MORTGAGE LOAN SALE AND SERVICING AGREEMENT MORGAN STANLEY MORTGAGE CAPITAL INC., Purchaser HSBC MORTGAGE CORPORATION (USA), Seller and Servicer Dated as of August 1, 2005 Fixed and Adjustable Rate Mortgage Loans First Liens
Exhibit
99.17c
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
HSBC
MORTGAGE CORPORATION (USA),
Seller
and Servicer
Dated
as
of August 1, 2005
Fixed
and
Adjustable Rate Mortgage Loans
First
Liens
TABLE
OF
CONTENTS
Page
|
SECTION 1.
|
DEFINITIONS.
|
1
|
|
SECTION 2.
|
AGREEMENT
TO PURCHASE MORTGAGE LOANS.
|
19
|
|
SECTION 3.
|
MORTGAGE
LOAN SCHEDULES.
|
19
|
|
SECTION 4.
|
PURCHASE
PRICE.
|
19
|
|
SECTION 5.
|
EXAMINATION
OF MORTGAGE FILES.
|
20
|
|
SECTION 6.
|
CONVEYANCE
FROM SELLER TO PURCHASER.
|
21
|
|
SECTION 7.
|
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES FOR
BREACH.
|
24
|
|
SECTION 8.
|
CLOSING.
|
40
|
|
SECTION 9.
|
CLOSING
DOCUMENTS.
|
40
|
|
SECTION 10.
|
COSTS.
|
42
|
|
SECTION 11.
|
ADMINISTRATION
AND SERVICING OF THE MORTGAGE LOANS.
|
42
|
|
SECTION 12.
|
DEFAULT.
|
59
|
|
SECTION 13.
|
TERMINATION
|
60
|
|
SECTION 14.
|
COOPERATION
OF SELLER WITH A RECONSTITUTION.
|
61
|
|
SECTION 15.
|
NOTICE
OF SERVICING TRANSFER.
|
65
|
|
SECTION 16.
|
THE
SELLER.
|
65
|
|
SECTION 17.
|
SELLER
AND SERVICER NOT TO RESIGN
|
00
|
-x-
|
XXXXXXX 00.
|
MANDATORY
DELIVERY
|
67
|
|
SECTION 19.
|
NOTICES
|
68
|
|
SECTION 20.
|
SEVERABILITY
CLAUSE.
|
69
|
|
SECTION 21.
|
COUNTERPARTS.
|
69
|
|
SECTION 22.
|
GOVERNING
LAW.
|
69
|
|
SECTION 23.
|
INTENTION
OF THE PARTIES.
|
70
|
|
SECTION 24.
|
SUCCESSORS
AND ASSIGNS.
|
70
|
|
SECTION 25.
|
WAIVERS.
|
70
|
|
SECTION 26.
|
EXHIBITS.
|
71
|
|
SECTION 27.
|
NONSOLICITATION.
|
71
|
|
SECTION 28.
|
GENERAL
INTERPRETIVE PRINCIPLES.
|
71
|
|
SECTION 29.
|
REPRODUCTION
OF DOCUMENTS.
|
71
|
|
SECTION 30.
|
FURTHER
AGREEMENTS.
|
72
|
|
SECTION 31.
|
WAIVER
OF TRIAL BY JURY.
|
72
|
|
SECTION 32.
|
JURISDICTION;
CONSENT TO SERVICE OF PROCESS.
|
72
|
|
SECTION 33.
|
PRIVACY.
|
72
|
|
SECTION 34.
|
NO
PARTNERSHIP
|
72
|
|
SECTION 35.
|
CONFIDENTIALITY
|
72
|
EXHIBITS
|
EXHIBIT
1
|
FORM
OF SELLER’S OFFICER’S CERTIFICATE
|
|
EXHIBIT
2
|
FORM
OF SECURITY RELEASE CERTIFICATION
|
|
EXHIBIT
3
|
ASSIGNMENT
AND CONVEYANCE
|
|
EXHIBIT
4
|
CONTENTS
OF EACH MORTGAGE FILE
|
|
EXHIBIT
5
|
MORTGAGE
LOAN DOCUMENTS
|
-ii-
|
EXHIBIT
6
|
FORM
OF MONTHLY REMITTANCE ADVICE FIELDS
|
|
EXHIBIT
7
|
FORM
OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
|
|
EXHIBIT
8
|
ANNUAL
CERTIFICATION
|
|
EXHIBIT
9
|
CUSTODIAL
ACCOUNT CERTIFICATION
|
|
EXHIBIT
10
|
CUSTODIAL
ACCOUNT LETTER AGREEMENT
|
|
EXHIBIT
11
|
ESCROW
ACCOUNT CERTIFICATION
|
|
EXHIBIT
12
|
ESCROW
ACCOUNT LETTER AGREEMENT
|
|
EXHIBIT
13
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
14
|
FORM
OF ASSIGNMENT AND RECOGNITION AGREEMENT
|
|
EXHIBIT
15
|
FORM
OF OPINION OF COUNSEL TO SELLER
|
|
EXHIBIT
A
|
MORTGAGE
LOANS
|
|
SCHEDULE I
|
MORTGAGE
LOAN SCHEDULE
|
-iii-
MORTGAGE
LOAN SALE AND SERVICING
AGREEMENT
This
is a
MORTGAGE LOAN SALE AND SERVICING AGREEMENT (the “Agreement”), dated as of
August 1, 2005, is by and between Xxxxxx Xxxxxxx Mortgage
Capital Inc., having an office at 0000 Xxxxxxxx, Xxx Xxxx, XX 00000
(together with any Person to whom the Purchaser has assigned its rights and
obligations hereunder as Purchaser with respect to the Mortgage Loan and each
respective successors and assigns, the “Purchaser”) and HSBC Mortgage
Corporation (USA), having an office at 0000 Xxxxxx Xxxxxx, Xxxxx, XX 00000,
in
its capacity as seller (the “Seller”) and in its capacity as servicer
(the “Servicer”).
W
I T
N E S S E T H :
WHEREAS,
the Seller desires to sell, from time to time, to the Purchaser, and the
Purchaser desires to purchase, from time to time, from the Seller, certain
fixed
and adjustable rate residential first lien mortgage loans (the “Mortgage
Loans”) as described herein on a servicing retained basis and which shall be
delivered in groups of whole loans (each a “Mortgage Loan Package”) on
various dates as provided in the related Purchase Price and Terms Letter
Agreement (each, a “Closing Date”);
WHEREAS,
each Mortgage Loan is secured by a mortgage, deed of trust or other security
instrument creating a first lien on a residential dwelling located in the
jurisdiction indicated on the Mortgage Loan Schedule for the related
Mortgage Loan Package, which is to be annexed hereto on each Closing Date as
Schedule I;
WHEREAS,
the Purchaser, the Seller and the Servicer wish to prescribe the manner of
the
conveyance, servicing and control of the Mortgage Loans;
WHEREAS,
following its purchase of the Mortgage Loans from the Seller, the Purchaser
desires to sell some or all of the Mortgage Loans to one or more purchasers
as a
whole loan transfer or a public or private, rated or unrated mortgage
pass-through transaction; and
WHEREAS,
certain Mortgage Loans have been, or will be, registered on the MERS® System
(defined below) such that the mortgagee of record under each such Mortgage
Loan
shall be identified as MERS.
NOW,
THEREFORE, in consideration of the premises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser, the Seller and
the
Servicer agree as follows:
SECTION 1. Definitions. For
purposes of this Agreement the following capitalized terms shall have the
respective meanings set forth below.
Accepted
Servicing Practices: With respect to any Mortgage Loan, the
servicing procedures which (i) conform to customary and usual standards of
practice of prudent mortgage lenders and mortgage loan servicers, for mortgage
loans similar to the Mortgage Loans, (ii) follow the policies and
procedures that the Servicer applies to similar mortgage loans serviced for
third parties and for its own account, (iii) meet the requirements of FNMA
and FHLMC, (iv) comply with all applicable laws and follow collection
practices with respect to the related Mortgage Loans that are in all material
respects legal and customary, and (v) subject to clauses (i), (ii) (iii)
and (iv) above, comply with the reasonable requests of the Purchaser and
the requirements of this Agreement.
Adjustable
Rate Mortgage Loan: A Mortgage Loan which provides for the adjustment of the
Mortgage Interest Rate payable in respect thereto.
Adjustment
Date: With respect to each Adjustable Rate Mortgage Loan, the
date set forth in the related Mortgage Note on which the Mortgage Interest
Rate
on such Adjustable Rate Mortgage Loan is adjusted in accordance with the terms
of the related Mortgage Note.
Affiliate: With
respect to any specified Person, any other Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with the specified Person. For purposes of this
definition, the term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
a
Person, whether through the ownership of voting stock, by contract or
otherwise.
Agency
Transfer: A FNMA Transfer or a FHLMC Transfer.
Agreement: This
Mortgage Loan Sale and Servicing Agreement including all exhibits, schedules,
amendments and supplements hereto.
ALTA: The
American Land Title Association.
Ancillary
Income: All income derived from the Mortgage Loans (other than the Servicing
Fee) including but not limited to Prepayment Charge, late charges, any interest
paid on funds deposited in any collection account or escrow account (other
than
interest on escrowed funds required by law to be paid to the Mortgagor), fees
received with respect to checks or bank drafts returned by the related bank
for
non-sufficient funds, assumption fees, optional insurance administrative fees
and all other incidental fees and charges to the extent not otherwise payable
to
the Mortgagor under applicable law or pursuant to the terms of the related
Mortgage Note, including any set-up fees or servicing
transfer fees.
Appraised
Value: With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the originator
of the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser who met the minimum requirements of FNMA and/or FHLMC, and
(ii) the purchase price paid for the related Mortgaged Property by the
Mortgagor with the proceeds of the Mortgage Loan, provided, however, in the
case
of a Refinanced Mortgage Loan, such value of the Mortgaged Property is based
solely upon the value determined by an appraisal made for the originator of
such
Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage
Loan by an appraiser who met the minimum
-2-
requirements
of FNMA or FHLMC. However, in the case of a mortgage made on a
property in the state of New York, the value will always be determined by the
appraisal for determining any requirement for Primary Mortgage Insurance
only.
Assignment
and Conveyance: An individual assignment and conveyance of the
Mortgage Loans purchased on a Closing Date in the form annexed hereto as
Exhibit 3.
Assignment
of Mortgage: An individual assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the
laws
of the jurisdiction wherein the related Mortgaged Property is located to give
record notice of the sale of the Mortgage to the Purchaser.
Balloon
Loan: A Mortgage Loan identified on the Mortgage Loan Schedule as a
balloon mortgage loan.
Borrower: With
respect to any Mortgage Loan, the obligor(s) on the related Mortgage
Note.
Business
Day: Any day other than a Saturday or Sunday, or a day on which
banking and savings and loan institutions in the State of New York or Florida
are authorized or obligated by law or executive order to be closed.
Cash-Out
Refinancing: As defined in the Underwriting Guidelines attached
to the related Assignment and Conveyance.
Closing
Date: The date or dates on which the Purchaser from time to time
shall purchase from the Seller and the Seller from time to time shall sell
to
the Purchaser, the Mortgage Loans and related servicing listed on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Closing
Documents: With respect to any Closing Date, the documents
required pursuant to Section 9.
Code: The
Internal Revenue Code of 1986, as amended, or any successor statute
thereto.
Commission: The
United States Securities and Exchange Commission.
Condemnation
Proceeds: All awards, compensation and settlements in respect of
a taking of all or part of a Mortgaged Property, whether temporary or permanent,
by exercise of the power of condemnation or the right of eminent
domain.
Convertible
Mortgage Loan: A Mortgage Loan that by its terms and subject to certain
conditions contained in the related Mortgage or Mortgage Note allows the
Mortgagor to convert the adjustable Mortgage Interest Rate on such Mortgage
Loan
to a fixed Mortgage Interest Rate.
-3-
Co-op: A
private, cooperative housing corporation, having only one class of stock
outstanding, which owns or leases land and all or part of a building or
buildings, including apartments, spaces used for commercial purposes and common
areas therein and whose board of directors authorizes the sale of stock and
the
issuance of a Co-op Lease.
Co-op
Lease: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated
to
the related dwelling unit.
Co-op
Loan: A Mortgage Loan secured by the pledge of stock allocated to
a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Covered
Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor’s Glossary.
Custodial
Account: As defined in Subsection 11.04.
Custodial
Agreement: The agreement governing the retention of the originals
of each Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage
Loan
Documents. If more than one Custodial Agreement is in effect at any
given time, all of the individual Custodial Agreements shall collectively be
referred to as the “Custodial Agreement.”
Custodian: JPMorgan
Chase Bank, N.A., a national banking association, and its successors in
interest, or any successor to the Custodian under the Custodial Agreement as
therein provided.
Cut-off
Date: With respect to each Mortgage Loan, the first day of the
month in which the related Closing Date occurs or as otherwise set forth in
the
Purchase Price and Terms Letter Agreement for the related Mortgage Loan
Package.
Deleted
Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.
Delinquent
Mortgage Loans: As defined in
Subsection 11.01.
Determination
Date: With respect to each Remittance Date, the 15th day
(or, if such
15th day is
not
a Business Day, the following Business Day) of the month in which such
Remittance Date occurs.
Due
Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace.
Due
Period: With respect to each Remittance Date and any Mortgage
Loan, the period beginning on the second day of the month preceding such
Remittance Date through and including the first day of the month in which such
Remittance Date occurs.
Eligible
Investments: Any one or more of the following obligations or
securities:
-4-
(a) obligations
of or guaranteed as to principal and interest by FHLMC, FNMA 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 FHLMC or FNMA 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;
(b) repurchase
agreements on obligations specified in clause (a) maturing not more
than one month from the date of acquisition thereof;
(c) 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;
(d) 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; and
(e) 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
Payments: The amounts constituting taxes, assessments, Primary
Insurance Policy premiums and fire and hazard insurance premiums required to
be
escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any
Mortgage Note or Mortgage.
Event
of Default: Any one of the conditions or circumstances enumerated
in Subsection 12.
FDIC: The
Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC:
The Federal Home Loan Mortgage Corporation or any successor
thereto.
Fidelity
Bond: The fidelity bond required to be obtained by the Servicer
pursuant to Subsection 11.11.
-5-
Fixed
Rate Mortgage Loan: A Mortgage Loan with respect to which the Mortgage
Interest Rate set forth in the Mortgage Note is fixed for the term of such
Mortgage Loan.
FNMA: FNMA,
f/k/a Federal National Mortgage Association, or any successor
thereto.
FNMA
Guides: The FNMA Seller’s Guide and the FNMA Servicing Guide and
all amendments or additions thereto.
Gross
Margin: With respect to each Adjustable Rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note to determine the new Mortgage Interest Rate for such Mortgage
Loan.
High
Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a “high cost home,”
“threshold,” “covered,” (excluding New Jersey “Covered Home Loans” as that term
was defined in clause (1) of the definition of that term in the New Jersey
Home Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004), “high risk home,” “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) or (c) a
Mortgage Loan categorized as High Cost pursuant to Appendix E of
Standard & Poor’s Glossary. For avoidance of doubt, the
parties agree that this definition shall apply to any law regardless of whether
such law is presently, or in the future becomes, the subject of judicial review
or litigation.
Home
Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor’s Glossary.
HUD: The
United States Department of Housing and Urban Development or any successor
thereto.
Index: With
respect to each Adjustable Rate Mortgage Loan, the index set forth in the
related Mortgage Note for the purpose of calculating the Mortgage Interest
Rate
thereon.
Initial
Closing Date: The first Closing Date to occur under this
Agreement.
Insurance
Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest
Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Interim
Funder: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
-6-
Investor: With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the investor pursuant to the MERS Procedures Manual.
Lender
Paid Mortgage Insurance Policy or LPMI Policy: A policy of mortgage
guaranty insurance issued by a Qualified Insurer for which the owner or servicer
of the Mortgage Loan is responsible for the premiums associated with such
mortgage insurance policy.
Liquidation
Proceeds: The proceeds received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee’s sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan, other than amounts received following the
acquisition of REO Property, Insurance Proceeds and Condemnation
Proceeds.
Loan-to-Value
Ratio or LTV: With respect to any Mortgage Loan as of any
date of determination, the ratio (expressed as a percentage) on such date of
the
outstanding principal amount of the Mortgage Loan to the Appraised Value of
the
related Mortgaged Property.
LPMI
Fee: With respect to each Mortgage Loan which has an LPMI Policy, the
portion of the Mortgage Interest Rate as set forth on the related Mortgage
Loan
Schedule (which shall be payable solely from the interest portion of Monthly
Payments, Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds),
which, during such period prior to the required cancellation of the LPMI Policy,
shall be used to pay the premium due on the related LPMI Policy.
LPMI
Loan: Any Mortgage Loan with respect to which Servicer is responsible for
paying the premium due on the related LPMI Policy with the proceeds generated
by
the LPMI Fee relating to such Mortgage Loan, as set forth on the related
Mortgage Loan Schedule.
LPMI
Policy: A policy of primary mortgage guaranty insurance
issued by an insurer acceptable under the Underwriting Guidelines and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
pursuant to which the related premium is to be paid by the Servicer of the
related Mortgage Loan from payments of interest made by the Mortgagor in an
amount as is set forth in the related Mortgage Loan Schedule.
Manufactured
Home: A single family residential unit that is constructed in a factory in
sections in accordance with the Federal Manufactured Home Construction and
Safety Standards adopted on June 15, 1976, by the Department of Housing and
Urban Development (“HUD Code”), as amended in 2000, which preempts state
and local building codes. Each unit is identified by the presence of
a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer’s requirements and all state,
county, and local building codes and regulations). The manufactured
home is built on a non-removable, permanent frame chassis that supports the
complete unit of walls, floors, and roof. The underneath part of the
home may have running gear (wheels, axles, and brakes) that enable it to be
transported to the permanent site. The wheels and hitch are removed
prior to anchoring the unit to the permanent
foundation. The
-7-
manufactured
home must be classified as real estate and taxed accordingly. The
permanent foundation may be on land owned by the mortgager or may be on leased
land.
Material: A
matter shall be deemed to be “Material” if it is of substance, and is important,
essential, or pertinent to the matter under consideration. For
example (and without limiting the generality of the foregoing), a statement
that
“the Mortgage Loan is in compliance in all Material respects with all applicable
laws” shall be interpreted to mean that the Mortgage Loan complies with all
applicable laws except for non-substantive or technical deviations that are
primarily matters of form rather than substance, or which relate to
insignificant matters that have a negligible effect on the values,
marketability, or enforceability of the Mortgage Loan.
Maximum
Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, the rate that is set forth in the related Mortgage Note as the
maximum interest rate to which the Mortgage Interest Rate on such Mortgage
Loan
may be increased on any Adjustment Date.
MERS: Mortgage
Electronic Registration System, Inc., a subsidiary of MERSCORP,
Inc.
MERS
Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take
such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with the MERS Procedures Manual and (b) the
Seller has designated or will designate the Purchaser as the Investor on the
MERS® System.
MERS
Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS
Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS®
System: The electronic mortgage registration system maintained by
MERS.
Minimum
Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, the rate that is set forth in the related Mortgage Note and
is
the minimum interest rate to which the Mortgage Interest Rate on such Mortgage
Loan may be decreased on any Adjustment Date.
Monthly
Payment: With respect to any Mortgage Loan, the scheduled
combined payment of principal and interest payable by a Mortgagor under the
related Mortgage Note on each Due Date.
Mortgage: The
mortgage, deed of trust or other instrument creating a first lien on Mortgaged
Property securing the Mortgage Note. With respect to a Co-op Loan,
the Security Agreement.
-8-
Mortgagee: The
mortgagee or beneficiary named in the Mortgage and the successors and assigns
of
such mortgagee or beneficiary.
Mortgage
File: The items pertaining to a particular Mortgage Loan referred
to in Exhibit 4 and 5 annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement or the related
Purchase Price and Terms Agreement Letter.
Mortgage
Interest Rate: With respect to each Fixed Rate Mortgage Loan, the
fixed annual rate of interest provided for in the related Mortgage Note and,
with respect to each Adjustable Rate Mortgage Loan, the annual rate that
interest accrues on such Adjustable Rate Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note.
Mortgage
Loan: Each first lien residential mortgage loan sold, assigned
and transferred to the Purchaser pursuant to this Agreement and the related
Purchase Price and Terms Letter Agreement which is identified on the Mortgage
Loan Schedule annexed to this Agreement on the related Closing Date, which
Mortgage Loan includes without limitation the Mortgage File, the Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition proceeds, and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage
Loan.
Mortgage
Loan Documents: The documents listed in Exhibit 5 hereto
pertaining to any Mortgage Loan.
Mortgage
Loan Package: The Mortgage Loans listed on a Mortgage Loan
Schedule, delivered to the Purchaser at least five (5) Business Days prior
to the related Closing Date and attached to this Agreement as Schedule I on
the related Closing Date.
Mortgage
Loan Remittance Rate: With respect to each 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 to be annexed hereto as Schedule I (or a
supplement thereto) on each Closing Date for the Mortgage Loan Package delivered
on such Closing Date in both hard copy and electronic form, such schedule
setting forth the following information with respect to each Mortgage Loan
in
the Mortgage Loan Package: (1) the Seller’s Mortgage Loan
identifying number; (2) the Mortgagor’s first and last name; (3) the
street address of the Mortgaged Property including the state and zip code;
(4) a code indicating whether the Mortgaged Property is owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged Property;
(6) the original or modified months to maturity; (7) the original or
modified date of the Mortgage Loan and the remaining months to maturity from
the
related Cut-off Date, based on the original amortization schedule: provided,
however, that any such modification shall be consistent with the FNMA Guides
and
FHLMA standards; (8) the Loan-to-Value Ratio at origination; (9) the
Mortgage Interest Rate in effect immediately following the related Cut-off
Date;
(10) the date on which the first Monthly Payment was due on the Mortgage
Loan; (11) the stated maturity date;
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(12) the
amount of the Monthly Payment at origination; (13) the amount of the
Monthly Payment as of the related Cut-off Date; (14) the last Due Date on
which a Monthly Payment was actually applied to the unpaid Stated Principal
Balance; (15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the close of
business on the related Cut-off Date; (17) with respect to each Adjustable
Rate Mortgage Loan, the first Adjustment Date; (18) with respect to each
Adjustable Rate Mortgage Loan, the Gross Margin; (19) a code indicating the
purpose of the loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing); (20) with respect to each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Interest Rate under the terms of the Mortgage Note;
(21) with respect to each Adjustable Rate Mortgage Loan, the Minimum
Mortgage Interest Rate under the terms of the Mortgage Note; (22) the
Mortgage Interest Rate at origination; (23) with respect to each Adjustable
Rate Mortgage Loan, the Periodic Rate Cap; (24) with respect to each
Adjustable Rate Mortgage Loan, the first Adjustment Date immediately following
the related Cut-off Date; (25) with respect to each Adjustable Rate
Mortgage Loan, the Index; (26) a code indicating whether the Mortgage Loan
provides for negative amortization; (27) a code indicating whether the
Mortgage Loan is an Adjustable Rate Mortgage Loan or a Fixed Rate Mortgage
Loan;
(28) a code indicating the documentation style (i.e., full, alternative or
reduced); (29) a code indicating if the Mortgage Loan is subject to a
Primary Insurance Policy or LPMI Policy; (30) the Appraised Value of the
Mortgaged Property; (31) the sale price of the Mortgaged Property, if
applicable; (32) a code indicating whether the Mortgage Loan is subject to
a Prepayment Charge, the term of such Prepayment Charge and the amount of such
Prepayment Charge; (33) the product type (e.g., 2/28, 15 year fixed, 30
year fixed, balloon, etc.); (34) the Mortgagor’s debt-to-income ratio; and
(35) [reserved]; (36) if an automated underwriting engine is used with
respect to any Mortgage Loan, the identity of such engine and the reference
number used by such engine with respect to such Mortgage Loan; and (37) a
field indicating whether the Mortgage Loan is a Home Loan. With
respect to the Mortgage Loan Package in the aggregate, the Mortgage Loan
Schedule shall set forth the following information, as of the related
Cut-off Date: (1) the number of Mortgage Loans; (2) the
current principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans. Schedule I hereto shall be
supplemented as of each Closing Date to reflect the addition of the Mortgage
Loan Schedule with respect to the related Mortgage Loan
Package.
Mortgage
Note: The original executed note on standard FNMA/FHLMC documents
of legally enforceable Note as evidence of the Mortgage Loan indebtedness of
a
Mortgagor.
Mortgaged
Property: The Mortgagor’s real property securing repayment of a
related Mortgage Note, consisting of a fee simple interest in a single parcel
of
real property improved by a Residential Dwelling.
