The Pooling and Servicing Agreement
EXHIBIT 99.1
EXECUTION
COPY
CWALT,
INC.,
Depositor
COUNTRYWIDE
HOME LOANS, INC.,
Seller
PARK
GRANADA LLC,
Seller
PARK
MONACO INC.,
Seller
PARK
SIENNA LLC,
Seller
COUNTRYWIDE
HOME LOANS SERVICING LP,
Master
Servicer
and
THE
BANK
OF NEW YORK,
Trustee
___________________________________
Dated
as
of February 1, 2007
___________________________________
MORTGAGE
PASS-THROUGH CERTIFICATES, SERIES 2007-HY3
TABLE
OF
CONTENTS
Page
|
ARTICLE
I DEFINITIONS
|
||
|
SECTION
1.01.
|
Defined
Terms.
|
1
|
|
SECTION
1.02.
|
Certain
Interpretive Provisions.
|
37
|
|
ARTICLE
II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS
AND WARRANTIES
|
||
|
SECTION
2.01.
|
Conveyance
of Mortgage Loans
|
39
|
|
SECTION
2.02.
|
Acceptance
by Trustee of the Mortgage Loans.
|
43
|
|
SECTION
2.03.
|
Representations,
Warranties and Covenants of the Sellers and Master
Servicer.
|
45
|
|
SECTION
2.04.
|
Representations
and Warranties of the Depositor as to the Mortgage Loans.
|
47
|
|
SECTION
2.05.
|
Delivery
of Opinion of Counsel in Connection with Substitutions.
|
48
|
|
SECTION
2.06.
|
Execution
and Delivery of Certificates.
|
48
|
|
SECTION
2.07.
|
REMIC
Matters.
|
49
|
|
SECTION
2.08.
|
Covenants
of the Master Servicer.
|
49
|
|
ARTICLE
III ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS
|
||
|
SECTION
3.01.
|
Master
Servicer to Service Mortgage Loans.
|
50
|
|
SECTION
3.02.
|
Subservicing;
Enforcement of the Obligations of Servicers.
|
51
|
|
SECTION
3.03.
|
Rights
of the Depositor, the NIM Insurer and the Trustee in Respect of the
Master
Servicer.
|
51
|
|
SECTION
3.04.
|
Trustee
to Act as Master Servicer.
|
52
|
|
SECTION
3.05.
|
Collection
of Mortgage Loan Payments; Certificate Account; Distribution Account;
Carryover Reserve Fund; Principal Reserve Fund; Supplemental Interest
Trust and Cap Contract Reserve Fund.
|
52
|
|
SECTION
3.06.
|
Collection
of Taxes, Assessments and Similar Items; Escrow Accounts.
|
56
|
|
SECTION
3.07.
|
Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
|
57
|
|
SECTION
3.08.
|
Permitted
Withdrawals from the Certificate Account, the Distribution Account,
the
Carryover Reserve Fund; the Principal Reserve Fund and the Cap Contract
Reserve Fund.
|
57
|
|
SECTION
3.09.
|
Maintenance
of Hazard Insurance; Maintenance of Primary Insurance
Policies.
|
60
|
|
SECTION
3.10.
|
Enforcement
of Due-on-Sale Clauses; Assumption Agreements.
|
61
|
|
SECTION
3.11.
|
Realization
Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
Loans.
|
62
|
|
SECTION
3.12.
|
Trustee
to Cooperate; Release of Mortgage Files.
|
66
|
i
|
SECTION
3.13.
|
Documents,
Records and Funds in Possession of Master Servicer to be Held for
the
Trustee.
|
67
|
|
SECTION
3.14.
|
Servicing
Compensation.
|
67
|
|
SECTION
3.15.
|
Access
to Certain Documentation.
|
68
|
|
SECTION
3.16.
|
Annual
Statement as to Compliance.
|
68
|
|
SECTION
3.17.
|
Errors
and Omissions Insurance; Fidelity Bonds.
|
68
|
|
SECTION
3.18.
|
Notification
of Adjustments.
|
69
|
|
SECTION
3.19.
|
Cap
Contract.
|
69
|
|
SECTION
3.20.
|
Prepayment
Charges.
|
70
|
|
ARTICLE
IV DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
|
||
|
SECTION
4.01.
|
Advances.
|
71
|
|
SECTION
4.02.
|
Priorities
of Distribution.
|
72
|
|
SECTION
4.03.
|
[Reserved].
|
77
|
|
SECTION
4.04.
|
[Reserved].
|
77
|
|
SECTION
4.05.
|
[Reserved].
|
77
|
|
SECTION
4.06.
|
Monthly
Statements to Certificateholders.
|
78
|
|
SECTION
4.07.
|
Determination
of Pass-Through Rates for COFI Certificates.
|
78
|
|
SECTION
4.08.
|
Determination
of Pass-Through Rates for LIBOR Certificates.
|
79
|
|
SECTION
4.09.
|
Determination
of MTA.
|
81
|
|
SECTION
4.10.
|
Supplemental
Interest Trust.
|
81
|
|
ARTICLE
V THE CERTIFICATES
|
||
|
SECTION
5.01.
|
The
Certificates.
|
82
|
|
SECTION
5.02.
|
Certificate
Register; Registration of Transfer and Exchange of
Certificates.
|
83
|
|
SECTION
5.03.
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
88
|
|
SECTION
5.04.
|
Persons
Deemed Owners.
|
88
|
|
SECTION
5.05.
|
Access
to List of Certificateholders’ Names and Addresses.
|
88
|
|
SECTION
5.06.
|
Maintenance
of Office or Agency.
|
89
|
|
ARTICLE
VI THE DEPOSITOR AND THE MASTER SERVICER
|
||
|
SECTION
6.01.
|
Respective
Liabilities of the Depositor and the Master Servicer.
|
90
|
|
SECTION
6.02.
|
Merger
or Consolidation of the Depositor or the Master Servicer.
|
90
|
|
SECTION
6.03.
|
Limitation
on Liability of the Depositor, the Sellers, the Master Servicer,
the NIM
Insurer and Others.
|
90
|
|
SECTION
6.04.
|
Limitation
on Resignation of Master Servicer.
|
91
|
|
ARTICLE
VII DEFAULT
|
||
|
SECTION
7.01.
|
Events
of Default.
|
92
|
|
SECTION
7.02.
|
Trustee
to Act; Appointment of Successor.
|
94
|
|
SECTION
7.03.
|
Notification
to Certificateholders.
|
95
|
ii
|
ARTICLE
VIII CONCERNING THE TRUSTEE
|
||
|
SECTION
8.01.
|
Duties
of Trustee.
|
96
|
|
SECTION
8.02.
|
Certain
Matters Affecting the Trustee.
|
97
|
|
SECTION
8.03.
|
Trustee
Not Liable for Certificates or Mortgage Loans.
|
98
|
|
SECTION
8.04.
|
Trustee
May Own Certificates.
|
98
|
|
SECTION
8.05.
|
Trustee’s
Fees and Expenses.
|
98
|
|
SECTION
8.06.
|
Eligibility
Requirements for Trustee.
|
99
|
|
SECTION
8.07.
|
Resignation
and Removal of Trustee.
|
99
|
|
SECTION
8.08.
|
Successor
Trustee.
|
100
|
|
SECTION
8.09.
|
Merger
or Consolidation of Trustee.
|
101
|
|
SECTION
8.10.
|
Appointment
of Co-Trustee or Separate Trustee.
|
101
|
|
SECTION
8.11.
|
Tax
Matters.
|
102
|
|
SECTION
8.12.
|
Monitoring
of Significance Percentage.
|
105
|
|
ARTICLE
IX TERMINATION
|
||
|
SECTION
9.01.
|
Termination
upon Liquidation or Purchase of all Mortgage Loans.
|
106
|
|
SECTION
9.02.
|
Final
Distribution on the Certificates.
|
106
|
|
SECTION
9.03.
|
Additional
Termination Requirements.
|
108
|
|
ARTICLE
X MISCELLANEOUS PROVISIONS
|
||
|
SECTION
10.01.
|
Amendment.
|
109
|
|
SECTION
10.02.
|
Recordation
of Agreement; Counterparts.
|
110
|
|
SECTION
10.03.
|
Governing
Law.
|
111
|
|
SECTION
10.04.
|
Intention
of Parties.
|
111
|
|
SECTION
10.05.
|
Notices.
|
112
|
|
SECTION
10.06.
|
Severability
of Provisions.
|
113
|
|
SECTION
10.07.
|
Assignment.
|
114
|
|
SECTION
10.08.
|
Limitation
on Rights of Certificateholders.
|
114
|
|
SECTION
10.09.
|
Inspection
and Audit Rights.
|
114
|
|
SECTION
10.10.
|
Certificates
Nonassessable and Fully Paid.
|
115
|
|
SECTION
10.11.
|
[Reserved].
|
115
|
|
SECTION
10.12.
|
Protection
of Assets.
|
115
|
|
SECTION
10.13.
|
Rights
of the NIM Insurer.
|
115
|
|
ARTICLE
XI EXCHANGE ACT REPORTING
|
||
|
SECTION
11.01.
|
Filing
Obligations.
|
117
|
|
SECTION
11.02.
|
Form
10-D Filings.
|
117
|
|
SECTION
11.03.
|
Form
8-K Filings.
|
118
|
|
SECTION
11.04.
|
Form
10-K Filings.
|
118
|
|
SECTION
11.05.
|
Xxxxxxxx-Xxxxx
Certification.
|
119
|
|
SECTION
11.06.
|
Form
15 Filing.
|
119
|
|
SECTION
11.07.
|
Report
on Assessment of Compliance and Attestation.
|
119
|
|
SECTION
11.08.
|
Use
of Subservicers and Subcontractors.
|
121
|
iii
|
SECTION
11.09.
|
Amendments.
|
122
|
|
SECTION
11.10.
|
Reconciliation
of Accounts.
|
122
|
|
SCHEDULES
|
||
|
Schedule
I:
|
Mortgage
Loan Schedule
|
S-I-1
|
|
Schedule
II-A:
|
Representations
and Warranties of Countrywide
|
S-II-A-1
|
|
Schedule
II-B:
|
Representations
and Warranties of Park Granada
|
S-II-B-1
|
|
Schedule
II-C:
|
Representations
and Warranties of Park Monaco
|
S-II-C-1
|
|
Schedule
II-D:
|
Representations
and Warranties of Park Sienna
|
S-II-D-1
|
|
Schedule
III-A:
|
Representations
and Warranties of Countrywide as to all of the Mortgage
Loans
|
S-III-A-1
|
|
Schedule
III-B:
|
Representations
and Warranties of Countrywide as to the Countrywide Mortgage
Loans
|
S-III-B-1
|
|
Schedule
III-C:
|
Representations
and Warranties of Park Granada as to the Park Granada Mortgage
Loans
|
S-III-C-1
|
|
Schedule
III-D:
|
Representations
and Warranties of Park Monaco as to the Park Monaco Mortgage
Loans
|
S-III-D-1
|
|
Schedule
III-E:
|
Representations
and Warranties of Park Sienna as to the Park Sienna Mortgage
Loans
|
S-III-E-1
|
|
Schedule
IV:
|
Representations
and Warranties of the Master Servicer
|
S-IV-1
|
|
Schedule
V:
|
Principal
Balance Schedules [if applicable]
|
S-V-1
|
|
Schedule
VI:
|
Form
of Monthly Master Servicer Report
|
S-VI-1
|
|
Schedule
VII:
|
Prepayment
Charge Schedule
|
S-VII-1
|
|
EXHIBITS
|
||
|
Exhibit
A:
|
Form
of Senior Certificate (excluding Class A-R and Notional Amount
Certificates)
|
A-1
|
|
Exhibit
B:
|
Form
of Subordinated Certificate
|
B-1
|
|
Exhibit
C-1:
|
Form
of Class A-R Certificate
|
C-1-1
|
|
Exhibit
C-2:
|
Form
of Class P Certificate
|
C-2-1
|
|
Exhibit
C-3:
|
Form
of Class C Certificate
|
C-3-1
|
|
Exhibit
C-4
|
[Reserved]
|
C-4-1
|
|
Exhibit
D:
|
Form
of Notional Certificate
|
D-1
|
|
Exhibit
E:
|
Form
of Reverse of Certificates
|
E-1
|
|
Exhibit
F:
|
Form
of Initial Certification of Trustee
|
F-1
|
|
Exhibit
G:
|
Form
of Delay Delivery Certification of Trustee
|
G-1
|
|
Exhibit
H:
|
Form
of Final Certification of Trustee
|
H-1
|
|
Exhibit
I:
|
Form
of Transfer Affidavit
|
I-1
|
|
Exhibit
J-1:
|
Form
of Transferor Certificate (Residual)
|
X-0-0
|
|
Xxxxxxx
X-0:
|
Form
of Transferor Certificate (Private)
|
J-2-1
|
|
Exhibit
K:
|
Form
of Investment Letter [Non-Rule 144A]
|
K-1
|
|
Exhibit
L-1:
|
Form
of Rule 000X Xxxxxx
|
X-0
|
|
Xxxxxxx
X-0:
|
Form
of ERISA Letter (Covered Certificates)
|
L-1
|
|
Exhibit
M:
|
Form
of Request for Release (for Trustee)
|
M-1
|
iv
|
Exhibit
N:
|
Form
of Request for Release of Documents (Mortgage Loan) Paid in Full,
Repurchased and Replaced)
|
N-1
|
|
Exhibit
O:
|
[Reserved]
|
O-1
|
|
Exhibit
P:
|
[Reserved]
|
P-1
|
|
Exhibit
Q:
|
Then
current Standard & Poor’s LEVELS® Version 5.7 Glossary Revised,
Appendix E
|
Q-1
|
|
Exhibit
R:
|
Form
of Cap Contract
|
R-1
|
|
Exhibit
S-1:
|
[Reserved]
|
S-1-1
|
|
Exhibit
S-2:
|
[Reserved]
|
S-2-1
|
|
Exhibit
T:
|
Officer’s
Certificate with respect to Prepayments.
|
T-1
|
|
Exhibit
U:
|
Form
of Monthly Statement
|
U-1
|
|
Exhibit
V-1:
|
Form
of Performance Certification (Subservicer)
|
V-1-1
|
|
Exhibit
V-2:
|
Form
of Performance Certification (Trustee)
|
V-2-1
|
|
Exhibit
W:
|
Form
of Servicing Criteria to be Addressed in Assessment of Compliance
Statement
|
W-1
|
|
Exhibit
X:
|
List
of Item 1119 Parties
|
X-1
|
|
Exhibit
Y:
|
Form
of Xxxxxxxx-Xxxxx Certification (Replacement of Master
Servicer)
|
Y-1
|
v
WITNESSETH
THAT
In
consideration of the mutual agreements contained in this Agreement, the parties
to this Agreement agree as follows:
PRELIMINARY
STATEMENT
The
Depositor is the owner of the Trust Fund that is hereby conveyed to the Trustee
in return for the Certificates. For federal income tax purposes, the Trust
Fund
(other than the Carryover Shortfall Reserve Fund, the Cap Contract and the
Cap
Contract Reserve Fund), will consist of three real estate mortgage investment
conduits (each a “REMIC” or, in the alternative, the “Sub WAC (SW) REMIC,” the
“Strip (ST) REMIC” and “ the “Master REMIC”). Each Certificate, other than the
Class A-R Certificates, will represent ownership of one or more regular
interests in the Master REMIC for purposes of the REMIC Provisions. The Class
A-R Certificate will represent ownership of the sole class of residual interest
in each of the SW REMIC, the ES REMIC and the Master REMIC. The Master REMIC
will hold as assets the several classes of uncertificated ES REMIC Interests
(other than the Class ST-A-R Interests). The ES REMIC will hold as assets the
several classes of uncertificated SW REMIC Interests (other than the Class
SW-A-R Interests). The SW REMIC will hold all the assets of Loan Group 1, Loan
Group 2 and Loan Group 3 (other than the Carryover Reserve Fund). For federal
income tax purposes, each REMIC Interest (other than the interests represented
by the Class A-R Certificates) is hereby designated as a regular interest.
The
latest possible maturity date of all REMIC regular interests created hereby
shall be the Latest Possible Maturity Date.
The
Supplemental Interest Trust, the Carryover Shortfall Reserve Fund, the Cap
Contract and the Cap Contract Reserve Fund will not for any part of any REMIC
described herein.
Master
REMIC:
The
Master REMIC Certificates will have the original Class Certificate Balances
and
Pass-Through Rates as set forth in the following table:
|
Class
|
Original
Class Certificate Balance
|
Pass-Through
Rate
|
REMIC
Certificate
|
|||||||
|
Class 1-A-1
|
$
|
140,798,000
|
(1)
|
|
Class
1-A-1
|
|||||
|
Class 1-A-2
|
$
|
15,644,000
|
(1)
|
|
Class
1-A-2
|
|||||
|
Class 2-A-1
|
$
|
557,768,000
|
(2)
|
|
Class
2-A-1
|
|||||
|
Class 2-A-2
|
$
|
61,974,000
|
(2)
|
|
Class
2-A-2
|
|||||
|
Class 3-A-1
|
$
|
147,344,000
|
(3)
|
|
Class
3-A-1
|
|||||
|
Class 3-A-2
|
$
|
16,371,000
|
(3)
|
|
Class
3-A-2
|
|||||
|
Class
M-1
|
$
|
9,972,000
|
(4)
|
|
Class
M-1
|
|||||
|
Class
M-2
|
$
|
7,978,000
|
(4)
|
|
Class
M-2
|
|||||
|
Class
M-3
|
$
|
5,485,000
|
(4)
|
|
Class
M-3
|
|||||
|
Class
M-4
|
$
|
3,490,000
|
(4)
|
|
Class
M-4
|
|||||
|
Class
M-5
|
$
|
3,490,000
|
(4)
|
|
Class
M-5
|
|||||
|
Class
M-6
|
$
|
3,490,000
|
(4)
|
|
Class
M-6
|
|||||
|
Class
M-7
|
$
|
3,490,000
|
(4)
|
|
Class
M-7
|
|||||
|
Class
M-8
|
$
|
3,490,000
|
(4)
|
|
Class
M-8
|
|||||
|
Class
M-9
|
$
|
3,490,000
|
(4)
|
|
Class
M-9
|
|||||
|
Class
M-10
|
$
|
4,986,000
|
(4)
|
|
Class
M-10
|
|||||
|
Class
M-11
|
$
|
4,488,000
|
(4)
|
|
Class
M-11
|
|||||
|
Class C
|
(5
|
)
|
(6)
|
|
Class
C
|
|||||
|
Class 1-P
|
$
|
100(7
|
)
|
(8)
|
|
Class
1-P
|
||||
|
Class 2-P
|
$
|
100(7
|
)
|
(9)
|
|
Class
2-P
|
||||
|
Class 3-P
|
$
|
100(7
|
)
|
(10)
|
|
Class
3-P
|
||||
|
Class
A-R
|
$
|
100
|
(11)
|
|
Class
A-R
|
|||||
_______________
|
(1)
|
This
Certificates will accrue interest at the related Pass-Through Rates
identified in this Agreement. For federal income tax purposes, the
interest accruing on this Certificates will be subject to a cap equal
to
the Net Rate Cap for Loan Group 1.
|
|
(2)
|
This
Certificates will accrue interest at the related Pass-Through Rates
identified in this Agreement. For federal income tax purposes, the
interest accruing on this Certificates will be subject to a cap equal
to
the Net Rate Cap for Loan Group 2.
|
|
(3)
|
This
Certificates will accrue interest at the related Pass-Through Rates
identified in this Agreement. For federal income tax purposes, the
interest accruing on this Certificates will be subject to a cap equal
to
the Net Rate Cap for Loan Group 3.
|
|
(4)
|
This
Certificates will accrue interest at the related Pass-Through Rates
identified in this Agreement. For federal income tax purposes, the
interest accruing on this Certificates will be subject to a cap equal
to
the Net Rate Cap for the Subordinated
Certificates.
|
|
(5)
|
The
Class C Interest has no principal balance. For income tax purposes,
this
Class C Master REMIC Interest will have a principal balance equal
to the
Overcollateralized Amount.
|
|
(6)
|
For
each Interest Accrual Period the Class C Certificates are entitled
to an
amount (the “Class C Distributable Amount”) equal to the sum of (a) the
interest payable on the ST-C Interest and (b) a specified portion
of the
interest payable on the Strip REMIC Regular Interests (other than
the
ST-$100, ST-C and ST-P Interests) equal to the excess of the Pool
Net Rate
Cap over the weighted average interest rate of the Strip REMIC Regular
Interests (other than the ST-$100, ST-C and ST-P Interests) with
each such
Class subject to a cap equal to the Pass-Through Rate of the Corresponding
Master REMIC Class. The Pass-Through Rate of the Class C Certificates
shall be a rate sufficient to entitle it to an amount equal to all
interest accrued on the Mortgage Loans less the interest accrued
on the
other Certificates issued by the Master REMIC. The Class C Distributable
Amount for any Distribution Date is payable from current interest
on the
Mortgage Loans and any related OC Release Amount for that Distribution
Date.
|
|
(7)
|
This
Class also has a notional balance equal to the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group that require
the
payment of a Prepayment Charge. The minimum denomination for the
Class
1-P, Class 2-P and Class 3-P Certificates is a 20% Percentage Interest.
Any Percentage Interest in excess of 20% is an authorized
denomination.
|
|
(8)
|
F
or each Distribution Date the Class 1-P Interests are entitled to
all
amounts payable with respect to the Class ST-1-P
Interest.
|
|
(9)
|
For
each Distribution Date the Class 2-P Interests are entitled to all
amounts
payable with respect to the Class ST-2-P
Interest.
|
|
(10)
|
For
each Distribution Date the Class 3-P Interests are entitled to all
amounts
payable with respect to the Class ST-3-P
Interest.
|
|
(11)
|
The
A-R Interests represent the sole class of residual interest in the
Master
REMIC. The Class A-R Interests are not entitled to distributions
of
interest.
|
2
Sub-WAC
REMIC:
The
Sub-WAC REMIC Interests will have the initial balances, pass-through rates
and
corresponding Class of Certificates as set forth in the following
table:
|
The
Sub-WAC REMIC Interests
|
Initial
Principal Balance
|
Pass-Through
Rate
|
Corresponding
Loan Group
|
|
SW-A-1
|
(1)
|
(2)
|
1
|
|
SW-B-1
|
(1)
|
(2)
|
1
|
|
SW-C-1
|
(1)
|
(2)
|
1
|
|
SW-A-2
|
(1)
|
(2)
|
2
|
|
SW-B-2
|
(1)
|
(2)
|
2
|
|
SW-C-2
|
(1)
|
(2)
|
2
|
|
SW-A-3
|
(1)
|
(2)
|
3
|
|
SW-B-3
|
(1)
|
(2)
|
3
|
|
SW-C-3
|
(1)
|
(2)
|
3
|
|
SW-P1
|
$100.00
|
(3)
|
1
|
|
SW-P2
|
$100.00
|
(3)
|
2
|
|
SW-P3
|
$100.00
|
(3)
|
3
|
|
SW-A-R
|
(4)
|
(4)
|
N/A
|
_______________
|
(1)
|
Each
Class A Sub-WAC REMIC Interest will have an Initial Principal Balance
equal to 0.9% of the Subordinate Portion of its Corresponding Loan
Group.
Each Class B Sub-WAC REMIC Interest will have an Initial Principal
Balance
equal to 0.1% of the Subordinate Portion of its Corresponding Loan
Group.
Each Class C Sub-WAC REMIC Interest will have an Initial Principal
Balance
equal to the excess of the initial aggregate Stated Principal Balance
of
the Mortgage Loans in its Corresponding Loan Group over the initial
aggregate principal balances of the Class A and Class B Sub-WAC REMIC
Interests corresponding to such Loan
Group.
|
|
(2)
|
This
Sub-WAC REMIC Interest will have an interest rate equal to the weighted
average of the Adjusted Net Mortgage Rates of the Mortgage Loans
in the
Corresponding Loan Group.
|
|
(3)
|
This
Class SW-P Interest does not pay any interest. All Prepayment Charges
with respect to the Mortgage Loans in the Corresponding Loan Group
will be
allocated to this Class SW-P Interest.
|
|
(4)
|
The
Class SW-A-R Interest is the sole class of residual interest in Sub-WAC
REMIC It has no principal balance and pays no principal or
interest.
|
On
each
Distribution Date, the Available Funds (including Prepayment Charges) for each
Loan Group shall be distributed with respect to its corresponding Sub-WAC REMIC
Interests in the following manner:
(1) Interest.
