FLOW MORTGAGE LOAN SALE AND SERVICING AGREEMENT between BANK OF AMERICA, NATIONAL ASSOCIATION, as Seller and as Servicer, and LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC., as Purchaser April 1, 2006 Performing, Residential Mortgage Loans
|
Execution
Version
|
FLOW
MORTGAGE LOAN
between
BANK
OF
AMERICA, NATIONAL ASSOCIATION,
as
Seller
and as Servicer,
and
XXXXXX
CAPITAL,
A
DIVISION OF XXXXXX BROTHERS HOLDINGS INC.,
as
Purchaser
April
1,
2006
Performing,
Residential Mortgage Loans
TABLE
OF
CONTENTS
|
Page
|
|
|
SECTION
1. DEFINITIONS.
|
1
|
|
SECTION
2. PURCHASE
AND CONVEYANCE.
|
14
|
|
SECTION
3. MORTGAGE
LOAN SCHEDULE.
|
15
|
|
SECTION
4. PURCHASE
PRICE.
|
15
|
|
SECTION
5. EXAMINATION
OF MORTGAGE FILES.
|
15
|
|
SECTION
6. DELIVERY
OF MORTGAGE LOAN DOCUMENTS.
|
16
|
|
Subsection
6.01 Possession of Mortgage Files.
|
16
|
|
Subsection
6.02 Books and Records.
|
16
|
|
Subsection
6.03 Delivery of Mortgage Loan Documents.
|
17
|
|
SECTION
7. REPRESENTATIONS,
WARRANTIES AND COVENANTS; REMEDIES FOR BREACH.
|
17
|
|
Subsection
7.01 Representations and Warranties Regarding Individual Mortgage
Loans.
|
17
|
|
Subsection
7.02 Seller and Servicer Representations.
|
27
|
|
Subsection
7.03 Remedies for Breach of Representations and
Warranties.
|
29
|
|
SECTION
8. CLOSING
CONDITIONS.
|
31
|
|
SECTION
9. CLOSING
DOCUMENTS.
|
32
|
|
Subsection
9.01 Initial Closing Date.
|
32
|
|
Subsection
9.02 Subsequent Closing Dates.
|
32
|
|
SECTION
10. COSTS.
|
33
|
|
SECTION
11. ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS.
|
33
|
|
Subsection
11.01 Servicer to Act as Servicer; Subservicing.
|
33
|
|
Subsection
11.02 Liquidation of Mortgage Loans.
|
35
|
|
Subsection
11.03 Collection of Mortgage Loan Payments.
|
35
|
|
Subsection
11.04 Establishment of Custodial Account; Deposits in Custodial
Account.
|
36
|
|
Subsection
11.05 Withdrawals From the Custodial Account.
|
37
|
|
Subsection
11.06 Establishment of Escrow Account; Deposits in Escrow
Account.
|
38
|
|
Subsection
11.07 Withdrawals From Escrow Account.
|
39
|
|
Subsection
11.08 Payment of Taxes, Insurance and Other Charges; Collections
Thereunder.
|
39
|
|
Subsection
11.09 Transfer of Accounts.
|
40
|
|
Subsection
11.10 Maintenance of Hazard Insurance.
|
40
|
|
Subsection
11.11 Maintenance of Primary Mortgage Insurance Policy;
Claims.
|
41
|
|
Subsection
11.12 Fidelity Bond; Errors and Omissions Insurance.
|
42
|
|
Subsection
11.13 Title, Management and Disposition of REO Property.
|
42
|
|
Subsection
11.14 Servicing Compensation.
|
43
|
|
Subsection
11.15 Distributions.
|
43
|
|
Subsection
11.16 Statements to the Purchaser.
|
44
|
|
Subsection
11.17 Advances by the Servicer.
|
44
|
|
Subsection
11.18 Assumption Agreements.
|
45
|
|
Subsection
11.19 Satisfaction of Mortgages and Release of Mortgage
Files.
|
46
|
|
Subsection
11.20 Annual Statement as to Compliance.
|
46
|
|
Subsection
11.21 Annual Independent Public Accountants’ Servicing
Report.
|
46
|
|
Subsection
11.22 Servicer Shall Provide Access and Information as Reasonably
Required.
|
46
|
|
Subsection
11.23 Restoration of Mortgaged Property.
|
47
|
|
Subsection
11.24 Master Servicer.
|
47
|
|
Subsection
11.25 Fair Credit Reporting Act.
|
48
|
|
Subsection
11.26 Compliance with Safeguarding Customer Information
Requirements.
|
48
|
|
Subsection
11.27 BPP Mortgage Loans.
|
48
|
i
|
Page
|
|
SECTION
12. THE
SERVICER.
|
49
|
|
Subsection
12.01 Indemnification; Third Party Claims.
|
49
|
|
Subsection
12.02 Merger or Consolidation of the Servicer.
|
49
|
|
Subsection
12.03 Limitation on Liability of the Servicer and Others.
|
49
|
|
Subsection
12.04 Seller and Servicer Not to Resign.
|
50
|
|
SECTION
13. DEFAULT.
|
50
|
|
Subsection
13.01 Events of Default.
|
50
|
|
Subsection
13.02 Waiver of Default.
|
51
|
|
SECTION
14. TERMINATION.
|
52
|
|
Subsection
14.01 Termination.
|
52
|
|
Subsection
14.02 Termination of the Servicer Without Cause.
|
52
|
|
Subsection
14.03 Successors to the Servicer.
|
52
|
|
SECTION
15. NOTICES.
|
53
|
|
SECTION
16. SEVERABILITY
CLAUSE.
|
54
|
|
SECTION
17. NO
PARTNERSHIP.
|
54
|
|
SECTION
18. COUNTERPARTS.
|
54
|
|
SECTION
19. GOVERNING
LAW.
|
55
|
|
SECTION
20. INTENTION
OF THE PARTIES.
|
55
|
|
SECTION
21. WAIVERS.
|
55
|
|
SECTION
22. EXHIBITS.
|
55
|
|
SECTION
23. GENERAL
INTERPRETIVE PRINCIPLES.
|
55
|
|
SECTION
24. REPRODUCTION
OF DOCUMENTS.
|
56
|
|
SECTION
25. AMENDMENT.
|
56
|
|
SECTION
26. CONFIDENTIALITY.
|
56
|
|
SECTION
27. ENTIRE
AGREEMENT.
|
57
|
|
SECTION
28. FURTHER
AGREEMENTS; TRANSFERS.
|
57
|
|
SECTION
29. SUCCESSORS
AND ASSIGNS.
|
58
|
|
SECTION
30. NON-SOLICITATION.
|
59
|
|
SECTION
31. PROTECTION
OF CONSUMER INFORMATION.
|
59
|
|
SECTION
32. COMPLIANCE
WITH REGULATION AB.
|
60
|
ii
EXHIBITS
|
EXHIBIT
1
|
MORTGAGE
LOAN DOCUMENTS
|
|
EXHIBIT
2
|
CONTENTS
OF EACH MORTGAGE FILE
|
|
EXHIBIT
3
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
4
|
FORM
OF OFFICER’S CERTIFICATE
|
|
EXHIBIT
5
|
FORM
OF LOST NOTE AFFIDAVIT
|
|
EXHIBIT
6
|
FORM
OF MONTHLY REMITTANCE REPORT
|
|
EXHIBIT
7
|
FORM
OF ACKNOWLEDGMENT AND CONVEYANCE AGREEMENT
|
|
EXHIBIT
8
|
FORM
OF CERTIFICATION TO BE PROVIDED BY THE SERVICER
|
|
EXHIBIT
9
|
FORM
OF OPINION
|
|
EXHIBIT
10
|
FORM
OF CUSTODIAL ACCOUNT CERTIFICATION
|
|
EXHIBIT
11
|
FORM
OF ESCROW ACCOUNT
CERTIFICATION
|
iii
FLOW
MORTGAGE LOAN
THIS
FLOW
MORTGAGE LOAN SALE AND SERVICING AGREEMENT (the “Agreement”),
dated
as of April 1, 2006, is hereby executed by and between XXXXXX CAPITAL,
A
DIVISION OF XXXXXX BROTHERS HOLDINGS INC.,
a
Delaware corporation, as purchaser (the “Purchaser”),
and
BANK OF AMERICA, NATIONAL ASSOCIATION, a national banking association, as
seller
(the “Seller”)
and as
servicer (the “Servicer”).
WITNESSETH:
WHEREAS,
the Seller has agreed to sell from time to time to the Purchaser, and the
Purchaser has agreed to purchase from time to time from the Seller, certain
performing, conventional, residential, first lien mortgage loans (the
“Mortgage
Loans”)
as
described herein on a servicing-retained basis, and which shall be delivered
as
whole loans as provided herein; and
WHEREAS,
the Mortgage Loans will be sold by the Seller and purchased by the Purchaser
as
pools or groups of whole loans, servicing retained (each, a “Mortgage
Loan Package”)
on the
various Closing Dates as provided herein; and
WHEREAS,
each of the Mortgage Loans will be secured by a mortgage, deed of trust or
other
security instrument creating a first lien on a residential dwelling located
in
the jurisdiction indicated on the related Mortgage Loan Schedule which will
be
annexed to an Acknowledgment and Conveyance Agreement (as defined herein)
on the
related Closing Date; and
WHEREAS,
the Purchaser, the Seller and the Servicer wish to prescribe the manner of
the
conveyance, servicing and control of the Mortgage Loans;
NOW,
THEREFORE, in consideration of the premises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser, the Seller and
the
Servicer agree that the Existing Flow Agreement is hereby amended and restated
in its entirety as set forth in the heading and recitals hereto and as
follows:
SECTION
1. DEFINITIONS.
For
purposes of this Agreement, the following capitalized terms shall have the
respective meanings set forth below.
Acknowledgment
and Conveyance Agreement:
The
agreement, substantially in the form of Exhibit
7
hereto,
to be prepared by the Purchaser and executed by the Seller and the Purchaser
on
each Closing Date.
Adjustable
Rate Mortgage Loan:
A
Mortgage Loan that contains a provision pursuant to which the Mortgage Interest
Rate is adjusted periodically.
Adjustment
Date:
As to
each Adjustable Rate Mortgage Loan, the date on which the Mortgage Interest
Rate
is adjusted in accordance with the terms of the related Mortgage Note and
Mortgage.
Agency
Transfer:
An
exchange of the Mortgage Loans for agency securities.
Agreement:
This
Flow Mortgage Loan Sale and Servicing Agreement including all exhibits,
schedules, amendments and supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraised
Value:
With
respect to any Mortgaged Property, the lesser of (i) the value thereof as
determined by a Qualified Appraiser or as otherwise determined in accordance
with the Underwriting Guidelines at the time of origination of the Mortgage
Loan, and (ii) the purchase price paid for the related Mortgaged Property
by the
Mortgagor with the proceeds of the Mortgage Loan; provided,
however,
that in
the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property
is
based solely upon the value determined by an appraisal made for the originator
of such Refinanced Mortgage Loan at the time of origination of such Refinanced
Mortgage Loan by a Qualified Appraiser.
Assignment
and Assumption:
An
assignment and assumption of the Custodial Agreement, prepared by the Purchaser
and executed by the Seller and the Purchaser on each Closing Date, assigning
all
of the Purchaser’s rights as the “Servicer” thereunder to the
Servicer.
Assignment
of Mortgage:
An
individual assignment of the Mortgage, notice of transfer or equivalent
instrument in recordable form and in blank, sufficient under the laws of
the
jurisdiction in which the related Mortgaged Property is located to give record
notice of the sale of the Mortgage to the Purchaser.
Balloon
Mortgage Loan:
Any
Mortgage Loan which by its original terms or any modifications thereof provides
for amortization beyond its scheduled maturity date.
BPP
Addendum:
With
respect to any BPP Mortgage Loan, a Borrowers Protection Plan® addendum to the
related Mortgage Note pursuant to which the Servicer agrees to cancel (i)
certain payments of principal and interest on the related Mortgage Loan for
up
to twelve (12) months upon the disability or involuntary unemployment of
the
Mortgagor or (ii) the outstanding principal balance of such Mortgage Loan
upon
the accidental death of the Mortgagor, subject to the terms thereof. When
used
herein, a Mortgage Loan to which such BPP Addendum relates is a BPP Mortgage
Loan, to the extent not so stated.
BPP
Fees:
With
respect to any BPP Mortgage Loan, any fees payable by a Mortgagor for the
right
to cancel any portion of principal or interest of a BPP Mortgage Loan pursuant
to the terms of the related BPP Addendum.
BPP
Mortgage Loan:
Any
Mortgage Loan which includes a BPP Addendum, provided that such BPP Addendum
has
not been terminated in accordance with its terms.
2
BPP
Mortgage Loan Payment:
With
respect to any BPP Mortgage Loan, the Monthly Covered Amount or Total Covered
Amount, if any, payable by the Servicer pursuant to Subsection 11.27.
BPO:
A
broker’s price opinion with respect to a Mortgaged Property.
Business
Day:
Any day
other than a Saturday or Sunday, or a day on which banking and savings and
loan
institutions in the state in which (i) the Servicer is located or (ii) the
Custodial Account is maintained are authorized or obligated by law or executive
order to be closed.
Closing
Date:
The
date or dates, set forth in the related Acknowledgment and Conveyance Agreement
and/or Purchase Price and Terms Agreement, on which the Purchaser from time
to
time shall purchase and the Seller from time to time shall sell the Mortgage
Loans identified on the related Mortgage Loan Schedule attached
thereto.
CLTA:
The
California Land Title Association or any other successor thereto.
Code:
The
Internal Revenue Code of 1986, as amended, or any successor statute
thereto.
Condemnation
Proceeds:
All
awards, compensation and settlements in respect of a taking (whether permanent
or temporary) of all or part of a Mortgaged Property by exercise of the power
of
condemnation or the right of eminent domain, to the extent not required to
be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Consumer
Information:
Information including but not limited to all personal information about the
Mortgagors that is supplied to the Seller by or on behalf of the
Mortgagors.
Convertible
Mortgage Loan:
An
Adjustable Rate Mortgage Loan that by its terms and subject to certain
conditions allows the Mortgagor to convert the adjustable Mortgage Interest
Rate
thereon to a fixed Mortgage Interest Rate.
Cooperative
Corporation:
The
entity that holds title (fee or an acceptable leasehold estate) to the real
property and improvements constituting the Cooperative Property and which
governs the Cooperative Property, which Cooperative Corporation must qualify
as
a Cooperative Housing Corporation under Section 216 of the Code.
Cooperative
Loan:
Any
Mortgage Loan secured by Cooperative Shares and a Proprietary
Lease.
Cooperative
Loan Documents:
With
respect to any Cooperative Loan, (i) the Cooperative Shares, together with
a
stock power in blank; (ii) the original executed Security Agreement and the
assignment of the Security Agreement endorsed in blank; (iii) the original
executed Proprietary Lease and the assignment of the Proprietary Lease endorsed
in blank; (iv) the original executed Recognition Agreement and the
assignment of the Recognition Agreement (or a blanket assignment of all
Recognition Agreements) endorsed in blank; (v) the executed UCC-1 financing
statement with evidence of recording thereon, which has been filed in all
places
required to perfect the security interest in the Cooperative Shares and the
Proprietary Lease; and (vi) the Seller’s executed UCC-3 financing statements (or
copies thereof) or other appropriate UCC financing statements required by
state
law, evidencing a complete and unbroken chain of title from the mortgagee
to the
Seller with evidence of recording thereon (or in a form suitable for
recordation).
3
Cooperative
Property:
The
real property and improvements owned by the Cooperative Corporation, that
includes the allocation of individual dwelling units to the holders of the
Cooperative Shares of the Cooperative Corporation.
Cooperative
Shares:
Shares
issued by a Cooperative Corporation.
Cooperative
Unit:
A
single family dwelling located in a Cooperative Property.
Custodial
Account:
As
defined in Subsection 11.04.
Custodial
Account Certification:
As
defined in Subsection 11.04.
Custodial
Agreement:
That
certain Custodial Agreement between Xxxxxx Capital Corporation, as Owner
and
Initial Servicer (as such term is defined therein) and Custodian, dated as
of
February 1, 1993.
Custodian:
U.S.
Bank Trust National Association (as successor to First Trust National
Association) or any successor under the Custodial Agreement.
Customary
Servicing Procedures:
Procedures (including collection procedures) that the Servicer customarily
employs and exercises in servicing and administering mortgage loans for its
own
account that are similar to the Mortgage Loans and which are in accordance
with
accepted mortgage servicing practices of prudent lending institutions and
the
Xxxxxx Mae Guides.
Cut-off
Date:
With
respect to each Mortgage Loan, the first day of the month of the related
Closing
Date as set forth in the related Acknowledgment and Conveyance Agreement
and/or
the related Purchase Price and Terms Agreement.
Cut-off
Date Principal Balance:
The
aggregate Stated Principal Balance of the Mortgage Loans as of the related
Cut-off Date which is determined after the application, to the reduction
of
principal, of payments of principal due on or before the related Cut-off
Date,
whether or not collected (except with respect to Option ARM Mortgage Loans,
in
which case, to the extent collected, and of Principal Prepayments received
before the related Cut-off Date.
Deleted
Mortgage Loan:
A
Mortgage Loan replaced or to be replaced with a Substitute Mortgage Loan
in
accordance with this Agreement.
Determination
Date:
With
respect to each Remittance Date, the 15th day (or, if such 15th day is not
a
Business Day, the following Business Day) of the month in which such Remittance
Date occurs.
Due
Date:
With
respect to each Remittance Date, the first day of the calendar month in which
such Remittance Date occurs, which is the day on which the Monthly Payment
is
due on a Mortgage Loan, exclusive of any days of grace.
4
Due
Period:
With
respect to each Remittance Date, the period beginning on the second day of
the
month preceding the month of such Remittance Date, and ending on the first
day
of the month of such Remittance Date.
Eligible
Investments:
Any one
or more of the following obligations or securities:
(1) obligations
of or guaranteed as to principal and interest by Xxxxxxx Mac, Xxxxxx Xxx
or any
agency or instrumentality of the United States when such obligations are
backed
by the full faith and credit of the United States; provided,
however,
that
such obligations of Xxxxxxx Mac or Xxxxxx Xxx shall be limited to senior
debt
obligations and mortgage participation certificates except that investments
in
mortgage-backed or mortgage participation securities with yields evidencing
extreme sensitivity to the rate of principal payments on the underlying
mortgages shall not constitute Eligible Investments hereunder;
(2) repurchase
agreements on obligations specified in clause (i) maturing not more than
one
month from the date of acquisition thereof;
(3) federal
funds, certificates of deposit, demand deposits, time deposits and bankers’
acceptances (which shall each have an original maturity of not more than
ninety
(90) days and, in the case of bankers’ acceptances, shall in no event have an
original maturity of more than 365 days or a remaining maturity of more than
thirty (30) days) denominated in United States dollars of any United States
depository institution or trust company incorporated under the laws of the
United States or any state thereof or of any domestic branch of a foreign
depository institution or trust company;
(4) commercial
paper (having original maturities of not more than 365 days) of any corporation
incorporated under the laws of the United States or any state thereof which
is
rated not lower than “P-2” by Xxxxx’x Investors Service, Inc. and rated not
lower than “A-2” by Standard & Poor’s Ratings Service, a division of The
XxXxxx-Xxxx Companies, Inc.; and
(5) a
money
market fund;
provided,
however,
that no
instrument shall be an Eligible Investment if it represents, either (1) the
right to receive only interest payments with respect to the underlying debt
instrument or (2) the right to receive both principal and interest payments
derived from obligations underlying such instrument and the principal and
interest with respect to such instrument provide a yield to maturity greater
than 120% of the yield to maturity at par of such underlying
obligations.
Escrow
Account:
As defined in Subsection 11.06.
Escrow
Account Certification:
As defined in Subsection 11.06.
Escrow
Payments:
The amounts constituting ground rents, taxes, assessments, water rates, sewer
rents, municipal charges, Primary Mortgage Insurance Policy premiums (if
any),
fire and hazard insurance premiums, flood insurance premiums, condominium
charges and other payments as may be required to be escrowed by the Mortgagor
with the Mortgagee pursuant to the terms of any Mortgage Note or
Mortgage.
5
Event
of Default:
Any one of the conditions or circumstances enumerated in
Subsection 13.01.
Xxxxxx
Mae:
The
entity formerly known as the Federal National Mortgage Association or any
successor thereto.
Xxxxxx
Xxx Guides:
The
Xxxxxx Xxx Xxxxxxx’ Guide and the Xxxxxx Xxx Servicers’ Guide and all amendments
or additions thereto.
FDIC:
The
Federal Deposit Insurance Corporation or any successor thereto.
Fidelity
Bond:
The
fidelity bond required to be obtained by the Servicer pursuant to
Subsection 11.12.
FIRREA:
The
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as
amended
and in effect from time to time.
First
Remittance Date:
With
respect to each Mortgage Loan Package, the 18th
day (or
if such 18th day is not a Business Day, the Business Day immediately following
such 18th
day) of
the month following the related Closing Date.
Xxxxxxx
Mac:
The
entity formerly known as the Federal Home Loan Mortgage Corporation or any
successor thereto.
Xxxxxxx
Mac Guide:
The
Xxxxxxx Mac Single Family Seller/Servicer Guide and all amendments or additions
thereto.
GAAP:
Generally accepted accounting principles consistently applied.
Gross
Margin:
With
respect to each Adjustable Rate Mortgage Loan, the fixed percentage amount
set
forth in each related Mortgage Note and Mortgage which is added to the Index
on
each Adjustment Date in accordance with the terms of the Mortgage Note in
order
to determine the related Mortgage Interest Rate.
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 interest thereon.
Initial
Rate Cap:
As to
each Adjustable Rate Mortgage Loan, the maximum increase or decrease in the
Mortgage Interest Rate on the first Adjustment Date as provided in the related
Mortgage Note.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
6
Interest
Only Mortgage Loan:
A
Mortgage Loan that only requires payments of interest for a period of time
specified in the related Mortgage Note.
Lifetime
Rate Cap:
As to
each Adjustable Rate Mortgage Loan, the maximum Mortgage Interest Rate which
shall be as permitted in accordance with the provisions of the related Mortgage
Note.
Liquidation
Proceeds:
The
proceeds received in connection with the liquidation of a defaulted Mortgage
Loan through trustee’s sale, foreclosure sale or otherwise, other than amounts
received following the acquisition of REO Property, Insurance Proceeds and
Condemnation Proceeds.
Loan-to-Value
Ratio:
With
respect to any Mortgage Loan as of any date of determination, the ratio,
expressed as a percentage, the numerator of which is the outstanding principal
balance of the Mortgage Loan at origination (or on such date, if a current
Loan-to-Value Ratio is being calculated), and the denominator of which is
the
Appraised Value of the related Mortgaged Property.
LTV:
Loan-to-Value Ratio.
Monthly
Covered Amount:
With
respect to any BPP Mortgage Loan, the amount of any principal and interest
due
by a Mortgagor and cancelled for any month pursuant to the terms of the related
BPP Addendum upon the disability or involuntary unemployment of such
Mortgagor.
Monthly
Payment:
With
respect to any Mortgage Loan (other than an Option ARM Mortgage Loan), the
scheduled payment of principal and interest payable by a Mortgagor under
the
related Mortgage Note on each Due Date, which such payment may change on
any
Adjustment Date as provided in the related Mortgage Note and Mortgage for
any
Adjustable Rate Mortgage Loan. With respect to any Option ARM Mortgage Loan,
the
payment of interest and/or principal elected to be paid by a Mortgagor pursuant
to the payment options under the related Mortgage Note on each Due Date which
payment may change on any Due Date as provided in the related Mortgage Note.
Mortgage:
With
respect to any Mortgage Loan that is not a Cooperative Loan, the mortgage,
deed
of trust or other instrument creating a first lien on the Mortgaged Property
securing the Mortgage Note and, with respect to a Cooperative Loan, the related
Security Agreement.
Mortgage
File:
With
respect to any Mortgage Loan, the items listed in Exhibit 2
hereto
and any additional documents required to be added to the Mortgage File pursuant
to this Agreement.
Mortgage
Interest Rate:
With
respect to each Mortgage Loan, the annual rate at which interest accrues
on such
Mortgage Loan from time to time in accordance with the provisions of the
related
Mortgage Note, including, but not limited to, the limitations on such interest
rate imposed by the Initial Rate Cap, the Periodic Rate Cap/Floor and the
Lifetime Rate Cap, if any.
7
Mortgage
Loan:
Each
mortgage loan sold, assigned and transferred pursuant to this Agreement and
identified on the Mortgage Loan Schedule annexed to the related Acknowledgment
and Conveyance Agreement, including, without limitation, the Mortgage File,
the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds, any escrow accounts
related to the Mortgage Loan and all other rights, benefits, proceeds and
obligations arising from or in connection with such mortgage loan.
Mortgage
Loan Documents:
With
respect to any Mortgage Loan, the documents listed in Exhibit 1
hereto.
Mortgage
Loan Package:
The
pool or group of whole loans purchased on a Closing Date, as described in
the
Mortgage Loan Schedule annexed to the related Acknowledgment and Conveyance
Agreement.
Mortgage
Loan Remittance Rate:
With
respect to any Mortgage Loan, the annual rate of interest payable to the
Purchaser, which shall be equal to the related Mortgage Interest Rate minus
the
related Servicing Fee Rate.