Mortgagor: The
owner of the Mortgaged Property and the grantor or mortgagor named in the
related 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
thereto.
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OCC: Office
of the Comptroller of the Currency, or any successor thereto.
Officer’s
Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or a President or a Vice President and by the
Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Person on behalf of whom such certificate is being
delivered.
Opinion
of Counsel: A written opinion of counsel, who may be counsel for
the Seller or the Servicer, reasonably acceptable to the Purchaser, provided
that any Opinion of Counsel relating to (a) the qualification of any
account required to be maintained pursuant to this Agreement as an eligible
account, (b) qualification of the Mortgage Loans in a REMIC or
(c) compliance with the REMIC Provisions, must be (unless otherwise stated
in such Opinion of Counsel) an opinion of counsel who (i) is in fact
independent of the Seller and any servicer of the Mortgage Loans, (ii) does
not have any material direct or indirect financial interest in the Seller or
Servicer or in an Affiliate of either and (iii) is not connected with the
Seller or Servicer as an officer, employee, director or person performing
similar functions.
OTS: The
Office of Thrift Supervision or any successor thereto.
Owner: As
defined in Subsection 11.12.
P&I
Advance: As defined in Subsection 11.16.
Payment
Adjustment Date: As to each Adjustable Rate Mortgage Loan, the
date on which an adjustment to the Monthly Payment on a Mortgage Note becomes
effective.
Periodic
Rate Cap: With respect to each Adjustable Rate Mortgage Loan and
any Adjustment Date therefor, a number of percentage points per annum that
is
set forth in the related Mortgage Note, which is the maximum amount
by which the Mortgage Interest Rate for such Adjustable Rate Mortgage Loan
may
increase (without regard to the Maximum Mortgage Interest Rate) or decrease
(without regard to the Minimum Mortgage Interest Rate) on such Adjustment Date
from the Mortgage Interest Rate in effect immediately prior to such Adjustment
Date.
Person: An
individual, corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Premium
Rebate: In the event that a premium was paid by the Purchaser to
Seller on a Mortgage Loan and such Mortgage Loan is demanded for repurchase
or
make whole within 90 days of the related Closing Date, the Seller shall,
upon demand by the Purchaser, refund to the Purchaser the Premium Recapture
Price.
Premium
Recapture Price: With respect to any Mortgage Loan, an amount
equal to the product of (A) the Purchase Price Percentage as
stated in the related Purchase Price and Terms Letter Agreement in excess of
100% and (B) the Stated Principal Balance of the Mortgage Loan as of the
related Cut-off Date.
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Prepayment
Charge: With respect to any Mortgage Loan, any prepayment penalty or premium
thereon payable in connection with a principal prepayment on such Mortgage
Loan
pursuant to the terms of the related Mortgage Note.
Primary
Insurance Policy: A policy of primary mortgage guaranty insurance
issued by a Qualified Insurer.
Prime
Rate: The prime rate announced to be in effect from time to time,
as published as the average rate in The Wall Street Journal (Northeast
edition).
Principal
Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, excluding
any Prepayment Charge, which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Purchase
Price: The price paid on the related Closing Date by the
Purchaser to the Seller pursuant to the related Purchase Price and Terms Letter
Agreement in exchange for the Mortgage Loans purchased on such Closing Date
as
provided in Section 4.
Purchase
Price and Terms Letter Agreement: With respect to any Mortgage
Loan Package purchased and sold on any Closing Date, the letter agreement
between the Purchaser and the Seller (including any exhibits, schedules and
attachments thereto), setting forth the terms and conditions of such transaction
and describing the Mortgage Loans to be purchased by the Purchaser on such
Closing Date. A Purchase Price and Terms Agreement Letter
may relate to more than one Mortgage Loan Package to be purchased on one or
more
Closing Dates hereunder.
Purchase
Price Percentage: The percentage of par (expressed as decimal)
set forth in the related Purchase Price and Terms Letter Agreement.
Purchaser: Xxxxxx
Xxxxxxx Mortgage Capital Inc., or any successor.
Qualified
Insurer: Any insurer which meets the requirements of FNMA and
FHLMC.
Qualified
Substitute Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on
the
date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during
or
prior to the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Interest Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Interest Rate of the Deleted Mortgage Loan, (iii) have a remaining term to
maturity not greater than (and not more than 1 year less than) that of the
Deleted Mortgage Loan, (iv) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (v) be in first lien position (i.e., first) and have
a Loan-to-Value Ratio as of the date of substitution equal to or lower than
the
Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (vi) be
covered under a Primary Insurance Policy if such Qualified Substitute Mortgage
Loan has a Loan-to-Value Ratio in excess of 80% and the Deleted Mortgage Loan
was covered under a Primary Insurance Policy, (vii) conform to
each
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representation
and warranty set forth in Subsection 7.02 of this Agreement and
(viii) be the same type of Mortgage Loan (i.e. fixed or
adjustable rate with the same Gross Margin and Index as the Deleted Mortgage
Loan). In the event that one or more mortgage loans are substituted
for one or more Deleted Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate
principal balances, the Mortgage Interest Rates described in
clause (ii) hereof shall be determined on the basis of weighted
average Mortgage Interest Rates and shall be satisfied as to each such mortgage
loan, the terms described in clause (iii) shall be determined on the
basis of weighted average remaining terms to maturity, the Loan-to-Value Ratios
as described in clause (iv) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this sentence,
the
representations and warranties described in clause (v) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate,
as
the case may be. In addition, the substitution of a Mortgage Loan
where most but not all requirements pursuant to the previous sentence have
not
been met shall be subject to the Purchaser’s approval in its sole
discretion.
Rate/Term
Refinancing: As defined in the Underwriting Guidelines attached
to the related Assignment and Conveyance.
Reconstitution
Agreement: As defined in Section 14.
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:
As defined in Section 14.
REMIC: A
“real estate mortgage investment conduit” within the meaning of
Section 860D of the Code.
REMIC
Provisions: Provisions of the federal income tax law relating to REMICs,
which appear in Sections 860A through 860G of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance
Date: No later than the close of business New York time on the
18th day of any month (or, if such 18th day is not a Business Day, the following
Business Day).
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 11.12.
REO
Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed in lieu of foreclosure, as described in
Subsection 11.12.
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Repurchase
or Make Whole Price: The sum of: (1) the outstanding principal balance
of the Mortgage Loan, with accrued and unpaid interest thereon at the then
applicable Mortgage Interest Rate to the date on which such repurchase occurs;
(2) all recoverable advances made by the Purchaser and all charges due from
the Borrower; and (3) all reasonable and necessary expenses, losses and
damages paid or incurred by the Purchaser in connection with the Mortgage Loan
or an investigation of the Mortgage Loan or the related Mortgaged Property,
including, but not limited to, property taxes, maintenance costs, interest
expenses, insurance, appraisals, advertising, sales concessions, sales
commissions, reasonable attorneys’ fees, expenses and costs fines and penalties;
and (4) the rebate of premium due the Purchaser in accordance with the
Premium Rebate, if applicable.
Residential
Dwelling: Any one of the following: (i) a
one-family dwelling, including one-family dwellings which are part of a Co-op,
(ii) a two- to four family dwelling, (iii) a one-family dwelling unit
in a FNMA/FHLMC eligible condominium project (iv) a one-family dwelling in
a planned unit development, or (v) a one-family dwelling unit in a FNMA Type
1,
New York City Pilot or New Jersey Pilot Co-op, none of which is a commercial
property or mixed use property.
Securities
Act: The federal Securities Act of 1933, as amended.
Securities
Exchange Act: The federal Securities Exchange Act of 1934, as
amended.
Securitization
Transfer: The sale or transfer of some or all of the Mortgage
Loans to a trust or other entity as part of a publicly-offered or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Security
Agreement: The agreement creating a security interest in the stock allocated
to a dwelling unit in the residential cooperative housing corporation that
was
pledged to secure such Co-op Loan and the related Co-op Lease.
Seller: HSBC
Mortgage Corporation (USA).
Servicer: As
defined in the initial paragraph of this Agreement, together with its successors
and assigns as permitted under the terms of this Agreement.
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 (i) the
preservation, restoration and protection of the Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the Mortgaged Property if the
Mortgaged Property is acquired in satisfaction of the Mortgage, and
(iv) payments made by the Servicer with respect to a Mortgaged Property
pursuant to Subsection 11.08.
Servicing
Criteria: The “servicing criteria” set forth in Item 1122(d) of
Regulation AB, which as of the date hereof consists of the
following:
(a) General
servicing considerations.
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(1) Policies
and procedures are instituted to monitor any performance or other triggers
and
events of default in accordance with the transaction agreements.
(2) If
any material servicing activities are outsourced to third parties, policies
and
procedures are instituted to monitor the third party’s performance and
compliance with such servicing activities.
(3) Any
requirements in the transaction agreements to maintain a back up servicer for
the mortgage loans are maintained.
(4) A
fidelity bond and errors and omissions policy is in effect on the party
participating in the servicing function throughout the reporting period in
the
amount of coverage required by and otherwise in accordance with the terms of
the
transaction agreements.
(b) Cash
collection and administration.
(1) Payments
on mortgage loans are deposited into the appropriate custodial bank accounts
and
related bank clearing accounts no more than two business days of receipt, or
such other number of days specified in the transaction agreements.
(2) Disbursements
made via wire transfer on behalf of an obligor or to an investor are made only
by authorized personnel.
(3) Advances
of funds or guarantees regarding collections, cash flows or distributions,
and
any interest or other fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
(4) The
related accounts for the transaction, such as cash reserve accounts or accounts
established as a form of overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the transaction
agreements.
(5) Each
custodial account is maintained at a federally insured depository institution
as
set forth in the transaction agreements. For purposes of this
criterion, “federally insured depository institution” with respect to a
foreign financial institution means a foreign financial institution that meets
the requirements of Rule 13k 1(b)(1) of the Securities Exchange
Act.
(6) Unissued
checks are safeguarded so as to prevent unauthorized access.
(7) Reconciliations
are prepared on a monthly basis for all asset backed securities related bank
accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B) prepared within 30 calendar days after the bank statement cutoff
date, or such
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other
number of days specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared the reconciliation;
and
(D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
(c) Investor
remittances and reporting.
(1) Reports
to investors, including those to be filed with the Commission, are maintained
in
accordance with the transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree with investors’ or
the trustee’s records as to the total unpaid principal balance and number of
mortgage loans serviced by the Servicer.
(2) Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
(3) Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the transaction
agreements.
(4) Amounts
remitted to investors per the investor reports agree with cancelled checks,
or
other form of payment, or custodial bank statements.
(d) Mortgage
Loan administration.
(1) Collateral
or security on mortgage loans is maintained as required by the
transaction agreements or related mortgage loan documents.
(2) Mortgage
loan and related documents are safeguarded as required by the transaction
agreements.
(3) Any
additions, removals or substitutions to the asset pool are made, reviewed and
approved in accordance with any conditions or requirements in the transaction
agreements.
(4) Payments
on mortgage loans, including any payoffs, made in accordance with the related
mortgage loan documents are posted to the Servicer’s obligor records maintained
no more than two business days after receipt, or such other number of days
specified in the transaction agreements, and allocated to principal, interest
or
other items (e.g., escrow) in accordance with the related mortgage loan
documents.
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(5) The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
(6) Changes
with respect to the terms or status of an obligor’s mortgage loan (e.g., loan
modifications or re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements and related mortgage
loan documents.
(7) Loss
mitigation or recovery actions (e.g., forbearance plans, modifications and
deeds
in lieu of foreclosure, foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
(8) Records
documenting collection efforts are maintained during the period a mortgage
loan
is delinquent in accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or such other period
specified in the transaction agreements, and describe the entity’s activities in
monitoring delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is deemed
temporary (e.g., illness or unemployment).
(9) Adjustments
to interest rates or rates of return for mortgage loans with variable rates
are
computed based on the related mortgage loan documents.
(10) Regarding
any funds held in trust for an obligor (such as escrow accounts): (A) such
funds are analyzed, in accordance with the obligor’s mortgage loan documents, on
at least an annual basis, or such other period specified in the transaction
agreements; (B) interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws; and
(C) such funds are returned to the obligor within 30 calendar days of
full repayment of the related mortgage loan, or such other number of days
specified in the transaction agreements.
(11) Payments
made on behalf of an obligor (such as tax or insurance payments) are made on
or
before the related penalty or expiration dates, as indicated on the appropriate
bills or notices for such payments, provided that such support has been received
by the servicer at least 30 calendar days prior to these dates, or such
other number of days specified in the transaction agreements.
(12) Any
late payment penalties in connection with any payment to be made on behalf
of an
obligor are paid from the servicer’s funds and not charged to the obligor,
unless the late payment was due to the obligor’s error or omission.
(13) Disbursements
made on behalf of an obligor are posted within two business days to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
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(14) Delinquencies,
charge offs and uncollectable accounts are recognized and recorded in accordance
with the transaction agreements.
(15) Any
external enhancement or other support, identified in Item 1114(a)(1) through
(3) or Item 1115 of Regulation AB, is maintained as set forth in the
transaction agreements.
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 (i) the product of the 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, and shall be pro rated (based upon the number of days of the related
month the Servicer so acted as Servicer relative to the number of days in that
month) for each part thereof. 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 in the applicable Purchase Price and Terms Letter
Agreement.
Servicing
File: With respect to each Mortgage Loan, the file delivered by
the Seller consisting of originals of all documents in the Mortgage
File. See Exhibit 4.
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 Ratings Services, a division
of The McGraw Hill Companies Inc., and any successor thereto.
Standard &
Poor’s Glossary: The Standard & Poor’s LEVELS® Glossary,
as may be in effect from time to time.
Stated
Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of such Mortgage Loan at the
related Cut-off Date after giving effect to payments of principal due on or
before such date, whether or not collected from the Mortgagor on or before
such
date, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal, or advances in lieu thereof.
Static
Pool Information: As defined in
Section 14.
Successor
Servicer: Any servicer of one or more Mortgage Loans designated
by the Purchaser as being entitled to the benefits of the indemnifications
set
forth in Subsections 7.03 and 16.01.
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Transfer
Date: In the event the Servicer is terminated as servicer of a
Mortgage Loan pursuant to Sections 12, 13.01(c), 13.02
or 17, the date on which the Purchaser, or its designee, shall receive
the transfer of servicing responsibilities and begin to perform the servicing
of
such Mortgage Loans, and the Seller, as Servicer, shall cease all servicing
responsibilities.
Underwriting
Guidelines: The underwriting guidelines of the Seller, a copy of which is
attached hereto as Exhibit 13 and a then-current copy of which shall
be attached as an exhibit to the related Assignment and Conveyance.
Whole
Loan Transfer: The sale or transfer by the Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant
to a
Reconstitution Agreement.
SECTION 2. Agreement
to Purchase Mortgage Loans. The
Seller agrees to sell, and the Purchaser agrees to purchase, from time-to-time,
Mortgage Loans having an aggregate principal balance on the related Cut-off
Date
in an amount as set forth in the related Purchase Price and Terms Letter
Agreement, or in such other amount as agreed to by the Purchaser and the Seller
as evidenced by the actual aggregate principal balance of the Mortgage Loans
accepted by the Purchaser on the related Closing Date, together with the related
Mortgage Files and all rights and obligations arising under the documents
contained therein. The Seller, simultaneously with the delivery of
the Mortgage Loan Schedule with respect to the related Mortgage Loan Package
to
be purchased on each Closing Date, shall execute and deliver an Assignment
and
Conveyance Agreement in the form attached hereto as Exhibit 3 (the
“Assignment and Conveyance”).
SECTION 3. Mortgage
Loan Schedules. The
Seller shall deliver the Mortgage Loan Schedule for a Mortgage Loan Package
to be purchased on a particular Closing Date to the Purchaser at least two
(2) Business Days prior to the related Closing Date or as otherwise set
forth in the related Purchase Price and Terms Agreement
Letter.
SECTION 4. Purchase
Price. The
Purchase Price for each Mortgage Loan listed on the related Mortgage Loan
Schedule shall be the percentage of par as stated in the related Purchase
Price and Terms Letter Agreement (subject to adjustment as provided therein),
multiplied by its principal balance as of the related Cut-off Date after
application of scheduled payments of principal due on or before the related
Cut-off Date, but only to the extent such payments were actually
received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed
as
of the related Cut-off Date. If so provided in the related Purchase
Price and Terms Letter Agreement, portions of the Mortgage Loans shall be priced
separately.
In
addition to the Purchase Price as described above, the Purchaser shall pay
to
the Seller, at closing, accrued interest on the current principal amount of
the
related Mortgage Loans as of the related Cut-off Date at the weighted average
Mortgage Interest Rate of those Mortgage Loans. The Purchase Price
plus accrued interest as set forth in the preceding paragraph shall be paid
to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
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With
respect to each Mortgage Loan purchased, the Purchaser shall own and be entitled
to receive: (a) all scheduled principal due after the related
Cut-off Date, (b) all other payments and/or recoveries of principal
collected after the related Cut-off Date (provided, however, that all
scheduled payments of principal due on or before the related Cut-off Date and
collected by the Servicer after the related Cut-off Date shall belong to the
Seller), and (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 related Cut-off Date).
For
the
purposes of this Agreement, payments of scheduled principal and interest prepaid
for a Due Date beyond the related Cut-off Date shall not be applied to reduce
the Stated Principal Balance as of the related Cut-off Date. Such
prepaid amounts (minus the applicable Servicing Fee) shall be the property
of
the Purchaser. The Seller shall remit to the Servicer for deposit any
such prepaid amounts into the Custodial Account, which account is established
for the benefit of the Purchaser, for remittance by the Servicer to the
Purchaser on the appropriate Remittance Date. All payments of
principal and interest, less the applicable Servicing Fee, due on a Due Date
following the related Cut-off Date shall belong to the Purchaser.
SECTION 5. Examination
of
Mortgage Files. In
addition to the rights granted to the Purchaser under the related Purchase
Price
and Terms Letter Agreement to underwrite the Mortgage Loans and review the
Mortgage Files prior to the related Closing Date, the Seller shall either
(a) deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased on such Closing Date, the
related Mortgage File (credit pack), including the Assignment of Mortgage,
pertaining to each Mortgage Loan - unless such Mortgage Loan is a MERS
Designated Mortgage Loan or has been previously assigned to MERS, in which
case
no such Assignment of Mortgage is required, or (b) make the related
Mortgage File available to the Purchaser for examination at the Seller’s offices
or such other location as shall otherwise be agreed upon by the Purchaser and
the Seller. Any delivery of Mortgage Files to the Purchaser shall be
pursuant to the Custodial Agreement. Such examination may be made by
the Purchaser or its designee at any reasonable time before the Closing
Date. Such examination shall be during regular business hours and the
Purchaser shall give Seller ten days prior written notice. If
the Purchaser makes such examination prior to the related Closing Date and
identifies any Mortgage Loans that do not conform to the terms of the related
Purchase Price and Terms Agreement Letter or the Seller’s
underwriting standards, such Mortgage Loans may, at the Purchaser’s option, be
rejected for purchase by the Purchaser. If not purchased by the
Purchaser, such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule, and the Mortgage File for each such deleted Mortgage Loan shall be
returned to the Seller within two (2) Business Days of the date of
rejection. The Purchaser may, at its option, purchase all or part of
any Mortgage Loan Package without conducting any partial or complete
examination. The fact that the Purchaser has conducted or has
determined not to conduct any partial or complete examination of the Mortgage
Files shall not affect the Purchaser’s (or any of its successors’) rights to
demand repurchase or other relief or remedy provided for in this
Agreement. In the event that the Seller fails to deliver the Mortgage
File with respect to any Mortgage Loan, the Seller shall, upon the request
of
the Purchaser, repurchase such Mortgage Loan at the price and in the manner
specified in Subsection 7.03.
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SECTION 6. Conveyance
From Seller To Purchaser.
Subsection
6.01 Conveyance of
Mortgage Loans. The
Seller, simultaneously with the payment of the Purchase Price, shall execute
and
deliver to the Purchaser an Assignment and Conveyance with respect to the
related Mortgage Loan Package in the form attached hereto as
Exhibit 3. After such sale, the Seller
shall release from its custody the contents of any Servicing File retained
by it
only in accordance with this Agreement, except when such release is required
in
connection with a repurchase of any such Mortgage Loan pursuant to section
7.03
or 7.04.
The
contents of each Mortgage File required to be retained by or delivered to the
Servicer to service the Mortgage Loans pursuant to this Agreement and thus
not
delivered to the Purchaser, or its designee, are and shall be held in trust
by
the Servicer for the benefit of the Purchaser as the owner
thereof. The Servicer’s possession of any portion of each such
Mortgage File is at the will of the Purchaser for the sole purpose of
facilitating servicing of the Mortgage Loans pursuant to this Agreement, and
such retention and possession by the Servicer shall be in a custodial capacity
only. The ownership of each Mortgage Note, 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 and/or books and records to reflect clearly the sale of such related
Mortgage Loan to 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 or
if required under applicable law or court order.
Subsection
6.02 Books and
Records. Record
title to each Mortgage and the related Mortgage Note as of the related Closing
Date shall be in the name of the Seller, MERS, the Purchaser, or one or more
designees of the Purchaser, as the Purchaser shall
designate. Notwithstanding the foregoing, after the payment to the
Seller of the Purchase Price, beneficial ownership of each Mortgage and the
related Mortgage Note shall be vested solely in the Purchaser or the appropriate
designee of the Purchaser, as the case may be. All rights arising out
of the Mortgage Loans including, but not limited to, all funds received by
the
Servicer after the related Cut-off Date on or in connection with a Mortgage
Loan
as provided in Section 4 shall, after the payment to the Seller of
the Purchase Price, be vested in the Purchaser or one or more designees of
the
Purchaser; provided, however, that all such funds received on or in connection
with a Mortgage Loan as provided in Section 4 shall be received and
held by the Servicer for the benefit of the Purchaser or the assignee of the
Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant
to
the terms of this Agreement.
It
is the
express intention of the parties that the transactions contemplated by this
Agreement be, and be construed as, a sale of the Mortgage Loans by the Seller
and not a pledge of the Mortgage Loans by the Seller to the Purchaser to secure
a debt or other obligation of the Seller. Consequently, the sale of
each Mortgage Loan shall be reflected as a sale on the Seller’s and as a
purchase on the Purchaser’s business records, tax returns and financial
statements. In
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the
event, for any reason, any transaction contemplated herein is construed by
any
court or regulatory authority as a borrowing rather than as a sale, the Seller
and the Purchaser intend that the Purchaser or its assignee, as the case may
be,
shall have a perfected first priority security interest in the Mortgage Loans
which may be held by MERS as the nominee for the Purchaser, and the proceeds
of
any and all of the foregoing (collectively, the “Collateral”), free and
clear of adverse claims. In such case, the Seller shall be deemed to
have hereby granted to the Purchaser or its assignee, as the case may be, a
first priority security interest in and lien upon the Collateral, free and
clear
of adverse claims. In such event, the related Purchase Price and
Terms Letter Agreement and this Agreement shall constitute a security agreement,
and the Purchaser or its assignee, as the case may be, shall have all of the
rights of a secured party under applicable law.
Subsection
6.03 Delivery of
Mortgage Loan Documents. Pursuant
to this Agreement, the Seller shall provide, or cause to be provided, in
connection with each Closing Date, at least five (5) Business Days prior to
such Closing Date or a mutually acceptable time prior to the Closing Date,
deliver and release to the Purchaser those Mortgage Loan Documents as required
by this Agreement with respect to each Mortgage Loan to be purchased and sold
on
the related Closing Date and set forth on the related Mortgage Loan
Schedule delivered with such Mortgage Loan Documents.
If
required pursuant to a Purchase Price and Terms Letter Agreement, the Purchaser
shall certify its receipt of all such Mortgage Loan Documents required to be
delivered pursuant to this Agreement for the related Closing Date.
With
respect to each Mortgage Loan, the Seller shall deliver the Mortgage and, if
applicable, the intervening Assignment of Mortgage and title insurance policy
to
be delivered to Purchaser if they have not yet been returned from the applicable
recording office or title insurer. Seller shall use reasonable
efforts to obtain such documents on a timely basis. Promptly upon
receipt thereof, and in any case not later than 180 days from the related
Closing Date, Seller shall deliver such original documents to the Purchaser
(unless Seller is delayed in making such delivery by reason of the fact that
such documents shall not have been returned by the appropriate recording
office).
In
any
instance in which the Seller fails to deliver an original recorded document
to
the Purchaser within the one hundred eighty (180) day period, the Purchaser
may
attempt to obtain the document from the relevant public office. The
Seller shall reimburse the Purchaser for its reasonable expenses incurred in
attempting to obtain such documents, up to $150 per Mortgage Loan.