Interest is to be distributed with respect to each Sub-WAC REMIC Interest at
the
rate, or according to the formulas, described above;
(2) Prepayment
Charges.
All
Prepayment Charges will be allocated to the Class SW-P Interests as
described above.
3
(3) Principal,
if no Cross-Over Situation Exists.
If no
Cross-Over Situation exists with respect to any Class of Sub-WAC
REMIC Interests,
pincipal aounts arising with respect to each of Loan Group 1, Loan Group 2
and
Loan Group 3 will be allocated: first to cause the Loan Group’s corresponding
Class A and Class B Interests
to
equal,
respectively, 0.9% of the Subordinate
Portion of such Loan Group
and 0.1%
of the Subordinate
Portion of such Loan Group;
and
second to the Loan Group’s corresponding Class C Interest;
(4) Principal,
if a Cross-Over Situation Exists.
If a
Cross-Over Situation exists with respect to the Class A and Class B
Interests:
(a) If
the Calculation Rate
in respect of the outstanding Class A and Class B Interests is less than the
Net
Rate Cap for the Subordinated Certificates, then Principal Relocation Payments
will be made proportionately to the outstanding Class A Interests prior to
any
other principal distributions from each such Loan Group.
(b) If
the Calculation Rate
in respect of the outstanding Class A and Class B Interests is greater than
the
Net Rate Cap for the Subordinated Certificates, then Principal Relocation
Payments will be made to the outstanding Class B Interests prior to any other
principal distributions from each such Loan Group.
In
each
case, Principal Relocation Payments will be made so as to cause the Calculation
Rate in respect of the outstanding Class A and Class B Interests to equal the
Net Rate Cap for the Subordinated Certificates. With respect to each
Corresponding Loan Group, if (and to the extent that) the sum of (a) the
principal payments received during the Due Period and (b) the Realized Losses,
are insufficient to make the necessary reductions of principal on the Class
A
and Class B Interests, then interest will be added to the Loan Group’s Class C
Interest.
(c) Unless
required to
achieve the Calculation Rate, the outstanding aggregate Class A and Class B
Interests for all Corresponding Loan Groups will not be reduced below 1%
of
the
excess of (i) the aggregate outstanding principal balances
of all
Loan Groups as of the end of any Due Period (reduced by principal prepayments
received after the Due Period that are to be distributed on the Distribution
Date related to the Due Period) over (ii) the aggregate Class Certificate
Balance of the Senior Certificates for all Loan Groups as of the related
Distribution Date (after taking into account distributions of principal on
such
Distribution Date).
If
(and
to the extent that) the limitation in paragraph (c) prevents the distribution
of
principal to the corresponding Class A and Class B Interests of a Loan Group,
and if the Loan Group’s Class C Interest has already been reduced to zero, then
the excess principal from that Loan Group will be paid to the Class C Interests
of the other Corresponding Loan Group, the aggregate Class A and Class B
Interests of which are less than 1% of the Subordinate Portion of such Loan
Groups. If the Loan Group corresponding to the Class C Interest that receives
such payment has a weighted average Adjusted Net Mortgage Rate below the
weighted average Adjusted Net Mortgage Rate of the Loan Group making the
payment, then the payment will be treated by Sub-WAC REMIC as a Realized Loss.
Conversely, if a Loan Group corresponding to the Class C Interest
that receives such payment has a weighted average Adjusted Net Mortgage Rate
above the weighted average Adjusted Net Mortgage Rate of the Loan Group making
the payment, then the payment will be treated by Sub-WAC REMIC as a
reimbursement for prior Realized Losses.
4
Strip
REMIC:
The
Strip
REMIC Regular Interests will have the principal balances, pass-through rates
and
Corresponding Classes of Certificates as set forth in the following
table:
|
Strip
REMIC Interests
|
Initial
Principal Balance
|
Pass-Through
Rate
|
Corresponding
Class of Certificates
|
|
ST-1-A-1
|
(1)
|
(3)
|
1-A-1
|
|
ST-1-A-2
|
(1)
|
(3)
|
1-A-2
|
|
ST-2-A-1
|
(1)
|
(3)
|
2-A-1
|
|
ST-2-A-2
|
(1)
|
(3)
|
2-A-2
|
|
ST-3-A-1
|
(1)
|
(3)
|
3-A-1
|
|
ST-3-A-2
|
(1)
|
(3)
|
3-A-2
|
|
ST-M-1
|
(1)
|
(3)
|
M-1
|
|
ST-M-2
|
(1)
|
(3)
|
M-2
|
|
ST-M-3
|
(1)
|
(3)
|
M-3
|
|
ST-M-4
|
(1)
|
(3)
|
M-4
|
|
ST-M-5
|
(1)
|
(3)
|
M-5
|
|
ST-M-6
|
(1)
|
(3)
|
M-6
|
|
ST-M-7
|
(1)
|
(3)
|
M-7
|
|
ST-M-8
|
(1)
|
(3)
|
M-8
|
|
ST-M-9
|
(1)
|
(3)
|
M-9
|
|
ST-M-10
|
(1)
|
(3)
|
M-10
|
|
ST-M-11
|
(1)
|
(3)
|
M-11
|
|
ST-$100
|
$100
|
(4)
|
A-R
|
|
ST-C
|
(2)
|
(3)
|
N/A
|
|
ST-P1
|
$100
|
(5)
|
P-1
|
|
ST-P2
|
$100
|
(5)
|
P-2
|
|
ST-P3
|
$100
|
(5)
|
P-3
|
|
ST-A-R
|
(6)
|
(6)
|
N/A
|
(1)
This
Strip REMIC Interest has a principal balance that is initially equal to 100%
of
its Corresponding Certificate Class issued by the Master REMIC. Principal
payments, both scheduled and prepaid, Realized Losses and Subsequent Recoveries
attributable to the Sub-WAC REMIC Interests held by Strip REMIC will be
allocated to this class to maintain its size relative to its Corresponding
Certificate Class.
(2)
This
Strip REMIC Interest has a principal balance that is initially equal to 100%
of
the Overcollateralization Amount. Principal payments, both scheduled and
prepaid, Realized Losses and Subsequent Recoveries attributable to the Sub-WAC
REMIC Interests held by Strip REMIC will be allocated to this class to maintain
its size relative to the Overcollateralization Amount.
(3)
The
pass-through rate with respect to any Distribution Date (and the related Accrual
Period) for this Strip REMIC Interest is a per annum rate equal to the weighted
average of the Mortgage Loans (the “Pool Net Rate Cap”).
5
(4)
This
Strip REMIC Interest pays no interest.
(5)
The
ST-P1, ST-P2 and ST-P3 Interests are entitled to, respectively, all amounts
payable with respect to the SW-P1, SW-P2 and SW-P3 Interests. They pay no
interest.
(6)
The
ST-A-R Interest is the sole class of residual interest in Strip REMIC. It has
no
principal balance and pays no principal or interest.
On
each
Distribution Date, the Interest Funds and the Principal Distribution Amount
payable with respect to the Sub-WAC REMIC Interests shall be payable with
respect to the Strip REMIC Interests in the following manner:
(1) Interest.
Interest is to be distributed with respect to each Strip REMIC Interest at
the
rate, or according to the formulas, described above.
(2) Principal.
Principal Distribution Amounts shall be allocated among the Strip REMIC
Interests as described above.
The
foregoing REMIC structure is intended to cause all of the cash from the Mortgage
Loans to flow through to the Master REMIC as cash flow on REMIC regular
interests, without creating any shortfall—actual or potential (other than for
credit losses)— to any REMIC regular interest. It is not intended that the Class
A-R Certificates be entitled to any cash flows pursuant to this Agreement except
as provided in Section 3.08(a) hereunder (that is, its entitlement to
$100).
6
Set
forth
below are designations of Classes or Components of Certificates and other
defined terms to the categories used in this Agreement:
|
Accretion
Directed Certificates
|
None.
|
|
Accretion
Directed Components
|
None.
|
|
Accrual
Certificates
|
None.
|
|
Accrual
Components
|
None.
|
|
Book-Entry
Certificates
|
All
Classes of Certificates other than the Physical
Certificates.
|
|
COFI
Certificates
|
None.
|
|
Component
Certificates
|
None.
|
|
Components
|
None.
|
|
Delay
Certificates
|
All
interest-bearing Classes of Certificates other than the Non-Delay
Certificates, if any.
|
|
ERISA-Restricted
Certificates
|
The
Residual Certificates and the Private Certificates; and any Certificate
of
a Class that does not or no longer has a rating of BBB- or its equivalent,
or better from at least one Rating
Agency.
|
|
Floating
Rate Certificates
|
The
Variable Rate Certificates and the LIBOR Certificates.
|
|
Group
1 Senior Certificates
|
The
Class 1-A-1 and Class 1-A-2 Certificates.
|
|
Group
2 Senior Certificates
|
The
Class 2-A-1 and Class 2-A-3
Certificates.
|
|
Group
3 Senior Certificates
|
The
Class 3-A-1 and Class 3-A-2
Certificates.
|
|
Inverse
Floating Rate Certificates
|
None.
|
|
LIBOR
Certificates
|
The
Subordinated Certificates.
|
7
|
Non-Delay
Certificates
|
The
LIBOR Certificates.
|
|
Notional
Amount Certificates
|
None.
|
|
Offered
Certificates
|
All
Classes of Certificates other than the Private Certificates.
|
|
Physical
Certificates
|
The
Private Certificates and the Residual Certificates.
|
|
Planned
Principal Classes
|
None.
|
|
Planned
Principal Components
|
None.
|
|
Principal
Only Certificates
|
None.
|
|
Private
Certificates
|
The
Class M-11, Class C, Class 1-P, Class 2-P and Class 3-P Certificates.
|
|
Rating
Agencies
|
S&P
and Xxxxx’x.
|
|
Regular
Certificates
|
All
Classes of Certificates, other than the Residual Certificates.
|
|
Residual
Certificates
|
The
Class A-R Certificates.
|
|
Scheduled
Principal Classes
|
None.
|
|
Senior
Certificates
|
The
Group 1 Senior Certificates, the Group 2 Senior Certificates, the
Group 3
Senior Certificates and the Class A-R
Certificates.
|
|
Subordinated
Certificates
|
The
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class
M-7, Class M-8, Class M-9, Class M-10 and Class M-11
Certificates.
|
|
Targeted
Principal Classes
|
None.
|
|
Variable
Rate Certificates
|
The
Senior Certificates.
|
|
Underwriter
|
Deutsche
Bank Securities Inc.
|
With
respect to any of the foregoing designations as to which the corresponding
reference is “None,” all defined terms and provisions in this Agreement relating
solely to such designations shall be of no force or effect, and any calculations
in this Agreement incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions in this Agreement relating to statistical rating agencies not
designated above as Rating Agencies shall be of no force or effect.
8
ARTICLE
I
DEFINITIONS
DEFINITIONS
SECTION
1.01. Defined
Terms.
Whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
Account:
Any
Escrow Account, the Certificate Account, the Distribution Account, the Carryover
Reserve Fund, the Cap Contract Reserve Fund or any other account related to
the
Trust Fund or the Mortgage Loans.
Accretion
Directed Classes:
As
specified in the Preliminary Statement.
Accrual
Period:
With
respect to each Class of Delay Certificates, its corresponding Sub-WAC REMIC
Regular Interest and any Distribution Date, the calendar month prior to the
month of such Distribution Date. With respect to any Class of Non-Delay
Certificates, its corresponding Sub-WAC REMIC Regular Interest and any
Distribution Date, the period commencing on the Distribution Date in the month
preceding the month in which such Distribution Date occurs (other than the
first
Distribution Date, for which it is the Closing Date) and ending on the day
preceding such Distribution Date.
Additional
Designated Information:
As
defined in Section 11.02.
Adjusted
Mortgage Rate:
As to
each Mortgage Loan, and at any time, the per annum rate equal to the Mortgage
Rate less the Master Servicing Fee Rate.
Adjusted
Net Mortgage Rate:
As to
each Mortgage Loan, and at any time, the per annum rate equal to the Mortgage
Rate less the Expense Fee Rate.
Adjustment
Date:
A date
specified in each Mortgage Note as a date on which the Mortgage Rate on the
related Mortgage Loan will be adjusted.
Advance:
As to
each Loan Group, the payment required to be made by the Master Servicer with
respect to any Distribution Date pursuant to Section 4.01, the amount of any
such payment being equal to the aggregate of payments of principal and interest
(net of the Master Servicing Fee on the Mortgage Loans in such Loan Group that
were due on the related Due Date and not received by the Master Servicer as
of
the close of business on the related Determination Date, together with an amount
equivalent to interest on each Mortgage Loan as to which the related Mortgaged
Property is an REO Property (net of any net income from that REO Property),
less
the aggregate amount of any such delinquent payments that the Master Servicer
has determined would constitute a Nonrecoverable Advance if
advanced.
Agreement:
This
Pooling and Servicing Agreement and all amendments or supplements this Pooling
and Servicing Agreement.
Amount
Held for Future Distribution:
As to
any Distribution Date and each Loan Group, the aggregate amount held in the
Certificate Account at the close of business on the related Determination Date
on account of (i) Principal Prepayments received after the related Prepayment
Period and Liquidation Proceeds and Subsequent Recoveries received in the month
of such Distribution Date relating to such Loan Group and (ii) all Scheduled
Payments due after the related Due Date relating to such Loan
Group.
Applied
Realized Loss Amount:
Applied
Realized Loss Amount: With respect to any Distribution Date and the Offered
Certificates, the sum of the Realized Losses with respect to the Mortgage Loans
which are to be applied in reduction of the Class Certificate Balance of any
such Class of Certificates pursuant to this Agreement, with respect to each
Class of the Subordinated Certificates, the amount, if any, by which the
aggregate Class Certificate Balance of all Subordinated Certificates (after
all
distributions of principal on such Distribution Date) exceeds the aggregate
Stated Principal Balance of the Mortgage Loans as of the Due Date in the month
in which such Distribution Date occurs (after giving effect to Principal
Prepayments and Liquidation Proceeds allocated to principal and Subsequent
Recoveries received in the related Prepayment Period). With respect to each
Class of Senior Certificates and any Distribution Date on or after which the
aggregate Class Certificate Balance of the Subordinated Certificates and Class
C
Certificates is equal to zero, the amount, if any, by which the aggregate Class
Certificate Balance of the Senior Certificates (after all distributions of
principal on such Distribution Date) exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of the Due Date in the month in which such
Distribution Date occurs (after giving effect to Principal Prepayments and
Liquidation Proceeds allocated to principal and Subsequent Recoveries received
in the related Prepayment Period).
Appraised
Value:
With
respect to any Mortgage Loan, the Appraised Value of the related Mortgaged
Property shall be: (i) with respect to a Mortgage Loan other than a Refinancing
Mortgage Loan, the lesser of (a) the value of the Mortgaged Property based
upon
the appraisal made at the time of the origination of such Mortgage Loan and
(b)
the sale price of the Mortgaged Property at the time of the origination of
such
Mortgage Loan; (ii) with respect to a Refinancing Mortgage Loan other than
a
Streamlined Documentation Mortgage Loan, the value of the Mortgaged Property
based upon the appraisal made-at the time of the origination of such Refinancing
Mortgage Loan; and (iii) with respect to a Streamlined Documentation Mortgage
Loan, (a) if the loan-to-value ratio with respect to the Original Mortgage
Loan
at the time of the origination thereof was 80% or less and the loan amount
of
the new mortgage loan is $650,000 or less, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of the Original
Mortgage Loan and (b) if the loan-to-value ratio with respect to the Original
Mortgage Loan at the time of the origination thereof was greater than 80% or
the
loan amount of the new mortgage loan being originated is greater than $650,000,
the value of the Mortgaged Property based upon the appraisal (which may be
a
drive-by appraisal) made at the time of the origination of such Streamlined
Documentation Mortgage Loan.
Available
Funds:
As to
any Distribution Date and each Loan Group, the sum of (a) the aggregate amount
held in the Certificate Account at the close of business on the related
Determination Date, including any Subsequent Recoveries, in respect of such
Mortgage Loans net of the related Amount Held for Future Distribution and net
of
Prepayment Charges and amounts permitted to be withdrawn from the Certificate
Account pursuant to clauses (i) - (viii) of Section 3.08(a) in respect of such
Mortgage Loans and amounts permitted to be withdrawn from the Distribution
Account pursuant to clauses (i) - (iii) of Section 3.08(b) in respect of such
Mortgage Loans, (b) the amount of the related Advance and (c) in connection
with
Defective Mortgage Loans in such Loan Group, as applicable, the aggregate of
the
Purchase Prices and Substitution Adjustment Amounts deposited on the related
Distribution Account Deposit Date. The Holders of the Class P Certificates
will
be entitled to all Prepayment Charges received on the Mortgage Loans and such
amounts will not be available for distribution to the Holders of any other
Class
of Certificates.
2
Bankruptcy
Code:
The
United States Bankruptcy Reform Act of 1978, as amended.
Benefit
Plan Opinion:
As
defined in Section 5.02(b)..
Book-Entry
Certificates:
As
specified in the Preliminary Statement.
Business
Day:
Any day
other than (i) a Saturday or a Sunday or (ii) a day on which banking
institutions in the City of New York, New York, or the States of California
or
Texas or the city in which the Corporate Trust Office of the Trustee is located
are authorized or obligated by law or executive order to be closed.
Calculation
Rate:
For
each Distribution Date, the product of (i) 10 and (ii) the weighted average
pass-through rate of the outstanding Class A and Class B Interests, treating
each of the Class A Interests as capped at zero.
Cap
Contract:
With
respect to the Covered Certificates, the transaction evidenced by the
Confirmation, a form of which is attached hereto as Exhibit S-1.
Cap
Contract Counterparty:
Swiss
Re Financial Products Corporation.
Cap
Contract Reserve Fund:
The
separate fund created and initially maintained by the Supplemental Interest
Trustee pursuant to Section 3.05(h) in the name of the Supplemental Interest
Trustee for the benefit of the Holders of the Covered Certificates and
designated “The Bank of New York in trust for registered holders of Alternative
Loan Trust 2007-HY3, Mortgage Pass-Through Certificates, Series 2007-HY3.” Funds
in the Cap Contract Reserve Fund shall be held in trust for the Holders of
the
Covered Certificates for the uses and purposes set forth in this
Agreement.
Cap
Contract Scheduled Termination Date:
The
Distribution Date in February 2017.
Carryover
Reserve Fund:
The
separate Eligible Account created and initially maintained by the Trustee
pursuant to Section 3.05(g) in the name of the Trustee for the benefit of the
Holders of the Offered Certificates and designated “The Bank of New York in
trust for registered holders of CWALT, Inc., Alternative Loan Trust 2007-HY3,
Mortgage Pass-Through Certificates, Series 2007-HY3.” Funds in the Carryover
Reserve Fund shall be held in trust for the Holders of the Offered Certificates
for the uses and purposes set forth in this Agreement.
Certificate:
Any one
of the Certificates executed by the Trustee in substantially the forms attached
this Agreement as exhibits.
Certificate
Account:
The
separate Eligible Account or Accounts created and maintained by the Master
Servicer pursuant to Section 3.05 with a depository institution, initially
Countrywide, N.A., in the name of the Master Servicer for the benefit of the
Trustee on behalf of Certificateholders and designated “Countrywide Home Loans
Servicing LP in trust for the registered holders of Alternative Loan Trust
2007-HY3, Mortgage Pass-Through Certificates Series 2007-HY3.”
3
Certificate
Balance:
With
respect to any Certificate (other than the Class C Certificates) at any date,
the maximum dollar amount of principal to which the Holder thereof is then
entitled under this Agreement, such amount being equal to the Denomination
of
that Certificate (A) plus, with respect to the Subordinated Certificates, any
increase to the Certificate Balance of such Certificate pursuant to Section
4.02
due to the receipt of Subsequent Recoveries and (B) minus
the sum
of (i) all distributions of principal previously made with respect to that
Certificate and (ii) with respect to the Subordinated Certificates, any
Applied Realized Loss Amounts allocated to such Certificate on previous
Distribution Dates pursuant to Section 4.02 without duplication.
Certificate
Owner:
With
respect to a Book-Entry Certificate, the Person who is the beneficial owner
of
such Book-Entry Certificate. For the purposes of this Agreement, in order for
a
Certificate Owner to enforce any of its rights under this Agreement, it shall
first have to provide evidence of its beneficial ownership interest in a
Certificate that is reasonably satisfactory to the Trustee, the Depositor,
and/or the Master Servicer, as applicable.
Certificate
Register:
The
register maintained pursuant to Section 5.02.
Certificateholder
or Holder:
The
person in whose name a Certificate is registered in the Certificate Register,
except that, solely for the purpose of giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor or any
affiliate of the Depositor shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary
to
effect such consent has been obtained; provided, however, that if any such
Person (including the Depositor) owns 100% of the Percentage Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be Outstanding
for purposes of any provision of this Agreement (other than the second sentence
of Section 10.01) that requires the consent of the Holders of Certificates
of a
particular Class as a condition to the taking of any action under this
Agreement. The Trustee is entitled to rely conclusively on a certification
of
the Depositor or any affiliate of the Depositor in determining which
Certificates are registered in the name of an affiliate of the
Depositor.
Certification
Party:
As
defined in Section 11.05.
Certifying
Person:
As
defined in Section 11.05.
Class:
All
Certificates bearing the same class designation as set forth in the Preliminary
Statement.
Class
A Interest:
Each of
the Class 1-A-1 and Class 1-A-2 Interests.
Class
B Interest:
Each of
the Class 1-B-1 and Class 1-B-2 Interests.
Class
C Distributable Amount:
As
defined in the Preliminary Statement.
Class
C Interest:
Each of
the Class 1-C-1 and Class 1-C-2 Interests.
4
Class
Certificate Balance:
With
respect to any Class of Certificates other than the Class C Certificates and
as
to any date of determination, the aggregate of the Certificate Balances of
all
Certificates of such Class as of such date. The Class C Certificates do not
have
a Class Certificate Balances.
Class
P Certificate:
Each of
the Class 1-P, Class 2-P and Class 3-P Certificates, in the form of Exhibit
C-3
hereto, representing the right to distributions as set forth
herein.
Class
P Principal Distribution Date:
As to
any Class of Class P Certificates, the first Distribution Date that occurs
after
the end of the latest Prepayment Charge Period for the Mortgage Loans in the
related Loan Group that have a Prepayment Charge.
Closing
Date:
February 28, 2007.
Code:
The
Internal Revenue Code of 1986, including any successor or amendatory
provisions.
COFI:
The
Monthly Weighted Average Cost of Funds Index for the Eleventh District Savings
Institutions published by the Federal Home Loan Bank of San
Francisco.
COFI
Certificates:
As
specified in the Preliminary Statement.
Commission:
The
U.S. Securities and Exchange Commission.
Compensating
Interest:
As to
any Distribution Date and Loan Group, an amount equal to the product of 50%
and
the aggregate Master Servicing Fee payable to the Master Servicer for that
Loan
Group and Distribution Date.
Component:
As
specified in the Preliminary Statement.
Component
Balance:
Not
applicable.
Component
Certificates:
As
specified in the Preliminary Statement.
Component
Notional Amount:
Not
applicable.
Confirmation:
With
respect to the Covered Certificates, the Confirmation (reference #1293759)
with
a trade date of February 23, 2007, evidencing a transaction between the Cap
Contract Counterparty and The Bank of New York, as Supplemental Interest
Trustee, on behalf of the Supplemental Interest Trust.
Coop
Shares:
Shares
issued by a Cooperative Corporation.
Cooperative
Corporation:
The
entity that holds title (fee or an acceptable leasehold estate) to the real
property and improvements constituting the Cooperative Property and which
governs the Cooperative Property, which Cooperative Corporation must qualify
as
a Cooperative Housing Corporation under Section 216 of the
Code.
