage Loan or Loans. In the
event that this Agreement is assigned to any Person to whom the servicing or
master servicing of any Mortgage Loan is sold or transferred, the rights and
benefits under this agreement which inure to the Purchaser shall inure to the
benefit of both the Person to whom such Mortgage Loan is transferred and the
Person to whom the servicing or master servicing of the Mortgage Loan has been
transferred; provided that, the right to require a Mortgage Loan to be
repurchased by the Seller pursuant to Subsection 7.03 or 7.04 shall be retained
solely by the Purchaser. This Agreement shall not be assigned, pledged or
hypothecated by the Seller or the Servicer to a third party without the consent
of the Purchaser.
SECTION 25. Waivers.
-------
No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.
SECTION 26. Exhibits.
---------
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
SECTION 27. Nonsolicitation.
---------------
The Seller and the Servicer covenant and agree that neither shall take any
action to solicit the refinancing of any Mortgage Loan following the date hereof
or provide information to any other entity to solicit the refinancing of any
Mortgage Loan; provided that, the foregoing shall not preclude the Seller or the
Servicer from engaging in solicitations to the general public by newspaper,
radio, television or other media which are not directed toward the Mortgagors or
from refinancing the Mortgage Loan of any Mortgagor who, without solicitation,
contacts the Seller or the Servicer to request the refinancing of the related
Mortgage Loan.
54
SECTION 28. General Interpretive Principles.
-------------------------------
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other
gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other Subdivisions without reference to a document
are to designated Articles, Sections, Subsections, Paragraphs and
other subdivisions of this Agreement;
(d) reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which
the reference appears, and this rule shall also apply to Paragraphs
and other subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 29. Reproduction of Documents.
--------------------------
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 30. Further Agreements.
-------------------
The Seller, the Servicer and the Purchaser each agree to execute and
deliver to the other such reasonable and appropriate additional documents,
instruments or agreements as may be necessary or appropriate to effectuate the
purposes of this Agreement.
55
SECTION 31. Third-Party Beneficiary.
------------------------
Each Master Servicer shall be considered a third-party beneficiary of this
Agreement, entitled to all the rights and benefits hereunder as if it were a
direct party to this Agreement.
SECTION 32. Entire Agreement.
-----------------
This Agreement, the Confirmation and the exhibits and schedules hereto
constitute the entire agreement and understanding of the parties with respect to
the matters and transactions contemplated by this Agreement and, except to the
extent otherwise set forth in writing, supersedes any prior agreement and
understandings with respect to those matters and transactions. In the event of
any contradiction, conflict or inconsistency between the terms and provisions of
this Agreement and the terms and provisions of any Confirmation, the terms and
provisions of such Confirmation will govern.
56
IN WITNESS WHEREOF, the Seller, the Servicer and the Purchaser have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
GREENPOINT MORTGAGE FUNDING, INC.
(Seller and Servicer)
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
LUMINENT MORTGAGE CAPITAL, INC.
(Initial Purchaser)
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
MAIA MORTGAGE FINANCE
STATUTORY TRUST
(Initial Purchaser)
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
MERCURY MORTGAGE FINANCE
STATUTORY TRUST
(Initial Purchaser)
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
EXHIBIT 1
---------
SELLER'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly elected
______________ of [Seller], a __________________ (the "Seller"), and further
certify, on behalf of the Seller as follows:
1. Attached hereto as Attachment I are a true and correct copy
of the Certificate of Incorporation and by-laws of the
Seller as are in full force and effect on the date hereof.
2. Other than what has been previously disclosed, no
proceedings looking toward merger, liquidation, dissolution
or bankruptcy of the Seller are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the
Seller, signed (a) the Amended and Restated Master Mortgage
Loan Purchase and Servicing Agreement (the "Purchase
Agreement"), dated as of ____________, 2006, by and among
the Seller, the Servicer and [ ](the "Purchaser"); (b) the
Confirmation, dated _____________ 2006, between the Seller
and the Purchaser (the "Confirmation"); and (c) any other
document delivered prior hereto or on the date hereof in
connection with the sale and servicing of the Mortgage Loans
in accordance with the Purchase Agreement and the
Confirmation was, at the respective times of such signing
and delivery, and is as of the date hereof, duly elected or
appointed, qualified and acting as such officer or
attorney-in-fact, and the signatures of such persons
appearing on such documents are their genuine signatures.
4. Attached hereto as Attachment II is a true and correct copy
of the resolutions duly adopted by the board of directors of
the Seller on ________________, 2006 (the "Resolutions")
with respect to the authorization and approval of the sale
and servicing of the Mortgage Loans; said Resolutions have
not been amended, modified, annulled or revoked and are in
full force and effect on the date hereof.
5. Attached hereto as Attachment III is a Certificate of Good
Standing of the Seller dated ______________, 2006. No event
has occurred since ___________________, 2006 which has
affected the good standing of the Seller under the laws of
the State of ___________.
6. All of the representations and warranties of the Seller
contained in Subsections 7.01 and 7.02 of the Purchase
Agreement were true and correct in all material respects as
of the date of the Purchase Agreement and are true and
correct in all material respects as of the date hereof.
Exh 1-A-1
7. The Seller has performed all of its duties and has satisfied
all the material conditions on its part to be performed or
satisfied prior to the related Closing Date pursuant to the
Purchase Agreement and the related Confirmation.
All capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Purchase Agreement.
Exh 1-A-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
the Seller.
Dated:_________________________
[Seal]
[SELLER]
(Seller)
By:
-----------------------------------------
Name:
---------------------------------------
Title: Vice President
I, _______________________, Secretary of the Seller, hereby certify that
_________________________ is the duly elected, qualified and acting Vice
President of the Seller and that the signature appearing above is his genuine
signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:_________________________
[Seal]
[SELLER]
(Seller)
By:
----------------------------------------
Name:
--------------------------------------
Title: [Assistant] Secretary
Exh 1-A-3
EXHIBIT 2
---------
[FORM OF OPINION OF COUNSEL TO THE SELLER AND THE SERVICER]
FORM OF OPINION
------------------------
Ladies and Gentlemen:
I have acted as counsel to GreenPoint Mortgage Funding, Inc., a New York
corporation (the "Company"), in connection with certain matters described in the
Agreements. In connection with rendering this opinion letter, I, or attorneys
working under my direction have examined, among other things, originals,
certified copies or copies otherwise identified as being true copies of the
following:
A. Signed copies of the Agreements;
B. The Company's Certificate of Incorporation
C. The Company's By-Laws; and
D. Resolutions adopted by the Board of Directors of the Company.
For the purpose of rendering this opinion, I have made such documentary,
factual and legal examinations as I deemed necessary under the circumstances. As
to factual matters, I have relied upon statements, certificates and other
assurances of public officials and of officers and other representatives of the
Company, and upon such other certificates as I deemed appropriate, which factual
matters have not been independently established or verified by me. I have also
assumed, among other things, the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
me as originals, and the conformity to original documents of all documents
submitted to me as copies and the authenticity of the originals of such copied
documents.
On the basis of and subject to the foregoing examination, and in reliance
thereon, and subject to the assumptions, qualifications, exceptions and
limitations expressed herein, I am of the opinion that:
1. The Company has been duly incorporated and is validly existing and in
good standing under the laws of the State of New York with corporate power and
authority to own its properties and conduct its business as presently conducted
by it. The Company has the corporate power and authority to execute, deliver,
and perform its obligations under the Agreements.
Exh 2-1
2. The Agreements have been duly and validly authorized,
executed and delivered by the Company.
3. The Agreements constitute valid, legal and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms.
4. No consent, approval, authorization or order of any United States
federal or California government authority on the part of the Company is
required for the execution, delivery and performance by the Company of the
Agreements, except for those consents, approvals, authorizations or orders which
previously have been obtained.
5. The execution, delivery and performance of the Agreements will not, as
of the Closing Date, result in a violation of the Certificate of Incorporation
or By-Laws of the Company, or, to the best of my knowledge, result in a
violation of, or constitute a default under, (i) the terms of any indenture or
other agreement or instrument known to me to which the Company is a party or by
which it is bound, (ii) any California or United States federal statute or
regulation applicable to the Company, or (iii) any order of any State of
California or United States federal court, regulatory body, administrative
agency or governmental body having jurisdiction over the Company, except in any
such case where the violation or default would not have a material adverse
effect on the Company or its ability to perform its obligations under the
Agreements.
6. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Company which, in my judgment,
would draw into question the validity of the Agreements or which would be likely
to impair materially the ability of the Company to perform under the terms of
the Agreements.
The opinions above are subject to the following additional assumptions,
exceptions, qualifications and limitations:
A. I have assumed that all parties to the Agreements other than the Company
have all requisite power and authority to execute, deliver and perform their
respective obligations under the Agreements, and that the Agreements have been
duly authorized by all necessary corporate action on the part of such parties,
have been executed and delivered by such parties and constitute the legal, valid
and binding obligations of such parties.
B. My opinion expressed in paragraph 3 above is subject to the
qualifications that (i) the enforceability of the Agreements may be limited by
the effect of laws relating to (1) bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, including, without limitation, the effect of
statutory or other laws regarding fraudulent conveyances or preferential
transfers, and (2) general principles of equity upon the specific enforceability
of any of the remedies, covenants or other provisions of the Agreements and upon
the availability of injunctive relief or other equitable remedies and the
application of principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) as such principles relate to,
limit or affect the enforcement of creditors' rights generally and the
Exh 2-2
discretion of the court before which any proceeding for such enforcement may be
brought; and (ii) I express no opinion herein with respect to the validity,
legality, binding effect or enforceability of provisions for indemnification in
the Agreements to the extent such provisions may be held to be unenforceable as
contrary to public policy.
C. My opinion expressed in paragraph 5 above relating to violations of
United States federal and California statutes, regulations or orders applicable
to the Company is limited to such statutes, regulations or orders that in my
experience are typically applicable to a transaction of the nature contemplated
by the Agreements.
D. I have assumed, without independent check or certification, that there
are no agreements or understandings among the Company and any other party, which
would expand, modify or otherwise affect the terms of the Agreements or the
respective rights or obligations of the parties thereunder.
I am admitted to practice in the State of California, and I render no
opinion herein as to matters involving or governed by the laws of any
jurisdiction other than the State of California and the federal laws of the
United States of America. I also express no opinion as to whether the laws of
any particular jurisdiction apply, and no opinion to the extent that the laws of
any jurisdiction other than those identified above are applicable to the
Agreements.
This opinion letter has been prepared and should be understood in
accordance with the Legal Opinion Principles, 53 Bus. Law. 831 (1998), and
Guidelines for the Preparation of Closing Opinions, 57 Bus. Law. 345 (2001), of
the Committee on Legal Opinions, ABA Section of Business Law.
Very truly yours,
----------------------------
Xxxxx X. Xxxxxxx
General Counsel
GreenPoint Mortgage Funding, Inc.
(Date)
[ ]
[ ]
[ ]
Re: Master Mortgage Loan Purchase and Servicing
Agreement, dated as of [Month] 1, 2006
Exh 2-3
EXHIBIT 3
---------
SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
___________________________, hereby relinquishes any and all right, title
and interest it may have in and to the Mortgage Loans described in Exhibit A
attached hereto upon purchase thereof by [ ] from the Seller named below
pursuant to that certain Master Mortgage Loan Purchase and Servicing Agreement,
dated as of [Month] 1, 2006, as of the date and time of receipt by
______________________________ of $__________ for such Mortgage Loans (the "Date
and Time of Sale"), and certifies that all notes, mortgages, assignments and
other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Seller named below or its designees as of the Date
and Time of Sale.
Name and Address of Financial Institution
(Name)
(Address)
By:______________________________________
Exh 3-1
II. Certification of Release
The Seller named below hereby certifies to [ ] that, as of the Date and
Time of Sale of the above mentioned Mortgage Loans to [ ], the security
interests in the Mortgage Loans released by the above named corporation comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Seller warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
[SELLER]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Exh 3-2
EXHIBIT 4
---------
ASSIGNMENT AND CONVEYANCE
On this _______ day of ________, 2006, [SELLER] ("Seller"), as the Seller
under that certain Master Mortgage Loan Purchase and Servicing Agreement, dated
as of [Month] 1, 2006 (the "Agreement"), does hereby sell, transfer, assign, set
over and convey to [ ] a Purchaser under the Agreement, without recourse, but
subject to the terms of the Agreement, all rights, title and interest of the
Seller in and to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto, together with the related servicing rights thereto, Mortgage
Files and all rights and obligations arising under the documents contained
therein including, subject to the terms of the Agreement, the right to any
Prepayment Charges payable with respect thereto. Pursuant to Subsection 6.03 of
the Agreement, the Seller has delivered to the Custodian the documents for each
Mortgage Loan to be purchased as set forth in Exhibit 13 to the Agreement. The
contents of each related Servicing File required to be retained by the Seller to
service the Mortgage Loans pursuant to the Agreement and thus not delivered to
the Purchaser are and shall be held in trust by the Seller for the benefit of
the Purchaser as the owner thereof. The Seller's possession of any portion of
each such Servicing File is at the will of the Purchaser for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to the Agreement,
and such retention and possession by the Seller shall be in a custodial capacity
only. The ownership of each Mortgage Note, Mortgage, and the contents of the
Mortgage File and Servicing File is vested in the Purchaser and the ownership of
all records and documents with respect to the related Mortgage Loan prepared by
or which come into the possession of the Seller shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Seller at the
will of the Purchaser in such custodial capacity only.
The Seller confirms to the Purchaser that the representation and warranties
set forth in Subsections 7.01 and 7.02 of the Agreement are true and correct
with respect to the Seller and the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto as of the date hereof, and that all statements made in
the Seller's Officer's Certificates and all Attachments thereto remain complete,
true and correct in all respects as of the date hereof, and that the Mortgage
Loan characteristics identified on the attached Schedule are true and correct as
of the date hereof.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
[SELLER],
Seller
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Exh 4-1
EXHIBIT 5
---------
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each of
the following items, which shall be available for inspection by the Purchaser
and which shall be retained by the Seller or delivered to the Custodian:
1. Mortgage Loan Documents.
2. Residential loan application.
3. Mortgage Loan closing statement.
4. Verification of employment and income.
5. Verification of acceptable evidence of source and
amount of downpayment.
6. Credit report on Mortgagor.
7. Residential appraisal report.
8. Photograph of the Mortgaged Property.
9. Survey of the Mortgaged Property.
10. Copy of each instrument necessary to complete
identification of any exception set forth in the
exception schedule in the title policy, i.e., map or
plat, restrictions, easements, sewer agreements, home
association declarations, etc.
11. All required disclosure statements and statement of
Mortgagor confirming receipt thereof.
12. If available, termite report, structural engineer's
report, water potability and septic certification.