The
Seller can prevent or delay such actions by the Purchaser, on a loan-by-loan
basis, by providing Purchaser with a signed certification from the Seller
indicating required documents have been delivered to appropriate recording
offices, and the stated recording office has caused the delay (as indicated
in
Exhibit 5). Seller is required to notify Purchaser of
such certification on or before the 181st day after the related Closing
Date. Notwithstanding the foregoing, any delay of any actions by the
Purchaser pursuant to this Section 6.03 following the
270th day
after the related Closing Date shall be in the sole discretion of the
Purchaser. In any event, if the Purchaser’s failure to receive an
original or court certified true copy of the original recorded mortgage, deed
of
trust, security instrument, assignment or other documents required
to
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be
recorded under this Agreement, or an original title policy as required by this
Agreement, and such failure results in the Purchaser incurring a direct out
of
pocket loss, the Purchaser may, at its option, require the Seller to repurchase
the affected Mortgage Loan at the Repurchase or Make Whole Price. If
the Purchaser purchases a Mortgage Loan having relied on a marked-up title
insurance binder or title certificate rather than a title insurance policy,
the
Seller shall have ninety (90) days after the related Closing Date to
deliver to the Purchaser the original title insurance policy (free from
deficiencies, and inclusive of all required endorsements) with original
signatures or computer generated signature deemed original by the issuing title
company.
Seller
shall, at its own expense, (i) prepare an individual Assignment of Mortgage
for each Mortgage Loan not originated on MERS to Purchaser in a form acceptable
under state or federal law and FNMA requirements, and satisfactory to Purchaser,
and (ii) initiate an electronic transmission to MERS designating the
Purchaser as the Investor, the Custodian as custodian, and no Person shall
be
listed as Interim Funder with respect to any Mortgage Loan registered with
MERS
as of the Closing Date. In addition, on or prior to the related
Closing Date, Seller shall provide the Custodian and the Purchaser with a MERS
Report listing the Purchaser as the Investor, the Custodian as custodian and
no
Person listed as Interim Funder with respect to each MERS Designated Mortgage
Loan.
To
the
extent received by it, the Servicer shall 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 within two (2) weeks after their execution; provided,
however, that the Servicer shall provide the Purchaser, or its designee, with
a
copy, certified by the Servicer as a true copy, of any such document submitted
for recordation within two (2) weeks after its execution, and shall
promptly provide the original of any document submitted for recordation or
a
copy of such document certified by the appropriate public recording office
to be
a true and complete copy of the original within two (2) weeks following
receipt of the original document by the Servicer; provided, however, that such
original recorded document or certified copy thereof shall be delivered to
the
Purchaser no later than 180 days following the related Closing Date, unless
there has been a delay at the applicable recording office.
All
final
documentation required to be delivered by this Subsection 6.03 shall
be delivered genuine and free from deficiencies in accordance with the FNMA
Guide and FHLMC guidelines. All deficiencies which the Purchaser
gives notice of to the Seller are to be cured by Seller at Seller’s expense
within the set time period set forth in this Agreement.
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SECTION 7. Representations,
Warranties and Covenants of the Seller; Remedies for Breach.
Subsection
7.01 Representations
and Warranties Respecting the Seller. The
Seller represents, warrants and covenants to the Purchaser as of the Initial
Closing Date and each subsequent Closing Date or as of such date specifically
provided herein or in the applicable Assignment and Conveyance:
(i) The
Seller is
duly organized, validly existing and in good standing under the laws of the
state of Delaware and is and will remain in compliance with the laws of each
state in which any Mortgaged Property is located to the extent necessary to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loan in accordance with the terms of this Agreement. No
licenses or approvals obtained by the Seller have been suspended or revoked
by
any court, administrative agency, arbitrator or governmental body and no
proceedings are pending which might result in such suspension or
revocation;
(ii) The
Seller
has the full power and authority to hold each Mortgage Loan, to sell each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate, all transactions contemplated by this Agreement. The
Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the Purchaser, constitutes
a legal, valid and binding obligation of the Seller, enforceable against it
in
accordance with its terms except as enforceability may be limited by
(1) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights
of
creditors; (2) general principles of equity, whether enforcement is sought
in a proceeding in equity of at law and (iii) the execution and delivery of
this Agreement by the Seller and the performance of and compliance with the
terms of this Agreement will not violate the Seller’s articles of incorporation
or by-laws or constitute a default under or result in a breach or acceleration
of, any contract, agreement or other instrument to which the Seller is a party
or which may be applicable to the Seller or its assets;
(iii) The
execution
and delivery of this Agreement by the Seller and the performance of and
compliance with the terms of this Agreement will not violate the Seller’s
articles of incorporation or by-laws or constitute a default under or result
in
a breach or acceleration of, any material contract, agreement or other
instrument to which the Seller is a party or which may be applicable to the
Seller or its assets;
(iv) The
Seller is
not in violation of, and the execution and delivery of this Agreement by the
Seller and its performance and compliance with the terms of this Agreement
will
not constitute a violation with respect to, any order or decree of any court
or
any order or regulation of any federal, state, municipal or governmental agency
having jurisdiction over the Seller or its assets, which violation might have
consequences that would materially and adversely affect the condition (financial
or otherwise) or the operation of the Seller or its assets or might have
consequences that would materially and adversely affect the performance of
its
obligations and duties hereunder;
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(v) The
Seller
does not believe, nor does it have any reason or cause to believe, that it
cannot perform each and every covenant contained in this Agreement;
(vi) The
Mortgage
Loan Documents and other documents required to be delivered with respect to
each
Mortgage Loan (with the exception of noted final documentation as
evidenced in Subsection 6.03) pursuant to this Agreement
have been delivered to the Purchaser all in compliance with the specific
requirements of this Agreement;
(vii) [Reserved.]
(viii) Immediately
prior to the payment of the Purchase Price for each Mortgage Loan, the Seller
was the owner of record or had appointed MERS as the Seller’s nominee of the
related Mortgage and the indebtedness evidenced by the related Mortgage Note,
and upon the payment of the Purchase Price by the Purchaser, in the event that
the Seller or MERS as nominee for the Seller retains record title, the Seller
or
MERS as nominee for the Seller shall retain such record title to each Mortgage,
each related Mortgage Note and the related Mortgage Files with respect thereto
in trust for the Purchaser as the owner thereof and only for the purpose of
servicing and supervising the servicing of each Mortgage Loan;
(ix) There
are no
actions or proceedings against, or investigations of, the Seller before any
court, administrative agency or other tribunal (A) that might prohibit its
entering into this Agreement, (B) seeking to prevent the sale of the
Mortgage Loans or the consummation of the transactions contemplated by this
Agreement or (C) that might prohibit or materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement;
(x) No
consent,
approval, authorization or order of any court or governmental agency or body
is
required for the execution, delivery and performance by the Seller of, or
compliance by the Seller with, this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior
to
the related Closing Date;
(xi) The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Seller, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Seller pursuant to
this Agreement are not subject to the bulk transfer or any similar statutory
provisions;
(xii) Neither
this
Agreement nor any written statement, report or other document prepared and
furnished or, to be prepared and furnished by the Seller pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of fact or omits to state
a fact necessary to make the statements contained herein or therein
not misleading;
(xiii) The
consideration received by the Seller upon the sale of the Mortgage Loans
constitutes fair consideration and reasonably equivalent value for such Mortgage
Loans;
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(xiv) The
Seller is solvent and will not be rendered insolvent by the consummation of
the
transactions contemplated hereby. The Seller is not transferring any
Mortgage Loan with any intent to hinder, delay or defraud any of its
creditors;
(xv) The
Seller’s decision to originate any mortgage loan or to deny any mortgage loan
application is an independent decision based upon the Underwriting Guidelines,
and is in no way made as a result of Purchaser’s decision to purchase, or not to
purchase, or the price Purchaser may offer to pay for, any such mortgage loan,
if originated;
(xvi) 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;
(xvii) The
Seller has delivered to the Purchaser financial statements as to its last three
complete fiscal years and any later quarter ended more than 60 days prior to
the
execution of this Agreement. All such financial statements fairly
present the pertinent results of operations and changes in financial position
for each of such periods and the financial position at the end of each such
period of the Seller and its subsidiaries and have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as set forth in the notes thereto. In
addition, the Seller has delivered information as to its loan gain and loss
experience in respect of foreclosures and its loan delinquency experience for
the immediately preceding three year period, in each case with respect to
mortgage loans owned by it and such mortgage loans serviced for others during
such period, and all such information so delivered shall be true and correct
in
all material respects. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller’s financial Statements that would have a material adverse
effect on its ability to perform its obligations under this
Agreement. The Seller has completed any forms requested by the
Purchaser in a timely manner and in accordance with the provided
instructions;
(xviii) Seller
has the facilities, procedures, and experienced personnel necessary for the
sound servicing of mortgage loans of the same type as the Mortgage
Loans. The Seller is duly qualified, licensed, registered and
otherwise authorized under all applicable federal, state and local laws, and
regulations, if applicable, meets the minimum capital requirements set forth
by
HUD, the OTS, the OCC or the FDIC, if applicable, and is in good standing to
enforce, originate, sell mortgage loans to, and service mortgage loans in the
jurisdiction wherein the Mortgaged Properties are located;
(xix) The
Seller acknowledges and agrees that the Servicing Fee represents reasonable
compensation for performing such services and that the entire Servicing Fee
shall be treated by the Seller, for accounting and tax purposes, as compensation
for the servicing and administration of the Mortgage Loans pursuant to this
Agreement;
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(xx) The
Mortgage Loans were selected from among the outstanding one-to-four-family
mortgage loans in the Seller’s portfolio at the related Closing Date as to which
the representations and warranties set forth in Subsection 7.02 could be
made and such selection was not made in a manner so as to affect adversely
the
interests of the Purchaser;
(xxi) The
Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered with respect to each Mortgage Loan pursuant to the
Custodial Agreement, shall be delivered to the Custodian all in compliance
with
the specific requirements of the Custodial Agreement. With respect to
each Mortgage Loan, the Seller will be in possession of a complete Mortgage
File
in compliance with Exhibit 2 hereto, except for such documents as will be
delivered to the Custodian;
(xxii) The
characteristics of the related Mortgage Loan Package are as set forth on the
description of the pool characteristics for the applicable Mortgage Loan Package
delivered pursuant to Section 8 on the related Closing Date in the form
attached as Exhibit B to each related Assignment and Conveyance;
(xxiii) Neither
this Agreement nor any information, statement, tape, diskette, report, form,
or
other document furnished or to be furnished pursuant to this Agreement or any
Reconstitution Agreement or in connection with the transactions contemplated
hereby (including any Securitization Transfer or Whole Loan Transfer) contains
or will contain any untrue statement of fact or omits or will omit to state
a
fact necessary to make the statements contained herein or therein not
misleading;
(xxiv) The
Seller has not dealt with any broker, investment banker, agent or other person
that may be entitled to any commission or compensation in connection with the
sale of the Mortgage Loans; and
(xxv) The
Seller expects to be advised by its independent certified public accountants
that under generally accepted accounting principles the transfer of the Mortgage
Loans will be treated as a sale on the books and records of the Seller and
the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting
purposes.
Subsection
7.02 Representations
and Warranties Regarding Individual Mortgage Loans. The
Seller hereby represents and warrants to the Purchaser that, as to each Mortgage
Loan, as of the related Closing Date for such Mortgage Loan (or as of such
other
date as may be specified herein):
(i) The
information set forth on the related Mortgage Loan Schedule is
true and correct in all Material respects. If the related information
on the Mortgage Loan Schedule is left blank, then there is no data
associated with that information in relation to such Mortgage Loan.
(ii) The
Mortgage Loan conforms to the pool characteristics for the related Mortgage
Loan
Package set forth in the related Purchase Price and Terms Letter Agreement,
and
the Mortgage Loan was underwritten in compliance with the Underwriting
Guidelines attached
-27-
to
this
Agreement, subject to any modifications thereto set forth in the related
Assignment and Conveyance the related Purchase Price and Terms Letter
Agreement.
(iii) All
payments required to be made up to the close of business on the related Closing
Date for such Mortgage Loan under the terms of the Mortgage Note have been
made;
the Seller has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the Mortgagor directly
or indirectly, for the payment of any amount required by the Mortgage Note
or
Mortgage. No payment under the Mortgage Loan has been delinquent for
more than twenty-nine (29) days during the last twelve months;
(iv) There
are no delinquent taxes, ground rents, water charges, sewer rents, assessments,
insurance premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related Mortgaged
Property;
(v) The
terms of the Mortgage Note and the Mortgage have not been impaired, waived,
altered or modified in any respect, except by written instruments, recorded
in
the applicable public recording office if necessary to maintain the lien
priority of the Mortgage, and which have been delivered to the Purchaser; the
substance of any such waiver, alteration or modification has been approved
by
the insurer under the Primary Insurance Policy or LPMI Policy, if any, and
the
title insurer, to the extent required by the related policy, and is reflected
on
the related Mortgage Loan Schedule. No instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by the insurer under the Primary Insurance Policy or LPMI Policy,
if
any, the title insurer, to the extent required by the policy, and which
assumption agreement has been delivered to the Purchaser and the terms of which
are reflected in the related Mortgage Loan Schedule;
(vi) The
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will
the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole
or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(vii) All
buildings upon the Mortgaged Property are insured by an insurer acceptable
to
FNMA against loss by fire, hazards of extended coverage and such other hazards
as are customary in the area where the Mortgaged Property is located, pursuant
to insurance policies conforming to the requirements of this
Agreement. All such insurance policies contain a standard mortgagee
clause naming the Purchaser, 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
FNMA. 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
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to
maintain such insurance at Mortgagor’s cost and expense and to seek
reimbursement therefor from the Mortgagor;
(viii) Any
and all applicable requirements of any federal, state or local law including,
without limitation, usury, truth in lending, real estate settlement procedures,
consumer credit protection, predatory and abusive lending, equal credit
opportunity, fair housing or disclosure laws applicable to the origination
and
servicing of mortgage loans of a type similar to the Mortgage Loans, in the
applicable jurisdictions, have been complied with, and the Seller shall maintain
in its possession, available for the Purchaser’s inspection, and shall deliver
to the Purchaser upon demand, evidence of compliance with all such
requirements;
(ix) The
Mortgage has not been satisfied, cancelled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such satisfaction, cancellation, subordination, rescission
or
release;
(x) The
related Mortgage is properly recorded and is a valid, existing and
enforceable (A) first lien and first priority security interest on the
Mortgaged Property, including all improvements on the Mortgaged Property subject
only to (a) the lien of current real property taxes and assessments not yet
due and payable, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
being acceptable to mortgage lending institutions generally and specifically
referred to in the lender’s title insurance policy delivered to the originator
of the Mortgage Loan and which do not adversely affect the Appraised Value
of
the Mortgaged Property, (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value
or
marketability of the related Mortgaged Property. Any security
agreement, chattel mortgage or equivalent document related to and delivered
in
connection with the Mortgage Loan establishes and creates a valid, existing
and
enforceable (A) first lien and first priority security interest on the
property described therein and the Seller has full right to sell and assign
the
same to the Purchaser. The Mortgaged Property was not, as of the date
of origination of the Mortgage Loan, subject to a mortgage, deed of trust,
deed
to secure debt or other security instrument creating a lien subordinate to
the
lien of the Mortgage; with respect to any Co-op Loan, the related Mortgage
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 housing corporation for
unpaid assessments representing the Mortgagor’s pro rata share of the related
residential cooperative housing 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 the related Security Agreement;
(xi) The
Mortgage Note and the related Mortgage are genuine and each is the legal, valid
and binding obligation of the maker thereof, enforceable in accordance with
its
terms,
-29-
(xii) All
parties to the Mortgage Note and the Mortgage had legal capacity to enter into
the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage,
and the Mortgage Note and the Mortgage have been duly and properly executed
by
such parties. The Mortgagor is a natural person, a qualified living
trust (revocable trust) or a qualified land trust which complies with FNMA
and/or FHLMC underwriting guidelines or the related Underwriting
Guidelines;
(xiii) The
proceeds of the Mortgage Loan have been fully disbursed to or for the account
of
the Mortgagor and there is no obligation for the Mortgagee to advance additional
funds thereunder and any and all requirements as to completion of any on-site
or
off-site improvement and as to disbursements of any escrow funds therefor have
been complied with in all Material respects. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording
of
the Mortgage have been paid, and the Mortgagor is not entitled to any refund
of
any amounts paid or due to the Mortgagee pursuant to the Mortgage Note or
Mortgage;
(xiv) The
Seller is the sole legal, beneficial and equitable owner of the Mortgage Note
and the Mortgage and has full right to transfer and sell the Mortgage Loan
to
the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files or any part thereof with
respect thereto not delivered to the Custodian, the Purchaser or the Purchaser’s
designee, in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan;
(xv) All
parties which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) in compliance with any and all applicable
“doing business” and licensing requirements of the laws of the state wherein the
Mortgaged Property is located;
(xvi) With
respect to each Mortgage Loan which is not a Co-op Loan, the Mortgage Loan
is
covered by an American Land Title Association (“ALTA”) ALTA lender’s
title insurance policy (which, in the case of an Adjustable Rate Mortgage Loan
has an adjustable rate mortgage endorsement in the form of ALTA 6.0 or 6.1)
acceptable to FNMA and FHLMC, issued by a title insurer acceptable to FNMA
and
FHLMC and qualified to do business in the jurisdiction where the Mortgaged
Property is located, and with respect to each first lien Mortgage Loan, insuring
(subject to the exceptions in Subsection 7.02(x)(a) and
(b) above) the Seller and/or MERS as nominee for 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 and Monthly
Payment. Additionally, such lender’s title insurance policy
affirmatively insures ingress and egress to and from the Mortgaged Property,
and
against encroachments by or upon the Mortgaged Property or any interest
therein. The Seller and/or MERS as nominee for the Seller, its
successors and assigns, is the sole insured of such lender’s title insurance
policy, and such lender’s title insurance policy is in full force and effect and
will be in full force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such
lender’s title insurance
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policy,
and no prior holder of the related Mortgage, including the Seller, has done,
by
act or omission, anything which would impair the coverage of such lender’s title
insurance policy;
(xvii) There
is no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event of acceleration, and the Seller has not
waived any default, breach, violation or event of acceleration;
(xviii) There
are no mechanics’ or similar liens or claims which have been filed for work,
labor or Material (and no rights are outstanding that under law could give
rise
to such lien) affecting the related Mortgaged Property which are or may be
liens
prior to, or equal or coordinate with, the lien of the related
Mortgage;
(xix) All
improvements which were considered in determining the Appraised Value of the
related Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on adjoining
properties encroach upon the Mortgaged Property. No improvement
located on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation;
(xx) The
Mortgage Loan was originated by a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act, or a savings and loan association, a savings bank, a commercial
bank, credit union, insurance company or other similar institution which is
supervised and examined by a federal or state authority, and such originator
had
all licenses required to originate Mortgage Loans in the jurisdiction where
the
Mortgage Property is located;
(xxi) Principal
payments on the Mortgage Loan shall commence (with respect to any newly
originated Mortgage Loans) or commenced no more than sixty days after the
proceeds of the Mortgage Loan were disbursed. The Mortgage Loan bears
interest at the Mortgage Interest Rate. The Mortgage Note is payable
on the first day of each month in Monthly Payments, which, unless otherwise
specified on the related Mortgage Loan Schedule, (A) in the case of a Fixed
Rate Mortgage Loan, are sufficient to fully amortize the original principal
balance over the original term thereof and to pay interest at the related
Mortgage Interest Rate, (B) in the case of an Adjustable Rate Mortgage
Loan, are changed on each Adjustment Date, and in any case, after the First
Adjustment Date, are sufficient to fully amortize the original principal balance
over the original term thereof and to pay interest at the related Mortgage
Interest Rate, (C) in the case of a Balloon Loan, are based on a fifteen (15)
year or thirty (30) year amortization schedule (or such other amortization
schedule as may specified in the related Purchase Price and Terms Letter
Agreement), as set forth in the related Mortgage Note, and a final monthly
payment substantially greater than the preceding monthly payment which is
sufficient to amortize the remaining principal balance of the Balloon Loan
and
to pay interest at the related Mortgage Interest Rate, and (D) with respect
to
each interest-only Mortgage Loan, an interest-only period followed by full
amortization of the remaining principal balance during the duration of the
loan
term. The Index for each Adjustable Rate Mortgage Loan is
as set forth on the Mortgage Loan Schedule. The
Mortgage Note does not permit negative amortization. No Mortgage Loan
is a Convertible Mortgage Loan;
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(xxii) No
Mortgage Loan is a Balloon Loan that has an original stated maturity of less
than seven (7) years;
(xxiii) The
origination and collection practices used by the Seller with respect to each
Mortgage Note and Mortgage have been legal, proper, prudent and customary in
the
mortgage origination and servicing industry. The Mortgage Loan has
been serviced by the Seller and any predecessor servicer in accordance with
the
terms of the Mortgage Note. With respect to escrow deposits and
Escrow Payments), if any, all such payments are in the possession of, or under
the control of, the Seller and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. No escrow deposits or Escrow Payments or other charges or
payments due the Seller have been capitalized under any Mortgage or the related
Mortgage Note;
(xxiv) The
Mortgaged Property is free of damage and waste and there is no proceeding
pending or to the best of the Seller’s knowledge, threatened for the total or
partial condemnation thereof;
(xxv) The
Mortgage contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided thereby,
including, (a) in the case of a Mortgage designated as a deed of trust, by
trustee’s sale, and (b) otherwise by judicial
foreclosure. The Borrower is not subject to any bankruptcy
proceeding or foreclosure proceeding and the Mortgagor has not filed for
protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor which would interfere with the right
to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the
Mortgage, except as otherwise required by law. The Mortgagor has not
notified the Seller and the Seller has no knowledge of any relief requested
or
allowed to the Mortgagor under the Servicemembers Civil Relief Act or other
similar statute; the Mortgage Loan was underwritten in accordance with the
underwriting standards of the Seller in effect at the time the Mortgage Loan
was
originated; and the Mortgage Note and Mortgage are on forms acceptable to FNMA
and FHLMC;
(xxvi) The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the corresponding Mortgage on the Mortgaged Property and the security
interest of any applicable security agreement or chattel mortgage referred
to in
(ix) above;
(xxvii) The
Mortgage File contains an appraisal of the related Mortgaged Property which
satisfied the standards of FNMA and FHLMC and was made and signed, prior to
the
origination of the Mortgage Loan by a qualified appraiser, duly appointed by
the
Seller, who had no interest, direct or indirect in the Mortgaged Property or
in
any loan made on the security thereof, whose compensation is not affected by
the
approval or disapproval of the Mortgage Loan and who met the minimum
qualifications of FNMA and FHLMC, and each appraisal of the Mortgage Loan was
made in accordance with the relevant provisions of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989, all as in effect on the date
the
Mortgage Loan was originated;
(xxviii) In the event the Mortgage
constitutes a deed of trust, a trustee, duly qualified under applicable law
to
serve as such, has been properly designated and currently so
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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;
(xxix) No
Mortgage Loan contains provisions pursuant to which Monthly Payments are
(a) paid or partially paid with funds deposited in any separate account
established by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor,
(b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a “buydown”
provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;
(xxx) No
Mortgage Loan was made in connection with (a) the construction or
rehabilitation of a Mortgaged Property or (b) facilitating the trade-in or
exchange of a Mortgaged Property;
(xxxi) The
Seller has no knowledge of any circumstances or conditions with respect to
the
Mortgage, the Mortgaged Property, the Mortgagor, the Mortgage File or the
Mortgagor’s credit standing that can reasonably be expected to cause private
institutional investors who invest in prime mortgage loans similar to the
Mortgage Loan to regard the Mortgage Loan as an unacceptable
investment. No Mortgaged Property is located in a state, city, county
or other local jurisdiction which the Purchaser has determined in its sole
good
faith discretion would cause the related Mortgage Loan to be ineligible for
whole loan sale or securitization in a transaction consistent with the
prevailing sale and securitization industry (including, without limitation,
the
practice of the rating agencies) with respect to substantially similar mortgage
loans;
(xxxii) With