Mortgage
Loan Schedule:
With
respect to each Mortgage Loan Package, the schedule of Mortgage Loans annexed
to
the related Acknowledgment and Conveyance Agreement (and delivered in electronic
format to the Purchaser), setting forth the following information with respect
to each Mortgage Loan: (1) the Servicer’s Mortgage Loan identifying number;
(2) the Mortgagor’s and Co-Mortgagor’s (if applicable) names; (3) the
street address of the Mortgaged Property, including the city, state, zip
code,
county, lot number, block number and section number; (4) a code indicating
whether the Mortgaged Property is a single family residence, a 2 family
dwelling, a 3-4 family dwelling, a manufactured home, a planned unit
development, a townhouse, a unit in a condominium project, a Cooperative
Property, a mixed-use property, land, or a non-residential property; (5)
a code
indicating the loan is a fixed rate or Adjustable Rate Mortgage Loan (to
be
provided in accordance with Standard and Poor’s loan type requirements-Field
14); (6) product description (to be provided in accordance with Standard
and
Poor’s description categories-Field 7); (7) a code indicating the lien status
of
the Mortgage Loan; (8) the original months to maturity and the remaining
months to maturity from the Cut-off Date, in any case based on the original
amortization schedule, and if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (9) the LTV at
origination; (10) the combined LTV at origination; (11) the Mortgage
Interest Rate as of the Cut-off Date; (12) the payment and rate adjustment
frequencies (if applicable); (13) the Index (if applicable); (14) the
initial Adjustment Date (if applicable); (15) the initial payment
Adjustment Date (if applicable); (16) the next interest rate Adjustment
Date (if applicable); (17) the next payment Adjustment Date (if applicable);
(18) the Gross Margin (if applicable); (19) the minimum Mortgage Interest
Rate under the terms of the Mortgage Note (if applicable); (20) Mortgage
Interest Rate adjustment frequencies (if applicable); (21) the maximum Mortgage
Interest Rate under the terms of the Mortgage Note (if applicable); (22)
the
Mortgage Interest Rate adjustment cap at the initial interest rate Adjustment
Date (if applicable); (23) the Mortgage Interest Rate adjustment cap at all
subsequent interest rate Adjustment Dates (if applicable); (24) the Lifetime
Rate Cap (if applicable); (25) the rounding provisions under the terms of
the
Mortgage Note (if applicable); (26) the lookback provisions (# of days) under
the terms of the Mortgage Note (if applicable);
8
(27)
negative amortization indicator and limit; (28) the date on which the first
payment is due; (29) the original term of the Mortgage Loan; (30) the stated
maturity date; (31) the amount of the Monthly Payment; (32) the annual
payment cap expressed as a percentage (for Adjustable Rate Mortgage Loans
only);
(33) the next due date as of the Cut-off Date; (34) the original principal
amount of the Mortgage Loan; (35) the senior and subordinate balances (if
applicable); (36) the closing date of the Mortgage Loan; (37) the principal
balance of the Mortgage Loan as of the close of business on the Cut-off Date;
after deduction of payments of principal actually received on or before the
Cut-off Date; (38) monthly payment histories on current and prior mortgages
(24
months if available); (39) prior foreclosure history (for the past
24 months); (40) prior bankruptcy history (for the past 24 months);
(41) the loan purpose code; (42) the occupancy code; (43) the loan
documentation type, (to be provided in conformance with Standard and Poor’s
documentation categories - Field 5); (44) asset verification (purchase money
loans only), (yes or no); (45) a code indicating the credit grade of the
Mortgage Loan; (46) the debt to income ratio; (47) the Mortgagor’s and
co-Mortgagor’s (if applicable) social security numbers; (48) the
Mortgagor’s and co-Mortgagor’s (if applicable) original FICO score and the next
generation FICO score for new credit scores; (49) the date of the FICO score;
(50) the Mortgagor’s mailing address if different from number (3) above;
(51) the Mortgagor’s home telephone number; (52) the Mortgagor’s business
telephone number; (53) the purchase price of the Mortgaged Property (if a
purchase); (54) the Appraisal date and the Appraised Value of the Mortgaged
Property; (55) the Mortgagor’s and co-Mortgagor’s (if applicable) race;
(56) the Mortgagor’s and co-Mortgagor’s (if applicable) gender;
(57) the Mortgagor’s and co-Mortgagor’s (if applicable) date of birth; (58)
the number of bedrooms; (59) rental income per unit; (60) the combined annual
income; (61) the application date; (62) the broker’s name; (63) the
broker’s firm name; (64) the appraiser’s name; (65) the appraiser’s
firm name; (66) the settlement agent; (67) the origination channel
(wholesale, retail, or correspondent); (68) flood insurance contract
provider; (69) tax service contract provider; (70) number of units; (71) as
of date; (72) amortization term; (73) balloon flag; (74) prepayment penalty
flag; (75) prepayment penalty term and prepayment penalty description
(i.e.,
6
months interest, set percentage of UPB); (76) payment history current loan;
(77)
payment history previous loan and all refinanced loans; (78) mortgage insurance
provider, or code for LPMI; (79) mortgage insurance coverage percentage;
(80)
mortgage insurance cost; (81) mortgage insurance certificate number;
(82) number of borrowers; (83) first time home buyer flag; (84) the
year in which the Mortgaged Property was built; (85) the monthly tax and
insurance payment; (86) the monthly servicing fee; (87) the escrow balance
as of
the Cut-off Date; (88) a code indicating whether the Mortgage Loan is an
Interest Only Mortgage Loan; (89) with respect to each Interest Only Mortgage
Loan, the duration of the related interest only period; (90) a code
indicating the Appraisal Type (Tax Assessment, BPO, Drive-By Form 704, URAR,
Form 2065, Form 2055 (Exterior only), Form 2055 (Interior Inspection), or
AVM;
(91) if the Appraisal Type in #90 is an AVM, then a description of the AVM
type;
(92) a code indicating whether the borrower(s) is self-employed (yes or
no); (93) a section 32 flag and the origination points and or fees; (94)
a code
indicating if a loan is assumable (yes or no); (95) code indicating whether
the borrower’s assets were verified; (96) a code indicating whether the loan is
a high cost or covered loan under applicable state/jurisdiction anti-predatory
lending laws; (97) Annual Percentage Rate (APR) and (98) a code indicating
whether the Mortgage Loan is an Option ARM Mortgage Loan. With respect to
the
Mortgage Loans on the Mortgage Loan Schedule in the aggregate, the Mortgage
Loan
Schedule shall set forth the following information, as of the Cut-off Date:
(i) the number of Mortgage Loans; (ii) the Cut-off Date Principal
Balance; (iii) the weighted average Mortgage Interest Rate of the Mortgage
Loans; (iv) the weighted average months to maturity of the Mortgage Loans;
(v) with respect to each Adjustable Rate Mortgage Loan, the weighted
average Lifetime Rate Cap; and (vi) with respect to each Adjustable Rate
Mortgage Loan, the weighted average Gross Margin.
9
Mortgage
Note:
The
original executed note or other evidence of the Mortgage Loan indebtedness
of a
Mortgagor, including any riders or addenda thereto.
Mortgaged
Property:
With
respect to each Mortgage Loan that is not a Cooperative Loan, the Mortgagor’s
real property securing repayment of a related Mortgage Note, consisting of
an
unsubordinated estate in fee simple or, with respect to real property located
in
jurisdictions in which the use of leasehold estates for residential properties
is a widely accepted practice, a leasehold estate, in a single parcel or
multiple parcels of real property improved by a Residential Dwelling. With
respect to each Cooperative Loan, the Cooperative Shares allocated to a
Cooperative Unit in the related Cooperative Corporation that were pledged
to
secure such Cooperative Loan and the related Proprietary Lease.
Mortgagee:
The
mortgagee or beneficiary named in the Mortgage and the successors and assigns
of
such mortgagee or beneficiary.
Mortgagor:
The
obligor on a Mortgage Note, who is an owner of the Mortgaged Property and
the
grantor or mortgagor named in the Mortgage and such grantor’s or mortgagor’s
successors in title to the Mortgaged Property.
NAIC:
The National
Association of Insurance Commissioners or any successor
organization.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board, the Vice Chairman of the
Board,
a President or a Vice President of the Person on behalf of whom such certificate
is being delivered.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Seller or the
Servicer, reasonably acceptable to the Purchaser.
Option
ARM Mortgage Loan:
An
Adjustable Rate Mortgage Loan with an original term to maturity of not more
than
thirty (30) years and with respect to which the related borrower may choose
a
flexible payment option each month pursuant to the terms of the related Mortgage
Note.
OTS:
The
Office of Thrift Supervision or any successor thereto.
Owner:
As
defined in Subsection 11.13.
P&I
Advance:
As
defined in Subsection 11.17.
Periodic
Rate Cap/Floor:
As to
each Adjustable Rate Mortgage Loan, the maximum increase or decrease in the
Mortgage Interest Rate, on any Adjustment Date as provided in the related
Mortgage Note.
10
Person:
An
individual, corporation, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Primary
Mortgage Insurance Policy:
A
policy of primary mortgage guaranty insurance issued by an insurer acceptable
to
Xxxxxx Xxx or Xxxxxxx Mac.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date that 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.
Proprietary
Lease:
With
respect to any Cooperative Unit, a lease or occupancy agreement between a
Cooperative Corporation and a holder of related Cooperative Shares.
Purchase
Price:
The
price paid on the related Closing Date by the Purchaser to the Seller pursuant
to this Agreement in exchange for the Mortgage Loans included in the related
Mortgage Loan Package, as calculated pursuant to Section 4 and the related
Purchase Price and Terms Agreement.
Purchase
Price and Terms Agreement:
With
respect to each purchase of a Mortgage Loan Package hereunder, that certain
letter agreement by and between the Seller and the Purchaser, prepared by
the
Purchaser substantially identical to the form delivered in connection with
the
purchase and sale of the Mortgage Loans on the initial Closing Date hereunder,
setting forth the general terms, conditions and portfolio characteristics
for
each Mortgage Loan Package to be purchased hereunder as of the related Closing
Date.
Purchase
Price Percentage:
For
each Mortgage Loan included in a Mortgage Loan Package, the percentage of
par
set forth in the related Purchase Price and Terms Agreement that is used
to
calculate the Purchase Price of the Mortgage Loans included in such Mortgage
Loan Package.
Purchaser:
The
Person listed as such in the initial paragraph of this Agreement, together
with
its successors and assigns as permitted under the terms of this
Agreement.
Qualified
Appraiser:
An
appraiser of a Mortgaged Property duly appointed by the originator of the
related Mortgage Loan, who had no interest, direct or indirect, in such
Mortgaged Property or in any loan made on the security thereof, whose
compensation is not affected by the approval or disapproval of the related
Mortgage Loan and who met the minimum qualifications of Xxxxxx Mae or Xxxxxxx
Mac and satisfied the requirements of Title XI of FIRREA.
Qualified
Depository:
A
deposit account or accounts maintained with a federal or state chartered
depository institution the deposits in which are insured by the FDIC to the
applicable limits and the long-term unsecured debt obligations of which (or,
in
the case of a depository institution that is a subsidiary of a holding company,
the long-term unsecured debt obligations of such holding company) are rated
AA
by Standard & Poor’s Ratings Group or Aa by Xxxxx’x Investors Service, Inc.
(or a comparable rating if another rating agency is specified by the Purchaser
by written notice to the Seller) at the time any deposits are held on deposit
therein.
11
Recognition
Agreement:
With
respect to any Cooperative Loan, an agreement between the related Cooperative
Corporation and the originator of such Mortgage Loan to establish the rights
of
such originator in the related Cooperative Property.
Record
Date:
The close of business of the last Business Day of the month preceding the
month
of the related Remittance Date.
Refinanced
Mortgage Loan:
A
Mortgage Loan the proceeds of which were not used to purchase the related
Mortgaged Property.
Regulation
AB Compliance Addendum:
Exhibit
12
attached
hereto and incorporated herein by reference thereto.
Remittance
Date:
The
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately following such 18th
day) of
any month, beginning with the First Remittance Date.
REO
Disposition:
The
final sale by the Servicer of an REO Property.
REO
Disposition
Proceeds:
All
amounts received with respect to an REO Disposition pursuant to
Subsection 11.13.
REO
Property:
A
Mortgaged Property acquired by the Servicer through foreclosure or deed in
lieu
of foreclosure, as described in Subsection 11.13.
Repurchase
Price:
With
respect to any Mortgage Loan, an amount equal to (A) the Stated Principal
Balance of such Mortgage Loan as of the date of repurchase plus
(B) interest on such Stated Principal Balance at the Mortgage Loan
Remittance Rate from and including the last Due Date through which interest
has
been paid on behalf of the Mortgagor or advanced by the Servicer to the day
prior to such 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.
Residential
Dwelling:
Any one
of the following: (i) a detached one-family dwelling, (ii) a detached
two- to four-family dwelling, (iii) a one-family dwelling unit in a condominium
project or (iv) a one-family dwelling in a planned unit development, except
as set forth in the related Purchase Price and Terms Agreement, none of which
is
a Cooperative Property, mobile home or manufactured home.
Securities: The
securities issued in connection with a Securitization evidencing beneficial
ownership interests in a trust the assets of which include the Mortgage
Loans.
Securitization: The
transfer of the Mortgage Loans to a trust formed as part of a publicly issued
and/or privately placed, rated securitization, including the issuance of
the
related Securities.
12
Security
Agreement:
With
respect to any Cooperative Loan, the agreement between the owner of the related
Cooperative Shares and the originator of the related Mortgage Note that defines
the terms of the security interest in such Cooperative Shares and the related
Proprietary Lease.
Seller:
Bank of
America, National Association, a national banking association, or its successor
in interest or any successor to the Seller under this Agreement appointed
as
herein provided.
Servicer:
Bank of
America, National Association, a national banking association, or its successor
in interest or any successor to the Servicer under this Agreement appointed
as
herein provided.
Servicing
Advances:
All
customary, reasonable and necessary out-of-pocket costs and expenses incurred
in
the performance by the Servicer of its servicing obligations, including,
but not
limited to, the cost of (a) the preservation, restoration and protection of
the Mortgaged Property, (b) any enforcement or judicial proceedings,
including foreclosures, (c) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the Mortgage,
and (d) payments made by the Servicer with respect to a Mortgaged Property
pursuant to Subsection 11.08.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Purchaser
shall
pay to the Servicer, which shall, for each month, be equal to one-twelfth
of the
product of (i) the applicable Servicing Fee Rate and (ii) the Stated
Principal Balance of such Mortgage Loan. Such fee shall be payable monthly,
computed on the basis of the same principal amount and period respecting
which
any related interest payment on a Mortgage Loan is computed. The obligation
of
the Purchaser to pay the Servicing Fee is limited to, and payable solely
from,
the interest portion (including recoveries with respect to interest from
Liquidation Proceeds and other proceeds, to the extent permitted by
Subsection 11.05) of related Monthly Payments collected by the Servicer, or
as otherwise provided under Subsection 11.05.
Servicing
Fee Rate:
With
respect to each Mortgage Loan, the per annum rate set forth on the related
Mortgage Loan Schedule, or if not specified thereon, in the related Purchase
Price and Terms Agreement.
Servicing
Officer:
Any
officer of the Servicer involved in, or responsible for, the administration
and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished to the Purchaser by the Servicer, as such list may be
amended
from time to time.
Standard
& Poor’s:
Standard & Poor’s Rating Service, a division of the McGraw Hill Companies,
Inc., or any successor thereto.
Stated
Principal Balance:
As to
each Mortgage Loan as to any date of determination, (i) the principal
balance of the Mortgage Loan at the related Cut-off Date after giving effect
to
the principal portion of any Monthly Payments due on or before such date,
whether or not received, (except with respect to Option ARM Mortgage Loans,
in
which case, to the extent received), as well as any Principal Prepayments
received before such date, minus (ii) all amounts previously distributed to
the Purchaser with respect to the Mortgage Loan representing payments or
recoveries of principal, or advances in lieu thereof.
13
Substitute
Mortgage Loan:
A
mortgage loan substituted by the Seller for a Deleted Mortgage Loan which
must,
on the date of such substitution, (i) have a Stated Principal Balance,
after deduction of the principal portion of the Monthly Payment due in the
month
of substitution, not in excess of, and not materially greater or less than,
the
Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage
Interest Rate, Gross Margin, Initial Rate Cap, Periodic Rate Cap/Floor and
Lifetime Rate Cap equal to that of the Deleted Mortgage Loan; (iii) have a
Loan-to-Value Ratio not higher than that of the Deleted Mortgage Loan;
(iv) have a remaining term to maturity not greater than (and not more than
one year less than) that of the Deleted Mortgage Loan; (v) comply with each
representation and warranty set forth in Subsection 7.01; (vi) be
current in the payment of principal and interest; and (vii) be secured by a
Mortgaged Property of the same type and occupancy status as secured the Deleted
Mortgage Loan.
Total
Covered Amount:
With
respect to any BPP Mortgage Loan, the outstanding principal balance of the
Mortgage Loan cancelled pursuant to the terms of the related BPP Addendum
upon
the accidental death of the related Mortgagor.
Transfers:
As
defined in Section
28.
Underwriting
Guidelines:
The
underwriting guidelines of the Seller attached hereto as Exhibit
3,
as may
be updated and incorporated into Exhibit
3
from
time to time by providing such updates to the Purchaser; provided,
however,
any
such updates shall apply to the Mortgage Loans in the related Mortgage Loan
Package which are subject to purchases and sales occurring after such
updates.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to
a
third party, which sale or transfer is not an Agency Transfer or a
Securitization.
SECTION
2. PURCHASE
AND CONVEYANCE.
On
each
related Closing Date, the Seller, simultaneously with the execution and delivery
of the related Acknowledgment and Conveyance Agreement, in exchange for the
payment of the applicable Purchase Price by the Purchaser, receipt of which
is
hereby acknowledged, hereby sells, transfers, assigns, sets over and conveys
to
the Purchaser, without recourse, but subject to the terms of this Agreement,
all
of its rights, title and interest in and to the Mortgage Loans in the related
Mortgage Loan Package having an aggregate principal balance on the related
Cut-off Date in an amount as set forth in the related Purchase Price and
Terms
Agreement, or in such other amount as agreed by the Purchaser and the Seller
as
evidenced by the actual aggregate principal balance of the Mortgage Loan
Package
accepted by the Purchaser on the related Closing Date, together with the
related
Mortgage Files and all rights and obligations arising under the documents
contained therein, but excluding any BPP Fees.
14
With
respect to each Mortgage Loan purchased, the Purchaser shall own and be entitled
to receive: (a) all principal portion of all Monthly Payments due (or
received in the case of the Option ARM Mortgage Loans) after the applicable
Cut-off Date, (b) all other payments and/or recoveries of principal
collected on or after the applicable Cut-off Date (provided,
however,
that
all scheduled payments of principal due on or before the applicable Cut-off
Date
and collected by the Servicer after the applicable Cut-off Date shall, except
in
the case of the Option ARM Mortgage Loans, belong to the Seller), (c) all
payments of interest on the Mortgage Loans net of the Servicing Fee (minus
that
portion of any such interest payment that is allocable to the period prior
to
the applicable Cut-off Date) and (d) all BPP Mortgage Loan Payments payable
by
the Servicer pursuant to Subsection 11.27 with respect to scheduled principal
and interest due after the applicable Cut-off Date.
SECTION
3. MORTGAGE
LOAN SCHEDULE.
The
Seller shall deliver the Mortgage Loan Schedule (which will be annexed to
the
related Acknowledgment and Conveyance Agreement) to the Purchaser at least
two
(2) Business Days prior to the related Closing Date.
SECTION
4. PURCHASE
PRICE.
The
Purchase Price shall be the percentage of par as stated in the related Purchase
Price and Terms Agreement (subject to the adjustments as provided therein),
multiplied by the aggregate Cut-off Date Principal Balance of the Mortgage
Loans
included in the related Mortgage Loan Package, plus accrued interest on the
aggregate scheduled principal balance of the Mortgage Loan Package at the
weighted average Mortgage Loan Remittance Rate from the related Cut-off Date
through the day immediately prior to the related Closing Date, inclusive.
The
initial principal amount of the Mortgage Loans shall be the aggregate principal
balance of the Mortgage Loans, so computed as of the related Cut-off Date,
after
application of scheduled payments of principal due on or before the related
Cut-off Date, whether or not collected (except with respect to Option ARM
Mortgage Loans, in which case, to the extent received). Subject to satisfaction
or waiver of the conditions set forth in Section 8 hereof, the Purchaser
shall
pay the Purchase Price to the Seller by 4:00 p.m. Eastern Time on the related
Closing Date. Such payment shall be made to the account designated by the
Seller
by wire transfer of immediately available funds.
SECTION
5. EXAMINATION
OF MORTGAGE FILES.
In
addition to any rights granted to the Purchaser hereunder to underwrite the
Mortgage Loans and review the Mortgage Loan Documents prior to the related
Closing
Date, the Seller shall, prior to the related
Closing
Date, make the Mortgage Files available to the Purchaser for examination
at the
Seller’s offices. Such examination may be made by the Purchaser or its designee,
at its expense, at any reasonable time before the related
Closing
Date. Such underwriting by the Purchaser or its designee shall not impair
or
diminish the rights of the Purchaser or any of its successors under this
Agreement with respect to a breach of the representations and warranties
contained in this Agreement. The fact that the Purchaser or its designee
has
conducted or has failed to conduct any partial or complete examination of
the
Mortgage Files shall not affect the Purchaser’s or any of its successors’ rights
to demand repurchase or other relief or remedy provided for in this
Agreement.
15
SECTION
6. DELIVERY
OF MORTGAGE LOAN DOCUMENTS.
Subsection
6.01 Possession
of Mortgage Files.
The
contents of each Mortgage File required to be retained by the Servicer to
service the Mortgage Loans pursuant to this Agreement and thus not delivered
to
the Purchaser or its designee are and shall be held in trust by the Servicer
for
the benefit of the Purchaser as the owner thereof. The Servicer shall be
permitted to maintain the Mortgage Files in imaged, rather than physical,
form
consistent with the requirements of Xxxxxx Xxx or Xxxxxxx Mac. The Servicer’s
possession of any portion of each such Mortgage File is at the will of the
Purchaser for the sole purpose of facilitating servicing of the Mortgage
Loans
pursuant to this Agreement, and such retention and possession by the Servicer
shall be in a custodial capacity only. The ownership of each Mortgage Note,
each
Mortgage and the contents of each Mortgage File is vested in the Purchaser
and
the ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Servicer shall
immediately vest in the Purchaser and shall be retained and maintained, in
trust, by the Servicer at the will of the Purchaser in such custodial capacity
only. The Mortgage File retained by the Servicer with respect to each Mortgage
Loan pursuant to this Agreement shall be appropriately identified in the
Servicer’s computer system to reflect clearly the ownership of such related
Mortgage Loan by the Purchaser. The Servicer shall release from its custody
the
contents of any Mortgage File retained by it only in accordance with this
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 7.03 of this Agreement or
if required under applicable law or court order. The Servicer shall deliver
to
the Purchaser physical copies of any documents in a Mortgage File reasonably
requested by the Purchaser within five (5) Business Days after the date of
such
request at the expense of the Purchaser.
Subsection
6.02 Books
and Records.
All
rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Servicer after the Cut-off Date on or in connection
with a
Mortgage Loan as provided in Section 2 shall be vested in the Purchaser,
subject to this Agreement; provided,
however,
that
all such funds received on or in connection with a Mortgage Loan as provided
in
Section 2 shall be received and held by the Servicer in trust for the
benefit of the Purchaser as the owner of the Mortgage Loans pursuant to the
terms of this Agreement.
As
more
fully set forth in Section 20, 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
purchase on the Purchaser’s business records, tax returns and financial
statements, and as a sale of assets on the Seller’s business records, tax
returns and financial statements.
16
Subsection
6.03 Delivery
of Mortgage Loan Documents.
With
respect to each Mortgage Loan, the Seller shall deliver and release to the
Purchaser, its designee or the Custodian, (a) at least five (5) Business
Days
prior to the related Closing Date (or such later date as the Purchaser may
reasonably request), the original Mortgage Note endorsed in blank and the
original Assignment of Mortgage assigned in blank and (b) the other Mortgage
Loan Documents no later than sixty (60) days following the related Closing
Date,
subject to the following paragraph. All documents shall be original documents
or, in the case of Mortgage Loan Documents delivered for recording, either
the
original recorded documents or clerk-certified copies.
In
the
event that such original or copy of any Mortgage Loan Document is not so
delivered to the Purchaser or its designee within one hundred eighty (180)
days
following the related Closing Date, and in the event that the Seller does
not
cure such failure within sixty (60) days after receipt of written
notification of such failure from the Purchaser, the related Mortgage Loan
shall, upon the request of the Purchaser, be repurchased by the Seller at
a
price and in the manner specified in Subsection 7.03. The foregoing
repurchase obligation shall not apply in the event the Seller cannot cause
the
Servicer to deliver such original or clerk-certified copy of any document
submitted for recordation to the appropriate public recording office within
the
specified period due to a delay caused by the recording office in the applicable
jurisdiction; provided
that
the
Seller shall cause the Servicer instead to deliver a recording receipt of
such
recording office or, if such recording receipt is not available, an Officer’s
Certificate of a servicing officer of the Servicer, confirming that such
document has been accepted for recording and that the Servicer shall immediately
deliver such document upon receipt; and, provided
further,
that if
the Seller cannot cause the Servicer to deliver such original or clerk-certified
copy of any document submitted for recordation to the appropriate public
recording office within the specified time for any reason within one hundred
eighty (180) days after receipt of written notification of such failure from
the
Purchaser, the Seller shall repurchase the related Mortgage Loan at the price
and in the manner specified in Subsection 7.03.
To
the extent received by it, the Servicer shall promptly forward to the Purchaser,
or its designee, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance
with
this Agreement.
SECTION
7. REPRESENTATIONS,
WARRANTIES AND COVENANTS; REMEDIES FOR BREACH.
Subsection
7.01 Representations
and Warranties Regarding Individual Mortgage Loans.
The
Seller and, solely if specified below, the Servicer, hereby represent and
warrant to the Purchaser that, as to each Mortgage Loan included in the related
Mortgage Loan Package, as of the related Closing Date or such other date
specified herein:
(a) The
information set forth in the Mortgage Loan Schedule annexed to the related
Acknowledgment and Conveyance Agreement and the related Mortgage Loan Documents
is true, correct and complete in all material respects.
17
(b) There
are
no defaults by the Seller, the Servicer or any prior originator in complying
with the terms of the Mortgage, and all taxes, ground rents, governmental
assessments, insurance premiums, leasehold payments, water, sewer and municipal
charges which previously became due and owing have been paid, or escrow funds
have been established in an amount sufficient to pay for every such escrowed
item which remains unpaid and which has been assessed but is not yet due
and
payable.
