COUNTRYWIDE HOME LOANS, INC.,
as Seller
and
BANC OF AMERICA MORTGAGE CAPITAL CORPORATION,
as Purchaser
----------
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
dated as of April 1, 2003
----------
Conventional Residential Mortgage Loans
(SERVICING RETAINED)
ARTICLE I.
DEFINITIONS
ARTICLE II.
PRE-CLOSING AND CLOSING PROCEDURES
Section 2.01 Due Diligence by the Purchaser.............................. 10
Section 2.02 Identification of Mortgage Loan Package..................... 11
Section 2.03 Post-Closing Due Diligence.................................. 11
Section 2.04 Credit Document Deficiencies Identified
During Due Diligence..................................... 11
Section 2.05 Delivery of Collateral Files................................ 11
Section 2.06 Purchase Confirmation....................................... 12
Section 2.07 Closing..................................................... 12
Section 2.08 Payment of the Purchase Proceeds............................ 13
Section 2.09 Entitlement to Payments on the Mortgage Loans............... 13
Section 2.10 Payment of Costs and Expenses............................... 13
Section 2.11 MERS Mortgage Loans and the MERS System..................... 13
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Representations and Warranties Respecting Countrywide....... 14
Section 3.02 Representations and Warranties Regarding
Individual Mortgage Loans................................ 15
Section 3.03 Remedies for Breach of Representations and Warranties....... 22
Section 3.04 Repurchase of Convertible Mortgage Loans.................... 23
Section 3.05 Representations and Warranties Respecting the Purchaser..... 24
Section 3.06 Indemnification by the Purchaser............................ 25
ARTICLE IV.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Countrywide to Act as Servicer.............................. 25
Section 4.02 Collection of Mortgage Loan Payments........................ 26
Section 4.03 Realization Upon Defaulted Mortgage Loans................... 27
Section 4.04 Establishment of Custodial Accounts; Deposits
in Custodial Accounts.................................... 28
Section 4.05 Permitted Withdrawals From the Custodial Account............ 29
Section 4.06 Establishment of Escrow Accounts; Deposits in
Escrow Accounts.......................................... 30
Section 4.07 Permitted Withdrawals From Escrow Account................... 30
Section 4.08 Transfer of Accounts........................................ 31
Section 4.09 Payment of Taxes, Insurance and Other Charges;
Maintenance of PMI Policies; Collections Thereunder...... 31
Section 4.10 Maintenance of Hazard Insurance............................. 32
Section 4.11 Business Continuity Plan/Disaster Recovery.................. 32
Section 4.12 Fidelity Bond; Errors and Omissions Insurance............... 33
Section 4.13 Title, Management and Disposition of REO Property........... 33
Section 4.14 Notification of Adjustments................................. 34
Section 4.15 Notification of Maturity Date............................... 34
Section 4.16 Assumption Agreements....................................... 35
Section 4.17 Satisfaction of Mortgages and Release of Collateral Files... 35
Section 4.18 Servicing Compensation...................................... 36
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ARTICLE V.
PROVISIONS OF PAYMENTS AND REPORTS TO PURCHASER
Section 5.01 Distributions............................................... 37
Section 5.02 Periodic Reports to the Purchaser........................... 38
Section 5.03 Monthly Advances by Countrywide............................. 38
Section 5.04 Annual Statement as to Compliance........................... 39
Section 5.05 Annual Independent Certified Public Accountants'
Servicing Report......................................... 39
Section 5.06 Purchaser's Access to Countrywide's Records................. 39
Section 5.07 Compliance with REMIC Provisions............................ 40
ARTICLE VI.
COVENANTS BY COUNTRYWIDE
Section 6.01 Indemnification by Countrywide.............................. 40
Section 6.02 Third Party Claims.......................................... 40
Section 6.03 Merger or Consolidation of Countrywide...................... 40
Section 6.04 Limitation on Liability of Countrywide and Others........... 41
Section 6.05 No Transfer of Servicing.................................... 42
Section 6.06 Provision of Information.................................... 42
ARTICLE VII.