respect to any Mortgage Loan with an original Loan-to-Value Ratio greater than
80%, the Mortgage Loan will be insured by a Primary Insurance Policy, issued
by
a Qualified Insurer, which insures that portion of the Mortgage Loan in excess
of the portion of the Appraised Value of the Mortgaged Property required by
FNMA. All provisions of such Primary Insurance Policy have been and
are being complied with, such policy is in full force and effect, and all
premiums due thereunder have been paid. Any Mortgage subject to any
such Primary Insurance Policy obligates the Mortgagor thereunder to maintain
such insurance and to pay all premiums and charges in connection
therewith. The Mortgage Interest Rate for the Mortgage Loan does not
include any such insurance premium;
(xxxiii) The
Mortgaged Property is lawfully occupied under applicable law; all inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy,
have been made or obtained from the appropriate authorities;
(xxxiv) With
respect to the Mortgage Loan, no error, omission, misrepresentation, negligence,
fraud or similar occurrence has taken place on the part of the Mortgagor, any
appraiser or any other party involved in the origination of the Mortgage Loan
or
in the application of any insurance in relation to such Mortgage
Loan;
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(xxxv) The
Assignment of Mortgage, if required, is in recordable form and is acceptable
for
recording under the laws of the jurisdiction in which the Mortgaged Property
is
located;
(xxxvi) Any
principal advances made to the Mortgagor prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the Mortgage,
and
the secured principal amount, as consolidated, bears a single interest rate
and
single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first lien priority
with respect to each Mortgage Loan which is indicated by the Seller to be a
first lien (as reflected on the Mortgage Loan Schedule) by a title insurance
policy, an endorsement to the policy insuring the mortgagee’s consolidated
interest or by other title evidence acceptable to FNMA and FHLMC;
(xxxvii) If
the Mortgaged Property is a Residential Dwelling in a condominium or a planned
unit development (other than a de minimis planned unit development) such
condominium or planned unit development project meets the eligibility
requirements of FNMA, FHLMC or the Underwriting Guidelines; no Mortgaged
Property is a Residential Dwelling in a condominium in which the developer
or
sponsor of the condominium controls the board of managers, homeowners
association or similar governing body of such condominium;
(xxxviii) The
source of the down payment with respect to each Mortgage Loan has been fully
verified by the Seller. Unless the Mortgage loan is in an acceptable
program that does not require verification of assets;
(xxxix) Interest
on each Mortgage Loan is calculated on the basis of a 360-day year consisting
of
twelve 30-day months;
(xl) To
the Seller’s knowledge, there is no pending action or proceeding directly
involving the Mortgaged Property in which compliance with any environmental
law,
rule or regulation is an issue; there is no violation of any environmental
law,
rule or regulation with respect to the Mortgage Property; and nothing further
remains to be done to satisfy in full all requirements of each such law, rule
or
regulation constituting a prerequisite to use and enjoyment of said
property;
(xli) Each
Mortgage Loan is covered by a paid in full, life loan, tax service contract
by
either Timberlink Settlement Services, LLC, or First American Real Estate Tax
Service, and such contracts are transferable. In the event that the
Purchaser assumes servicing responsibility for any Mortgage Loan(s), the Seller
shall transfer the life of loan tax service contract from Timberlink Settlement
Services, LLC to First American Real Estate Tax Service at no cost to the
Purchaser;
(xlii) Each
Mortgage Loan is covered by a paid in full, life of loan, flood service contract
issued by either Timberlink Settlement Services, LLC, or First American Real
Estate Tax Service, and such contracts are transferable. In the event
that the Purchaser assumes servicing responsibility for any Mortgage Loan(s),
the Seller shall transfer the life of loan flood service contract from
Timberlink Settlement Services, LLC to First American Real Estate Tax Service
at
no cost to the Purchaser;
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(xliii) No
selection procedures were used by the Seller that identified the Mortgage Loans
as being less desirable or valuable than other comparable mortgage loans in
the
Seller’s portfolio;
(xliv) The
Loan-to-Value Ratio of any Mortgage Loan at origination was not more than
95%;
(xlv) Each
Mortgage Loan constitutes a “qualified mortgage” under
Section 860G(a)(3)(A) of the Code and Treasury Regulation
Section 1.860G-2(a)(1);
(xlvi) No
Mortgage Loan is a High Cost Loan or Covered Loan, as applicable. No
Mortgage Loan is covered by the Home Ownership and Equity Protection Act of
1994
and no Mortgage Loan is in violation of any comparable state or local
law. The Mortgaged Property is not located in a jurisdiction where a
breach of this representation with respect to the related Mortgage Loan may
result in additional assignee liability to the Purchaser, as determined by
Purchaser in its reasonable discretion;
(xlvii) No
Mortgage Loan had an original term to maturity of more than thirty
(30) years;
(xlviii) No
Mortgagor was required to purchase any single premium credit insurance policy
(e.g., life, disability, property, accident, unemployment or health insurance
product) or debt cancellation agreement as a condition of obtaining the
extension of credit. No Mortgagor obtained a prepaid single-premium
credit insurance policy (e.g., life, disability, property, accident,
unemployment, mortgage or health insurance) in connection with the origination
of the Mortgage Loan. No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies as part of the origination
of,
or as a condition to closing, such Mortgage Loan;
(xlix) There
is no Mortgage Loan that was originated (or modified) 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 that is a “high cost home loan” as
defined under the Georgia Fair Lending Act;
(l)
No
Mortgagor with respect to any Mortgage Loan originated on or after
August 1, 2004 agreed to submit to arbitration to resolve any dispute
arising out of or relating in any way to the mortgage loan
transaction;
(li) The
documents, instruments and agreements used in underwriting the loan were not
falsified and contain no untrue statement of Material fact and do not omit
to
state a Material fact required to be stated or necessary to make the information
and statements therein not misleading;
(lii) With
respect to a Mortgage Loan that is a Co-op Loan, the stock that is pledged
as
security for the Mortgage Loan is 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);
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(liii) With
respect to a Mortgage Loan that is not a Co-op Loan and is not secured by an
interest in a leasehold estate, the Mortgaged Property is a fee simple estate
that 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
residential condominium unit in a condominium project, or an individual unit
in
a planned unit development. No portion of the Mortgaged Property is
used for commercial purposes, and 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. None of the Mortgaged Properties are
Manufactured Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(liv) If
applicable, with respect to each Mortgage Loan, the Seller has within the last
twelve months (unless such Mortgage was originated within such twelve month
period) analyzed the required Escrow Payments for each Mortgage and adjusted
the
amount of such payments so that, assuming all required payments are timely
made,
any deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
(lv) As
to each consumer report (as defined in the Fair Credit Reporting Act, Public
Law
91-508) or other credit information furnished by the Seller to the Purchaser,
that Seller has full right and authority and is not precluded by law or contract
from furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective purchaser
of
such Mortgage. The Seller has and shall in its capacity as servicer,
for each Mortgage Loan, 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;
(lvi) If
the Mortgage Loan is secured by a leasehold estate, (1) the ground lease is
assignable or transferable; (2) the ground lease will not terminate earlier
than
five years after the maturity date of the Mortgage Loan; (3) the ground lease
does not provide for termination of the lease in the event of lessee’s default
without the Mortgagee being entitled to receive written notice of, and a
reasonable opportunity to cure the default; (4) the ground lease permits the
mortgaging of the related Mortgaged Property; (5) the ground lease protects
the
Mortgagee’s interests in the event of a property condemnation; (6) all ground
lease rents, other payments, or assessments that have become due have been
paid;
and (7) the use of leasehold estates for residential properties is a widely
accepted practice in the jurisdiction in which the Mortgaged Property is
located;
(lvii) Each
Mortgage Loan that is subject to a Prepayment Charge as provided in the related
Mortgage Note is identified on the related Mortgage Loan Schedule. No
such Prepayment Charge is for a term in excess of five (5) years following
origination of the Mortgage Loan, and each Prepayment Charge complies with
all
applicable laws;
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(lviii) No
predatory or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the Mortgagor to repay
and
the extension of credit which has no apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage Loan; and
(lix) The
Mortgage Loan has not previously been offered for sale.
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 or the Purchaser of a breach of
any of the foregoing representations and warranties which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of the
Purchaser in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan).
Within
60 days of the earlier of either discovery by or notice to the Seller of
any breach of a representation or warranty which materially and adversely
affects the value of a Mortgage Loan or the Mortgage Loans, the Seller shall
use
its best efforts promptly to cure such breach in all material respects and,
if
such breach cannot be cured within such period, the Seller may request an
extension of up to 30 days in which to cure such breach, such request for
extension not to be unreasonably denied so long as Seller is diligently working
to cure such breach. If the Seller cannot cure such breach within the
time period specified in the preceding sentence, the Seller shall, at the
Purchaser’s option, repurchase such Mortgage Loan at the Repurchase or Make
Whole Price or substitute a Qualified Substitute Mortgage Loan for such Mortgage
Loan in breach. In the event that a breach shall involve any
representation or warranty set forth in Subsection 7.01 and such
breach cannot be cured within 60 days of the earlier of either discovery by
or notice to the Seller of such breach, all of the Mortgage Loans shall, at
the
Purchaser’s option, be repurchased by the Seller at the Repurchase or Make Whole
Price. The Seller shall, at the request of the Purchaser and assuming
that the Seller has a Qualified Substitute Mortgage Loan, rather than repurchase
the affected Mortgage Loan as provided above, remove such Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage Loan or Mortgage Loans;
provided that such substitution shall be effected not later than 120 days
after notice to the Seller of such breach. If the Seller has no
Qualified Substitute Mortgage Loan, the Seller shall repurchase the deficient
Mortgage Loan. Notwithstanding anything to the contrary herein,
within sixty (60) days after the earlier of either discovery by, or notice
to, the Seller of any breach of the representations or warranties set forth
in
clause (x1v), (x1vi), (x1viii), (x1ix), (1), (lv), (1vii) or (1viii) of
Subsection 7.02, the Seller shall repurchase such Mortgage Loan at
the Repurchase or Make Whole Price. Any repurchase of a Mortgage
Loan(s) pursuant to the foregoing provisions of this Subsection 7.03
shall occur on a date designated by the Purchaser and shall be accomplished
(i) by wire transfer of immediately available funds on the repurchase date
to an account designated by the Purchaser or (ii) as otherwise set forth in
the related Purchase Price and Terms Letter Agreement.
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At
the
time of repurchase or substitution of any deficient Mortgage Loan,
the Purchaser and the Seller shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Seller or its designee and
the
delivery to the Seller or its designee of any documents held by the Purchaser
relating to the repurchased or substituted Mortgage Loan. Upon such
repurchase the related Mortgage Loan Schedule shall be amended to reflect
the withdrawal of the repurchased or substituted Mortgage Loan from this
Agreement.
For
any
month in which the Seller substitutes one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Seller shall determine the
amount (if any) by which the aggregate principal balance of all such Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of
substitution). The amount of such shortfall shall be remitted to the
Servicer by the Seller for distribution by the Servicer in the month of
substitution pursuant to Subsection 11.04. Accordingly,
on the date of such substitution, the Seller will remit to the Servicer from
its
own funds for deposit into the Custodial Account an amount equal to the amount
of such shortfall plus one month’s interest thereon at the Mortgage Loan
Remittance Rate.
In
addition to such cure and repurchase obligation, the Seller shall, indemnify
the
Purchaser and hold it harmless against any actual, losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other such costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from,
a
breach of the Seller’s representations and warranties contained in this
Section 7. It is understood and agreed that the
obligations of the Seller set forth in this Subsection 7.03 to cure
or repurchase a defective Mortgage Loan and to indemnify the Purchaser as
provided in this Subsection 7.03 constitute the sole remedies of the
Purchaser respecting a breach of the foregoing representations and
warranties.
Any
cause
of action against the Seller relating to or arising out of the breach of any
representations and warranties made in Subjections 7.01 or
7.02 shall accrue as to any Mortgage Loan upon (i) discovery of such
breach by the Purchaser or notice thereof by the Seller to the Purchaser,
(ii) failure by the Seller to cure such breach or repurchase such Mortgage
Loan as specified above, and (iii) demand upon the Seller by the Purchaser
for compliance with the relevant provisions of this Agreement.
Subsection
7.04 Repurchase of
Certain Mortgage Loans; Premium Recapture; Early Payment
Defaults. In
the event that any Mortgage Loans prepays-in-full within three (3) months
from and after the related Closing Date, the Seller shall remit to the Purchaser
the Premium Recapture Price with respect to such Mortgage Loan. In
the event that any Mortgagor fails to make (i) the first Monthly Payment
due to the Purchaser after the related Closing Date, the Seller shall repurchase
such Mortgage Loan at the Premium Recapture Price with respect to such Mortgage
Loan or (ii) the second or third Monthly Payments due to the Purchaser
after the related Closing Date (so long as the Seller is not otherwise required
to repurchase such Mortgage Loan pursuant to Sections6.03 or
7.03) the Seller shall repurchase such Mortgage Loan at
100% of the
Stated Principal Balance of such Mortgage Loan as of the date of such repurchase
if such failure continues thirty (30) days or more beyond the Due Date for
such
Monthly Payment.
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Subsection 7.05 Representations of
the Purchaser. The
Purchaser hereby represents and warrants to the Seller, as of the date hereof
and as of each Closing Date, that:
(i) The
Purchaser is duly incorporated validly existing and in good standing under
the
laws of the State of New York with full corporate power and authority
to conduct its business as presently conducted by it to the extent Material
to
the consummation of the transactions contemplated herein. The
Purchaser has the full corporate power and authority to own the Mortgage Loans
and has the full corporate power authority to execute and deliver, engage in
the
transactions contemplated by, and perform and observe the terms and conditions
of the Agreement;
(ii) The
Purchaser has duly authorized the execution, delivery and performance of the
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the Seller, constitutes
a
legal, valid and binding obligation of the Purchaser, enforceable against it
in
accordance with its terms except as the enforceability thereof may be limited
by
bankruptcy, insolvency or reorganization or by general principles of
equity;
(iii) The
execution, delivery and performance of this Agreement by the Purchaser
(x) does not conflict and will not conflict with, does not breach and will
not result in a breach of and does not constitute and will not constitute a
default (or an event, which with notice or lapse of time or both, would
constitute a default) under (A) any terms or provision on the
organizational documents of the Purchaser, (B) any term or provision of any
material agreement, contract, instrument or indenture, to which the Purchaser
is
a party or by which the Purchaser or any of its property is bound, or
(C) any law, rule, regulation, order, judgment, writ, injunction or decree
of any court or governmental authority having jurisdiction over the Purchaser
or
any of its property and (y) does not create or impose and will not result
in the creation or imposition of any lien, charge or encumbrance which would
have an adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans;
(iv) No
consent, approval, authorization or order of, registration or filing with,
or
notice on behalf of the Purchaser to any governmental authority or court is
required for the execution, delivery and performance by the Purchaser of, or
compliance by the Purchaser with, this Agreement or the consummation by the
Purchaser of any other transaction contemplated hereby;
(v) The
Purchaser is not in violation of, and the execution and delivery of this
Agreement by the Purchaser and its performance and compliance with the terms
of
this Agreement will not constitute a violation with respect to, any order or
decree of any court or any order or regulation of any federal, state, municipal
or governmental agency having jurisdiction over the Purchaser or its assets,
which violation might have consequences that would materially and adversely
affect the condition (financial or otherwise) or the operation of the Purchaser
or its assets or might have consequences that would materially and adversely
affect the performance of its obligation and duties hereunder;
(vi) There
are not actions or proceedings against, or investigations known to it
of, the Purchaser before any court, administrative or other tribunal
(A) that might prohibit its
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entering
into the Agreement, or (B) that might prohibit or materially and adversely
affect the performance by the Purchaser of its obligations under, or validity
or
enforceability of, this Agreement; and
(vii) There
is no litigation currently pending or, to the best of the Purchaser’s knowledge
without independent investigation, threatened against the Purchaser that would
reasonably be expected to adversely affect the execution, delivery, performance
or enforceability of this Agreement, or that would result in an adverse change
in the financial condition of the Purchaser.
SECTION 8. CLOSING. The
closing for each Mortgage Loan Package shall take place on the related Closing
Date. At the Purchaser’s option, the closing shall be either by
telephone, confirmed by letter or wire as the parties shall agree, or conducted
in person, at such place as the parties shall agree.
The
closing for the Mortgage Loans to be purchased on each Closing Date shall be
subject to each of the following conditions:
(a) all
of the representations and warranties of the Seller under this Agreement shall
be true and correct as of the related Closing Date, and no event shall have
occurred which, with reasonable notice to the Seller or the passage of time,
would constitute a default under this Agreement;
(b) the
Purchaser shall have received, or the Purchaser’s attorneys 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 other than the Purchaser as required pursuant to the terms
hereof;
(c) the
Seller shall have delivered and released to the Purchaser all documents required
pursuant to this Agreement; and
(d) all
other terms and conditions of this Agreement shall have been complied
with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on the
related Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4, by wire transfer of immediately available funds to the
account designated by the Seller.
SECTION 9. CLOSING
DOCUMENTS. On
or
before the initial Closing Date, the Seller shall submit to the Purchaser fully
executed originals of the following documents:
(a) this
Agreement (to be executed and delivered only for the initial Closing
Date);
(b) the
related Purchase Price and Terms Letter Agreement, executed in four
(4) counterparts;
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(c) with
respect to the initial Closing Date, the Custodial Agreement, dated as of the
initial Cut-off Date;
(d) with
respect to the initial Closing Date, a Custodial Account Certification in the
form attached as Exhibit 9 hereto or a Custodial Account Letter
Agreement in the form attached as Exhibit 10 hereto;
(e) with
respect to the initial Closing Date, an Escrow Account Certification in the
form
attached as Exhibit 11 hereto or an Escrow Account Letter Agreement
in the form attached as Exhibit 12 hereto;
(f) the
related Mortgage Loan Schedule, segregated by Mortgage Loan Package, one copy
to
be attached hereto, one copy to be attached to the Custodian’s counterpart of
the Custodial Agreement, and one copy to be attached to the related Assignment
and Conveyance as the Mortgage Loan Schedule thereto;
(g) with
respect to the initial Closing Date, an Officer’s Certificate, in the form of
Exhibit 1 hereto with respect to the Seller, including all
attachments thereto and with respect to subsequent Closing Dates, an Officer’s
Certificate upon request of the Purchaser; and
(h) with
respect to the initial Closing Date, an Opinion of Counsel of the Seller (who
may be an employee of the Seller), in the form of Exhibit 15 hereto
and with respect to subsequent Closing Dates, an Opinion of Counsel of the
Seller upon request of the Purchaser;
(i) with
respect to the initial Closing Date, an Opinion of Counsel of the Custodian
(who
may be an employee of the Custodian), in the form of an exhibit to the Custodial
Agreement, if required;
(j) a
Security Release Certification, in the form of Exhibit 2, hereto
executed by any person, as requested by the Purchaser, if any of the Mortgage
Loans have at any time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
(k) a
certificate or other evidence of merger or change of name, signed or stamped
by
the applicable regulatory authority, if any of the Mortgage Loans were acquired
by the Seller by merger or acquired or originated by the Seller while conducting
business under a name other than its present name, if applicable;
(l) with
respect to the initial Closing Date, the Underwriting Guidelines to be attached
hereto as Exhibit 13 and with respect to each subsequent Closing
Date, the Underwriting Guidelines to be attached to the related Assignment
and
Conveyance;
(m) Assignment
and Conveyance in the form of Exhibit 3 hereto, including all
exhibits thereto;
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(n) a
Custodian’s receipt, as required under the Custodial Agreement, in the form of
Exhibit 3 to the Custodial Agreement; and
(o) a
MERS Report reflecting the Purchaser as Investor, the Custodian as custodian
and
no Person as Interim Funder for each MERS Designated Mortgage Loan.
The
Seller shall bear the risk of loss of the closing documents until such time
as
they are received by the Purchaser or its attorneys.
SECTION 10. Costs. The
Purchaser shall pay any commissions due its salesmen, and the legal fees and
expenses of its attorneys. All other costs and expenses incurred in
connection with the transfer and delivery of the Mortgage Loans, and the related
servicing rights, including without limitation MERS transfer fees, Tax Service
fees, fees for title policy endorsements and continuations, fees for recording
Assignments of Mortgage in regard to Co-op Loans – UCC—3 filings and the
Seller’s attorney’s fees, shall be paid by the Seller.
SECTION 11. Administration
and
Servicing of the Mortgage Loans.
Subsection
11.01 Servicer to Act as
Servicer. The
Servicer shall service and administer the Mortgage Loans in accordance with
this
Agreement and Accepted Servicing Practices and the terms of the Mortgage Notes
and Mortgages, and shall have full power and authority, acting alone or through
sub servicers 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 may perform its servicing responsibilities
through agents or independent contractors, but shall not thereby be released
from any of its responsibilities hereunder.
Consistent
with the terms of this Agreement, the Servicer may waive, modify or vary any
term of any Mortgage Loan or consent to the postponement of strict compliance
with any such term or in any manner grant indulgence to any Mortgagor;
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 materially and adversely affects the Mortgage Loan, including without
limitation, any modification that would 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, extend the final
maturity date or change the Mortgage Interest Rate, as the case may be, with
respect to such Mortgage Loan. Notwithstanding the foregoing, the
Servicer shall not waive any Prepayment Charge or portion thereof unless
(i) the enforceability thereof shall have been limited by bankruptcy,
insolvency, moratorium, receivership or other similar laws relating to
creditors’ rights generally or is otherwise prohibited by law, or (ii) the
enforceability thereof shall have been permanently limited due to acceleration
in connection with a foreclosure or other involuntary payment or (iii) in
the Servicer’s reasonable judgment, (x) such waiver relates to a default or
a reasonably foreseeable default, (y) such waiver would maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and
related Mortgage Loan and (z) doing so is standard and customary in servicing
Mortgage Loans (including any waiver of a Prepayment Charge in connection with
a
refinancing of a Mortgage Loan that is related to a
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default
or reasonably foreseeable default). Except as provided in the
preceding sentence, in no event will the Servicer waive a Prepayment Charge
in
connection with a refinancing of a Mortgage Loan that is not related to a
default or a reasonably foreseeable default. In connection with any
waiver of a Prepayment Charge by the Servicer, the Servicer shall account for
such waiver in its monthly reports as agreed upon by the Servicer and the
Purchaser. Without limiting the generality of the foregoing, the
Servicer in its own name or acting through sub servicers 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 11.12. The Servicer shall make all required
Servicing Advances and shall service and administer the Mortgage Loans in
accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The
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 in this Agreement, the Purchaser may at any time and
from time to time, in its sole discretion, upon written notice to the Seller,
with respect to (1) any REO Property or (2) all Mortgage Loans that
are 90 or more days delinquent as of the date of such notice and any
Mortgage Loans that subsequently become 90 or more days delinquent
following the date of such notice (for the purposes of this paragraph such
Mortgage Loans, “Delinquent Mortgage Loans”), either (i) terminate
the Seller’s servicing obligations hereunder with respect to such REO Properties
and Delinquent Mortgage Loans, upon reimbursement of any unreimbursed advances
owed to the Servicer and payment of the termination fee referred to in
Subsection 13.02, or (ii) assume the absolute right to direct
the Seller to take such actions with respect to such REO Property and Delinquent
Mortgage Loans as the Seller would otherwise be able to undertake pursuant
to
Subsection 11.12. Upon the effectiveness of any such
termination of the Seller’s servicing obligations with respect to any such REO
Property or Delinquent Mortgage Loan, the Seller shall deliver all agreements,
documents, and instruments related thereto to the Purchaser, in accordance
with
Accepted Servicing Practices and applicable law and shall transfer servicing
to
the Purchaser’s designee in accordance with Acceptable Servicing
Procedures.
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 one hundred twenty
(120) days or more, the Servicer shall commence foreclosure proceedings in
accordance with the guidelines set forth by FNMA or FHLMC. In such
event, the Servicer shall from its own funds make all necessary and proper
Servicing Advances.
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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 Accepted Servicing Practices ascertain and estimate taxes,
assessments, fire and hazard insurance premiums, and all other charges that,
as
provided in any Mortgage, will become due and payable to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges
as
and when they become due and payable.
Subsection
11.04 Establishment of
Custodial Account; Deposits in Custodial Account. The
Servicer shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts
(collectively, the “Custodial Account”), titled “HSBC Mortgage
Corporation (USA), in trust for Xxxxxx Xxxxxxx Mortgage Capital Inc. as
Purchaser of Mortgage Loans and various Mortgagors.” Such Custodial
Account shall be established with a commercial bank, a savings bank or a savings
and loan association (which may be a depository affiliate of the Servicer)
which
meets the guidelines set forth by FNMA or FHLMC as an eligible depository
institution for custodial accounts. 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 any Custodial Account shall be evidenced by
(i) a certification in the form of Exhibit 9 hereto, in the case of an
account established with a depository affiliate of the Servicer, or (ii) a
letter agreement in the form of Exhibit 10 hereto, in the case of an
account held by a depository other than an affiliate of the
Servicer. In either case, a copy of such certification or letter
agreement shall be furnished to the Purchaser upon request.