(c) The
terms
of the Mortgage Note and the Mortgage have not been impaired, waived, altered
or
modified in any respect, except by written instruments which have been recorded
in the applicable public recording office required by law or if necessary
to
maintain the lien priority of the Mortgage, and which have been delivered
to the
Purchaser; the substance of any such waiver, alteration or modification has
been
approved by the insurer under the Primary Mortgage Insurance Policy, if any,
by
the title insurer, to the extent required by the related policy, and is
reflected on the related Mortgage Loan Schedule. No other instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by the insurer under the Primary Mortgage Insurance Policy, if any,
by
the title insurer, to the extent required by the policy, and which assumption
agreement is a part of the Mortgage File and is reflected on the related
Mortgage Loan Schedule.
(d) The
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including, without limitation, the defense
of
usury, nor will the operation of any of the terms of the Mortgage Note and
the
Mortgage, or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to any
right
of rescission, set-off, counterclaim or defense, including, without limitation,
the defense of usury, and no such right of rescission, set-off, counterclaim
or
defense has been asserted with respect thereto; and the Mortgagor was not
a
debtor in any state or federal bankruptcy or insolvency proceeding at the
time
the Mortgage Loan was originated.
(e) All
buildings or other customarily insured improvements upon the Mortgaged Property
are insured by an insurer generally acceptable to Xxxxxx Mae, Xxxxxxx Mac
and
prudent mortgage lending institutions against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the Xxxxxx Mae Guides
and
Xxxxxxx Mac Guide as well as all additional requirements set forth herein,
pursuant to an insurance policy conforming to the requirements of Customary
Servicing Procedures and providing coverage in an amount equal to the lesser
of
(i) the full insurable value of the Mortgaged Property or (ii) the
outstanding principal balance owing on the Mortgage Loan. If the Mortgaged
Property is a condominium unit, it is included under the coverage afforded
by a
blanket policy. All such insurance policies are in full force and effect
and
contain a standard mortgagee clause naming the originator of the Mortgage
Loan,
its successors and assigns as mortgagee and all premiums thereon have been
paid.
If the Mortgaged Property is in an area identified on a flood hazard map
or
flood insurance rate map issued by the Federal Emergency Management Agency
as
having special flood hazards (and such flood insurance has been made available),
a flood insurance policy meeting the requirements of the current guidelines
of
the Federal Insurance Administration is in effect which policy conforms to
the
requirements of Xxxxxx Mae or Xxxxxxx Mac. The Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor’s cost and expense,
and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage
to maintain such insurance at the Mortgagor’s cost and expense and to seek
reimbursement therefor from the Mortgagor.
18
(f) Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth in lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, fair housing or disclosure laws
applicable to the origination and servicing of the Mortgage Loans have been
complied with; the Servicer maintains, and shall maintain, evidence of such
compliance as required by applicable law or regulation and shall make such
evidence available for inspection at the Servicer’s office during normal
business hours upon reasonable advance notice.
(g) The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in
whole
or in part (other than as to Principal Prepayments in full which may have
been
received on or after the related Cut-off Date and prior to the related Closing
Date), and the Mortgaged Property has not been released from the lien of
the
Mortgage, in whole or in part, nor has any instrument been executed that
would
effect any such satisfaction, cancellation, subordination, rescission or
release. Neither the Seller nor the Servicer has waived the performance by
the
Mortgagor of any action, if the Mortgagor’s failure to perform such action would
cause the Mortgage Loan to be in default, and neither the Seller nor the
Servicer has waived any default resulting from any action or inaction by
the
Mortgagor.
(h) The
Mortgage is a valid, existing, perfected and enforceable first lien on the
Mortgaged Property, including all improvements on the Mortgaged Property,
free
and clear of all adverse claims, liens and encumbrances having priority over
the
lien of the Mortgage, subject only to (i) the lien of current real property
taxes and assessments not yet due and payable, (ii) covenants, conditions
and restrictions, rights of way, easements and other matters of the public
record as of the date of recording being acceptable to mortgage lending
institutions generally and either (A) specifically referred to in the
lender’s title insurance policy, if any, delivered to the originator of the
Mortgage Loan or (B) which do not adversely affect the Appraised Value of
the Mortgaged Property and (iii) other matters to which like properties are
commonly subject which do not individually or in the aggregate materially
interfere with the benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property. Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes
and
creates a valid, existing and enforceable first lien and first priority security
interest on the property described therein and the Seller has the full right
to
sell and assign the same to the Purchaser. With respect to any Cooperative
Loan,
the Security Agreement is a valid, subsisting and enforceable first priority
security interest on the related Cooperative Shares securing the Mortgage
Note,
subject only to (a) liens of the related residential Cooperative
Corporation for unpaid assessments representing the Mortgagor’s pro rata share
of the related residential Cooperative Corporation’s payments for its blanket
mortgage, current and future real property taxes, insurance premiums,
maintenance fees and other assessments to which like collateral is commonly
subject and (b) other matters to which like collateral is commonly subject
which do not materially interfere with the benefits of the security interest
intended to be provided by such Security Agreement.
19
(i) The
Mortgage Note, the related Mortgage and, in the case of a Cooperative Loan,
the
related Security Agreement, are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms except as enforceability may be limited by
(i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights
of
creditors and (ii) general principles of equity, whether enforcement is
sought in a proceeding in equity or at law and the Seller has taken all action
necessary to transfer such rights of enforceability to the
Purchaser.
(j) All
parties to the Mortgage Note, the Mortgage and, in the case of a Cooperative
Loan, the related Security Agreement, had the legal capacity to enter into
the
Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage,
and
the Mortgage Note and the Mortgage have been duly and properly executed by
such
parties. Either the Mortgagor is a natural person or the related co-borrower
or
guarantor is a natural person.
(k) The
proceeds of the Mortgage Loan have been fully disbursed to or for the account
of
the Mortgagor and there is no obligation for the Mortgagee to advance additional
funds thereunder and any and all requirements as to completion of any on-site
or
off-site improvement and as to disbursements of any escrow funds therefor
have
been complied with. All costs, fees and expenses incurred in making or closing
the Mortgage Loan and the recording of the Mortgage have been paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due to the
Mortgagee pursuant to the Mortgage Note or Mortgage.
(l) The
Seller and all other parties which have had any interest in the Mortgage
Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period
in which they held and disposed of such interest, were) in compliance with
any
and all applicable “doing business” and licensing requirements of the laws of
the state wherein the Mortgaged Property is located.
(m) With
respect to each Mortgage Loan, (i) the Mortgage Loan is covered by an ALTA
or
CLTA lender’s title insurance policy, acceptable to Xxxxxx Xxx or Xxxxxxx Mac,
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring (subject to the exceptions contained in (h)(i), (ii) and (iii) above)
the Seller, its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan and, with
respect
to any Adjustable Rate Mortgage Loan, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions
of the
Mortgage providing for adjustment in the Mortgage Interest Rate or Monthly
Payment, (ii) with respect to certain Refinanced Mortgage Loans, a title
search
has been done showing no lien (other than the exceptions contained in (h)(i),
(ii) or (iii) above) on the related Mortgaged Property senior to the lien
of the
Mortgage or (iii) in the case of any Mortgage Loan secured by a Mortgaged
Property located in a jurisdiction where title insurance policies are generally
not available, an opinion of counsel of the type customarily rendered in
such
jurisdiction in lieu of title insurance is instead received. For each Mortgage
Loan covered by a title insurance policy, (i) the Seller and its successors
and
assigns are the sole insureds of such lender’s title insurance policy, and such
lender’s title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by
this
Agreement and will inure to the benefit of the Purchaser and its assigns
without
any further act and (ii) no claims have been made under such lender’s title
insurance policy, and the Seller has not done, by act or omission, anything
which would impair the coverage of such lender’s title insurance
policy..
20
(n) Other
than Mortgage Loans delinquent less than thirty (30) days as of the related
Cut-off Date (so long as delinquent Mortgage Loans are to be included in
the
related Mortgage Loan Package as agreed to by the parties pursuant to the
related Purchase Price and Terms Agreement), there is no default, breach,
violation or event of acceleration existing under the Mortgage or the Mortgage
Note and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event permitting acceleration, and neither the Seller nor the
Servicer has waived any default, breach, violation or event permitting
acceleration.
(o) There
are
no, and, as of the related Closing Date, neither the Seller nor the Servicer
has
received any notice of any, mechanics’ or similar liens or claims filed for
work, labor or material (and no rights are outstanding that under law could
give
rise to such lien) affecting the related Mortgaged Property which are or
may be
liens prior to, or equal or coordinate with, the lien of the related
Mortgage.
(p) All
improvements which were considered in determining the Appraised Value of
the
related Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on adjoining
properties encroach upon the Mortgaged Property.
(q) The
Mortgage Loan was originated by a commercial bank or similar banking institution
which is supervised and examined by a federal or state authority, or by a
mortgagee approved by the Secretary of HUD.
(r) Except
with respect to Interest Only Mortgage Loans, principal payments on the Mortgage
Loan commenced no more than sixty (60) days after the proceeds of the Mortgage
Loan were disbursed. The Mortgage Loans identified on the related Mortgage
Loan
Schedule have an original term to maturity of not more than thirty (30) years,
with interest payable in arrears on the first day of the month. As to each
Adjustable Rate Mortgage Loan, on each applicable Adjustment Date, the Mortgage
Interest Rate will be adjusted to equal the sum of the Index plus the applicable
Gross Margin, rounded up or down as provided in the Mortgage Note; provided,
however,
that the
Mortgage Interest Rate will not increase or decrease by more than the Initial
Rate Cap on the first Adjustment Date or the Periodic Rate Cap on any subsequent
Adjustment Date, and will in no event exceed the Lifetime Rate Cap. Each
Mortgage Note evidencing a Mortgage Loan that is not both an Adjustable Rate
Mortgage Loan and a Balloon Mortgage Loan requires a Monthly Payment which
is
sufficient to amortize the original principal balance fully over the original
term thereof and to pay interest at the related Mortgage Interest Rate. Except
with respect to Option ARM Mortgage Loans, each Mortgage Note evidencing
an
Adjustable Rate Mortgage Loan that is not a Balloon Mortgage Loan requires
a
Monthly
Payment
which is sufficient (i) during the period prior to the first adjustment to
the Mortgage Interest Rate, to amortize the original principal balance fully
over the original term thereof and to pay interest at the related Mortgage
Interest Rate, and (ii) during the period following each Adjustment Date,
to
amortize the outstanding principal balance fully as of the first day of such
period over the then remaining term of such Mortgage Note and to pay interest
at
the related Mortgage Interest Rate. Except with respect to Option ARM Mortgage
Loans, no Mortgage Note evidencing an Adjustable Rate Mortgage Loan permits
negative amortization. Interest on the Mortgage Note is calculated on the
basis
of a 360-day year consisting of twelve 30-day months. Unless otherwise indicated
on the Mortgage Loan Schedule, no Mortgage Loan is a Convertible Mortgage
Loan.
21
(s) There
is
no proceeding pending or, to the Seller’s knowledge, threatened for the total or
partial condemnation of the Mortgaged Property and such property is in good
repair and is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty, so as to affect adversely the value of
the
Mortgaged Property as security for the Mortgage Loan or the use for which
the
premises were intended.
(t) The
Mortgage and related Mortgage Note contain customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate
for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including (i) in the case of a Mortgage designated as a
deed of trust, by trustee’s sale, and (ii) otherwise by judicial
foreclosure. To the best of the Seller’s knowledge, following the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject
to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has
not
filed for protection under applicable bankruptcy laws. There is no homestead
or
other exemption or right available to the Mortgagor or any other person which
would interfere with the right to sell the Mortgaged Property at a trustee’s
sale or the right to foreclose the Mortgage, subject to applicable federal
and
state laws and judicial precedent with respect to bankruptcy and right of
redemption or similar law.
(u) The
Mortgage Note and Mortgage are on forms acceptable to Xxxxxx Xxx or Xxxxxxx
Mac.
(v) The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the corresponding Mortgage on the Mortgaged Property and the security
interest of any applicable security agreement or chattel mortgage referred
to in
(h) above.
(w) The
Mortgage File contains an appraisal of the related Mortgaged Property, in
a form
acceptable to Xxxxxx Mae or Xxxxxxx Mac, and such appraisal complies with
the
requirements of FIRREA and, to the extent required in the Underwriting
Guidelines with respect to mortgage loans of the same type as the Mortgage
Loan,
was made and signed, prior to the approval of the Mortgage Loan application,
by
a Qualified Appraiser.
(x) In
the
event the Mortgage constitutes a deed of trust, a trustee, duly qualified
under
applicable law to serve as such, has been properly designated and currently
so
serves and is named in the Mortgage, and no fees or expenses are or will
become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor.
22
(y) 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,
nor
does it contain any “buydown” provision which is currently in
effect.
(z) The
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent
of
the mortgagee thereunder.
(aa) The
Mortgagor has received all disclosure materials required by applicable law
with
respect to the making of mortgage loans of the same type as the Mortgage
Loan
and rescission materials required by applicable law if the Mortgage Loan
is a
Refinanced Mortgage Loan and has acknowledged receipt of such materials to
the
extent required by applicable law and such documents will remain in the Mortgage
File.
(bb) Each
Mortgage Loan with an LTV at origination in excess of 80%, if any, will be
subject to a Primary Mortgage Insurance Policy, issued by an insurer acceptable
to Xxxxxx Mae or Xxxxxxx Mac at the time of origination, which insures that
portion of the Mortgage Loan in excess of the portion of the Appraised Value
of
the Mortgaged Property as required by Xxxxxx Mae and Xxxxxxx Mac guidelines.
All
provisions of such Primary Mortgage Insurance Policy have been and are being
complied with, such policy is in full force and effect, and all premiums
due
thereunder have been paid. Any Mortgage subject to any such Primary Mortgage
Insurance Policy obligates the Mortgagor thereunder to maintain such insurance
and to pay all premiums and charges in connection therewith at least until
the
LTV of such Mortgage Loan is reduced to less than 80%. The Mortgage Interest
Rate for the Mortgage Loan does not include any such insurance premium. No
Mortgage Loan requires payment of such premiums, in whole or in part, by
the
Purchaser.
(cc) As
of the
date of origination of the Mortgage Loan, (i) the Mortgaged Property is
lawfully occupied under applicable law, (ii) all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy, have been made
or
obtained from the appropriate authorities and (iii) no improvement located
on or part of the Mortgaged Property is in violation of any zoning law or
regulation.
(dd) The
Assignment of Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is
located.
(ee) All
payments required to be made prior to the related Cut-off Date for such Mortgage
Loan under the terms of the Mortgage Note have been made, the Mortgage Loan
has
not been dishonored, other than Mortgage Loans delinquent less than thirty
(30)
days as of the related Cut-off Date (so long as delinquent Mortgage Loans
are to
be included in the related Mortgage Loan Package as agreed to by the parties
pursuant to the related Purchase Price and Terms Agreement), there are no
material defaults under the terms of the Mortgage Loan and no Mortgage Loan
has
been thirty (30) days or more delinquent in the twelve (12) month period
immediately prior to the related Cut-off Date.
23
(ff) None
of
the Seller, the Servicer or any prior originator or servicer has advanced
funds,
or induced, solicited or knowingly received any advance from any party other
than the Mortgagor, directly or indirectly, for the payment of any amount
due
under the Mortgage Loan.
(gg) With
respect to each Mortgage Loan, the Seller is in possession of a complete
Mortgage File except for the documents which have been delivered to the
Purchaser or which have been submitted for recording and not yet
returned.
(hh) Immediately
prior to the payment of the related Purchase Price, the Seller was the sole
owner and holder of the Mortgage Loans and the indebtedness evidenced by
the
Mortgage Note. The Mortgage Loans, including the Mortgage Note and the Mortgage,
were not assigned or pledged by the Seller and the Seller had good and
marketable title thereto, and the Seller had full right to transfer and sell
the
Mortgage Loans to the Purchaser free and clear of any encumbrance, participation
interest, lien, equity, pledge, claim or security interest and had full right
and authority subject to no interest or participation in, or agreement with
any
other party to sell or otherwise transfer the Mortgage Loans. Following the
sale
of the Mortgage Loans, the Purchaser will own such Mortgage Loan free and
clear
of any encumbrance, equity, participation interest, lien, pledge, charge,
claim
or security interest. The Seller intends to relinquish all rights to monitor,
possess and control the Mortgage Loan except in connection with the servicing
of
the Mortgage Loan by the Servicer as set forth in this Agreement. After the
related Closing Date, neither the Seller nor the Servicer will have any right
to
modify or alter the terms of the sale of the Mortgage Loans and neither the
Seller nor the Servicer will have any obligation or right to repurchase the
Mortgage Loans, except as provided in this Agreement or as otherwise agreed
to
by the Seller, the Servicer and the Purchaser.
(ii) Any
future advances made prior to the related Cut-off Date have been consolidated
with the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first lien priority by a title insurance
policy, an endorsement to the policy insuring the mortgagee’s consolidated
interest or by other title evidence acceptable to Xxxxxx Mae and Xxxxxxx
Mac.
The consolidated principal amount does not exceed the original principal
amount
of the Mortgage Loan.
(jj) The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
in
effect at the time of origination with exceptions thereto exercised in a
reasonable manner, which exceptions will have no material adverse effects
on the
Purchaser.
(kk) With
respect to a Mortgage Loan that is not a Cooperative Loan and is not secured
by
an interest in a leasehold estate, the Mortgaged Property is located in the
state identified in the related Mortgage Loan Schedule and consists of a
single
parcel of real property with a detached single family residence erected thereon,
or a two- to four-family dwelling, or an individual condominium unit, or
an
individual unit in a planned unit development; provided, however,
that any
condominium project or planned unit development generally conforms with the
Underwriting Guidelines regarding such dwellings (or underlying Cooperative
Property, in the case of a Cooperative Loan), and except as set forth in
the
related Mortgage Loan Schedule, no residence or dwelling is a mobile home
or
manufactured dwelling. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes and, to the Seller’s
knowledge, since the date of origination, no portion of the Mortgaged Property
has been used for commercial purposes; provided,
that
Mortgaged Properties which contain a home office shall not be considered
as
being used for commercial purposes as long as the Mortgaged Property has
not
been altered for commercial purposes and is not storing any chemicals or
raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes.
24
(ll) If
the
Mortgaged Property is a condominium unit or a planned unit development (other
than a de
minimis
planned
unit development) such condominium or planned unit development project meets
Xxxxxx Xxx or Xxxxxxx Mac eligibility requirements for sale to Xxxxxx Mae
or
Xxxxxxx Mac, as the case may be, or is located in a condominium or planned
unit
development project which has received Xxxxxx Mae or Xxxxxxx Mac project
approval or as to which Xxxxxx Mae’s and Xxxxxxx Mac’s eligibility requirements
have been waived.
(mm) The
Seller used no adverse selection procedures in selecting the Mortgage Loan
from
among the outstanding first lien, residential mortgage loans owned by it
which
were available for inclusion in the Mortgage Loans.
(nn) Each
Mortgage Loan is a “qualified mortgage” within the meaning of
Section 860G(a)(3) of the Code.
(oo) With
respect to each Mortgage where a lost note affidavit has been delivered to
the
Purchaser or its designee in place of the related Mortgage Note, the related
Mortgage Note is no longer in existence. Each such lost note affidavit is
substantially in the form attached hereto as Exhibit 5.
(pp) No
fraud
was committed by the Seller or the Servicer or, to the Seller’s or the
Servicer’s knowledge, any other person in connection with the origination of the
Mortgage Loan.
(qq) The
origination practices used by the Seller and the collection and servicing
practices used by the Servicer with respect to each Mortgage Loan have been
in
all respects legal, proper, prudent and customary in the mortgage origination
and servicing industry and the collection and servicing practices used by
the
Servicer have been acceptable to Xxxxxx Mae and Xxxxxxx Mac.
(rr) The
Mortgagor is not in bankruptcy and is not insolvent, and neither the Seller
nor
the Servicer has any knowledge of any circumstances or condition with respect
to
the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit
standing that could reasonably be expected to cause investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent or materially adversely affect the value or the marketability
of the
Mortgage Loan.
(ss) The
Mortgagor has not notified the Seller or the Servicer, and neither the Seller
nor the Servicer has knowledge of any relief requested by the Mortgagor under
the Servicemembers Civil Relief Act.
25
(tt) No
Mortgage Loan was made in connection with (i) the construction or
rehabilitation of a Mortgaged Property or (ii) facilitating the trade-in or
exchange of a Mortgaged Property.
(uu) To
the
best of the Seller’s knowledge, there exists no violation of any local, state or
federal environmental law, rule or regulation in respect of the Mortgaged
Property which violation has had or would have a material adverse effect
on the
market value of such Mortgaged Property. There is no pending action or
proceeding directly involving any Mortgaged Property of which the Seller
or the
Servicer is aware in which compliance with any environmental law, rule or
regulation is an issue.
(vv) No
action, inaction, or event has occurred and no state of affairs exists or
has
existed that has resulted or will result in the exclusion from, denial of,
or
defense to coverage under any applicable special hazard insurance policy,
Primary Mortgage Insurance Policy (if any) or bankruptcy bond, irrespective
of
the cause of such failure of coverage. In connection with the placement of
any
such insurance, no commission, fee, or other compensation has been or will
be
received by the Seller or the Servicer or any designee of the Seller or the
Servicer or any corporation in which the Seller, the Servicer or any officer,
director, or employee of the Seller or the Servicer had a financial interest
at
the time of placement of such insurance.
(ww) With
respect to any ground lease to which a Mortgaged Property may be subject:
(A) the Mortgagor is the owner of a valid and subsisting leasehold interest
under such ground lease; (B) such ground lease is in full force and effect,
unmodified and not supplemented by any writing or otherwise; (C) all rent,
additional rent and other charges reserved therein have been fully paid to
the
extent payable as of the related Closing Date; (D) the Mortgagor enjoys the
quiet and peaceful possession of the leasehold estate; (E) the Mortgagor is
not in default under any of the terms of such ground lease, and, to the best
of
the Seller’s knowledge, there are no circumstances which, with the passage of
time or the giving of notice, or both, would result in a default under such
ground lease; (F) the lessor under such ground lease is not in default
under any of the terms or provisions of such ground lease on the part of
the
lessor to be observed or performed; (G) the lessor under such ground lease
has satisfied any repair or construction obligations due as of the related
Closing Date pursuant to the terms of such ground lease; and (H) the
execution, delivery and performance of the Mortgage do not require the consent
(other than those consents which have been obtained and are in full force
and
effect) under, and will not contravene any provision of or cause a default
under, such ground lease.
(xx) With
respect to escrow deposits and payments that the Servicer is entitled to
collect, all such payments are in the possession of, or under the control
of the
Servicer, and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All escrow
payments have been collected in full compliance with state and federal law
and
the provisions of the related Mortgage Note and Mortgage. As to any Mortgage
Loan that is the subject of an escrow, escrow of funds is not prohibited
by
applicable law and has been established in an amount sufficient to pay for
every
escrowed item that remains unpaid and has been assessed but is not yet due
and
payable. No escrow deposits or other charges or payments due under the Mortgage
Note have been capitalized under any Mortgage or the related Mortgage
Note.
26
(yy) The
Mortgage Loan characteristics set forth in Section 4 of the related
Purchase Price and Terms Agreement are true and complete in all material
respects.
(zz) No
Mortgage Loan is (i) covered by the Home Ownership and Equity Protection
Act of
1994, as amended (“HOEPA”),
(ii)
in violation of any comparable state law or (iii) considered a “high cost”
mortgage loan under Section 32 of HOEPA or a “high cost,” “predatory” or similar
loan under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans
having high interest rates, points and/or fees).
(aaa) There
is
no Mortgage Loan that was originated on or after October 1, 2002 and before
March 7, 2003, which is secured by property located in the State of Georgia.
There is no Mortgage Loan that was originated on or after March 7, 2003,
which
is a “high cost home loan” as defined under the Georgia Fair Lending
Act.
(bbb) No
Mortgage Loan originated on or after October 1, 2002 will impose a
prepayment premium for a term in excess of three years after its origination.
No
Mortgage Loan originated before October 1, 2002 will impose a prepayment
premium for a term in excess of five years after its origination.
(ccc) The
Servicer, in its capacity as servicer for each Mortgage Loan, has fully
furnished, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly
basis.
(ddd) With
respect to a Mortgage Loan that is a Cooperative Loan, the Cooperative Shares
that are pledged as security for the Mortgage Loan are held by a person as
a
tenant-stockholder (as defined in Section 216 of the Code) in a cooperative
housing corporation (as defined in Section 216 of the Code).
(eee) None
of
the Mortgage Loans are daily simple interest loans.
(fff) No
Mortgagor agreed to submit to mandatory arbitration to resolve any dispute
arising out of or relating in any way to the Mortgage transaction.
(ggg) None
of
the proceeds of the Mortgage Loan were used to finance single-premium credit
life insurance policies.
Subsection
7.02 Seller
and Servicer Representations.
The
Seller and the Servicer hereby represent and warrant to the Purchaser that,
as
to itself as of the related Closing Date:
27
(a) It
is a
national banking association, duly organized, validly existing, and in good
standing under the laws of the United States of America and has all licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in the states where the Mortgaged Property
is
located if the laws of such state require licensing or qualification in order
to
conduct business of the type conducted by it. It is an approved seller/servicer
in good standing of conventional residential mortgage loans for Xxxxxx Mae
or
Xxxxxxx Mac and is a HUD-approved mortgagee under Section 203 of the
National Housing Act. It has corporate power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by it and the consummation
of the transactions contemplated hereby have been duly and validly authorized.
This Agreement, assuming due authorization, execution and delivery by the
Purchaser, evidences the legal, valid, binding and enforceable obligation
of it,
subject to applicable law except as enforceability may be limited by
(i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights
of
creditors and (ii) general principles of equity, whether enforcement is
sought in a proceeding in equity or at law. All requisite corporate action
has
been taken by it to make this Agreement valid and binding upon it in accordance
with the terms of this Agreement.