TERMINATION OF COUNTRYWIDE AS SERVICER
Section 7.01 Termination Due to an Event of Default...................... 42
Section 7.02 Termination without Cause................................... 44
Section 7.03 Termination by Other Means.................................. 44
ARTICLE VIII.
MISCELLANEOUS
Section 8.01 Notices..................................................... 45
Section 8.02 Sale Treatment.............................................. 45
Section 8.03 Exhibits.................................................... 45
Section 8.04 General Interpretive Principles............................. 45
Section 8.05 Reproduction of Documents................................... 46
Section 8.06 Further Agreements.......................................... 46
Section 8.07 Assignment of Mortgage Loans by the Purchaser;
Whole Loan Transfer; Pass-Through Transfers.............. 46
Section 8.08 Conflicts between Transaction Documents..................... 48
Section 8.09 Governing Law............................................... 48
Section 8.10 Severability Clause......................................... 48
Section 8.11 Successors and Assigns...................................... 49
Section 8.12 Confidentiality............................................. 49
Section 8.13 Solicitation of Mortgagors.................................. 49
Section 8.14 Relationship of the Parties................................. 50
Section 8.15 Entire Agreement............................................ 51
Exhibit A Schedule of Collateral Documents............................ A-1
ii
Exhibit B Form of Purchase Confirmation............................... B-1
Exhibit C Form of Custodial Agreement................................. C-1
Exhibit D Form of Trade Confirmation.................................. D-1
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MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This Master Mortgage Loan Purchase and Servicing Agreement is made and
entered into as of April 1, 2003 (the "Agreement"), between Countrywide Home
Loans, Inc., having an address at 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000
("Countrywide"), and Banc of America Mortgage Capital Corporation, having an
address at 000 X. Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (the
"Purchaser").
RECITALS
The Purchaser has agreed to purchase from Countrywide and Countrywide has
agreed to sell from time to time to the Purchaser all of Countrywide's right,
title and interest, excluding servicing rights, in and to those certain mortgage
loans identified in a Purchase Confirmation (as defined below) executed by
Countrywide and the Purchaser. This Agreement is intended to set forth the terms
and conditions by which Countrywide shall transfer and the Purchaser shall
acquire such mortgage loans.
In consideration of the promises and mutual agreements set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Countrywide and the Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
Unless the context requires otherwise, all capitalized terms used herein
shall have the meanings assigned to such terms in this Article I unless defined
elsewhere herein. Any capitalized term used or defined in a Purchase
Confirmation that conflicts with the corresponding definition set forth herein
shall supersede such term.
Accepted Servicing Practices: With respect to any Mortgage Loan, procedures
(including collection procedures) that comply with applicable federal, state and
local law and that Countrywide customarily employs and exercises in servicing
and administering mortgage loans for its own account and that are in accordance
with accepted mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as the Mortgage Loans
in the jurisdiction where the related Mortgaged Property is located.
Adjustable Rate Mortgage Loan: Any Mortgage Loan in which the related
Mortgage Note contains a provision whereby the Mortgage Interest Rate is
adjusted from time to time in accordance with the terms of such Mortgage Note.
Agency: Either Xxxxxx Mae or Xxxxxxx Mac.
Agreement: This Master Mortgage Loan Purchase and Servicing Agreement,
including all exhibits and supplements hereto, and all amendments hereof.
Appraised Value: The value of the related Mortgaged Property as set forth
in an appraisal made in connection with the origination of a Mortgage Loan or
the sale price of the related Mortgaged Property if the proceeds of such
Mortgage Loan were used to purchase such Mortgaged Property, whichever is less.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan wherein the Mortgage Note matures
prior to full amortization and requires a final and accelerated payment of
principal.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions in either the State of
California or the State of Texas are authorized or obligated by law or executive
order to be closed.