Cooperative
Loan:
Any
Mortgage Loan secured by Coop Shares and a Proprietary Lease.
5
Cooperative
Property:
The
real property and improvements owned by the Cooperative Corporation, including
the allocation of individual dwelling units to the holders of the Coop Shares
of
the Cooperative Corporation.
Cooperative
Unit:
A
single family dwelling located in a Cooperative Property.
Corporate
Trust Office:
The
designated office of the Trustee in the State of New York at which at any
particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at 000 Xxxxxxx Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx 00000 (Attn:
Mortgage-Backed Securities Group, CWALT, Inc. Series 2007-HY3), facsimile no.
(000) 000-0000, and which is the address to which notices to and correspondence
with the Trustee should be directed.
Countrywide:
Countrywide Home Loans, Inc., a New York corporation and its successors and
assigns, in its capacity as the seller of the Countrywide Mortgage Loans to
the
Depositor.
Countrywide
Mortgage Loans:
The
Mortgage Loans identified as such on the Mortgage Loan Schedule for which
Countrywide is the applicable Seller.
Countrywide
Servicing:
Countrywide Home Loans Servicing LP, a Texas limited partnership and its
successors and assigns.
Covered
Certificates:
The
Offered Certificates (other than the Class A-R Certificates).
Cross-Over
Situation:
For any
Distribution Date and for any Loan Group (after taking into account principal
distributions on such Distribution Date) a Cross-Over Situation exists with
respect to the Class A and Class B Interests of the Loan Group if such Interests
in the aggregate are less than 1% of the Subordinated Portion of the related
Loan Group.
Cumulative
Loss Trigger Event:
With
respect to a Distribution Date on or after the Stepdown Date, the aggregate
amount of Realized Losses on the Mortgage Loans from (and including) the Cut-off
Date to the related Due Date (reduced by the aggregate amount of Subsequent
Recoveries received from the Cut-off Date through the Prepayment Period related
to that Due Date) exceeds the applicable percentage, for such Distribution
Date,
of the aggregate Stated Principal Balance of the Mortgage Loans as set forth
below:
6
|
Distribution
Date
|
Percentage
|
|
|
March
2009 - February 2010
|
0.20%
with respect to March 2009, plus an additional 1/12th of
0.25% for each month thereafter through February 2010
|
|
|
March
2010 - February 2011
|
0.45%
with respect to March 2010, plus an additional 1/12th of
0.30% for each month thereafter through February 2011
|
|
|
March
2011 - February 2012
|
0.75%
with respect to March 2011, plus an additional 1/12th of
0.30% for each month thereafter through February 2012
|
|
|
March
2012 - February 2013
|
1.05%
with respect to March 2012, plus an additional 1/12th of
0.20% for each month thereafter through February 2013
|
|
|
March
2013 and thereafter
|
1.25%
|
Current
Interest: With respect to each Class of Offered Certificates and each
Distribution Date, the interest accrued at the applicable Pass-Through Rate
for
the applicable Accrual Period on the Class Certificate Balance of such Class
immediately prior to such Distribution Date.
Cut-off
Date:
As to
any Mortgage Loan, the later of the date of origination of that Mortgage Loan
and February 1, 2007.
Cut-off
Date Pool Principal Balance: $997,240,133.91.
Cut-off
Date Principal Balance:
As to any Mortgage Loan, the Stated Principal Balance thereof as of the close
of
business on the Cut-off Date.
Debt
Service Reduction:
With
respect to any Mortgage Loan, a reduction by a court of competent jurisdiction
in a proceeding under the Bankruptcy Code in the Scheduled Payment for such
Mortgage Loan that became final and non-appealable, except such a reduction
resulting from a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
Defective
Mortgage Loan:
Any
Mortgage Loan that is required to be repurchased pursuant to Section 2.02
or 2.03.
Deferred
Interest:
Not
applicable.
Deficient
Valuation: With respect to any Mortgage Loan, a valuation by a court of
competent jurisdiction of the Mortgaged Property in an amount less than the
then-outstanding indebtedness under the Mortgage Loan, or any reduction in
the
amount of principal to be paid in connection with any Scheduled Payment that
results in a permanent forgiveness of principal, which valuation or reduction
results from an order of such court which is final and non-appealable in a
proceeding under the Bankruptcy Code.
7
Definitive
Certificates:
Any
Certificate evidenced by a Physical Certificate and any Certificate issued
in
lieu of a Book-Entry Certificate pursuant to Section 5.02(e).
Delay
Certificates:
As
specified in the Preliminary Statement.
Delay
Delivery Certification:
As
defined in Section 2.02(a).
Delay
Delivery Mortgage Loans:
The
Mortgage Loans for which all or a portion of a related Mortgage File is not
delivered to Trustee on the Closing Date. With respect to up to 50% of the
Mortgage Loans in each Loan Group, the Depositor may deliver all or a portion
of
each related Mortgage File to the Trustee not later than thirty days after
the
Closing Date. To the extent that Countrywide Servicing shall be in possession
of
any Mortgage Files with respect to any Delay Delivery Mortgage Loan, until
delivery of such Mortgage File to the Trustee as provided in Section 2.01,
Countrywide Servicing shall hold such files as Master Servicer hereunder, as
agent and in trust for the Trustee.
Deleted
Mortgage Loan:
As
defined in Section 2.03(c).
Delinquency
Trigger Event:
With
respect to a Distribution Date on or after the Stepdown Date, the Rolling
Sixty-Day Delinquency Rate for the outstanding Mortgage Loans equals or exceeds
the product of (i) 40.00% and (ii) the Senior Enhancement Percentage for such
Distribution Date.
Delinquent:
A
Mortgage Loan is “delinquent” if any payment due thereon is not made pursuant to
the terms of such Mortgage Loan by the close of business on the day such payment
is scheduled to be due. A Mortgage Loan is “30 days delinquent” if such payment
has not been received by the close of business on the corresponding day of
the
month immediately succeeding the month in which such payment was due, or, if
there is no such corresponding day (e.g., as when a 30-day month follows a
31-day month in which a payment was due on the 31st
day of
such month), then on the last day of such immediately succeeding month.
Similarly for “60 days delinquent,” “90 days delinquent” and so on.
Denomination:
With
respect to each Certificate, the amount set forth on the face of that
Certificate as the “Initial Certificate Balance of this Certificate” or the
“Initial Notional Amount of this Certificate” or, if neither of the foregoing,
the Percentage Interest appearing on the face thereof.
Depositor:
CWALT,
Inc., a Delaware corporation, or its successor in interest.
Depository:
The
initial Depository shall be The Depository Trust Company, the nominee of which
is CEDE & Co., as the registered Holder of the Book-Entry Certificates. The
Depository shall at all times be a “clearing corporation” as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State of New
York.
Depository
Participant:
A
broker, dealer, bank or other financial institution or other Person for whom
from time to time a Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
8
Determination
Date:
As to
any Distribution Date, the 22nd
day of
each month or, if such 22nd
day is
not a Business Day, the next preceding Business Day; provided, however, that
if
such 22nd
day or
such Business Day, whichever is applicable, is less than two Business Days
prior
to the related Distribution Date, the Determination Date shall be the first
Business Day that is two Business Days preceding such Distribution
Date.
Distribution
Account:
The
separate Eligible Account created and maintained by the Trustee pursuant to
Section 3.05(d) in the name of the Trustee for the benefit of the
Certificateholders and designated “The Bank of New York in trust for registered
holders of Alternative Loan Trust 2007-HY3, Mortgage Pass-Through Certificates,
Series 2007-HY3.” Funds in the Distribution Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this
Agreement.
Distribution
Account Deposit Date:
As to
any Distribution Date, 12:30 p.m. Pacific time on the Business Day immediately
preceding such Distribution Date.
Distribution
Date:
The
25th
day of
each calendar month after the initial issuance of the Certificates, or if such
25th
day is
not a Business Day, the next succeeding Business Day, commencing in March
2007.
Due
Date:
With
respect to a Mortgage Loan, the date on which Scheduled Payments are due on
that
Mortgage Loan. With respect to any Distribution Date, the related Due Date
is
the first day of the calendar month in which that Distribution Date
occurs.
Due
Period:
Not
applicable.
XXXXX:
The
Commission’s Electronic Data Gathering, Analysis and Retrieval
system.
Eligible
Account:
Any of
(i) an account or accounts maintained with a federal or state chartered
depository institution or trust company the short-term unsecured debt
obligations of which (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the debt
obligations of such holding company) have the highest short-term ratings of
Xxxxx’x and one of the two highest short-term ratings of S&P, if S&P is
a Rating Agency at the time any amounts are held on deposit therein, or
(ii) an account or accounts in a depository institution or trust company in
which such accounts are insured by the FDIC (to the limits established by the
FDIC) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to
each
Rating Agency, the Certificateholders have a claim with respect to the funds
in
such account or a perfected first priority security interest against any
collateral (which shall be limited to Permitted Investments) securing such
funds
that is superior to claims of any other depositors or creditors of the
depository institution or trust company in which such account is maintained,
or
(iii) a trust account or accounts maintained with (a) the trust
department of a federal or state chartered depository institution or (b) a
trust company, acting in its fiduciary capacity or (iv) any other account
acceptable to each Rating Agency. Eligible Accounts may bear interest, and
may
include, if otherwise qualified under this definition, accounts maintained
with
the Trustee.
Eligible
Repurchase Month:
As
defined in Section 3.11.
9
ERISA:
The
Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying
Underwriting:
A best
efforts or firm commitment underwriting or private placement that meets the
requirements of the Underwriter’s Exemption.
ERISA-Restricted
Certificate:
As
specified in the Preliminary Statement.
Escrow
Account:
The
Eligible Account or Accounts established and maintained pursuant to
Section 3.06(a).
Event
of Default:
As
defined in Section 7.01.
Excess
Cashflow:
With
respect to any Distribution Date, the sum of (i) the amount remaining as set
forth in Section 4.02(a)(2)(iii) and (ii) the amount remaining as set forth
in
Section 4.02(b)(1)(B)(ii) or 4.02(b)(2)(B)(ii), as applicable, in each case
for
such Distribution Date.
Excess
Overcollateralization Amount:
With
respect to any Distribution Date, the excess, if any, of the Overcollateralized
Amount for the Distribution Date over the Overcollateralization Target Amount
for the Distribution Date.
Excess
Proceeds:
With
respect to any Liquidated Mortgage Loan, the amount, if any, by which the sum
of
any Liquidation Proceeds received with respect to such Mortgage Loan during
the
calendar month in which such Mortgage Loan became a Liquidated Mortgage Loan
plus any Subsequent Recoveries received with respect to such Mortgage Loan,
net
of any amounts previously reimbursed to the Master Servicer as Nonrecoverable
Advance(s) with respect to such Mortgage Loan pursuant to Section 3.08(a)(iii),
exceeds (i) the unpaid principal balance of such Liquidated Mortgage Loan as
of
the Due Date in the month in which such Mortgage Loan became a Liquidated
Mortgage Loan plus (ii) accrued interest at the Mortgage Rate from the Due
Date
as to which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date applicable to the Distribution Date
immediately following the calendar month during which such liquidation
occurred.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
Exchange
Act Reports:
Any
reports on Form 10-D, Form 8-K and Form 10-K required to be filed by the
Depositor with respect to the Trust Fund under the Exchange Act.
Expense
Fee:
As to
each Mortgage Loan and any Distribution Date, the product of the related Expense
Fee Rate and its Stated Principal Balance as of that Distribution Date.
Expense
Fee Rate:
As to
each Mortgage Loan and any date of determination, the sum of (a) the related
Master Servicing Fee Rate and (b) the Trustee Fee Rate.
Extra
Principal Distribution Amount:
With
respect to any Distribution Date, the lesser of (1) the Overcollateralization
Deficiency Amount and (2) the Excess Cashflow available for payment pursuant
to
Section 4.02(c).
10
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC:
The
Federal Home Loan Mortgage Corporation, a corporate instrumentality of the
United States created and existing under Title III of the Emergency Home Finance
Act of 1970, as amended, or any successor to the Federal Home Loan Mortgage
Corporation.
Final
Certification:
As
defined in Section 2.02(a) of this Agreement.
FIRREA:
The
Financial Institutions Reform, Recovery, and Enforcement Act of
1989.
Fitch:
Fitch,
Inc., or any successor thereto. If Fitch is designated as a Rating Agency in
the
Preliminary Statement, for purposes of Section 10.05(b) the address for
notices to Fitch shall be Fitch, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Residential Mortgage Surveillance Group, or such other
address as Fitch may hereafter furnish to the Depositor and the Master
Servicer.
FNMA:
The
Federal National Mortgage Association, a federally chartered and privately
owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor to the Federal National Mortgage
Association.
Form
10-D Disclosure Item:
With
respect to any Person, any material litigation or governmental proceedings
pending against (a) such Person or (b) against any of the Trust Fund, the
Depositor, the Trustee, any co-trustee, the Master Servicer or any Subservicer,
if such Person has actual knowledge thereof.
Form
10-K Disclosure Item:
With
respect to any Person, (a) Form 10-D Disclosure Item, and (b) any affiliations
or relationships between such Person and any Item 1119 Party.
Gross
Margin:
The
percentage set forth in the related Mortgage Note for the Mortgage Loans to
be
added to One-Year LIBOR for use in determining the Mortgage Rate on each
Adjustment Date, and which is set forth in the Mortgage Loan
Schedule.
Group
1 Mortgage Loans:
The
Mortgage Loans in Loan Group 1.
Group
1 Overcollateralization Reduction Amount:
With
respect to each Distribution Date, the Overcollateralization Reduction Amount
for such Distribution Date multiplied by a fraction, the numerator of which
is
the Principal Remittance Amount for Loan Group 1 for such Distribution Date,
and
the denominator of which is the aggregate Principal Remittance Amount for Loan
Group 1, Loan Group 2 and Loan Group 3 for such Distribution Date.
Group
1 Principal Distribution Target Amount:
With
respect to each Distribution Date, the excess of:
(1) the
aggregate Class Certificate Balance of the Group 1 Senior Certificates
immediately prior to such Distribution Date, over
(2) the
lesser of (x) 88.50% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 1 as of the Due Date in the month of that Distribution
Date
(after giving effect to Principal Prepayments received in the related Prepayment
Period) and (y) the aggregate Stated Principal Balance of the Mortgage Loans
in
Loan Group 1 as of the Due Date in the month of that Distribution Date (after
giving effect to Principal Prepayments received in the related Prepayment
Period) minus 0.35% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 1 as of the Cut-off Date.
11
Group
1 Senior Principal Distribution Amount:
With
respect to each Distribution Date, the product of (i) the Senior Principal
Distribution Amount and (ii) a fraction, the numerator of which is (x) the
Group
1 Principal Distribution Target Amount for that Distribution Date and the
denominator of which is (y) the sum of the Group 1 Principal Distribution Target
Amount, the Group 2 Principal Distribution Target Amount and the Group 3
Principal Distribution Target Amount for that Distribution Date.
Group
2 Mortgage Loans:
The
Mortgage Loans in Loan Group 2.
Group
2 Overcollateralization Reduction Amount:
With
respect to each Distribution Date, the Overcollateralization Reduction Amount
for such Distribution Date multiplied by a fraction, the numerator of which
is
the Principal Remittance Amount for Loan Group 2 for such Distribution Date,
and
the denominator of which is the aggregate Principal Remittance Amount for Loan
Group 1, Loan Group 2 and Loan Group 3 for such Distribution Date.
Group
2 Principal Distribution Target Amount:
With
respect to each Distribution Date, the excess of:
(1) the
aggregate Class Certificate Balance of the Group 2 Senior Certificates
immediately prior to such Distribution Date, over
(2) the
lesser of (x) 88.50% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 2 as of the Due Date in the month of that Distribution
Date
(after giving effect to Principal Prepayments received in the related Prepayment
Period) and (y) the aggregate Stated Principal Balance of the Mortgage Loans
in
Loan Group 2 as of the Due Date in the month of that Distribution Date (after
giving effect to Principal Prepayments received in the related Prepayment
Period) minus 0.35% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 2 as of the Cut-off Date.
Group
2 Senior Principal Distribution Amount:
With
respect to each Distribution Date, the product of (i) the Senior Principal
Distribution Amount and (ii) a fraction, the numerator of which is (x) the
Group
2 Principal Distribution Target Amount for that Distribution Date and the
denominator of which is (y) the sum of the Group 1 Principal Distribution Target
Amount, the Group 2 Principal Distribution Target Amount and the Group 3
Principal Distribution Target Amount for that Distribution Date.
Group
3 Mortgage Loans:
The
Mortgage Loans in Loan Group 3.
Group
3 Overcollateralization Reduction Amount:
With
respect to each Distribution Date, the Overcollateralization Reduction Amount
for such Distribution Date multiplied by a fraction, the numerator of which
is
the Principal Remittance Amount for Loan Group 3 for such Distribution Date,
and
the denominator of which is the aggregate Principal Remittance Amount for Loan
Group 1, Loan Group 2 and Loan Group 3 for such Distribution Date.
12
Group
3 Principal Distribution Target Amount:
With
respect to each Distribution Date, the excess of:
(1) the
aggregate Class Certificate Balance of the Group 3 Senior Certificates
immediately prior to such Distribution Date, over
(2) the
lesser of (x) 88.50% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 3 as of the Due Date in the month of that Distribution
Date
(after giving effect to Principal Prepayments received in the related Prepayment
Period) and (y) the aggregate Stated Principal Balance of the Mortgage Loans
in
Loan Group 3 as of the Due Date in the month of that Distribution Date (after
giving effect to Principal Prepayments received in the related Prepayment
Period) minus 0.35% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 3 as of the Cut-off Date.
Group
3 Senior Principal Distribution Amount:
With
respect to each Distribution Date, the product of (i) the Senior Principal
Distribution Amount and (ii) a fraction, the numerator of which is (x) the
Group
3 Principal Distribution Target Amount for that Distribution Date and the
denominator of which is (y) the sum of the Group 1 Principal Distribution Target
Amount, the Group 2 Principal Distribution Target Amount and the Group 3
Principal Distribution Target Amount for that Distribution Date.
Guarantees:
The
three guarantees of the Guarantor in favor of the Supplemental Interest Trustee
of all of the Counterparty’s obligations under the Cap Contract.
Guarantor:
Swiss
Reinsurance Company.
Index:
With
respect to any Accrual Period for the COFI Certificates, if any, the
then-applicable index used by the Trustee pursuant to Section 4.07 to determine
the applicable Pass-Through Rate for such Accrual Period for the COFI
Certificates.
Indirect
Participant:
A
broker, dealer, bank or other financial institution or other Person that clears
through or maintains a custodial relationship with a Depository
Participant.
Initial
Certification:
As
defined in Section 2.02(a).
Initial
Component Balance:
As
specified in the Preliminary Statement.
Initial
LIBOR Rate:
5.32%.
Initial
Periodic Rate Cap:
As to
each Mortgage Loan and the related Mortgage Note, the provision therein that
limits permissible increases and decreases in the Mortgage Rate on the first
Adjustment Date for that Mortgage Loan to not more than the amount set forth
therein.
Insurance
Policy:
With
respect to any Mortgage Loan included in the Trust Fund, any insurance policy,
including all riders and endorsements thereto in effect, including any
replacement policy or policies for any Insurance Policies.
13
Insurance
Proceeds:
Proceeds paid by an insurer pursuant to any Insurance Policy, in each case
other
than any amount included in such Insurance Proceeds in respect of Insured
Expenses.
Insured
Expenses:
Expenses covered by an Insurance Policy or any other insurance policy with
respect to the Mortgage Loans.
Interest
Carry Forward Amount:
With
respect to each Class of Offered Certificates and each Distribution Date, the
excess of (i) the Current Interest for such Class with respect to prior
Distribution Dates over (ii) the amount actually distributed to such Class
with
respect to interest on such prior Distribution Dates.
Interest
Determination Date:
With
respect to (a) any Accrual Period for any LIBOR Certificates and
(b) any Accrual Period for the COFI Certificates for which the applicable
Index is LIBOR, the second Business Day prior to the first day of such Accrual
Period. With respect to the Variable Rate Certificates, the 15th
day
prior to the commencement of each Accrual Period or, if such 15th
day is
not a Business Day, the next preceding Business Day.
Interest
Funds:
With
respect to any Distribution Date and Loan Group, the excess of the Interest
Remittance Amount for that Loan Group over the pro rata portion of the Trustee
Fee for such Distribution Date allocable to such Loan Group.
Interest
Remittance Amount:
With
respect to the Mortgage Loans in a Loan Group and any Distribution Date, (x)
the
sum, without duplication, of (i) all scheduled interest on the Mortgage Loans
in
that Loan Group due on the related Due Date and received on or prior to the
related Determination Date, less the related Master Servicing Fees and any
payments made in respect of premiums on Lender PMI Mortgage Loans, (ii) all
interest on Principal Prepayments on the Mortgage Loans in that Loan Group,
other than Prepayment Interest Excess, (iii) all Advances relating to interest
with respect to the Mortgage Loans in that Loan Group, (iv) all Compensating
Interest with respect to such Mortgage Loans in that Loan Group and (v)
Liquidation Proceeds with respect to the Mortgage Loans in that Loan Group
during the related Prepayment Period (to the extent such Liquidation Proceeds
relate to interest), less (y) all reimbursements to the Master Servicer since
the immediately preceding Due Date for Advances of interest previously made
allocable to such Loan Group.
Investment
Letter:
As
defined in Section 5.02(b).
Item
1119 Party:
The
Depositor, any Seller, the Master Servicer, the Trustee, any Subservicer, any
originator identified in the Prospectus Supplement, the Cap Contract
Counterparty and any other material transaction party, as identified in Exhibit
X hereto, as updated pursuant to Section 11.04.
Last
Scheduled Distribution Date:
The
Distribution Date occurring in March 2047.
Latest
Possible Maturity Date:
The
Distribution Date following the third anniversary of the scheduled maturity
date
of the Mortgage Loan having the latest scheduled maturity date as of the Cut-off
Date.
14
Lender
PMI Mortgage Loan:
Certain
Mortgage Loans as to which the lender (rather than the Mortgagor) acquires
the
Primary Insurance Policy and charges the related Mortgagor an interest
premium.
LIBOR:
The
London interbank offered rate for one-month United States dollar deposits
calculated in the manner described in Section 4.08.
LIBOR
Certificates:
As
specified in the Preliminary Statement.
Limited
Exchange Act Reporting Obligations:
The
obligations of the Master Servicer under Section 3.16(b), Section 6.02 and
Section 6.04 with respect to notice and information to be provided to the
Depositor and Article XI (except Section 11.07(a)(1) and (2)).
Liquidated
Mortgage Loan:
With
respect to any Distribution Date, a defaulted Mortgage Loan (including any
REO
Property) that was liquidated in the calendar month preceding the month of
such
Distribution Date and as to which the Master Servicer has determined (in
accordance with this Agreement) that it has received all amounts it expects
to
receive in connection with the liquidation of such Mortgage Loan, including
the
final disposition of an REO Property.
Liquidation
Proceeds:
Amounts, including Insurance Proceeds, received in connection with the partial
or complete liquidation of defaulted Mortgage Loans, whether through trustee’s
sale, foreclosure sale or otherwise or amounts received in connection with
any
condemnation or partial release of a Mortgaged Property and any other proceeds
received in connection with an REO Property, less the sum of related
unreimbursed Master Servicing Fees, Servicing Advances and
Advances.
Loan
Group:
Any of
Loan Group 1, Loan Group 2 or Loan Group 3, as applicable.
Loan
Group 1:
All
Mortgage Loans identified as Loan Group 1 Mortgage Loans on the Mortgage Loan
Schedule.
Loan
Group 2:
All
Mortgage Loans identified as Loan Group 2 Mortgage Loans on the Mortgage Loan
Schedule.
Loan
Group 3:
All
Mortgage Loans identified as Loan Group 3 Mortgage Loans on the Mortgage Loan
Schedule.
Loan-to-Value
Ratio:
With
respect to any Mortgage Loan and as to any date of determination, the fraction
(expressed as a percentage) the numerator of which is the principal balance
of
the related Mortgage Loan at that date of determination and the denominator
of
which is the Appraised Value of the related Mortgaged Property.