(b) No
consent, approval, authorization or order of, or registration or filing with,
or
notice to any court or governmental agency or body is required for the
execution, delivery and performance by the Seller of or compliance by the
Seller
with this Agreement or the Mortgage Loans or the sale of the Mortgage Loans
or
the consummation of the transactions contemplated by this Agreement or, if
required, such approval has been obtained prior to the Closing
Date.
(c) The
consummation of the transactions contemplated by this Agreement are in its
ordinary course of business and will not result in the breach of any term
or
provision of its charter or by-laws or result in the breach of any term or
provision of, or conflict with or constitute a default under or result in
the
acceleration of any obligation under, any agreement, indenture or loan or
credit
agreement or other instrument to which it or its property is subject, or
result
in the violation of any law, rule, regulation, order, judgment or decree
to
which it or its property is subject.
(d) Its
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
pursuant to this Agreement are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction.
(e) There
is
no action, suit, proceeding or investigation pending or, to its best knowledge,
threatened against it which, either individually or in the aggregate, would
result in any material adverse change in its business, operations, financial
condition, properties or assets, or in any material impairment of its right
or
ability to carry on its business substantially as now conducted or which
would
draw into question the validity of this Agreement or the Mortgage Loans or
of
any action taken or to be taken in connection with its obligations contemplated
herein, or which would materially impair its ability to perform under the
terms
of this Agreement.
(f) It
does
not believe, nor does it have any reason or cause to believe, that it cannot
perform each and every covenant contained in this Agreement.
28
(g) It
acknowledges and agrees that the Servicing Fee shall be treated by the Servicer,
for accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement.
(h) It
has
determined that the disposition of the Mortgage Loans pursuant to this Agreement
will be afforded sale treatment for accounting and tax purposes.
(i) It
is
solvent and the sale of the Mortgage Loans will not cause it to become
insolvent. The sale of the Mortgage Loans is not undertaken with the intent
to
hinder, delay or defraud any of its creditors.
(j) It
has
not dealt with any broker, investment banker, agent or other person that
may be
entitled to any commission or compensation in connection with the sale of
the
Mortgage Loans.
(k) None
of
this Agreement, the Mortgage Loan Schedule or the Mortgage Loan Documents
furnished in connection with this transaction contain any untrue statement
of
fact by the Seller or the Servicer, or omits to state a fact, necessary to
make
the statements of the Seller or the Servicer herein or therein, in the light
of
the circumstances under which they were made, not materially misleading;
provided,
however,
that
the Purchaser acknowledges that it had the opportunity to dictate the contents
of the Mortgage Loan Schedule and, therefore, the Seller and the Servicer
shall
not be liable for any omitted fields on the Mortgage Loan Schedule that were
not
requested by the Purchaser.
(l) 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 property in question, and maintains, and will maintain, sufficient
information to identify the applicable Mortgagor for purposes of the Anti-Money
Laundering Laws.
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 File.
Upon
discovery by the Seller, the Servicer or the Purchaser of a breach of any
of the
foregoing representations and warranties which materially and adversely affects
the value of the Mortgage Loans or the interest of the Purchaser therein
(or
which materially and adversely affects the interest of the Purchaser in or
the
value of the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan), the party discovering such breach
shall
give prompt written notice to the others.
29
Within
sixty (60) days after the earlier of either discovery by or notice to
either the Seller or the Servicer of any breach of a representation or warranty
set forth in Subsections 7.01 or 7.02 which materially and adversely affects
the
value of a Mortgage Loan or the Mortgage Loans or the interest of the Purchaser
therein, the Seller or the Servicer, as the case may be, shall use its best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured within sixty (60) day period, the Seller shall repurchase
such Mortgage Loan or Mortgage Loans at the Repurchase Price. However, the
Seller may, at its option and assuming that the Seller has a Substitute Mortgage
Loan, rather than repurchase the Mortgage Loan as provided above, remove
such
Mortgage Loan and substitute in its place a Substitute Mortgage Loan or
Substitute Mortgage Loans; provided,
however,
that
any such substitution shall be effected not later than ninety (90) days after
the related Closing Date. If the Seller has no Substitute Mortgage Loan,
it
shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan
pursuant to the foregoing provisions of this Subsection 7.03 shall occur on
a date designated by the Purchaser, and acceptable to the Seller, and shall
be
accomplished by the Seller remitting to the Servicer the amount of the related
Repurchase Price for distribution to the Purchaser on the next scheduled
Remittance Date.
At
the
time of repurchase of any deficient Mortgage Loan (or removal of any Deleted
Mortgage Loan), the Purchaser and the Seller shall arrange for the assignment
of
the repurchased Mortgage Loan (or Deleted Mortgage Loan) to the Seller or
its
designee and the delivery to the Seller of any documents held by the Purchaser
relating to the repurchased Mortgage Loan in the manner required by this
Agreement with respect to the purchase and sale of such Mortgage Loan on
the
related Closing Date. In the event a deficient Mortgage Loan is repurchased,
the
Seller shall, simultaneously with its remittance to the Servicer for
distribution to the Purchaser of such related Repurchase Price, give written
notice to the Purchaser that such repurchase has taken place. Upon such
repurchase, the related Mortgage Loan Schedule shall simultaneously 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 one or more Substitute
Mortgage Loans, the Seller shall effect such substitution by delivering to
the
Purchaser for each Substitute Mortgage Loan the Mortgage Note, the Mortgage,
the
Assignment of Mortgage and such other documents and agreements as are required
by Subsection 6.03. The Seller shall remit to the Servicer for distribution
the Monthly Payment due on each Substitute Mortgage Loan in the month following
the date of such substitution. Monthly Payments due with respect to 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 it in respect of such Deleted Mortgage Loan. The Seller shall
give
written notice to the Purchaser that such substitution has taken place and
shall
amend the related Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Substitute Mortgage Loan. Upon such substitution, each Substitute Mortgage
Loan
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 Substitute Mortgage Loan,
as
of the date of substitution, the covenants, representations and warranties
set
forth in Subsections 7.01 and 7.02.
30
For
any
month in which the Seller substitutes one or more 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 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). The amount of such
shortfall, plus an amount equal to the aggregate of any P&I Advances made
with respect to such Deleted Mortgage Loans, shall be remitted to the Servicer
by the Seller for distribution by the Servicer to the Purchaser in the month
of
substitution.
In
addition to such cure, repurchase and substitution obligations, the Seller
or
the Servicer shall indemnify the Purchaser and hold it harmless against any
out-of-pocket losses, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion by any third party that is based
on
or grounded upon, or resulting from, a breach of the Seller or the Servicer,
as
applicable, representations and warranties contained in this Agreement;
provided,
however,
indemnification shall not be available for any economic losses of the Purchaser
due to reinvestment losses, loss of investment income or any other special,
indirect or consequential losses or damages.
No
action
may be brought against the Seller
or the Servicer, as applicable, relating
to or arising out of the breach of any representations and warranties made
in
Subsections 7.01 or 7.02 with respect to any Mortgage Loan unless and until
(i) discovery of such breach by the Purchaser or notice thereof by the
Seller or the Servicer to Purchaser, (ii) failure by the Seller
or
the Servicer, as applicable, to
cure
such breach, repurchase such Mortgage Loan as specified above, substitute
a
Substitute Mortgage Loan for such Mortgage Loan as specified above and/or
indemnify the Purchaser and (iii) demand upon the Seller or
the Servicer, as applicable, by
the
Purchaser for compliance with the terms of this Agreement.
It
is
understood and agreed that the obligations of the Seller or
the Servicer, as applicable, set
forth
in this Subsection 7.03 to cure, repurchase or substitute for a defective
Mortgage Loan and/or to indemnify the Purchaser constitute the sole remedies
of
the Purchaser respecting a breach of the representations and warranties set
forth in Subsections 7.01 and 7.02.
SECTION
8. CLOSING
CONDITIONS.
The
closing for the purchase and sale of each Mortgage Loan Package shall take
place
on the respective Closing Date. The closing shall be either by telephone,
confirmed by letter or wire as the parties hereto shall agree, or conducted
in
person, at such place as the parties hereto shall agree.
The
closing for each Mortgage Loan Package shall be subject to the satisfaction
of
each of the following conditions:
(a) the
Seller shall have delivered to the Purchaser the related Mortgage Loan Schedule
and an electronic data file containing information on a loan-level
basis;
(b) all
of
the representations and warranties of the Seller
and the
Servicer under this Agreement shall be true and correct as of the related
Closing Date (or, with respect to Subsection 7.01, such other date specified
therein) in all material respects and no event shall have occurred hereunder
which, with notice or the passage of time or both, would constitute an Event
of
Default hereunder;
31
(c) the
Purchaser shall have received from the Purchaser’s bailee or the Custodian an
initial certification with respect to its receipt of the Mortgage Loan Documents
for the related Mortgage Loans;
(d) the
Purchaser shall have received in escrow all Closing Documents as specified
in
Section 9, in such forms as are agreed upon and acceptable to the
Purchaser, duly executed by all signatories as required pursuant to the terms
hereof; and
(e) all
other
terms and conditions of this Agreement, the related Purchase Price and Terms
Agreement and the related Acknowledgment and Conveyance Agreement to be
satisfied by the Seller
shall
have been complied with in all material respects.
Upon
satisfaction of the foregoing conditions, the Purchaser shall pay to the
Seller
on such
Closing Date the Purchase Price for the related Mortgage Loan Package, plus
accrued interest pursuant to Section 4 of this Agreement.
SECTION
9. CLOSING
DOCUMENTS.
Subsection
9.01 Initial
Closing Date.
On
the
initial Closing Date, the Seller and the Servicer shall deliver to its attorneys
in escrow fully executed originals of:
(a) this
Agreement, executed by the Seller and the Servicer, including all
exhibits;
(b) §an
Escrow Account Certification; and
(c) a
Custodial Account Certification.
Subsection
9.02 Subsequent
Closing Dates.
The
closing documents for the Mortgage Loans to be purchased on each Closing
Date
under this Agreement (including the initial Closing Date) shall consist of
fully
executed originals of the following documents:
(a) the
related Purchase Price and Terms Agreement;
(b) the
related Acknowledgment and Conveyance Agreement, including all annexes
thereto;
(c) the
related Assignment and Assumption.;
(d) upon
request, an Officer’s Certificate, in the form of Exhibit
4
hereto,
for the Seller and the Servicer including all attachments thereto; provided,
however,
that
such Officer’s Certificate shall not be required to be delivered by the Seller
and the Servicer more than once in any calendar year; and
32
(e) upon
request, an opinion of in-house counsel for the Seller and the Servicer,
substantially in the form of Exhibit
9
attached
hereto; provided,
however,
that
such opinion shall not be required to be delivered by the Seller and the
Servicer more than once in any calendar year.
SECTION
10. COSTS.
The
Seller shall pay any commissions due its salesmen and the legal fees and
expenses of its attorneys. The Purchaser shall pay the cost of preparing
and
recording the Assignments of Mortgage (and, if any Assignment of Mortgage
is
missing, the reasonable cost of securing a copy of such Assignment of Mortgage).
The Purchaser shall pay the Seller’s cost of delivering the Mortgage Loan
Documents for each related Closing Date to a location designated by the
Purchaser (if other than the Custodian). All other costs and expenses incurred
in connection with the sale of the Mortgage Loans by the Seller to the
Purchaser, including without limitation the fees and expenses of the Custodian,
all costs and expenses of the Seller, the Servicer and the Purchaser incurred
in
connection with any Transfer or further assignment of the Mortgage Loans
and the
Purchaser’s attorneys’ fees shall be paid by the Purchaser.
SECTION
11. ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS.
Subsection
11.01 Servicer
to Act as Servicer; Subservicing.
The
Servicer, as an independent contractor, shall service and administer the
Mortgage Loans in accordance with this Agreement and Customary Servicing
Procedures and the terms of the Mortgage Notes and Mortgages, and shall have
full power and authority, acting alone or through subservicers or agents,
to do
or cause to be done any and all things in connection with such servicing
and
administration which the Servicer may deem necessary or desirable and consistent
with the terms of this Agreement. The Servicer shall service the Mortgage
Loans
in accordance with the guidelines of the applicable governing agency and
shall
comply with all of the rules and regulations as set forth by each applicable
agency. The Servicer may perform its servicing responsibilities through agents
or independent contractors, but shall not thereby be released from any of
its
responsibilities hereunder. Notwithstanding anything to the contrary, the
Servicer may delegate any of its duties under this Agreement to one or more
of
its affiliates without regard to any of the requirements of this section;
provided,
however, that
the
Servicer shall not be released from any of its responsibilities hereunder
by
virtue of such delegation. The Mortgage Loans may be subserviced by one or
more
unaffiliated subservicers on behalf of the Servicer provided each subservicer
is
a Xxxxxx Xxx approved seller/servicer or a Xxxxxxx Mac approved seller/servicer
in good standing, and no event has occurred, including but not limited to
a
change in insurance coverage, that would make it unable to comply with the
eligibility for seller/servicers imposed by Xxxxxx Xxx or Xxxxxxx Mac, or
which
would require notification to Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall
pay
all fees and expenses of the subservicer from its own funds (provided that
any
such expenditures that would constitute Servicing Advances if made by the
Servicer hereunder shall be reimbursable to the Servicer as Servicing Advances),
and the subservicer’s fee shall not exceed the Servicing Fee.
33
At
the
cost and expense of the Servicer, without any right of reimbursement from
the
Custodial Account, the Servicer shall be entitled to terminate the rights
and
responsibilities of a subservicer and arrange for any servicing responsibilities
to be performed by a successor subservicer meeting the requirements in the
preceding paragraph; provided,
however,
that
nothing contained herein shall be deemed to prevent or prohibit the Servicer,
at
the Servicer’s option, from electing to service the related Mortgage Loans
itself. If the Servicer’s responsibilities and duties under this Agreement are
terminated and if requested to do so by the Purchaser, the Servicer shall
at its
own cost and expense terminate the rights and responsibilities of the
subservicer as soon as is reasonably possible. The Servicer shall pay all
fees,
expenses or penalties necessary in order to terminate the rights and
responsibilities of the subservicer from the Servicer’s own funds without
reimbursement from the Purchaser.
The
Servicer shall be entitled to enter into an agreement with the subservicer
for
indemnification of the Servicer by the subservicer and nothing contained
in this
Agreement shall be deemed to limit or modify such indemnification.
Any
subservicing agreement and any other transactions or services relating to
the
Mortgage Loans involving the subservicer shall be deemed to be between the
subservicer and Servicer alone, and the Purchaser shall have no obligations,
duties or liabilities with respect to the subservicer including no obligation,
duty or liability of the Purchaser to pay the subservicer’s fees and expenses.
For purposes of distributions and advances by the Servicer pursuant to this
Agreement, the Servicer shall be deemed to have received a payment on a Mortgage
Loan when the subservicer has received such payment.
Consistent
with the terms of this Agreement and Customary Servicing Procedures, the
Servicer may waive, modify or vary any term of any Mortgage Loan or consent
to
the postponement of strict compliance with any such term or in any manner
grant
indulgence to any Mortgagor; provided,
however,
that (unless the Mortgagor is in default with respect to the Mortgage Loan,
or
such default is, in the judgment of the Servicer, imminent, and the Servicer
has
the consent of the Purchaser) the Servicer shall not permit any modification
with respect to any Mortgage Loan which would materially and adversely affect
the Mortgage Loan, including without limitation, any modification that would
change
the Mortgage Interest Rate, the Lifetime Rate Cap (if applicable), the Initial
Rate Cap (if applicable), the Periodic Rate Cap/Floor (if applicable) or
the
Gross Margin (if applicable), defer
or forgive the payment of any principal or interest, change the outstanding
principal amount (except for actual payments of principal), make any future
advances or extend the final maturity date, as the case may be, with respect
to
such Mortgage Loan. Without limiting the generality of the foregoing, the
Servicer in its own name or acting through subservicers or agents is hereby
authorized and empowered by the Purchaser when the Servicer believes it
appropriate and reasonable in its best judgment, to execute and deliver,
on
behalf of itself 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 the Mortgaged Properties
and
to institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure
so
as to convert the ownership of such properties, and to hold or cause to be
held
title to such properties, on behalf of the Purchaser pursuant to the provisions
of Subsection 11.13.
34
The
Servicer shall make all required Servicing Advances and shall service and
administer the Mortgage Loans in accordance with all applicable laws, rules
and
regulations and shall provide to the Mortgagors any reports required to be
provided to them thereby. The Purchaser shall furnish to the Servicer any
powers
of attorney and other documents reasonably necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties under this
Agreement.
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed-in-lieu of foreclosure, if the Servicer has reasonable
cause to believe that a Mortgaged Property is contaminated by hazardous or
toxic
substances or waste, or if the Purchaser otherwise requests an environmental
inspection or review of such Mortgaged Property, such an inspection or review
is
to be conducted by a qualified inspector at the Purchaser’s expense. Upon
completion of the inspection, the Servicer shall promptly provide the Purchaser
with a written report of the environmental inspection. After reviewing the
inspection, the Purchaser shall determine how the Servicer shall proceed
with
respect to the Mortgaged Property.
Subsection
11.02 Liquidation
of Mortgage Loans.
If
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. If any payment due under any Mortgage
Loan remains delinquent for a period of ninety (90) days or more, the
Servicer shall commence foreclosure proceedings in accordance with Customary
Servicing Procedures and the guidelines set forth by Xxxxxx Xxx or Xxxxxxx
Mac.
In such connection, the Servicer shall from its own funds make all necessary
and
proper Servicing Advances. If the portion of any Liquidation Proceeds or
REO
Disposition Proceeds allocable as a recovery of interest on any Mortgage
Loan is
less than the full amount of accrued and unpaid interest on such Mortgage
Loan
as of the date such proceeds are received, then the applicable Servicing
Fees
with respect to such Mortgage Loan shall be paid first and any amounts remaining
thereafter shall be distributed to the Purchaser.
Subsection
11.03 Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, the Servicer will proceed diligently, in accordance with this
Agreement, to collect all payments due under each of the Mortgage Loans when
the
same shall become due and payable. Further, the Servicer will in accordance
with
Customary Servicing Procedures ascertain and estimate taxes, assessments,
fire
and hazard insurance premiums, premiums for Primary Mortgage Insurance Policies
(if any), and all other charges that, as provided in any Mortgage, will become
due and payable to the end that the installments payable by the Mortgagors
will
be sufficient to pay such charges as and when they become due and
payable.
35
Subsection
11.04 Establishment
of Custodial Account; Deposits in Custodial Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts
(collectively, the “Custodial
Account”),
titled “Bank of America, National Association, in trust for Xxxxxx Capital, A
Division of Xxxxxx Brothers Holdings Inc., as Purchaser of Mortgage Loans
and
various Mortgagors.” Such Custodial Account shall be established with a
Qualified Depository. In any case, the Custodial Account shall be insured
by the
FDIC in a manner which shall provide maximum available insurance thereunder
and
which may be drawn on by the Servicer. The creation of the Custodial Account
shall be evidenced by a certificate delivered by the Servicer (the “Custodial
Account Certification”)
substantially in the form of Exhibit
10
hereto.
The
Servicer shall deposit in the Custodial Account on a daily basis, and retain
therein the following payments and collections received or made by it subsequent
to the related Cut-off Date (other than in respect of principal and interest
on
the Mortgage Loans due on or before the related Cut-off Date):
(a) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
(b) all
payments on account of interest on the Mortgage Loans adjusted to the related
Mortgage Loan Remittance Rate;
(c) all
Liquidation Proceeds;
(d) all
proceeds received by the Servicer under any title insurance policy, hazard
insurance policy, Primary Mortgage Insurance Policy (if any) or other insurance
policy other than proceeds to be held in the Escrow Account and applied to
the
restoration or repair of the Mortgaged Property or released to the Mortgagor
in
accordance with Customary Servicing Procedures;
(e) all
awards or settlements in respect of condemnation proceedings or eminent domain
affecting any Mortgaged Property which are not released to the Mortgagor
in
accordance with Customary Servicing Procedures;
(f) any
amount required to be deposited in the Custodial Account pursuant to
Subsections 11.15, 11.17 and 11.19;
(g) any
amount required to be deposited by the Servicer in connection with any REO
Property pursuant to Subsection 11.13;
(h) any
amounts payable in connection with the repurchase of any Mortgage Loan pursuant
to Subsection 7.03, and all amounts required to be deposited by the Servicer
in
connection with shortfalls in principal amount of Substitute Mortgage Loans
pursuant to Subsection 7.03;
36
(i) with
respect to each Principal Prepayment in full, an amount (to be paid by the
Servicer out of its own funds) which, when added to all amounts allocable
to
interest received in connection with the Principal Prepayment in full, equals
one month’s interest on the amount of principal so prepaid for the month of
prepayment at the applicable Mortgage Loan Remittance Rate; provided,
however,
that the
Servicer’s aggregate obligations under this paragraph for any month shall be
limited to the total amount of Servicing Fees actually received with respect
to
the Mortgage Loans by the Servicer during such month;
(j) amounts
required to be deposited by the Servicer in connection with the deductible
clause of any hazard insurance policy; and
(k) any
BPP
Mortgage Loan Payments payable by the Servicer pursuant to Subsection
11.27.
The
foregoing requirements for deposit in the Custodial Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges, assumption fees,
BPP
Fees and other ancillary fees need not be deposited by the Servicer in the
Custodial Account.
The
Servicer may invest the funds in the Custodial Account in Eligible Investments
designated in the name of the Servicer for the benefit of the Purchaser,
which
shall mature not later than the Business Day next preceding the Remittance
Date
next following the date of such investment (except that (A) any investment
in the institution with which the Custodial Account is maintained may mature
on
such Remittance Date and (B) any other investment may mature on such
Remittance Date if the Servicer shall advance funds on such Remittance Date,
pending receipt thereof to the extent necessary to make distributions to
the
Purchaser) and shall not be sold or disposed of prior to maturity.
Notwithstanding anything to the contrary herein and above, all income and
gain
realized from any such investment shall be for the benefit of the Servicer
and
shall be subject to withdrawal by the Servicer. The amount of any losses
incurred in respect of any such investments shall be deposited in the Custodial
Account by the Servicer out of its own funds immediately as
realized.
Subsection
11.05 Withdrawals
From the Custodial Account.
The
Servicer shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(a) to
make
payments to the Purchaser in the amounts and in the manner provided for in
Subsection 11.15;
(b) to
reimburse itself for P&I Advances, the Servicer’s right to reimburse itself
pursuant to this subclause (b) with respect to any Mortgage Loan being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and such other amounts as may be collected
by
the Servicer from the Mortgagor or otherwise relating to the Mortgage Loan,
it
being understood that, in the case of any such reimbursement, the Servicer’s
right thereto shall be prior to the rights of the Purchaser with respect
to such
Mortgage Loan, except that, where the Seller is required to repurchase a
Mortgage Loan, pursuant to Subsection 6.03 or 7.03, the Servicer’s right to
such reimbursement shall be subsequent to the payment to the Purchaser of
the
Repurchase Price pursuant to Subsection 6.03 or 7.03, and all other amounts
required to be paid to the Purchaser with respect to such Mortgage
Loan;
37
(c) to
reimburse itself for any unpaid Servicing Fees and for unreimbursed Servicing
Advances, the Servicer’s right to reimburse itself pursuant to this
subclause (c) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition
Proceeds and such other amounts as may be collected by the Servicer from
the
Mortgagor or otherwise relating to the Mortgage Loan, it being understood
that,
in the case of any such reimbursement, the Servicer’s right thereto shall be
prior to the rights of the Purchaser unless the Seller is required to repurchase
a Mortgage Loan pursuant to Subsection 6.03 or 7.03, in which case the
Servicer’s right to such reimbursement shall be subsequent to the payment to the
Purchaser of the related Repurchase Price pursuant to Subsection 6.03 or
7.03 and all other amounts required to be paid to the Purchaser with respect
to
such Mortgage Loan;
(d) to
reimburse itself for unreimbursed Servicing Advances and for xxxxxxxxxxxx
X&X Advances, to the extent that such amounts are nonrecoverable (as
certified by the Servicer to the Purchaser in an Officer’s Certificate) by the
Servicer pursuant to subclause (b) or (c) above, provided that the Mortgage
Loan for which such advances were made is not required to be repurchased
by a
Seller pursuant to Subsection 7.03;
(e) to
reimburse itself for expenses incurred by and reimbursable to it pursuant
to
Subsection 12.01;
(f) to
withdraw amounts to make P&I Advances in accordance with
Subsection 11.17;
(g) to
pay to
itself any interest earned or any investment earnings on funds deposited
in the
Custodial Account, net of any losses on such investments;
(h) to
withdraw any amounts inadvertently deposited in the Custodial Account;
and
(i) to
clear
and terminate the Custodial Account upon the termination of this
Agreement.
Subsection
11.06 Establishment
of Escrow Account; Deposits in Escrow Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan which constitute Escrow Payments separate and apart from
any
of its own funds and general assets and shall establish and maintain one
or more
Escrow Accounts (collectively, the “Escrow
Account”),
titled “Bank of America, National Association, in trust for Xxxxxx Capital, A
Division of Xxxxxx Brothers Holdings Inc., as Purchaser of Mortgage Loans
and
various Mortgagors.” The Escrow Account shall be established with a Qualified
Depository. In any case, the Escrow Account shall be insured by the FDIC
in a
manner which shall provide maximum available insurance thereunder and which
may
be drawn on by the Servicer. The creation of the Escrow Account shall be
evidenced by a certificate delivered by the Servicer (the “Escrow
Account Certification”)
substantially in the form of Exhibit
11
hereto.
38
The
Servicer shall deposit in the Escrow Account on a daily basis, and retain
therein: (a) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement, (b) all amounts representing proceeds of
any hazard insurance policy which are to be applied to the restoration or
repair
of any Mortgaged Property and (c) all amounts representing proceeds of any
Primary Mortgage Insurance Policy (if any). The Servicer shall make withdrawals
therefrom only in accordance with Subsection 11.07 hereof. As part of its
servicing duties, the Servicer shall pay to the Mortgagors interest on funds
in
the Escrow Account, to the extent required by law.