Cash Liquidation: Recovery of all cash proceeds by Countrywide with respect
to the termination of any defaulted Mortgage Loan other than a Mortgage Loan
which became an REO Property, including all PMI Proceeds, Government Insurance
Proceeds, Other Insurance Proceeds, Liquidation Proceeds, Condemnation Proceeds
and other payments or recoveries whether made at one time or over a period of
time which Countrywide deems to be finally recoverable, in connection with the
sale or assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise.
Closing: The consummation of the sale and purchase of each Mortgage Loan
Package.
Closing Date: The date on which the purchase and sale of the Mortgage Loans
constituting a Mortgage Loan Package is consummated, as set forth in the Trade
Confirmation or Purchase Confirmation.
Code: The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
Collateral Documents: The collateral documents pertaining to each Mortgage
Loan as set forth in Exhibit A hereto.
Collateral File: With respect to each Mortgage Loan, a file containing each
of the Collateral Documents.
Condemnation Proceeds: All awards or settlements in respect of a taking of
an entire Mortgaged Property by exercise of the power of eminent domain or
condemnation.
Conventional Mortgage Loan: A Mortgage Loan that is not insured by the FHA
or guaranteed by the VA.
Convertible Mortgage Loan: Any Adjustable Rate Mortgage Loan that contains
a provision whereby the Mortgagor is permitted to convert the Mortgage Loan to a
fixed-rate mortgage loan in accordance with the terms of the related Mortgage
Note.
Co-op Shares: Shares issued by private non-profit housing corporations.
Countrywide: Countrywide Home Loans, Inc., or any successor or assign to
Countrywide under this Agreement as provided herein.
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Credit File: The file retained by Countrywide that includes the mortgage
loan documents pertaining to a Mortgage Loan including copies of the Collateral
Documents together with the credit documentation relating to the origination of
such Mortgage Loan, which Credit File may be maintained by Countrywide on
microfilm or any other comparable medium.
Custodial Account: The account or accounts created and maintained pursuant
to Section 4.04, each of which shall be an Eligible Account.
Custodial Agreement: The agreement, substantially in the form of Exhibit C,
that governs the retention of the Collateral Files by the Custodian with respect
to a Closing Date.
Custodian: Treasury Bank, National Association, its successor in interest
or assign, or such other custodian that may be designated in the Custodial
Agreement from time to time.
Cut-off Date: The first day of the month in which the related Closing Date
occurs or such other date as may be set forth in the related Trade Confirmation
or Purchase Confirmation.
Cut-off Date Balance: The aggregate scheduled unpaid principal balance of
the Mortgage Loans in a Mortgage Loan Package as of the Cut-off Date, after
application of (i) scheduled payments of principal due on such Mortgage Loans on
or before such Cut-off Date, whether or not collected, and (ii) any Principal
Prepayments received from the Mortgagor prior to the Cut-off Date.
Determination Date: The fifteenth calendar day of each month (or if such
fifteenth day is not a Business Day, the first Business Day immediately
following).
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month preceding the month of the Remittance Date and
ending on the first day of the month of the Remittance Date.
Eligible Account: An account or accounts (i) maintained with a depository
institution the short term debt obligations of which are rated by a nationally
recognized statistical rating agency in one of its two (2) highest rating
categories at the time of any deposit therein, (ii) the deposits of which are
insured up to the maximum permitted by the FDIC, or (iii) maintained with an
institution and in a manner acceptable to an Agency.
Escrow Account: The separate trust account or accounts created and
maintained pursuant to Section 4.06, each of which shall be an Eligible Account.
Escrow Payments: The amounts constituting ground rents, taxes, assessments,
water rates, mortgage insurance premiums, fire and hazard insurance premiums and
other payments required to be escrowed by the Mortgagor with the Mortgagee
pursuant to any Mortgage Loan.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 7.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
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FHA: The Federal Housing Administration.
Xxxxxx Xxx: The Federal National Mortgage Association or any successor
organization.
Fidelity Bond: A fidelity bond to be maintained by Countrywide pursuant to
Section 4.12.
Fixed Rate Mortgage Loan: Any Mortgage Loan wherein the Mortgage Interest
Rate set forth in the Mortgage Note is fixed for the term of such Mortgage Loan.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation or any successor
organization.