Lost
Mortgage Note:
Any
Mortgage Note the original of which was permanently lost or destroyed and has
not been replaced.
Maintenance:
With
respect to any Cooperative Unit, the rent paid by the Mortgagor to the
Cooperative Corporation pursuant to the Proprietary Lease.
15
Majority
in Interest:
As to
any Class of Regular Certificates, the Holders of Certificates of such Class
evidencing, in the aggregate, at least 51% of the Percentage Interests evidenced
by all Certificates of such Class.
Master
REMIC:
As
described in the Preliminary Statement.
Master
Servicer:
Countrywide Home Loans Servicing LP, a Texas limited partnership, and its
successors and assigns, in its capacity as master servicer
hereunder.
Master
Servicer Advance Date:
As to
any Distribution Date, 12:30 p.m. Pacific time on the Business Day immediately
preceding such Distribution Date.
Master
Servicing Fee:
As to
each Mortgage Loan and any Distribution Date, an amount payable out of each
full
payment of interest received on such Mortgage Loan and equal to one-twelfth
of
the Master Servicing Fee Rate multiplied by the Stated Principal Balance of
such
Mortgage Loan as of the Due Date in the month preceding the month of such
Distribution Date, subject to reduction as provided in Section
3.14.
Master
Servicing Fee Rate:
With
respect to each Mortgage Loan, the per annum rate set forth in the Mortgage
Loan
Schedule.
Maximum
Mortgage Rate:
With
respect to each Mortgage Loan, the maximum rate of interest set forth as such
in
the related Mortgage Note.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor to Mortgage
Electronic Registration Systems, Inc.
MERS
Mortgage Loan:
Any
Mortgage Loan registered with MERS on the MERS® System.
MERS®
System:
The
system of recording transfers of mortgages electronically maintained by
MERS.
MIN:
The
mortgage identification number for any MERS Mortgage Loan.
Minimum
Mortgage Rate:
With
respect to each Mortgage Loan, the minimum rate of interest set forth as such
in
the related Mortgage Note, which, with respect to certain Mortgage Loans is
equal to the related Gross Margin.
MOM
Loan:
Any
Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee for
the
originator of such Mortgage Loan and its successors and assigns.
Monthly
Statement:
The
statement delivered to the Certificateholders pursuant to
Section 4.06.
Moody’s:
Xxxxx’x
Investors Service, Inc., or any successor thereto. If Xxxxx’x is designated as a
Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Moody’s shall be Xxxxx’x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Pass-Through Monitoring, or such other address as Moody’s may
hereafter furnish to the Depositor or the Master Servicer.
16
Mortgage:
The
mortgage, deed of trust or other instrument creating a first lien on an estate
in fee simple or leasehold interest in real property securing a Mortgage
Note.
Mortgage
File:
The
mortgage documents listed in Section 2.01 pertaining to a particular
Mortgage Loan and any additional documents delivered to the Trustee to be added
to the Mortgage File pursuant to this Agreement.
Mortgage
Index:
As to
each Mortgage Loan, the index from time to time in effect for adjustment of
the
Mortgage Rate as set forth as such on the related Mortgage Note.
Mortgage
Loan Schedule:
The
list of Mortgage Loans (as from time to time amended by the Master Servicer
to
reflect the addition of Substitute Mortgage Loans and the deletion of Deleted
Mortgage Loans pursuant to the provisions of this Agreement) transferred to
the
Trustee as part of the Trust Fund and from time to time subject to this
Agreement, attached to this Agreement as Schedule I, setting forth the following
information with respect to each Mortgage Loan:
|
|
(i)
|
the
loan number;
|
|
|
(ii)
|
the
Loan Group;
|
|
|
(iii)
|
the
Mortgagor’s name and the street address of the Mortgaged Property,
including the zip code;
|
|
|
(iv)
|
the
maturity date;
|
|
|
(v)
|
the
original principal balance;
|
|
|
(vi)
|
the
Cut-off Date Principal Balance;
|
|
|
(vii)
|
the
first payment date of the Mortgage
Loan;
|
|
|
(viii)
|
the
Scheduled Payment in effect as of the Cut-off
Date;
|
|
|
(ix)
|
the
Loan-to-Value Ratio at origination;
|
|
|
(x)
|
a
code indicating whether the residential dwelling at the time of
origination was represented to be
owner-occupied;
|
|
|
(xi)
|
a
code indicating whether the residential dwelling is either (a) a
detached or attached single family dwelling, (b) a
dwelling in a de minimis PUD, (c) a condominium unit or PUD (other
than a de minimis PUD) or (d) a two- to four-unit residential
property or (e) a Cooperative Unit;
|
|
|
(xii)
|
the
Mortgage Rate as of the Cut-off
Date;
|
17
|
|
(ix)
|
the
Loan-to-Value Ratio at origination;
|
|
|
(x)
|
a
code indicating whether the residential
dwelling at the time of
origination was represented to be
owner-occupied;
|
|
|
(xi)
|
a
code indicating whether the residential
dwelling is either (a) a
detached or attached single family dwelling, (b) a
dwelling in a de minimis PUD, (c) a condominium unit or PUD (other
than a de minimis PUD) or (d) a two- to four-unit residential
property or (e) a Cooperative Unit;
|
|
|
(xii)
|
the
Mortgage Rate as of the Cut-off
Date;
|
|
|
(xiii)
|
the
initial Payment Adjustment Date for each
Mortgage
Loan;
|
|
|
(xiv)
|
a
code indicating whether the Mortgage Loan
is a Lender PMI Mortgage Loan
and, in the case of any Lender PMI Mortgage
Loan, a percentage
representing the amount of the related
interest premium charged to the
borrower;
|
|
|
(xv)
|
the
purpose for the Mortgage Loan;
|
|
|
(xvi)
|
the
type of documentation program pursuant
to which the Mortgage Loan was
originated;
|
|
|
(xvii)
|
a
code indicating whether the Mortgage Loan
is a Countrywide Mortgage Loan,
a Park Granada Mortgage Loan, a Park Monaco
Mortgage Loan or a Park Sienna
Mortgage Loan;
|
|
|
(xviii)
|
the
direct servicer of such Mortgage Loan as
of the Cut-off
Date;
|
|
|
(xix)
|
a
code indicating whether the Mortgage Loan
is a MERS Mortgage
Loan;
|
|
|
(xx)
|
with
respect to each Mortgage Loan, the Gross
Margin, the Mortgage Index, the
Maximum Mortgage Rate and the Minimum Mortgage
Rate;
and
|
|
|
(xxi)
|
the
initial Adjustment Date and the Master
Servicing Fee Rate both before and
after the initial Adjustment Date for each
Mortgage
Loan.
|
Such
schedule shall also set forth the total of the amounts described under (iv)
and
(v) above for all of the Mortgage Loans and for each Loan Group.
Mortgage
Loans:
Such of
the mortgage loans as from time to time are transferred and assigned to the
Trustee pursuant to the provisions of this Agreement and that are held as a
part
of the Trust Fund (including any REO Property), the mortgage loans so held
being
identified in the Mortgage Loan Schedule, notwithstanding foreclosure or other
acquisition of title of the related Mortgaged Property.
Mortgage
Note:
The
original executed note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage
Pool:
The
aggregate of the Mortgage Loans identified in the Mortgage Loan
Schedule.
Mortgage
Rate:
The
annual rate of interest borne by a Mortgage Note from time to time, net of
any
interest premium charged by the mortgagee to obtain or maintain any Primary
Insurance Policy.
Mortgaged
Property:
The
underlying property securing a Mortgage Loan, which, with respect to a
Cooperative Loan, is the related Coop Shares and Proprietary Lease.
Mortgagor:
The
obligor(s) on a Mortgage Note.
18
MTA:
The
twelve-month average monthly yield on U.S. Treasury Securities adjusted to
a
constant maturity of one-year, as published by the Federal Reserve Board in
the
Federal Reserve Statistical Release “Selected Interest Rates
(H.15)”.
MTA
Certificates:
As
specified in the Preliminary Statement.
National
Cost of Funds Index:
The
National Monthly Median Cost of Funds Ratio to SAIF-Insured Institutions
published by the Office of Thrift Supervision.
Net
Prepayment Interest Shortfalls:
As to
any Distribution Date and Loan Group, the excess of the amount of the aggregate
Prepayment Interest Shortfalls for that Loan Group during the related Prepayment
Period over the sum of (x) the Compensating Interest for such Loan Group and
Distribution Date and (y) the excess of the Compensating Interest over the
Prepayment Interest Shortfalls for each other Loan Group for such Distribution
Date.
Net
Rate Cap:
For
each Distribution Date and the Group 1 Senior Certificates, the Group 2 Senior
Certificates and the Group 3 Senior Certificates the Weighted Average Adjusted
Net Mortgage Rate on the Mortgage Loans in the related Loan Group as of the
Due
Date in the prior calendar month (after giving effect to Principal Prepayments
in the Prepayment Period related to that prior Due Date). With respect to the
Subordinated Certificates, the product of (a) the lesser of (1) the sum of
the
following for Loan Group 1, Loan Group 2 and Loan Group 3: the product of:
(A)
the weighted average of the Net Rate Caps of the Group 1 Senior Certificates,
the Group 2 Senior Certificates and the Group 3 Senior Certificates, in each
case adjusted to an effective rate reflecting the accrual of interest on the
basis of a 360-day year and the actual number of days that elapse in the related
Accrual Period, weighted on the basis of the excess of the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group as of the
Due
Date in the prior calendar month (after giving effect to Principal Prepayments
in the Prepayment Period related to that prior Due Date) over the aggregate
Class Certificate Balance of the Senior Certificates in the applicable Senior
Certificate Group.
Net
Rate Carryover:
For any
Class of Offered Certificates (other than the Class A-R Certificates) and any
Distribution Date, the excess of: (1) the amount of interest that such Class
would have accrued for such Distribution Date had the Pass-Through Rate for
that
Class and the related Accrual Period not been calculated based on the applicable
Net Rate Cap, over (2) the amount of interest such Class accrued for such
Distribution Date based on the applicable Net Rate Cap, plus the unpaid portion
of any such excess from prior Distribution Dates (and interest accrued thereon
at the then applicable Pass-Through Rate, without giving effect to the
applicable Net Rate Cap).
NIM
Insurer:
Any
insurer guarantying at the request of Countrywide certain payments under notes
backed or secured by the Class C or Class P Certificates.
Non-Delay
Certificates:
As
specified in the Preliminary Statement.
Nonrecoverable
Advance:
Any
portion of an Advance previously made or proposed to be made by the Master
Servicer that, in the good faith judgment of the Master Servicer, will not
be
ultimately recoverable by the Master Servicer from the related Mortgagor,
related Liquidation Proceeds or otherwise.
19
Notice
of Final Distribution:
The notice to be provided pursuant to Section 9.02 to the effect that final
distribution on any of the Certificates shall be made only upon presentation
and
surrender thereof.
Notional
Amount Certificates:
As
specified in the Preliminary Statement.
OC
Floor:
An
amount equal to 0.35% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the Cut-off Date.
Offered
Certificates:
As
specified in the Preliminary Statement.
Officer’s
Certificate:
A
certificate (i) in the case of the Depositor, signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director,
a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor, (ii) in the case of the Master Servicer, signed
by
the President, an Executive Vice President, a Vice President, an Assistant
Vice
President, the Treasurer, or one of the Assistant Treasurers or Assistant
Secretaries of Countrywide GP, Inc., its general partner, (iii) if provided
for
in this Agreement, signed by a Servicing Officer, as the case may be, and
delivered to the Depositor and the Trustee, as the case may be, as required
by
this Agreement or (iv) in the case of any other Person, signed by an authorized
officer of such Person.
One-Year
LIBOR:
As of
any date of determination, the per annum rate equal to the average of the London
interbank offered rates for one-year U.S. dollar deposits in the London market,
generally as set forth in either The
Wall Street Journal
or some
other source generally accepted in the residential mortgage loan origination
business and specified in the related Mortgage Note, or, if such rate ceases
to
be published in The
Wall Street Journal
or
becomes unavailable for any reason, then based upon a new index selected by
the
Master Servicer, based on comparable information, in each case, as most recently
announced as of either 45 days prior to, or the first business day of the month
immediately preceding the month of, such Adjustment Date.
Opinion
of Counsel:
A
written opinion of counsel, who may be counsel for a Seller, the Depositor
or
the Master Servicer, including, in-house counsel, reasonably acceptable to
the
Trustee; provided, however, that with respect to the interpretation or
application of the REMIC Provisions, such counsel must (i) in fact be
independent of a Seller, the Depositor and the Master Servicer, (ii) not have
any direct financial interest in a Seller, the Depositor or the Master Servicer
or in any affiliate thereof, and (iii) not be connected with a Seller, the
Depositor or the Master Servicer as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
Optional
Termination Date:
The
first Distribution Date on which the aggregate Stated Principal Balance of
the
Mortgage Loans is less than or equal to 10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
20
Original
Mortgage Loan:
The
mortgage loan refinanced in connection with the origination of a Refinancing
Mortgage Loan.
OTS:
The
Office of Thrift Supervision.
Outside
Reference Date:
As to
any Accrual Period for the COFI Certificates, the close of business on the
tenth
day thereof.
Outstanding:
With
respect to the Certificates as of any date of determination, all Certificates
theretofore executed and authenticated under this Agreement except:
| (i) |
Certificates
theretofore canceled by the Trustee or delivered to the Trustee
for
cancellation; and
|
| (ii) |
Certificates
in exchange for which or in lieu of which other Certificates
have been
executed and delivered by the Trustee pursuant to this Agreement.
|
Outstanding
Mortgage Loan:
As of
any Due Date, a Mortgage Loan with a Stated Principal Balance greater than
zero,
which was not the subject of a Principal Prepayment in Full prior to the end
of
the related Prepayment Period and which did not become a Liquidated Mortgage
Loan prior to the end of the related Prepayment Period.
Overcollateralization
Deficiency Amount:
With
respect to any Distribution Date, the amount, if any, by which the
Overcollateralization Target Amount exceeds the Overcollateralized Amount on
such Distribution Date (after giving effect to distributions in respect of
the
Principal Remittance Amount for Loan Group 1, Loan Group 2 and Loan Group 3
on
such Distribution Date).
Overcollateralization
Reduction Amount:
With
respect to any Distribution Date, an amount equal to the lesser of (i) the
Excess Overcollateralization Amount for the Distribution Date and (ii) the
Principal Remittance Amount for Loan Group 1, Loan Group 2 and Loan Group 3
for
the Distribution Date.
Overcollateralization
Target Amount:
With
respect to any Distribution Date, the OC Floor.
Overcollateralized
Amount:
For any
Distribution Date, the amount, if any, by which (x) the aggregate Stated
Principal Balance of the Mortgage Loans as of the Due Date in the month of
that
Distribution Date (after giving effect to Principal Prepayments, the principal
portion of any Liquidation Proceeds and any Subsequent Recoveries received
in
the related Prepayment Period) exceeds (y) the aggregate Class Certificate
Balance of the Offered Certificates as of such Distribution Date (after giving
effect to distributions of the Principal Remittance Amount to be made on such
Distribution Date).
Ownership
Interest:
As to
any Residual Certificate, any ownership interest in such Certificate including
any interest in such Certificate as the Holder thereof and any other interest
therein, whether direct or indirect, legal or beneficial.
00
Xxxx
Xxxxxxx:
Xxxx
Xxxxxxx LLC, a Delaware limited liability company, and its successors and
assigns, in its capacity as the seller of the Park Granada Mortgage Loans to
the
Depositor.
Park
Granada Mortgage Loans:
The
Mortgage Loans identified as such on the Mortgage Loan Schedule for which Park
Granada is the applicable Seller.
Park
Monaco:
Park
Monaco Inc., a Delaware corporation, and its successors and assigns, in its
capacity as the seller of the Park Monaco Mortgage Loans to the
Depositor.
Park
Monaco Mortgage Loans:
The
Mortgage Loans identified as such on the Mortgage Loan Schedule for which Park
Monaco is the applicable Seller.
Park
Sienna:
Park
Sienna LLC, a Delaware limited liability company, and its successors and
assigns, in its capacity as the seller of the Park Sienna Mortgage Loans to
the
Depositor.
Park
Sienna Mortgage Loans:
The
Mortgage Loans identified as such on the Mortgage Loan Schedule for which Park
Sienna is the applicable Seller.
Pass-Through
Margin:
With
respect to the Accrual Period for any Distribution Date and Class of LIBOR
Certificates, the per annum rate indicated in the following table:
|
Class
of Certificates
|
Pass-Through
Margin
|
||||||
|
(1)
|
(2)
|
||||||
|
Class
M-1
|
0.300
|
%
|
0.450
|
%
|
|||
|
Class
M-2
|
0.320
|
%
|
0.480
|
%
|
|||
|
Class
M-3
|
0.380
|
%
|
0.570
|
%
|
|||
|
Class
M-4
|
0.500
|
%
|
0.750
|
%
|
|||
|
Class
M-5
|
0.570
|
%
|
0.855
|
%
|
|||
|
Class
M-6
|
0.650
|
%
|
0.975
|
%
|
|||
|
Class
M-7
|
1.000
|
%
|
1.500
|
%
|
|||
|
Class
M-8
|
1.000
|
%
|
1.500
|
%
|
|||
|
Class
M-9
|
1.000
|
%
|
1.500
|
%
|
|||
|
Class
M-10
|
1.000
|
%
|
1.500
|
%
|
|||
|
Class
M-11
|
1.000
|
%
|
1.500
|
%
|
|||
|
(1)
|
For
the Accrual Period related to any Distribution Date occurring on
or prior
to the Optional Termination Date.
|
|
(2)
|
For
the Accrual Period related to any Distribution Date occurring after
the
Optional Termination Date.
|
Pass-Through
Rate:
With
respect to the Accrual Period for such Distribution Date, and (1) the Class
1-A-1 and Class 1-A-2 Certificates, 5.9901% per annum prior to or on the
Distribution Date in February 2012; (2) the Class 2-A-1 and Class 2-A-2
Certificates, 5.5443% per annum prior to or on the Distribution Date in February
2014; and (3) the Class 3-A-1 and Class 3-A-2 Certificates, 5.6202% per annum
prior to or on the Distribution Date in February 2017. The Pass-Through Rate
with respect to each Accrual Period after the Distribution Date in (x) February
2012 with respect to the Class 1-A-1 and Class 1-A-2 Certificates, (y) February
2014 with respect to the Class 2-A-1 and Class 2-A-2 Certificates and (z)
February 2017 with respect to the Class 3-A-1 and Class 3-A-2 Certificates
will
be a per annum rate equal to the lesser of: (1) One-Year LIBOR for such Accrual
Period plus 1.700%, and (2) the
related Net Rate Cap for such Distribution Date. The Pass-Through Rate with
respect to each Accrual Period and each Class of LIBOR Certificates will be
a
per annum rate equal to the lesser of: (1) One-Month LIBOR for such Accrual
Period plus the Pass-Through Margin for such Class and Accrual Period, and
the
related Net Rate Cap for such Distribution Date.
22
Payment
Adjustment Date:
For
each Mortgage Loan, the date specified in the related Mortgage Note as the
annual date on which the related Scheduled Payment will be adjusted.
Percentage
Interest:
As to
any Certificate, the percentage interest evidenced thereby in distributions
required to be made on the related Class, such percentage interest being set
forth on the face thereof or equal to the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of the same Class. With respect to the Class C, Class P, Class
R-X
and Class A-R Certificates, the portion of the Class evidenced thereby,
expressed as a percentage, as stated on the face of such
Certificate.
Performance
Certification:
As
defined in Section 11.05.
Permitted
Investments:
At any
time, any one or more of the following obligations and securities:
|
|
(i)
|
obligations
of the United States or any agency thereof, provided such obligations
are
backed by the full faith and credit of the United
States;
|
|
|
(ii)
|
general
obligations of or obligations guaranteed by any state of the
United States
or the District of Columbia receiving the highest long-term debt
rating of
each Rating Agency, or such lower rating as will not result in
the
downgrading or withdrawal of the ratings then assigned to the
Certificates
by each Rating Agency;
|
|
|
(iii)
|
commercial
or finance company paper which is then receiving the highest
commercial or
finance company paper rating of each Rating Agency, or such lower
rating
as will not result in the downgrading or withdrawal of the ratings
then
assigned to the Certificates by each Rating
Agency;
|
|
|
(iv)
|
certificates
of deposit, demand or time deposits, or bankers’ acceptances issued by any
depository institution or trust company incorporated under the
laws of the
United States or of any state thereof and subject to supervision
and
examination by federal and/or state banking authorities, provided
that the
commercial paper and/or long term unsecured debt obligations
of such
depository institution or trust company (or in the case of the
principal
depository institution in a holding company system, the commercial
paper
or long-term unsecured debt obligations of such holding company,
but only
if Xxxxx’x is not a Rating Agency) are then rated one of the two highest
long-term and the highest short-term ratings of each Rating Agency
for
such securities, or such lower ratings as will not result in
the
downgrading or withdrawal of the rating then assigned to the
Certificates
by either Rating Agency;
|
|
|
(v)
|
repurchase
obligations with respect to any security described in clauses (i) and
(ii) above, in either case entered into with a depository institution
or
trust company (acting as principal) described in clause (iv)
above;
|
|
|
(vi)
|
units
of a taxable money-market portfolio having the highest rating
assigned by
each Rating Agency (except if Fitch is a Rating Agency and has
not rated
the portfolio, the highest rating assigned by Moody’s) and restricted to
obligations issued or guaranteed by the United States of America
or
entities whose obligations are backed by the full faith and credit
of the
United States of America and repurchase agreements collateralized
by such
obligations; and
|
|
|
(vii)
|
such
other relatively risk free investments bearing interest or sold
at a
discount acceptable to each Rating Agency as will not result
in the
downgrading or withdrawal of the rating then assigned to the
Certificates
by either Rating Agency, as evidenced by a signed writing delivered
by
each Rating Agency, and reasonably acceptable to the NIM Insurer,
as
evidenced by a signed writing delivered by the NIM
Insurer;
|
provided,
that no such instrument shall be a Permitted Investment if such instrument
evidences the right to receive interest only payments with respect to the
obligations underlying such instrument.
Permitted
Transferee:
Any
person other than (i) the United States, any State or political subdivision
thereof, or any agency or instrumentality of any of the foregoing, (ii) a
foreign government, International Organization or any agency or instrumentality
of either of the foregoing, (iii) an organization (except certain farmers’
cooperatives described in Section 521 of the Code) which is exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511
of
the Code on unrelated business taxable income) on any excess inclusions (as
defined in Section 860E(c)(1) of the Code) with respect to any Residual
Certificate, (iv) rural electric and telephone cooperatives described in Section
1381(a)(2)(C) of the Code, (v) an “electing large partnership” as defined in
Section 775 of the Code, (vi) a Person that is not a citizen or resident of
the
United States, a corporation, partnership, or other entity created or organized
in or under the laws of the United States, any state thereof or the District
of
Columbia, or an estate or trust whose income from sources without the United
States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States or a trust if a court within the United States is
able
to exercise primary supervision over the administration of the trust and one
or
more United States persons have the authority to control all substantial
decisions of the trust unless such Person has furnished the transferor and
the
Trustee with a duly completed Internal Revenue Service Form W-8ECI or any
applicable successor form, and (vii) any other Person so designated by the
Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause any REMIC created
under this Agreement to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms “United States,” “State” and
“International Organization” shall have the meanings set forth in Section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and,
with
the exception of the Federal Home Loan Mortgage Corporation, a majority of
its
board of directors is not selected by such government unit.
23
Person:
Any
individual, corporation, partnership, joint venture, association, limited
liability company, joint-stock company, trust, unincorporated organization
or
government, or any agency or political subdivision thereof.
Physical
Certificate:
As
specified in the Preliminary Statement.
Plan:
An
“employee benefit plan” as defined in section 3(3) of ERISA that is subject to
Title I of ERISA, a “plan” as defined in section 4975 of the Code that is
subject to section 4975 of the Code, or any Person investing on behalf of or
with plan assets (as defined in 29 CFR §2510.3-101 or otherwise under ERISA) of
such an employee benefit plan or plan.