Subsection
11.07 Withdrawals
From Escrow Account.
Withdrawals
from the Escrow Account shall be made by the Servicer only (a) to effect
timely payments of ground rents, taxes, assessments, premiums for Primary
Mortgage Insurance Policies (if any), fire and hazard insurance premiums
or
other items constituting Escrow Payments for the related Mortgage, (b) to
reimburse the Servicer for any Servicing Advance made by Servicer pursuant
to
Subsection 11.08 hereof with respect to a related Mortgage Loan,
(c) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Mortgage Loan, (d) for
transfer to the Custodial Account upon default of a Mortgagor or in accordance
with the terms of the related Mortgage Loan and if permitted by applicable
law,
(e) for application to restore or repair of the Mortgaged Property,
(f) to pay to the Mortgagor, to the extent required by law, any interest
paid on the funds deposited in the Escrow Account, (g) to pay to itself any
interest earned on funds deposited in the Escrow Account (and not required
to be
paid to the Mortgagor), (h) to the extent permitted under the terms of the
related Mortgage Note and applicable law, to pay late fees with respect to
any
Monthly Payment which is received after the applicable grace period, (i) to
withdraw suspense payments that are deposited into the Escrow Account,
(j) to withdraw any amounts inadvertently deposited in the Escrow Account,
(k) to pay the Mortgagors or other parties Insurance Proceeds deposited in
accordance with Section 11.06 or (l) to clear and terminate the Escrow Account
upon the termination of this Agreement.
Subsection
11.08 Payment
of Taxes, Insurance and Other Charges; Collections Thereunder.
With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments and other charges
which are or may become a lien upon the Mortgaged Property and the status
of
premiums for Primary Mortgage Insurance Policies (if any) and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such
purpose
deposits of the Mortgagor in the Escrow Account which shall have been estimated
and accumulated by the Servicer in amounts sufficient for such purposes,
as
allowed under the terms of the Mortgage. If a Mortgage does not provide for
Escrow Payments, the Servicer shall determine that any such payments are
made by
the Mortgagor. The Servicer assumes full responsibility for the timely payment
of all such bills and shall effect timely payments of all such bills
irrespective of each Mortgagor’s faithful performance in the payment of same or
the making of the Escrow Payments and shall make Servicing Advances to effect
such payments, subject to its ability to recover such Servicing Advances
pursuant to Subsections 11.05(c), 11.05(d) and 11.07(b). No costs incurred
by the Servicer or subservicers in effecting the payment of taxes and
assessments on the Mortgaged Properties shall, for the purpose of calculating
remittances to the Purchaser, be added to the amount owing under the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so
permit.
39
Subsection
11.09 Transfer
of Accounts.
The
Servicer may transfer the Custodial Account or the Escrow Account to a different
Qualified Depository. Such transfer shall be made only upon providing notice
to
the Purchaser.
Subsection
11.10 Maintenance
of Hazard Insurance.
The
Servicer shall cause to be maintained for each Mortgage Loan fire and hazard
insurance with extended coverage customary in the area where the Mortgaged
Property is located by an insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac
in an
amount which is at least equal to the lesser of (a) the full insurable
value of the Mortgaged Property or (b) the greater of (i) the
outstanding principal balance owing on the Mortgage Loan and (ii) an amount
such that the proceeds of such insurance shall be sufficient to avoid the
application to the Mortgagor or loss payee of any coinsurance clause under
the
policy. If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as a special flood hazard
area (and such flood insurance has been made available) the Servicer will
cause
to be maintained a flood insurance policy meeting the requirements of the
National Flood Insurance Program, in an amount representing coverage not
less
than the lesser of (A) the minimum amount required under the terms of the
coverage to compensate for any damage or loss to the Mortgaged Property on
a
replacement-cost basis (or the outstanding principal balance of the Mortgage
Loan if replacement-cost basis is not available) or (B) the maximum amount
of insurance available under the National Flood Insurance Program. The Servicer
shall also maintain on REO Property fire and hazard insurance with extended
coverage in an amount which is at least equal to the maximum insurable value
of
the improvements which are a part of such property, liability insurance and,
to
the extent required and available under the National Flood Insurance Program,
flood insurance in an amount required above. Any amounts collected by the
Servicer under any such policies (other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the property subject
to the related Mortgage or property acquired in liquidation of the Mortgage
Loan, or to be released to the Mortgagor in accordance with Customary Servicing
Procedures) shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Subsection 11.05. It is understood and agreed that no
earthquake or other additional insurance need be required by the Servicer
of any
Mortgagor or maintained on REO Property other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require
such
additional insurance. All policies required hereunder shall be endorsed with
standard mortgagee clauses with loss payable to Servicer, and shall provide
for
at least thirty (30) days prior written notice of any cancellation,
reduction in amount or material change in coverage to the Servicer. The Servicer
shall not interfere with the Mortgagor’s freedom of choice in selecting either
its insurance carrier or agent; provided,
however,
that the
Servicer shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to Xxxxxx Mae or Xxxxxxx Mac, and are
licensed to do business in the state wherein the property subject to the
policy
is located.
40
The
hazard insurance policies for each Mortgage Loan secured by a unit in a
condominium development or planned unit development shall be maintained with
respect to such Mortgage Loan and the related development in a manner which
is
consistent with Xxxxxx Mae or Xxxxxxx Mac requirements.
Subsection
11.11 Maintenance
of Primary Mortgage Insurance Policy; Claims.
With
respect to each Mortgage Loan with a LTV in excess of 80%, the Servicer shall,
without any cost to the Purchaser, maintain or cause the Mortgagor to maintain
in full force and effect a Primary Mortgage Insurance Policy insuring the
portion over 78% (or such other percentage in conformance with then current
Xxxxxx Mae requirements) until terminated pursuant to the Homeowners Protection
Act of 1998, 12 USC § 4901, et seq. or any other applicable federal, state
or local law or regulation. The Servicer shall pay or shall cause the Mortgagor
to pay the premium thereon on a timely basis, at least until the LTV of such
Mortgage Loan is reduced to an amount acceptable to Xxxxxx Xxx requirements.
In
the event that such Primary Mortgage Insurance Policy shall be terminated
other
than as required by law, the Servicer shall obtain from another insurer a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated Primary Mortgage Insurance Policy. If the insurer
shall cease to be a qualified insurer, the Servicer shall obtain from another
qualified insurer a replacement Primary Mortgage Insurance Policy. The Servicer
shall not take any action which would result in noncoverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions
of the
Servicer would have been covered thereunder. In connection with any assumption
or substitution agreement entered into or to be entered into pursuant to
Subsection 11.18, the Servicer shall promptly notify the insurer under the
related Primary Mortgage Insurance Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such Primary Mortgage
Insurance Policy and shall take all actions which may be required by such
insurer as a condition to the continuation of coverage under such Primary
Mortgage Insurance Policy. If such Primary Mortgage Insurance Policy is
terminated as a result of such assumption or substitution of liability, the
Servicer shall obtain a replacement Primary Mortgage Insurance Policy as
provided above.
In
connection with its activities as servicer, the Servicer agrees to prepare
and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
Primary Mortgage Insurance Policy (if any) in a timely fashion in accordance
with the terms of such Primary Mortgage Insurance Policy and, in this regard,
to
take such action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policy respecting a defaulted Mortgage Loan. Pursuant
to
Subsection 11.06, any amounts collected by the Servicer under any Primary
Mortgage Insurance Policy (if any) shall be deposited in the Escrow Account,
subject to withdrawal pursuant to Subsection 11.07.
41
Subsection
11.12 Fidelity
Bond; Errors and Omissions Insurance.
The
Servicer shall maintain, at its own expense, a blanket Fidelity Bond and
an
errors and omissions insurance policy, with broad coverage on all officers,
employees or other persons acting in any capacity requiring such persons
to
handle funds, money, documents or papers relating to the Mortgage Loans.
These
policies must insure the Servicer against losses resulting from fraud, theft,
errors, omissions, negligence, dishonest or fraudulent acts committed by
the
Servicer’s personnel, any employees of outside firms that provide data
processing services for the Servicer, and temporary contract employees or
student interns. The Fidelity Bond shall also protect and insure the Servicer
against losses in connection with the release or satisfaction of a Mortgage
Loan
without having obtained payment in full of the indebtedness secured thereby.
No
provision of this Subsection 11.12 requiring such Fidelity Bond and errors
and omissions insurance shall diminish or relieve the Servicer from its duties
and obligations as set forth in this Agreement. The minimum coverage under
any
such Fidelity Bond and insurance policy shall be at least equal to the
corresponding amounts required by Xxxxxx Mae in the Xxxxxx Xxx Guides or
by
Xxxxxxx Mac in the Xxxxxxx Mac Guide, as amended or restated from time to
time,
as applicable, or in an amount as may be permitted to the Servicer by express
waiver of Xxxxxx Mae or Xxxxxxx Mac, as applicable. Upon request of the
Purchaser, the Servicer shall cause to be delivered to the Purchaser a certified
true copy of such Fidelity Bond or a certificate evidencing the same with
a
statement that the Servicer shall endeavor to provide written notice to the
Purchaser thirty (30) days prior to modification or any material
change.
Subsection
11.13 Title,
Management and Disposition of REO Property.
If
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
Servicer or its nominee, in either case as nominee, for the benefit of the
Purchaser of record on the date of acquisition of title (the “Owner”).
If
the Servicer is not authorized or permitted to hold title to real property
in
the state where the REO Property is located, or would be adversely affected
under the “doing business” or tax laws of such state by so holding title, the
deed or certificate of sale shall be taken in the name of such Person or
Persons
as shall be consistent with an opinion of counsel obtained by the Servicer,
at
the expense of the Purchaser, from an attorney duly licensed to practice
law in
the state where the REO Property is located. The Person or Persons holding
such
title other than the Owner shall acknowledge in writing that such title is
being
held as nominee for the Owner.
The
Servicer shall cause to be deposited on a daily basis in the Custodial Account
all revenues received with respect to the conservation and disposition of
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 and the fees
of
any managing agent acting on behalf of the Servicer. Any disbursement in
excess
of $10,000 shall be made only with the written approval of the Purchaser.
The
Servicer shall make distributions as required on each Remittance Date to
the
Purchaser of the net cash flow from the REO Property (which shall equal the
revenues from such REO Property net of the expenses described above and of
any
reserves reasonably required from time to time to be maintained to satisfy
anticipated liabilities for such expenses).
42
The
disposition of REO Property shall be carried out by the Servicer in accordance
with the provisions of this Agreement and shall be made at such price, and
upon
such terms and conditions, as the Servicer deems to be in the best interests
of
the Owner. The Servicer shall be entitled to withdraw from the Custodial
Account
a fee of $1,500 for such REO Property to reimburse itself for services
associated with managing the REO Property through its disposition. Upon the
request of the Owner, and at the Owner’s expense, the Servicer shall cause an
appraisal of the REO Property to be performed for the Owner. The proceeds
of
sale of the REO Property shall be promptly deposited in the Custodial Account
and, as soon as practical thereafter, the expenses of such sale shall be
paid,
the Servicer shall reimburse itself for any related unreimbursed Servicing
Advances, unpaid Servicing Fees, unreimbursed advances made pursuant to
Subsection 11.17 and any appraisal performed pursuant to this paragraph and
the
net cash proceeds of such sale remaining in the Custodial Account shall be
distributed to the Purchaser.
The
Servicer shall either itself or through an agent selected by the Servicer,
manage, conserve, protect and operate the REO Property in the same manner
that
it manages, conserves, protects and operates other foreclosed property for
its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Servicer shall attempt to sell the same
within a three-year period (and may temporarily rent the same) on such terms
and
conditions as the Servicer deems to be in the best interest of the
Owner.
Upon
request, with respect to any REO Property, the Servicer shall furnish to
the
Owner a statement covering the Servicer’s efforts in connection with the sale of
that REO Property and any rental of the REO Property incidental to the sale
thereof for the previous month (together with an operating
statement).
Subsection
11.14 Servicing
Compensation.
As
compensation for its services hereunder, the Servicer shall be entitled to
retain the Servicing Fee from interest payments actually collected on the
Mortgage Loans. Additional servicing compensation in the form of assumption
fees, late payment charges, prepayment penalties, BPP Fees, fees related
to the
disposition of REO Property and other ancillary income shall be retained
by the
Servicer to the extent not required to be deposited in the Custodial Account.
The Servicer shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided for herein.
Subsection
11.15 Distributions.
On
each
Remittance Date the Servicer shall remit by wire transfer of immediately
available funds to the account designated in writing by the Purchaser of
record
on the preceding Record Date (i) all Monthly Payments due in the Due Period
prior to such Remittance Date and received by the Servicer prior to the related
Determination Date, plus (ii) all amounts, if any, which the Servicer is
obligated to distribute pursuant to Subsection 11.17, plus (iii) any amounts
attributable to Principal Prepayments received in the calendar month preceding
the month in which the Remittance Date occurs, together with any additional
interest required to be deposited in the Custodial Account in connection
with
such Principal Prepayments in accordance with Subsection 11.04(i), minus
(iv)
all amounts that may be withdrawn from the Custodial Account pursuant to
Subsections 11.05(b) through (e) minus (v) except in the case of Option ARM
Mortgage Loans, any amounts (other than Principal Prepayments) attributable
to
Monthly Payments collected but due on a Due Date or Due Dates subsequent
to the
related Due Date.
43
With
respect to any remittance received by the Purchaser after the Business Day
on
which such payment was due, the Servicer shall pay to the Purchaser interest
on
any such late payment at an annual rate equal to the rate of interest as
is
publicly announced from time to time at its principal office by Bank of America,
National Association, or its successor, as its prime lending rate, adjusted
as
of the date of each change, plus two percent (2%), but in no event greater
than the maximum amount permitted by applicable law. Such interest shall
be paid
by the Servicer to the Purchaser on the date such late payment is made and
shall
cover the period commencing with the Business Day on which such payment was
due
and ending with the Business Day immediately preceding the Business Day on
which
such payment is made, both inclusive. The payment by the Servicer of any
such
interest shall not be deemed an extension of time for payment or a waiver
of any
Event of Default by the Servicer.
Subsection
11.16 Statements
to the Purchaser.
Not
later
than the tenth day of each calendar month, the Servicer shall forward to
the
Purchaser a statement, substantially in the form of Exhibit
6
and
certified by a Servicing Officer, setting forth on a loan-by-loan basis:
(a) the amount of the distribution made on such Remittance Date which is
allocable to principal and allocable to interest; (b) the amount of
servicing compensation received by the Servicer during the prior calendar
month;
and (c) the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the preceding month. Such statement shall also include
information regarding delinquencies on Mortgage Loans, indicating the number
and
aggregate principal amount of Mortgage Loans which are either one (1),
two (2) or three (3) or more months delinquent and the book value of
any REO Property. The Servicer shall submit to the Purchaser monthly a
liquidation report with respect to each Mortgaged Property sold in a foreclosure
sale as of the related Record Date and not previously reported. Such liquidation
report shall be incorporated into the remittance report delivered to Purchaser
in the form of Exhibit 6
hereto.
Upon the written request of the Purchaser, the Servicer shall also provide
such
information as set forth above to the Purchaser in electronic form in the
Servicer’s standard format.
The
Servicer shall prepare and file any and all tax returns, information statements
or other filings required to be delivered to any governmental taxing authority,
the Mortgagor or to the Purchaser pursuant to any applicable law with respect
to
the Mortgage Loans and the transactions contemplated hereby. In addition,
the
Servicer shall provide the Purchaser with such information concerning the
Mortgage Loans as is necessary for such Purchaser to prepare federal income
tax
returns as the Purchaser may reasonably request from time to time.
Subsection
11.17 Advances
by the Servicer.
44
On
the
Business Day immediately preceding each related Remittance Date, the Servicer
shall either (a) deposit in the Custodial Account from its own funds an
amount equal to (i) except in the case of Option ARM Mortgage Loans, the
aggregate amount of all Monthly Payments (with interest adjusted to the Mortgage
Loan Remittance Rate) which were due on the Mortgage Loans during the applicable
Due Period and (ii) in the case of Option ARM Mortgage Loans, an amount equal
to
the aggregate amount of all scheduled payments of interest payable by the
Mortgagor under the related Mortgage Note during the applicable Due Period,
in
each case, which were delinquent at the close of business on the immediately
preceding Determination Date (each such advance, a “P&I
Advance”),
(b) cause to be made an appropriate entry in the records of the Custodial
Account that amounts held for future distribution have been, as permitted
by
this Subsection 11.17, used by the Servicer in discharge of any such
P&I Advance or (c) make P&I Advances in the form of any combination
of (a) or (b) aggregating the total amount of advances to be made. Any amounts
held for future distribution and so used shall be replaced by the Servicer
by
deposit in the Custodial Account on or before any future Remittance Date
if
funds in the Custodial Account on such Remittance Date shall be less than
payments to the Purchaser required to be made on such Remittance Date. The
Servicer’s obligation to make P&I Advances as to any Mortgage Loan will
continue through the last Monthly Payment due prior to the payment in full
of a
Mortgage Loan, or through the last related Remittance Date prior to the
Remittance Date for the distribution of all other payments or recoveries
(including proceeds under any title, hazard or other insurance policy, or
condemnation awards) with respect to a Mortgage Loan; provided,
however,
that
such obligation shall cease if the Servicer, in its good faith judgment,
determines that such P&I Advances would not be recoverable pursuant to
Subsection 11.05(d). The determination by the Servicer that a P&I
Advance, if made, would be nonrecoverable, shall be evidenced by an Officer’s
Certificate of the Servicer, delivered to the Purchaser, which details the
reasons for such determination. The Servicer shall not have any obligation
to
advance amounts in respect of shortfalls relating to the Servicemembers Civil
Relief Act and similar state and local laws.
Subsection
11.18 Assumption
Agreements.
The
Servicer will use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note; provided
that,
subject to the Purchaser’s prior approval, the Servicer shall permit such
assumption if so required in accordance with the terms of the Mortgage or
the
Mortgage Note. When the Mortgaged Property has been conveyed by the Mortgagor,
the Servicer will, to the extent it has knowledge of such conveyance, exercise
its rights to accelerate the maturity of such Mortgage Loan under the
“due-on-sale” clause applicable thereto; provided,
however,
the
Servicer will not exercise such rights if prohibited by law from doing so
or if
the exercise of such rights would impair or threaten to impair any recovery
under the related Primary Mortgage Insurance Policy. In connection with any
such
assumption, the outstanding principal amount, the Monthly Payment, the Mortgage
Interest Rate, the Lifetime Rate Cap (if applicable), the Gross Margin (if
applicable), the Initial Rate Cap (if applicable) or the Periodic Rate Cap/Floor
(if applicable) of the related Mortgage Note shall not be changed, and the
term
of the Mortgage Loan will not be increased or decreased. If an assumption
is
allowed pursuant to this Subsection 11.18, the Servicer with the prior
consent of the issuer of the Primary Mortgage Insurance Policy, if any, is
authorized to enter into a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is
released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage
Note.
45
Subsection
11.19 Satisfaction
of Mortgages and Release of Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary
for
such purposes, the Servicer will obtain the portion of the Mortgage File
that is
in the possession of the Purchaser or its designee, prepare and process any
required satisfaction or release of the Mortgage and notify the Purchaser
in
accordance with the provisions of this Agreement. The Purchaser or its designee
agrees to deliver to the Servicer the original Mortgage Note for any Mortgage
Loan not later than five (5) Business Days following its receipt of a
notice from the Servicer that such a payment in full has been received or
that a
notification has been received that such a payment in full shall be made.
Such
Mortgage Note shall be held by the Servicer, in trust, for the purpose of
canceling such Mortgage Note and delivering the canceled Mortgage Note to
the
Mortgagor in a timely manner as and to the extent provided under applicable
state law.
If
the
Servicer grants a satisfaction or release of a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage or should the
Servicer otherwise prejudice any right the Purchaser may have under the mortgage
instruments, the Servicer, upon written demand of the Purchaser, shall remit
to
the Purchaser the Stated Principal Balance of the related Mortgage Loan by
deposit thereof in the Custodial Account. The Fidelity Bond shall insure
the
Servicer against any loss it may sustain with respect to any Mortgage Loan
not
satisfied in accordance with the procedures set forth herein.
Subsection
11.20 Annual
Statement as to Compliance.
Within
ninety (90) days after the Servicer’s fiscal year end, beginning with the fiscal
year end 2005, the Servicer will deliver to the Purchaser an Officer’s
Certificate stating that (a) a review of the activities of the Servicer
during the preceding calendar year and if performance under this Agreement
has
been made under such officer’s supervision, and (b) to the best of such
officer’s knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement throughout such year, or, if there has been
a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof and the action being
taken by the Servicer to cure such default.
Subsection
11.21 Annual
Independent Public Accountants’ Servicing Report.
Within
ninety (90) days after the Servicer’s fiscal year end, beginning with the fiscal
year end 2005, the Servicer at its expense shall cause a firm of independent
public accountants which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Purchaser to the effect
that
such firm has, with respect to the Servicer’s overall servicing operations,
examined such operations in accordance with the requirements of the Uniform
Single Attestation Program for Mortgage Bankers, stating such firm’s conclusions
relating thereto.
Subsection
11.22 Servicer
Shall Provide Access and Information as Reasonably Required.
The
Servicer shall provide to the Purchaser, and for any Purchaser insured by
FDIC
or NAIC, the supervisory agents and examiners of FDIC and OTS or NAIC, access
to
any documentation regarding the Mortgage Loans which may be required by
applicable regulations. Such access shall be afforded without charge, but
only
upon reasonable request, during normal business hours and at the offices
of the
Servicer.
46
In
addition, the Servicer shall furnish upon request by the Purchaser, during
the
term of this Agreement, such periodic, special or other reports or information,
whether or not provided for herein, as shall be necessary, reasonable and
appropriate with respect to the purposes of this Agreement and applicable
regulations. All such reports or information shall be provided by and in
accordance with all reasonable instructions and directions the Purchaser
may
require. The Servicer agrees to execute and deliver all such instruments
and
take all such action as the Purchaser, from time to time, may reasonably
request
in order to effectuate the purposes and to carry out the terms of this
Agreement.
Subsection
11.23 Restoration
of Mortgaged Property.
The
Servicer need not obtain the approval of the Purchaser prior to releasing
any
Insurance Proceeds
or
Condemnation Proceeds to the Mortgagor to be applied to the restoration or
repair of the Mortgaged Property if such release is in accordance with Customary
Servicing Procedures. At a minimum, the Servicer shall comply with the following
conditions in connection with any such release of Insurance Proceeds or
Condemnation Proceeds:
(A) the
Servicer shall receive satisfactory independent verification of completion
of
repairs and issuance of any required approvals with respect
thereto;
(B) the
Servicer shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens;
(C) the
Servicer shall verify that the Mortgage Loan is not in default; and
(D) pending
repairs or restoration, the Servicer shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
If
the
Purchaser is named as an additional loss payee, the Servicer is hereby empowered
to endorse any loss draft issued
in
respect of such a claim in the name of the Purchaser.
Subsection
11.24 Master
Servicer.
The
Purchaser has designated Aurora Loan Services, Inc. (“Aurora”)
as its
master servicer for the Mortgage Loans being sold by the Seller and purchased
by
the Purchaser from time to time pursuant to this Agreement. The Purchaser
has
empowered and given the authority to Aurora, in its capacity as the Purchaser’s
master servicer, to conduct and administer certain servicing and pool
administration activities of the Servicer on the Purchaser’s behalf. The parties
hereto agree that this interaction between Aurora and the Servicer will occur
when Aurora deals with the Servicer in its capacity of servicer of the Mortgage
Loans pursuant to the terms hereof. The parties hereto expect that subsequent
to
the respective closings of the purchase and sale contemplated hereunder,
representatives of Aurora will contact the Servicer (a) to discuss the reporting
and remittance timing and requirements relative to the servicing/master
servicing function and (b) to provide the Servicer with any forms which the
Servicer will be required to produce in connection with the monthly reporting
process.
47
Subsection
11.25 Fair
Credit Reporting Act.
The
Servicer, in its capacity as servicer for each Mortgage Loan, agrees to fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian
and
Trans Union Credit Information Company (three of the credit repositories),
on a
monthly basis.
Subsection
11.26 Compliance
with Safeguarding Customer Information Requirements.
The
Servicer has implemented and shall maintain security measures designed to
meet
the objectives of the Interagency Guidelines Establishing Standards for
Safeguarding Customer Information published in final form on February 1,
2001,
66 Fed. Reg. 8616, and the rules promulgated thereunder, as amended from
time to
time. The Servicer shall provide the Purchaser with information regarding
such
security measures upon the reasonable request of the Purchaser, which
information shall include, but not be limited to, any audit reports, summaries
of test results or equivalent measures taken by the Servicer and relating
to the
applicable Mortgage Loans with respect to its security measures, as agreed
upon
by the parties.
Subsection
11.27 BPP
Mortgage Loans.
With
respect to any BPP Mortgage Loan, the Servicer hereby agrees to deposit in
the
Custodial Account and remit to the Purchaser any BPP Mortgage Loan Payment
due
pursuant to a BPP Addendum. Any Monthly Covered Amount payable by the Servicer
pursuant to this Subsection 11.27 shall be remitted to the Purchaser on or
prior
to the Remittance Date relating to the Determination Date immediately following
the Due Date as to which such Monthly Covered Amount relates. Any Total Covered
Amount payable by the Servicer pursuant to this Subsection 11.27 shall be
remitted to the Purchaser on or prior to the Remittance Date relating to
the
Determination Date in the month following the month in which the cancellation
to
which such Total Covered Amount relates occurs. For the avoidance of any
doubt,
no duty of the Servicer to remit or advance funds hereunder (including, without
limitation, Servicing Advances) shall include remittances or advances of
or with
respect to BPP Fees. Notwithstanding any provision in this Agreement to the
contrary, in the event servicing is transferred from the Servicer, the BPP
Addendum shall be of no further force and effect and the Servicer shall not
have
obligations to make BPP Mortgage Loan Payments or otherwise with respect
to the
BPP Addendum; provided,
however,
that
the Servicer would be required to make any payments required under the BPP
Addendum with respect to protected events that occur on or prior to the
effective date of termination as set forth in the BPP Addendum.