Funding Deadline: With respect to each Closing Date, one o'clock (1:00)
p.m. New York time.
GNMA: The Government National Mortgage Association or any successor
organization.
Government Insurance Proceeds: With respect to each Government Mortgage
Loan, payments made pursuant to a MIC or LGC.
Government Mortgage Loan: A Mortgage Loan insured by the FHA or guaranteed
by the VA.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note, which amount is added
to the index in accordance with the terms of the related Mortgage Note to
determine on each Interest Adjustment Date, the Mortgage Interest Rate for such
Mortgage Loan.
HUD: The Department of Housing and Urban Development or any federal agency
or official thereof which may from time to time succeed to the functions
thereof.
Index: With respect to each Adjustable Rate Mortgage Loan, the index set
forth in the related Mortgage Note for the purpose of calculating the interest
rate thereon.
Interest Adjustment Date: With respect to an Adjustable Rate Mortgage Loan,
the date on which an adjustment to the Mortgage Interest Rate on a Mortgage Note
becomes effective.
LGC: A loan guarantee certificate issued by the VA.
LTV: With respect to any Mortgage Loan, the ratio (expressed as a
percentage) of the Stated Principal Balance (or the original principal balance,
if so indicated) of such Mortgage Loan as of the date of determination to the
Appraised Value of the related Mortgaged Property.
Late Collections: With respect to any Mortgage Loan, all amounts received
during any Due Period, whether as late payments of Monthly Payments or as
Liquidation Proceeds, Condemnation Proceeds, PMI Proceeds, Government Insurance
Proceeds, Other Insurance Proceeds, proceeds of any REO Disposition or
otherwise, which represent late payments or collections of Monthly Payments due
but delinquent for a previous Due Period and not previously recovered.
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Lifetime Rate Cap: With respect to each Adjustable Rate Mortgage Loan, the
absolute maximum Mortgage Interest Rate payable, above which the Mortgage
Interest Rate shall not be adjusted, as set forth in the related Mortgage Note
and Mortgage Loan Schedule.
Liquidation Proceeds: Amounts, other than PMI Proceeds, Government
Insurance Proceeds, Condemnation Proceeds and Other Insurance Proceeds, received
by Countrywide in connection with the liquidation of a defaulted Mortgage Loan
through trustee's sale, foreclosure sale or otherwise, other than amounts
received following the acquisition of an REO Property pursuant to Section 4.13.
LPMI Fee: The portion of the Mortgage Interest Rate relating to an LPMI
Loan, which is set forth on the related Mortgage Loan Schedule, to be retained
by Countrywide to pay the premium due on the PMI Policy with respect to such
LPMI Loan.
LPMI Loan: Any Mortgage Loan with respect to which Countrywide is
responsible for paying the premium due on the related PMI Policy with the
proceeds generated by the LPMI Fee relating to such Mortgage Loan, as set forth
on the related Mortgage Loan Schedule.
MERS: Mortgage Electronic Registration Systems, Inc. or any successor or
assign thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The electronic system of recording transfers of mortgages
maintained by MERS.
MIC: A mortgage insurance certificate issued by HUD.
Missing Credit Documents: As defined in Section 2.04 hereof.
Monthly Advance: The advances made or required to be made by Countrywide on
any Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment of principal and interest on
a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgage Interest Rate: The annual rate at which interest accrues on any
Mortgage Loan and, with respect to an Adjustable Rate Mortgage Loan, as adjusted
from time to time in accordance with the provisions of the related Mortgage
Note.
Mortgage Loan: Any mortgage loan that is sold pursuant to this Agreement,
as evidenced by such mortgage loan's inclusion on the related Mortgage Loan
Schedule, which mortgage loan includes the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, PMI Proceeds (if
applicable), Government Insurance Proceeds (if applicable), Other Insurance
Proceeds, REO Disposition proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan, excluding the
5
servicing rights relating thereto. Unless the context requires otherwise, any
reference to the Mortgage Loans in this Agreement shall refer to the Mortgage
Loans constituting a Mortgage Loan Package.