Pool
Stated Principal Balance:
The
aggregate of the Stated Principal Balances of the Outstanding Mortgage
Loans.
Prepayment
Charge:
With
respect to any Mortgage Loan, the charges or premiums, if any, due in connection
with a full or partial prepayment of such Mortgage Loan within the related
Prepayment Charge Period in accordance with the terms thereof.
Prepayment
Charge Amount:
As to
any Loan Group and Distribution Date, the sum of the Prepayment Charges
collected on the related Mortgage Loans during the related Prepayment Period
and
any amounts paid pursuant to Section 3.20 with respect to such Loan Group and
Distribution Date.
Prepayment
Charge Period:
With
respect to any Mortgage Loan, the period of time during which a Prepayment
Charge may be imposed.
Prepayment
Charge Schedule:
As of
the Cut off Date with respect to each Mortgage Loan, a list attached hereto
as
Schedule VII (including the prepayment charge summary attached thereto), setting
forth the following information with respect to each Prepayment
Charge:
| (i) |
the
Mortgage Loan identifying
number;
|
| (ii) |
a
code indicating the type of Prepayment
Charge;
|
| (iii) |
the
state of origination of the related Mortgage
Loan;
|
| (iv) |
the
Mortgage Loan identifying number;the date on which the first
monthly
payment was due on the related Mortgage
Loan;
|
| (v) |
the
term of the related Prepayment Charge;
and
|
| (vi) |
the
principal balance of the related Mortgage Loan as of
the Cut off
Date.
|
As
of the
Closing Date, the Prepayment Charge Schedule shall contain the necessary
information for each Mortgage Loan. The Prepayment Charge Schedule shall be
amended from time to time by the Master Servicer in accordance with the
provisions of this Agreement and a copy of each related amendment shall be
furnished by the Master Servicer to the Class P and Class C Certificateholders
and the NIM Insurer.
24
Prepayment
Interest Excess:
As to
any Principal Prepayment received by the Master Servicer from the first day
through the fifteenth day of any calendar month (other than the calendar month
in which the Cut-off Date occurs), all amounts paid by the related Mortgagor
in
respect of interest on such Principal Prepayment. All Prepayment Interest Excess
shall be paid to the Master Servicer as additional master servicing
compensation.
Prepayment
Interest Shortfall:
As to
any Distribution Date, Mortgage Loan and Principal Prepayment received on or
after the sixteenth day of the month preceding the month of such Distribution
Date (or, in the case of the first Distribution Date, on or after February
1,
2007) and on or before the last day of the month preceding the month of such
Distribution Date, the amount, if any, by which one month’s interest at the
related Mortgage Rate, net of the related Master Servicing Fee Rate, on such
Principal Prepayment exceeds the amount of interest paid in connection with
such
Principal Prepayment.
Prepayment
Period:
As to
any Distribution Date and the related Due Date, the period from the
16th
day of
the calendar month immediately preceding the month in which the Distribution
Date occurs (or, in the case of the first Distribution Date, from February
1,
2007) through the 15th
day of
the calendar month in which the Distribution Date occurs.
Primary
Insurance Policy:
Each
policy of primary mortgage guaranty insurance or any replacement policy therefor
with respect to any Mortgage Loan.
Prime
Rate:
The
prime commercial lending rate of The Bank of New York, as publicly announced
to
be in effect from time to time. The Prime Rate shall be adjusted automatically,
without notice, on the effective date of any change in such prime commercial
lending rate. The Prime Rate is not necessarily The Bank of New York’s lowest
rate of interest.
Principal
Distribution Amount:
With
respect to each Distribution Date and Loan Group, the sum of: (1) the Principal
Remittance Amount for such Loan Group and Distribution Date, and (2) the Extra
Principal Distribution Amount for such Loan Group and Distribution Date, minus
(3) (a) the Group 1 Overcollateralization Reduction Amount for that Distribution
Date in the case of Loan Group 1, (b) the Group 2 Overcollateralization
Reduction Amount for that Distribution Date in the case of Loan Group 2, and
(c)
the Group 3 Overcollateralization Reduction Amount for that Distribution Date
in
the case of Loan Group 3.
Principal
Prepayment:
Any
payment of principal by a Mortgagor on a Mortgage Loan that is received in
advance of its scheduled Due Date and is not accompanied by an amount
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment. Partial Principal Prepayments shall
be
applied by the Master Servicer in accordance with the terms of the related
Mortgage Note.
Principal
Prepayment in Full:
Any
Principal Prepayment made by a Mortgagor of the entire principal balance of
a
Mortgage Loan.
25
Principal
Relocation Payments:
A
payment from any Loan Group to REMIC 1 Regular Interests other than those of
their corresponding Loan Group as provided in the Preliminary Statement.
Principal Relocation Payments shall be made of principal allocations comprising
the Principal Remittance Amount for a Loan Group.
Principal
Remittance Amount:
As to
any Distribution Date and any Loan Group, (x) the sum, without duplication,
of
(a) the principal portion of each Scheduled Payment (without giving effect
to
any reductions thereof caused by any Debt Service Reductions or Deficient
Valuations) collected or advanced on each Mortgage Loan in that Loan Group
(other than a Liquidated Mortgage Loan) on the related Due Date, (b) the
principal portion of the Purchase Price of each Mortgage Loan in that Loan
Group
that was repurchased by the applicable Seller or purchased by the Master
Servicer pursuant to this Agreement as of such Distribution Date, (c) the
Substitution Adjustment Amount in connection with any Deleted Mortgage Loan
in
that Loan Group received with respect to such Distribution Date, (d) any
Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal
of Mortgage Loans in that Loan Group that are not yet Liquidated Mortgage Loans
received during the calendar month preceding the month of such Distribution
Date, (e) with respect to each Mortgage Loan in that Loan Group that became
a
Liquidated Mortgage Loan during the related Prepayment Period, the amount of
the
Liquidation Proceeds allocable to principal received during such Prepayment
Period with respect to such Mortgage Loan, (f) all Principal Prepayments on
the
Mortgage Loans in that Loan Group received during the related Prepayment Period
and (g) any Subsequent Recoveries on the Mortgage Loans in that Loan Group
received during the related Prepayment Period minus
(y) all
non-recoverable Advances on the Mortgage Loans in that Loan Group relating
to
principal and certain expenses reimbursable pursuant to Section 6.03 and
reimbursed since the immediately preceding Due Date.
Principal
Reserve Fund:
The
separate Eligible Account created and initially maintained by the Trustee
pursuant to Section 3.05(c) in the name of the Trustee for the benefit of the
Holders of the Class P Certificates and designated “The Bank of New York in
trust for registered holders of CWALT, Inc., Alternative Loan Trust 2007-HY3,
Mortgage Pass-Through Certificates, Series 2007-HY3.” Funds in the Principal
Reserve Fund shall be held in trust for the Holders of each Class of Class
P
Certificates for the uses and purposes set forth in this Agreement.
Private
Certificate:
As
specified in the Preliminary Statement.
Proprietary
Lease:
With
respect to any Cooperative Unit, a lease or occupancy agreement between a
Cooperative Corporation and a holder of related Coop Shares.
Prospectus:
The
prospectus dated November 14, 2006 generally relating to mortgage pass-through
certificates to be sold by the Depositor.
Prospectus
Supplement:
The
prospectus supplement dated February 27, 2007 relating to the Offered
Certificates.
PUD:
Planned
Unit Development.
26
Purchase
Price:
With
respect to any Mortgage Loan required to be purchased by the applicable Seller
pursuant to Section 2.02 or 2.03 or purchased at the option of the Master
Servicer pursuant to Section 3.11, an amount equal to the sum of
(i) 100% of the unpaid principal balance of the Mortgage Loan on the date
of such purchase, (ii) accrued interest thereon at the applicable Mortgage
Rate (or at the applicable Adjusted Mortgage Rate if (x) the purchaser is
the Master Servicer or (y) if the purchaser is Countrywide and Countrywide
is an affiliate of the Master Servicer) from the date through which interest
was
last paid by the Mortgagor to the Due Date in the month in which the Purchase
Price is to be distributed to Certificateholders and (iii) costs and damages
incurred by the Trust Fund in connection with a repurchase pursuant to Section
2.03 that arises out of a violation of any predatory or abusive lending law
with
respect to the related Mortgage Loan.
Qualified
Insurer:
A
mortgage guaranty insurance company duly qualified as such under the laws of
the
state of its principal place of business and each state having jurisdiction
over
such insurer in connection with the insurance policy issued by such insurer,
duly authorized and licensed in such states to transact a mortgage guaranty
insurance business in such states and to write the insurance provided by the
insurance policy issued by it, approved as a FNMA-approved mortgage insurer
and
having a claims paying ability rating of at least “AA” or equivalent rating by a
nationally recognized statistical rating organization. Any replacement insurer
with respect to a Mortgage Loan must have at least as high a claims paying
ability rating as the insurer it replaces had on the Closing Date.
Rating
Agency:
Each of
the Rating Agencies specified in the Preliminary Statement. If any such
organization or a successor is no longer in existence, “Rating Agency” shall be
such nationally recognized statistical rating organization, or other comparable
Person, identified as a “Rating Agency” under the Underwriter’s Exemption, as is
designated by the Depositor, notice of which designation shall be given to
the
Trustee. References in this Agreement to a given rating category of a Rating
Agency shall mean such rating category without giving effect to any
modifiers.
Realized
Loss:
With
respect to each Liquidated Mortgage Loan, an amount (not less than zero or
more
than the Stated Principal Balance of the Mortgage Loan) as of the date of such
liquidation, equal to (i) the Stated Principal Balance of the Liquidated
Mortgage Loan as of the date of such liquidation, plus (ii) interest at the
Adjusted Net Mortgage Rate from the Due Date as to which interest was last
paid
or advanced (and not reimbursed) to Certificateholders up to the Due Date in
the
month in which Liquidation Proceeds are required to be distributed on the Stated
Principal Balance of such Liquidated Mortgage Loan from time to time, minus
(iii) the Liquidation Proceeds, if any, received during the month in which
such liquidation occurred, to the extent applied as recoveries of interest
at
the Adjusted Net Mortgage Rate and to principal of the Liquidated Mortgage
Loan.
With respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, if the principal amount due under the related Mortgage Note has
been
reduced, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect
to each Mortgage Loan which has become the subject of a Debt Service Reduction
and any Distribution Date, the amount, if any, by which the principal portion
of
the related Scheduled Payment has been reduced.
27
To
the
extent the Master Servicer receives Subsequent Recoveries with respect to any
Mortgage Loan, the amount of Realized Losses with respect to that Mortgage
Loan
will be reduced by the amount of such Subsequent Recoveries.
Recognition
Agreement:
With
respect to any Cooperative Loan, an agreement between the Cooperative
Corporation and the originator of such Mortgage Loan which establishes the
rights of such originator in the Cooperative Property.
Record
Date:
With
respect to any Distribution Date and the Delay Certificates, the last Business
Day of the month preceding the month of that Distribution Date. With respect
to
any Distribution Date and the Non-Delay Certificates, the Business Day
immediately preceding such Distribution Date, or if such Certificates are no
longer Book-Entry Certificates, the last Business Day of the month preceding
the
month of such Distribution Date.
Reference
Bank:
As
defined in Section 4.08(b).
Refinancing
Mortgage Loan:
Any
Mortgage Loan originated in connection with the refinancing of an existing
mortgage loan.
Regular
Certificates:
As
specified in the Preliminary Statement.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
Relief
Act:
The
Servicemembers Civil Relief Act and any similar state or local
laws.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of
the Code.
REMIC
1-P:
As
defined in the Preliminary Statement.
REMIC
1-P Interest:
Each
interest in REMIC 1-P as described in the Preliminary Statement.
REMIC
1-P Regular Interest:
Each
REMIC 1-P Interest other than the Class R-1-P Interest.
REMIC
2-P:
As
defined in the Preliminary Statement.
REMIC
2-P Interest:
Each
interest in REMIC 2-P as described in the Preliminary Statement.
REMIC
2-P Regular Interest:
Each
REMIC 2-P Interest other than the Class R-2-P Interest.
28
REMIC
3-P:
As
defined in the Preliminary Statement.
REMIC
3-P Interest:
Each
interest in REMIC 3-P as described in the Preliminary Statement.
REMIC
3-P Regular Interest:
Each
REMIC 3-P Interest other than the Class R-3-P Interest.
REMIC
Cap:
For
each Distribution Date and (i) with respect to the Group 1 Senior Certificates
and the Group 2 Senior Certificates, the Weighted Average Adjusted Net Mortgage
Rate on the Mortgage Loans in the related Loan Group as of the Due Date in
the
prior calendar month (after giving effect to Principal Prepayments in the
Prepayment Period related to that prior Due Date) (ii) with respect to the
Group
3 Senior Certificates, the product of (a) the Weighted Average Adjusted Net
Mortgage Rate on the Mortgage Loans in Loan Group 3 and (b) a fraction, the
numerator of which is 30, and the denominator of which is the actual number
of
days that elapsed in the related Accrual Period and (iii) with respect to the
Subordinated Certificates, the product of (a) the sum of the following for
Loan
Group 1, Loan Group 2 and Loan Group 3: the product of: (A) the Weighted Average
Adjusted Net Mortgage Rate on the Mortgage Loans in that Loan Group; and (B)
a
fraction, (i) the numerator of which is the related Subordinated Portion
immediately prior to that Distribution Date; and (ii) the denominator of which
is the greater of, (a) such Subordinated Portion and (b) the excess of (I)
the
aggregate Stated Principal Balance of the Mortgage Loans as of the Due Date
in
the prior month (after giving effect to Principal Prepayments in the Prepayment
Period related to that prior Due Date), over (II) the aggregate Class
Certificate Balance of the Senior Certificates (other than the Notional Amount
Certificates) immediately prior to that Distribution Date, and (b) a fraction,
the numerator of which is 30, and the denominator of which is the actual number
of days that elapsed in the related Accrual Period.
REMIC
Change of Law:
Any
proposed, temporary or final regulation, revenue ruling, revenue procedure
or
other official announcement or interpretation relating to REMICs and the REMIC
Provisions issued after the Closing Date.
REMIC
C:
As
defined in the Preliminary Statement.
REMIC
C Interest:
Each
interest in REMIC C as described in the Preliminary Statement.
REMIC
C Regular Interest:
Each
REMIC C Interest other than the Class R-C Interest.
REMIC
Provisions:
Provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at Sections 860A through 860G of
Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from
time
to time as well as provisions of applicable state laws.
REO
Property:
A
Mortgaged Property acquired by the Trust Fund through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage
Loan.
Reportable
Event:
Any
event required to be reported on Form 8-K, and in any event, the following:
29
(a) entry
into a definitive agreement related to the Trust Fund, the Certificates or
the
Mortgage Loans, or an amendment to a Transaction Document, even if the Depositor
is not a party to such agreement (e.g., a servicing agreement with a servicer
contemplated by Item 1108(a)(3) of Regulation AB);
(b) termination
of a Transaction Document (other than by expiration of the agreement on its
stated termination date or as a result of all parties completing their
obligations under such agreement), even if the Depositor is not a party to
such
agreement (e.g., a servicing agreement with a servicer contemplated by Item
1108(a)(3) of Regulation AB);
(c) with
respect to the Master Servicer only, if the Master Servicer becomes aware of
any
bankruptcy or receivership with respect to Countrywide, the Depositor, the
Master Servicer, any Subservicer, the Trustee, the Cap Contract Counterparty
any
enhancement or support provider contemplated by Items 1114(b) or 1115 of
Regulation AB, or any other material party contemplated by Item 1101(d)(1)
of
Regulation AB;
(d) with
respect to the Trustee, the Master Servicer and the Depositor only, the
occurrence of an early amortization, performance trigger or other event,
including an Event of Default under this Agreement;
(e) the
resignation, removal, replacement, substitution of the Master Servicer, any
Subservicer or the Trustee;
(f) with
respect to the Master Servicer only, if the Master Servicer becomes aware that
(i) any material enhancement or support specified in Item 1114(a)(1) through
(3)
of Regulation AB or Item 1115 of Regulation AB that was previously applicable
regarding one or more classes of the Certificates has terminated other than
by
expiration of the contract on its stated termination date or as a result of
all
parties completing their obligations under such agreement; (ii) any material
enhancement specified in Item 1114(a)(1) through (3) of Regulation AB or Item
1115 of Regulation AB has been added with respect to one or more Classes of
the
Certificates; or (iii) any existing material enhancement or support specified
in
Item 1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB
with
respect to one or more Classes of the Certificates has been materially amended
or modified; and
(g) with
respect to the Trustee, the Master Servicer and the Depositor only, a required
distribution to Holders of the Certificates is not made as of the required
Distribution Date under this Agreement.
Reporting
Subcontractor:
With
respect to the Master Servicer or the Trustee, any Subcontractor determined
by
such Person pursuant to Section 11.08(b) to be “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB. References to a
Reporting Subcontractor shall refer only to the Subcontractor of such Person
and
shall not refer to Subcontractors generally.
Request
for Release:
The
Request for Release submitted by the Master Servicer to the Trustee,
substantially in the form of Exhibits M and N to this Agreement, as
appropriate.
30
Required
Insurance Policy:
With
respect to any Mortgage Loan, any insurance policy that is required to be
maintained from time to time under this Agreement.
Residual
Certificates:
As
specified in the Preliminary Statement.
Responsible
Officer:
When
used with respect to the Trustee, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, any Trust Officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also to whom, with respect
to a particular matter, such matter is referred because of such officer’s
knowledge of and familiarity with the particular subject.
Rolling
Sixty-Day Delinquency
Rate:
With
respect to any Distribution Date on or after the Stepdown Date, the average
of
the Sixty-Day Delinquency Rates for such Distribution Date and the two
immediately preceding Distribution Dates.
S&P:
Standard & Poor’s, a division of The XxXxxx-Xxxx Companies, Inc. If S&P
is designated as a Rating Agency in the Preliminary Statement, for purposes
of
Section 10.05(b) the address for notices to S&P shall be Standard &
Poor’s, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage
Surveillance Monitoring, or such other address as S&P may hereafter furnish
to the Depositor and the Master Servicer.
Xxxxxxxx-Xxxxx
Certification:
As defined in Section 11.05.
Scheduled
Balances:
Not
applicable.
Scheduled
Classes:
As
specified in the Preliminary Statement.
Scheduled
Payment:
The
scheduled monthly payment on a Mortgage Loan due on any Due Date allocable
to
principal and/or interest on such Mortgage Loan which, unless otherwise
specified in this Agreement, shall give effect to any related Debt Service
Reduction and any Deficient Valuation that affects the amount of the monthly
payment due on such Mortgage Loan.
Securities
Act:
The
Securities Act of 1933, as amended.
Seller:
Countrywide, Park Granada, Park Monaco or Park Sienna, as
applicable.
Senior
Certificates:
As
specified in the Preliminary Statement.
Senior
Enhancement Percentage:
With
respect to a Distribution Date on and after the Stepdown Date, the fraction
(expressed as a percentage) (1) the numerator of which is the excess of (a)
the
aggregate Stated Principal Balance of the Mortgage Loans for the preceding
Distribution Date over (b) (i) before the Class Certificate Balances of the
Senior Certificates have been reduced to zero, the sum of the Class Certificate
Balances of the Senior Certificates, or (ii) after the Class Certificate
Balances of the Senior Certificates have been reduced to zero, the Class
Certificate Balance of the most senior Class of Subordinated Certificates
outstanding as of the Business Day immediately preceding the Distribution Date
in the calendar month prior to the month of such Distribution Date and (2)
the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans for the preceding Distribution Date.
31
Senior
Principal Distribution Amount:
For any
Distribution Date, the excess of:
Senior
Principal Distribution Target Amount:
As to
any Distribution Date, the excess of (x) the aggregate Class Certificate
Balance of the Senior Certificates immediately prior to such Distribution Date,
over (y) the lesser of (i) 88.40% of the aggregate Stated Principal Balance
of
the Mortgage Loans as of the Due Date in the month of such Distribution Date
(after giving effect to Principal Prepayments, the principal portion of any
Liquidation Proceeds and any Subsequent Recoveries received in the related
Prepayment Period) and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the Due Date in the month of such Distribution Date (after
giving effect to Principal Prepayments, the principal portion of any Liquidation
Proceeds and any Subsequent Recoveries received in the related Prepayment
Period), minus the OC Floor.
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses incurred
in the performance by the Master Servicer of its servicing obligations,
including, but not limited to, the cost of (i) the preservation,
restoration and protection of a Mortgaged Property, (ii) any expenses
reimbursable to the Master Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.09.
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB.
Servicing
Officer:
Any
officer of the Master Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans whose name and facsimile
signature appear on a list of servicing officers furnished to the Trustee by
the
Master Servicer on the Closing Date pursuant to this Agreement, as such list
may
from time to time be amended.
Sixty-Day
Delinquency Rate:
With
respect to any Distribution Date on or after the Stepdown Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate Stated
Principal Balance for such Distribution Date of all Mortgage Loans 60 or more
days delinquent as of the close of business on the last day of the calendar
month preceding such Distribution Date (including Mortgage Loans in foreclosure,
bankruptcy and REO Properties) and the denominator of which is the aggregate
Stated Principal Balance for such Distribution Date of the Mortgage Loans as
of
the related Due Date (after giving effect to Principal Prepayments received
in
the related Prepayment Period).
Startup
Day:
The
Closing Date.
Stated
Principal Balance:
As to
any Mortgage Loan and Due Date, the unpaid principal balance of such Mortgage
Loan as of such Due Date, as specified in the amortization schedule at the
time
relating thereto (before any adjustment to such amortization schedule by reason
of any moratorium or similar waiver or grace period) after giving effect to
the
sum of: (i) any previous partial Principal Prepayments and the payment of
principal due on such Due Date, irrespective of any delinquency in payment
by
the related Mortgagor, and (ii) Liquidation Proceeds allocable to principal
(other than with respect to any Liquidated Mortgage Loan) received in the prior
calendar month and Principal Prepayments received through the last day of the
related Prepayment Period, in each case, with respect to that Mortgage
Loan.
32
Stepdown
Date:
The
earlier to occur of: (1) the Distribution Date after the Distribution Date
on
which the aggregate Class Certificate Balance of the Senior Certificates is
reduced to zero, and (2) the later to occur of (x) the Distribution Date in
March 2010 and (y) the first Distribution Date on which the aggregate Class
Certificate Balance of the Senior Certificates (after calculating anticipated
distributions on such Distribution Date) is less than or equal to 88.50% of
the
aggregate Stated Principal Balance of the Mortgage Loans as of the Due Date
in
the month of that Distribution Date (after giving effect to Principal
Prepayments, the principal portion of any Liquidation Proceeds and any
Subsequent Recoveries received in the Prepayment Period related to that Due
Date).
Stepdown
Target Subordination Percentage:
With
respect to any Class of Subordinated Certificates, the respective percentage
indicated in the following table:
|
Stepdown
Target Subordination Percentage
|
|||||||
|
Class
M-1
|
9.50%
|
|
|||||
|
Class
M-2
|
7.90%
|
|
|||||
|
Class
M-3
|
6.80%
|
|
|||||
|
Class
M-4
|
6.10%
|
|
|||||
|
Class
M-5
|
5.40%
|
|
|||||
|
Class
M-6
|
4.70%
|
|
|||||
|
Class
M-7
|
4.00%
|
|
|||||
|
Class
M-8
|
3.30%
|
|
|||||
|
Class
M-9
|
2.60%
|
|
|||||
|
Class
M-10
|
1.60%
|
|
|||||
|
Class
M-11
|
0.70%
|
|
|||||
Streamlined
Documentation Mortgage Loan:
Any
Mortgage Loan originated pursuant to Countrywide’s Streamlined Loan
Documentation Program then in effect. For the purposes of this Agreement, a
Mortgagor is eligible for a mortgage pursuant to Countrywide’s Streamlined Loan
Documentation Program if that Mortgagor is refinancing an existing mortgage
loan
that was originated or acquired by Countrywide where, among other things, the
mortgage loan has not been more than 30 days delinquent in payment during the
previous twelve month period.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
the Mortgage Loans under the direction or authority of the Master Servicer
or a
Subservicer or the Trustee, as the case may be.