48
SECTION
12. THE
SERVICER.
Subsection
12.01 Indemnification;
Third Party Claims.
The
Servicer agrees to indemnify and hold harmless the Purchaser against any
and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that the Purchaser may
sustain
in any way related to the failure of the Servicer to service the Mortgage
Loans
in compliance with the terms of this Agreement. The Servicer shall immediately
notify the Purchaser if a claim is made by a third party with respect to
this
Agreement or the Mortgage Loans, and the Servicer shall assume (with the
consent
of the Purchaser, which consent shall not be unreasonably withheld or delayed)
the defense of any such claim and pay all expenses in connection therewith,
including counsel fees. The Servicer shall provide the Purchaser with a written
report of all expenses and advances incurred by the Servicer, if any, pursuant
to this Subsection 12.01 and the Purchaser shall promptly reimburse the Servicer
for all amounts advanced by it pursuant to the preceding sentence except
when
the claim in any way relates to the failure of the Servicer to service the
Mortgage Loans in accordance with the terms of this Agreement.
Subsection
12.02 Merger
or Consolidation of the Servicer.
The
Servicer will keep in full effect its existence, rights and franchises as
a
national banking association, and will obtain and preserve its qualification
to
do business in each jurisdiction in which such qualification is or shall
be
necessary to protect the validity and enforceability of this Agreement or
any of
the Mortgage Loans and to perform its duties under this Agreement.
Any
Person into which the Servicer may be merged or consolidated, or any entity
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to substantially all of the business
of the Servicer (whether or not related to loan servicing), shall be the
successor of the Servicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Subsection
12.03 Limitation
on Liability of the Servicer and Others.
The
duties and obligations of the Servicer shall be determined solely by the
express
provisions of this Agreement, the Servicer shall not be liable except for
the
performance of such duties and obligations as are specifically set forth
in this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Servicer. Neither the Servicer nor any of the directors,
officers, employees or agents of the Servicer shall be under any liability
to
the Purchaser for any action taken or for refraining from the taking of any
action in accordance with Customary Servicing Procedures and otherwise in
good
faith pursuant to this Agreement or for errors in judgment; provided,
however,
that
this provision shall not protect the Servicer against any liability resulting
from any breach of any representation or warranty made herein, or from any
liability specifically imposed on the Servicer herein; and, provided
further,
that
this provision shall not protect the Servicer against any liability that
would
otherwise be imposed by reason of the willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard
of
the obligations or duties hereunder. The Servicer and any director, officer,
employee or agent of the Servicer may rely on any document of any kind which
it
in good faith reasonably believes to be genuine and to have been adopted
or
signed by the proper authorities respecting any matters arising hereunder.
Subject to the terms of Subsection 12.01,
the Servicer shall have no obligation to appear with respect to, prosecute
or
defend any legal action which is not incidental to the Servicer’s duty to
service the Mortgage Loans in accordance with this Agreement.
49
Subsection
12.04 Seller
and Servicer Not to Resign.
Neither
the Seller nor the Servicer shall assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer or the Seller, as the case may be, and the Purchaser or upon the
determination that the Servicer’s duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Servicer.
Any
such determination permitting the unilateral resignation of the Servicer
shall
be evidenced by an Opinion of Counsel to such effect delivered to the Purchaser,
which Opinion of Counsel shall be in form and substance acceptable to the
Purchaser. No such resignation or assignment shall become effective until
a
successor has assumed the Servicer’s responsibilities and obligations hereunder
in accordance with Subsection 14.02.
SECTION
13. DEFAULT.
Subsection
13.01 Events
of Default.
In
case
one or more of the following Events of Default by the Servicer shall occur
and
be continuing:
(a) any
failure by the Servicer to remit to the Purchaser any payment required to
be
made under the terms of this Agreement which continues unremedied for a period
of two (2) Business Days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Purchaser;
(b) failure
by the Servicer to duly observe or perform, in any material respect, any
other
covenants, obligations or agreements of the Servicer as set forth in this
Agreement which failure continues unremedied for a period of thirty (30)
days after the date on which written notice of such failure, requiring the
same
to be remedied, shall have been given to the Servicer by the
Purchaser;
(c) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
bankruptcy, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall
have been entered against the Servicer and such decree or order shall have
remained in force, undischarged or unstayed for a period of sixty (60)
days;
(d) the
Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of
assets and liabilities or similar proceedings of or relating to the Servicer
or
relating to all or substantially all of the Servicer’s property;
50
(e) the
Servicer shall admit in writing its inability to pay its debts as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations;
(f) the
Servicer shall cease to be qualified to do business under the laws of any
state
in which a Mortgaged Property is located, but only to the extent such
qualification is necessary to ensure the enforceability of each Mortgage
Loan
and to perform the Servicer’s obligations under this Agreement; or
(g) the
Servicer shall fail to meet the servicer eligibility qualifications of Xxxxxx
Xxx or the Servicer shall fail to meet the servicer eligibility qualifications
of Xxxxxxx Mac;
then,
and in each and every such case, so long as an Event of Default shall not
have
been remedied, the Purchaser, by notice in writing to the Servicer, may,
in
addition to whatever rights the Purchaser may have at law or equity to damages,
including injunctive relief and specific performance, commence termination
of
all the rights and obligations of the Servicer under this Agreement and in
and
to the Mortgage Loans and the proceeds thereof. Upon receipt by the Servicer
of
such written notice from the Purchaser stating that it intends to terminate
the
Servicer as a result of such Event of Default, all authority and power of
the
Servicer under this Agreement, whether with respect to the Mortgage Loans
or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Subsection 14.02. Upon written request from the Purchaser, the Servicer
shall prepare, execute and deliver to a successor any and all documents and
other instruments, place in such successor’s possession all Mortgage Files and
do or cause to be done all other acts or things necessary or appropriate
to
effect the purposes of such notice of termination, including, but not limited
to, the transfer and endorsement or assignment of the Mortgage Loans and
related
documents to the successor at the Servicer’s sole expense. The Servicer agrees
to cooperate with the Purchaser and such successor in effecting the termination
of the Servicer’s responsibilities and rights hereunder, including, without
limitation, the transfer to such successor for administration by it of all
amounts which shall at the time be credited by the Servicer to the Custodial
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.
Subsection
13.02 Waiver
of Default.
The
Purchaser may waive any default by the Servicer in the performance of its
obligations hereunder and its consequences. Upon any waiver of a past default,
such default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement.
No
such waiver shall extend to any subsequent or other default or impair any
right
consequent thereto except to the extent expressly so waived.
51
SECTION
14. TERMINATION.
Subsection
14.01 Termination.
The
respective obligations and responsibilities of the Servicer, as servicer,
shall
terminate upon (a) the distribution to the Purchaser of the final payment
or liquidation with respect to the last Mortgage Loan (or advances of same
by
the Servicer), (b) the mutual consent of the Servicer and the Purchaser in
writing or (c) disposition of all property acquired upon foreclosure or deed
in
lieu of foreclosure with respect to the last Mortgage Loan and the remittance
of
all funds due hereunder, unless terminated with respect to all or a portion
of
the Mortgage Loans on an earlier date pursuant to Section 13. Upon written
request from the Purchaser in connection with any such termination, the Servicer
shall prepare, execute and deliver, any and all documents and other instruments,
place in the Purchaser’s possession all Mortgage Files, and do or accomplish all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise, at
the
Purchaser’s sole expense. The Servicer agrees to cooperate with the Purchaser
and such successor in effecting the termination of the Servicer’s
responsibilities and rights hereunder as servicer, including, without
limitation, the transfer to such successor for administration by it of all
cash
amounts which shall at the time be credited by the Servicer to the Custodial
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.
Subsection
14.02 Termination
of the Servicer Without Cause.
Notwithstanding
anything herein to the contrary, the Purchaser may terminate the obligations
and
responsibilities of the Servicer in its capacity as Servicer with respect
to one
or more Mortgage Loan Packages, without cause, upon payment to the Servicer
of a
termination fee equal to two percent (2.00%) of the aggregate outstanding
principal balance of the Mortgage Loans included in such terminated Mortgage
Loan Packages as of the date of such termination. In addition, the Purchaser
shall reimburse the Servicer for any and all out-of-pocket costs incurred
by the
Servicer in connection with such termination; provided,
however,
that the
Purchaser’s reimbursement obligation for such out-of-pocket costs shall not
exceed Fifty Dollars ($50.00) per Mortgage Loan. The termination fee provided
for in this Subsection 14.02 shall be paid by the Purchaser within ten (10)
Business Days of any such termination without cause by the Purchaser, and
the
Purchaser shall reimburse the Servicer for its out-of-pocket costs resulting
from such termination within ten (10) Business Days following the Purchaser’s
receipt of an invoice for such costs.
Subsection
14.03 Successors
to the Servicer.
Prior
to
the termination of the Servicer’s responsibilities and duties under this
Agreement pursuant to Subsections 12.04, 13.01 or 14.01, the Purchaser
shall, (a) succeed to and assume all of the Servicer’s responsibilities,
rights, duties and obligations under this Agreement or (b) appoint a
successor which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
upon such termination. In connection with such appointment and assumption,
the
Purchaser may make such arrangements for the compensation of such successor
out
of payments on Mortgage Loans as it and such successor shall agree. If the
Servicer’s duties, responsibilities and liabilities under this Agreement shall
be terminated pursuant to the aforementioned Subsections, the Servicer shall
discharge such duties and responsibilities during the period from the date
it
acquires knowledge of such termination until the effective date thereof with
the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation
or
removal of the Servicer pursuant to the aforementioned Subsections shall
not
become effective until a successor shall be appointed pursuant to this
Subsection and shall in no event relieve the Seller of the representations
and
warranties made pursuant to Subsections 7.01 and 7.02 and the remedies
available to the Purchaser under Subsection 7.03, it being understood and
agreed that the provisions of such Subsections 7.01 and 7.02 shall be
applicable to the Seller notwithstanding any such resignation or termination
of
the Servicer, or the termination of this Agreement.
52
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Servicer and to the Purchaser an instrument accepting such appointment,
whereupon such successor shall become fully vested with all the rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer, with
like
effect as if originally named as a party to this Agreement. Any termination
or
resignation of the Servicer or this Agreement pursuant to
Subsections 12.04, 13.01 or 14.01 shall not affect any claims that the
Purchaser may have against the Servicer arising prior to any such termination
or
resignation.
The
Servicer shall promptly deliver to the successor the funds in the Custodial
Account and Escrow Account and all Mortgage Files and related documents and
statements held by it hereunder and the Servicer shall account for all funds
and
shall execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitively vest in the successor
all
such rights, powers, duties, responsibilities, obligations and liabilities
of
the Servicer.
Upon
a
successor’s acceptance of appointment as such, the Servicer shall notify by mail
the Purchaser of such appointment.
SECTION
15. NOTICES.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address as follows:
(a) if
to the
Purchaser:
Xxxxxx
Capital, A Division of Xxxxxx Brothers Holdings Inc.
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Contract Finance
(b) if
to the
Seller:
Bank
of America, National Association
000
Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Attention:
Secondary Marketing Manager
53
(c) if
to the
Servicer:
Bank
of America, National Association
000
Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx,
Xxx Xxxx 00000-0000
Attention:
Servicing Manager
or
such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed
to
have been received on the date delivered to or received at the premises of
the
addressee (as evidenced, in the case of registered or certified mail, by
the
date noted on the return receipt).
SECTION
16. SEVERABILITY
CLAUSE.
Any
part,
provision, representation or warranty of this Agreement which is prohibited
or
which is held to be void or unenforceable shall be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation or warranty of this
Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability
in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity
of any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement,
the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of
this
Agreement without regard to such invalidity.
SECTION
17. NO
PARTNERSHIP.
Nothing
herein contained shall be deemed or construed to create a co-partnership
or
joint venture between the parties hereto and the services of the Servicer
shall
be rendered as an independent contractor and not as agent for the
Purchaser.
SECTION
18. COUNTERPARTS.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts
shall
constitute one and the same instrument.
54
SECTION
19. GOVERNING
LAW.
EXCEPT
TO THE EXTENT PREEMPTED BY FEDERAL LAW, THE AGREEMENT SHALL BE CONSTRUED
IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS
PROVISIONS OF NEW YORK OR ANY OTHER JURISDICTION.
SECTION
20. INTENTION
OF THE PARTIES.
It
is the
intention of the parties that the Purchaser is purchasing, and the Seller
is
selling, the Mortgage Loans and not a debt instrument of the Seller or another
security. Accordingly, the parties hereto each intend to treat the transaction
for federal income tax purposes as a sale by the Seller, and a purchase by
the
Purchaser, of the Mortgage Loans. The Purchaser shall have the right to review
the Mortgage Loans and the related Mortgage Files to determine the
characteristics of the Mortgage Loans which shall affect the federal income
tax
consequences of owning the Mortgage Loans and the Seller and the Servicer
shall
cooperate with all reasonable requests made by the Purchaser in the course
of
such review.
It
is not
the intention of the parties that such conveyances be deemed a pledge thereof.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Seller or if for any other reason
this
Agreement is held or deemed to create a security interest in either such
assets,
then (a) this Agreement shall be deemed to be a security agreement within
the meaning of the Uniform Commercial Code of the State of New York and
(b) the conveyances provided for in this Agreement shall be deemed to be an
assignment and a grant by the Seller to the Purchaser of a security interest
in
all of the assets transferred, whether now owned or hereafter
acquired.
SECTION
21. WAIVERS.
No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
22. EXHIBITS.
The
exhibits to this Agreement are hereby incorporated and made a part hereof
and
are an integral part of this Agreement.
SECTION
23. GENERAL
INTERPRETIVE PRINCIPLES.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
55
(a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender
herein
shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(c) references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d) reference
to a Subsection without further reference to a Section is a reference to
such
Subsection as contained in the same Section in which the reference appears,
and
this rule shall also apply to Paragraphs and other subdivisions;
(e) the
words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
SECTION
24. REPRODUCTION
OF DOCUMENTS.
This
Agreement and all documents relating thereto, including, without limitation
(a) consents, waivers and modifications which may hereafter be executed,
(b) documents received by any party at the closing and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties
hereto
agree that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party
hereto
in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION
25. AMENDMENT.
This
Agreement may be amended from time to time by the Purchaser, the Seller and
the
Servicer by written agreement signed by the parties hereto.
SECTION
26. CONFIDENTIALITY.
Each
of the Purchaser, the Seller and the Servicer shall employ proper procedures
and
standards designed to maintain the confidential nature of the terms of this
Agreement, except to the extent (a) the disclosure of which is reasonably
believed by such party to be required in connection with regulatory requirements
or other legal requirements relating to its affairs; (b) disclosed to any
one or more of such party’s employees, officers, directors, agents, attorneys or
accountants who would have access to the contents of this Agreement and such
data and information in the normal course of the performance of such person’s
duties for such party, to the extent such party has procedures in effect
to
inform such person of the confidential nature thereof; (c) that is
disclosed in a prospectus, prospectus supplement or private placement memorandum
relating to a Securitization of the Mortgage Loans by the Purchaser (or an
affiliate assignee thereof) or to any person in connection with the resale
or
proposed resale of all or a portion of the Mortgage Loans by such party in
accordance with the terms of this Agreement; and (d) that is reasonably
believed by such party to be necessary for the enforcement of such party’s
rights under this Agreement.
56
The
Seller and the Servicer each shall comply with all provisions of the Privacy
Laws relating to the Mortgage Loans, the related borrowers and any “nonpublic
personal information” (as defined in the Privacy Laws) received by the Seller or
the Servicer incidental to the performance of its obligations under this
Agreement, including maintaining adequate information security procedures
to
protect such nonpublic personal information and providing all privacy notices
required by the Privacy Laws. As used herein, “Privacy Laws” shall mean
Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999, as amended, and all
applicable regulations promulgated thereunder.
SECTION
27. ENTIRE
AGREEMENT.
This
Agreement constitutes the entire agreement and understanding relating to
the
subject matter hereof between the parties hereto and any prior oral or written
agreements between them shall be deemed to have merged herewith.
SECTION
28. FURTHER
AGREEMENTS; TRANSFERS.
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.
The
Purchaser shall provide the Seller and the Servicer with at least ten (10)
days’
prior written notice prior to effecting a Whole-Loan Transfer, Agency Transfer
or Securitization (each, a “Transfer”).
The
Seller and the Servicer each agree to enter into additional documents,
instruments or agreements as may be reasonably necessary to effect each
Transfer; provided that the Seller and the Servicer shall have reasonable
opportunity to review such documents. The parties also agree that the servicing
provisions set forth in this Agreement may be altered in a manner reasonably
acceptable to the Servicer if necessary to effect a Transfer (including,
but not
limited to, any changes required to satisfy rating agency requirements or
the
requirements of Xxxxxx Mae or Xxxxxxx Mac). If the Purchaser sells any Mortgage
Loans as part of a Whole Loan Transfer, the Purchaser may assign this Agreement,
to the extent it relates to those Mortgage Loans, to any subsequent purchaser
pursuant to the provisions of Section 29. Notwithstanding the foregoing,
the
Servicer shall not be required to service the Mortgage Loans for more than
three
(3) Persons at any time and shall not recognize any Transfer if following
such
Transfer more than three (3) Persons would be Purchasers hereunder. As used
herein and in Section 29, the trust formed in connection with a Securitization
shall be deemed to constitute a single “Person.” All reasonable out-of-pocket
costs actually incurred by the Seller or the Servicer, including reasonable
attorney’s fees and accountant’s fees in connection with performing its
obligations under this Section 28 with respect to a Transfer shall be reimbursed
by the Purchaser upon demand therefor.
57
With
respect to any Mortgage Loans sold in a Transfer where the Servicer is the
servicer, the Servicer agrees that on or before March 20th
of each
year beginning March 20, 2006, the Servicer shall deliver to the master
servicer, the depositor and the trustee, and their officers, directors and
affiliates, a certification in a form mutually agreed upon which is
substantially similar to that attached as Exhibit
8
hereto,
executed by the senior officer in charge of servicing at the Servicer for
use in
connection with any Form 10-K to be filed with the Securities and Exchange
Commission with respect to the securitization trust so long as such
certification is required pursuant to the terms of the Xxxxxxxx-Xxxxx Act
of
2002, as such may be in effect and amended from time to time.
SECTION
29. SUCCESSORS
AND ASSIGNS.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
initial Purchaser, the Seller and the Servicer, and the respective successors
and assigns of the initial Purchaser, the Seller and the Servicer. The initial
Purchaser and any subsequent Purchasers may assign this Agreement to any
Person
to whom any Mortgage Loan is transferred pursuant to a sale or financing
upon
prior written notice to the Servicer in accordance with the following paragraph;
provided,
however,
that
with respect to each Mortgage Loan Package, the Servicer shall not be required
to service the Mortgage Loans for more than three (3) Persons at any time
and
shall not recognize any assignment of this Agreement to the extent that
following such assignment more than three (3) Persons would be Purchasers
hereunder. As used herein, all of the trusts formed
in
connection with a Securitization shall be deemed to constitute single “Person.”
.. Upon any such assignment and written notice thereof to the Servicer, the
Person to whom such assignment is made shall succeed to all rights and
obligations of the Purchaser under this Agreement to the extent of the related
Mortgage Loan or Mortgage Loans and this Agreement, to the extent of the
related
Mortgage Loan or Mortgage Loans, shall be deemed to be a separate and distinct
agreement between the Servicer and such purchaser, and a separate and distinct
agreement between the Servicer and each other purchaser to the extent of
the
other related Mortgage Loan or Mortgage Loans.
At
least
five (5) Business Days prior to the end of the month preceding the date upon
which the first remittance is to be made to an assignee of the Purchaser,
the
Purchaser shall provide to the Servicer written notice of any assignment
setting
forth: (a) the Servicer’s applicable Mortgage Loan identifying number for each
of the Mortgage Loans affected by such assignment; (b) the aggregate scheduled
transfer balance of such Mortgage Loans; and (c) the full name, address and
wiring instructions of the assignee and the name and telephone number of
an
individual representative for such assignee, to whom the Servicer should:
(i)
send remittances; (ii) send any notices required by or provided for in this
Agreement; and (iii) deliver any legal documents relating to the Mortgage
Loans (including, but not limited to, contents of any Mortgage File obtained
after the effective date of any assignment).
58
If
the
Purchaser has not provided the notice of assignment required by this Section
29,
the Servicer shall not be required to treat any other Person as a “Purchaser”
hereunder and may continue to treat the Purchaser which purports to assign
the
Agreement as the “Purchaser” for all purposes of this Agreement.
SECTION
30. NON-SOLICITATION.
From
and
after the Closing Date, the Seller hereby agrees that it will not take any
action or permit or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on its behalf, to personally,
by
telephone or mail, solicit a Mortgagor under any Mortgage Loan for the purpose
of refinancing a Mortgage Loan, in whole or in part, without the prior written
consent of the Purchaser. It is understood and agreed that all rights and
benefits relating to the solicitation of any Mortgagors and the attendant
rights, title and interest in and to the list of such Mortgagors and data
relating to their Mortgages (including insurance renewal dates) shall be
transferred to the Purchaser pursuant hereto on the Closing Date and the
Seller
shall not take any action to undermine these rights and benefits.
Notwithstanding
the foregoing, it is understood and agreed that the Seller:
(a) may
advertise its availability for handling refinancings of mortgages in its
portfolio, including the promotion of terms it has available for such
refinancings, through the sending of letters or promotional material, so
long as
it does not specifically target Mortgagors and so long as such promotional
material either is sent to the mortgagors for all of the mortgages in the
A-quality servicing portfolio of the Seller (those it owns as well as those
serviced for others) or sent to all of the mortgagors who have specific types
of
mortgages (such as conventional fixed-rate or conventional adjustable-rate,
or
sent to those mortgagors whose mortgages fall within specific interest rate
ranges;
(b) may
provide pay-off information and otherwise cooperate with individual mortgagors
who contact it about prepaying their mortgages by advising them of refinancing
terms and streamlined origination arrangements that are available;
and
(c) may
offer
to refinance a Mortgage Loan made within thirty (30) days following receipt
by it of a pay-off request from the related Mortgagor.
Promotions
undertaken by the Seller or any affiliate of the Seller which are directed
to
the general public at large (including, without limitation, mass mailing
based
on commercially acquired mailing lists, newspaper, radio and television
advertisements), shall not constitute solicitation under this
Section 30.
SECTION
31. PROTECTION
OF CONSUMER INFORMATION.
The
Purchaser agrees that the Purchaser (i) shall not disclose Consumer Information
to third parties except at the specific written direction of the Seller or
the
Servicer; provided,
however, that
the
Purchaser may disclose Consumer Information to third parties in connection
with
secondary market transactions to the extent not prohibited by applicable
law,
(ii) shall maintain reasonable protection to protect Consumer Information
from
unauthorized access and (iii) shall immediately notify the Seller of any
actual
or suspected breach of the confidentiality of Consumer Information of which
the
Purchaser has knowledge.
59
SECTION
32. COMPLIANCE
WITH REGULATION AB.
In
order
to facilitate compliance with Regulation AB promulgated under the Securities
Act
of 1933 and the Securities Exchange Act of 1934, the Seller, the Servicer
and
the Purchaser agree to comply with the provisions of the Regulation AB
Compliance Addendum attached hereto as Exhibit 12.
[SIGNATURES
ON FOLLOWING PAGE]
60
IN
WITNESS WHEREOF, the Purchaser, the Seller and the Servicer have caused their
names to be signed hereto by their respective officers thereunto duly authorized
on the date first above written.
XXXXXX
CAPITAL, A
DIVISION OF XXXXXX BROTHERS HOLDINGS INC.,
as
Purchaser
By: ____________________________________________
Name: ____________________________________________
Title: ____________________________________________
BANK
OF
AMERICA, NATIONAL ASSOCIATION,
as
Seller
and as Servicer
By: ____________________________________________
Name: ____________________________________________
Title: ____________________________________________
[Signature
Page to Flow Mortgage Loan Sale and Servicing Agreement, dated as of April
1,
2006]
EXHIBIT
1
MORTGAGE
LOAN DOCUMENTS
With
respect to each Mortgage Loan, the Mortgage Loan Documents shall consist
of the
following:
(a) the
original Mortgage Note bearing all intervening endorsements, endorsed in
blank
and signed in the name of the Seller by an officer thereof together with
any
applicable original BPP Addendum or, if the original Mortgage Note has been
lost
or destroyed, a lost note affidavit substantially in the form of Exhibit
5
hereto;
(b) the
original Assignment of Mortgage with assignee’s name left blank;
(c) the
original of any guarantee executed in connection with the Mortgage
Note;
(d) the
original Mortgage with evidence of recording thereon, or if any such mortgage
has not been returned from the applicable recording office or has been lost,
or
if such public recording office retains the original recorded mortgage, a
photocopy of such mortgage certified by the Seller to be a true and complete
copy of the original recorded mortgage;
(e) the
originals of all assumption, modification, consolidation or extension
agreements, if any, with evidence of recording thereon;
(f) the
originals of all intervening assignments of mortgage with evidence of recording
thereon, or if any such intervening assignment of mortgage has not been returned
from the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of mortgage, a
photocopy of such intervening assignment of mortgage, certified by the Seller
to
be a true and complete copy of the original recorded intervening assignment
of
mortgage;
(g) (i)
the
original mortgagee title insurance policy or attorney’s opinion of title and
abstract or a title commitment or title binder if an original title insurance
policy has not been issued, or a duplicate copy of an original title insurance
policy, including an Environmental Protection Agency Endorsement and, with
respect to any Adjustable Rate Mortgage Loan, an adjustable-rate endorsement,
(ii) with respect to certain Refinanced Mortgage Loans, a title search report
or
other evidence of title or (iii) in the case of any jurisdiction where title
insurance policies are generally not available, an opinion of counsel of
the
type customarily rendered in such jurisdictions in lieu of title
insurance;
(h) the
original of any security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage;
(i) a
copy of
any applicable power of attorney; and
(j) with
respect to any Cooperative Loan, the applicable Cooperative Loan
Documents.