13. Sales Contract, if applicable.
14. Hazard insurance policy.
15. Tax receipts, insurance premium receipts, ledger
sheets, payment history from date of origination,
insurance claim files, correspondence, current and
historical computerized data files, and all other
processing, underwriting and closing papers and
records which are customarily contained in a mortgage
loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.
Exh 5-1
16. Amortization schedule, if available.
17. Payment history for Mortgage Loans that have been
closed for more than 90 days.
18. Flood insurance policy, if applicable.
19. Tax Service Contract.
20. Flood Service Contract.
Exh 5-2
EXHIBIT 6
---------
CUSTODIAL AGREEMENT
Exh 6-1
EXHIBIT 7
---------
CUSTODIAL ACCOUNT LETTER AGREEMENT
________________________ __, 2006
To: __________________________________
(the "Depository")
As Seller under the Master Mortgage Loan Purchase and Servicing Agreement,
dated as of [Month] 1, 2006, we hereby authorize and request you to establish an
account, as a Custodial Account, to be designated as "[SELLER] in trust for the
Purchaser and various Mortgagors, Fixed and Adjustable Rate Mortgage Loans." All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Seller. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter is
submitted to you in duplicate. Please execute and return one original to us.
[SELLER]
(Seller)
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Date:
--------------------------------------
Exh 7-1
The undersigned, as Depository, hereby certifies that the above-described
account has been established under Account Number ___________ at the office of
the Depository indicated above, and agrees to honor withdrawals on such account
as provided above. The full amount deposited at any time in the account will be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
(Depository)
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
Exh 7-2
EXHIBIT 8
---------
ESCROW ACCOUNT LETTER AGREEMENT
________________, 2006
To: __________________________________
(the "Depository")
As Seller under the Master Mortgage Loan Purchase and Servicing Agreement,
dated as of [Month] 1, 2006, we hereby authorize and request you to establish an
account, as an Escrow Account, to be designated as "[SELLER] in trust for the
Purchaser and various Mortgagors, Fixed and Adjustable Rate Mortgage Loans." All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Seller. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter is
submitted to you in duplicate. Please execute and return one original to us.
[SELLER]
(Seller)
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Date:
---------------------------------------
Exh 8-1
The undersigned, as Depository, hereby certifies that the above-described
account has been established under Account Number ___________ at the office of
the Depository indicated above, and agrees to honor withdrawals on such account
as provided above. The full amount deposited at any time in the account will be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
(Depository)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Exh 8-2
EXHIBIT 9
---------
SERVICING ADDENDUM
Subsection 11.01 Seller to Act as Servicer.
--------------------------
The Seller, as independent contract servicer, shall service and administer
the Mortgage Loans in accordance with Accepted Servicing Practices and this
Agreement and shall have full power and authority, acting alone, to do or cause
to be done any and all things in connection with such servicing and
administration which the Seller may deem necessary or desirable and consistent
with the terms of this Agreement. The Seller shall be responsible for any and
all acts of a Subservicer and a Subcontractor, and the Seller's utilization of a
Subservicer or a Subcontractor shall in no way relieve the liability of the
Seller under this Agreement.
Consistent with the terms of this Agreement, the Servicer may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Servicer's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser; provided, however, that the Servicer shall not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, defer or forgive the payment thereof or of any principal or
interest payments, reduce the outstanding principal amount (except for actual
payments of principal), make additional advances of additional principal or
extend the final maturity date on such Mortgage Loan. Without limiting the
generality of the foregoing, the Servicer shall continue, and is hereby
authorized and empowered, to execute and deliver on behalf of itself, and the
Purchaser, all instruments of satisfaction or cancellation, or of partial or
full release, discharge and all other comparable instruments, with respect to
the Mortgage Loans and with respect to the Mortgaged Property. If reasonably
required by the Servicer, the Purchaser shall furnish the Servicer with any
powers of attorney and other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties under this
Agreement.
If applicable, the Servicer shall notify MERS of the ownership interest of
the Purchaser in each MOM Loan through the MORNET system or MIDANET system, as
applicable, or any other comparable system acceptable to MERS. At any time
during the term of this Agreement, the Purchaser may direct the Servicer to
cause any MOM Loan to be deactivated from the MERS System.
In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the Purchaser's reliance
on the Servicer.
The Seller will furnish, with respect to each Mortgage Loan, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information on its borrower credit files to Equifax, Experian, and
Trans Union Credit Information Company, on a monthly basis.
Exh 9-1
Subsection 11.02 Collection of Mortgage Loan Payments.
-------------------------------------
Continuously from the related Closing Date, the Servicer shall proceed
diligently to collect all payments due under each Mortgage Loan when the same
shall become due and payable and shall, to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Primary Insurance Policy, follow such collection procedures as it follows with
respect to mortgage loans comparable to the Mortgage Loans and held for its own
account. Further, the Servicer shall take special care in ascertaining and
estimating annual ground rents, taxes, assessments, water rates, fire and hazard
insurance premiums, mortgage insurance premiums, and all other charges that, as
provided in the Mortgage, will become due and payable to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable.
The Seller shall not waive any Prepayment Charge with respect to any
Mortgage Loan which contains a Prepayment Charge which prepays during the term
of the charge. If the Seller fails to collect the Prepayment Charge upon any
prepayment of any Mortgage Loan which contains a Prepayment Charge, the Seller
shall pay the Purchaser at such time (by deposit to the Custodial Account) an
amount equal to amount of the Prepayment Charge which was not collected.
Notwithstanding the above, the Seller may waive (and shall waive, in the case of
(v) below) a Prepayment Charge without paying the Purchaser the amount of the
Prepayment Charge (i) if the Mortgage Loan is in default (defined as 61 days or
more delinquent) and such waiver would maximize recovery of total proceeds
taking into account the value of such Prepayment Charge and the related Mortgage
Loan, (ii) if the prepayment is not a result of a refinancing by the Seller or
any of its affiliates and the Mortgage Loan is foreseen to be in default and
such waiver would maximize recovery of total proceeds taking into account the
value of such Prepayment Charge and the related Mortgage Loan, (iii) if the
collection of the Prepayment Charge would be in violation of applicable laws,
(iv) if the collection of such Prepayment Charge would be considered "predatory"
pursuant to written guidance published or issued by any applicable federal,
state or local regulatory authority acting in its official capacity and having
jurisdiction over such matters and (v) notwithstanding any state or federal law
to the contrary, any instance when a Mortgage Loan is in foreclosure. The Seller
hereby acknowledges that for the purposes of the preceding sentence, (i) the law
applicable to the enforcement of prepayment penalties and charges is the law
applicable to the related originator of the Mortgage Loans and (ii) state laws
prohibiting or limiting prepayment penalties or charges are preempted and
thereby inapplicable if the related originator of the mortgage loans is a
federal association or federal bank or an operating subsidiary of such
institution. In the event the Seller determines that (i) the foregoing
acknowledgement is no longer accurate and (ii) applicable state law would
prevent it from fully enforcing prepayment penalties or charges, the Seller
shall (i) provide prompt notice to such effect to the Purchaser and (ii) provide
a written opinion of counsel from a nationally recognized law firm experienced
in regulatory matters concluding that fully enforcing prepayment penalties or
charges would violate applicable law.
Subsection 11.03 Realization Upon Defaulted Mortgage Loans.
------------------------------------------
(a) The Servicer shall use its best efforts, consistent with the procedures
that the Servicer would use in servicing loans for its own account, to foreclose
upon or otherwise comparably convert the ownership of such Mortgaged Properties
as come into and continue in default and as to which no satisfactory
Exh 9-2
arrangements can be made for collection of delinquent payments pursuant to
Subsection 11.01. The Servicer shall use its best efforts to realize upon
defaulted Mortgage Loans in such a manner as will maximize the receipt of
principal and interest by the Purchaser, taking into account, among other
things, the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage, the Servicer shall not be required to expend its own funds toward the
restoration of such property in excess of $2,000 unless it shall determine in
its discretion (i) that such restoration will increase the proceeds of
liquidation of the related Mortgage Loan to Purchaser after reimbursement to
itself for such expenses, and (ii) that such expenses will be recoverable by the
Servicer through Insurance Proceeds or Liquidation Proceeds from the related
Mortgaged Property, as contemplated in Subsection 11.05. In the event that any
payment due under any Mortgage Loan is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Servicer shall take such action as it shall deem to
be in the best interest of the Purchaser. In the event that any payment due
under any Mortgage Loan remains delinquent for a period of 90 days or more, the
Servicer shall commence foreclosure proceedings, provided that prior to
commencing foreclosure proceedings, the Servicer shall notify the Purchaser in
writing of the Servicer's intention to do so, and the Servicer shall not
commence foreclosure proceedings if the Purchaser objects to such action within
ten (10) Business Days of receiving such notice. The Servicer shall notify the
Purchaser in writing of the commencement of foreclosure proceedings. In such
connection, the Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the related Mortgaged Property, as
contemplated in Subsection 11.05.
(b) Notwithstanding the foregoing provisions of this Subsection 11.03, 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 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
Purchaser 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 prudent
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 Purchaser 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
Exh 9-3
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 Purchaser to take such actions with respect
to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this Subsection
11.03 shall be advanced by the Servicer, subject to the Servicer's right to be
reimbursed therefor from the Custodial Account as provided in Subsection
11.05(v).
If the Servicer determines, as described above, that it is in the best
economic interest of the Purchaser 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 Purchaser. 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 Custodial Account as provided in Subsection
11.05(v).
(c) Proceeds received in connection with any Final Recovery Determination,
as well as any recovery resulting from a partial collection of Insurance
Proceeds or Liquidation Proceeds in respect of any Mortgage Loan, will be
applied in the following order of priority: first, to reimburse the Servicer for
any related unreimbursed Servicing Advances, pursuant to Subsection 11.05(iii);
second, 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 third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Servicer as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Servicer pursuant to Subsection 11.05(iii).
Subsection 11.04 Establishment of Custodial Accounts; Deposits in
------------------------------------------------
Custodial Accounts.
-------------------
The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts. The creation of any Custodial
Account shall be evidenced by a Custodial Account Letter Agreement in the form
of Exhibit 7.
The Servicer shall deposit in the Custodial Account on a daily basis, and
retain therein the following payments and collections received by it subsequent
to the Cut-off Date, or received by it prior to the Cut-off Date but allocable
to a period subsequent thereto, other than in respect of principal and interest
on the Mortgage Loans due on or before the Cut-off Date:
(i) all payments on account of principal on the Mortgage Loans;
Exh 9-4
(ii) all payments on account of interest on the Mortgage Loans;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Subsections 11.10 and 11.11, other than proceeds to be held in
the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the
Servicer's normal servicing procedures, the loan documents or applicable
law;
(v) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, the loan documents or applicable law;
(vi) all proceeds of any Mortgage Loan repurchased in accordance with
Subsections 7.03 and 7.04 and all amounts required to be deposited by the
Servicer in connection with shortfalls in principal amount of Qualified
Substitute Mortgage Loans pursuant to Subsection 7.03;
(vii) any amounts required to be deposited by the Servicer pursuant to
Subsection 11.11 in connection with the deductible clause in any blanket
hazard insurance policy. Such deposit shall be made from the Servicer's own
funds, without reimbursement therefor;
(viii) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Subsection 11.13; and
(ix) any amounts required to be deposited in the Custodial Account
pursuant to Subsections 11.19 or 11.20.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Subsection 11.01, need not be deposited by the
Servicer in the Custodial Account. Such Custodial Account shall be an Eligible
Account. Any interest or earnings on funds deposited in the Custodial Account by
the depository institution shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Subsection 11.05(iii). The Servicer shall give
notice to the Purchaser of the location of the Custodial Account when
established and prior to any change thereof.
If the balance on deposit in the Custodial Account exceeds $75,000 as of
the commencement of business on any Business Day and the Custodial Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of Eligible Account, the Servicer shall, on or before twelve o'clock noon
Eastern time on such Business Day, withdraw from the Custodial Account any and
all amounts payable to the Purchaser and remit such amounts to the Purchaser by
wire transfer of immediately available funds.
Exh 9-5
Subsection 11.05 Permitted Withdrawals From the Custodial Account.
------------------------------------------------
The Servicer may, from time to time, withdraw from the Custodial Account
for the following purposes:
(i) to make distributions to the Purchaser in the amounts and in the
manner provided for in Subsection 11.14;
(ii) to reimburse itself for unreimbursed Servicing Advances, the
Servicer's right to reimburse itself pursuant to this subclause (ii) with
respect to any Mortgage Loan being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Servicer from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of such reimbursement,
the Servicer's right thereto shall be prior to the rights of the Purchaser,
except that, where the Servicer is required to repurchase a Mortgage Loan,
pursuant to Subsection 7.03 or Subsection 7.04, the Servicer's right to
such reimbursement shall be subsequent to the payment to the Purchaser of
the Repurchase Price pursuant to Subsection 7.03 or Subsection 7.04 and all
other amounts required to be paid to the Purchaser with respect to such
Mortgage Loans;
(iii) to pay to itself pursuant to Subsection 11.21 as servicing
compensation (a) any interest earned on funds in the Custodial Account (all
such interest to be withdrawn monthly not later than each Distribution
Date), and (b) the Servicing Fee from that portion of any payment or
recovery as to interest on a particular Mortgage Loan;
(iv) to pay to itself with respect to each Mortgage Loan that has been
repurchased pursuant to Subsection 7.03 or Subsection 7.04 all amounts
received thereon and not distributed as of the date on which the related
Repurchase Price is determined;
(v) to pay, or to reimburse the Servicer for advances in respect of,
expenses incurred in connection with any Mortgage Loan pursuant to
Subsection 11.03(b), but only to the extent of amounts received in respect
of the Mortgage Loans to which such expense is attributable; and
(vi) to clear and terminate the Custodial Account on the termination
of this Agreement.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Custodial Account pursuant to such subclauses (ii), (iii), (iv) and (v)
above.
Subsection 11.06 Establishment of Escrow Accounts; Deposits in Escrow
-------------------------------------------------------
Accounts.
--------
The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts. The creation of any Escrow Account shall be evidenced by Escrow
Account Letter Agreement in the form of Exhibit 8.
Exh 9-6
The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein, (i) all Escrow Payments collected on account of the
Mortgage Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement, and (ii) all Insurance Proceeds
which are to be applied to the restoration or repair of any Mortgaged Property.
The Servicer shall make withdrawals therefrom only to effect such payments as
are required under this Agreement, and for such other purposes as shall be as
set forth or in accordance with Subsection 11.08. The Servicer shall be entitled
to retain any interest paid on funds deposited in the Escrow Account by the
depository institution other than interest on escrowed funds required by law to
be paid to the Mortgagor and, to the extent required by law, the Servicer shall
pay interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is non-interest bearing or that interest paid thereon is insufficient
for such purposes.