Subordinated
Class Principal Distribution Target Amount:
With
respect to any Class of Subordinated Certificates and Distribution Date, the
excess of: (1) the sum of: (a) the aggregate Class Certificate Balance
of the Senior Certificates (after taking into account the distribution of the
Senior Principal Distribution Amount for such Distribution Date), (b) the
aggregate Class Certificate Balance of any Class(es) of Subordinated
Certificates that are senior to the subject Class (in each case, after taking
into account distribution of the Subordinated Class Principal Distribution
Amount(s) for such more senior Class(es) of Certificates for such Distribution
Date), and (c) the Class Certificate Balance of the subject Class of
Subordinated Certificates immediately prior to such Distribution Date over
(2) the lesser of (a) the product of (x) 100% minus the Stepdown
Target Subordination Percentage for the subject Class of Certificates and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date (after giving effect to Principal Prepayments received in
the
related Prepayment Period) and (b) the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date (after giving effect to
Principal Prepayments received in the related Prepayment Period) minus the
OC
Floor; provided, however, that if such Class of Subordinated Certificates is
the
only Class of Subordinated Certificates outstanding on such Distribution Date,
that Class will be entitled to receive the entire remaining Principal
Distribution Amount for Aggregate Loan until its Class Certificate Balance
is
reduced to zero.
33
Subordinated
Certificates:
As
specified in the Preliminary Statement.
Subordinated
Portion:
For any
Distribution Date and Loan Group, the aggregate Stated Principal Balance of
the
Mortgage Loans in the related Loan Group as of the Due Date in the prior month
(after giving effect to Principal Prepayments in the Prepayment Period related
to that prior Due Date) minus the aggregate Class Certificate Balance of the
related Senior Certificates immediately prior to such Distribution
Date.
Subordinated
WAC REMIC:
As
described in the Preliminary Statement.
Subordinated
WAC REMIC Interest:
Any one
of the REMIC Interests.
Subordinated
WAC REMIC Regular Interest:
Any one
of the “regular interests” in the Subordinated WAC REMIC described in the
Preliminary Statement.
Subsequent
Periodic Rate Cap:
As to
each Mortgage Loan and the related Mortgage Note, the provision therein that
limits permissible increases and decreases in the Mortgage Rate on the each
Adjustment Date after the first Adjustment Date for that Mortgage Loan to not
more than the amount set forth therein.
Subsequent
Recoveries:
As to
any Distribution Date and Loan Group, with respect to a Liquidated Mortgage
Loan
in that Loan Group that resulted in a Realized Loss in a prior calendar month,
unexpected amounts received by the Master Servicer (net of any related expenses
permitted to be reimbursed pursuant to Section 3.08) specifically related to
such Liquidated Mortgage Loan after the classification of such Mortgage Loan
as
a Liquidated Mortgage Loan.
Subservicer:
Any
person to whom the Master Servicer has contracted for the servicing of all
or a
portion of the Mortgage Loans pursuant to Section 3.02.
Substitute
Mortgage Loan:
A
Mortgage Loan substituted by the applicable Seller for a Deleted Mortgage Loan
which must, on the date of such substitution, as confirmed in a Request for
Release, substantially in the form of Exhibit M, (i) have a Stated
Principal Balance, after deduction of the principal portion of the Scheduled
Payment due in the month of substitution, not in excess of, and not more than
10% less than the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) be accruing interest at a rate no lower than and not more than 1% per
annum higher than, that of the Deleted Mortgage Loan; (iii) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(iv) have a remaining term to maturity no greater than (and not more than
one year less than that of) the Deleted Mortgage Loan; (v) have a Maximum
Mortgage Rate no lower than and not more than 1% per annum higher than, that
of
the Deleted Mortgage Loan; (vi) have a Minimum Mortgage Rate specified in its
related mortgage note not more than 1% per annum higher or lower than the
Minimum Mortgage Rate of the Deleted Mortgage Loan; (vii) have the same Mortgage
Index and Mortgage Index reset period as the Deleted Mortgage Loan and a Gross
Margin not more than 1% per annum higher or lower than that of the Deleted
Mortgage Loan; (viii) not be a Cooperative Loan unless the Deleted Mortgage
Loan was a Cooperative Loan and (ix) comply with each representation and
warranty set forth in Section 2.03.
34
Substitution
Adjustment Amount:
The
meaning ascribed to such term pursuant to Section 2.03.
Supplemental
Interest Trust:
The
separate trust created under this Agreement pursuant to Section
4.10.
Supplemental
Interest Trustee:
The
Bank of New York, a New York banking corporation, not in its individual
capacity, but solely in its capacity as trustee of the Supplemental Interest
Trust for the benefit of the Holders of the Certificates under this Agreement,
and any successor thereto, and any corporation or national banking association
resulting from or surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee as may from time to time
be
serving as successor trustee hereunder.
Tax
Matters Person:
The
person designated as “tax matters person” in the manner provided under Treasury
regulation § 1.860F-4(d) and Treasury regulation § 301.6231(a)(7)1.
Initially, the Tax Matters Person shall be the Trustee.
Tax
Matters Person Certificate:
The
Class A-R Certificate with a Denomination of $0.01.
Terminator:
As
defined in Section 9.01.
Transaction
Documents:
This
Agreement, the Cap Contract and any other document or agreement entered into
in
connection with the Trust Fund, the Certificates or the Mortgage
Loans.
Transfer:
Any
direct or indirect transfer or sale of any Ownership Interest in a Residual
Certificate.
Trigger
Event:
With
respect to a Distribution Date on or after the Stepdown Date, the existence
of
either a Delinquency Trigger Event or a Cumulative Loss Trigger Event with
respect to that Distribution Date.
Trust
Fund:
The
corpus of the trust created under this Agreement consisting of (i) the Mortgage
Loans and all interest and principal received on or with respect thereto after
the Cut-off Date to the extent not applied in computing the Cut-off Date
Principal Balance of the Mortgage Loans; (ii) the Certificate Account, the
Distribution Account and the Carryover Reserve Fund, and all amounts deposited
therein pursuant to the applicable provisions of this Agreement; (iii) the
Carryover Shortfall Reserve Fund; (iv) property that secured a Mortgage Loan
and
has been acquired by foreclosure, deed-in-lieu of foreclosure or otherwise;
and
(v) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
35
Trustee:
The
Bank of New York and its successors and, if a successor trustee is appointed
under this Agreement, such successor.
Trustee
Advance Rate:
With
respect to any Advance made by the Trustee pursuant to Section 4.01(b), a per
annum rate of interest determined as of the date of such Advance equal to the
Prime Rate in effect on such date plus 5.00%.
Trustee
Fee:
As to
any Distribution Date, an amount equal to one-twelfth of the Trustee Fee Rate
multiplied by the Pool Stated Principal Balance with respect to such
Distribution Date.
Trustee
Fee Rate:
With
respect to each Mortgage Loan, 0.009% per annum.
Underwriters:
As
specified in the Preliminary Statement.
Underwriter’s
Exemption:
Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002), as amended
(or any successor thereto), or any substantially similar administrative
exemption granted by the U.S. Department of Labor.
Unpaid
Realized Loss Amount:
For any
Class of Certificates, (x) the portion of the aggregate Applied Realized Loss
Amount previously allocated to that Class remaining unpaid from prior
Distribution Dates minus (y) any increase in the Class Certificate Balance
of
that Class due to the receipt of Subsequent Recoveries to the Class Certificate
Balance of that Class pursuant to Section 4.02(g).
Voting
Rights:
The
portion of the voting rights of all of the Certificates which is allocated
to
any Certificate. As of any date of determination, (a) 1% of all Voting
Rights shall be allocated to each Class of Notional Amount Certificates, if
any
(such Voting Rights to be allocated among the holders of Certificates of each
such Class in accordance with their respective Percentage Interests), (b) 1%
of
all Voting Rights shall be allocated to each of the Class A-R, Class C, Class
1-P, Class 2-P and Class 3-P Certificates, and (c) the remaining Voting Rights
shall be allocated among Holders of the remaining Classes of Certificates in
proportion to the Certificate Balances of their respective Certificates on
such
date.
Weighted
Average Adjusted Net Mortgage Rate:
For any
Distribution Date and Loan Group, the average of the Adjusted Net Mortgage
Rate
of each Mortgage Loan in that Loan Group, weighted on the basis of its Stated
Principal Balance as of the Due Date occurring in the month preceding the month
of that Distribution Date (after giving effect to Principal Prepayments in
the
Prepayment Period related to that prior Due Date).
SECTION
1.02. Certain
Interpretive Provisions.
All
terms
defined in this Agreement shall have the defined meanings when used in any
certificate, agreement or other document delivered pursuant hereto unless
otherwise defined therein. For purposes of this Agreement and all such
certificates and other documents, unless the context otherwise requires: (a)
accounting terms not otherwise defined in this Agreement, and accounting terms
partly defined in this Agreement to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles; (b) the words “hereof,” “herein” and “hereunder” and words of
similar import refer to this Agreement (or the certificate, agreement or other
document in which they are used) as a whole and not to any particular provision
of this Agreement (or such certificate, agreement or document); (c) references
to any Section, Schedule or Exhibit are references to Sections, Schedules and
Exhibits in or to this Agreement, and references to any paragraph, subsection,
clause or other subdivision within any Section or definition refer to such
paragraph, subsection, clause or other subdivision of such Section or
definition; (d) the term “including” means “including without limitation”; (e)
references to any law or regulation refer to that law or regulation as amended
from time to time and include any successor law or regulation; (f) references
to
any agreement refer to that agreement as amended from time to time; (g)
references to any Person include that Person’s permitted successors and assigns;
and (h) a Mortgage Loan is “30 days delinquent” if any Scheduled Payment has not
been received by the close of business on the day immediately preceding the
Due
Date on which the next Scheduled Payment is due. Similarly for “60 days
delinquent,” “90 days delinquent” and so on.
36
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
SECTION
2.01. Conveyance
of Mortgage Loans
(a) Each
Seller, concurrently with the execution and delivery of this Agreement, hereby
sells, transfers, assigns, sets over and otherwise conveys to the Depositor,
without recourse, all its respective right, title and interest in and to the
related Mortgage Loans, including all interest and principal received or
receivable by such Seller, on or with respect to the applicable Mortgage Loans
after the Cut-off Date and all interest and principal payments on the related
Mortgage Loans received prior to the Cut-off Date in respect of installments
of
interest and principal due thereafter, but not including payments of principal
and interest due and payable on such Mortgage Loans on or before the Cut-off
Date. On or prior to the Closing Date, Countrywide shall deliver to the
Depositor or, at the Depositor’s direction, to the Trustee or other designee of
the Depositor, the Mortgage File for each Mortgage Loan listed in the Mortgage
Loan Schedule (except that, in the case of the Delay Delivery Mortgage Loans
(which may include Countrywide Mortgage Loans, Park Granada Mortgage Loans,
Park
Monaco Mortgage Loans or Park Sienna Mortgage Loans), such delivery may take
place within thirty (30) days following the Closing Date). Such delivery of
the
Mortgage Files shall be made against payment by the Depositor of the purchase
price, previously agreed to by the Sellers and Depositor, for the Mortgage
Loans. With respect to any Mortgage Loan that does not have a first payment
date
on or before the Due Date in the month of the first Distribution Date,
Countrywide shall deposit into the Distribution Account on or before the
Distribution Account Deposit Date relating to the first Distribution Date,
an
amount equal to one month’s interest at the related Adjusted Mortgage Rate on
the Cut-off Date Principal Balance of such Mortgage Loan.
(b) Immediately
upon the conveyance of the Mortgage Loans referred to in clause (a), the
Depositor sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for the benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund together
with the Depositor’s right to require each Seller to cure any breach of a
representation or warranty made in this Agreement by such Seller or to
repurchase or substitute for any affected Mortgage Loan in accordance
herewith.
(c) In
connection with the transfer and assignment set forth in clause (b) above,
the Depositor has delivered or caused to be delivered to the Trustee (or, in
the
case of the Delay Delivery Mortgage Loans, will deliver or cause to be delivered
to the Trustee within thirty (30) days following the Closing Date) for the
benefit of the Certificateholders the following documents or instruments with
respect to each Mortgage Loan so assigned:
(i) (A) the
original
Mortgage Note endorsed by manual or facsimile signature in blank in the
following form: “Pay to the order of ____________ without recourse,” with all
intervening endorsements showing a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such endorsement
being sufficient to transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that Mortgage Note);
or
37
(B) with
respect
to any Lost Mortgage Note, a lost note affidavit from Countrywide stating that
the original Mortgage Note was lost or destroyed, together with a copy of such
Mortgage Note;
(ii) except
as
provided below and for each Mortgage Loan that is not a MERS Mortgage Loan,
the
original recorded Mortgage or a copy of such Mortgage, with recording
information, (or, in the case of a Mortgage for which the related Mortgaged
Property is located in the Commonwealth of Puerto Rico, a true copy of the
Mortgage certified as such by the applicable notary) and in the case of each
MERS Mortgage Loan, the original Mortgage or a copy of such Mortgage, with
recording information, noting the presence of the MIN of the Mortgage Loans
and
either language indicating that the Mortgage Loan is a MOM Loan if the Mortgage
Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan at origination,
the original Mortgage and the assignment thereof to MERS, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded;
(iii) in
the case
of each Mortgage Loan that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage or a copy of such assignment, with recording
information, (which may be included in a blanket assignment or assignments),
together with, except as provided below, all interim recorded assignments of
such mortgage or a copy of such assignment, with recording information, (each
such assignment, when duly and validly completed, to be in recordable form
and
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which the assignment relates); provided that, if the
related Mortgage has not been returned from the applicable public recording
office, such assignment of the Mortgage may exclude the information to be
provided by the recording office; provided, further, that such assignment of
Mortgage need not be delivered in the case of a Mortgage for which the related
Mortgaged Property is located in the Commonwealth of Puerto Rico;
(iv) the
original or
copies of each assumption, modification, written assurance or substitution
agreement, if any;
(v) except
as
provided below, the original or a copy of lender’s title policy or a printout of
the electronic equivalent and all riders thereto; and
(vi) in
the case of a
Cooperative Loan, the originals of the following documents or
instruments:
(A)
The
Coop
Shares, together with a stock power in blank;
(B) The
executed Security Agreement;
(C) The
executed Proprietary Lease;
(D) The
executed Recognition Agreement;
38
(E) The
executed UCC-1 financing statement with evidence of recording thereon which
have
been filed in all places required to perfect the applicable Seller’s interest in
the Coop Shares and the Proprietary Lease; and
(F) The
executed UCC-3 financing statements or other appropriate UCC financing
statements required by state law, evidencing a complete and unbroken line from
the mortgagee to the Trustee with evidence of recording thereon (or in a form
suitable for recordation).
In
addition, in connection with the assignment of any MERS Mortgage Loan, each
Seller agrees that it will cause, at the Trustee’s expense, the MERS® System to
indicate that the Mortgage Loans sold by such Seller to the Depositor have
been
assigned by that Seller to the Trustee in accordance with this Agreement for
the
benefit of the Certificateholders by including (or deleting, in the case of
Mortgage Loans which are repurchased in accordance with this Agreement) in
such
computer files the information required by the MERS® System to identify the
series of the Certificates issued in connection with such Mortgage Loans. Each
Seller further agrees that it will not, and will not permit the Master Servicer
to, and the Master Servicer agrees that it will not, alter the information
referenced in this paragraph with respect to any Mortgage Loan sold by such
Seller to the Depositor during the term of this Agreement unless and until
such
Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
In
the
event that in connection with any Mortgage Loan that is not a MERS Mortgage
Loan
the Depositor cannot deliver (a) the original recorded Mortgage or a copy of
such Mortgage, with recording information, or (b) all interim recorded
assignments or a copy of such assignments, with recording information, or (c)
the lender’s title policy or a copy of lender’s title policy (together with all
riders thereto) satisfying the requirements of clause (ii), (iii) or (v) above,
respectively, concurrently with the execution and delivery of this Agreement
because such document or documents have not been returned from the applicable
public recording office in the case of clause (ii) or (iii) above, or because
the title policy has not been delivered to either the Master Servicer or the
Depositor by the applicable title insurer in the case of clause (v) above,
the
Depositor shall promptly deliver to the Trustee, in the case of clause (ii)
or
(iii) above, such original Mortgage or a copy of such Mortgage, with recording
information, or such interim assignment or a copy of such assignments, with
recording information, as the case may be, with evidence of recording indicated
thereon upon receipt thereof from the public recording office, or a copy
thereof, certified, if appropriate, by the relevant recording office, but in
no
event shall any such delivery of the original Mortgage and each such interim
assignment or a copy thereof, certified, if appropriate, by the relevant
recording office, be made later than one year following the Closing Date, or,
in
the case of clause (v) above, no later than 120 days following the Closing
Date;
provided,
however,
in the
event the Depositor is unable to deliver by such date each Mortgage and each
such interim assignment by reason of the fact that any such documents have
not
been returned by the appropriate recording office, or, in the case of each
such
interim assignment, because the related Mortgage has not been returned by the
appropriate recording office, the Depositor shall deliver such documents to
the
Trustee as promptly as possible upon receipt thereof and, in any event, within
720 days following the Closing Date. The Depositor shall forward or cause to
be
forwarded to the Trustee (a) from time to time additional original documents
evidencing an assumption or modification of a Mortgage Loan and (b) any other
documents required to be delivered by the Depositor or the Master Servicer
to
the Trustee. In the event that the original Mortgage is not delivered and in
connection with the payment in full of the related Mortgage Loan and the public
recording office requires the presentation of a “lost instruments affidavit and
indemnity” or any equivalent document, because only a copy of the Mortgage can
be delivered with the instrument of satisfaction or reconveyance, the Master
Servicer shall execute and deliver or cause to be executed and delivered such
a
document to the public recording office. In the case where a public recording
office retains the original recorded Mortgage or in the case where a Mortgage
is
lost after recordation in a public recording office, Countrywide shall deliver
to the Trustee a copy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage.
39
As
promptly as practicable subsequent to such transfer and assignment, and in
any
event, within one hundred twenty (120) days after such transfer and assignment,
the Trustee shall (A) as the assignee thereof, affix the following language
to
each assignment of Mortgage: “CWALT, Inc., Series 2007-HY3, The Bank of New
York, as trustee”, (B) cause such assignment to be in proper form for recording
in the appropriate public office for real property records and (C) cause to
be
delivered for recording in the appropriate public office for real property
records the assignments of the Mortgages to the Trustee, except that, (i) with
respect to any assignments of Mortgage as to which the Trustee has not received
the information required to prepare such assignment in recordable form, the
Trustee’s obligation to do so and to deliver the same for such recording shall
be as soon as practicable after receipt of such information and in any event
within thirty (30) days after receipt thereof and (ii) the Trustee need not
cause to be recorded any assignment which relates to a Mortgage Loan, the
Mortgaged Property and Mortgage File relating to which are located in any
jurisdiction (including Puerto Rico) under the laws of which the recordation
of
such assignment is not necessary to protect the Trustee’s and the
Certificateholders’ interest in the related Mortgage Loan as evidenced by an
opinion of counsel delivered by Countrywide to the Trustee within 90 days of
the
Closing Date (which opinion may be in the form of a “survey” opinion and is not
required to be delivered by counsel admitted to practice law in the jurisdiction
as to which such legal opinion applies).
In
the
case of Mortgage Loans that have been prepaid in full as of the Closing Date,
the Depositor, in lieu of delivering the above documents to the Trustee, will
deposit in the Certificate Account the portion of such payment that is required
to be deposited in the Certificate Account pursuant to
Section 3.05.
Notwithstanding
anything to the contrary in this Agreement, within thirty (30) days after the
Closing Date with respect to the Mortgage Loans, Countrywide (on its own behalf
and on behalf of Park Granada, Park Monaco and Park Sienna) shall either
(i) deliver to the Depositor, or at the Depositor’s direction, to the
Trustee or other designee of the Depositor the Mortgage File as required
pursuant to this Section 2.01 for each Delay Delivery Mortgage Loan or
(ii) either (A) substitute a Substitute Mortgage Loan for the Delay
Delivery Mortgage Loan or (B) repurchase the Delay Delivery Mortgage Loan,
which substitution or repurchase shall be accomplished in the manner and subject
to the conditions set forth in Section 2.03 (treating each Delay Delivery
Mortgage Loan as a Deleted Mortgage Loan for purposes of such
Section 2.03); provided,
however,
that if
Countrywide fails to deliver a Mortgage File for any Delay Delivery Mortgage
Loan within the thirty (30)-day period provided in the prior sentence,
Countrywide (on its own behalf and on behalf of Park Granada, Park Monaco and
Park Sienna) shall use its best reasonable efforts to effect a substitution,
rather than a repurchase of, such Deleted Mortgage Loan and provided further
that the cure period provided for in Section 2.02 or in Section 2.03
shall not apply to the initial delivery of the Mortgage File for such Delay
Delivery Mortgage Loan, but rather Countrywide (on its own behalf and on behalf
of Park Granada, Park Monaco and Park Sienna) shall have five (5) Business
Days
to cure such failure to deliver. At the end of such thirty (30)-day period
the
Trustee shall send a Delay Delivery Certification for the Delay Delivery
Mortgage Loans delivered during such thirty (30)-day period in accordance with
the provisions of Section 2.02.
40
Each
Seller has entered into this Agreement in consideration for the purchase of
the
Mortgage Loans sold by such Seller to the Depositor and has agreed to take
the
actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders,
without recourse, all right title and interest in the portion of the Trust
Fund
not otherwise conveyed to the Trust Fund pursuant to Sections 2.01(a) or
(b).
(d) Neither
the Depositor nor the Trust will acquire or hold any Mortgage Loan that would
violate the representations made by Countrywide set forth in clause (46) of
Schedule III-A hereto.
SECTION
2.02. Acceptance
by Trustee of the Mortgage Loans.
(a) The
Trustee acknowledges receipt of the documents identified in the Initial
Certification in the form annexed hereto as Exhibit F (an “Initial
Certification”)
and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it holds or will
hold
such other assets as are included in the Trust Fund, in trust for the exclusive
use and benefit of all present and future Certificateholders. The Trustee
acknowledges that it will maintain possession of the Mortgage Notes in the
State
of California, unless otherwise permitted by the Rating Agencies.
The
Trustee agrees to execute and deliver on the Closing Date to the Depositor,
the
Master Servicer and Countrywide (on its own behalf and on behalf of Park
Granada, Park Monaco and Park Sienna) an Initial Certification in the form
annexed to this Agreement as Exhibit F. Based on its review and examination,
and
only as to the documents identified in such Initial Certification, the Trustee
acknowledges that such documents appear regular on their face and relate to
the
Mortgage Loans. The Trustee shall be under no duty or obligation to inspect,
review or examine said documents, instruments, certificates or other papers
to
determine that the same are genuine, enforceable or appropriate for the
represented purpose or that they have actually been recorded in the real estate
records or that they are other than what they purport to be on their
face.
On
or
about the thirtieth (30th)
day
after the Closing Date, the Trustee shall deliver to the Depositor, the Master
Servicer and Countrywide (on its own behalf and on behalf of Park Granada,
Park
Monaco and Park Sienna) a Delay Delivery Certification with respect to the
Mortgage Loans in the form annexed hereto as Exhibit G (a “Delay
Delivery Certification”),
with
any applicable exceptions noted thereon.
Not
later
than 90 days after the Closing Date, the Trustee shall deliver to the Depositor,
the Master Servicer and Countrywide (on its own behalf and on behalf of Park
Granada, Park Monaco and Park Sienna) a Final Certification with respect to
the
Mortgage Loans in the form annexed hereto as Exhibit H (a “Final
Certification”),
with
any applicable exceptions noted thereon.