1-1
EXHIBIT
2
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items in physical or imaged form, unless otherwise disclosed to
the
Purchaser on the data tape, which shall be available for inspection by the
Purchaser and which shall be retained by the Servicer or delivered to the
Purchaser:
(a) Copies
of
the Mortgage Loan Documents.
(c) Mortgage
Loan closing statement.
(d) Verification
of employment and income, if required.
(e) Verification
of acceptable evidence of source and amount of down payment.
(f) Credit
report on Mortgagor, in a form acceptable to either Xxxxxx Xxx or Xxxxxxx
Mac.
(g) Residential
appraisal report.
(h) Photograph
of the Mortgaged Property.
(i) Survey
of
the Mortgaged Property, unless a survey is not required by the title
insurer.
(j) Copy
of
each instrument necessary to complete identification of any exception set
forth
in the exception schedule in the title policy, i.e., map or plat, restrictions,
easements, home owner association declarations, etc.
(k) Copies
of
all required disclosure statements.
(l) If
applicable, termite report, structural engineer’s report, water potability and
septic certification.
(m) Sales
Contract, if applicable.
(n) The
Primary Mortgage Insurance Policy or certificate of insurance or electronic
notation of the existence of such policy, where required pursuant to the
Agreement.
(o) Evidence
of electronic notation of the hazard insurance policy, and, if required by
law,
evidence of the flood insurance policy.
2-1
EXHIBIT
3
UNDERWRITING
GUIDELINES
[Intentionally
Omitted]
3-1
EXHIBIT
4
FORMS
OF SELLER’S AND SERVICER’S OFFICER’S CERTIFICATE
I,
[______________],
hereby
certify that I am a duly elected [______________]
of Bank
of America, National Association, a national banking association (the “Bank”),
and further certify, on behalf of the Bank as follows:
1. Attached
hereto as Attachment I are a true and correct copy of the Articles of
Association and by-laws of the Bank as are in full force and effect on the
date
hereof. No event has occurred which has affected the good standing of the
Bank
under the laws of the United States.
2. No
proceedings looking toward liquidation, dissolution or bankruptcy of the
Bank or
a merger pursuant to which the Bank would not be the surviving entity are
pending or contemplated.
3. Each
person who, as an officer or attorney-in-fact of the Bank, signed (a) the
Flow
Mortgage Loan Sale and Servicing Agreement (the “Sale Agreement”), dated April
1, 2006, by and between the Bank, as seller and as servicer, and Xxxxxx Capital,
A Division of Xxxxxx Brothers Holdings Inc., as purchaser, and (b) 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 Sale Agreement
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. All
of
the representations and warranties of the Bank contained in Subsections 7.01
and
7.02 of the Sale Agreement were true and correct in all material respects
as of
the Closing Date.
5. The
Bank
has performed all of its duties and has satisfied all the material conditions
on
its part to be performed or satisfied prior to the Closing Date pursuant
to the
Sale Agreement.
4-1
All
capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Sale Agreement.
IN
WITNESS WHEREOF, I have hereunto signed my name on this __th
day of
_______, _____.
BANK
OF
AMERICA, NATIONAL ASSOCIATION
By:
___________________________
Name:
_________________________
Title:
__________________________
I,
____________________, a _____________________ of Bank of America, National
Association, hereby certify that ____________________ is a duly elected,
qualified and acting ____________________ of the Seller and the Servicer
and
that the signature appearing above is such person’s genuine
signature.
IN
WITNESS WHEREOF, I have hereunto signed my name on this __th
day of
___________, _____.
BANK
OF
AMERICA, NATIONAL ASSOCIATION
By:
___________________________
Name:
_________________________
Title:
__________________________
4-2
EXHIBIT
5
FORM
OF LOST NOTE AFFIDAVIT
________________________________________,
being first duly sworn upon oath deposes and states:
That
he/she is authorized by Bank of America, National Association (“B of A”) to
execute this Lost Note Affidavit on behalf of B of A. Notwithstanding anything
contained herein, he/she shall have no personal liability pursuant to this
Lost
Note Affidavit.
That
the
note dated ______________, executed by _______________ in the original principal
sum of $____________, payable to the order of __________________ and secured
by
a mortgage (or deed of trust or other instrument creating a lien securing
the
Note (as defined below)) of even date on premises commonly known as
________________________________ ____________________________, a copy of
which
is attached hereto as Exhibit
A
(the
“Note”) was lost and /or destroyed and the affiant herein has no knowledge of
the location or whereabouts of said Note and said Note has not been paid,
satisfied, transferred, assigned, pledged, or hypothecated in any
way.
NOW
THEREFORE,
for and
in consideration of _______________and its successors and/or assigns, accepting
a certified copy of the Note identified on Exhibit “A” in lieu of the original
Note, B of A does hereby agree to defend, indemnify and hold harmless __________
_______________ its respective transferees, and their respective assigns
(the
“Indemnified”) from and against any and all loss or damage, together with all
reasonable costs, charges and expenses (whether or not a lawsuit is filed)
(collectively, the “Loss”) incurred as a result of the inability to enforce the
Note in accordance with its terms due to the lack of an original Note or
incurred by reason of any claim, demand, suit, cause of action or proceeding
by
a third party arising out of the Indemnified’s inability to enforce the Note
according to its terms or the inability to receive any related insurance
proceeds due to the lack of an original Note by a third party. B of A shall
pay
any such Loss upon demand provided that B of A is notified of any such Loss
in
writing, after __________ or transferee becomes aware of same, at the following
address: Bank of America, 000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000; Attention: Secondary Marketing Manager; with copy to
_______________________; Attention: ________________. B of A does hereby
further
agree that should the original Note ever be found by it, it will promptly
notify
_________________ or its respective transferees, or their respective assigns,
as
applicable, and upon receipt by B of A of the original Note, will endorse
to
_______________ or its designee or transferee, as applicable, without recourse,
such original Note and promptly forward said Note to_______________ or its
designee or transferee, as applicable. Upon receipt to the original Note
by
__________________ this indemnification agreement shall become null and void
as
to any loss accruing subsequent to _____________ ___________’s receipt of such
original Note, however, B of A shall remain liable as to any loss accruing
on or
prior to __________________’s receipt of such original Note.
5-1
Executed
this _______day of _________________, 200__.
BANK
OF AMERICA, NATIONAL ASSOCIATION
By:___________________________________
Witness:
______________________________
Subscribed
and sworn to before me this _______ day of_________________, 200__.
___________________________________
Notary
Public
5-2
EXHIBIT
6
FORM
OF MONTHLY REMITTANCE REPORT
[Intentionally
Omitted]
6-1
EXHIBIT
7
FORM
OF
ACKNOWLEDGMENT AND CONVEYANCE AGREEMENT
This
is
an Acknowledgment and Conveyance Agreement delivered pursuant to that certain
Flow Mortgage Loan Sale and Servicing Agreement, dated as of April 1, 2006
(the
“Agreement”),
between XXXXXX CAPITAL, A Division of Xxxxxx Brothers Holdings Inc., as
purchaser (the “Purchaser”),
BANK
OF
AMERICA, NATIONAL ASSOCIATION, as
seller
(the “Seller”)
and
BANK OF AMERICA, NATIONAL ASSOCIATION, as servicer (the “Servicer”).
All
capitalized terms used herein without definition shall have the respective
meanings ascribed thereto in the Agreement.
The
Purchaser, the Servicer and the Seller hereby confirm that they have reached
agreement on the purchase, sale and servicing of the Mortgage Loans described
on
the Mortgage Loan Schedule attached as Annex
1
hereto
on the terms and conditions set forth in the Agreement (which terms and
conditions are incorporated herein by this reference) and the Purchase Price
and
Terms Agreement, dated as of ___________ __, 200_ between the parties
hereto.
Accordingly,
on this ___ day of _________, 200_, the Seller does hereby sell, transfer,
assign, set over and convey to the Purchaser without recourse, except as
provided in the Agreement, and on a servicing retained basis, all right,
title
and interest of the Seller in and to the Mortgage Loans listed on the Mortgage
Loan Schedule attached as Annex
1
hereto,
including all interest and principal received by the Seller on or with respect
to the Mortgage Loans after the related Cut-off Date, together with all of
the
Seller’s right, title and interest in and to each Custodial Account and all
amounts from time to time credited to and the proceeds of such Custodial
Account, all amounts from time to time credited to and the proceeds of any
Escrow Account, any Liquidation Proceeds or Condemnation Proceeds, any REO
Disposition Proceeds, the Seller’s rights under any insurance policies related
to the Mortgage Loans, the Primary Mortgage Insurance Policy related to each
Mortgage Loan and all rights of the Seller thereunder, any Insurance Proceeds,
the Seller’s security interest in any collateral pledged to secure the Mortgage
Loans, including the Mortgaged Properties, and any proceeds of the foregoing.
Pursuant to Section 6 the Agreement, the Seller has delivered to the Custodian
the documents for each Mortgage Loan to be purchased as set forth in the
Agreement. The ownership of each Mortgage Note, Mortgage, and the contents
of
each Mortgage File is vested in the Purchaser and the ownership of all records
and documents with respect to the related Mortgage Loan prepared by or which
come into the possession of the Seller shall immediately vest in the
Purchaser.
By
its
execution and delivery of this Acknowledgment and Conveyance Agreement, the
Seller and the Servicer hereby represent and warrant to the Purchaser that
each
of the representations and warranties contained in Subsections 7.01 and 7.02
of
the Agreement hereto is true and correct as of the date hereof (or such other
date specified therein) with respect to the Seller and the Servicer (as
applicable) and each of the Mortgage Loans listed on the Mortgage Loan Schedule
attached as Annex
1
hereto.
7-1
By
its
execution and delivery of this Acknowledgment and Conveyance Agreement, the
Servicer agrees that it shall service the Mortgage Loans on behalf of the
Purchaser in accordance with the terms and conditions contained in the
Agreement.
[Signatures
On Following Page]
7-2
This
Acknowledgment and Conveyance Agreement may be executed simultaneously in
any
number of counterparts. Each counterpart shall be deemed an original, and
all
such counterparts shall constitute one and the same instrument.
BANK
OF
AMERICA, NATIONAL ASSOCIATION, as Seller and Servicer
By:
____________________________________
Name:
Title:
XXXXXX
CAPITAL, A
DIVISION OF XXXXXX BROTHERS HOLDINGS INC.,
as
Purchaser
By:
______________________________________
Name:
Title:
7-3
Annex
1
to
Acknowledgment
and Conveyance Agreement
Mortgage
Loan Schedule
EXHIBIT
8
FORM
OF
CERTIFICATION TO BE PROVIDED BY THE SERVICER
|
Re:
|
[______________]
(the “Trust”), Mortgage Pass-Through Certificates, Series [_____], issued
pursuant to the Pooling and Servicing Agreement, dated as of [_____],
200[_] (the “Pooling and Servicing Agreement”), among [_____], as
depositor (the “Depositor”), [_____], as trustee (the “Trustee”), [_____],
as servicer (the “Servicer”), and [_____], as responsible
party
|
I,
[identify the certifying individual], certify to the Depositor and the Trustee,
and their officers, directors and affiliates, and with the knowledge and
intent
that they will rely upon this certification, that:
|
1.
|
The
servicing information required to be provided to the Trustee by
the
Servicer under the Pooling and Servicing Agreement has been so
provided;
|
|
2.
|
I
am responsible for reviewing the activities performed by the Servicer
under the Pooling and Servicing Agreement and based upon my knowledge
and
the annual compliance review required under the Pooling and Servicing
Agreement, and except as disclosed in the annual compliance statement
required to be delivered to the Trustee in accordance with the
terms of
the Pooling and Servicing Agreement (which has been so delivered
to the
Trustee), the Servicer has fulfilled its obligation under the Pooling
and
Servicing Agreement; and
|
|
3.
|
All
significant deficiencies relating to the Servicer’s compliance with the
minimum servicing standards for purpose of the report provided
by an
independent public accountant, after conducting a review conducted
in
compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar procedure, as set forth in the Pooling and Servicing
Agreement, have been disclosed to such
accountant.
|
Date:
______________________
___________________________
[Signature]
[Title]
8-1
EXHIBIT
9
FORM
OF OPINION OF COUNSEL
[Date]
Xxxxxx
Capital, A Division of Xxxxxx Brothers Holdings Inc.
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
I
am
Assistant General Counsel to Bank of America Corporation and have acted as
special counsel to Bank of America, National Association (the “Bank”) in
connection with the transactions referred to herein. In that capacity, I
am
familiar with the sale by the Bank of the Mortgage Loans pursuant to that
certain Flow Mortgage Loan Sale and Servicing Agreement by and between the
Bank,
as Seller and as Servicer, and Xxxxxx Capital, A Division of Xxxxxx Brothers
Holdings Inc., as Purchaser, dated as of April 1, 2006 (the “Sale
Agreement”). Capitalized terms not otherwise defined herein have the meanings
set forth in the Sale Agreement.
In
connection with rendering this opinion letter, I have examined the Sale
Agreement and such other records and other documents as I have deemed necessary
and relevant. As to matters of fact, I have examined and relied upon
representations of the parties contained in the Sale Agreement and, where
I have
deemed appropriate, representations and certifications of officers of the
Bank
or public officials. I have assumed the authenticity of all documents submitted
to me as originals, the genuineness of all signatures, the legal capacity
of
natural persons and the conformity to the originals of all documents submitted
to me as copies. I have assumed that all parties, except for the Bank, had
the
corporate power and authority to enter into and perform all obligations under
such documents, and, as to such parties, I also have assumed the due
authorization by all requisite corporate action, the due execution and delivery
and the validity, binding effect and enforceability of such documents. I
have
not examined the Mortgages, the Mortgage Loan Documents or other documents
in
the Mortgage Files (such documents, collectively, the “Mortgage Documents”), and
I express no opinion concerning the conformity of any of the Mortgage Documents
to the requirements of the Sale Agreement.
The
opinions set forth herein are limited to matters governed by the laws of
the
State of North Carolina and the federal laws of the United States of America,
and no opinion is expressed herein as to the laws of any other jurisdiction.
For
purposes of these opinions, I have disregarded the choice of law provision
in
the Sale Agreement and, instead, have assumed that the Sale Agreement is
governed exclusively by the internal, substantive laws and judicial
interpretation of the State of North Carolina. I assume no obligation to
supplement this opinion if any applicable laws change after the date of this
opinion, or if I become aware of any facts that might change the opinions
expressed herein after the date of this opinion. I do not express any opinion,
either implicitly or otherwise, on any issue not expressly addressed
below.
9-1
Based
upon the foregoing, I am of the opinion that:
1. The
Bank
is duly organized and validly existing as a national banking association
in good
standing under the federal laws of the United States and has the requisite
power
and authority, corporate or other, to own its own properties and conduct
its own
business, as presently conducted by it, and to enter into and perform its
obligations under the Sale Agreement.
2. The
Bank
has authorized the execution, delivery and performance of the Sale Agreement
by
all necessary corporate action and the Sale Agreement has been duly executed
and
delivered by the Bank.
3. No
consent, approval, authorization or order of any State of North Carolina
or
federal court or governmental agency or body is required for the execution,
delivery and performance by the Bank of the Sale Agreement or the consummation
by the Bank of the transactions contemplated by the terms of the Sale Agreement,
except for those consents, approvals, authorizations or orders which previously
have been obtained.
4. The
Sale
Agreement constitutes the legal, valid and binding obligation of the Bank,
enforceable against the Bank in accordance with its terms, subject to the
following:
(a) This
opinion is subject to the effect of applicable bankruptcy, insolvency,
receivership, reorganization, fraudulent conveyance, moratorium and similar
laws
affecting the enforcement of creditors’ rights generally.
(b) The
opinion is subject to the effect of general principles of equity (regardless
of
whether considered in a proceeding in equity or at law), which may, among
other
things, deny rights of specific performance.
5. The
consummation of the transactions contemplated by, and the performance by
the
Bank of any other of the terms of, the Sale Agreement, will not result in
a
breach of any term or provision of the articles of association or by-laws
of the
Bank or, to the best of my knowledge, conflict with, result in a breach,
violation or acceleration of, or constitute a default under, the terms of
any
material indenture or other material agreement or instrument to which the
Bank
is a party of by which it is bound or any order of any State of North Carolina
or federal court, regulatory body, administrative agency or governmental
body
having jurisdiction over the Bank.
6. To
the
best of my knowledge, there are no actions, proceedings or investigations
pending or threatened before any court, administrative agency or other tribunal
(a) asserting the invalidity of the Sale Agreement or (b) seeking to prevent
the
consummation of any of the transactions contemplated by the Sale Agreement,
which might materially and adversely affect the performance by the Bank of
its
obligations under, or the validity or enforceability of, the Sale
Agreement.
9-2
This
opinion letter is rendered for the sole benefit of the persons or entities
to
which it is addressed, and no other person or entity is entitled to rely
hereon
without my prior written consent. Copies of this opinion letter may note
be
furnished to any other person or entity, nor may any portion of this opinion
letter be quoted, circulated or referred to in any other document without
my
prior written consent.
Very
truly yours,
Xxxx
X.
Xxxx
Assistant
General Counsel
9-3
EXHIBIT
10
FORM
OF
CUSTODIAL ACCOUNT CERTIFICATION
_________
__, 2006
Bank
of America, National Association hereby certifies that it has established
the
account described below as a Custodial Account pursuant to Subsection 11.04
of
the Flow Mortgage Loan Sale and Servicing Agreement, dated April 1, 2006,
Performing, Conventional, Residential Mortgage Loans.
Title
of
Account: “Bank
of
America, National Association, in trust for Xxxxxx Capital, A Division of
Xxxxxx
Brothers Holdings Inc., as Purchaser of Mortgage Loans and various
Mortgagors.”
Account
Number: __________________________
Address
of office or branch
of
Bank
of America, National Association
at
which the Custodial Account
is
maintained:
000
Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx,
Xxx Xxxx 00000-0000
BANK
OF
AMERICA, NATIONAL ASSOCIATION
By:
___________________________
Name:
_________________________
Title:
__________________________
10-1
EXHIBIT
11
FORM
OF
ESCROW ACCOUNT CERTIFICATION
_________
__, 2006
Bank
of
America, National Association hereby certifies that it has established the
account described below as an Escrow Account pursuant to Subsection 11.06
of the
Flow Mortgage Loan Sale and Servicing Agreement, dated April 1, 2006,
Performing, Conventional, Residential Mortgage Loans.
Title
of
Account: “Bank
of
America, National Association, in trust for Xxxxxx Capital, A Division of
Xxxxxx
Brothers Holdings Inc., as Purchaser of Mortgage Loans and various
Mortgagors.”
Account
Number: __________________________
Address
of office or branch of
Bank
of America, National Association
at
which the Escrow Account is
maintained:
000
Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx,
Xxx Xxxx 00000-0000
BANK
OF
AMERICA, NATIONAL ASSOCIATION
By:
___________________________
Name:
_________________________
Title:
__________________________
00-0
XXXXXXX
00
XXXXXXXXXX
XX COMPLIANCE ADDENDUM
TO
FLOW
MORTGAGE LOAN SALE AND SERVICING AGREEMENT
ARTICLE
I
DEFINED
TERMS
Capitalized
terms used but not defined herein shall have the meanings assigned to such
terms
in the Agreement. The following terms shall have the meanings set forth
below:
Commission:
The
United States Securities and Exchange Commission.
Company:
Bank of
America, National Association
Company
Information:
As
defined in Section 2.07(a).
Depositor:
With
respect to any Securitization Transaction, the Person identified in writing
to
the Company by the Purchaser as depositor for such Securitization Transaction.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
Qualified
Correspondent:
Any
Person from which the Company purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Company and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for
sale to
the Company, in accordance with underwriting guidelines designated by the
Company (“Designated
Guidelines”)
or
guidelines that do not vary materially from such Designated Guidelines;
(ii)
such Mortgage Loans were in fact underwritten as described in clause (i)
above
and were acquired by the Company within 180 days after origination; (iii)
either
(x) the Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Company in origination of mortgage loans of the
same
type as the Mortgage Loans for the Company’s own account or (y) the Designated
Guidelines were, at the time such Mortgage Loans were underwritten, designated
by the Company on a consistent basis for use by lenders in originating
mortgage
loans to be purchased by the Company; and (iv) the Company employed, at
the time
such Mortgage Loans were acquired by the Company, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review
of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchased
mortgage loans properly applied the underwriting criteria designated by
the
Company.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject
to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
12-1
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (1) a sale or other transfer of some or all
of the
Mortgage Loans directly or indirectly to an issuing entity in connection
with an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage
loans
consisting, in whole or in part, of some or all of the Mortgage Loans.
Servicer:
As
defined in Section 2.03(c).
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB for which the
Company is responsible in its capacity as Servicer as identified on Exhibit
B
hereto, provided that such Exhibit B as may be amended from time to time
to
reflect changes in Regulation AB.
Sponsor:
With
respect to any Securitization Transaction, the Person identified in writing
to
the Company by the Purchaser as sponsor for such Securitization Transaction.
Static
Pool Information:
Static
pool information as described in Item 1l05(a)(l)-(3) and 1105(c) of Regulation
AB.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or
more
discrete functions identified in Item l122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Company or a Subservicer.
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Company or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
identified in Item 1122(d) of Regulation AB that are required to be performed
by
the Company under this Regulation AB Compliance Addendum or any Reconstitution
Agreement.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage
Loans
acquired by the Company.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction.
12-2
ARTICLE
II
COMPLIANCE
WITH REGULATION AB
Section
2.01. Intent
of the Parties; Reasonableness.
The
Purchaser and the Company acknowledge and agree that the purpose of Article
II
of this Regulation AB Compliance Addendum is to facilitate compliance by
the
Purchaser and any Depositor with the provisions of Regulation AB and related
rules and regulations of the Commission and that the provisions of this
Regulation AB Compliance Addendum shall be applicable to all Mortgage Loans
included in a Securitization Transaction closing on or after January 1,
2006,
regardless whether the Mortgage Loans were purchased by the Purchaser from
the
Company prior to the date hereof. Neither the Purchaser nor any Depositor
shall
exercise its right to request delivery of information or other performance
under
these provisions other than in good faith, or for purposes other than
compliance
with the Securities Act, the Exchange Act and the rules and regulations
of the
Commission thereunder. The Company acknowledges that interpretations of
the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise,
and
agrees to comply with reasonable requests made by the Purchaser or any
Depositor
in good faith for delivery of information under these provisions on the
basis of
evolving interpretations of Regulation AB. In connection with any Securitization
Transaction, the Company shall cooperate with the Purchaser to deliver
to the
Purchaser (including any of its assignees or designees) and any Depositor,
any
and all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Purchaser or any Depositor
to
permit the Purchaser or such Depositor to comply with the provisions of
Regulation AB, together with such disclosures relating to the Company,
any
Subservicer, any Third-Party Originator and the Mortgage Loans, or the
servicing
of the Mortgage Loans, reasonably believed by the Purchaser or any Depositor
to
be necessary in order to effect such compliance.
The
Purchaser and the Company also acknowledge and agree that Section
2.02(a)(i)-(v), Section 2.03(c), (e) and (f), Section 2.04, Section 2.05
and
Section 2.06 of this Regulation AB Compliance Addendum shall only be applicable
with respect to any Mortgage Loan if the Company (or Subservicer, if any)
services such Mortgage Loan for a period following the closing date of
a related
Securitization Transaction. The Purchaser and the Company also acknowledge
and
agree that this Regulation AB Compliance Addendum is intended to supplement
the
terms of the Agreement and, to the extent inconsistent, the rights and
obligations under the Agreement shall continue to apply with respect to
any
Transfer (as defined in the Agreement) that is not covered by the definition
of
“Securitization Transfer” in this Regulation AB Compliance
Addendum.
For
purposes of this Regulation AB Compliance Addendum, the term “Purchaser” shall
refer to Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc. and
its
successors in interest, assigns and designees. In addition, any notice
or
request that must be “in writing” or “written” may be made in mutually
acceptable electronic format.
12-3
Section
2.02. Additional
Representations and Warranties of the Company.
(a) The
Company shall be deemed to represent to the Purchaser and to any Depositor,
as
of the date on which information is first provided to the Purchaser or
any
Depositor under Section 2.03
that,
except as disclosed in writing to the Purchaser or such Depositor prior
to such
date: (i) the Company is not aware and has not received notice that any
default, early amortization or other performance triggering event has occurred
as to any other securitization due to any act or failure to act of the
Company;
(ii) the Company has not been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application
of a
servicing performance test or trigger; (iii) no material noncompliance
with the
applicable Servicing Criteria with respect to other securitizations of
residential mortgage loans involving the Company as servicer has been disclosed
or reported by the Company; (iv) no material changes to the Company’s policies
or procedures with respect to the servicing function it will perform under
this
Agreement and any Reconstitution Agreement for mortgage loans of a type
similar
to the Mortgage Loans have occurred during the three-year period immediately
preceding the related Securitization Transaction; (v) there are no aspects
of
the Company’s financial condition that could have a material adverse effect on
the performance by the Company of its servicing obligations under this
Agreement
or any Reconstitution Agreement; (vi) there are no material legal or
governmental proceedings pending (or known to be contemplated) against
the
Company, any Subservicer or any Third-Party Originator; and (vii) there
are no
affiliations, relationships or transactions relating to the Company, any
Subservicer or any Third-Party Originator with respect to any Securitization
Transaction and any party thereto identified in writing to the Company
by the
related Depositor of a type described in Item 1119 of Regulation AB.