The
Servicer shall deposit in the Custodial Account on a daily basis on the Business
Day following receipt thereof, 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 Mortgage
Loan Remittance Rate;
(c) all
Liquidation Proceeds;
(d) all
proceeds received by the Servicer under any title insurance policy, hazard
insurance policy, or other insurance policy other than proceeds to be held
in
the Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with Accepted Servicing
Practices;
(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 Accepted Servicing Practices;
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(f) any
amount required to be deposited in the Custodial Account pursuant to
Subsections 11.14, 11.16 and 11.18;
(g) any
amount required to be deposited by the Servicer in connection with any REO
Property pursuant to Subsection 11.12;
(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 Qualified
Substitute Mortgage Loans pursuant to Subsection 7.03;
and
(i) with
respect to each Principal Prepayment, 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, 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.
The
foregoing requirements for deposit in the Custodial Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges, assumption fees
and
other ancillary fees need not be deposited by the Servicer in the Custodial
Account.
The
Servicer may invest the funds in the Custodial Account in Eligible Investments
designated in the name of the Servicer for the benefit of the Purchaser, which
shall mature not later than the Business Day next preceding the Remittance
Date
next following the date of such investment (except that (A) any investment
in the institution with which the Custodial Account is maintained may mature
on
such Remittance Date and (B) any other investment may mature on such
Remittance Date if the Servicer shall advance funds on such Remittance Date,
pending receipt thereof to the extent necessary to make distributions to the
Owner) 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 11.14;
(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
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case
of
any such reimbursement, the Servicer’s right thereto shall be prior to the
rights of the Purchaser, except that, where the Seller is required to repurchase
a Mortgage Loan, pursuant to Subsection 7.03, the Servicer’s right
to such reimbursement shall be subsequent to the payment to the Purchaser of
the
Repurchase Price pursuant to Subsection 7.03, and all other amounts
required to be paid to the Purchaser with respect to such Mortgage
Loan;
(c) to
reimburse itself for any unpaid Servicing Fees and for unreimbursed Servicing
Advances, the Servicer’s right to reimburse itself pursuant to this
subclause (c) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, 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 7.03,
in which case the Servicer’s right to such reimbursement shall be subsequent to
the payment to the Purchaser of the Repurchase Price pursuant to
Subsection 7.03 and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loan;
(d) to
reimburse itself for unreimbursed Servicing Advances and for xxxxxxxxxxxx
X&X Advances, in accordance with Subsection 11.16, to the extent
that such amounts are nonrecoverable 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 the Seller
pursuant to Subsection 7.03;
(e) to
reimburse itself for expenses incurred by and reimbursable to it pursuant to
Subsection 16.01;
(f) to
withdraw amounts to make P&I Advances in accordance with
Subsection 11.16;
(g) to
pay to itself any interest earned or any investment earnings on funds deposited
in the Custodial Account;
(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 “HSBC
Mortgage Corporation (USA), in trust for Xxxxxx Xxxxxxx Mortgage
Capital Inc. as Purchaser of Mortgage Loans and various
Mortgagors.” The Escrow Account shall be established with a
commercial bank, a savings bank or a savings and loan association (which may
be
a depository affiliate of Servicer), which meets the guidelines set
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forth
by
FNMA or FHLMC as an eligible institution for escrow accounts. 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 any Escrow Account shall be evidenced by a
certification in the form of Exhibit 11 hereto, in the case of an
account established with a depository affiliate of the Servicer, or by a letter
agreement in the form of Exhibit 12 hereto, in the case of an
account held by a depository. In either case, a copy of such
certification or letter agreement shall be furnished to the Purchaser upon
request.
The
Servicer shall deposit in the Escrow Account on a daily basis, and retain
therein: (a) all Escrow Payments collected on account of the
Mortgage Loans, for the purpose of effecting timely payment of any such items
as
required under the terms of this Agreement, and (b) all amounts
representing proceeds of any hazard insurance policy which are to be applied
to
the restoration or repair of any Mortgaged Property. The Servicer
shall make withdrawals therefrom only in accordance with
Subsection 11.07. 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, 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 with respect to a related Mortgage
Loan, (c) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Mortgage Loan, (d) for
transfer to the Custodial Account upon default of a Mortgagor or in accordance
with the terms of the related Mortgage Loan and if permitted by applicable
law,
(e) for application to restore or repair of the Mortgaged Property,
(f) to pay to the Mortgagor, to the extent required by law, any interest
paid on the funds deposited in the Escrow Account, (g) to pay to itself any
interest earned on funds deposited in the Escrow Account (and not required
to be
paid to the Mortgagor), (h) to the extent permitted under the terms of the
related Mortgage Note and applicable law, to pay late fees with respect to
any
Monthly Payment which is received after the applicable grace period, (i) to
withdraw suspense payments that are deposited into the Escrow Account, (j)
to
withdraw any amounts inadvertently deposited in the Escrow Account or (k) to
clear and terminate the Escrow Account upon the termination of this
Agreement.
Subsection
11.08 Payment of Taxes,
Insurance and Other Charges; Collections Thereunder. With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments and other charges
which are or may become a lien upon the Mortgaged Property and the status of
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
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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 Subsection 11.07(b). With respect to each Mortgage
Loan, the Servicer shall perform, or cause to be performed by its tax service
provider, annual tax searches to ensure that all property taxes due and payable
on each Mortgaged Property during the twelve (12) month period preceding the
date of such search have been timely paid.
With
respect to each Mortgage Loan identified on the Mortgage Loan Schedule as
an LPMI Loan, the Servicer shall maintain in full force and effect any LPMI
Policy, and from time to time, withdraw the premium with respect to such
Mortgage Loans from the Custodial Account in order to pay the premium thereon
on
a timely basis. In the event that the interest payments made with
respect to the Mortgage Loan are less than the premium with respect to the
LPMI
Policy, the Servicer shall advance from its own funds the amount of any such
shortfall in the LPMI Policy premiums, in payment of such
premium. Any such advance shall be a Servicing Advance subject to
reimbursement. In the event that such LPMI Policy shall be
terminated, the Servicer shall obtain from another insurer acceptable under
the
Underwriting Guidelines, a comparable replacement policy, with a total coverage
equal to the remaining coverage of such terminated LPMI Policy, at substantially
the same fee level. If the insurer shall cease to be an insurer
acceptable under the Underwriting Guidelines, the Servicer shall determine
whether recoveries under the LPMI Policy are jeopardized for reasons related
to
the financial condition of such insurer, it being understood that the Servicer
shall in no event have any responsibility or liability for any failure to
recover under the LPMI Policy for such reason. If the Servicer
determines that recoveries are so jeopardized, it shall notify the Purchaser
and
the Mortgagor, if required, and obtain from another insurer acceptable under
the
Underwriting Guidelines a replacement insurance policy. The Servicer
shall not take any action which would result in noncoverage under any applicable
LPMI 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, the Servicer shall
promptly notify the insurer under the related LPMI Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
LPMI Policy and shall take all actions which may be required by such insurer
as
a condition to the continuation of coverage under such LPMI
Policy. If such LPMI Policy is terminated as a result of such
assumption or substitution of liability, the Servicer shall obtain a replacement
LPMI Policy as provided above.
Purchaser,
in its sole discretion, at any time, may (i) either obtain an additional
LPMI Policy on any Mortgage Loan which already has an LPMI Policy in place,
or
(ii) obtain a LPMI Policy for any Mortgage Loan which does not already have
a LPMI Policy in place. In any event, the Servicer agrees to
administer such LPMI Policies in accordance with the Agreement or any
Reconstitution Agreement.
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 Insurance Policy or LPMI Policy in a timely fashion in accordance with
the terms of such Primary Insurance Policy and LPMI Policy and, in this regard,
to take such action as shall be necessary to permit recovery under any Primary
Insurance Policy or LPMI Policy respecting a defaulted
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Mortgage
Loan. Any amounts collected by the Servicer under any Primary
Insurance Policy shall be deposited in the Escrow Account.
Subsection
11.09 Transfer of
Accounts. The
Servicer may transfer the Custodial Account or the Escrow Account to a different
depository institution. Such transfer shall be made only upon
obtaining the prior written consent of the Purchaser; such consent not to be
unreasonably withheld.
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 that conforms to the requirements of FNMA or
FHLMC. If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having special
flood hazards (and such flood insurance has been made available) the Servicer
will cause to be maintained a flood insurance policy meeting the requirements
of
FNMA or FHLMC. The Servicer shall also maintain on REO Property fire
and hazard insurance with extended coverage in an amount which meets the
requirements of FNMA or FHLMC. 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 Accepted Servicing Practices)
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 that
do
not conform to the requirements of FNMA or FHLMC.
Subsection
11.11 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 shall insure the Servicer against losses
resulting from 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 11.11 requiring
such Fidelity Bond and errors and omissions insurance shall diminish or relieve
the Servicer of 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 FNMA in the FNMA Servicing Guide or by FHLMC in the FHLMC Sellers’ &
Servicers’ Guide, as
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amended
or restated from time to time, or in an amount as may be permitted to the
Servicer by express waiver of FNMA or FHLMC.
Subsection
11.12 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 $5,000 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).
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. 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 11.16 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 (and may temporarily rent the same) on such terms and conditions as
the
Servicer deems to be in the best interest of the Owner.
If
a
REMIC election is or is to be made with respect to the arrangement under which
the Mortgage Loans and any REO Property are held, the Servicer shall manage,
conserve, protect and operate each REO Property in a manner which does not
cause
such REO Property to
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fail
to
qualify as “foreclosure property” within the meaning of Section 860G(a)(8)
of the Code or result in the receipt by such REMIC of any “income from non
permitted assets” within the meaning of Section 860F(a)(2)(B) of the Code
or any “net income from foreclosure property” within the meaning of
Section 860G(c)(2) of the Code.
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
11.13 Servicing
Compensation. As
compensation for its services hereunder, the Servicer shall be entitled to
retain the Servicing Fee from interest payments on the Mortgage
Loans. Additional servicing compensation in the form of assumption
fees, late payment charges 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
11.14 Distributions. On
each Remittance Date the Servicer shall remit by wire transfer of immediately
available funds to the account designated in writing by the Purchaser of record
on the preceding Record Date (a) all Monthly Payments due in the Due Period
relating to such Remittance Date and received by the Servicer prior to the
related Determination Date, plus (b) all amounts, if any, which the
Servicer is obligated to distribute pursuant to Subsection 11.16,
plus (c) 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 (d) all amounts that may be
withdrawn from the Custodial Account pursuant to
Subsections 11.05(b) through (e).
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 Prime Rate, adjusted as
of
the date of each change, plus three percent (3%), 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
11.15 Statements to the
Purchaser. Not
later than the 10th calendar day of each month (or, if such 10th day is not
a
Business Day, the following Business Day), the Servicer shall forward to the
Purchaser in hard copy and electronic format mutually acceptable to the
Purchaser and the Seller, a statement, substantially in the form of, and
containing the information fields set forth on, Exhibit 6 and
certified by a Servicing Officer. Such statement shall also include
(i) information regarding delinquencies on Mortgage Loans, indicating the
number and aggregate principal amount of Mortgage Loans which are delinquent
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(including
number of days delinquent through liquidation of the related REO Property)
and
the book value of any REO Property and (ii) Static Pool Information
regarding the Mortgage Loans. 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.
The
Servicer shall furnish to the Purchaser an individual loan accounting report
in
hard copy and electronic format mutually acceptable to the Purchaser and the
Seller, as of the last Business Day of each month, in the Purchaser’s assigned
loan number order (provided that such loan numbers previously have been provided
in writing by the Purchaser to the Servicer) to document Mortgage Loan payment
activity on an individual Mortgage Loan basis. With respect to each
month, the corresponding individual loan accounting report shall be received
by
the Purchaser no later than the fifth Business Day of the following month,
which
report shall contain the following:
(i) with
respect to each Monthly Payment, the amount of such remittance allocable to
principal (including a separate breakdown of any Principal Prepayment, including
the date of such prepayment, along with a detailed report of interest on
principal prepayment amounts remitted in accordance with
Subsection 11.14);
(ii) with
respect to each Monthly Payment, the amount of such remittance allocable to
interest; and
(iii) the
next actual due date for each Mortgage Loan.
In
addition, within a reasonable period of time after the end of each calendar
year, the Servicer will furnish a report to each Person that was a Purchaser
at
any time during such calendar year. Such report shall state the
aggregate of amounts distributed to the Purchaser for such calendar
year. Such obligation of the Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Servicer pursuant to any requirements of the Code.
The
Servicer shall prepare and file any and all tax returns, information statements
or other filings required to be delivered to any governmental taxing authority
or to 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.
The
Servicer shall promptly notify the Purchaser of (i) any litigation or
governmental proceedings pending against the Servicer of the type described
in
Subsection 7.01(ix) or (ii) any affiliations or relationships
that may develop following a Securitization Transfer between the Servicer and
any of the Persons identified in Item 1119 of Regulation AB.
Subsection
11.16 Advances by the
Servicer. On
the Business Day immediately preceding each Remittance Date, the Servicer shall
either (a) deposit in the
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Custodial
Account from its own funds an amount equal to the aggregate amount of all
Monthly Payments (with interest adjusted to the Mortgage Loan Remittance Rate)
which were due on the Mortgage Loans during the applicable Due Period and which
were delinquent at the close of business on the immediately preceding
Determination Date (each such advance, a “P&I Advance”),
(b) cause to be made an appropriate entry in the records of the Custodial
Account that amounts held for future distribution have been, as permitted by
this Subsection 11.16, 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 P&I 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 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 (i) for any
Mortgage Loan and on any Remittance Date that the distribution of all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) occurs with respect to such Mortgage Loan
or
(ii) if the Servicer, in its good faith judgment, determines that 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.
Subsection
11.17 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 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. In
connection with any such assumption, the outstanding principal amount, the
Monthly Payment or the Mortgage Interest Rate 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 11.17, the Servicer is authorized to enter into a
substitution of liability agreement with the purchaser of the Mortgaged Property
pursuant to which the original Mortgagor is released from liability and the
purchaser of the Mortgaged Property is substituted as Mortgagor and becomes
liable under the Mortgage Note.
Subsection
11.18 Satisfaction of
Mortgages and Release of Mortgage Files. Upon
the payment in full of any Mortgage Loan, or the receipt by the Servicer of
a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Servicer will obtain the portion of the Mortgage File that
is
in the possession of the Purchaser or its designee, prepare and process any
required satisfaction or release of the Mortgage and notify the Purchaser in
accordance with the provisions of this Agreement. The Purchaser
agrees to deliver to the Servicer the original Mortgage Note for any Mortgage
Loan not later than three (3) Business Days following its receipt of a
notice from the Servicer that such a payment in full has been
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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 cancelled
Mortgage Note to the Mortgagor in a timely manner as and to the extent provided
under applicable state law. If the Mortgage has been recorded in the
name of MERS or its designee, the Servicer shall take all necessary action
to
effect the release of the Mortgage Loan on the records of MERS.
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
11.19 Annual Statement
as to Compliance. The
Servicer shall deliver to the Purchaser (i) on or before March 15,
2006, 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 and (ii) on or
before March 15th of each year beginning March 15, 2007, the servicer
compliance statement required by Item 1123 of Regulation AB, which as of
the date hereof requires a statement to the effect that (i) an authorized
officer of the Servicer has reviewed (or a review has been made under its
supervision) of the Servicer’s activities under this Agreement during the prior
calendar year and (ii) to the best of such officers’ knowledge, based on
such review, the Servicer has fulfilled all of its obligations under this
Agreement in all respects throughout the period covered by the prior calendar
year or, if there has been a failure to fulfill any such obligation in any
respect, a statement of such failure known to such officer and the nature and
the status thereof.
Subsection
11.20 Annual Independent
Public Accountants’ Servicing Report or Attestation. (a) On
or before March 15th of each year beginning March 15, 2006, 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 and
(b) on or before March 15th of each year beginning March 15,
2007, furnish to the Purchaser a report by a registered public accounting firm
that attests to, and reports on, the assessment made by the Servicer pursuant
to
Subsection 11.25, as required by Rules 13a-18 and 15d-18 of the
Securities Exchange Act and Section 1122(b) of Regulation AB, which
attestation shall be in accordance with Rule 1-02(a)(3) and
Rule 2-02(g) of Regulation S-X under the Securities Act and the
Securities Exchange Act.
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Subsection
11.21 Servicer Shall
Provide Access and Information as Reasonably Required. The
Servicer shall provide to the Purchaser, and for any Purchaser insured by FDIC
or NAIC, the supervisory agents and examiners of FDIC and OTS or NAIC, access
to
any documentation regarding the Mortgage Loans which may be required by
applicable regulations. Such access shall be afforded without charge,
but only upon reasonable request, during normal business hours and at the
offices of the Servicer.
In
addition, the Servicer shall furnish upon request by the Purchaser, during
the
term of this Agreement, such periodic, special or other reports or information,
whether or not provided for herein, as shall be necessary, reasonable and
appropriate with respect to the purposes of this Agreement and applicable
regulations. All such reports or information shall be provided by and
in accordance with all reasonable instructions and directions the Purchaser
may
require. The Servicer agrees to execute and deliver all such
instruments and take all such action as the Purchaser, from time to time, may
reasonably request in order to effectuate the purposes and to carry out the
terms of this Agreement.
Subsection
11.22 Transfer of
Servicing. On
the related Transfer Date, if any, the Purchaser, or its designee, shall assume
all servicing responsibilities related to, and the Seller cease all servicing
responsibilities related to, the related Mortgage Loans subject to such Transfer
Date. On or prior to the related Transfer Date, the Seller shall, at
its sole cost and expense, take such steps as may be necessary or appropriate
to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice
to Mortgagors. The Seller shall mail to the Mortgagor of each
related Mortgage Loan a letter advising such Mortgagor of the transfer of the
servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990,
as amended; provided, however, the content and format of the
letter shall have the prior approval of the Purchaser. The Seller
shall provide the Purchaser with copies of all such related notices no later
than the related Transfer Date.
(b) Notice
to Taxing Authorities and Insurance Companies. The Seller shall
transmit to the applicable taxing authorities and insurance companies (including
primary mortgage insurance policy insurers, if applicable) and/or agents,
notification of the transfer of the servicing to the Purchaser, or its designee,
and instructions to deliver all notices, tax bills and insurance statements,
as
the case may be, to the Purchaser from and after the related Transfer
Date. The Seller shall provide the Purchaser with copies of all such
notices no later than the related Transfer Date.
(c) Delivery
of Servicing Records. The Seller shall forward to the Purchaser,
or its designee, all servicing records and the Servicing File in the Seller’s
possession relating to each related Mortgage Loan.
(d) Escrow
Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of
the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related
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Mortgage
Loans. The Seller shall provide the Purchaser with an accounting
statement, in electronic format acceptable to the Purchaser in its sole
discretion, of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment
with
the accounts of the Mortgage Loans. Additionally, the Seller shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the
Seller.
(e) Payoffs
and Assumptions. The Seller shall provide to the Purchaser, or
its designee, copies of all assumption and payoff statements generated by the
Seller on the related Mortgage Loans from the related Cut-off Date to the
related Transfer Date.
(f) Mortgage
Payments Received Prior to Transfer Date. Prior to the related
Transfer Date all payments received by the Seller on each related Mortgage
Loan
shall be properly applied by the Seller to the account of the particular
Mortgagor.
(g) Mortgage
Payments Received after Transfer Date. The amount of any related
Monthly Payments received by the Seller after the related Transfer Date shall
be
forwarded to the Purchaser by overnight mail on the date of receipt or by wire
transfer on the next succeeding Business Day. The Seller shall notify
the Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Seller forwards with its payment sufficient
information to permit appropriate processing of the payment by the
Purchaser. The Seller shall assume full responsibility for the
necessary and appropriate legal application of such Monthly Payments received
by
the Seller after the related Transfer Date with respect to related Mortgage
Loans then in foreclosure or bankruptcy; provided, for purposes of this
Agreement, necessary and appropriate legal application of such Monthly Payments
shall include, but not be limited to, endorsement of a Monthly Payment to the
Purchaser with the particulars of the payment such as the account number, dollar
amount, date received and any special Mortgagor application instructions and
the
Seller shall comply with the foregoing requirements with respect to all Monthly
Payments received by the Seller after the related Transfer Date.
(h) Misapplied
Payments. Misapplied payments shall be processed as
follows:
(i) All
parties shall cooperate in correcting misapplication errors;
(j) The
party receiving notice of a misapplied payment occurring prior to the related
Transfer Date and discovered after such Transfer Date shall immediately notify
the other party;
(k) If
a misapplied payment which occurred prior to the related Transfer Date cannot
be
identified and said misapplied payment has resulted in a shortage in a Custodial
Account or Escrow Account, the Seller shall be liable for the amount of such
shortage. The Seller shall reimburse the Purchaser for the amount of
such shortage within thirty (30) days after receipt of written demand
therefor from the Purchaser;
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(l) If
a misapplied payment which occurred prior to the related Transfer Date has
created an improper Purchase Price as the result of an inaccurate outstanding
principal balance, a check shall be issued to the party shorted by the improper
payment application within five (5) Business Days after notice thereof by
the other party; and
(m) Any
check issued under the provisions of this Section 11.22(h) shall be
accompanied by a statement indicating the corresponding Seller and/or the
Purchaser Mortgage Loan identification number and an explanation of the
allocation of any such payments.
(n) Books
and Records. On the related Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be
in
accordance with all applicable Purchaser requirements.
(o) Reconciliation. The
Seller shall, on or before the related Transfer Date, reconcile principal
balances and make any monetary adjustments required by the
Purchaser. Any such monetary adjustments will be transferred between
the Seller and the Purchaser as appropriate.
(p) IRS
Forms. The Seller shall file or shall cause to be filed all IRS
forms 1099, 1099A, 1098 or 1041 and K 1 which are required to be filed on or
before the related Transfer Date in relation to the servicing and ownership
of
the related Mortgage Loans. The Seller shall provide copies of such
forms to the Purchaser upon request and shall reimburse the Purchaser for any
costs or penalties incurred by the Purchaser due to the Seller’s failure to
comply with this paragraph.
(q) Mortgage
Loans in Foreclosure. The servicing with respect to Mortgage
Loans in foreclosure on or before the related Transfer Date shall not be
transferred from the Servicer to the Purchaser or its designee, as the case
may
be, and such Mortgage Loans shall continue to be serviced by the Servicer
pursuant to the terms of this Agreement. However, if the Purchaser so
elects, the Purchaser may waive the provisions of this paragraph and accept
transfer of servicing of such Mortgage Loans and all amounts received by the
Servicer thereunder.
(r) Servicing
Advances. Notwithstanding the fact that the related Transfer Date
has occurred, the Servicer shall not be reimbursed for any Servicing Advances
in
relation to any Mortgage Loan until the Servicer or the successor servicer
receives a Monthly Payment or Liquidation Proceeds in relation to such Mortgage
Loan. At such time, the Servicer shall be entitled to be reimbursed
for all unreimbursed Servicing Advances with respect to such Mortgage Loan
on a
first priority basis from the Monthly Payment or Liquidation Proceeds received
with respect to such Mortgage Loan. This clause shall survive
each Transfer Date.
Subsection
11.23 Notification of
Maturity Date. With
respect to each Mortgage Loan, the Seller shall execute and deliver to the
Mortgagor any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the maturity date
if
required under applicable law.
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Subsection
11.24 Notification of
Adjustments. With
respect to each ARM Mortgage Loan, Seller shall adjust the Mortgage Interest
Rate on the related Interest Rate Adjustment Date and shall adjust the Monthly
Payment on the related Payment Adjustment Date in compliance with the
requirements of applicable law and the related Mortgage and Mortgage
Note. If, pursuant to the terms of the Mortgage Note, another index
is selected for determining the Mortgage Interest Rate because the original
index is no longer available, the same index will be used with respect to each
Mortgage Note which requires a new index to be selected, provided that such
selection does not conflict with the terms of the related Mortgage
Note. Seller shall execute and deliver any and all necessary notices
required under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Seller shall promptly, upon written request therefor,
deliver to the Purchaser such notifications and any additional applicable data
regarding such adjustments and the methods used to calculate and implement
such
adjustments. Upon the discovery by Seller or the Purchaser that
Seller has failed to adjust a Mortgage Interest Rate or a Monthly Payment
pursuant to the terms of the related Mortgage Note and Mortgage, Seller shall
immediately deposit in the Custodial Account, from its own funds, the amount
of
any interest loss caused the Purchaser thereby without reimbursement
therefor.