Subsection 11.07 Permitted Withdrawals From Escrow Account.
------------------------------------------
Withdrawals from the Escrow Account may be made by the Servicer (i) to
effect timely payments of ground rents, taxes, assessments, water rates, hazard
insurance premiums, Primary Insurance Policy premiums, if applicable, and
comparable items, (ii) to reimburse the Servicer for any Servicing Advance made
by the Servicer with respect to a related Mortgage Loan but only from amounts
received on the related Mortgage Loan which represent late payments or
collections of Escrow Payments thereunder, (iii) to refund to the Mortgagor any
funds as may be determined to be overages, (iv) for transfer to the Custodial
Account in accordance with the terms of this Agreement, (v) for application to
restoration or repair of the Mortgaged Property, (vi) to pay to the Servicer, or
to the Mortgagor to the extent required by law, any interest paid on the funds
deposited in the Escrow Account, or (vii) to clear and terminate the Escrow
Account on the termination of this Agreement.
Subsection 11.08 Payment of Taxes, Insurance and Other Charges;
----------------------------------------------
Maintenance of Primary Insurance Policies; Collections Thereunder.
------------------------------------------------------------------
With respect to each Mortgage Loan, the Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges which are or may become a lien upon the Mortgaged Property and
the status of Primary Insurance Policy and fire and hazard insurance coverage
and shall obtain, from time to time, all bills for the payment of such charges,
including insurance renewal premiums and shall effect payment thereof prior to
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Servicer in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage and applicable law. To the extent that the Mortgage does
not provide for Escrow Payments, the Servicer shall determine that any such
payments are made by the Mortgagor at the time they first become due. The
Servicer assumes full responsibility for the timely payment of all such bills
and shall effect timely payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments.
Exh 9-7
The Seller shall maintain in full force and effect, a Primary Insurance
Policy, issued by a Qualified Insurer, with respect to each Mortgage Loan for
which such coverage is required. Such coverage shall be maintained until the
Loan-to-Value Ratio of the related Mortgage Loan is reduced to that amount for
which Xxxxxx Xxx no longer requires such insurance to be maintained. The Seller
will not cancel or refuse to renew any Primary Insurance Policy in effect on the
Closing Date that is required to be kept in force under this Agreement unless a
replacement Primary Insurance Policy for such cancelled or non- renewed policy
is obtained from and maintained with a Qualified Insurer. The Seller shall not
take any action which would result in non-coverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Seller, would
have been covered thereunder. In connection with any assumption or substitution
agreement entered into or to be entered into pursuant to Subsection 11.19, the
Seller shall promptly notify the insurer under the related Primary Insurance
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such policy and shall take all actions which may be required
by such insurer as a condition to the continuation of coverage under the Primary
Insurance Policy. If such Primary Insurance Policy is terminated as a result of
such assumption or substitution of liability, the Seller shall obtain a
replacement Primary Insurance Policy as provided above.
In connection with its activities as servicer, the Seller agrees to prepare
and present, on behalf of itself, and the Purchaser, claims to the insurer under
any Primary Insurance Policy in a timely fashion in accordance with the terms of
such policies and, in this regard, to take such action as shall be necessary to
permit recovery under any Primary Insurance Policy respecting a defaulted
Mortgage Loan. Pursuant to Subsection 11.04, any amounts collected by the Seller
under any Primary Insurance Policy shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Subsection 11.05.
Subsection 11.09 Transfer of Accounts.
---------------------
The Servicer may transfer the Custodial Account or the Escrow Account to a
different depository institution from time to time. Such transfer shall be made
only upon obtaining the consent of the Purchaser, which consent shall not be
unreasonably withheld. In any case, the Custodial Account and Escrow Account
shall be Eligible Accounts.
Subsection 11.10 Maintenance of Hazard Insurance.
--------------------------------
The Servicer shall cause to be maintained for each Mortgage Loan fire and
hazard insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in an amount which is at least equal to the lesser
of (i) the amount necessary to fully compensate for any damage or loss to the
improvements which are a part of such property on a replacement cost basis or
(ii) the outstanding principal balance of the Mortgage Loan (including any
cumulative related Negative Amortization) plus with respect to any second lien
Mortgage Loan, the outstanding principal balance of the related first lien
mortgage loan (including any cumulative related Negative Amortization), in each
case in an amount not less than such amount as is necessary to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged
Property is in an area identified on a Flood Hazard Boundary Map or Flood
Insurance Rate Map issued by the Flood Emergency Management Agency as having
special flood hazards and such flood insurance has been made available, the
Exh 9-8
Servicer will cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the lesser of (i) the outstanding principal balance of
the Mortgage Loan (plus, if the Mortgage Loan provides for negative
amortization, the maximum amount of Negative Amortization in accordance with the
Mortgage)or (ii) the maximum amount of insurance which is available under the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, as amended. The Servicer also shall maintain on any REO Property, fire and
hazard insurance with extended coverage 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 (including any cumulative related Negative Amortization) at the
time it became an REO Property plus accrued interest at the Mortgage Interest
Rate and related Servicing Advances, liability insurance and, to the extent
required and available under the National Flood Insurance Act of 1968 or the
Flood Disaster Protection Act of 1973, as amended, flood insurance in an amount
as provided above. Pursuant to Subsection 11.04, any amounts collected by the
Servicer under any such policies other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with the
Servicer's normal servicing procedures, shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Subsection 11.05. Any cost incurred
by the Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Purchaser, 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 need be required by the Servicer of the Mortgagor or
maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Servicer, or
upon request to the Purchaser, and shall provide for at least thirty days prior
written notice of any cancellation, reduction in the amount of, or material
change in, coverage to the Servicer. The Servicer shall not interfere with the
Mortgagor's freedom of choice in selecting either his insurance carrier or
agent, provided, however, that the Servicer shall not accept any such insurance
policies from insurance companies unless such companies currently reflect a
General Policy Rating of A:VI or better in Best's Key Rating Guide and are
licensed to do business in the state wherein the property subject to the policy
is located.
Subsection 11.11 Maintenance of Mortgage Impairment Insurance Policy.
---------------------------------------------------
In the event that the Servicer shall obtain and maintain a mortgage
impairment or blanket policy issued by an issuer that has a Best rating of A:VI
insuring against hazard losses on all of Mortgaged Properties securing the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Subsection 11.10 and otherwise complies
with all other requirements of Subsection 11.10, the Servicer shall conclusively
be deemed to have satisfied its obligations as set forth in Subsection 11.10, 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 Subsection 11.10, and there shall have been one or more losses which would
have been covered by such policy, deposit in the Custodial Account the amount
not otherwise payable under the blanket policy because of such deductible
Exh 9-9
clause. In connection with its activities as servicer of the Mortgage Loans, the
Servicer agrees to prepare and present, on behalf of the Purchaser, claims under
any such blanket policy in a timely fashion in accordance with the terms of such
policy. Upon request of the Purchaser, the Servicer shall cause to be delivered
to the Purchaser a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without thirty days prior written notice to the Purchaser.
Subsection 11.12 Fidelity Bond, Errors and Omissions Insurance.
---------------------------------------------
The Servicer shall maintain, at its own expense, a blanket fidelity bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of FNMA or FHLMC on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The fidelity bond and errors and omissions insurance shall be in
the form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such persons. Such fidelity bond shall also
protect and insure the Servicer against losses in connection with the failure to
maintain any insurance policies required pursuant to this Agreement and the
release and satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Subsection 11.12
requiring the fidelity bond and errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the corresponding amounts required by FNMA in the FNMA
Servicing Guide or by FHLMC in the FHLMC Servicers' and Servicers' Guide. Upon
request of the Purchaser, the Servicer shall cause to be delivered to the
Purchaser a certified true copy of the fidelity bond and insurance policy and a
statement from the surety and the insurer that such fidelity bond or insurance
policy shall in no event be terminated or materially modified without thirty
days' prior written notice to the Purchaser.
Subsection 11.13 Title, Management and Disposition of REO Property.
-------------------------------------------------
In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the person designated by the Purchaser, or in the
event such person is not authorized or permitted to hold title to real property
in the state where the REO Property is located, or would be adversely affected
under the "doing business" or tax laws of such state by so holding title, the
deed or certificate of sale shall be taken in the name of such Person or Persons
as shall be consistent with an opinion of counsel obtained by the Servicer from
an attorney duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Purchaser.
The Seller shall either itself or through an agent selected by the Seller,
manage, conserve, protect and operate each REO Property (and may temporarily
rent the same) in the same manner that it manages, conserves, protects and
operates other foreclosed property for its own account, and in the same manner
that similar property in the same locality as the REO Property is managed. If a
REMIC election is or is to be made with respect to the arrangement under which
Exh 9-10
the Mortgage Loans and any REO Property are held, the Seller shall manage,
conserve, protect and operate each REO Property in a manner which does not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code or result in the receipt by such REMIC
of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" within
the meaning of Section 860G(c)(2) of the Code. The Seller shall cause each REO
Property to be inspected promptly upon the acquisition of title thereto and
shall cause each REO Property to be inspected at least monthly thereafter. The
Seller shall make or cause to be made a written report of each such inspection.
Such reports shall be retained in the Mortgage File and copies thereof shall be
forwarded by the Seller to the Purchaser. The Seller shall use its best efforts
to dispose of the REO Property as soon as possible and shall sell such REO
Property in any event within one year after title has been taken to such REO
Property, unless the Seller determines, and gives appropriate notice to the
Purchaser, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is necessary to sell any REO
property, (i) the Seller shall report monthly to the Purchaser as to the
progress being made in selling such REO Property and (ii) if, with the written
consent of the Purchaser, a purchase money mortgage is taken in connection with
such sale, such purchase money mortgage shall name the Seller as mortgagee, and
a separate servicing agreement between the Seller and the Purchaser shall be
entered into with respect to such purchase money mortgage. Notwithstanding the
foregoing, if a REMIC election is made with respect to the arrangement under
which the Mortgage Loans and the REO Property are held, such REO Property shall
be disposed of before the close of the third taxable year following the taxable
year in which the Mortgage Loan became an REO Property, unless the Seller
provides to the trustee under such REMIC an opinion of counsel to the effect
that the holding of such REO Property subsequent to the close of the third
taxable year following the taxable year in which the Mortgage Loan became an REO
Property, will not result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code, or cause the transaction
to fail to qualify as a REMIC at any time that certificates are outstanding.
Seller shall manage, conserve, protect and operate each such REO Property for
the certificateholders solely for the purpose of its prompt disposition and sale
in a manner which does not cause such property to fail to qualify as
"foreclosure property" within the meaning of Section 860F(a)(2)(E) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC provisions of the Code. Pursuant to its efforts to sell such property,
the Seller shall either itself or through an agent selected by Seller, protect
and conserve such property in the same manner and to such an extent as is
customary in the locality where such property is located. Additionally, Seller
shall perform the tax withholding and reporting related to Sections 1445 and
6050J of the Code.
With respect to each REO Property, the Seller shall segregate and hold all
funds collected and received in connection with the operation of the REO
Property separate and apart from its own funds or general assets and shall
establish and maintain a separate REO Account for each REO Property in the form
of a non-interest bearing demand account, unless an Opinion of Counsel is
obtained by the Seller to the effect that the classification as a grantor trust
or REMIC for federal income tax purposes of the arrangement under which the
Mortgage Loans and the REO Property is held will not be adversely affected by
holding such funds in another manner. Each REO Account shall be established with
the Seller or, with the prior consent of the Purchaser, with a commercial bank,
a mutual savings bank or a savings association. The creation of any REO Account
shall be evidenced by a letter agreement substantially in the form of the
Exh 9-11
Custodial Account Letter Agreement attached as Exhibit 7 hereto. An original of
such letter agreement shall be furnished to any Purchaser upon request.
The Seller shall deposit or cause to be deposited, on a daily basis in each
REO Account all revenues received with respect to the related REO Property and
shall withdraw therefrom funds necessary for the proper operation, management
and maintenance of the REO Property, including the cost of maintaining any
hazard insurance pursuant to Subsection 11.10 hereof and the fees of any
managing agent acting on behalf of the Seller. The Seller shall not be entitled
to retain interest paid or other earnings, if any, on funds deposited in such
REO Account. On or before each Determination Date, the Seller shall withdraw
from each REO Account and deposit into the Custodial Account the net income from
the REO Property on deposit in the REO Account.
The Seller shall furnish to the Purchaser on each Distribution Date, an
operating statement for each REO Property covering the operation of each REO
Property. Such operating statement shall be accompanied by such other
information as the Purchaser shall reasonably request. Together with such
statement, the Seller shall furnish to the Purchaser a statement covering the
Seller's efforts in connection with the sale of such REO Property and any rental
of such REO Property incidental to the sale thereof for the previous month.
Each REO Disposition shall be carried out by the Seller at such price and
upon such terms and conditions as the Seller deems to be in the best interest of
the Purchaser only with the prior written consent of the Purchaser. If as of the
date title to any REO Property was acquired by the Seller there were outstanding
unreimbursed Servicing Advances with respect to the REO Property, the Servicer,
upon an REO Disposition of such REO Property, shall be entitled to reimbursement
for any related unreimbursed Servicing Advances from proceeds received in
connection with such REO Disposition. The proceeds from the REO Disposition, net
of any payment to the Seller as provided above, shall be deposited in the REO
Account and shall be transferred to the Custodial Account on the Determination
Date in the month following receipt thereof for distribution on the succeeding
Distribution Date in accordance with Subsection 11.14.
Subsection 11.14 Distributions.
--------------
On each Distribution Date, the Servicer shall distribute to the Purchaser
all amounts credited to the Custodial Account as of the close of business on the
preceding Determination Date, net of charges against or withdrawals from the
Custodial Account pursuant to Subsection 11.05.
All distributions made to the Purchaser on each Distribution Date will be
made to the Purchaser of record on the preceding Record Date, and shall be based
on the Mortgage Loans owned and held by the Purchaser, and shall be made by wire
transfer of immediately available funds to the account of the Purchaser at a
bank or other entity having appropriate facilities therefor, if the Purchaser
shall have so notified the Servicer or by check mailed to the address of the
Purchaser.
With respect to any remittance received by the Purchaser on or after the
second Business Day following the Business Day on which such payment was due,
the Servicer shall pay to the Purchaser interest on any such late payment at an
Exh 9-12
annual rate equal to the rate of interest as is publicly announced from time to
time at its principal office by JPMorgan Chase Bank, New York, New York, as its
prime lending rate, adjusted as of the date of each change, plus three
percentage points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be paid by the Servicer to the Purchaser on
the date such late payment is made and shall cover the period commencing with
the day following such second Business Day and ending with the Business Day on
which such payment is made, both inclusive. Such interest shall be remitted
along with such late payment. The payment by the Servicer of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event of
Default by the Servicer.