41
If,
in
the course of such review, the Trustee finds any document constituting a part
of
a Mortgage File that does not meet the requirements of Section 2.01, the
Trustee shall list such as an exception in the Final Certification; provided,
however
that the
Trustee shall not make any determination as to whether (i) any endorsement
is sufficient to transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that Mortgage Note
or
(ii) any assignment is in recordable form or is sufficient to effect the
assignment of and transfer to the assignee thereof under the mortgage to which
the assignment relates. Countrywide (on its own behalf and on behalf of Park
Granada, Park Monaco and Park Sienna) shall promptly correct or cure such defect
within 90 days from the date it was so notified of such defect and, if
Countrywide does not correct or cure such defect within such period, Countrywide
(on its own behalf and on behalf of Park Granada, Park Monaco and Park Sienna)
shall either (a) substitute for the related Mortgage Loan a Substitute
Mortgage Loan, which substitution shall be accomplished in the manner and
subject to the conditions set forth in Section 2.03, or (b) purchase
such Mortgage Loan from the Trustee within 90 days from the date Countrywide
(on
its own behalf and on behalf of Park Granada, Park Monaco and Park Sienna)
was
notified of such defect in writing at the Purchase Price of such Mortgage Loan;
provided,
however,
that in
no event shall such substitution or purchase occur more than 540 days from
the
Closing Date, except that if the substitution or purchase of a Mortgage Loan
pursuant to this provision is required by reason of a delay in delivery of
any
documents by the appropriate recording office, and there is a dispute between
either the Master Servicer or Countrywide (on its own behalf and on behalf
of
Park Granada, Park Monaco and Park Sienna) and the Trustee over the location
or
status of the recorded document, then such substitution or purchase shall occur
within 720 days from the Closing Date. The Trustee shall deliver written notice
to each Rating Agency within 270 days from the Closing Date indicating each
Mortgage Loan (a) that has not been returned by the appropriate recording
office or (b) as to which there is a dispute as to location or status of
such Mortgage Loan. Such notice shall be delivered every 90 days thereafter
until the related Mortgage Loan is returned to the Trustee. Any such
substitution pursuant to (a) above or purchase pursuant to (b) above
shall not be effected prior to the delivery to the Trustee of the Opinion of
Counsel required by Section 2.05, if any, and any substitution pursuant to
(a) above shall not be effected prior to the additional delivery to the Trustee
of a Request for Release substantially in the form of Exhibit N. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. The Purchase Price for any such Mortgage
Loan
shall be deposited by Countrywide (on its own behalf and on behalf of Park
Granada, Park Monaco and Park Sienna) in the Certificate Account on or prior
to
the Distribution Account Deposit Date for the Distribution Date in the month
following the month of repurchase and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit N hereto, the
Trustee shall release the related Mortgage File to Countrywide (on its own
behalf and on behalf of Park Granada, Park Monaco and Park Sienna) and shall
execute and deliver at Countrywide’s (on its own behalf and on behalf of Park
Granada, Park Monaco and Park Sienna) request such instruments of transfer
or
assignment prepared by Countrywide, in each case without recourse, as shall
be
necessary to vest in Countrywide (on its own behalf and on behalf of Park
Granada, Park Monaco and Park Sienna), or its designee, the Trustee’s interest
in any Mortgage Loan released pursuant hereto. If pursuant to the foregoing
provisions Countrywide (on its own behalf and on behalf of Park Granada, Park
Monaco and Park Sienna) repurchases a Mortgage Loan that is a MERS Mortgage
Loan, the Master Servicer shall either (i) cause MERS to execute and deliver
an
assignment of the Mortgage in recordable form to transfer the Mortgage from
MERS
to Countrywide (on its own behalf and on behalf of Park Granada, Park Monaco
and
Park Sienna) or its designee and shall cause such Mortgage to be removed from
registration on the MERS® System in accordance with MERS’ rules and regulations
or (ii) cause MERS to designate on the MERS® System Countrywide (on its own
behalf and on behalf of Park Granada, Park Monaco and Park Sienna) or its
designee as the beneficial holder of such Mortgage Loan.
42
(b) [Reserved].
(c) [Reserved].
(d) The
Trustee shall retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions set forth in this Agreement. The
Master Servicer shall promptly deliver to the Trustee, upon the execution or
receipt thereof, the originals of such other documents or instruments
constituting the Mortgage File as come into the possession of the Master
Servicer from time to time.
(e) It
is
understood and agreed that the respective obligations of each Seller to
substitute for or to purchase any Mortgage Loan sold to the Depositor by it
which does not meet the requirements of Section 2.01 above shall constitute
the sole remedy respecting such defect available to the Trustee, the Depositor
and any Certificateholder against that Seller.
SECTION
2.03. Representations,
Warranties and Covenants of the Sellers and Master Servicer.
(a) Countrywide
hereby makes the representations and warranties set forth in (i) Schedule II-A,
Schedule II-B, Schedule II-C and Schedule II-D hereto, and by this reference
incorporated herein, to the Depositor, the Master Servicer and the Trustee,
as
of the Closing Date, (ii) Schedule III-A hereto, and by this reference
incorporated herein, to the Depositor, the Master Servicer and the Trustee,
as
of the Closing Date, or if so specified therein, as of the Cut-off Date with
respect to the Mortgage Loans, and (iii) Schedule III-B hereto, and by this
reference incorporated herein, to the Depositor, the Master Servicer and the
Trustee, as of the Closing Date, or if so specified therein, as of the Cut-off
Date with respect to the Mortgage Loans that are Countrywide Mortgage Loans.
Park Granada hereby makes the representations and warranties set forth in (i)
Schedule II-B hereto, and by this reference incorporated herein, to the
Depositor, the Master Servicer and the Trustee, as of the Closing Date and
(ii)
Schedule III-C hereto, and by this reference incorporated herein, to the
Depositor, the Master Servicer and the Trustee, as of the Closing Date, or
if so
specified therein, as of the Cut-off Date with respect to the Mortgage Loans
that are Park Granada Mortgage Loans. Park Monaco hereby makes the
representations and warranties set forth in (i) Schedule II-C hereto, and
by this reference incorporated herein, to the Depositor, the Master Servicer
and
the Trustee, as of the Closing Date and (ii) Schedule III-D hereto, and by
this reference incorporated herein, to the Depositor, the Master Servicer and
the Trustee, as of the Closing Date, or if so specified therein, as of the
Cut-off Date with respect to the Mortgage Loans that are Park Monaco Mortgage
Loans. Park Sienna hereby makes the representations and warranties set forth
in
(i) Schedule II-D hereto, and by this reference incorporated herein, to the
Depositor, the Master Servicer and the Trustee, as of the Closing Date and
(ii) Schedule III-E hereto, and by this reference incorporated herein, to
the Depositor, the Master Servicer and the Trustee, as of the Closing Date,
or
if so specified therein, as of the Cut-off Date with respect to the Mortgage
Loans that are Park Sienna Mortgage Loans.
43
(b) The
Master Servicer hereby makes the representations and warranties set forth in
Schedule IV hereto, and by this reference incorporated herein, to the Depositor
and the Trustee, as of the Closing Date.
(c) Upon
discovery by any of the parties hereto of a breach of a representation or
warranty with respect to a Mortgage Loan made pursuant to Section 2.03(a)
that materially and adversely affects the interests of the Certificateholders
in
that Mortgage Loan, the party discovering such breach shall give prompt notice
thereof to the other parties and the NIM Insurer. Each Seller hereby covenants
that within 90 days of the earlier of its discovery or its receipt of written
notice from any party of a breach of any representation or warranty with respect
to a Mortgage Loan sold by it pursuant to Section 2.03(a) that materially
and adversely affects the interests of the Certificateholders in that Mortgage
Loan, it shall cure such breach in all material respects, and if such breach
is
not so cured, shall, (i) if such 90-day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a “Deleted
Mortgage Loan”)
from
the Trust Fund and substitute in its place a Substitute Mortgage Loan, in the
manner and subject to the conditions set forth in this Section; or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the
Trustee at the Purchase Price in the manner set forth below; provided,
however,
that
any such substitution pursuant to (i) above shall not be effected prior to
the
delivery to the Trustee of the Opinion of Counsel required by Section 2.05,
if any, and any such substitution pursuant to (i) above shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit N and the Mortgage File for any such
Substitute Mortgage Loan. The Seller repurchasing a Mortgage Loan pursuant
to
this Section 2.03(c) shall promptly reimburse the Master Servicer and the
Trustee for any expenses reasonably incurred by the Master Servicer or the
Trustee in respect of enforcing the remedies for such breach. With respect
to
the representations and warranties described in this Section which are made
to the best of a Seller’s knowledge, if it is discovered by either the
Depositor, a Seller or the Trustee that the substance of such representation
and
warranty is inaccurate and such inaccuracy materially and adversely affects
the
value of the related Mortgage Loan or the interests of the Certificateholders
therein, notwithstanding that Seller’s lack of knowledge with respect to the
substance of such representation or warranty, such inaccuracy shall be deemed
a
breach of the applicable representation or warranty.
With
respect to any Substitute Mortgage Loan or Loans sold to the Depositor by a
Seller, Countrywide (on its own behalf and on behalf of Park Granada, Park
Monaco and Park Sienna) shall deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment
of
the Mortgage, and such other documents and agreements as are required by
Section 2.01, with the Mortgage Note endorsed and the Mortgage assigned as
required by Section 2.01. No substitution is permitted to be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Substitute Mortgage Loans in the month of substitution
shall
not be part of the Trust Fund and will be retained by the related Seller on
the
next succeeding Distribution Date. For the month of substitution, distributions
to Certificateholders will include the monthly payment due on any Deleted
Mortgage Loan for such month and thereafter that Seller shall be entitled to
retain all amounts received in respect of such Deleted Mortgage Loan. The Master
Servicer shall amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and
the
substitution of the Substitute Mortgage Loan or Loans and the Master Servicer
shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the Substitute Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and the related Seller shall be deemed
to have made with respect to such Substitute Mortgage Loan or Loans, as of
the
date of substitution, the representations and warranties made pursuant to
Section 2.03(a) with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Certificate Account of the amount required
to be deposited therein in connection with such substitution as described in
the
following paragraph, the Trustee shall release the Mortgage File held for the
benefit of the Certificateholders relating to such Deleted Mortgage Loan to
the
related Seller and shall execute and deliver at such Seller’s direction such
instruments of transfer or assignment prepared by Countrywide (on its own behalf
and on behalf of Park Granada, Park Monaco and Park Sienna), in each case
without recourse, as shall be necessary to vest title in that Seller, or its
designee, the Trustee’s interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.03.
44
For
any
month in which a Seller substitutes one or more Substitute Mortgage Loans for
one or more Deleted Mortgage Loans, the Master Servicer will determine the
amount (if any) by which the aggregate principal balance of all Substitute
Mortgage Loans sold to the Depositor by that Seller as of the date of
substitution is less than the aggregate Stated Principal Balance of all Deleted
Mortgage Loans repurchased by that Seller (after application of the scheduled
principal portion of the monthly payments due in the month of substitution).
The
amount of such shortage (the “Substitution
Adjustment Amount”)
plus
an amount equal to the aggregate of any unreimbursed Advances with respect
to
such Deleted Mortgage Loans shall be deposited in the Certificate Account by
Countrywide (on its own behalf and on behalf of Park Granada, Park Monaco and
Park Sienna) on or before the Distribution Account Deposit Date for the
Distribution Date in the month succeeding the calendar month during which the
related Mortgage Loan became required to be purchased or replaced
hereunder.
In
the
event that a Seller shall have repurchased a Mortgage Loan, the Purchase Price
therefor shall be deposited in the Certificate Account pursuant to
Section 3.05 on or before the Distribution Account Deposit Date for the
Distribution Date in the month following the month during which that Seller
became obligated hereunder to repurchase or replace such Mortgage Loan and
upon
such deposit of the Purchase Price, the delivery of the Opinion of Counsel
required by Section 2.05 and receipt of a Request for Release in the form
of Exhibit N hereto, the Trustee shall release the related Mortgage File
held for the benefit of the Certificateholders to such Person, and the Trustee
shall execute and deliver at such Person’s direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood
and
agreed that the obligation under this Agreement of any Person to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and
is
continuing shall constitute the sole remedy against such Persons respecting
such
breach available to Certificateholders, the Depositor or the Trustee on their
behalf.
The
representations and warranties made pursuant to this Section 2.03 shall
survive delivery of the respective Mortgage Files to the Trustee for the benefit
of the Certificateholders.
SECTION
2.04. Representations
and Warranties of the Depositor as to the Mortgage Loans.
45
The
Depositor hereby represents and warrants to the Trustee with respect to each
Mortgage Loan as of the date of this Agreement or such other date set forth
in
this Agreement that as of the Closing Date, and following the transfer of the
Mortgage Loans to it by each Seller, the Depositor had good title to the
Mortgage Loans and the Mortgage Notes were subject to no offsets, defenses
or
counterclaims.
The
Depositor hereby assigns, transfers and conveys to the Trustee all of its rights
with respect to the Mortgage Loans including, without limitation, the
representations and warranties of each Seller made pursuant to
Section 2.03(a), together with all rights of the Depositor to require a
Seller to cure any breach thereof or to repurchase or substitute for any
affected Mortgage Loan in accordance with this Agreement.
It
is
understood and agreed that the representations and warranties set forth in
this
Section 2.04 shall survive delivery of the Mortgage Files to the Trustee. Upon
discovery by the Depositor or the Trustee of a breach of any of the foregoing
representations and warranties set forth in this Section 2.04 (referred to
herein as a “breach”), which breach materially and adversely affects the
interest of the Certificateholders, the party discovering such breach shall
give
prompt written notice to the others and to each Rating Agency and the NIM
Insurer.
SECTION
2.05. Delivery
of Opinion of Counsel in Connection with Substitutions.
(a) Notwithstanding
any contrary provision of this Agreement, no substitution pursuant to
Section 2.02 or Section 2.03 shall be made more than 90 days after the
Closing Date unless Countrywide delivers to the Trustee an Opinion of Counsel,
which Opinion of Counsel shall not be at the expense of either the Trustee
or
the Trust Fund, addressed to the Trustee, to the effect that such substitution
will not (i) result in the imposition of the tax on “prohibited
transactions” on the Trust Fund or contributions after the Startup Date, as
defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively, or
(ii) cause any REMIC created under this Agreement to fail to qualify as a
REMIC at any time that any Certificates are outstanding.
(b) Upon
discovery by the Depositor, a Seller, the Master Servicer, or the Trustee that
any Mortgage Loan does not constitute a “qualified mortgage” within the meaning
of Section 860G(a)(3) of the Code, the party discovering such fact shall
promptly (and in any event within five (5) Business Days of discovery) give
written notice thereof to the other parties and the NIM Insurer. In connection
therewith, the Trustee shall require Countrywide (on its own behalf and on
behalf of Park Granada, Park Monaco and Park Sienna) at its option, to either
(i) substitute, if the conditions in Section 2.03(c) with respect to
substitutions are satisfied, a Substitute Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days
of such discovery in the same manner as it would a Mortgage Loan for a breach
of
representation or warranty made pursuant to Section 2.03. The Trustee shall
reconvey to Countrywide the Mortgage Loan to be released pursuant to this
Section in the same manner, and on the same terms and conditions, as it would
a
Mortgage Loan repurchased for breach of a representation or warranty contained
in Section 2.03.
SECTION
2.06. Execution
and Delivery of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, has executed and delivered
to or
upon the order of the Depositor, the Certificates in authorized denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates and to
perform the duties set forth in this Agreement, to the end that the interests
of
the Holders of the Certificates may be adequately and effectively protected.
46
SECTION
2.07. REMIC
Matters.
The
Preliminary Statement sets forth the designations and “latest possible maturity
date” for federal income tax purposes of all interests created hereby. The
“Startup Day” for purposes of the REMIC Provisions shall be the Closing Date.
The “tax matters person” with respect to each REMIC hereunder shall be the
Trustee and the Trustee shall hold the Tax Matters Person Certificate. Each
REMIC’s fiscal year shall be the calendar year.
SECTION
2.08. Covenants
of the Master Servicer.
The
Master Servicer hereby covenants to the Depositor and the Trustee as
follows:
(a) the
Master Servicer shall comply in the performance of its obligations under this
Agreement with all reasonable rules and requirements of the insurer under each
Required Insurance Policy; and
(b) no
written information, certificate of an officer, statement furnished in writing
or written report delivered to the Depositor, any affiliate of the Depositor
or
the Trustee and prepared by the Master Servicer pursuant to this Agreement
will
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make such information, certificate, statement or report not
misleading.
47
ARTICLE
III
ADMINISTRATION
AND SERVICING
OF
MORTGAGE LOANS
SECTION
3.01. Master
Servicer to Service Mortgage Loans.
For
and
on behalf of the Certificateholders, the Master Servicer shall service and
administer the Mortgage Loans in accordance with the terms of this Agreement
and
customary and usual standards of practice of prudent mortgage loan servicers.
In
connection with such servicing and administration, the Master Servicer shall
have full power and authority, acting alone and/or through Subservicers as
provided in Section 3.02, subject to the terms of this Agreement
(i) to execute and deliver, on behalf of the Certificateholders and the
Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of
the Mortgage Notes and related Mortgages (but only in the manner provided in
this Agreement), (iii) to collect any Insurance Proceeds and other
Liquidation Proceeds (which for the purpose of this Section 3.01 includes any
Subsequent Recoveries), and (iv) to effectuate foreclosure or other
conversion of the ownership of the Mortgaged Property securing any Mortgage
Loan; provided that the Master Servicer shall not take any action that is
inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee and the Certificateholders under this Agreement. The
Master Servicer shall represent and protect the interests of the Trust Fund
in
the same manner as it protects its own interests in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan,
and
shall not make or permit any modification, waiver or amendment of any Mortgage
Loan which would cause any REMIC created under this Agreement to fail to qualify
as a REMIC or result in the imposition of any tax under section 860F(a) or
section 860G(d) of the Code. Without limiting the generality of the
foregoing, the Master Servicer, in its own name or in the name of the Depositor
and the Trustee, is hereby authorized and empowered by the Depositor and the
Trustee, when the Master Servicer believes it appropriate in its reasonable
judgment, to execute and deliver, on behalf of the Trustee, the Depositor,
the
Certificateholders or any of them, any and all instruments of satisfaction
or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans, and with respect
to
the Mortgaged Properties held for the benefit of the Certificateholders. The
Master Servicer shall prepare and deliver to the Depositor and/or the Trustee
such documents requiring execution and delivery by either or both of them as
are
necessary or appropriate to enable the Master Servicer to service and administer
the Mortgage Loans to the extent that the Master Servicer is not permitted
to
execute and deliver such documents pursuant to the preceding sentence. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Master Servicer. The Master Servicer further
is authorized and empowered by the Trustee, on behalf of the Certificateholders
and the Trustee, in its own name or in the name of the Subservicer, when the
Master Servicer or the Subservicer, as the case may be, believes it appropriate
in its best judgment to register any Mortgage Loan on the MERS® System, or cause
the removal from the registration of any Mortgage Loan on the MERS® System, to
execute and deliver, on behalf of the Trustee and the Certificateholders or
any
of them, any and all instruments of assignment and other comparable instruments
with respect to such assignment or re-recording of a Mortgage in the name of
MERS, solely as nominee for the Trustee and its successors and
assigns.
48
In
accordance with the standards of the preceding paragraph, the Master Servicer
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the payment of taxes and assessments on the Mortgaged Properties,
which advances shall be reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. The costs incurred by the Master Servicer, if
any, in effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balances of the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
SECTION
3.02. Subservicing;
Enforcement of the Obligations of Servicers.
(a) The
Master Servicer may arrange for the subservicing of any Mortgage Loan by a
Subservicer pursuant to a subservicing agreement; provided,
however,
that
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated under this Agreement;
provided, however, that the NIM Insurer shall have consented to such
subservicing agreements (which consent shall not be unreasonably withheld).
Unless the context otherwise requires, references in this Agreement to actions
taken or to be taken by the Master Servicer in servicing the Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf of the Master
Servicer. Notwithstanding the provisions of any subservicing agreement, any
of
the provisions of this Agreement relating to agreements or arrangements between
the Master Servicer and a Subservicer or reference to actions taken through
a
Subservicer or otherwise, the Master Servicer shall remain obligated and liable
to the Depositor, the Trustee and the Certificateholders for the servicing
and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from
the
Subservicer and to the same extent and under the same terms and conditions
as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
All actions of each Subservicer performed pursuant to the related subservicing
agreement shall be performed as an agent of the Master Servicer with the same
force and effect as if performed directly by the Master Servicer.
(b) For
purposes of this Agreement, the Master Servicer shall be deemed to have received
any collections, recoveries or payments with respect to the Mortgage Loans
that
are received by a Subservicer regardless of whether such payments are remitted
by the Subservicer to the Master Servicer.
SECTION
3.03. Rights
of the Depositor, the NIM Insurer and the Trustee in Respect of the Master
Servicer.
The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer under this Agreement and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
under this Agreement and in connection with any such defaulted obligation to
exercise the related rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. None of the Trustee, the NIM Insurer or the Depositor shall
have any responsibility or liability for any action or failure to act by the
Master Servicer nor shall the Trustee or the Depositor be obligated to supervise
the performance of the Master Servicer under this Agreement or
otherwise.
49
SECTION
3.04. Trustee
to Act as Master Servicer.
In
the
event that the Master Servicer shall for any reason no longer be the Master
Servicer under this Agreement (including by reason of an Event of Default or
termination by the Depositor), the Trustee or its successor shall then assume
all of the rights and obligations of the Master Servicer under this Agreement
arising thereafter (except that the Trustee shall not be (i) liable for
losses of the Master Servicer pursuant to Section 3.09 or any acts or
omissions of the predecessor Master Servicer under this Agreement),
(ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions
of Mortgage Loans under this Agreement including, but not limited to,
repurchases or substitutions of Mortgage Loans pursuant to Section 2.02 or
2.03, (iv) responsible for expenses of the Master Servicer pursuant to
Section 2.03 or (v) deemed to have made any representations and
warranties of the Master Servicer under this Agreement). Any such assumption
shall be subject to Section 7.02. If the Master Servicer shall for any
reason no longer be the Master Servicer (including by reason of any Event of
Default or termination by the Depositor), the Trustee or its successor shall
succeed to any rights and obligations of the Master Servicer under each
subservicing agreement.
The
Master Servicer shall, upon request of the Trustee, but at the expense of the
Master Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement or substitute subservicing agreement
and
the Mortgage Loans then being serviced thereunder and an accounting of amounts
collected or held by it and otherwise use its best efforts to effect the orderly
and efficient transfer of the substitute subservicing agreement to the assuming
party.
| SECTION 3.05. |
Collection
of Mortgage Loan Payments; Certificate Account; Distribution Account;
Carryover Reserve Fund; Principal Reserve Fund; Supplemental Interest
Trust and Cap Contract Reserve Fund.
|
(a) The
Master Servicer shall make reasonable efforts in accordance with the customary
and usual standards of practice of prudent mortgage servicers to collect all
payments called for under the terms and provisions of the Mortgage Loans to
the
extent such procedures shall be consistent with this Agreement and the terms
and
provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, subject to Section 3.20, any Prepayment Charge or penalty
interest in connection with the prepayment of a Mortgage Loan and
(ii) extend the due dates for payments due on a Mortgage Note for a period
not greater than 180 days; provided,
however,
that
the Master Servicer cannot extend the maturity of any such Mortgage Loan past
the date on which the final payment is due on the latest maturing Mortgage
Loan
as of the Cut-off Date. In the event of any such arrangement, the Master
Servicer shall make Advances on the related Mortgage Loan in accordance with
the
provisions of Section 4.01 during the scheduled period in accordance with
the amortization schedule of such Mortgage Loan without modification thereof
by
reason of such arrangements. In addition, the NIM Insurer’s prior written
consent shall be required for any waiver of Prepayment Charges or for the
extension of the due dates for payments due on a Mortgage Note, if the aggregate
number of outstanding Mortgage Loans that have been granted such waivers or
extensions exceeds 5% of the aggregate number of Mortgage Loans. The Master
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law.