Subsection
11.25 Assessment of
Servicing Compliance. The
Servicer shall deliver to the Purchaser or its designee on or before
March 15th of each year, beginning March 15, 2007, a report reasonably
satisfactory to the Purchaser regarding its assessment of compliance with
Servicing Criteria as required by Rules 13a-18 and 15d-18 of the Securities
Exchange Act and Item 1122 of Regulation AB, which as of the date hereof
require a report by an authorized officer of the Servicer that contains the
following:
(a) A
statement by such officer of its responsibility of assessing the Servicing
Criteria applicable to the Servicer;
(b) A
statement by such officer that it used the Servicing Criteria to assess
compliance with the Servicing Criteria applicable to the Servicer;
(c) A
statement by such officer of the Servicer’s compliance with the applicable
Servicing Criteria as of the immediately preceding December 31 and for the
period covered by the preceding calendar year and disclosure of any instance
of
noncompliance with respect thereto;
(d) A
statement that a registered public accounting firm has issued an attestation
report on the Servicer’s compliance with the applicable Servicing Criteria as of
the immediately preceding December 31, and for the period covered by the
preceding calendar year; and
(e) A
statement as to which of the Servicing Criteria, if any, are not applicable
to
the Servicer (which statement shall be based on the activities it performs
with
respect to asset backed securities transactions taken as a whole involving
the
Servicer that are backed by the same asset type as the Mortgage
Loans).
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Subsection
11.26 Subservicing. The
Servicer shall not hire or otherwise utilize a subservicer hereunder without
the
prior written consent of the Purchaser and its designee. Any such
subservicer must agree in writing to comply with Subsections 11.19,
11.20 and 11.25 and this Subsection 11.26 and to
provide such information relating to such subservicer as the Purchaser or its
designee may request from time to time in order to permit the Purchaser or
its
designee to comply with Regulation AB in connection with any Securitization
Transfer.
SECTION 12. Default.
Subsection
12.01 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 one (1) Business Day after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Purchaser;
(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
sixty (60) days (or, in the case of (i) the annual statement of
compliance required under Subsection 11.19, (ii) the annual
independent public accountants’ servicing report or attestation required under
Subsection 11.20, (iii) the annual assessment of servicing
compliance required under Subsection 11.25, or (iv) the
certification required under Section 14 in the form of
Exhibit 8, five (5) 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; or
(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;
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
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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 13.03. Upon written request from the
Purchaser, the Servicer shall, in accordance with Subsection 11.22
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
12.02 Waiver of
Defaults. The
Purchaser may waive any default by the Servicer in the performance of its
obligations hereunder and its consequences. Upon any waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereto except to the extent expressly
so
waived.
SECTION 13. Termination
Subsection
13.01 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 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 or (c) by mutual consent
of the Servicer and the Purchaser in writing. 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
13.02 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, without cause,
upon payment to the Servicer of a termination fee equal to one and one half
percent (1.5%) of the aggregate
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outstanding
principal balance of the Mortgage Loans as of the date of such
termination. The termination fee provided for in this
Subsection 13.02 shall be paid by the Purchaser on the applicable
Transfer Date.
Subsection
13.03 Successors to the
Servicer. Prior
to the termination of the Servicer’s responsibilities and duties under this
Agreement pursuant to Subsections 17, 12, 13.01 or
13.02, 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 13.03 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.
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
Sections 17, 12, 13.01 or 13.02 shall not
affect any claims that the Purchaser may have against the Servicer arising
prior
to any such termination or resignation.
Upon
a
successor’s acceptance of appointment as such, the Servicer shall notify by mail
the Purchaser of such appointment.
SECTION 14. Cooperation
of
Seller with a Reconstitution. The
Seller and the Purchaser agree that with respect to some or all of the Mortgage
Loans, after the related Closing Date, on one or more dates (each, a
“Reconstitution Date”) at the Purchaser’s sole option, the Purchaser may
effect a sale (each, a “Reconstitution”) of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) FNMA
under its Cash Purchase Program or MBS Program (Special Servicing Option) (each,
a “FNMA Transfer”); or
(ii) FHLMC
(the “FHLMC Transfer”); or
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(iii) one
or more third party purchasers in one or more Whole Loan Transfers;
or
(iv) one
or more trusts or other entities to be formed as part of one or more
Securitization Transfers;
provided,
however, that the Purchaser shall provide notice to the Seller of each such
Reconstitution no later than ten (10) calendar days prior to the related
Reconstitution Date and the Purchaser shall not enter into more than five (5)
Reconstitutions of the Mortgage Loans in a Mortgage Loan Package.
The
Seller agrees to execute in connection with any Agency Transfer, any and all
reasonably acceptable pool purchase contracts, and/or agreements among the
Purchaser, the Seller, FNMA or FHLMC (as the case may be) and any servicer
in
connection with a Whole Loan Transfer, a seller’s warranties and servicing
agreement or a participation and servicing agreement in form and substance
reasonably acceptable to the parties, and in connection with a Securitization
Transfer, a pooling and servicing agreement in form and substance reasonably
acceptable to the parties or an Assignment and Recognition Agreement
substantially in the form attached hereto as Exhibit 14
(collectively, the agreements referred to herein are designated, the
“Reconstitution Agreements”), together with an opinion of counsel with
respect to such Reconstitution Agreements.
With
respect to each Whole Loan Transfer and each Securitization Transfer entered
into by the Purchaser, the Seller agrees (1) to cooperate fully with the
Purchaser and any prospective purchaser with respect to all reasonable requests
and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; (3) to restate the
representations and warranties set forth in this Agreement as of the settlement
or closing date in connection with such Reconstitution or make the
representations and warranties set forth in the related selling/servicing guide
of the servicer or issuer, as the case may be, or such representations or
warranties reasonably acceptable to the Seller as may be required by any rating
agency or prospective purchaser of the related securities or such Mortgage
Loans, in connection with such Reconstitution; (4) to deliver to Purchaser
and any prospective purchaser within five (5) days after request by
Purchaser or prospective purchaser, information, in form and substance
satisfactory to Purchaser and such prospective purchaser, with respect to each
originator of the Mortgage Loans (x) reasonably requested by the Purchaser
or (y) required by Item 1110 of Regulation AB under the Securities Act
and the Securities Exchange Act, as such regulation is amended from time to
time
(the “Regulation AB”), which as of the date hereof requires the
following information: (a) the originator’s form of
organization; and (b) a description of the originator’s origination program
and how long the originator has been engaged in originating residential mortgage
loans, which description must include a discussion of the originator’s
experience in originating mortgage loans of the same type as the Mortgage Loans
and information regarding the size and composition of the originator’s
origination portfolio as well as information that may be material, in the good
faith judgment of the Purchaser, to an analysis of the performance of the
Mortgage Loans, such as the originators’ credit granting or underwriting
criteria for mortgage loans of the same type as the Mortgage Loans; and
(5) to deliver to the Purchaser and any prospective purchaser within three
(3) Business Days after request by Purchaser, static pool information set
forth in Item 1105(a) of Regulation AB (“Static
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Pool
Information”) with respect to those mortgage loans that were originated by
the originator of the Mortgage Loans and which are of the same type as the
Mortgage Loans, which as of the date hereof requires Static Pool Information
regarding delinquencies, cumulative losses and prepayments by vintage
origination year or prior securitized pools, as applicable. A vintage
origination year represents mortgage loans originated during the same
year. Such Static Pool Information shall be for the prior
five years or for so long as the originator has been originating (in the
case of data by vintage origination year) or securitizing (in the case of data
by prior securitized pools) such mortgage loans, if originating for less than
five years. The Static Pool Information for each vintage
origination year or prior securitized pools, as applicable, shall be presented
in monthly increments over the life of the mortgage loans included in the
vintage origination year or prior securitized pool. The Seller shall
provide to such servicer or issuer, as the case may be, and any other
participants or purchasers in such Reconstitution: (i) any and
all information and appropriate verification of information which may be
reasonably available to the Seller or its affiliates, whether through letters
of
its auditors and counsel or otherwise, as the Purchaser or any such other
participant shall request; (ii) such additional representations,
warranties, covenants, opinions of counsel, letters from auditors, and
certificates of public officials or officers of the Seller or the Servicer
as
are reasonably believed necessary by the Purchaser or any such other participant
(including, without limitation, such revisions to this Agreement relating to
the
servicing of REO Property and the provision of remittance reports as the
Purchaser may reasonably believe to be necessary to enable such servicer to
fulfill its master servicing obligations) and (iii) to execute, deliver and
satisfy all conditions set forth in any indemnity agreement required by the
Purchaser or any such participant, including, without limitation, an
Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit 7. Moreover, the Seller agrees to
cooperate with all reasonable requests made by the Purchaser to effect such
Reconstitution Agreements. The Seller shall indemnify the Purchaser,
each Affiliate of the Purchaser participating in the Reconstitution, each Person
who controls the Purchaser or such Affiliate and each underwriter and initial
purchaser participating in the Reconstitution, and their respective present
and
former directors, officers, employees and agents, and hold each of them harmless
from and against any losses, damages, penalties, fines, forfeitures, legal
fees
and expenses and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any information
provided by or on behalf of the Seller regarding the Seller or the Servicer,
the
Seller’s or other originator’s Static Pool Information, the Seller’s or the
Servicer’s servicing practices or the performance of the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous
sentence, “Purchaser” shall mean the Person then acting as the Purchaser
under this Agreement and any and all Persons who previously were
“Purchasers” under this Agreement.
With
respect to any Mortgage Loans sold in a Securitization Transfer in which the
Servicer is the servicer, the Servicer agrees that on or before March 15th
of each year beginning March 15, 2006, the Servicer shall deliver to the
depositor, the master servicer (if any) and the trustee for the securitization
trust in the Securitization Transfer, and their officers, directors and
affiliates, a certification in the form 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. The
Servicer shall indemnify and hold harmless the depositor, the master servicer
(if any) and the trustee, and their respective officers, directors and
Affiliates, from and against any losses, damages, penalties,
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fines,
forfeitures, legal fees and expenses and related costs, judgments and other
costs and expenses arising out of or based upon any breach of the Servicer’s
obligations under this paragraph or any material misstatement or omission,
negligence, bad faith or willful misconduct of the Servicer in connection
therewith. If the indemnification provided for in the preceding
sentence is unavailable or insufficient to hold harmless any indemnified party,
then the Servicer agrees that it shall contribute to the amount paid or payable
by such indemnified party as a result of the losses, claims, damages or
liabilities of such indemnified party in such proportion as is appropriate
to
reflect the relative fault of such indemnified party, on the one hand, and
the
Servicer, on the other, in connection with a breach of the Servicer’s
obligations under this paragraph or any material misstatement or omission,
negligence, bad faith or willful misconduct of the Servicer in connection
therewith.
In
connection with any Securitization Transfer, the Servicer shall, if requested
by
the Purchaser or its designee, deliver to the Purchaser or its designee within
five (5) Business Days after such request information, in form and
substance satisfactory to the Purchaser or such designee, with respect to such
Servicer information reasonably requested by the Purchaser or its designee
and
the information set forth under Items 1108(b) and 1108(c) of Regulation AB
(collectively, the “Servicer Information”), which as of the date hereof
includes:
(a) a
description of 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 this Agreement
and any Reconstitution Agreements; material information regarding the size,
composition and growth of the Servicer’s portfolio of mortgage loans of the type
similar to the Mortgage Loans and information on factors related to the Servicer
that may be material, in the good faith judgment of the Purchaser, to any
analysis of the servicing of the Mortgage Loans or the related asset backed
securities, as applicable (including, without limitation, whether any prior
securitizations of mortgage loans of the type similar to the Mortgage Loans
involving the Servicer have defaulted or experienced an early amortization
or
other performance triggering event because of servicing, the extent of
outsourcing the Servicer utilizes or if there has been previous disclosure
of
noncompliance with Servicing Criteria with respect to other securitizations
involving the Servicer);
(c) a
description of any material changes to the Servicer’s policies or procedures in
the servicing function it will perform in under this Agreement and any
Reconstitution Agreements for mortgage loans of the type similar to the Mortgage
Loans during the past three years;
(d) information
regarding the Servicer’s financial condition to the extent that there is a risk
that the effect on one or more aspects of servicing resulting from such
financial condition could have an impact on the performance of the pool of
Mortgage Loans or performance of the securities issued in the Securitization
Transfer, or on servicing of mortgage loans of the same asset type as the
Mortgage Loans;
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(e) statistical
information regarding advances made by the Servicer on the Mortgage Loans and
the Servicer’s overall servicing portfolio for the past
three years;
(f) the
Servicer’s process for handling delinquencies, losses, bankruptcies and
recoveries, such as through liquidation of REO Properties, sale of the Mortgage
Loans or workouts; and
(g) the
Servicer’s processes and procedures designed to address any special or unique
factors involved in servicing loans of the same type as the Mortgage
Loans.
All
Mortgage Loans not sold or transferred pursuant to a Reconstitution shall remain
subject to this Agreement and shall continue to be serviced in accordance with
the terms of this Agreement, and with respect thereto this Agreement shall
remain in full force and effect.
SECTION 15. Notice
of
Servicing Transfer. Seller
and Purchaser shall each comply with, and Seller shall assist Purchaser in
complying with, the notice requirements for the transfer of servicing rights
as
set forth in RESPA and Regulation X. The Seller shall mail, or cause
to be mailed, to the Mortgagor of each Mortgage Loan a letter advising the
Mortgagor of the transfer of the servicing of the related Mortgage Loan to
a
successor servicer in accordance with the Xxxxxxxx Xxxxxxxx National Affordable
Housing Act of 1990, as amended; provided, however, the content and format
of
the letter shall have the prior approval of the Purchaser and the successor
servicer. The Seller shall provide, or cause to be provided to the
Purchaser and the successor servicer copies of all such notices no later than
the related Transfer Date.
SECTION 16. The
Seller.
Subsection
16.01 Indemnification;
Third-Party Claims.
The
Servicer agrees to indemnify and hold the Purchaser and any Successor Servicer
and their respective present and former directors, officers, employees and
agents harmless from any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses (including, without limitation, any legal
fees and expenses, judgments or expenses relating to such liability, claim,
loss
or damage) and related costs, judgments, and any other costs, fees and expenses
that such parties may sustain in any way related to the Servicer’s
failure:
(a) to
observe and perform any or all of Servicer’s duties, obligations, covenants,
agreements, warranties or representations contained in this Agreement or in
the
related Purchase Price and Terms Letter Agreement; or
(b) to
comply with all applicable requirements contained in this Agreement or the
related Purchase Price and Terms Letter Agreement with respect to the servicing
of the Mortgage Loan and the transfer of Servicing Rights.
The
Servicer immediately shall notify the Purchaser if a claim is made by a third
party with respect to this Agreement.
For
purposes of this Section, “Purchaser” shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
“Purchasers”
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under
this Agreement and “Successor Servicer” shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were “Successor Servicers” pursuant to this Agreement.
If
any
action is commenced for which indemnification may be available under this
Subsection 16.01 of which an indemnified party has notice, promptly
after receipt by such indemnified party under this Subsection 16.01
of notice of the commencement of such action, such indemnified party will,
if a
claim in respect thereof is to be made against the indemnifying party under
this
Subsection 16.01, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
will
not relieve the indemnifying party from any liability which it may have to
any
indemnified party under this Subsection 16.01, except to the extent
that it has been prejudiced in any material respect, or from any liability
which
it may have, otherwise than under this
Subsection 16.01. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to
the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in
any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there
may
be legal defenses available to it or them and/or other indemnified parties
which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of
its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party for expenses incurred by the indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with one local counsel, if
applicable)), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized in writing the employment of
counsel for the indemnified party at the expense of the indemnifying party;
and
except that, if clause (i) or (iii) is applicable, such liability
shall be only in respect of the counsel referred to in such
clause (i) or (iii).
Notwithstanding
anything to the contrary contained herein, in no event shall a termination
of
this Agreement or the Servicer hereunder terminate any indemnification
obligations of the Servicer under this Agreement, which obligations shall
survive any such termination.
Subsection
16.02 Merger or
Consolidation of the Seller. The
Seller shall keep in full force and effect its existence, rights and franchises
as a corporation under the laws of the state of its incorporation except as
permitted herein, and shall
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obtain
and preserve its qualification to do business as a foreign entity in each
jurisdiction in which such qualification is or shall be necessary to protect
the
validity and enforceability of this Agreement or any of the Mortgage Loans,
and
to enable the Seller to perform its duties under this Agreement; provided,
however, that the Seller shall not be required to indemnify the Purchaser for
any claims caused by, or arising from the negligence or willful misconduct
of
the Purchaser.
Subsection
16.03 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 Accepted Servicing Practices 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 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 16.01, 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.
SECTION 17. Seller
and
Servicer Not to Resign. With
respect to the retention of the Seller to service the Mortgage Loans hereunder,
the Seller acknowledges that the Purchaser has acted in reliance upon the
Seller’s independent status, the adequacy of its servicing facilities, plan,
personnel, records and procedures, its integrity, reputation and financial
standing and the continuance thereof. Without in any way limiting the
generality of this Section, neither Seller nor Servicer shall assign this
Agreement or the servicing hereunder or delegate its rights or duties hereunder
or any portion thereof, or sell or otherwise dispose of all or substantially
all
of its property or assets, without the prior written approval of the Purchaser,
which consent shall be granted or withheld in the Purchaser’s sole discretion 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 13.03.
SECTION 18. Mandatory
Delivery. The
sale and delivery of each Mortgage Loan on or before the related Closing Date
of
the Mortgage Loans described on the related
-67-
Mortgage
Loan Schedule is mandatory from and after the date of the execution of the
related Purchase Price and Terms Agreement Letter, it
being specifically understood and agreed that each Mortgage Loan is unique
and
identifiable on the date hereof and that in the event of the Seller’s failure to
deliver each of the related Mortgage Loans or one of the Mortgage Loans
otherwise acceptable to the Purchaser on or before the related
Closing Date the seller will incur a pairoff fee as described in the Purchase
Price and Terms Letter Agreement. The Seller hereby grants to the
Purchaser a lien on and a continuing security interest in each Mortgage Loan
and
each document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligations under the related Purchase Price
and Terms Letter Agreement, and the Seller agrees that it shall hold such
Mortgage Loans in custody for the Purchaser subject to the Purchaser’s
(a) right to reject any Mortgage Loan (or Qualified Substitute Mortgage
Loan) under the terms of this Agreement and to require another Mortgage Loan
(or
Qualified Substitute Mortgage Loan) to be substituted therefor, and
(b) obligation to pay the Purchase Price for the Mortgage
Loans. All rights and remedies of the Purchaser under this Agreement
are distinct from, and cumulative with, any other rights or remedies under
this
Agreement or afforded by law or equity and all such rights and remedies may
be
exercised concurrently, independently or successively.
SECTION 19. Notices
. All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address as follows:
(i)
if to the Seller:
HSBC
Mortgage Corporation (USA)
0000
Xxxxxx Xxx
Xxxxx,
XX
00000
Attn:
Xxxxxxx Xxxxx
(ii)
if to the Purchaser:
Xxxxxx
Xxxxxxx Mortgage Capital Inc.
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention: Xxxxx
Xxxxxxxxxx - Whole Loan Operations Manager
Fax: 000-000-0000
Email:
xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
-68-
with
copies to:
Xxxx
Xxxxxxxx
Xxxxxx
Xxxxxxx – Servicing Oversight
0000
X-Xxx Xxx
Xxxxx
000
Xxxx
Xxxxx, Xxxxxxx 00000
Fax:
000-000-0000
Email:
xxxx.xxxxxxxx@xxxxxxxxxxxxx.xxx
Xxxxx
Xxxxxx
Xxxxxx
Xxxxxxx - RFPG
0000
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax:
000-000-0000
Email:
xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
or
such
other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be
deemed to have been received on the date delivered to or received at the
premises of the addressee (as evidenced, in the case of registered or certified
mail, by the date noted on the return receipt).
SECTION 20. Severability
Clause. Any
part, provision, representation or warranty of this Agreement 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 21. Counterparts. This
Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.
SECTION 22. Governing
Law. The
Agreement shall be construed in accordance with the laws of the State of New
York without regard to any conflicts of law provisions and the obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with the laws of the State of New York, except to the extent preempted by
Federal law.
-69-
SECTION 23. 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
Loan
Files to determine the characteristics of the Mortgage Loans which shall affect
the Federal income tax consequences of owning the Mortgage Loans and the Seller
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review. In the event, for any reason, any transaction
contemplated herein is construed by any court or regulatory authority as a
borrowing rather than as a sale, the Seller and the Purchaser intend that the
Purchaser or its assignee, as the case may be, shall have a perfected first
priority security interest in the Mortgage Loans which may be held by MERS
as
the nominee for the Purchaser, and the proceeds of any and all of the foregoing
(collectively, the “Collateral”), free and clear of adverse
claims. In such case, the Seller shall be deemed to have hereby
granted to the Purchaser or its assignee, as the case may be, a first priority
security interest in and lien upon the Collateral, free and clear of adverse
claims. In such event, the related Purchase
Price and Terms Agreement Letter and this Agreement shall
constitute a security agreement.
SECTION 24. Successors
and Assigns. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective successors and assigns of the Seller
and the Purchaser. Following the Transfer Date,
the Purchaser may assign this Agreement to any Person to whom any
Mortgage Loan is transferred whether pursuant to a sale or financing and to
any
Person to whom the servicing or master servicing of any Mortgage Loan is sold
or
transferred provided, however, that such Person will not be deemed to be the
“Purchaser” hereunder unless such transferee shall agree in writing to be
bound by the terms of this Agreement; an original counterpart of the document
evidencing such agreement shall have been executed by Purchaser and the
transferee and delivered to Seller. Upon any such assignment, the
Person to whom such assignment is made shall succeed to all rights and
obligations of the Purchaser under this Agreement to the extent of the related
Mortgage Loan or Mortgage Loans and this Agreement, to the extent of the related
Mortgage Loan or Loans, shall be deemed to be a separate and distinct Agreement
between the Seller and such Purchaser, and a separate and distinct Agreement
between the Seller and each other Purchaser to the extent of the other related
Mortgage Loan or Loans. In the event that this Agreement is assigned
to any Person to whom the servicing or master servicing of any Mortgage Loan
is
sold or transferred, the rights and benefits under this agreement which inure
to
the Purchaser shall inure to the benefit of both the Person to whom such
Mortgage Loan is transferred and the Person to whom the servicing or master
servicing of the Mortgage Loan has been transferred; provided that, the right
to
require a Mortgage Loan to be repurchased by the Seller pursuant
to Subsection 7.03 or 7.04 shall be retained
solely by the Purchaser. This Agreement shall not be assigned,
pledged or hypothecated by the Seller to a third party without the consent
of
the Purchaser, which consent shall not be unreasonably withheld.
SECTION 25. Waivers. No
term or provision of this Agreement may be waived or modified unless such waiver
or modification is in writing and signed by the party against whom such waiver
or modification is sought to be enforced.
-70-
SECTION 26. Exhibits. The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
SECTION 27. Nonsolicitation. From
and after the related Closing Date, the Seller agrees that it shall not take
any
action or permit or cause any action to be taken by any of its agents or by
any
independent contractors on the Seller’s behalf, and shall not assist any of its
affiliates (for the purposes of this Section 27, “assist” includes
providing names or contact information of Mortgagors of the Mortgage Loans)
to
personally, by telephone or mail (via electronic means or otherwise), 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.
Promotions
undertaken by the Seller or by 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 27.
SECTION 28. General
Interpretive Principles. For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(i)
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;
(ii) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(iii) 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;
(iv) 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;
(v)
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
(vi) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
SECTION 29. Reproduction
of
Documents. This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications which may hereafter be executed,
(b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the
original itself in any judicial or administrative proceeding, whether or not
the
-71-
original
is in existence and whether or not such reproduction was made by a party in
the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION 30. Further
Agreements. The
Seller and the Purchaser each agree to execute and deliver to the other such
reasonable and appropriate additional documents, instruments or agreements
as
may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 31. Waiver
of
Trial by Jury. THE
SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 32. Jurisdiction;
Consent to Service of Process. EACH
OF THE PURCHASER AND THE SELLER IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS
OF
THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSE OF ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT; (II) WAIVES,
TO
THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM IN
ANY
ACTION OR PROCEEDING IN ANY SUCH COURT; (III) AGREES THAT A FINAL JUDGMENT
IN
ANY ACTION OR PROCEEDING IN ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW; AND (IV) CONSENTS TO SERVICE OF PROCESS UPON IT BY
MAILING A COPY THEREOF BY CERTIFIED MAIL ADDRESSED TO IT AS PROVIDED FOR NOTICES
HEREUNDER.