Subsection 11.15 Remittance Reports.
-------------------
No later than the fifth Business Day of each month, the Servicer shall
furnish to the Purchaser or its designee an electronic file containing, and a
hard copy of, the monthly data (the "Remittance Report"). On the Business Day
following each Determination Date, the Servicer shall deliver to the Purchaser
or its designee by telecopy (or by such other means as the Servicer and the
Purchaser may agree from time to time) an electronic file containing, and a hard
copy of, the determination data with respect to the related Distribution Date,
together with such other information with respect to the Mortgage Loans as the
Purchaser may reasonably require to allocate distributions made pursuant to this
Agreement and provide appropriate statements with respect to such distributions.
On the same date, the Servicer shall forward to the Purchaser by overnight mail
a computer readable magnetic tape containing the information set forth in the
Remittance Report with respect to the related Distribution Date. To the extent
that the Mortgage Loans are the subject of a Pass-Through Transfer, the
electronic file must include all information known or available to the Servicer
that is necessary in order to provide the distribution and pool performance
information as required under Item 1121 of Regulation AB as determined by
Purchaser in its sole discretion. The Servicer shall modify the electronic file
as requested by the Purchaser from time to time to comply with the preceding
sentence.
Subsection 11.16 Statements to the Purchaser.
----------------------------
Not later than fifteen days after each Distribution Date, the Servicer
shall forward to the Purchaser or its designee a statement prepared by the
Servicer setting forth the status of the Custodial Account as of the close of
business on such Distribution Date and showing, for the period covered by such
statement, the aggregate amount of deposits into and withdrawals from the
Custodial Account of each category of deposit specified in Subsection 11.04 and
each category of withdrawal specified in Subsection 11.05, and such statement
shall also include the following:
(i) with respect to each Mortgage Loan and each Monthly Payment, the amount
of such remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any Prepayment
Charges, along with a detailed report of interest on principal prepayment
amounts remitted in accordance with Subsection 11.04);
Exh 9-13
(ii) with respect to each Mortgage Loan and each Monthly Payment, the
amount of such remittance allocable to interest;
(iii) with respect to each Mortgage Loan, the amount of servicing
compensation received by the Servicer during the prior distribution period;
(iv) the Stated Principal Balance of each Mortgage Loan and the aggregate
Stated Principal Balance of all Mortgage Loans as of the first day of the
distribution period and the last day of the distribution period;
(v) with respect to each Mortgage Loan, the current Mortgage Interest Rate;
(vi) with respect to each Mortgage Loan, the aggregate amount of any
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and REO
Disposition Proceeds received during the prior distribution period;
(vii) with respect to each Mortgage Loan, the amount of any prepayment
interest shortfalls paid by the Servicer during the prior distribution period;
(viii) the beginning and ending balances of the Custodial Account and
Escrow Account;
(ix) the number of Mortgage Loans as of the first day of the distribution
period and the last day of the distribution period;
(x) with respect to each Mortgage Loan, the Stated Principal Balance of
each Mortgage Loan (a) delinquent as grouped in the following intervals through
final liquidation of such Mortgage Loan: 30 to 59 days, 60 to 89 days, 90 days
or more; (b) as to which foreclosure has commenced; and (c) as to which REO
Property has been acquired;
(xi) with respect to each Mortgage Loan, the amount and severity of any
realized loss following liquidation of such Mortgage Loan;
(xii) with respect to each Mortgage Loan, and in the aggregate for all
Mortgage Loans, the amount of any Monthly Advances made by the Servicer during
the prior distribution period;
(xiii) with respect to each Mortgage Loan, the amount of any Monthly
Advances and Nonrecoverable Advances reimbursed to the Servicer with respect to
such Mortgage Loan during the prior distribution period pursuant to Section
11.05, and the source of funds for such reimbursement, and the aggregate amount
of any Monthly Advances and Nonrecoverable Advances reimbursed to the Servicer
for all Mortgage Loans during the prior distribution period pursuant to Section
11.05;
(xiv) with respect to any Mortgage Loan, a description of any material
modifications, extensions or waivers to the terms, fees, penalties or payments
of such Mortgage Loan during the prior distribution period or that have
cumulatively become material over time;
Exh 9-14
(xv) a description of any material breach of a representation or warranty
set forth in Subsections 7.01 or 7.02 herein or of any other breach of a
covenant or condition contained herein and the status of any resolution of such
breach;
(xvi) with respect to each Mortgage Loan, the Stated Principal Balance of
any substitute Mortgage Loan provided by the Servicer and the Stated Principal
Balance of any Mortgage Loan that has been replaced by a substitute Mortgage
Loan in accordance with Subsection 7.04; and
(xvii) with respect to each Mortgage Loan, the Stated Principal Balance of
any Mortgage Loan that has been repurchased by the Servicer in accordance with
Subsection 7.05.
In addition, the Servicer shall provide to the Purchaser such other
information known or available to the Servicer that is necessary in order to
provide the distribution and pool performance information as required under Item
1121 of Regulation AB, as amended from time to time, as determined by the
Purchaser in its sole discretion.
In addition, not more than sixty days after the end of each calendar year,
the Servicer shall furnish to each Person who was the Purchaser at any time
during such calendar year, (i) as to the aggregate of remittances for the
applicable portion of such year, an annual statement in accordance with the
requirements of applicable federal income tax law, and (ii) listing of the
principal balances of the Mortgage Loans outstanding at the end of such calendar
year.
The Servicer shall prepare and file any and all tax returns, information
statements or other filings required to be delivered to any governmental taxing
authority or to any Purchaser pursuant to any applicable law with respect to the
Mortgage Loans and the transactions contemplated hereby. In addition, the
Servicer shall provide the Purchaser with such information concerning the
Mortgage Loans as is necessary for the Purchaser to prepare its federal income
tax return as any Purchaser may reasonably request from time to time.
Subsection 11.17 Real Estate Owned Reports.
--------------------------
Together with the statement furnished pursuant to Subsection 11.02, with
respect to any REO Property, the Servicer shall furnish to the Purchaser a
statement covering the Servicer's efforts in connection with the sale of such
REO Property and any rental of such REO Property incidental to the sale thereof
for the previous month, together with the operating statement. Such statement
shall be accompanied by such other information as the Purchaser shall reasonably
request.
Subsection 11.18 Liquidation Reports.
--------------------
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed-in-lieu of foreclosure, the Servicer
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Exh 9-15
Subsection 11.19 Assumption Agreements.
----------------------
The Servicer shall, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (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 any
"due-on-sale" clause applicable thereto; provided, however, that the Servicer
shall not exercise any such rights if prohibited by law from doing so or if the
exercise of such rights would impair or threaten to impair any recovery under
the related Primary Insurance Policy, if any. If the Servicer reasonably
believes it is unable under applicable law to enforce such "due-on-sale" clause,
the Servicer shall enter into an assumption agreement with the person to whom
the Mortgaged 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. Where
an assumption is allowed pursuant to this Subsection 11.19, the Servicer, with
the prior written consent of the insurer under the Primary Insurance Policy, if
any, is authorized to enter into a substitution of liability agreement with the
person to whom the Mortgaged Property has been conveyed or is proposed to be
conveyed pursuant to which the original Mortgagor is released from liability and
such Person is substituted as Mortgagor and becomes liable under the related
Mortgage Note. Any such substitution of liability agreement shall be in lieu of
an assumption agreement.
In connection with any such assumption or substitution of liability, the
Servicer shall follow the underwriting practices and procedures of prudent
mortgage lenders in the state in which the related Mortgaged Property is
located. With respect to an assumption or substitution of liability, Mortgage
Interest Rate, the amount of the Monthly Payment, and the final maturity date of
such Mortgage Note may not be changed. The Servicer shall notify the Purchaser
that any such substitution of liability or assumption agreement has been
completed by forwarding to the Purchaser the original of any such substitution
of liability or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Servicer for entering into
an assumption or substitution of liability agreement in excess of 1% of the
outstanding principal balance of the Mortgage Loan shall be deposited in the
Custodial Account pursuant to Subsection 11.04.
Notwithstanding the foregoing paragraphs of this Subsection 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 any assumption which the
Servicer may be restricted by law from preventing, for any reason whatsoever.
For purposes of this Subsection 11.19, 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.
Subsection 11.20 Satisfaction of Mortgages and Release of Mortgage Files.
-------------------------------------------------------
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Purchaser
by a certification of a servicing officer of the Servicer (a "Servicing
Exh 9-16
Officer"), 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 Custodial Account pursuant to Subsection 11.04
have been or will be so deposited, and shall request execution of any document
necessary to satisfy the Mortgage Loan and delivery to it of the portion of the
Mortgage File held by the Purchaser or the Purchaser's designee. Upon receipt of
such certification and request, the Purchaser, shall promptly release the
related mortgage documents to the Servicer and the Servicer shall prepare and
process any satisfaction or release. No expense incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Custodial Account or the Purchaser.
In the event the Servicer satisfies or releases a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage or should
it otherwise prejudice any right the Purchaser may have under the mortgage
instruments, the Servicer, upon written demand, shall remit to the Purchaser the
then outstanding principal balance of the related Mortgage Loan by deposit
thereof in the Custodial Account. The Servicer shall maintain the fidelity bond
insuring the Servicer against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the servicing or foreclosure of
the Mortgage Loan, including, for this purpose, collection under any Primary
Insurance Policy, the Purchaser shall, upon request of the Servicer and delivery
to the Purchaser of a servicing receipt signed by a Servicing Officer, release
the requested portion of the Mortgage File held by the Purchaser to the
Servicer. Such servicing receipt shall obligate the Servicer to return the
related Mortgage documents to the Purchaser 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
Custodial 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 to the Purchaser a certificate of a Servicing Officer
certifying as to 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 certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated, the servicing receipt shall be released by the Purchaser to
the Servicer.
Subsection 11.21 Servicing Compensation.
-----------------------
As compensation for its services hereunder, the Servicer shall be entitled
to withdraw from the Custodial Account or to retain from interest payments on
the Mortgage Loans the amounts provided for as the Servicer's Servicing Fee.
Additional servicing compensation in the form of assumption fees, as provided in
Subsection 11.19, and late payment charges and similar ancillary servicing
compensation shall be retained by the Servicer to the extent not required to be
deposited in the Custodial Account. The Servicer shall not be permitted to
retain any portion of the Prepayment Charges collected on the Mortgage Loans,
which Prepayment Charges shall be remitted to the Purchaser. The Servicer shall
be required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided for.
Exh 9-17
Subsection 11.22 Notification of Adjustments.
----------------------------
On each Adjustment Date, the Servicer shall make interest rate adjustments
for each Adjustable Rate Mortgage Loan in compliance with the requirements of
the related Mortgage and Mortgage Note. The Servicer shall execute and deliver
the notices required by each Mortgage and Mortgage Note regarding interest rate
adjustments. The Servicer also shall provide timely notification to the
Purchaser of all applicable data and information regarding such interest rate
adjustments and the Servicer's methods of implementing such interest rate
adjustments. Upon the discovery by the Servicer or the Purchaser that the
Servicer has failed to adjust a Mortgage Interest Rate or a Monthly Payment
pursuant to the terms of the related Mortgage Note and Mortgage, the Servicer
shall immediately deposit in the Custodial Account from its own funds the amount
of any interest loss caused thereby without reimbursement therefor.
Subsection 11.23 Annual Statement as to Compliance; Annual Certification.
-------------------------------------------------------
(a) The Servicer will deliver to the Purchaser, not later than March 1 of
each fiscal year, beginning in 2007, an Officers' Certificate (an "Annual
Statement of Compliance") stating, as to each signatory thereof, that (i) a
review of the activities of the Servicer during the preceding year and of
performance under this Agreement or other applicable servicing agreement has
been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement or other applicable servicing agreement
throughout such year, or, if there has been a failure to fulfill any such
obligation, specifying each such failure known to such officer and the nature
and status thereof. Copies of such statement shall be provided by the Purchaser
to any Person identified as a prospective purchaser of the Mortgage Loans. The
Purchaser shall notify the Servicer prior to providing any such copies. In the
event that the Servicer has delegated any servicing responsibilities with
respect to the Mortgage Loans to a Subservicer, the Servicer shall deliver an
officer's certificate of the Subservicer as described above as to each
Subservicer as and when required with respect to the Servicer.
(b) With respect to any Mortgage Loans that are subject to a Pass-Through
Transfer or other securitization transaction, by March 1 of each calendar year,
beginning in 2007, an officer of the Servicer shall execute an Officer's
Certificate (an "Annual Certification") and deliver it to the Purchaser, any
master servicer which is master servicing loans in connection with such
transaction (a "Master Servicer") and any related depositor (a "Depositor") for
the benefit of each such entity and such entity's affiliates and the officers,
directors and agents of any such entity and such entity's affiliates, in the
form attached hereto as Exhibit 12. Such Officer's Certificate shall not be
provided to any other Person unless the Purchaser first notifies the Servicer of
its intention to do so. In the event that the Servicer has delegated any
servicing responsibilities with respect to the Mortgage Loans to a Subservicer,
the Servicer shall deliver an officers' certificate of the Subservicer as
described above as to each Subservicer as and when required with respect to the
Servicer.
(c) The Servicer shall indemnify and hold harmless the Master Servicer, the
Depositor, the Purchaser (and if this Agreement has been assigned in whole or in
part by the Purchaser, any and all Persons previously acting as "Purchaser"
Exh 9-18
hereunder), and their respective officers, directors, agents and affiliates, and
such affiliates' officers, directors and agents (any such person, an
"Indemnified Party") from and against any losses, damages, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach by the Servicer or any of its
officers, directors, agents or affiliates of its obligations under this Section
11.23 or Section 11.24, or the negligence, bad faith or willful misconduct of
the Servicer in connection therewith. If the indemnification provided for herein
is unavailable or insufficient to hold harmless any Indemnified Party, then the
Servicer agrees that it shall contribute to the amount paid or payable by the
Indemnified Party as a result of the losses, claims, damages or liabilities of
the Indemnified Party in such proportion as is appropriate to reflect the
relative fault of the Indemnified Party on the one hand and the Servicer in the
other in connection with a breach of the Servicer's obligations under this
Section 11.23 or Section 11.24, or the Servicer's negligence, bad faith or
willful misconduct in connection therewith.
Subsection 11.24 Annual Independent Certified Public Accountants'
------------------------------------------------
Servicing Report.