50
(b) The
Master Servicer shall establish and maintain a Certificate Account into which
the Master Servicer shall deposit or cause to be deposited no later than two
Business Days after receipt (or, if the current long-term credit rating of
Countrywide is reduced below “A-” by
S&P or “A3” by Xxxxx’x, the Master Servicer shall deposit or cause to be
deposited on a daily basis within one Business Day of receipt), except as
otherwise specifically provided in this Agreement, the following payments and
collections remitted by Subservicers or received by it in respect of Mortgage
Loans subsequent to the Cut-off Date (other than in respect of principal and
interest due on the Mortgage Loans on or before the Cut-off Date) and the
following amounts required to be deposited under this Agreement:
| (i) |
all
payments on account of principal on the Mortgage Loans, including
Principal Prepayments and Prepayment
Charges;
|
| (ii) |
all
payments on account of interest on the Mortgage Loans,
net of the related
Master Servicing Fee, Prepayment Interest Excess and any
lender paid
mortgage insurance premiums;
|
| (iii) |
all
Insurance Proceeds, Subsequent Recoveries and Liquidation
Proceeds, other
than proceeds to be applied to the restoration or
repair of a Mortgaged
Property or released to the Mortgagor in accordance
with the Master
Servicer’s normal servicing
procedures;
|
| (iv) |
any
amount required to be deposited by the Master
Servicer or the Depositor in
connection with any losses on Permitted Investments
for which it is
responsible;
|
| (v) |
any
amounts required to be deposited by the
Master Servicer pursuant to
Section 3.09(c) and in respect of net monthly rental
income from REO
Property pursuant to
Section 3.11;
|
| (vi) |
all
Substitution Adjustment
Amounts;
|
| (vii) |
all
Advances made by the Master
Servicer pursuant to Section 4.01;
and
|
| (viii) |
any
other amounts required
to be deposited under
this
Agreement.
|
In
addition, with respect to any Mortgage Loan that is subject to a buydown
agreement, on each Due Date for such Mortgage Loan, in addition to the monthly
payment remitted by the Mortgagor, the Master Servicer shall cause funds to
be
deposited into the Certificate Account in an amount required to cause an amount
of interest to be paid with respect to such Mortgage Loan equal to the amount
of
interest that has accrued on such Mortgage Loan from the preceding Due Date
at
the Mortgage Rate net of the related Master Servicing Fee.
51
The
foregoing requirements for remittance by the Master Servicer shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges or assumption fees,
if
collected, need not be remitted by the Master Servicer. In the event that the
Master Servicer shall remit any amount not required to be remitted, it may
at
any time withdraw or direct the institution maintaining the Certificate Account
to withdraw such amount from the Certificate Account, any provision in this
Agreement to the contrary notwithstanding. Such withdrawal or direction may
be
accomplished by delivering written notice thereof to the Trustee or such other
institution maintaining the Certificate Account which describes the amounts
deposited in error in the Certificate Account. The Master Servicer shall
maintain adequate records with respect to all withdrawals made pursuant to
this
Section. All funds deposited in the Certificate Account shall be held in trust
for the Certificateholders until withdrawn in accordance with
Section 3.08.
(c) The
Trustee shall establish and maintain, on behalf of the Holders of the Class
P
Certificates, a Principal Reserve Fund in the name of the Trustee. On the
Closing Date, the Depositor shall deposit into the Principal Reserve Fund $300.
Funds on deposit in the Principal Reserve Fund shall not be invested. The
Principal Reserve Fund shall be treated as an “outside reserve fund” under
applicable Treasury regulations and shall not be part of any REMIC created
under
this Agreement. Amounts on deposit in the Principal Reserve Fund shall not
be
invested.
(d) The
Trustee shall establish and maintain, on behalf of the Certificateholders,
the
Distribution Account. The Trustee shall, promptly upon receipt, deposit in
the
Distribution Account and retain in the Distribution Account the
following:
| (i) |
the
aggregate amount remitted by the Master Servicer to the Trustee
pursuant
to Section 3.08(a)(ix);
|
| (ii) |
any
amount deposited by the Master Servicer or the Depositor
pursuant to
Section 3.05(e) in connection with any losses on Permitted
Investments for which it is responsible;
and
|
| (iii) |
any
other amounts deposited hereunder which are required
to be deposited in
the Distribution Account.
|
In
the
event that the Master Servicer shall remit any amount not required
to be
remitted, it may at any time direct the Trustee to withdraw
such amount from the
Distribution Account, any provision in this Agreement to the
contrary
notwithstanding. Such direction may be accomplished by delivering
an Officer’s
Certificate to the Trustee which describes the amounts deposited
in error in the
Distribution Account. All funds deposited in the Distribution
Account shall be
held by the Trustee in trust for the Certificateholders until
disbursed in
accordance with this Agreement or withdrawn in accordance with
Section 3.08. In no event shall the Trustee incur liability for withdrawals
from the Distribution Account at the direction of the Master
Servicer.
52
(e) Each
institution at which the Certificate Account or the Distribution Account is
maintained shall invest the funds therein as directed in writing by the Master
Servicer in Permitted Investments, which shall mature not later than (i) in
the case of the Certificate Account, the second Business Day next preceding
the
related Distribution Account Deposit Date (except that if such Permitted
Investment is an obligation of the institution that maintains such account,
then
such Permitted Investment shall mature not later than the Business Day next
preceding such Distribution Account Deposit Date) and (ii) in the case of
the Distribution Account, the Business Day next preceding the Distribution
Date
(except that if such Permitted Investment is an obligation of the institution
that maintains such fund or account, then such Permitted Investment shall mature
not later than such Distribution Date) and, in each case, shall not be sold
or
disposed of prior to its maturity. All such Permitted Investments shall be
made
in the name of the Trustee, for the benefit of the Certificateholders. All
income and gain net of any losses realized from any such investment of funds
on
deposit in the Certificate Account, or the Distribution Account shall be for
the
benefit of the Master Servicer as servicing compensation and shall be remitted
to it monthly as provided in this Agreement. The amount of any realized losses
in the Certificate Account or the Distribution Account incurred in any such
account in respect of any such investments shall promptly be deposited by the
Master Servicer in the Certificate Account or paid to the Trustee for deposit
into the Distribution Account, as applicable. The Trustee in its fiduciary
capacity shall not be liable for the amount of any loss incurred in respect
of
any investment or lack of investment of funds held in the Certificate Account
or
the Distribution Account and made in accordance with this Section
3.05.
(f) The
Master Servicer shall give notice to the Trustee, each Seller, each Rating
Agency and the Depositor of any proposed change of the location of the
Certificate Account prior to any change thereof. The Trustee shall give notice
to the Master Servicer, each Seller, each Rating Agency and the Depositor of
any
proposed change of the location of the Distribution Account or the Carryover
Reserve Fund or the Cap Contract Reserve Fund prior to any change
thereof.
(g) On
the
Closing Date, the Trustee shall establish and maintain in its name, in trust
for
the benefit of the Holders of the Offered Certificates, the Carryover Reserve
Fund and shall deposit $1,000 therein upon receipt from or on behalf of the
Depositor of such amount. The Carryover Reserve Fund shall be an Eligible
Account, and funds on deposit therein shall be held separate and apart from,
and
shall not be commingled with, any other moneys, including without limitation,
other moneys held by the Trustee pursuant to this Agreement.
Funds
in
the Carryover Reserve Fund may be invested in Permitted Investments at the
direction of the Majority Holders of the Class C Certificates, which Permitted
Investments shall mature not later than the Business Day immediately preceding
the first Distribution Date that follows the date of such investment (except
that if such Permitted Investment is an obligation of the institution that
maintains the Carryover Reserve Fund, then such Permitted Investment shall
mature not later than such Distribution Date) and shall not be sold or disposed
of prior to maturity. All such Permitted Investments shall be made in the name
of the Trustee, for the benefit of the Holders of the Class C Certificates.
In
the absence of such written direction, all funds in the Carryover Reserve Fund
shall be invested by the Trustee in The Bank of New York cash reserves. Any
net
investment earnings on such amounts shall be retained therein until withdrawn
as
provided in Section 3.08. Any losses incurred in the Carryover Reserve Fund
in
respect of any such investments shall be charged against amounts on deposit
in
the Carryover Reserve Fund (or such investments) immediately as realized. The
Trustee shall not be liable for the amount of any loss incurred in respect
of
any investment or lack of investment of funds held in the Carryover Reserve
Fund
and made in accordance with this Section 3.05. The Carryover Reserve Fund will
not constitute an asset of any REMIC created hereunder. The Class C Certificates
shall evidence ownership of the Carryover Reserve Fund for federal tax
purposes.
(h) On
the
Closing Date, the Supplemental Interest Trustee shall establish and maintain
in
its name, in trust for the benefit of the Holders of the Covered Certificates,
the Cap Contract Reserve Fund, and shall deposit $1,000 therein upon receipt
from or on behalf of the Depositor of such amount. All funds on deposit in
the
Cap Contract Reserve Fund shall be held separate and apart from, and shall
not
be commingled with, any other moneys, including without limitation, other moneys
held by the Supplemental Interest Trustee or the Trustee pursuant to this
Agreement.
On
each
Distribution Date, the Supplemental Interest Trustee shall deposit into the
Cap
Contract Reserve Fund all amounts received in respect of the Cap Contract for
the related Accrual Period. The Supplemental Interest Trustee shall make
withdrawals from the Cap Contract Reserve Fund to make distributions pursuant
to
Section 4.02(e) exclusively (other than as expressly provided for in Section
3.08). Notwithstanding anything to the contrary in this Agreement, the
Supplemental Interest Trustee shall be allowed to transfer funds in the Cap
Contract Reserve Fund to the Trustee to facilitate, for administrative purposes,
distribution of such funds to Certificateholders through the Distribution
Account.
Funds
in
the Cap Contract Reserve Fund may be invested in Permitted Investments at the
direction of the Majority Holders of the Class C Certificates, which Permitted
Investments shall mature not later than the Business Day immediately preceding
the first Distribution Date that follows the date of such investment (except
that if such Permitted Investment is an obligation of the institution that
maintains the Cap Contract Reserve Fund, then such Permitted Investment shall
mature not later than such Distribution Date) and shall not be sold or disposed
of prior to maturity. All such Permitted Investments shall be made in the name
of the Trustee, for the benefit of the Holders of the Covered Certificates.
In
the absence of such written direction, all funds in the Cap Contract Reserve
Fund shall be invested by the Trustee in The Bank of New York cash reserves.
Any
net investment earnings on such amounts shall be retained therein until
withdrawn as provided in Section 3.08. Any losses incurred in the Cap Contract
Reserve Fund in respect of any such investments shall be charged against amounts
on deposit in the Cap Contract Reserve Fund (or such investments) immediately
as
realized. The Trustee shall not be liable for the amount of any loss incurred
in
respect of any investment or lack of investment of funds held in the Cap
Contract Reserve Fund and made in accordance with this Section 3.05. The Cap
Contract Reserve Fund will not constitute an asset of the Trust Fund or any
REMIC created hereunder.
SECTION
3.06. Collection
of Taxes, Assessments and Similar Items; Escrow Accounts.
(a) To
the
extent required by the related Mortgage Note and not violative of current law,
the Master Servicer shall establish and maintain one or more accounts (each,
an
“Escrow
Account”)
and
deposit and retain therein all collections from the Mortgagors (or advances
by
the Master Servicer) for the payment of taxes, assessments, hazard insurance
premiums or comparable items for the account of the Mortgagors. Nothing in
this
Agreement shall require the Master Servicer to compel a Mortgagor to establish
an Escrow Account in violation of applicable law.
53
(b) Withdrawals
of amounts so collected from the Escrow Accounts may be made only to effect
timely payment of taxes, assessments, hazard insurance premiums, condominium
or
PUD association dues, or comparable items, to reimburse the Master Servicer
out
of related collections for any payments made pursuant to Sections 3.01
(with respect to taxes and assessments and insurance premiums) and 3.09 (with
respect to hazard insurance), to refund to any Mortgagors any sums determined
to
be overages, to pay interest, if required by law or the terms of the related
Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow Account
or to
clear and terminate the Escrow Account at the termination of this Agreement
in
accordance with Section 9.01. The Escrow Accounts shall not be a part of
the Trust Fund.
(c) The
Master Servicer shall advance any payments referred to in Section 3.06(a)
that are not timely paid by the Mortgagors on the date when the tax, premium
or
other cost for which such payment is intended is due, but the Master Servicer
shall be required so to advance only to the extent that such advances, in the
good faith judgment of the Master Servicer, will be recoverable by the Master
Servicer out of Insurance Proceeds, Liquidation Proceeds or
otherwise.
SECTION
3.07. Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
The
Master Servicer shall afford each Seller, the Depositor, the NIM Insurer and
the
Trustee reasonable access to all records and documentation regarding the
Mortgage Loans and all accounts, insurance information and other matters
relating to this Agreement, such access being afforded without charge, but
only
upon reasonable request and during normal business hours at the office
designated by the Master Servicer.
Upon
reasonable advance notice in writing, the Master Servicer will provide to each
Certificateholder and/or Certificate Owner which is a savings and loan
association, bank or insurance company certain reports and reasonable access
to
information and documentation regarding the Mortgage Loans sufficient to permit
such Certificateholder and/or Certificate Owner to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided that the Master Servicer shall be
entitled to be reimbursed by each such Certificateholder and/or Certificate
Owner for actual expenses incurred by the Master Servicer in providing such
reports and access. Upon request, the Master Servicer shall furnish to the
Trustee and the NIM Insurer its most recent publicly available financial
statements and any other information relating to its capacity to perform its
obligations under this Agreement reasonably requested by the NIM
Insurer.
| SECTION 3.08. |
Permitted
Withdrawals from the Certificate Account, the Distribution Account,
the
Carryover Reserve Fund; the Principal Reserve Fund and
the Cap Contract Reserve Fund.
|
(a) The
Master Servicer may from time to time make withdrawals from the Certificate
Account for the following purposes:
54
(i) to
pay to
the Master Servicer (to the extent not previously retained by the Master
Servicer) the servicing compensation to which it is entitled pursuant to
Section 3.14 and to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in or
credited to the Certificate Account;
(ii) to
reimburse each of the Master Servicer and the Trustee for unreimbursed Advances
made by it, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on the Mortgage Loan(s) in respect of which
any such Advance was made;
(iii) to
reimburse each of the Master Servicer and the Trustee for any Nonrecoverable
Advance previously made by it;\
(iv) to
reimburse the Master Servicer for Insured Expenses from the related Insurance
Proceeds;
(v) to
reimburse the Master Servicer for (a) unreimbursed Servicing Advances, the
Master Servicer’s right to reimbursement pursuant to this clause (a) with
respect to any Mortgage Loan being limited to amounts received on such Mortgage
Loan(s) that represent late recoveries of the payments for which such advances
were made pursuant to Section 3.01 or Section 3.06 and (b) for
unpaid Master Servicing Fees as provided in Section 3.11;
(vi) to
pay to
the purchaser, with respect to each Mortgage Loan or property acquired in
respect thereof that has been purchased pursuant to Section 2.02, 2.03 or
3.11, all amounts received on such Mortgage Loan after the date of such
purchase;
(vii) to
reimburse the Sellers, the Master Servicer, the NIM Insurer or the Depositor
for
expenses incurred by any of them and reimbursable pursuant to
Section 6.03;
(viii) to
withdraw any amount deposited in the Certificate Account and not required to
be
deposited in the Certificate Account;
(ix) on
or
prior to the Distribution Account Deposit Date, to withdraw an amount equal
to
the related Available Funds, the related Prepayment Charge Amount and the pro
rata portion of the Trustee Fee for such Distribution Date and remit such amount
to the Trustee for deposit in the Distribution Account; and
(x) to
clear
and terminate the Certificate Account upon termination of this Agreement
pursuant to Section 9.01.
The
Master Servicer shall keep and maintain separate accounting, on a Mortgage
Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Certificate Account pursuant to such subclauses (i), (ii), (iv), (v) and
(vi). Prior to making any withdrawal from the Certificate Account pursuant
to
subclause (iii), the Master Servicer shall deliver to the Trustee an
Officer’s Certificate of a Servicing Officer indicating the amount of any
previous Advance determined by the Master Servicer to be a Nonrecoverable
Advance and identifying the related Mortgage Loans(s), and their respective
portions of such Nonrecoverable Advance.
55
(b) The
Trustee shall withdraw funds from the Distribution Account for distributions
to
Certificateholders, in the manner specified in this Agreement (and to withhold
from the amounts so withdrawn, the amount of any taxes that it is authorized
to
withhold pursuant to the third paragraph of Section 8.11). In addition, the
Trustee may from time to time make withdrawals from the Distribution Account
for
the following purposes:
(i) to
pay to
itself the Trustee Fee for the related Distribution Date;
(ii) to
pay to
the Master Servicer as additional servicing compensation earnings on or
investment income with respect to funds in the Distribution
Account;
(iii) to
withdraw and return to the Master Servicer any amount deposited in the
Distribution Account and not required to be deposited therein;
(iv) to
reimburse the Trustee for any unreimbursed Advances made by it pursuant to
Section 4.01(b) hereof, such right of reimbursement pursuant to this subclause
(iv) being limited to (x) amounts received on the related Mortgage Loan(s)
in
respect of which any such Advance was made and (y) amounts not otherwise
reimbursed to the Trustee pursuant to Section 3.08(a)(ii) hereof;
(v) to
reimburse the Trustee for any Nonrecoverable Advance previously made by the
Trustee pursuant to Section 4.01(b) hereof, such right of reimbursement pursuant
to this subclause (v) being limited to amounts not otherwise reimbursed to
the
Trustee pursuant to Section 3.08(a)(iii) hereof; and
(vi) to
clear
and terminate the Distribution Account upon termination of this Agreement
pursuant to Section 9.01.
(c) The
Trustee shall withdraw funds from the Carryover Reserve Fund for distribution
to
the Offered Certificates and the Class C Certificates in the manner specified
in
Sections 4.02(b) (and to withhold from the amounts so withdrawn the amount
of
any taxes that it is authorized to retain pursuant to the third paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Carryover Reserve Fund for the following purposes:
(i) to
withdraw any amount deposited in the Carryover Reserve Fund and not required
to
be deposited therein; and
(ii) to
clear
and terminate the Carryover Reserve Fund upon the termination of this Agreement
pursuant to Section 9.01.
(d) The
Supplemental Interest Trustee shall withdraw funds from the Cap Contract Reserve
Fund for distribution to the Covered Certificates in the manner specified in
Section 4.02(e) (and to withhold from the amounts so withdrawn the amount of
any
taxes that it is authorized to retain pursuant to the third paragraph of Section
8.11). In addition, the Supplemental Interest Trustee may from time to time
make
withdrawals from the Cap Contract Reserve Fund for the following
purposes:
56
(i) to
withdraw any amount deposited in the Cap Contract Reserve Fund and not required
to be deposited therein; and
(ii) to
clear
and terminate the Cap Contract Reserve Fund upon the earlier of (A) the Cap
Contract Scheduled Termination Date and (B) the termination of this Agreement
pursuant to Section 9.01.
(e) On
the
Business Day before any Class P Principal Distribution Date, the Trustee shall
transfer $100.00 from the Principal Reserve Fund to the Distribution Account
and
shall distribute such amount to the applicable Class of Class P Certificates
on
the related Class P Principal Distribution Date. Following the distribution
to
be made in accordance with the preceding sentence on the last Class P
Distribution Date, the Trustee shall then terminate the Principal Reserve
Fund.
SECTION
3.09. Maintenance
of Hazard Insurance; Maintenance of Primary Insurance Policies.
(a) The
Master Servicer shall cause to be maintained, for each Mortgage Loan, hazard
insurance with extended coverage in an amount that is at least equal to the
lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan or (ii) the greater of (y) the outstanding principal
balance of the Mortgage Loan and (z) an amount such that the proceeds of
such policy shall be sufficient to prevent the Mortgagor and/or the mortgagee
from becoming a co-insurer. Each such policy of standard hazard insurance shall
contain, or have an accompanying endorsement that contains, a standard mortgagee
clause. Any amounts collected by the Master Servicer under any such policies
(other than the amounts to be applied to the restoration or repair of the
related Mortgaged Property or amounts released to the Mortgagor in accordance
with the Master Servicer’s normal servicing procedures) shall be deposited in
the Certificate Account. Any cost incurred by the Master Servicer in maintaining
any such insurance shall not, for the purpose of calculating monthly
distributions to the Certificateholders or remittances to the Trustee for their
benefit, be added to the principal balance of the Mortgage Loan, notwithstanding
that the terms of the Mortgage Loan so permit. Such costs shall be recoverable
by the Master Servicer out of late payments by the related Mortgagor or out
of
proceeds of liquidation of the Mortgage Loan or Subsequent Recoveries to the
extent permitted by Section 3.08. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
or
maintained on property acquired in respect of a Mortgage other than pursuant
to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property is located
at
the time of origination of the Mortgage Loan in a federally designated special
flood hazard area and such area is participating in the national flood insurance
program, the Master Servicer shall cause flood insurance to be maintained with
respect to such Mortgage Loan. Such flood insurance shall be in an amount equal
to the least of (i) the outstanding principal balance of the related
Mortgage Loan, (ii) the replacement value of the improvements which are
part of such Mortgaged Property, and (iii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program.
57
(b) [Reserved].
(c) The
Master Servicer shall not take any action which would result in non-coverage
under any applicable Primary Insurance Policy of any loss which, but for the
actions of the Master Servicer, would have been covered thereunder. The Master
Servicer shall not cancel or refuse to renew any such Primary Insurance Policy
that is in effect at the date of the initial issuance of the Certificates and
is
required to be kept in force hereunder unless the replacement Primary Insurance
Policy for such canceled or non-renewed policy is maintained with a Qualified
Insurer.
Except
with respect to any Lender PMI Mortgage Loans, the Master Servicer shall not
be
required to maintain any Primary Insurance Policy (i) with respect to any
Mortgage Loan with a Loan-to-Value Ratio less than or equal to 80% as of any
date of determination or, based on a new appraisal, the principal balance of
such Mortgage Loan represents 80% or less of the new appraised value or
(ii) if maintaining such Primary Insurance Policy is prohibited by
applicable law. With respect to the Lender PMI Mortgage Loans, the Master
Servicer shall maintain the Primary Insurance Policy for the life of such
Mortgage Loans, unless otherwise provided for in the related Mortgage Note
or
prohibited by law.
The
Master Servicer agrees to effect the timely payment of the premiums on each
Primary Insurance Policy, and such costs not otherwise recoverable shall be
recoverable by the Master Servicer from the related proceeds of liquidation
and
Subsequent Recoveries.
(d) In
connection with its activities as Master Servicer of the Mortgage Loans, the
Master Servicer agrees to present on behalf of itself, the Trustee and
Certificateholders, claims to the insurer under any Primary Insurance Policies
and, in this regard, to take such reasonable action as shall be necessary to
permit recovery under any Primary Insurance Policies respecting defaulted
Mortgage Loans. Any amounts collected by the Master Servicer under any Primary
Insurance Policies shall be deposited in the Certificate Account.
SECTION
3.10. Enforcement
of Due-on-Sale Clauses; Assumption Agreements.
(a) Except
as
otherwise provided in this Section, when any property subject to a Mortgage
has
been conveyed by the Mortgagor, the Master Servicer shall to the extent that
it
has knowledge of such conveyance, enforce any due-on-sale clause contained
in
any Mortgage Note or Mortgage, to the extent permitted under applicable law
and
governmental regulations, but only to the extent that such enforcement will
not
adversely affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies
the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to
Section 3.10(b), to take or enter into an assumption and modification
agreement from or with the person to whom such property has been or is about
to
be conveyed, pursuant to which such person becomes liable under the Mortgage
Note and, unless prohibited by applicable state law, the Mortgagor remains
liable thereon, provided that the Mortgage Loan shall continue to be covered
(if
so covered before the Master Servicer enters such agreement) by the applicable
Required Insurance Policies. The Master Servicer, subject to
Section 3.10(b), is also authorized with the prior approval of the insurers
under any Required Insurance Policies to enter into a substitution of liability
agreement with such Person, pursuant to which the original Mortgagor is released
from liability and such Person is substituted as Mortgagor and becomes liable
under the Mortgage Note. Notwithstanding the foregoing, the Master Servicer
shall not be deemed to be in default under this Section by reason of any
transfer