SECTION 33. Privacy. Seller
and Purchaser shall maintain policies, procedures, .and safeguards designed
to
protect the security and confidentiality of any non-public personal information
relating to Mortgagors Seller and Purchaser agree to comply with the
provisions of the Xxxxx-Xxxxx-Xxxxxx Act of 1999, as the same may be amended
from time to time, and all implementing rules and regulations regarding consumer
financial privacy, to the extent applicable to each of their actions and
responsibilities hereunder.
SECTION 34. 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 35. 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
-72-
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.
Notwithstanding
any other express or implied agreement to the contrary, each of the Purchaser,
the Seller and the Servicer agree and acknowledge that each of them and each
of
their employees, representatives, and other agents may disclose to any and
all
persons, without limitation of any kind, the tax treatment and tax structure
of
the transaction and all materials of any kind (including opinions or other
tax
analyses) that are provided to any of them relating to such tax treatment and
tax structure, except to the extent that confidentiality is reasonably necessary
to comply with U.S. federal or state securities laws. For purposes of
this paragraph, the terms “tax treatment” and “tax structure” have the meanings
specified in Treasury Regulation section 1.6011-4(c).
-73-
IN
WITNESS WHEREOF, the Seller, the Purchaser and the Servicer have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
|
HSBCMortgageCorporation
(USA)
|
|||
|
|
By:
|
||
| Name | |||
| Title | |||
|
Xxxxxx
Xxxxxxx Mortgage Capital Inc .
|
|||
|
|
By:
|
||
| Name | |||
| Title | |||
EXHIBIT
1
FORM
OF
SELLER’S OFFICER’S CERTIFICATE
I,
________________________, hereby certify that I am the duly elected
______________ of , a corporation HSBC Mortgage Corporation (USA)
(the “Seller”), and further certify, on behalf of the Seller as
follows:
1. Attached
hereto as Attachment I are a true and correct copy of the Certificate of
Incorporation and by-laws of the Seller as are in full force and effect on
the
date hereof.
2. No
proceedings looking toward merger, liquidation, dissolution or bankruptcy of
the
Seller are pending or contemplated.
3. Each
person who, as an officer or attorney-in-fact of the Seller, signed (a) the
Mortgage Loan Sale and Servicing Agreement (the “Purchase Agreement”),
dated as of August 1, 2005 by and between the Seller and Xxxxxx Xxxxxxx Mortgage
Capital Inc. (“Purchaser”); (b) the Purchase Price and Terms
Letter Agreement, dated _______ __, 200_, between the Seller and the Purchaser
(the “Purchase Price and Terms Letter Agreement”); and (c) any other
document delivered prior hereto or on the date hereof in connection with the
sale of the Mortgage Loans in accordance with the Purchase Agreement and the
Purchase Price and Terms Agreement Letter was, at the
respective times of such signing and delivery, and is as of the date hereof,
duly elected or appointed, qualified and acting as such officer or
attorney-in-fact, and the signatures of such persons appearing on such documents
are their genuine signatures.
4. Attached
hereto as Attachment II is a true and correct copy of the resolutions duly
adopted by the board of directors of the Seller on ____________, 200_ (the
“Resolutions”) with respect to the authorization and approval of the sale
of the Mortgage Loans; said Resolutions have not been amended, modified,
annulled or revoked and are in full force and effect on the date
hereof.
5. Attached
hereto as Attachment III is a Certificate of Good Standing of the Seller dated
____________, 200_. No event has occurred since ____________, 200_
which has affected the good standing of the Seller under the laws of the State
of ___________.
6. [Reserved]
7. All
of the representations and warranties of the Seller contained in Subsections
7.01 and 7.02 of the Purchase Agreement were true and correct in all Material
respects as of the date of the Purchase Agreement and are true and correct
in
all Material respects as of the date hereof.
8. The
Seller has performed all of its duties and has satisfied all the Material
conditions on its part to be performed or satisfied prior to the related Closing
Date pursuant to the Purchase Agreement.
EXH.
1-1
All
capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Purchase Agreement.
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Seller.
|
Dated:
|
___________________________
|
|
|
[Seal]
|
|
HSBCMortgageCorporation
(USA) (Seller)
|
|||
|
|
By:
|
||
| Name: | |||
| Title: Vice President | |||
I,
_______________________, Secretary of the Seller, hereby certify that
_________________________ is the duly elected, qualified and acting Vice
President of the Seller and that the signature appearing above is
genuine.
IN
WITNESS WHEREOF, I have hereunto signed my name.
|
Dated:
|
___________________________
|
|
|
[Seal]
|
|
HSBCMortgageCorporation
(USA) (Seller)
|
|||
|
|
By:
|
||
| Name | |||
| Title Vice President | |||
EXH.
1-2
EXHIBIT
2
FORM
OF
SECURITY RELEASE CERTIFICATION
I. Release
of Security Interest
___________________________,
hereby relinquishes any and all right, title and interest it may have in and
to
the Mortgage Loans described in Exhibit A attached hereto upon purchase
thereof by Xxxxxx Xxxxxxx Mortgage Capital Inc. (Purchaser) from the Seller
named below pursuant to that certain Mortgage Loan Sale and Servicing Agreement,
dated as of August 1, 2005, as of the date and time of receipt by
______________________________ of $__________ for such Mortgage Loans (the
“Date and Time of Sale”), and certifies that all notes, mortgages,
assignments and other documents in its possession relating to such Mortgage
Loans have been delivered and released to the Seller named below or its
designees as of the Date and Time of Sale.
|
|
Name
and Address of Financial
Institution
|
|
(Name)
|
||
|
|
||
|
(Address)
|
||
| By: | ||
EXH.
2-1
II. Certification
of Release
The
Seller named below hereby certifies to Xxxxxx Xxxxxxx Mortgage Capital Inc.
that, as of the Date and Time of Sale of the above mentioned Mortgage Loans
to
Xxxxxx Xxxxxxx Mortgage Capital Inc., the security interests in the Mortgage
Loans released by the above named corporation comprise all security interests
relating to or affecting any and all such Mortgage Loans. The Seller
warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
|
HSBCMortgageCorporation
(USA)
(Seller)
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
EXH.
2-2
EXHIBIT
3
ASSIGNMENT
AND CONVEYANCE
On
this
_______ day of ________, 200_, HSBC Mortgage Corporation (USA) (the
“Seller” and the “Servicer”), as Seller and Servicer under that
certain Mortgage Loan Sale and Servicing Agreement, dated as of August 1, 2005
(the “Agreement”), does hereby sell, transfer, assign, set over and
convey to as Purchaser under the Agreement, without recourse, but subject to
the
terms of the Agreement, all rights, title and interest of the Seller in and
to
the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as
Schedule I, together with the related Mortgage Files and all rights and
obligations arising under the documents contained therein. Pursuant
to the Agreement, the Seller has delivered or shall deliver to the Purchaser
the
Mortgage Loan Documents for each Mortgage Loan to be purchased and such other
documents as set forth in this Agreement. The contents of each
related Servicing File required to be retained by the Seller to service the
Mortgage Loans pursuant to the Agreement and thus not delivered to the Purchaser
are and shall be held by the Seller for the benefit of the Purchaser as the
owner thereof. The Seller’s possession of any portion of each such
Servicing File is at the will of the Purchaser for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to the Agreement,
and such retention and possession by the Seller shall be in a custodial capacity
only. The ownership of each Mortgage Note, Mortgage, and the contents
of the Mortgage File and Servicing File is vested in the Purchaser and the
ownership of all records and documents with respect to the related Mortgage
Loan
prepared by or which come into the possession of the Seller shall immediately
vest in the Purchaser and shall be retained and maintained by the Seller at
the
will of the Purchaser in such custodial capacity only.
The
Seller confirms to the Purchaser that the representations and warranties set
forth in Subsections 7.01 and 7.02 of the Agreement are true
and correct in all Material respects as of the date hereof, and that all
statements made in the Seller’s Officer’s Certificate and all attachments
thereto remain complete, true and correct in all Material respects as of the
date hereof, and that the Mortgage Loan information set forth on Schedule I
attached hereto is true and correct in all Material respects as of the date
hereof.
A
copy of
the Underwriting Guidelines applicable to the Mortgage Loans is attached as
Schedule II hereto.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreement.
|
HSBCMortgageCorporation
(USA)
(Seller and Servicer)
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
EXH.
3-1
EXHIBIT
4
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include copies (or with
respect to items 1 and 2 below, originals) of each of the following items,
which
shall be delivered to the Purchaser in accordance with Section 7.03 by
the Seller:
Legal
Documents
|
1.
|
Mortgage
Note and applicable Riders and
Addendums.
|
|
2.
|
Allonge/Endorsement.
|
|
3.
|
Security
Instrument—Mortgage/Deed of Trust—and applicable Riders and
Addendums.
|
|
4.
|
Power
of Attorney (if applicable).
|
|
5.
|
A
copy of the Note Prior to endorsement to
MERS.
|
|
6.
|
MERS.
|
|
7.
|
Assignment(s)
if not affiliated with MERS.
|
|
8.
|
Intervening
Assignments.
|
|
9.
|
Modification
and Buydown Agreement (if applicable) A copy of the Note prior to
endorsement to Purchaser.
|
|
10.
|
Assumption
documents and history.
|
|
11.
|
Truth
in Lending RESPA disclosures, including applicable agency (OTS, OCC,
etc.)
.
|
|
12.
|
Escrow
assignments/Escrow Waver (if
applicable).
|
|
13.
|
Initial
Escrow Form.
|
|
14.
|
W-9’s
.
|
|
15.
|
[Reserved].
|
|
16.
|
Mortgage
Loan closing statement (HUD-1) (including
Addendum).
|
|
17.
|
Name
Affidavit ( if applicable).
|
|
18.
|
Right
of Rescission/ Notice of Right to
Cancel.
|
|
19.
|
Complete
Residential Loan Application.
|
EXH.
4-1
|
20.
|
Residential
Appraisal Report.
|
|
21.
|
Title Commitment.
|
|
22.
|
Hazard
Policy.
|
|
23.
|
Mortgage
Insurance Certificate.
|
|
24.
|
Flood
Certification.
|
|
25.
|
Monthly
Payment.
|
|
26.
|
Tax
Serv Authority Form (NY/NJ).
|
|
27.
|
Subordination
Agreement.
|
|
28.
|
2nd
Lien Note/Mortgage.
|
|
29.
|
ID
Verification.
|
|
30.
|
Any
other Legal documents used in the origination of the
loan.
|
Credit
Documents (placed on the right side of the Mortgage
file)
|
31.
|
Original
or copy handwritten application with original
signatures.
|
|
32.
|
Approval
Notice/Commitment letter.
|
|
33.
|
Verification
of Employment.
|
|
34.
|
Verification
of Deposit.
|
|
35.
|
Verification
of Credit.
|
|
36.
|
Verification
of acceptable evidence of source and amount of down payment, if required
pursuant to the related Mortgage Loan’s origination
program.
|
|
37.
|
Credit
Report on Mortgagor.
|
|
38.
|
Transmittal
Summary.
|
|
39.
|
{Reserved}
|
|
40.
|
Copy
of each instrument necessary to complete identification of any exception
set forth in the exception Schedule in the title policy, i.e., map or
plat, restrictions, easements, sewer agreements, home association
declarations, etc.
|
|
41.
|
All
required disclosure statements and statement of Mortgagor confirming
receipt thereof.
|
EXH.
4-2
|
42.
|
If
available, termite report, structural engineer’s report, water portability
and septic certification.
|
|
43.
|
Sales
Contract, if applicable.
|
|
44.
|
PMI
Certificate.
|
|
45.
|
{RESERVED}
|
|
46.
|
.{RESERVED}
|
|
47.
|
Any
other documents used in making the final credit
decision.
|
Note: Label
the top
outer cover of the file folder with Borrower’s Last Name, and
Loan #.
EXH.
4-3
EXHIBIT
5
MORTGAGE
LOAN DOCUMENTS
With
respect to each Mortgage Loan set forth on a related Mortgage Loan Schedule,
the
Seller shall deliver and release to the Purchaser the following
documents:
1. the
original Mortgage Note bearing all intervening endorsements necessary to show
a
complete chain of endorsements from the original payee to the Seller, endorsed
,
as follows, “Pay to the order of Xxxxxx Xxxxxxx Mortgage Capital Inc.,
without recourse”, and, if previously endorsed, signed in the name of the last
endorsee by a duly qualified officer of the last endorsee. If the
Mortgage Loan was acquired by the last endorsee in a merger, the endorsement
must be by “[name of last endorsee], successor by merger to [name of
predecessor]”. If the Mortgage Loan was acquired or originated by the
last endorsee while doing business under another name, the endorsement must
be
by “[name of last endorsee], formerly known as [previous name]”;
If
the
Seller uses facsimile signatures to endorse Mortgage Notes, the Seller must
provide in an Officer’s Certificate that the endorsement is valid and
enforceable in the jurisdiction(s) in which the Mortgaged Properties are located
and must retain in its corporate records the following specific documentation
authorizing the use of facsimile signatures: (i) a resolution from its
board of directors authorizing specific officers to use facsimile signatures;
stating that facsimile signatures will be a valid and binding act on the
Seller’s part; and authorizing the Seller’s corporate secretary to certify the
validity of the resolution, the names of the officers authorized to execute
documents by using facsimile signatures, and the authenticity of specimen forms
of facsimile signatures; (ii) the corporate secretary’s certification of
the authenticity and validity of the board of directors’ resolution; and
(iii) a notarized “certification of facsimile signature,” which includes
both the facsimile and the original signatures of the signing officer(s) and
each officer’s certification that the facsimile is a true and correct copy of
his or her original signature.
2. With
respect to Mortgage Loans that are not Co-op Loans, the original or
a certified true copy of the Assignment of Mortgage for each Mortgage
Loan, in form and substance acceptable for recording unless the Mortgage Loan
is
a MERS Designated Mortgage Loan or has been previously assigned to MERS. The
Mortgage shall be assigned, with assignee’s name to Xxxxxx Xxxxxxx Mortgage
Capital Inc. If the Mortgage Loan was acquired by the last assignee in a
merger, the Assignment of Mortgage must be made by “[name of last assignee],
successor by merger to [name of predecessor]”. If the Mortgage Loan
was acquired or originated by the last assignee while doing business under
another name, the Assignment of Mortgage must be by “[name of last assignee],
formerly known as [previous name]”;
3. the
original or a certified true copy of any guarantee executed in connection with
the Mortgage Note, if any;
EXH.
5-1
4. With
respect to Mortgage Loans that are not Co-op Loans the original or
a certified true copy of the Mortgage with evidence of recording
thereon With respect to any Co-op Loan, an original or a certified true copy
of
the Security Agreement. If in connection with any Mortgage Loan, the
Seller cannot deliver or cause to be delivered the original Mortgage or a
certified true copy of the Mortgage with evidence of recording thereon has
not
been returned by the public recording office where such Mortgage has been
delivered for recordation or such Mortgage has been lost or such public
recording office retains the original recorded Mortgage, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer’s Certificate of the Seller insuring the Mortgage
stating that such Mortgage has been delivered to the appropriate public
recording office for recordation and that the original recorded Mortgage or
a
copy of such Mortgage certified by such public recording office to be a true
and
complete copy of the original recorded Mortgage will be promptly
delivered to the Custodian upon receipt thereof by the party delivering the
Officer’s Certificate or by the Seller; or (ii) in the case of a Mortgage
where a public recording office retains the original recorded Mortgage or in
the
case where a Mortgage is lost after recordation in a public recording office,
a
copy of such Mortgage with the recording information thereon certified by such
public recording office to be a true and complete copy of the original recorded
Mortgage;
5. original
or a certified true copies of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if any;
6. With
respect to Mortgage Loans that are not Co-op Loans, the original or
a certified true copies of all intervening Assignments of Mortgage
with evidence of recording thereon evidencing a complete chain of ownership
from
the originator of the Mortgage Loan to the last assignee, or if any such
intervening Assignment of Mortgage has not been returned from the applicable
public recording office or has been lost or if such public recording office
retains the original recorded intervening Assignments of Mortgage, a photocopy
of such intervening Assignment of Mortgage, together with (i) in the case
of a delay caused by the public recording office, an Officer’s Certificate of
the Seller insuring the Mortgage stating that such intervening Assignment of
Mortgage has been delivered to the appropriate public recording office for
recordation and that such original recorded intervening Assignment of Mortgage
or a copy of such intervening Assignment of Mortgage certified by the
appropriate public recording office to be a true and complete copy of the
original recorded intervening Assignment of Mortgage will be promptly delivered
to the Custodian upon receipt thereof by the party delivering the Officer’s
Certificate or by the Seller; or (ii) in the case of an intervening
Assignment of Mortgage where a public recording office retains the original
recorded intervening Assignment of Mortgage or in the case where an intervening
Assignment of Mortgage is lost after recordation in a public recording office,
a
copy of such intervening Assignment of Mortgage with recording information
thereon certified by such public recording office to be a true and complete
copy
of the original recorded intervening Assignment of Mortgage;
7. if
the Mortgage Note, the Mortgage, any Assignment of Mortgage, or any other
related document has been signed by a Person on behalf of the Mortgagor, a
certified copy of the power of attorney or other instrument that authorized
and
empowered such Person to sign;
8. With
respect to Mortgage Loans that are not Co-op Loans, the original (which may
include a computer-generated signature) or a certified true copy of
the lender’s title
EXH.
5-2
insurance
policy in the form of an ALTA mortgage title insurance policy, containing each
of the endorsements required by FNMA and insuring the Purchaser and its
successors and assigns as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan or, if the original lender’s
title insurance policy has not been issued, the irrevocable commitment to issue
the same; the original or a certified true copy of any security agreement,
chattel mortgage or equivalent document executed in connection with the
Mortgage, if any. In addition, the Purchaser will accept a short-form
title insurance policy which, by nature of the conditions and stipulations
of
the title policy will include all FNMA and FHLMC requirements for endorsements;
and
9. with
respect to any Co-op Loan: (i) a copy of the Co-op Lease and the assignment
of such Co-op Lease, with all intervening assignments showing a complete chain
of title and an assignment thereof by Seller; (ii) the stock certificate
together with an undated stock power relating to such stock certificate executed
in blank; (iii) the recognition agreement of the interests of the mortgagee
with respect to the Co-op Loan by the residential cooperative housing
corporation, the stock of which was pledged by the related Mortgagor to the
originator of such Co-op Loan; and (iv) copies of the financial statement
filed by the originator as secured party and, if applicable, a filed UCC-3
assignment of the subject security interest showing a complete chain of title,
together with an executed UCC-3 assignment of such security interest by the
Seller in a form sufficient for filing.
EXH.
5-3
EXHIBIT
6
FORM
OF
MONTHLY REMITTANCE ADVICE FIELDS
Mortgage
Loan Number:
Previous
Stated Principal Balance:
Current
Stated Principal Balance:
Paid
To
Date:
Current
Mortgage Interest Rate:
Current
Monthly Payment:
Principal
Remitted:
Interest
Remitted:
Servicing
Fee:
FORM
OF
SERVICER REPORT
|
Field
Name
|
||
|
LOAN
NUMBER
|
||
|
INVESTOR
|
||
|
INV
LOAN
|
||
|
INT
RATE
|
||
|
YIELD
|
||
|
DUE
DATE
|
||
|
P-I
CON
|
||
|
BEGIN
P-BAL
|
||
|
END
P-BAL
|
||
|
PRN-COLL
|
||
|
INT-COLL
|
||
|
SER-FEE
COLL
|
||
|
BEGIN
SCHED P-BAL
|
||
|
END
SCHED P-BAL
|
||
|
SCH
PRN
|
||
|
SCH
NET-INT
|
||
|
BUYDOWN
|
||
|
REMITTANCE
AMOUNT
|
||
|
CURTAILMENT
AMOUNT
|
||
|
ADJUSTMENT
AMOUNT
|
||
|
PAYOFF
PRINCIPAL
|
||
|
PAYOFF
DATE
|
EXH.
6-1
EXHIBIT
7
FORM
OF
INDEMNIFICATION AND CONTRIBUTION AGREEMENT
This
INDEMNIFICATION AND CONTRIBUTION AGREEMENT (“Agreement”), dated as of
[_______], 200_, among [________________] (the “Depositor”), a
[______________] corporation (the “Depositor”), Xxxxxx Xxxxxxx Mortgage
Capital Inc., a New York corporation (“Xxxxxx”) and [_____________],
a [_______________] (the “Seller”).
W
I T N E
S S E T H:
WHEREAS,
the Depositor is acting as depositor and registrant with respect to the
Prospectus, dated [________________], and the Prospectus Supplement to the
Prospectus, [________________] (the “Prospectus Supplement”), relating to
[________________] Certificates (the “Certificates”) to be issued
pursuant to a Pooling and Servicing Agreement, dated as of [________________]
(the “P&S”), among the Depositor, as depositor, [________________],
as servicer (the “Servicer”), and [________________], as trustee (the
“Trustee”);
WHEREAS,
as an inducement to the Depositor to enter into the P&S, and
[____________________] (the “Underwriter[s]”) to enter into the
Underwriting Agreement, dated [____________________] (the “Underwriting
Agreement”), between the Depositor and the Underwriter[s], and
[_______________] (the “Initial Purchaser[s]”) to enter into the
Certificate Purchase Agreement, dated [____________] (the “Certificate
Purchase Agreement”), between the Depositor and the Initial Purchaser[s],
Seller has agreed to provide for indemnification and contribution on the terms
and conditions hereinafter set forth;
WHEREAS,
Xxxxxx purchased from Seller certain of the Mortgage Loans underlying the
Certificates (the “Mortgage Loans”) pursuant to a Mortgage Loan Sale and
Servicing Agreement, dated as of [DATE] (the “Sale and Servicing
Agreement”), by and between Xxxxxx and Seller; and
WHEREAS,
pursuant to Section 14 of the Sale and Servicing Agreement, the Seller has
agreed to indemnify the Depositor, Xxxxxx, the Underwriter[s], the Initial
Purchaser[s] and their respective affiliates, present and former directors,
officers, employees and agents.
NOW
THEREFORE, in consideration of the agreements contained herein, and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Depositor, Xxxxxx and the Seller agree as
follows:
1. Indemnification
and Contribution.
(e) The
Seller agrees to indemnify and hold harmless the Depositor, Xxxxxx, the
Underwriter[s], the Initial Purchaser[s] and their respective affiliates and
their respective present and former directors, officers, employees and agents
and each person, if any, who controls the Depositor, Xxxxxx, the Underwriter[s],
the Initial Purchaser[s] or such affiliate
EXH.
7-1
within
the meaning of either Section 15 of the Securities Act of 1933, as amended
(the “1933 Act”), or Section 20 of the Securities Exchange Act of
1934, as amended (the “1934 Act”), against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the 1933 Act, the 1934 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or
are based in whole or in part upon any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus Supplement, the
Offering Circular or in the Comp Materials or any omission or alleged omission
to state in the Prospectus Supplement, the Offering Circular or in the Comp
Materials a material fact required to be stated therein or necessary to make
the
statements therein, in light of the circumstances in which they were made,
not
misleading, or any such untrue statement or omission or alleged untrue statement
or alleged omission made in any amendment of or supplement to the Prospectus
Supplement, the Offering Circular or the Comp Materials and agrees to reimburse
the Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s] or such
affiliates and each such officer, director, employee, agent and controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by any of them in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that Seller shall be liable in any
such case only to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with the Seller Information. The foregoing indemnity
agreement is in addition to any liability which Seller may otherwise have to
the
Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s] their affiliates
or any such director, officer, employee, agent or controlling person of the
Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s] or their
respective affiliates; provided, however, that in the event of a conflict
between this Agreement (as executed by the parties) and Section 14 of the
Sale and Servicing Agreement, the provisions of this paragraph shall
control.
As
used
herein:
“Seller
Information” means any information relating to Seller, the Mortgage Loans
and/or the underwriting guidelines relating to the Mortgage Loans set forth
in
the Prospectus Supplement, the Offering Circular or the Comp Materials [and
static pool information regarding mortgage loans originated or acquired by
the
Seller and included in the Prospectus Supplement, the Offering Circular or
the
Comp Materials [incorporated by reference from the Seller’s website located at
______________].
The
terms
“Collateral Term Sheet” and “Structural Term Sheet” shall have the
respective meanings assigned to them in the February 13, 1995 letter (the
“PSA Letter”) of Cleary, Gottlieb, Xxxxx & Xxxxxxxx on behalf of
the Public Securities Association (which letter, and the SEC staff’s response
thereto, were publicly available February 17, 1995). The term
“Collateral Term Sheet” as used herein includes any subsequent Collateral
Term Sheet that reflects a substantive change in the information
presented. The term “Computational Materials” has the meaning
assigned to it in the May 17, 1994 letter (the “Xxxxxx letter” and,
together with the PSA Letter, the “No Action Letters”) of
Xxxxx & Xxxx on behalf of Xxxxxx, Peabody & Co., Inc. (which
letter, and the SEC staff’s response thereto, were publicly available
May 20, 1994). The term “Comp Materials” as used herein
means collectively Collateral Term Sheets,
XXX.