-----------------
Not later than March 1 of each fiscal year, beginning in 2006, the Servicer
at its expense shall cause a firm of independent public accountants (which may
also render other services to the Servicer) which is a member of the American
Institute of Certified Public Accountants to furnish a report (a "USAP Report")
to the Purchaser or its designee to the effect that such firm has examined
certain documents and records relating to the servicing of the Mortgage Loans
under this Agreement or of mortgage loans under pooling and servicing agreements
(including the Mortgage Loans and this Agreement) substantially similar one to
another (such statement to have attached thereto a schedule setting forth the
pooling and servicing agreements covered thereby) and that, on the basis of such
examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, such firm confirms that such servicing
has been conducted in compliance with such pooling and servicing agreements
examined pursuant to this Section 11.25 during the preceding fiscal year, except
for (i) such exceptions as such firm shall believe to be immaterial, and (ii)
such other exceptions as shall be set forth in such USAP Report. Such USAP
Report shall contain no restrictions or limitations on its use. Copies of such
USAP Reports shall be provided by the Servicer to the Purchaser. In addition, on
an annual basis, the Servicer shall provide the Purchaser with copies of its
audited financial statements.
In the event that the Servicer has delegated any servicing responsibilities
with respect to the Mortgage Loans to a Subservicer, the Servicer shall provide
a USAP report of the Subservicer as described above as to each Subservicer as
and when required with respect to the Servicer.
Notwithstanding the foregoing, the Servicer's obligation to deliver a USAP
Report under this Section, as to the Servicer or any Subservicer, as to any
fiscal year, beginning with the report required in March 2007, shall be
satisfied if an Assessment of Compliance and Attestation Report is delivered in
compliance with Section 11.30 for such fiscal year with respect to that entity.
Exh 9-19
Subsection 11.25 Access to Certain Documentation.
--------------------------------
The Servicer shall provide to the Office of Thrift Supervision, the FDIC
and any other federal or state banking or insurance regulatory authority that
may exercise authority over the Purchaser access to the documentation regarding
the Mortgage Loans serviced by the Servicer required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Servicer. In addition, access to the documentation will be provided to the
Purchaser and any Person identified to the Servicer by the Purchaser without
charge, upon reasonable request during normal business hours at the offices of
the Servicer.
Subsection 11.26 Prepayment Charges.
-------------------
(a) Notwithstanding anything in this Agreement to the contrary, in the event of
a Principal Prepayment in full or in part of a Mortgage Loan, the Seller may not
waive any Prepayment Charge or portion thereof required by the terms of the
related Mortgage Note unless (i) the enforceability thereof shall have been
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally or (ii) the collectability thereof
shall have been limited due to acceleration in connection with a foreclosure or
other involuntary payment, or (iii) in the Seller's reasonable judgment as
described herein, (x) such waiver relates to a default or a reasonably
foreseeable default, (y) such waiver would maximize recovery of total proceeds
taking into account the value of such Prepayment Premium and related Mortgage
Loan and (z) doing so is standard and customary in servicing similar Mortgage
Loans (including any waiver of a Prepayment Charge in connection with a
refinancing of a Mortgage Loan that is related to a default or a reasonably
foreseeable default). In no event will the Servicer waive a Prepayment Charge in
connection with a refinancing of a Mortgage Loan that is not related to a
default or a reasonably foreseeable default.
(b) If the Servicer waives or does not collect all or a portion of
Prepayment Charge relating to a Principal Prepayment in full or in
part due to any action or omission of the Servicer, other than as
provided above, the Servicer shall deposit the amount of such
Prepayment Charge(or such portion thereof as had been properly waived)
into the Custodial Account for distribution in accordance with the
terms of this Agreement. Subsection 11.27 Reports and Returns to be
Filed by the Servicer.
The Servicer shall file information reports with respect to the receipt of
mortgage interest received in a trade or business, reports of foreclosures and
abandonments of any Mortgaged Property and information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
Subsection 11.28 Superior Liens.
---------------
With respect to each second lien Mortgage, the Seller shall, for the
protection of the Purchaser's interest, file (or cause to be filed) of record a
request for notice of any action by a superior lienholder where permitted by
Exh 9-20
local law and whenever applicable state law does not require that a junior
lienholder be named as a party defendant in foreclosure proceedings in order to
foreclose such junior lienholder's equity of redemption. The Seller shall also
notify any superior lienholder in writing of the existence of the Mortgage Loan
and request notification of any action (as described below) to be taken against
the Borrower or the Mortgaged Property by the superior lienholder.
If the Seller is notified that any superior lienholder has accelerated or
intends to accelerate the obligations secured by the superior lien, or has
declared or intends to declare a default under the superior mortgage or the
promissory note secured thereby, or has filed or intends to file an election to
have the Mortgaged Property sold or foreclosed, the Seller shall take whatever
actions are necessary to protect the interests of the Purchaser, and/or to
preserve the security of the related Mortgage Loan, subject to any requirements
applicable to real estate mortgage investment conduits pursuant to the Internal
Revenue Code. The Seller shall make a Servicing Advance of the funds necessary
to cure the default or reinstate the superior lien if the Seller determines that
such Servicing Advance is in the best interests of the Purchaser. The Seller
shall not make such a Servicing Advance except to the extent that it determines
that such advance would not be a Nonrecoverable Servicing Advance from
Liquidation Proceeds on the related Mortgage Loan. The Seller shall thereafter
take such action as is necessary to recover the amount so advanced.
Subsection 11.29 Assessment of Compliance with Servicing Criteria.
------------------------------------------------
On and after January 1, 2006, the Servicer shall service and administer,
and shall cause each subservicer to service or administer, the Mortgage Loans in
accordance with all applicable requirements of the Servicing Criteria.
With respect to any Mortgage Loans that are the subject of a Pass-Through
Transfer, the Servicer shall deliver to the Purchaser or its designee on or
before March 1 of each fiscal year beginning in 2007, a report (an "Assessment
of Compliance") reasonably satisfactory to the Purchaser regarding the
Servicer's assessment of compliance with the Servicing Criteria during the
preceding fiscal year as required by Rules 13a-18 and 15d-18 of the Exchange Act
and Item 1122 of Regulation AB, which as of the date hereof, require a report by
an authorized officer of the Servicer that contains the following:
(a) A statement by such officer of its responsibility for assessing
compliance with the Servicing Criteria applicable to the Servicer;
(b) A statement by such officer that such officer used the Servicing
Criteria to assess compliance with the Servicing Criteria applicable to the
Servicer;
(c) An assessment by such officer of the Servicer's compliance with the
applicable Servicing Criteria for the period consisting of the preceding fiscal
year, including disclosure of any material instance of noncompliance with
respect thereto during such period, which assessment shall be based on the
activities it performs with respect to asset-backed securities transactions
taken as a whole involving the Servicer, that are backed by the same asset type
as the Mortgage Loans;
Exh 9-21
(d) A statement that a registered public accounting firm has issued an
attestation report on the Servicer's Assessment of Compliance for the period
consisting of the preceding fiscal year; and
(e) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Servicer, which statement shall be based on the activities it
performs with respect to asset-backed securities transactions taken as a whole
involving the Servicer, that are backed by the same asset type as the Mortgage
Loans.
Such report at a minimum shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit 17 hereto
delivered to the Purchaser concurrently with the execution of this Agreement.
With respect to any Mortgage Loans that are the subject of a Pass-Through
Transfer, on or before March 1 of each fiscal year beginning in 2007, the
Servicer shall furnish to the Purchaser or its designee a report (an
"Attestation Report") by a registered public accounting firm that attests to,
and reports on, the Assessment of Compliance made by the Servicer, as required
by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation
AB, which Attestation Report must be made in accordance with standards for
attestation reports issued or adopted by the Public Company Accounting Oversight
Board.
The Servicer shall cause each Subservicer, and each Subcontractor
determined by the Servicer pursuant to Subsection 11.30(c) to be "participating
in the servicing function" within the meaning of Item 1122 of Regulation AB, to
deliver to the Purchaser and any Depositor an assessment of compliance and
accountants' attestation as and when provided in clause (11) of Section 12.
Subsection 11.30. Use of Subservicers and Subcontractors.
--------------------------------------
(a) The Servicer shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Servicer as servicer under
this Agreement or any Reconstitution Agreement unless the Servicer complies with
the provisions of paragraph (b) of this Section. The Servicer shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Servicer as servicer under this Agreement
or any Reconstitution Agreement unless the Servicer complies with the provisions
of paragraph (d) of this Subsection.
(b) The Servicer shall cause any Subservicer used by the Servicer (or by
any Subservicer) for the benefit of the Purchaser and any Depositor to comply
with the provisions of this Subsection and with Subsections 11.23, 11.24 and 12
of this Agreement to the same extent as if such Subservicer were the Servicer,
and to provide the information required with respect to such Subservicer under
Section 12A(15) of this Agreement. The Servicer shall be responsible for
obtaining from each Subservicer and delivering to the Purchaser and any
Depositor any Annual Statement of Compliance required to be delivered by such
Subservicer under Section 11.23, any Assessment of Compliance and Attestation
Report required to be delivered by such Subservicer under Section 11.24 and any
Exh 9-22
Annual Certification required under Section 11.24 as and when required to be
delivered.
(c) The Servicer shall promptly upon request provide to the Purchaser and
any Depositor (or any designee of the Depositor, such as a master servicer or
administrator) a written description (in form and substance satisfactory to the
Purchaser and such Depositor) of the role and function of each Subcontractor
utilized by the Servicer or any Subservicer, specifying (i) the identity of each
such Subcontractor, (ii) which (if any) of such Subcontractors are
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
(d) As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 11.29 and 12 of this
Agreement to the same extent as if such Subcontractor were the Servicer. The
Servicer shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any Assessment of Compliance and
Attestation Report required to be delivered by such Subcontractor under Section
11.29, in each case as and when required to be delivered.
Subsection 11.31 Intent of the Parties; Reasonableness.
--------------------------------------
In addition, the Purchaser, Seller and Servicer acknowledge and agree that
the purpose of Subsections 11.29, 11.30 and 12A(6) - (16) of this Agreement is
to facilitate compliance by the Purchaser and any Depositor with the provisions
of Regulation AB and related rules and regulations of the Commission. Although
Regulation AB is applicable by its terms only to offerings of asset-backed
securities that are registered under the Securities Act, the Seller and Servicer
acknowledge that investors in privately offered securities may require that the
Purchaser or any Depositor provide comparable disclosure in unregistered
offerings. References in this Agreement to compliance with Regulation AB include
provision of comparable disclosure in private offerings. Neither the Purchaser
nor any Depositor shall exercise its right to request delivery of information or
other performance under these provisions other than in good faith, or for
purposes other than compliance with the Securities Act, the Exchange Act and, in
each case, the rules and regulations of the Commission thereunder (or the
provision in a private offering of disclosure comparable to that required under
the Securities Act) and the Xxxxxxxx-Xxxxx Act. The Seller and Servicer
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
reasonable requests made by the Purchaser, any Master Servicer or any Depositor
in good faith for delivery of information under these provisions on the basis of
established or, to the extent applicable, evolving interpretations of Regulation
AB. In connection with any Pass-Through Transfer, the Seller and Servicer shall
cooperate fully with the Purchaser and any Master Servicer to deliver to the
Purchaser (including any of its assignees or designees), any Master Servicer and
any Depositor, any and all statements, reports, certifications, records and any
other information necessary in the good faith determination of the Purchaser,
the Master Servicer or any Depositor to permit the Purchaser, such Master
Exh 9-23
Servicer or such Depositor to comply with the provisions of Regulation AB,
together with such disclosures relating to the Seller, Servicer, any
Subservicer, any Third-Party Originator and the Mortgage Loans, or the servicing
of the Mortgage Loans, reasonably believed by the Purchaser or any Depositor to
be necessary in order to effect such compliance.
Subsection 11.32 Compliance with REMIC Provisions.
---------------------------------
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Seller shall not take
any action, cause the REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not taken,
as the case may be, could (i) endanger the status of the REMIC as a REMIC or
(ii) result in the imposition of a tax upon the REMIC (including but not limited
to the tax on "prohibited transactions" as defined in Section 860F(a)(2) of the
Code and the tax on "contributions" to a REMIC set forth in Section 860G(d) of
the Code) unless the Seller has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
Exh 9-24
EXHIBIT 10
----------
FORM OF
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This is an Assignment, Assumption and Recognition Agreement (this "AAR
Agreement") made as of _____, 200_, among [ ] (the "Assignor"),
____________________ (the "Assignee") [not individually but solely as trustee on
behalf of the holders of the ___________, Series ____, Asset-Backed
Certificates] and _______________ (the "Company").
In consideration of the mutual promises contained herein the parties hereto
agree that the residential mortgage loans (the "Assigned Loans") listed on
Attachment 1 annexed hereto (the "Assigned Loan Schedule") purchased by Assignor
from Company pursuant to (a) the Master Mortgage Loan Purchase and Servicing
Agreement, dated as of _____, 200_, between Assignor and Company (the "Purchase
Agreement"), shall be subject to the terms of this AAR Agreement. Capitalized
terms used herein but not defined shall have the meanings ascribed to them in
the Purchase Agreement.
Assignment and Assumption
-------------------------
1. Assignor hereby grants, transfers and assigns to Assignee all of the
right, title and interest of Assignor in the Assigned Loans and, as they relate
to the Assigned Loans, all of its right, title and interest in, to and under the
Purchase Agreement. Assignor specifically reserves and does not assign to
Assignee any right title and interest in, to or under any Mortgage Loans subject
to the Agreements other than those set forth on Attachment l.
Recognition of the Company
--------------------------
2. [For Securitization Transactions include this sentence: From and after
the date hereof, the Company shall and does hereby recognize that the Assignee
will transfer the Mortgage Loans and assign its rights under the Purchase
Agreement (solely to the extent set forth herein) and this AAR Agreement to
______________________________ (the "Trust") created pursuant to a Pooling and
Servicing Agreement, dated as of _______________, 200__ (the "Pooling
Agreement"), among the Assignee as trustee (including its successors in interest
and any successor trustees under the Pooling Agreement), the Assignor and
_________________________, as servicer (including its successors in interest and
any successor servicer under the Pooling Agreement, the "Servicer").] The
Company hereby acknowledges and agrees that from and after the date hereof (i)
the [Trust][Assignee] will be the owner of the Mortgage Loans, (ii) the Company
shall look solely to the [Trust][Assignee] for performance of any obligations of
the Assignor insofar as they relate to the enforcement of the representations,
warranties and covenants with respect to the Mortgage Loans, (iii) the
[Assignee][Trust (including the Assignee and the Servicer acting on the Trust's
behalf)] shall have all the rights and remedies available to the Assignor,
insofar as they relate to the Mortgage Loans, under the Purchase Agreement,
including, without limitation, the enforcement of the document delivery
requirements and remedies with respect to breaches of representations and
warranties set forth in the Purchase Agreement, and shall be entitled to enforce
all of the obligations of the Company thereunder insofar as they relate to the
Exh 10-1
Mortgage Loans, and (iv) all references to the Purchaser (insofar as they relate
to the rights, title and interest and, with respect to obligations of the
Purchaser, only insofar as they relate to the enforcement of the
representations, warranties and covenants of the Company) under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the [Assignee] [Trust (including the Assignee and the Servicer acting on the
Trust's behalf)]. Neither the Company nor the Assignor shall amend or agree to
amend, modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Assignee.