(b) If
so
requested in writing by the Purchaser or any Depositor on any date following
the
date on which information is first provided to the Purchaser or any Depositor
under Section 2.03, the Company shall use its reasonable best efforts within
five (5) Business Days, but in no event later than ten (10) Business Days
following such request, to confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section
or, if
any such representation and warranty is not accurate as of the date of
such
request, provide reasonably adequate disclosure of the pertinent facts,
in
writing, to the requesting party.
Section
2.03. Information
to Be Provided by the Company.
In
connection with any Securitization Transaction, the Company shall (i) use
its best reasonable efforts to within five (5) Business Days, but in no
event
later than ten (10) Business Days, following written request by the Purchaser
or
any Depositor, provide to the Purchaser and such Depositor (or, as applicable,
cause each Third-Party Originator and each Subservicer to provide), in
writing
and in form and substance reasonably satisfactory to the Purchaser and
such
Depositor, the information and materials specified in paragraphs (a), (b),
(c)
and (f) of this Section, and (ii) as promptly as practicable following
notice to
or discovery by the Company, provide to the Purchaser and any Depositor
(in
writing and in form and substance reasonably satisfactory to the Purchaser
and
such Depositor) the information specified in paragraph (d) of this
Section.
12-4
(a) If
so
requested in writing by the Purchaser or any Depositor with respect to
any
Securitization Transaction for which 20% or more of the Pool Assets of
any
particular loan group (measured by principal balance as of the related
determination date) (or such other percentage specified in Item 1110 of
Regulation AB for unaffiliated servicers) are originated by the Company,
the
Company shall provide such information regarding (i) the Company, as originator
of the Mortgage Loans (including as an acquirer of Mortgage Loans from
a
Qualified Correspondent), or (ii) each Third-Party Originator, and (iii)
as
applicable, each Subservicer, as is reasonably requested for the purpose
of
compliance with Items 1103(a)(l), 1105, 1110, 1117 and 1119 of Regulation
AB.
Such information shall include as applicable, at a minimum (so long as
required
by Regulation AB):
(A) the
originator’s form of organization;
(B) a
description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage loans, which description
shall include a discussion of the originator’s experience in originating
mortgage loans of a similar type as the Mortgage Loans; information regarding
the size and composition of the originator’s origination portfolio; and
information that may be material, in the good faith judgment of the Purchaser
or
any Depositor, to an analysis of the performance of the Mortgage Loans,
including the originators’ credit-granting or underwriting criteria for mortgage
loans of similar type(s) as the Mortgage Loans and such other information
as the
Purchaser or any Depositor may reasonably request for the purpose of compliance
with Item 1110(b)(2) of Regulation AB;
(C) a
description of any legal or governmental proceedings pending (or known
to be
contemplated) against the Company, each Third-Party Originator and each
Subservicer that would be material to securityholders; and
(D) a
description of any affiliation or relationship between the Company, each
Third-Party Originator, each Subservicer and any of the following parties
to a
Securitization Transaction, as such parties are identified to the Company
by the
Purchaser or any Depositor in writing in advance of such Securitization
Transaction:
(1) the
Sponsor;
(2) the
depositor;
(3) the
issuing entity;
(4) any
servicer;
(5) any
trustee;
(6) any
originator;
(7) any
significant obligor;
(8) any
enhancement or support provider; and
12-5
(9) any
other
material transaction party.
(b) If
so requested in writing by the Purchaser or any Depositor, the Company
shall
provide (or, as applicable, cause each Third-Party Originator to provide)
Static
Pool Information solely with respect to securitized pools of mortgage loans
(of
a similar type as the Mortgage Loans, as reasonably identified by the Purchaser
as provided below) that were included in securitizations that closed during
the
five (5) years preceding the closing date of the related Securitization
Transaction and for which Banc of America Mortgage Securities, Inc. was
the
depositor. Such Static Pool Information shall be prepared by the Company
(or
Third-Party Originator) on the basis of its reasonable, good faith
interpretation of the requirements of Item 1105(a)(3) of Regulation AB.
To the
extent that there is reasonably available to the Company (or Third-Party
Originator) Static Pool Information with respect to more than one mortgage
loan
type, the Purchaser or any Depositor shall be entitled to specify whether
some
or all of such information shall be provided pursuant to this paragraph.
The
content of such Static Pool Information may be in the form customarily
provided
by the Company, and need not be customized for the Purchaser or any Depositor.
Such Static Pool Information for each prior securitized pool shall be presented
in increments no less frequently than quarterly over the life of the mortgage
loans included in such prior securitized pool. The most recent periodic
increment must be as of a date no later than 135 days prior to the date
of the
prospectus or other offering document in which the Static Pool Information
is to
be included or incorporated by reference. The Static Pool Information shall
be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or
other
such electronic format reasonably required by the Purchaser or the Depositor,
as
applicable.
Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an
omission
to include therein information required to be provided pursuant to such
paragraph), the Company shall provide corrected Static Pool Information
to the
Purchaser or any Depositor, as applicable, in the same format in which
Static
Pool Information was previously provided to such party by the
Company.
If
so
requested in writing by the Purchaser or any Depositor, the Company shall
provide (or, as applicable, cause each Third-Party Originator to provide),
at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Regulation AB Compliance
Addendum), such statements and agreed-upon procedures letters of certified
public accountants reasonably acceptable to the Purchaser or Depositor,
as
applicable, pertaining to Static Pool Information relating to securitizations
closed on or after January 1, 2006, as the Purchaser or such Depositor
shall
reasonably request. Such statements and letters shall be addressed to and
be for
the benefit of such parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any Sponsor, any Depositor and any
broker
dealer acting as underwriter, placement agent or initial purchaser with
respect
to a Securitization Transaction. Any such statement or letter may take
the form
of a standard, generally applicable document accompanied by a reliance
letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
12-6
(c) If
so
requested in writing by the Purchaser or any Depositor with respect to
any
Securitization Transaction for which 20% or more of the pool assets of
any
particular loan group (measured by principal balance as of the related
determination date) (or such other percentage specified in Item 1108 of
Regulation AB for unaffiliated servicers) are serviced by the Company and
any
Subservicer, the Company shall provide such information regarding the Company,
as servicer of the Mortgage Loans, and each Subservicer (each of the Company
and
each Subservicer, for purposes of this paragraph, a “Servicer”),
as is
reasonably requested for the purpose of compliance with Item 1108 of Regulation
AB. Such information shall include, at a minimum:
(A) the
Servicer’s form of organization;
(B) a
description of how long the Servicer has been servicing residential mortgage
loans; a general discussion of the Servicer’s experience in servicing assets of
any type as well as a more detailed discussion of the Servicer’s experience in,
and procedures for, the servicing function it will perform under the Agreement
and any Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer’s portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the
Servicer
that may be material, in the good faith judgment of the Purchaser or any
Depositor, to any analysis of the servicing of the Mortgage Loans or the
related
asset-backed securities, as applicable, including, without limitation:
(1) whether
any prior securitizations of mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing by the Servicer
during the three-year period immediately preceding the related Securitization
Transaction;
(2) the
extent of outsourcing the Servicer utilizes;
(3) whether
there has been previous disclosure of material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential
mortgage
loans involving the Servicer as a servicer during the three-year period
immediately preceding the related Securitization Transaction;
(4) whether
the Servicer has been terminated as servicer in a residential mortgage
loan
securitization, either due to a servicing default or to application of
a
servicing performance test or trigger; and
(5) such
other information as the Purchaser or any Depositor may reasonably request
for
the purpose of compliance with Item 1108(b)(2) of Regulation AB;
(C) a
description of any material changes during the three-year period immediately
preceding the related Securitization Transaction to the Servicer’s policies or
procedures with respect to the servicing function it will perform under
the
Agreement and any Reconstitution Agreements for mortgage loans of a type
similar
to the Mortgage Loans;
12-7
(D) information
regarding the Servicer’s financial condition, to the extent that there is a
material risk that an adverse financial event or circumstance involving
the
Servicer could have a material adverse effect on the performance by the
Company
of its servicing obligations under the Agreement or any Reconstitution
Agreement;
(E) information
regarding advances made by the Servicer on the Mortgage Loans and the Servicer’s
overall servicing portfolio of residential mortgage loans for the three-year
period immediately preceding the related Securitization Transaction, which
may
be limited to a statement by an authorized officer of the Servicer to the
effect
that the Servicer has made all advances required to be made on residential
mortgage loans serviced by it during such period, or, if such statement
would
not be accurate, information regarding the percentage and type of advances
not
made as required, and the reasons for such failure to advance;
(F) a
description of the Servicer’s processes and procedures designed to address any
special or unique factors involved in servicing loans of a similar type
as the
Mortgage Loans;
(G) a
description of the Servicer’s processes for handling delinquencies, losses,
bankruptcies and recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts; and
(H) information
as to how the Servicer defines or determines delinquencies and charge-offs,
including the effect of any grace period, re-aging, restructuring, partial
payments considered current or other practices with respect to delinquency
and
loss experience.
(d) If
so
requested in writing 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 Company shall (or shall cause each
Subservicer and Third-Party Originator to) (i) notify the Purchaser and
any
Depositor in writing of (A) any litigation or governmental proceedings
pending
against the Company, any Subservicer or any Third-Party Originator that
would be
material to securityholders and (B) any affiliations or relationships that
develop following the closing date of a Securitization Transaction between
the
Company, any Subservicer or any Third-Party Originator and any of the parties
specified in clause (D) of paragraph (a) of this Section (and any other
parties
identified in writing by the requesting party) with respect to such
Securitization Transaction, but only to the extent that such affiliations
or
relationships do not include the Purchaser, Depositor or any of their respective
affiliates as a party, and (ii) provide to the Purchaser and any Depositor
a
description of such proceedings, affiliations or relationships.
12-8
(e) As
a
condition to the succession to the Company or any Subservicer as servicer
or
subservicer under the Agreement or any Reconstitution Agreement by any
Person
(i) into which the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Company
or
any Subservicer, the Company shall provide to the Purchaser and any Depositor,
at least 15 calendar days prior to the effective date of such succession
or
appointment, (x) written notice to the Purchaser and any Depositor of such
succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, all information
reasonably requested in writing by the Purchaser or any Depositor in order
to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to
any class of asset-backed securities.
(f) In
addition to such information as the Company, as servicer, is obligated
to
provide pursuant to other provisions of the Agreement, if so requested
in
writing by the Purchaser or any Depositor, the Company shall provide such
information reasonably available to the Company regarding the performance
of the
Mortgage Loans as is reasonably required to facilitate preparation of
distribution reports in accordance with Item 1121 of Regulation AB. Such
information shall be provided concurrently with the monthly reports otherwise
required to be delivered by the servicer under this Agreement, commencing
with
the first such report due not less than ten Business Days following such
request.
Section
2.04. Servicer
Compliance Statement.
The
Company shall deliver using best reasonable efforts on or before March
1, but in
no event later than March 15, of each calendar year, commencing in 2007,
to the
Purchaser and any Depositor a statement of compliance addressed to the
Purchaser
and such Depositor and signed by an authorized officer of the Company,
to the
effect that (i) a review of the Company’s activities during the immediately
preceding calendar year (or applicable portion thereof) and of its performance
under the Agreement and any applicable Reconstitution Agreement during
such
period has been made under such officer’s supervision, and (ii) to the best of
such officers’ knowledge, based on such review, the Company has fulfilled all of
its obligations under the Agreement and any applicable Reconstitution Agreement
in all material respects throughout such calendar year (or applicable portion
thereof) or, if there has been a failure to fulfill any such obligation
in any
material respect, specifically identifying each such failure known to such
officer and the nature and the status thereof.
Section
2.05. Report
on Assessment of Compliance and Attestation.
(a) The
Company shall, by March 5 of each calendar year, commencing in 2007:
(i) deliver
to the Purchaser and any Depositor a report regarding the Company’s assessment
of compliance with the Servicing Criteria during the immediately preceding
calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange
Act and
Item 1122 of Regulation AB. Such report shall be addressed to the Purchaser
and
such Depositor and signed by an authorized officer of the Company, and
shall
address each of the Servicing Criteria specified on Exhibit B hereto, which
Exhibit B shall be incorporated into the Seller’s servicing agreement for each
Securitization Transaction;
(ii) deliver
to the Purchaser and any Depositor a report of a registered public accounting
firm that attests to, and reports on, the assessment of compliance made
by the
Company and delivered pursuant to the preceding paragraph. Such attestation
shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation
S-X under
the Securities Act and the Exchange Act;
12-9
(iii) cause
each Subservicer, and each Subcontractor determined by the Company pursuant
to
Section 2.06(b) to be “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, (each, a “Participating Entity”), to
deliver to the Purchaser and any Depositor an assessment of compliance
and
accountants’ attestation as and when provided in paragraphs (a) and (b) of this
Section; and
(iv) deliver
to the Purchaser, any Depositor and any other Person that will be responsible
for signing the certification (a “Sarbanes
Certification”)
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant
to
Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a certification in
the form
attached hereto as Exhibit A.
The
Company acknowledges that the parties identified in clause (a)(iv) above
may
rely on the certification provided by the Company pursuant to such clause
in
signing a Sarbanes Certification and filing such with the Commission.
(b) Each
assessment of compliance provided by a Subservicer pursuant to Section
2.05(a)(iii) shall address each of the Servicing Criteria specified on
a
certification substantially in the form of Exhibit B hereto delivered to
the
Purchaser concurrently with the execution of this Regulation AB Compliance
Addendum or, in the case of a Subservicer subsequently appointed as such,
on or
prior to the date of such appointment. An assessment of compliance provided
by a
Subcontractor pursuant to Section 2.05(a)(iii) need not address any elements
of
the Servicing Criteria other than those specified by the Company pursuant
to
Section 2.06.
Section
2.06. Use
of
Subservicers and Subcontractors.
The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company as servicer under the Agreement
or
any Reconstitution Agreement unless the Company complies with the provisions
of
paragraph (a) of this Section. The Company shall not hire or otherwise
utilize
the services of any Subcontractor, and shall not permit any Subservicer
to hire
or otherwise utilize the services of any Subcontractor, to fulfill any
of the
obligations of the Company as servicer under the Agreement or any Reconstitution
Agreement unless the Company complies with the provisions of paragraph
(b) of
this Section.
(a) It
shall
not be necessary for the Company to seek the consent of the Purchaser or
any
Depositor to the utilization of any Subservicer. The Company shall cause
any
Subservicer used by the Company (or by any Subservicer) for the benefit
of the
Purchaser and any Depositor to comply with the provisions of this Section
and
with Sections 2.02, 2.03(c) and (e), 2.04, 2.05 and 2.07 of this Regulation
AB
Compliance Addendum to the same extent as if such Subservicer were the
Company,
and to provide the information required with respect to such Subservicer
under
Section 2.03( d) of this Regulation AB Compliance Addendum. The Company
shall be
responsible for obtaining from each Subservicer and delivering to the Purchaser
and any Depositor any servicer compliance statement required to be delivered
by
such Subservicer under Section 2.04, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section
2.05 and
any certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 2.05 as
and
when required to be delivered.
12-10
(b) It
shall
not be necessary for the Company to seek the consent of the Purchaser or
any
Depositor to the utilization of any Subcontractor. The Company shall promptly
upon written 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 reasonably satisfactory to the Purchaser
and
such Depositor) of the role and function of each Subcontractor utilized
by the
Company or any Subservicer, specifying (i) the identity of each such
Subcontractor that is “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB as determined by the Company and
(ii)
which elements of the Servicing Criteria will be addressed in assessments
of
compliance provided by each Subcontractor identified pursuant to clause
(i) of
this paragraph.
As
a condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 2.05 and 2.07 of this
Regulation AB Compliance Addendum to the same extent as if such
Subcontractor were the Company. The Company shall be responsible for obtaining
from each Subcontractor and delivering to the Purchaser and any Depositor
any
assessment of compliance and attestation required to be delivered by such
Subcontractor under Section 2.05, in each case as and when required to
be
delivered.
Section
2.07. Indemnification;
Remedies.
(a) The
Company shall indemnify the Purchaser, each affiliate of the Purchaser,
and each
of the following parties participating in a Securitization Transaction:
each
Sponsor; each 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; 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
information, report, certification, accountants’ letter or other material
provided under this Article II by or on behalf of the Company, or provided
under
this Article II by or on behalf of any Subservicer, Subcontractor or Third-Party
Originator (collectively, the “Company
Information”),
or
(B) the omission or alleged omission to state in the Company Information
a
material fact required to be stated in the Company Information or necessary
in
order to make the statements therein, in the light of the circumstances
under
which they were made, not misleading; provided, by way of clarification,
that
clause (B) of this paragraph shall be construed solely by reference to
the
Company Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether the Company
Information or any portion thereof is presented together with or separately
from
such other information;
12-11
(ii) any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under this Article II, including
any failure by the Company to identify pursuant to Section 2.06(b) any
Subcontractor “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB; or
(iii) any
breach by the Company of a representation or warranty set forth in Section
2.02(a) or in a writing furnished pursuant to Section 2.02(b) and made
as of a
date prior to the closing date of the related Securitization Transaction,
to the
extent that such breach is not cured by such closing date, or any breach
by the
Company of a representation or warranty in a writing furnished pursuant
to
Section 2.02(b) to the extent made as of a date subsequent to such closing
date.
In
the
case of any failure of performance described in clause (a)(ii) of this
Section,
the Company shall promptly reimburse the Purchaser, any Depositor, as
applicable, and each Person responsible for the preparation, execution
or filing
of any report required to be filed with the Commission with respect to
such
Securitization Transaction, or for execution of a certification pursuant
to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Company, any Subservicer,
any
Subcontractor or any Third-Party Originator.
(b) (i) Any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under this Article II, or
any
breach by the Company of a representation or warranty set forth in Section
2.02(a) or in a writing furnished pursuant to Section 2.02(b) and made
as of a
date prior to the closing date of the related Securitization Transaction,
to the
extent that such breach is not cured by such closing date, or any breach
by the
Company of a representation or warranty in a writing furnished pursuant
to
Section 2.02(b) to the extent made as of a date subsequent to such closing
date,
shall, except as provided in clause (ii) of this paragraph, immediately
and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Company under the Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or Depositor,
as
applicable, in its sole discretion to terminate the rights and obligations
of
the Company as servicer under the Agreement and/or any applicable Reconstitution
Agreement without payment (notwithstanding anything in this Agreement or
any
applicable Reconstitution Agreement to the contrary) of any compensation
to the
Company; provided
that
to
the extent that any provision of the Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain
rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
12-12
(ii) Any
failure by the Company, any Subservicer or any Subcontractor to deliver
any
information, report, certification or accountants’ letter when and as required
under Section 2.04 or 2.05, including any failure by the Company to identify
pursuant to Section 2.06(b) any Subcontractor “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB, which continues
unremedied for ten calendar days after the date on which such information,
report, certification or accountants’ letter was required to be delivered shall
constitute an Event of Default with respect to the Company under the Agreement
and any applicable Reconstitution Agreement, and shall entitle the Purchaser
or
Depositor, as applicable, in its sole discretion to terminate the rights
and
obligations of the Company as servicer under the Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement to the contrary) of any compensation to the Company; provided
that
to
the extent that any provision of the Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain
rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
(iii) The
Company shall promptly reimburse the Purchaser (or any designee of the
Purchaser, such as a master servicer) and any Depositor, as applicable,
for all
reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of
the
Company as servicer and the transfer of servicing of the Mortgage Loans
to a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of
the
Agreement and/or any applicable Reconstitution Agreement or otherwise,
whether
in equity or at law, such as an action for damages, specific performance
or
injunctive relief.
Section
2.08. Additional
Agreements.
Notwithstanding
any other provision of this Regulation AB Compliance Addendum, the Company
shall
seek the consent of the Purchaser for the utilization of all third party
service
providers, including Subservicers and Subcontractors, when required by
and in
accordance with the terms of the Existing Agreement. In the event of a
conflict
between this Regulation AB Compliance Addendum and any other document or
agreement, including without limitation the Existing Agreement, this Regulation
AB Compliance Addendum shall control. This Regulation AB Compliance Addendum
shall be governed by and construed in accordance with the laws of the State
of
New York without reference to its conflict of law provisions (other than
Section
5-1401 of the General Obligations Law), and the obligations, rights and
remedies
of the parties hereunder shall be determined in accordance with such
laws.
12-13
This
Regulation AB Compliance Addendum may be executed in one or more counterparts
and by different parties hereto on separate counterparts, each of which,
when so
executed, shall constitute one and the same agreement. This Regulation
AB
Compliance Addendum will become effective as of April 1, 2006, subject
to
Section 2.01 hereof. This Regulation AB Addendum shall bind and inure to
the
benefit of and be enforceable by the Company and the Purchaser and the
respective permitted successors and assigns of the Company and the successors
and assigns of the Purchaser. This Regulation AB Compliance Addendum shall
not
be assigned, pledged or hypothecated by the Company to a third party without
the
prior written consent of the Purchaser, which consent may be withheld by
the
Purchaser in its sole discretion. The Agreement as amended by this Regulation
AB
Compliance Addendum may be assigned, pledged or hypothecated by the Purchaser
in
whole or in part, and with respect to one or more of the Mortgage Loans,
without
the consent of the Company.
12-14
EXHIBIT
A
FORM
OF
ANNUAL CERTIFICATION
| Re: |
The
[ ]
agreement dated as of [ ],
200[
] (the “Agreement”),
among [IDENTIFY
PARTIES]
|
I,
________________________________, the _____________________ of Bank of
America,
National Association, certify to [the Purchaser], [the Depositor], and
the
[Master Servicer] [Securities Administrator] [Trustee], and their officers,
with
the knowledge and intent that they will rely upon this certification, that:
(1)
I
have
reviewed the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the “Compliance
Statement”),
the
report on assessment of the Company’s compliance with the servicing criteria set
forth in Item 1122(d) of Regulation AB (the “Servicing
Criteria”),
provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
Act of 1934, as amended (the “Exchange
Act”)
and
Item 1122 of Regulation AB (the “Servicing
Assessment”),
the
registered public accounting firm’s attestation report provided in accordance
with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b)
of
Regulation AB (the “Attestation
Report”),
and
all servicing reports, officer’s certificates and other information relating to
the servicing of the Mortgage Loans by the Company during 200[ ] that were
delivered by the Company to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the
“Company
Servicing Information”);
(2)
Based
on
my knowledge, the Company Servicing Information, taken as a whole, does
not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in the light of the circumstances
under
which such statements were made, not misleading with respect to the period
of
time covered by the Company Servicing Information;
(3)
Based
on
my knowledge, all of the Company Servicing Information required to be provided
by the Company under the Agreement has been provided to the [Depositor]
[Master
Servicer] [Securities Administrator] [Trustee];
(4)
I
am
responsible for reviewing the activities performed by the Company as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed
in the
Compliance Statement, the Servicing Assessment or the Attestation Report,
the
Company has fulfilled its obligations under the Agreement in all material
respects; and
A-1
(5)
The
Compliance Statement required to be delivered by the Company pursuant to
the
Agreement, and the Servicing Assessment and Attestation Report required
to be
provided by the Company and by any Subservicer or Subcontractor pursuant
to the
Agreement, have been provided to the [Depositor] [Master Servicer]. Any
material
instances of noncompliance described in such reports have been disclosed
to the
[Depositor] [Master Servicer]. Any material instance of noncompliance with
the
Servicing Criteria has been disclosed in such reports.
Date: __________________________
By:
___________________________
Name:
Title:
A-2
EXHIBIT
B
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by [the Company] [Name of Subservicer]
shall address, at a minimum, the criteria identified as below as “Applicable
Servicing Criteria”;
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
General
Servicing Considerations
|
||
|
Policies
and procedures are instituted to monitor any performance or
other triggers
and events of default in accordance with the transaction agreements.
|
X
|
|
|
1122(d)(1)(i)
|
||
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third
party’s
performance and compliance with such servicing activities.
|
X
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
Not
applicable
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect
on the party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
|
X
|
|
Cash
Collection and Administration
|
||
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial
bank
accounts and related bank clearing accounts no more than two
business days
following receipt, or such other number of days specified in
the
transaction agreements.
|
X
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or
distributions,
and any interest or other fees charged for such advances, are
made,
reviewed and approved as specified in the transaction agreements.
|
X
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve
accounts or
accounts established as a form of overcollateralization, are
separately
maintained (e.g., with respect to commingling of cash) as set
forth in the
transaction agreements.
|
X
|
B-1
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For
purposes of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.
|
X
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
|
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank
clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction
agreements;
(C) reviewed and approved by someone other than the person
who prepared
the reconciliation; and (D) contain explanations for reconciling
items.
These reconciling items are resolved within 90 calendar days
of their
original identification, or such other number of
days
specified in the transaction agreements.
|
X
|
|
|
Investor
Remittances and Reporting
|
|||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and
applicable
Commission requirements. Specifically, such reports (A) are
prepared in
accordance with timeframes and other terms set forth in the
transaction
agreements; (B) provide information calculated in accordance
with the
terms specified in the transaction agreements; (C) are filed
with the
Commission as required by its rules and regulations; and (D)
agree with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the Servicer.
|
X
|
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to
the Servicer’s
investor records, or such other number of days specified in
the
transaction agreements.
|
X
|
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
|
B-2
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
Pool
Asset Administration
|
|||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by
the transaction
agreements or related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the
transaction
agreements
|
X
|
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are
made, reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
|
X
|
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance
with the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements,
and
allocated to principal, interest or other items (e.g., escrow)
in
accordance
with the related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor’s mortgage loans (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions,
as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such
other period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including,
for example,
phone calls, letters and payment rescheduling plans in cases
where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
|
B-3
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with
variable
rates are computed based on the related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period
specified in
the transaction agreements; (B) interest on such funds is paid,
or
credited, to obligors in accordance with applicable mortgage
loan
documents and state laws; and (C) such funds are returned to
the obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction agreements.
|
X
|
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that
such support
has been received by the servicer at least 30 calendar days
prior to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be
made on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business
days to the
obligor’s records maintained by the servicer, or such other number
of days
specified in the transaction agreements.
|
X
|
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as
set forth in
the transaction agreements.
|
Not
applicable
|
|
B-4