0-0
Xxxxxxxxxx
Xxxx Sheet and Computational Materials relating to the Certificates or the
transaction contemplated by the Prospectus Supplement.
“Offering
Circular” means the offering circular, dated [__________] relating to the
private offering of the [_______________] Certificates.
(f) Promptly
after receipt by any indemnified party under this Section 1 of
notice of any claim or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 1, notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify an indemnifying party shall not relieve it from any liability
which it may have under this Section 1 except to the extent it has
been materially prejudiced by such failure; and provided, further,
however, that the failure to notify any indemnifying party
shall not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 1.
If
any
such claim or action shall be brought against an indemnified party, and it
shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any
other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election
to
assume the defense of such claim or action, except as provided in the following
paragraph, the indemnifying party shall not be liable to the indemnified party
under this Section 1 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
Any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses
of
such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically
authorized by the indemnifying party in writing; (ii) such indemnified
party shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of such
counsel it is necessary or appropriate for such indemnified party to employ
separate counsel; or (iii) the indemnifying party has failed to assume the
defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at
the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations
or
circumstances, be liable for the reasonable fees and expenses of more than
one
separate firm of attorneys (in addition to local counsel) at any time for all
such indemnified parties.
Each
indemnified party, as a condition of the indemnity agreements contained in
this
Section 1, shall cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be
liable for any settlement of any such action effected
EXH.
7-3
without
its written consent (which consent shall not be unreasonably withheld), but
if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability
by
reason of such settlement or judgment.
Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for reasonable fees
and
expenses of counsel, the indemnifying party agrees that it shall be liable
for
any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement.
(g) If
the indemnification provided for in this Section 1 is unavailable to an
indemnified party, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities,
in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party, respectively, in connection with
the statements or omissions that result in such losses, claims, damages or
liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified party and
indemnifying party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such parties and their relative knowledge, access to information
and
opportunity to correct or prevent such statement or omission and any other
equitable considerations.
(h) The
indemnity and contribution agreements contained in this Section 1
and the representations and warranties set forth in Section 2 shall
remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the
Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s], their
respective affiliates, directors, officers, employees or agents or any person
controlling the Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s]
or any such affiliate, and (iii) acceptance of and payment for any of the
Offered Certificates or Private Certificates.
2. Representations
and Warranties. Seller represents and warrants that:
(i) Seller
is validly existing and in good standing under the laws of its jurisdiction
of
formation or incorporation, as applicable, and has full power and authority
to
own its assets and to transact the business in which it is currently
engaged. Seller is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the business transacted
by it or any properties owned or leased by it requires such qualification and
in
which the failure so to qualify would have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of
Seller;
(ii) Seller
is not required to obtain the consent of any other person or any consent,
license, approval or authorization from, or registration or declaration with,
any
EXH.
7-4
governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement;
(iii) the
execution, delivery and performance of this Agreement by Seller will not violate
any provision of any existing law or regulation or any order decree of any
court
applicable to Seller or any provision of the charter or bylaws of Seller, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which Seller is a party or by which it may be bound;
(iv) (a)
no proceeding of or before any court, tribunal or governmental body is currently
pending or, (b) to the knowledge of Seller, threatened against Seller or
any of its properties or with respect to this Agreement or the Offered
Certificates, in either case, which would have a material adverse effect on
the
business, properties, assets or condition (financial or otherwise) of
Seller;
(v) Seller
has full power and authority to make, execute, deliver and perform this
Agreement and all of the transactions contemplated hereunder, and has taken
all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of each of Seller enforceable
in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally, by the availability of
equitable remedies, and by limitations of public policy under applicable
securities law as to rights of indemnity and contribution thereunder;
and
(vi) this
Agreement has been duly executed and delivered by Seller.
3. Notices. All
communications hereunder will be in writing and effective only on receipt,
and,
if sent to Seller, will be mailed, delivered or faxed or emailed and
confirmed by mail [______________________]; if sent to Xxxxxx, xxxx be mailed,
delivered or faxed or emailed and confirmed by mail to Xxxxxx Xxxxxxx
Mortgage Capital Inc., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx Xxxxxxxxxx Whole Loans Operations Manager,
Fax: [_______], Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx, with copies to
(i) Xxxxxxxx Xxxxx, Xxxxxx Xxxxxxx – Legal Counsel, Securities, Xxxxxx
Xxxxxxx, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax [_____],
Email: xxxxxxxx.xxxxx@xxxxxxxxxxxxx.xxx, and (ii) Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxx – SPG Finance, Xxxxxx Xxxxxxx, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Fax [_____],Email: xxxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx; if to the
Depositor, will be mailed, delivered or telegraphed and confirmed to
[____________________]; or if to the Underwriter[s], will be mailed, delivered
or telegraphed and confirmed to [_____________________]; or if to the Initial
Purchaser[s], will be mailed, delivered or telegraphed and confirmed to
[_____________________].
4. Miscellaneous. This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York without giving effect to the conflict of laws provisions
thereof. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their successors and assigns and the controlling
persons referred to herein, and no
EXH.
7-5
otherperson
shall have any right or obligation hereunder. Neither this Agreement
nor any term hereof may be changed, waived, discharged or terminated orally,
but
only by an instrument in writing signed by the party against whom enforcement
of
the change, waiver, discharge or termination is sought. This
Agreement may be executed in counterparts, each of which when so executed and
delivered shall be considered an original, and all such counterparts shall
constitute one and the same instrument. Capitalized terms used but
not defined herein shall have the meanings provided in the P&S.
[SIGNATURE
PAGE FOLLOWS]
EXH.
7-6
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers hereunto duly authorized, this __th day
of
[_____________].
|
[DEPOSITOR]
|
|||
|
|
|||
|
|
By:
|
||
| Name: | |||
| Title : | |||
|
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
|
|||
|
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
|
[SELLER]
|
|||
|
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
EXH.
7-7
EXHIBIT
8
ANNUAL
CERTIFICATION
|
|
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, the Trustee
[and
the Master Servicer], and their officers, directors and affiliates, and with
the
knowledge and intent that they will rely upon this certification,
that:
1. Based
on my knowledge, the information in the Annual Statement of Compliance, the
Annual Independent Public Accountant’s Servicing Report, [the Assessment of
Servicing Compliance [commencing for certifications to be delivered in
March 2007 and thereafter]], and all servicing reports, officer’s
certificates and other information relating to the servicing of the Mortgage
Loans submitted to the [Master Servicer][Trustee] by the Servicer 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 light of the
circumstances under which such statements were made, not misleading as of the
date of this certification;
2. Based
on my knowledge, the servicing information required to be provided to the
[Master Servicer][_______] by the Servicer under [the Pooling and Servicing
Agreement][the Servicing Agreement] has been provided to the [Master
Servicer][________];
3. I
am responsible for reviewing the activities performed by the Servicer under
[the
Pooling and Servicing Agreement][the Servicing Agreement] and based upon my
knowledge and the review conducted in preparing the Annual Statement of
Compliance required under [the Pooling and Servicing Agreement][the Servicing
Agreement], and except as disclosed in the Annual Statement of Compliance,
the
Annual Independent Public Accountant’s Servicing Report and [the Assessment of
Servicing Compliance [commencing for certifications to be delivered in
March 2007 and thereafter]] required to be delivered to [the Trustee][the
Master Servicer] in accordance with the terms of the Pooling and Servicing
Agreement (which has been so delivered to [the Trustee][the Master Servicer]),
the Servicer has, as of the date of this certification, fulfilled its
obligations under [the Pooling and Servicing Agreement][the Servicing
Agreement]; and
4.
[If the Securitization Transfer occurs in 2005.] I have disclosed to
[the Master Servicer] all significant deficiencies relating to the Servicer’s
compliance with the minimum servicing standards in accordance with a review
conducted in compliance with
EXH.
8-1
the
Uniform Single Attestation Program for Mortgage Bankers or similar standard,
as
set forth in [the Pooling and Servicing Agreement][the Servicing Agreement],
have been disclosed to such accountant and are included in such
report.
5.
[If the Securitization Transfer occurs in 2006 or thereafter.] The report on
assessment of compliance with Servicing Criteria and its related accountant’s
attestation report required to be delivered by us under the [Pooling and
Servicing Agreement] [the Servicing Agreement] have been delivered to the
Trustee and complied with the requirements thereunder and any material instance
of non compliance with the Servicing Criteria has been disclosed on such
reports.
|
|
|||
|
Date:
|
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|
|
|
||
|
[Signature]
|
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|
[Title]
|
|||
EXH.
8-2
EXHIBIT
9
CUSTODIAL
ACCOUNT CERTIFICATION
_________
__, 200__
[_____________________]
hereby certifies that it has established the account described below as a
Custodial Account pursuant to Subsection 11.04 of the Mortgage Loan
Sale and Servicing Agreement, dated as of August 1, 2005, Fixed and Adjustable
Rate Mortgage Loans.
Title of
Account: “[_____________________], in trust for
Xxxxxx Xxxxxxx Mortgage Capital Inc. as Purchaser of Mortgage Loans and
various Mortgagors.”
Account
Number: __________________________
Address
of office or
branch
of
[_____________________]
at
which
the Custodial
|
Account
is maintained:
|
______________________
|
|
______________________
|
|
______________________
|
|
[SELLER]
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
EXH.
9-1
EXHIBIT
10
CUSTODIAL
ACCOUNT LETTER AGREEMENT
_________
__, 200__
To:
(the
“Depository”)
As
Servicer under the Mortgage Loan Sale and Servicing Agreement, dated as of
August 1, 2005, we hereby authorize and request you to establish an account,
as
a Custodial Account, to be designated as “[_____________________], in trust for
Xxxxxx Xxxxxxx Mortgage Capital Inc. as Purchaser of Mortgage Loans and
various Mortgagors.” All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. You may refuse
any deposit which would result in violation of the requirement that the account
be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to
us.
|
[SELLER]
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
EXX.
00-0
The
undersigned, as Depository, hereby certifies that the
above-described account has been established under Account Number
____________________ at the office of the Depository indicated above, and agrees
to honor withdrawals on such account as provided above. The account
will be insured by the Federal Deposit Insurance Corporation through the Bank
Insurance Fund (“BIF”) or the Savings Association Insurance Fund
(“SAIF”).
|
[___________________________],
|
|||
| as Depository | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
| Date: | |||
EXX.
00-0
EXHIBIT
11
ESCROW
ACCOUNT CERTIFICATION
_________
__, 200__
[_____________________]
hereby certifies that it has established the account described below as an
Escrow Account pursuant to Subsection 11.06 of the Mortgage Loan
Sale and Servicing Agreement, dated as of August 1, 2005 Fixed and Adjustable
Rate Mortgage Loans.
Title of
Account: “[_____________________], in trust for
Xxxxxx Xxxxxxx Mortgage Capital Inc. as Purchaser of Mortgage Loans and
various Mortgagors.”
Account
Number: __________________________
Address
of office or
branch
of
[_____________________]
at
which
the Escrow
|
Account
is maintained:
|
______________________
|
|
______________________
|
|
______________________
|
|
[SELLER]
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
EXX.
00-0
EXHIBIT
12
ESCROW
ACCOUNT LETTER AGREEMENT
_________
__, 200__
To:
(the
“Depository”)
As
Servicer under the Mortgage Loan Sale and Servicing Agreement, dated as of
August 1, 2005, we hereby authorize and request you to establish an account,
as
an Escrow Account, to be designated as “[_____________________], in trust for
Xxxxxx Xxxxxxx Mortgage Capital Inc. as Purchaser of Mortgage Loans and
various Mortgagors.” All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. You may refuse
any deposit which would result in violation of the requirement that the account
be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to
us.
|
[SELLER]
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
EXX.
00-0
The
undersigned, as Depository, hereby certifies that the above-described account
has been established under Account Number ____________________ at the office
of
the Depository indicated above, and agrees to honor withdrawals on such account
as provided above. The account will be insured by the Federal Deposit
Insurance Corporation through the Bank Insurance Fund (“BIF”) or the
Savings Association Insurance Fund (“SAIF”).
|
[___________________________],
|
|||
| as Depository | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
| Date: | |||
EXH.
12-2
EXHIBIT
13
UNDERWRITING
GUIDELINES
[SELLER
TO PROVIDE]
EXH.
13-1
EXHIBIT
14
FORM
OF
ASSIGNMENT AND RECOGNITION AGREEMENT
THIS
ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __, 20__]
(“Agreement”), among Xxxxxx Xxxxxxx Mortgage Capital Inc.
(“Assignor”), [____________________] (“Assignee”) and [SELLER]
(the “Company”):
For
and
in consideration of the sum of TEN DOLLARS ($10.00) and other valuable
consideration the receipt and sufficiency of which hereby are acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
Assignment
and Conveyance
1. The
Assignor hereby conveys, sells, grants, transfers and assigns to the Assignee
all of the right, title and interest of the Assignor, as purchaser, in, to
and
under (a) those certain Mortgage Loans listed on the schedule (the
“Mortgage Loan Schedule”) attached hereto as Exhibit A (the
“Mortgage Loans”) and (b) except as described below, that certain
Mortgage Loan Sale and Servicing Agreement (the “Sale and Servicing
Agreement”), dated as of [DATE], between the Assignor, as purchaser (the
“Purchaser”), and the Company, as seller, solely insofar as the Sale and
Servicing Agreement relates to the Mortgage Loans.
The
Assignor specifically reserves and does not assign to the Assignee hereunder
any
and all right, title and interest in, to and under and any obligations of the
Assignor with respect to (a) Subsection 7.04 of the Sale and
Servicing Agreement or (b) any mortgage loans subject to the Sale and
Servicing Agreement which are not the Mortgage Loans set forth on the Mortgage
Loan Schedule and are not the subject of this Agreement.
Recognition
of the Company
2. From
and after the date hereof (the “Securitization Closing Date”), the
Company shall and does hereby recognize that the Assignee will transfer the
Mortgage Loans and assign its rights under the Sale and Servicing Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the “Trust”) created pursuant to a Pooling and
Servicing Agreement, dated as of [__________, 200_] (the “Pooling
Agreement”), among the Assignee, the Assignor, [___________________], as
trustee (including its successors in interest and any successor trustees under
the Pooling Agreement, the “Trustee”), [____________________], as
servicer (including its successors in interest and any successor servicer under
the Pooling Agreement, the “Servicer”). The Company hereby
acknowledges and agrees that from and after the date hereof (i) the Trust
will be the owner of the Mortgage Loans, (ii) the Company shall look solely
to the Trust for performance of any obligations of the Assignor insofar as
they
relate to the Mortgage Loans, (iii) the Trust (including the Trustee and
the Servicer acting on the Trust’s behalf) shall have all the rights and
remedies available to the Assignor, insofar as they relate to the Mortgage
Loans, under the Sale and Servicing Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in
Section 6 of the Sale and Servicing Agreement, and shall be entitled
to enforce all of the obligations of the Company thereunder insofar as they
relate to the Mortgage Loans, and (iv) all
EXH.
14-1
references
to the Purchaser, the Custodian or the Bailee under the Sale and Servicing
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to
refer
to the Trust (including the Trustee and the Servicer acting on the Trust’s
behalf). Neither the Company nor the Assignor shall amend or agree to
amend, modify, waiver, or otherwise alter any of the terms or provisions of
the
Sale and Servicing Agreement which amendment, modification, waiver or other
alteration would in any way affect the Mortgage Loans or the Company’s
performance under the Sale and Servicing Agreement with respect to the Mortgage
Loans without the prior written consent of the Trustee.
Representations
and Warranties of the Company
3. The
Company warrants and represents to the Assignor, the Assignee and the Trust
as
of the date hereof that:
(a) The
Company is duly organized, validly existing and in good standing under the
laws
of the jurisdiction of its incorporation;
(b) The
Company has full power and authority to execute, deliver and perform its
obligations under this Agreement and has full power and authority to perform
its
obligations under the Sale and Servicing Agreement. The execution by
the Company of this Agreement is in the ordinary course of the Company’s
business and will not conflict with, or result in a breach of, any of the terms,
conditions or provisions of the Company’s charter or bylaws or any legal
restriction, or any material agreement or instrument to which the Company is
now
a party or by which it is bound, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Company or its property
is
subject. The execution, delivery and performance by the Company of
this Agreement have been duly authorized by all necessary corporate action
on
part of the Company. This Agreement has been duly executed and
delivered by the Company, and, upon the due authorization, execution and
delivery by the Assignor and the Assignee, will constitute the valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or hereafter
in
effect relating to creditors’ rights generally, and by general principles of
equity regardless of whether enforceability is considered in a proceeding in
equity or at law;
(c) No
consent, approval, order or authorization of, or declaration, filing or
registration with, any governmental entity is required to be obtained or made
by
the Company in connection with the execution, delivery or performance by the
Company of this Agreement; and
(d) There
is no action, suit, proceeding or investigation pending or threatened against
the Company, before any court, administrative agency or other tribunal, which
would draw into question the validity of this Agreement or the Sale and
Servicing Agreement, or which, either in any one instance or in the aggregate,
would result in any material adverse change in the ability of the Company to
perform its obligations under this Agreement or the Sale and Servicing
Agreement, and the Company is solvent.
EXX.
00-0
0. Xxxxxxxx
xo Section 14 of the Sale and Servicing Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in
Subsections 7.01 and 7.02 of the Sale and Servicing
Agreement are true and correct as of the date hereof as if such representations
and warranties were made on the date hereof unless otherwise specifically stated
in such representations and warranties.
Remedies
for Breach of Representations and Warranties
5. The
Company hereby acknowledges and agrees that the remedies available to the
Assignor, the Assignee and the Trust (including the Trustee and the Servicer
acting on the Trust’s behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3
and 4 hereof shall be as set forth in Subsection 7.03 of the Sale
and Servicing Agreement as if they were set forth herein (including without
limitation the repurchase and indemnity obligations set forth
therein).
Miscellaneous
6. This
Agreement shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of law principles, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
7. 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, with the prior written consent of
the
Trustee.
8. This
Agreement shall inure to the benefit of (i) the successors and assigns of
the parties hereto and (ii) the Trust (including the Trustee and the
Servicer acting on the Trust’s behalf). Any entity into which
Assignor, Assignee or Company may be merged or consolidated shall, without
the
requirement for any further writing, be deemed Assignor, Assignee or Company,
respectively, hereunder.
9. Each
of this Agreement and the Sale and Servicing Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Sale and Servicing
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend
the
terms of the Sale and Servicing Agreement.
10. 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.
11. In
the event that any provision of this Agreement conflicts with any provision
of
the Sale and Servicing Agreement with respect to the Mortgage Loans, the terms
of this Agreement shall control.
EXH.
14-3
12. Capitalized
terms used in this Agreement (including the exhibits hereto) but not defined
in
this Agreement shall have the meanings given to such terms in the Sale and
Servicing Agreement.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
duly authorized officers as of the date first above written.
|
[SELLER
|
|||
|
|
|||
|
|
By:
|
||
| Name: | |||
| Its: | |||
|
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
|
|||
|
|
|||
|
|
By:
|
||
| Name: | |||
| Its: | |||
|
[ASSIGNEE]
|
|||
|
|
|||
|
|
By:
|
||
| Name: | |||
| Its: | |||
EXH.
14-4
EXHIBIT
15
FORM
OF
OPINION OF COUNSEL TO SELLER
(date)
Xxxxxx
Xxxxxxx Mortgage Capital Inc.
1600
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Dear
Sirs:
You
have
requested [our] [my] opinion, as [Assistant] General Counsel to
___________________ (the “Company”), with respect to certain matters in
connection with the sale by the Company of the Mortgage Loans pursuant to that
certain Mortgage Loan Sale and Servicing Agreement, by and between the Company
and Xxxxxx Xxxxxxx Mortgage Capital Inc. (the “Purchaser”), dated as
of August 1, 2005 (the “Sale and Servicing Agreement”) which sale is in
the form of whole loans, delivered pursuant to a Custodial Agreement dated
as of
_____ __, 200_ among the Purchaser, the Company, and
______________________[CUSTODIAN] (the “Custodial Agreement” and,
collectively with the Sale and Servicing Agreement, the
“Agreements”). Capitalized terms not otherwise defined herein
have the meanings set forth in the Sale and Servicing Agreement.
[We]
[I]
have examined the following documents:
1. the
Sale and Servicing Agreement;
2. the
Custodial Agreement;
3. the
form of Assignment of Mortgage;
4. the
form of endorsement of the Mortgage Notes; and
5. such
other documents, records and papers as we have deemed necessary and relevant
as
a basis for this opinion.
To
the
extent [we] [I] have deemed necessary and proper, [we] [I] have relied upon
the
representations and warranties of the Company contained in the Sale and
Servicing Agreement. [We] [I] have assumed the authenticity of all
documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
EXH.
15-1
Based
upon the foregoing, it is [our] [my] opinion that:
1. The
Company is a [type of entity] duly organized, validly existing and in good
standing under the laws of the [United States] and is qualified to transact
business in, and is in good standing under, the laws of [the state of
incorporation/formation].
2. The
Company has the power to engage in the transactions contemplated by the
Agreements and all requisite power, authority and legal right to execute and
deliver the Agreements and to perform and observe the terms and conditions
of
the Agreements.
3. Each
of the Agreements has been duly authorized, executed and delivered by the
Company, and is a legal, valid and binding agreement enforceable in accordance
with its respective terms against the Company, subject to bankruptcy laws and
other similar laws of general application affecting rights of creditors and
subject to the application of the rules of equity, including those respecting
the availability of specific performance, none of which will materially
interfere with the realization of the benefits provided thereunder or with
the
Purchaser’s ownership of the Mortgage Loans.
4. The
Company has been duly authorized to allow designated officers to execute any
and
all documents by original signature in order to complete the transactions
contemplated by the Agreements.
5. The
Company has been duly authorized to allow designated officers to execute by
original [or facsimile] signature the endorsements to the Mortgage Notes and
the
Assignments of Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the Mortgage Notes and
the
Assignments of Mortgages represents the legal and valid signature of said
officer of the Company.
6. Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the Agreements
and the sale of the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
7. Neither
the consummation of the transactions contemplated by, nor the fulfillment of
the
terms of, the Agreements conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default under the
charter or by-laws of the Company, the terms of any indenture or other agreement
or instrument to which the Company is a party or by which it is bound or to
which it is subject, or violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory body
to
which the Company is subject or by which it is bound.
8. There
is no action, suit, proceeding or investigation pending or, to the best of
[our]
[my] knowledge, threatened against the Company which, in [our] [my] judgment,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties
or
assets of the Company or in any material impairment of the right or ability
of
the Company to carry on its business substantially as now
EXX.
00-0
conducted
or in any material liability on the part of the Company or which would draw
into
question the validity of the Agreements or the Mortgage Loans or of any action
taken or to be taken in connection with the transactions contemplated thereby,
or which would be likely to impair materially the ability of the Company to
perform under the terms of the Agreements.
9. The
sale of each Mortgage Note and Mortgage as and in the manner contemplated by
the
Agreements is sufficient to fully transfer to the Purchaser all right, title
and
interest of the Company thereto as noteholder and mortgagee.
10. The
Mortgages have been duly assigned and the Mortgage Notes have been duly endorsed
as provided in the Custodial Agreement. The Assignments of Mortgage
are in recordable form, except for the insertion of the name of the assignee,
and upon the name of the assignee being inserted, are acceptable for recording
under the laws of the state where each related Mortgaged Property is
located. The endorsement of the Mortgage Notes, the delivery to the
Purchaser, or its designee, of the Assignments of Mortgage, and the delivery
of
the original endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all protection available
under applicable law against the claims of any present or future creditors
of
the Company, and are sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage Notes by the Company
from being enforceable.
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which you
initially and directly resell the Mortgage Loans may rely on this opinion as
if
it were addressed to them as of the date of this opinion.
Very
truly yours,
_____________________________
[Name]
_____________________________
[Assistant]
General Counsel
EXX.
00-0
XXXXXXX
X
XXXXXXXX
XXXXX
XXX.
A-1
SCHEDULE I
MORTGAGE
LOAN SCHEDULE
Sch I-1