Representations; Warranties and Covenants
-----------------------------------------
3. Assignor warrants and represents to Assignee and Company as of the date
hereof:
a. Attached hereto as Attachment 2 is a true and accurate copy
of the Purchase Agreement, which agreement is in full force
and effect as of the date hereof and the provisions of which
have not been waived, amended or modified in any respect,
nor has any notice of termination been given thereunder;
b. Assignor is the lawful owner of the Assigned Loans with full
right to transfer the Assigned Loans and any and all of its
interests, rights and obligations under the Purchase
Agreement as they relate to the Assigned Loans, free and
clear of any and all liens, claims and encumbrances; and
upon the transfer of the Assigned Loans to Assignee as
contemplated herein, Assignee shall have good title to each
and every Assigned Loan, as well as any and all of
Assignor's interests, rights and obligations under the
Purchase Agreement as they relate to the Assigned Loans,
free and clear of any and all liens, claims and
encumbrances;
c. Assignor has not received notice of, and has no knowledge
of, any offsets, counterclaims or other defenses available
to Company with respect to the Assigned Loans or the
Purchase Agreement;
d. Assignor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of
its formation, and has all requisite power and authority to
acquire, own and sell the Assigned Loans;
e. Assignor has full power and authority to execute, deliver
and perform its obligations under this AAR Agreement, and to
consummate the transactions set forth herein. The
consummation of the transactions contemplated by this AAR
Agreement is in the ordinary course of Assignor's business
and will not conflict with, or result in a breach of, any of
the terms, conditions or provisions of Assignor's charter or
by-laws or any legal restriction, or any material agreement
Exh 10-2
or instrument to which Assignor is now a party or by which
it is bound, or result in the violation of any law, rule,
regulation, order, judgment or decree to which Assignor or
its property is subject. The execution, delivery and
performance by Assignor of this AAR Agreement and the
consummation by it of the transactions contemplated hereby,
have been duly authorized by all necessary action on the
part of Assignor. This AAR Agreement has been duly executed
and delivered by Assignor and, upon the due authorization,
execution and delivery by Assignee and Company, will
constitute the valid and legally binding obligation of
Assignor enforceable against Assignor in accordance with its
terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights
generally, and by general principles of equity regardless of
whether enforceability is considered in a proceeding in
equity or at law;
f. No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental
entity is required to be obtained or made by Assignor in
connection with the execution, delivery or performance by
Assignor of this AAR Agreement, or the consummation by it of
the transactions contemplated hereby; and
g. There is no action, suit, proceeding, investigation or
litigation pending or, to Assignor's knowledge, threatened,
which either in any instance or in the aggregate, if
determined adversely to Assignor, would adversely affect
Assignee's execution or delivery of, or the enforceability
of, this AAR Agreement, or the Assignor's ability to perform
its obligations under this AAR Agreement.
4. Assignee warrants and represents to, and covenants with, Assignor and
Company as of the date hereof:
a. Assignee is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
organization and has all requisite power and authority to
acquire and [own] [hold] the Assigned Loans [as trustee on
behalf of the Trust];
b. Assignee has full power and authority to execute, deliver
and perform its obligations under this AAR Agreement, and to
consummate the transactions set forth herein. The
consummation of the transactions contemplated by this AAR
Agreement is in the ordinary course of Assignee's business
and will not conflict with, or result in a breach of, any of
the terms, conditions or provisions of Assignee's
organizational documentation or any legal restriction, or
any material agreement or instrument to which Assignee is
now a party or by which it is bound, or result in the
violation of any law, rule, regulation, order, judgment or
Exh 10-3
decree to which Assignee or its property is subject. The
execution, delivery and performance by Assignee of this AAR
Agreement and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all
necessary action on the part of Assignee. This AAR Agreement
has been duly executed and delivered by Assignee and, upon
the due authorization, execution and delivery by Assignor
and Company, will constitute the valid and legally binding
obligation of Assignee enforceable against Assignee in
accordance with its terms except as enforceability may be
limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and by general
principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
c. No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental
entity is required to be obtained or made by Assignee in
connection with the execution, delivery or performance by
Assignee of this AAR Agreement, or the consummation by it of
the transactions contemplated hereby; and
d. There is no action, suit, proceeding, investigation or
litigation pending or, to Assignee's knowledge, threatened,
which either in any instance or in the aggregate, if
determined adversely to Assignee, would adversely affect
Assignee's execution or delivery of, or the enforceability
of, this AAR Agreement, or the Assignee's ability to perform
its obligations under this AAR Agreement.
5. Company warrants and represents to, and covenants with, Assignor and
Assignee as of the date hereof:
a. Attached hereto as Attachment 2 is a true and accurate copy
of the Purchase Agreement, which agreement is in full force
and effect as of the date hereof and the provisions of which
have not been waived, amended or modified in any respect,
nor has any notice of termination been given thereunder;
b. Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation, and has all requisite power and authority to
perform its obligations under the Purchase Agreement;
c. Company has full corporate power and authority to execute,
deliver and perform its obligations under this AAR
Agreement, and to consummate the transactions set forth
herein. The consummation of the transactions contemplated by
this AAR Agreement is in the ordinary course of Company's
business and will not conflict with, or result in a breach
of, any of the terms, conditions or provisions of Company's
organizational documentation or any legal restriction, or
any material agreement or instrument to which Company is now
a party or by which it is bound, or result in the violation
Exh 10-4
of any law, rule, regulation, order, judgment or decree to
which Company or its property is subject. The execution,
delivery and performance by Company of this AAR Agreement
and the consummation by it of the transactions contemplated
hereby, have been duly authorized by all necessary corporate
action on the part of Company. This AAR Agreement has been
duly executed and delivered by Company, and, upon the due
authorization, execution and delivery by Assignor and
Assignee, will constitute the valid and legally binding
obligation of Company, enforceable against Company in
accordance with its terms except as enforceability may be
limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and by general
principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
d. No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental
entity is required to be obtained or made by Company in
connection with the execution, delivery or performance by
Company of this AAR Agreement, or the consummation by it of
the transactions contemplated hereby;
e. There is no action, suit, proceeding, investigation or
litigation pending or, to Company's knowledge, threatened,
which either in any instance or in the aggregate, if
determined adversely to Company, would adversely affect
Company's execution or delivery of, or the enforceability
of, this AAR Agreement, or the Company's ability to perform
its obligations under this AAR Agreement; and
f. Pursuant to Section 12 of the Purchase Agreement, the
Company hereby represents and warrants, for the benefit of
the Assignor, the Assignee [and the Trust,] that the
representations and warranties set forth in Section 7.01 and
7.02 of the Purchase Agreement, are true and correct as of
the date hereof, except that the representation and warranty
set forth in Section 7.02(i) shall, for purposes of this AAR
Agreement, relate to the Mortgage Loan Schedule attached
hereto.
[Additional Representations and Warranties Necessary for Securitization]
6. The Company hereby acknowledges and agrees that the remedies available
to the Assignor, the Assignee [and the Trust (including the Assignee and the
Servicer acting on the Trust's behalf)] in connection with any breach of the
representations and warranties made by the Company set forth in Section 4 hereof
shall be as set forth in Subsection 7.03 of the Purchase Agreement as if they
were set forth herein (including without limitation the repurchase and indemnity
obligations set forth therein).
Exh 10-5
7. [Notwithstanding any term hereof to the contrary, the execution and
delivery of this AAR Agreement by the Assignee is solely in its capacity as
trustee for the Trust and not individually, and any recourse against the
Assignee in respect of any obligations it may have under or pursuant to the
terms of this AAR Agreement shall be limited solely to the assets it may hold as
trustee of the Trust.]
Miscellaneous
-------------
8. All demands, notices and communications related to the Assigned Loans,
the Agreements and this AAR Agreement shall be in writing and shall be deemed to
have been duly given if personally delivered or mailed by registered mail,
postage prepaid, as follows:
a. In the case of Company,
GreenPoint Mortgage Funding, Inc.
000 Xxxx Xxxxxx Xxxxx
Novato, _CA 94945_____
Attn: Xxxxx Xxxxx
b. In the case of Assignor,
[ ]
Attention: [__________]
c. In the case of Assignee,
[Assignee]
----------------
----------------, ------------ -----
Attn: _____________
9. This AAR Agreement shall be construed in accordance with the laws of the
State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
10. No term or provision of this AAR Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
11. This AAR Agreement shall inure to the benefit of the successors and
assigns of the parties hereto. Any entity into which Assignor, Assignee or
Company may be merged or consolidated shall without the requirement for any
further writing, be deemed Assignor, Assignee or Company, respectively
hereunder.
Exh 10-6
12. This AAR Agreement shall survive the conveyance of the Assigned Loans
as contemplated in this AAR Agreement.
13. This AAR Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
14. In the event that any provision of this AAR Agreement conflicts with
any provision of the Purchase Agreement with respect to the Assigned Loans, the
terms of this AAR Agreement shall control.
Exh 10-7
IN WITNESS WHEREOF, the parties hereto have executed this AAR Agreement as
of the day and year first above written.
[ ]
Assignor
By:
-----------------------------------------
Name:
Title:
[ASSIGNEE]
By:
-----------------------------------------
Name:
Title:
[COMPANY]
Company
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Exh 10-8
ATTACHMENT l
ASSIGNED LOAN SCHEDULE
Xxx 00-0
XXXXXXXXXX 0
XXXXXXXX XXXXXXXXX
Xxx 10-10
EXHIBIT 11
----------
FORM OF INDEMNIFICATION AGREEMENT
ADD CROSS INDEMNIFICATION
This Indemnification Agreement (the "Agreement"), dated as of _____, 200_
(the "Settlement Date"), by and between [ ] (such entity, and its successors and
assigns, being referred to herein as the "Depositor") and [COMPANY] (the
"Company").
The Depositor and the Company hereby recite and agree as follows:
RECITALS
1. [ ] (the "Seller") has purchased certain [adjustable]-rate, [first] lien
mortgage loans (the "Mortgage Loans") from the Company and intends to transfer
all of its right, title and interest in and to the Mortgage Loans to the
_______________ (the "Trust") pursuant to the terms of a Pooling and Servicing
Agreement, dated as of _____, 200_ (the "Pooling and Servicing Agreement"), by
and among the Seller, the Depositor, _________ as [master] servicer and
___________, as trustee of the Trust (the "Trustee").
2. In exchange for the Mortgage Loans, the Trust shall issue to the Seller
___________________________, Series _____, Asset-Backed Certificates (the
"Certificates") pursuant to the terms of the Pooling and Servicing Agreement.
3. In accordance with an Underwriting Agreement, dated _____, 200_ (the
"Underwriting Agreement"), the Depositor will sell to [ ]. (the "Underwriter")
the Certificates.
4. The Certificates will be offered and sold by the Underwriter pursuant to
the terms and conditions of the Underwriting Agreement, through the use of a
prospectus supplement to be dated as of the date of its printing but not later
than the Settlement Date (the "Prospectus Supplement") and a related prospectus
dated _____, 200_, (the "Base Prospectus" and together with the Prospectus
Supplement, the "Prospectus").
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises herein made and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Representations and Warranties.
-------------------------------
(a) The Company hereby represents and warrants to the Depositor, as of the
date of this Agreement, that:
(i) the Company has been duly organized and is validly existing and in
good standing as a [corporation] under the laws of the State of __________,
Exh 11-1
with full power and authority to enter into and perform its obligations
under this Agreement; and
(ii) this Agreement has been duly authorized, executed and delivered
by the Company and constitutes a legal, valid and binding agreement of the
Company, enforceable against it in accordance with its terms, subject to
(A) bankruptcy, insolvency, receivership, conservatorship or other similar
laws affecting creditors' rights generally, (B) general principles of
equity regardless of whether enforcement is sought in a proceeding in
equity or at law, and (C) public policy considerations limiting the
enforceability of provisions of this Agreement that purport to provide
indemnification from liabilities under applicable securities laws.
(b) The Company represents and warrants to the Depositor that as of the
Settlement Date:
(i) the information set forth in the Prospectus Supplement under [TO
BE DETERMINED], (such information, the "Company Information") does not
contain an untrue statement of a material fact; and
(ii) the Company Information does not omit or fail to state any
material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(c) The Depositor hereby represents and warrants to the Company that as of
the date of this Agreement:
(ii) it is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate
power and authority to enter into and perform its obligations under this
Agreement; and
(iii) this Agreement has been duly authorized, executed and delivered
by the Depositor and constitutes the legal, valid and binding agreement of
the Depositor enforceable against the Depositor in accordance with its
terms, subject to (A) bankruptcy, insolvency, receivership,
conservatorship, reorganization, moratorium or other similar laws affecting
creditors' rights generally, (B) general principals of equity regardless of
whether enforcement is sought in a proceeding in equity or at law, and (C)
public policy considerations limiting the enforceability of provisions of
this Agreement that purport to provide indemnification from penalties under
applicable securities laws.
2. Indemnification.
----------------
(a) Company (also referred to herein as the "Indemnifying Party") agrees to
indemnify and hold harmless the Depositor and each of its directors and officers
and affiliates and each person, if any, who controls the Depositor within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "Securities
Exh 11-2
Act"), or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (the "Indemnified Party") and any assignee thereof, against any
and all actual losses, claims, expenses, damages or liabilities to which the
Depositor or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (x) any untrue statement of any material fact contained in the Company
Information or omission to state therein, a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which such statements were made, not misleading (in each
case, regardless of whether a final judgment has been entered by a finder of
fact) or (y) any material misstatement or omission contained in the Prospectus
Supplement regarding information or statistics therein regarding the Mortgage
Loans based on information correctly derived by the Depositor or its affiliates
and included in the Prospectus Supplement which results or arises from
information actually provided in writing to the Depositor or its affiliates by
Company; and will promptly upon request reimburse any such reasonable legal or
other expenses reasonably incurred by the Depositor or any such director,
officer or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity agreement will be
in addition to any liability which Company may otherwise have.
(b) The Depositor and each Person who controls the Depositor
shall indemnify the Company, each affiliate of the Company, each
Person who controls any of such parties or the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act) and the respective present and former
directors, officers, employees and agents of each of the
foregoing and of the Company, and shall hold each of them
harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon (A) any untrue
statement of a material fact contained or alleged to be contained
in any offering materials related to a Pass-Through Transfer,
including without limitation the registration statement,
prospectus, prospectus supplement, any private placement
memorandum, any offering circular, any computational materials,
and any amendments or supplements to the foregoing (collectively,
the "Securitization Materials") or (B) the omission or alleged
omission to state in the Securitization Materials a material fact
required to be stated in the Securitization Materials or
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
but only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission is other than a
statement or omission arising out of, resulting from, or based
upon the Company Information.
(c) Promptly after receipt by the Indemnified Party under this Section 2 of
notice of the commencement of any action described therein, the Indemnified
Party will, if a claim in respect thereof is to be made against the Indemnifying
Party under this Section 2, notify the Indemnifying Party of the commencement
thereof, but the omission so to notify the Indemnifying Party will not relieve
the Indemnifying Party from any liability that it may have to the Indemnified
Exh 11-3
Party under this Agreement, except to the extent that such failure or delay in
notification materially prejudices the Indemnifying Party's defense of such
action or proceeding, and shall in no event relieve the Indemnifying Party from
any other obligation or liability which it may have to any Indemnified Person
otherwise than under this Agreement or with respect to any other action or
proceeding. In case any such action is brought against the Indemnified Party,
and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled to participate therein, and, to the extent
that it may wish to do so, jointly with any other Indemnifying Party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
the Indemnified Party, and, after notice from the Indemnifying Party to the
Indemnified Party under this Section 2, the Indemnifying Party shall not be
liable for any legal or other expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof other than reasonable out-of-pocket
costs of investigation.
(d) The Indemnified Party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Indemnified Party
unless: (i) the employment thereof has been specifically authorized by the
Indemnifying Party; (ii) the Indemnifying Party shall have been advised by such
counsel that there may be one or more legal defenses available to the
Indemnified Party which are different from or additional to those available to
the Indemnifying Party and in the reasonable judgment of such counsel it is
advisable for the Indemnified Party to employ separate counsel (iii) a conflict
exists between the Indemnified Party and the Indemnifying Party (in which case
the Indemnifying Party will not have the right to direct the defense of such
action on behalf of the Indemnified Party) or (iv) the Indemnifying Party has
failed to assume the defense of such action and employ counsel reasonably
satisfactory to the Indemnified Party, in which case, if the Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense of such action on behalf of the
Indemnified Party, it being understood, however, the Indemnifying Party shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to local
counsel) at any time for the Indemnified Party, which firm shall be designated
in writing by the Depositor or any of the Depositor's directors, officers or
controlling persons.
(e) The Indemnified Party, as a condition of the indemnity agreements
contained herein, shall use its best efforts to cooperate with the Indemnifying
Party in the defense of any such action or claim. The Indemnifying Party shall
not be liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action, the Indemnifying Party agrees to indemnify and hold harmless the
Indemnified Party from and against any loss or liability (to the extent set
forth herein as applicable) by reason of such settlement or judgment.
3. Successors and Assigns, Additional Information. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. No party hereto may assign either this Agreement or any
of its rights, interests or obligations hereunder without the prior written
approval of the other parties hereto.
Exh 11-4
4. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, covenants, indemnities and other statements of the
Depositor and the Company and their respective officers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Depositor or the Company and will
survive delivery of and payment for the Certificates. The provisions of Section
4 hereof shall survive the termination or cancellation of this Agreement.
5. Notices. All demands, notices and communications hereunder shall be in
writing, shall be effective only upon receipt and shall, if sent to the
Depositor, be addressed to it at [ ], if sent to the Company, be addressed to it
at, [ADDRESS], Attn: [---------].
6. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Neither this Agreement nor
any term hereof may be changed, waived, discharged or terminated except by a
writing signed by the party against whom enforcement of such change, waiver,
discharge or termination is sought. This Agreement may be signed in any number
of counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument. This Agreement supersedes all
prior or contemporaneous agreements and understandings relating to the subject
matter hereof.
7. Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Exh 11-5
IN WITNESS WHEREOF, the Depositor and the Company have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
[ ].
By: ____________________________
Name:
Title:
[COMPANY]
By: ____________________________
Name:
Title:
Exh 11-6
EXHIBIT 12
FORM OF ANNUAL CERTIFICATION
I, the _______________________ of [NAME OF COMPANY] certify to [the
Purchaser], [the Depositor], and the [Master Servicer] [Securities
Administrator] [Trustee], and their officers, with the knowledge and intent that
they will rely upon this certification, that:
(i) I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Company's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), and all servicing reports,
officer's certificates and other information relating to the servicing of
the Mortgage Loans by the Company during 200[ ] that were delivered to the
[Depositor] [Master Servicer] [Securities Administrator] [Trustee] pursuant
to the Agreement (collectively, the "Company Servicing Information");
(ii) Based on my knowledge, the Company Servicing Information, taken
as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in the
light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company
Servicing Information;
(iii) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
(iv) I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations under
the Agreement in all material respects; and
(v) The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Subservicer or
Subcontractor pursuant to the Agreement, have been provided to the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the [Depositor] [Master
Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports.
Exh 12-1
[COMPANY]
(Servicer)
By:
-----------------------------------------
Name:
Title:
Date:
Exh 12-2
EXHIBIT 13
----------
MORTGAGE LOAN DOCUMENTS
(a) the original Mortgage Note bearing all intervening
endorsements necessary to show a complete chain of
endorsements from the original payee, endorsed in blank,
"Pay to the order of _____________, without recourse", and,
if previously endorsed, signed in the name of the last
endorsee by a duly qualified officer of the last endorsee.
If the Mortgage Loan was acquired by the last endorsee in a
merger, the endorsement must be by "[name of last endorsee],
successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the last
endorsee while doing business under another name, the
endorsement must be by "[name of last endorsee], formerly
known as [previous name]";
(b) the original Assignment of Mortgage for each Mortgage Loan,
in form and substance acceptable for recording. The Mortgage
shall be assigned, with assignee's name left blank. If the
Mortgage Loan was acquired by the last assignee in a merger,
the Assignment of Mortgage must be made by "[name of last
assignee], successor by merger to [name of predecessor]". If
the Mortgage Loan was acquired or originated by the last
assignee while doing business under another name, the
Assignment of Mortgage must be by "[name of last assignee],
formerly known as [previous name];
(c) the original of each guarantee executed in connection with
the Mortgage Note, if any;
(d) the original recorded Mortgage, with evidence of recording
thereon. If in connection with any Mortgage Loan, the Seller
has not delivered or caused to be delivered the original
Mortgage with evidence of recording thereon on or prior to
the related Closing Date because of a delay caused by the
public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has been
lost or because such public recording office retains the
original recorded Mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, (i) in the case of a
delay caused by the public recording office, a copy of such
Mortgage certified by the Seller, escrow agent, title
insurer or closing attorney to be a true and complete copy
of the original recorded Mortgage and (ii) in the case where
a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such
Mortgage certified by such public recording office to be a
true and complete copy of the original recorded Mortgage;
Exh 13-1
(e) originals or a certified copy of each modification
agreement, if any;
(f) the originals of all intervening assignments of mortgage
with evidence of recording thereon evidencing a complete
chain of ownership from the originator of the Mortgage Loan
to the last assignee, or if any such intervening assignment
of mortgage has not been returned from the applicable public
recording office or has been lost or if such public
recording office retains the original recorded intervening
assignments of mortgage, a photocopy of such intervening
assignment of mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's
Certificate of the Seller, escrow agent, closing attorney or
the title insurer insuring the Mortgage stating that such
intervening assignment of mortgage has been delivered to the
appropriate public recording office for recordation and that
such original recorded intervening assignment of mortgage or
a copy of such intervening assignment of mortgage certified
by the appropriate public recording office to be a true and
complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the
Custodian upon receipt thereof by the party delivering the
Officer's Certificate or by the Seller; or (ii) in the case
of an intervening assignment of mortgage where a public
recording office retains the original recorded intervening
assignment of mortgage or in the case where an intervening
assignment of mortgage is lost after recordation in a public
recording office, a copy of such intervening assignment of
mortgage with recording information thereon certified by
such public recording office to be a true and complete copy
of the original recorded intervening assignment of mortgage;
(g) if the Mortgage Note, the Mortgage, any Assignment of
Mortgage or any other related document has been signed by a
Person on behalf of the Mortgagor, the copy of the power of
attorney or other instrument that authorized and empowered
such Person to sign;
(h) the original lender's title insurance policy (or a marked
title insurance commitment, in the event that an original
lender's title insurance policy has not yet been issued) in
the form of an ALTA mortgage title insurance policy,
containing each of the endorsements required by FNMA and
insuring the Purchaser and its successors and assigns as to
the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan; and
(i) original of any security agreement, chattel mortgage or
equivalent document executed in connection with the
Mortgage, if any.
Exh 13-2
EXHIBIT 14
----------
UNDERWRITING GUIDELINES
Exh 14-1
EXHIBIT 15
----------
SUMMARY OF REGULATION AB
SERVICING CRITERIA
NOTE: This Exhibit 15 is provided for convenience of reference only. In the
event of a conflict or inconsistency between the terms of this Exhibit 15 and
the text of Regulation AB, the text of Regulation AB, its adopting release and
other public statements of the SEC shall control.
Item 1122(d)
(a) General servicing considerations.
(1) Policies and procedures are instituted to monitor any performance
or other triggers and events of default in accordance with the transaction
agreements.
(2) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the third party's
performance and compliance with such servicing activities.
(3) Any requirements in the transaction agreements to maintain a
back-up servicer for the mortgage loans are maintained.
(4) A fidelity bond and errors and omissions policy is in effect on
the party participating in the servicing function throughout the reporting
period in the amount of coverage required by and otherwise in accordance with
the terms of the transaction agreements.
(b) Cash collection and administration.
(1) Payments on mortgage loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no more than two
business days following receipt, or such other number of days specified in the
transaction agreements.
(2) Disbursements made via wire transfer on behalf of an obligor or to
an investor are made only by authorized personnel.
(3) Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for such advances, are
made, reviewed and approved as specified in the transaction agreements.
(4) The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of overcollateralization, are
separately maintained (e.g., with respect to commingling of cash) as set forth
in the transaction agreements.
(5) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements. For purposes
of this criterion, "federally insured depository institution" with respect to a
foreign financial institution means a foreign financial institution that meets
the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
Exh 15-1
(6) Unissued checks are safeguarded so as to prevent unauthorized
access.
(7) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after the bank statement cutoff
date, or such other number of days specified in the transaction agreements; (C)
reviewed and approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
(c) Investor remittances and reporting.
(1) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction agreements and
applicable Commission requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal balance and number of
mortgage loans serviced by the Servicer.
(2) Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth in the
transaction agreements.
(3) Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of days specified
in the transaction agreements.
(4) Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank statements.
(d) Mortgage Loan administration.
(1) Collateral or security on mortgage loans is maintained as required
by the transaction agreements or related mortgage loan documents.
(2) Mortgage loan and related documents are safeguarded as required by
the transaction agreements.
(3) Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or requirements in
the transaction agreements.
Exh 15-2
(4) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to the Servicer's
obligor records maintained no more than two business days after receipt, or such
other number of days specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in accordance with the related
mortgage loan documents.
(5) The Servicer's records regarding the mortgage loans agree with the
Servicer's records with respect to an obligor's unpaid principal balance.
(6) Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction agreements
and related mortgage loan documents.
(7) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and repossessions,
as applicable) are initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the transaction agreements.
(8) Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the transaction
agreements. Such records are maintained on at least a monthly basis, or such
other period specified in the transaction agreements, and describe the entity's
activities in monitoring delinquent mortgage loans including, for example, phone
calls, letters and payment rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or unemployment).
(9) Adjustments to interest rates or rates of return for mortgage
loans with variable rates are computed based on the related mortgage loan
documents.
(10) Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the obligor's
mortgage loan documents, on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage loan documents and
state laws; and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other number of
days specified in the transaction agreements.
(11) Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration dates, as
indicated on the appropriate bills or notices for such payments, provided that
such support has been received by the Servicer at least 30 calendar days prior
to these dates, or such other number of days specified in the transaction
agreements.
(12) Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the Servicer's funds and not charged
to the obligor, unless the late payment was due to the obligor's error or
omission.
Exh 15-3
(13) Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the Servicer, or such other
number of days specified in the transaction agreements.
(14) Delinquencies, charge-offs and uncollectable accounts are
recognized and recorded in accordance with the transaction agreements.
(15) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth
in the transaction agreements.
Exh 15-4
EXHIBIT 16
----------
SUMMARY OF APPLICABLE REGULATION AB REQUIREMENTS
NOTE: This Exhibit 16 is provided for convenience of reference only. In the
event of a conflict or inconsistency between the terms of this Exhibit 16 and
the text of Regulation AB, the text of Regulation AB, its adopting release and
other public statements of the SEC shall control.
Item 1105(a)(1)-(3) and (c)
-Provide static pool information with respect to mortgage loans that were
originated or purchased by the Seller and which are of the same type as the
Mortgage Loans.
-Provide static pool information regarding delinquencies, cumulative losses
and prepayments for prior securitized pools of the Seller.
-If the Seller has less than 3 years experience securitizing assets of the
same type as the Mortgage Loans, provide the static pool information by vintage
origination years regarding loans originated or purchased by the Seller, instead
of by prior securitized pool. A vintage origination year represents mortgage
loans originated during the same year.
-Such static pool information shall be for the prior five years, or for so
long as the Seller has been originating or purchasing (in the case of data by
vintage origination year) or securitizing (in the case of data by prior
securitized pools) such mortgage loans if for less than five years.
-The static pool information for each vintage origination year or prior
securitized pool, as applicable, shall be presented in monthly increments over
the life of the mortgage loans included in the vintage origination year or prior
securitized pool.
-Provide summary information for the original characteristics of the prior
securitized pools or vintage origination years, as applicable and material,
including: number of pool assets, original pool balance, weighted average
initial loan balance, weighted average mortgage rate, weighted average and
minimum and maximum FICO, product type, loan purpose, weighted average and
minimum and maximum LTV, distribution of loans by mortgage rate, and geographic
concentrations of 5% or more.
Item 1108(b) and (c)
Provide the following information with respect to each servicer that will
service, including interim service, 20% or more of the mortgage loans in any
loan group in the securitization issued in the Pass-Through Transfer:
-a description of the Servicer's form of organization;
-a description of how long the Servicer has been servicing residential
mortgage loans; a general discussion of the Servicer's experience in servicing
assets of any type as well as a more detailed discussion of the Servicer's
experience in, and procedures for the servicing function it will perform under
Exh 16-1
this Agreement and any Reconstitution Agreements; information regarding the
size, composition and growth of the Servicer's portfolio of mortgage loans of
the type similar to the Mortgage Loans and information on factors related to the
Servicer that may be material to any analysis of the servicing of the Mortgage
Loans or the related asset-backed securities, as applicable, including whether
any default or servicing related performance trigger has occurred as to any
other securitization due to any act or failure to act of the Servicer, whether
any material noncompliance with applicable servicing criteria as to any other
securitization has been disclosed or reported by the Servicer, and the extent of
outsourcing the Servicer uses;
-a description of any material changes to the Servicer's policies or
procedures in the servicing function it will perform under this Agreement and
any Reconstitution Agreements for mortgage loans of the type similar to the
Mortgage Loans during the past three years;
-information regarding the Servicer's financial condition to the extent
that there is a material risk that the effect on one or more aspects of
servicing resulting from such financial condition could have a material impact
on the performance of the securities issued in the Pass-Through Transfer, or on
servicing of mortgage loans of the same asset type as the Mortgage Loans;
-any special or unique factors involved in servicing loans of the same type
as the Mortgage Loans, and the Servicer's processes and procedures designed to
address such factors;
-statistical information regarding principal and interest advances made by
the Servicer on the Mortgage Loans and the Servicer's overall servicing
portfolio for the past three years; and
-the Servicer's process for handling delinquencies, losses, bankruptcies
and recoveries, such as through liquidation of REO Properties, foreclosure, sale
of the Mortgage Loans or workouts.
Item 1110(a)
-Identify any originator or group of affiliated originators that
originated, or are expected to originate, 10% or more of the mortgage loans in
any loan group in the securitization issued in the Pass-Through Transfer.
Item 1110(b)
Provide the following information with respect to any originator or group
of affiliated originators that originated, or is expected to originate, 20% or
more of the mortgage loans in any loan group in the securitization issued in the
Pass-Through Transfer:
-the Seller's form of organization; and
-a description of the Seller's origination program and how long the Seller
has been engaged in originating residential mortgage loans, which description
must include a discussion of the Seller's experience in originating mortgage
loans of the same type as the Mortgage Loans and information regarding the size
and composition of the Seller's origination portfolio as well as information
Exh 16-2
that may be material to an analysis of the performance of the Mortgage Loans,
such as the Seller's credit-granting or underwriting criteria for mortgage loans
of the same type as the Mortgage Loans.
Item 1117
-describe any legal proceedings pending against the Seller and Servicer or
against any of their respective property, including any proceedings known to be
contemplated by governmental authorities, that may be material to the holders of
the securities issued in the Pass-Through Transfer.
Item 1119(a)
-describe any affiliations of the Servicer, each other originator of the
Mortgage Loans and each Subservicer with the sponsor, depositor, issuing entity,
trustee, any originator, any other servicer, any significant obligor,
enhancement or support provider or any other material parties related to the
Pass-Through Transfer.
Item 1119(b)
-describe any business relationship, agreement, arrangement, transaction or
understanding entered into outside of the ordinary course of business or on
terms other than those obtained in an arm's length transaction with an unrelated
third party, apart from the Pass-Through Transfer, between the Seller, Servicer,
each other originator of the Mortgage Loans and each Subservicer, or their
respective affiliates, and the sponsor, depositor or issuing entity or their
respective affiliates, that exists currently or has existed during the past two
years, that may be material to the understanding of an investor in the
securities issued in the Pass-Through Transfer.
Item 1119(c)
-describe any business relationship, agreement, arrangement, transaction or
understanding involving or relating to the Mortgage Loans or the Pass-Through
Transfer, including the material terms and approximate dollar amount involved,
between the Seller, Servicer, each other originator of the Mortgage Loans and
each Subservicer, or their respective affiliates and the sponsor, depositor or
issuing entity or their respective affiliates, that exists currently or has
existed during the past two years.
Exh 16-3
EXHIBIT 17
----------
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Servicer] [Name of
Subservicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
---------------------------------------------------------------------------------------------------------------------
Applicable Servicing
Servicing Criteria Criteria
---------------------------------------------------------------------------------------------------------------------
Reference Criteria
---------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
----------------------- -----------------------
Policies and procedures are instituted to monitor any performance X
or other triggers and events of default in accordance with the
1122(d)(1)(i) transaction agreements.
----------------------- -----------------------
If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
1122(d)(1)(ii) activities.
----------------------- -----------------------
Any requirements in the transaction agreements to maintain a X
1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained.
----------------------- -----------------------
A fidelity bond and errors and omissions policy is in effect on the X
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction
1122(d)(1)(iv) agreements.
----------------------- -----------------------
Cash Collection and Administration
----------------------- -----------------------
Payments on mortgage loans are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
1122(d)(2)(i) days specified in the transaction agreements.
----------------------- -----------------------
Disbursements made via wire transfer on behalf of an obligor or to X
1122(d)(2)(ii) an investor are made only by authorized personnel.
----------------------- -----------------------
Advances of funds or guarantees regarding collections, cash flows X
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
1122(d)(2)(iii) transaction agreements.
----------------------- -----------------------
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with X
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
----------------------- -----------------------
Each custodial account is maintained at a federally insured X
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of Rule
1122(d)(2)(v) 13k-1(b)(1) of the Securities Exchange Act.
----------------------- -----------------------
Unissued checks are safeguarded so as to prevent unauthorized X
1122(d)(2)(vi) access.
----------------------- -----------------------
Reconciliations are prepared on a monthly basis for all X
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or such other number of
days specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items.
These reconciling items are resolved within 90 calendar days of
their original identification, or such other number of days
1122(d)(2)(vii) specified in the transaction agreements.
---------------------------------------------------------------------------------------------------------------------
Exh 17-1
---------------------------------------------------------------------------------------------------------------------
Applicable Servicing
Servicing Criteria Criteria
---------------------------------------------------------------------------------------------------------------------
Reference Criteria
---------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
----------------------- -----------------------
Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the
1122(d)(3)(i) Servicer.
----------------------- -----------------------
Amounts due to investors are allocated and remitted in accordance X
with timeframes, distribution priority and other terms set forth in
1122(d)(3)(ii) the transaction agreements.
----------------------- -----------------------
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of X
1122(d)(3)(iii) days specified in the transaction agreements.
----------------------- -----------------------
Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment,
1122(d)(3)(iv) or custodial bank statements. X
----------------------- -----------------------
Pool Asset Administration
----------------------- -----------------------
Collateral or security on mortgage loans is maintained
as required by the transaction agreements or related X
1122(d)(4)(i) mortgage loan documents.
----------------------- -----------------------
Mortgage loan and related documents are safeguarded as required by X
1122(d)(4)(ii) the transaction agreements
----------------------- -----------------------
Any additions, removals or substitutions to the asset pool are X
made, reviewed and approved in accordance with any conditions or
1122(d)(4)(iii) requirements in the transaction agreements.
----------------------- -----------------------
Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage
1122(d)(4)(iv) loan documents.
----------------------- -----------------------
The Servicer's records regarding the mortgage loans agree with the X
Servicer's records with respect to an obligor's unpaid principal
1122(d)(4)(v) balance.
----------------------- -----------------------
Changes with respect to the terms or status of an obligor's X
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
1122(d)(4)(vi) the transaction agreements and related pool asset documents.
----------------------- -----------------------
Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements
1122(d)(4)(vii) established by the transaction agreements.
----------------------- -----------------------
Records documenting collection efforts are maintained during the X
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency
1122(d)(4)(viii) is deemed temporary (e.g., illness or unemployment).
----------------------- -----------------------
Adjustments to interest rates or rates of return for mortgage loans X
with variable rates are computed based on the related mortgage loan
1122(d)(4)(ix) documents.
---------------------------------------------------------------------------------------------------------------------
Exh 17-2
---------------------------------------------------------------------------------------------------------------------
Applicable Servicing
Servicing Criteria Criteria
---------------------------------------------------------------------------------------------------------------------
Reference Criteria
---------------------------------------------------------------------------------------------------------------------
----------------------- -----------------------
Regarding any funds held in trust for an obligor (such as escrow X
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other
1122(d)(4)(x) number of days specified in the transaction agreements.
----------------------- -----------------------
Payments made on behalf of an obligor (such as tax or insurance X
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such
1122(d)(4)(xi) other number of days specified in the transaction agreements.
----------------------- -----------------------
Any late payment penalties in connection with any payment to be X
made on behalf of an obligor are paid from the servicer's funds and
not charged to the obligor, unless the late payment was due to the
1122(d)(4)(xii) obligor's error or omission.
----------------------- -----------------------
Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of days
1122(d)(4)(xiii) specified in the transaction agreements. X
----------------------- -----------------------
Delinquencies, charge-offs and uncollectible accounts are X
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
----------------------- -----------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation
1122(d)(4)(xv) AB, is maintained as set forth in the transaction agreements.
----------------------- -----------------------
---------------------------------------------------------------------------------------------------------------------
[SERVICER] [NAME OF SUBSERVICER]
Date: _________________________
By:________________________________
Name:
Title:
Exh 17-3
EXHIBIT 18
----------
Foreclosure Rights
1. The Servicer shall include in its monthly servicing reports a code
indicating each Mortgage Loan that is 60 or more days delinquent, each
Mortgage Loan that is 90 or more days delinquent, and each Mortgage Loan
that is in foreclosure or similar proceedings.
2. Within five Business Days of its receipt of the monthly servicing report,
the holder of the designated foreclosure rights (the "Securityholder")
shall notify both the Servicer and Master Servicer if it objects to the
proposed course of action.
3. If the Securityholder timely and affirmatively objects pursuant section 2
above, then the Securityholder shall instruct the Master Servicer (with a
copy to the Servicer) to hire three appraisal firms selected by the Master
Servicer in its reasonable discretion, to compute the fair value of the
Mortgaged Property securing the related Mortgage Loan utilizing the Xxxxxx
Xxx Form 2055 Exterior-Only Inspection Residential Appraisal Report (each
such appraisal-firm computation, a "Fair Value Price"), in each case no
later than 30 days from the date of such Securityholder objection. All
costs relating to the computation of the Fair Value Prices shall be for the
account of the Securityholder and shall be paid by the Securityholder at
the time that such Mortgage Loan is purchased by the Securityholder.
(a) If the Master Servicer shall have received three Fair Value Prices
by the expiration of such 30-day period, then the Securityholder shall, no
later than five Business after the expiration of such 30-day period,
purchase such Mortgage Loan for an amount equal to the lesser of (i) the
unpaid principal balance of the related Mortgage Loan (the "Unpaid
Principal Balance") and (ii) the average of such three Fair Value Prices
respectively determined by such appraisal firms; and shall deliver such
amount to the Servicer against the assignment of the related Mortgage Loan
and the delivery of the related documents on the purchase date.
(b) If the Master Servicer shall not have received three Fair Value
Prices by the end of the 30-day period set forth in paragraph 3 above,
then:
(i) If the Master Servicer shall have received only two Fair
Value Prices by the end of such 30-day period, then the Master
Servicer shall determine, in its reasonable discretion, the fair value
of the Mortgaged Property and other collateral relating to such
Mortgage Loan (such fair value, the "Master Servicer's Fair Value
Price") and the Securityholder shall, no later than five Business Days
Exh 18-1
after the expiration of such 30-day period, purchase such Mortgage
Loan for an amount equal to the least of (1) the Unpaid Principal
Balance thereof, (2) the average of such Fair Value Prices determined
by such appraisal firms and (3) the Master Servicer's Fair Value
Price; and shall deliver such amount to the Servicer against the
assignment of the related Mortgage Loan and the delivery of the
related documents on the purchase date.
(ii) If the Master Servicer shall have received only one Fair
Value Price by the end of such 30-day period, then the Master Servicer
will determine the Master Servicer Fair Value Price of the Mortgaged
Property related to such Mortgage Loan and the Securityholder shall,
no later than five Business Days after the expiration of such 30-day
period, purchase such Mortgage Loan for an amount equal to the least
of (1) the Unpaid Principal Balance thereof, (2) the Fair Value Price
determined by such appraisal firm and (3) the Master Servicer's Fair
Value Price; and shall deliver such amount to the Servicer against the
assignment of the related Mortgage Loan and the delivery of the
related documents on the purchase date.
(iii) If the Master Servicer shall not have received any such
Fair Value Prices by the end of such 30-day period, then the Master
Servicer will determine the Master Servicer Fair Value Price of the
Mortgaged Property related to such Mortgage Loan and the
Securityholder shall, no later than five Business Days after the
expiration of such 30-day period, purchase such Mortgage Loan for an
amount equal to the lesser of (1) the Unpaid Principal Balance thereof
and (2) the Master Servicer's Fair Value Price; and shall deliver such
amount to the Servicer against the assignment of the related Mortgage
Loan and the delivery of the related documents on the purchase date.
(iv) If the Master Servicer has not received three Fair Value
Prices by the end of such 30-day period, it shall continue for the
next 30 days to try to obtain three Fair Value Prices. Upon the
earlier of the date that it obtains the three Fair Value Prices, or
the end of the 30-day extension, the Master Servicer shall recalculate
the price payable pursuant to this Exhibit and, within five Business
Days thereafter, (i) the Securityholder shall pay the Servicer the
positive difference between the recalculated purchase price, and the
price actually paid by it, or (ii) the Servicer shall refund to the
Securityholder the positive difference between the purchase price
actually paid by the Securityholder, and the recalculated purchase
price.
4. Notwithstanding anything herein to the contrary, the Securityholder shall
not be entitled to any of its rights set forth herein with respect to a
Mortgage Loan following its failure to purchase such Mortgage Loan at the
purchase price set forth above within the timeframe set forth above
following the Securityholder's objection to an action of the Servicer, and
the Servicer shall provide the Master Servicer written notice of such
failure.
5. Any notice, confirmation, instruction or objection pursuant to paragraphs
(1) or (2) above may be delivered via facsimile or other written or
electronic communication as the parties hereto and the Securityholder may
agree to from time to time.
Exh 18-2
6. For the avoidance of doubt, the Securityholder's rights set forth in
this Exhibit are intended to provide the Securityholder, for so long as it
has not forfeited its right under paragraph 4 hereof as set forth in
paragraph (3) above, with the unilateral right to control foreclosure
decisions in respect of delinquent and defaulted Mortgage Loans, and
certain exclusive purchase rights so as to maximize the recovery value on
delinquent and defaulted Mortgage Loans.
7. To the extent that the Securityholder purchases any Mortgage Loan
pursuant to this Exhibit, the Servicer will continue to service such
Mortgage Loan in accordance with this Agreement. The parties acknowledge
that, in such event, the Securityholder will have no duty or responsibility
to service any such Mortgage Loan.
8. In the event that the Securityholder purchases any Mortgage Loan
pursuant to this Exhibit, the Servicer and the Securityholder will work
together in good faith to take any and all actions necessary to effect such
purchase, including, but not limited to, the preparation and execution of
any endorsements or assignments of the Mortgage Loan documents, all at the
expense of the Securityholder.
9. The Master Servicer shall promptly deliver any written notices that it
receives under this Exhibit to the Securityholder.
10. [The Master Servicer shall provide copies of each Fair Value Price and
any written supporting materials it receives to the Certificate Insurer
within ten days of receipt of such items by the Master Servicer.]
Exh 18-3