Mortgage Loan Package: The Mortgage Loans sold to the Purchaser pursuant to
a Purchase Confirmation.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
interest rate payable to the Purchaser on each Remittance Date which shall equal
the Mortgage Interest Rate less the Servicing Fee and the LPMI Fee, if
applicable.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package, the
schedule of Mortgage Loans, in the form attached hereto as Exhibit E, included
therein and made a part of the related Purchase Confirmation, which schedule
shall include, the following information with respect to each Mortgage Loan: (i)
information sufficient to uniquely identify such Mortgage Loan; (ii) the
Mortgage Interest Rate as of the Cut-off Date; (iii) with respect to any
Adjustable Rate Mortgage Loan, the Gross Margin, the Periodic Rate Cap, the
Lifetime Rate Cap, the next Interest Adjustment Date and whether such Adjustable
Rate Mortgage Loan is a Convertible Mortgage Loan, (iv) with respect to a LPMI
Loan, the LPMI Fee, (v) the LTV at origination; (vi) the remaining term as of
the Cut-off Date and the original term of such Mortgage Loan, and (vii) any
other information pertaining to such Mortgage Loan as may be reasonably
requested by the Purchaser. The information set forth in the Mortgage Loan
Schedule relating to the Mortgage Interest Rate, with respect to any LPMI Loan
shall have a separate field for Mortgage Interest Rate, exclusive of the LPMI
Fee.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note.
OCC: The Office of the Comptroller of the Currency.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of Countrywide, and delivered to
the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of
the party on behalf of whom the opinion is being given.
Other Insurance Proceeds: Proceeds of any title policy, hazard policy, pool
policy or other insurance policy covering a Mortgage Loan, other than the PMI
Policy, if any, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that Countrywide would follow in servicing
mortgage loans held for its own account.
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Pass-Through Transfer: The sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a trust to be formed as part of a publicly issued or
privately placed mortgage-backed securities transaction.
Payment Adjustment Date: As to any Adjustable Rate Mortgage Loan, the date
on which an adjustment to the Monthly Payment on a Mortgage Note becomes
effective.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan, the
provision of each Mortgage Note which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an
Adjustment Date above or below the Mortgage Interest Rate previously in effect,
equal to the rate set forth on the Mortgage Loan Schedule per adjustment.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
PMI Policy: A policy of private mortgage guaranty insurance relating to a
Mortgage Loan and issued by a Qualified Insurer.
PMI Proceeds: Proceeds of any PMI Policy.
Preliminary Mortgage Loan Package: The mortgage loans identified or
described in a Trade Confirmation, which, subject to the Purchaser's due
diligence as contemplated in Section 2.01, are intended to be sold under this
Agreement as a Mortgage Loan Package.
Preliminary Mortgage Loans: The mortgage loans constituting a Preliminary
Mortgage Loan Package.
Prepayment Interest Shortfall Amount: With respect to any Remittance Date
and Mortgage Loan that was subject to a Principal Prepayment in full or in part
during the related Principal Prepayment Period, which Principal Prepayment was
applied to such Mortgage Loan prior to such Mortgage Loan's Due Date in such
calendar month, the amount of interest (at the Mortgage Loan Remittance Rate)
that would have accrued on the amount of such Principal Prepayment during the
period commencing on the date as of which such Principal Prepayment was applied
to such Mortgage Loan and ending on the day immediately preceding such Due Date,
inclusive.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, excluding
any prepayment penalty or premium thereon (unless the Purchase Confirmation
provides otherwise), which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment Period: As to any Remittance Date, the calendar month
preceding the month of distribution.
Purchase Confirmation: A letter agreement, substantially in the form of
Exhibit B hereto, executed by Countrywide and the Purchaser in connection with
the purchase and sale of each Mortgage Loan Package, which sets forth the terms
relating thereto including a description of the
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related Mortgage Loans (including the Mortgage Loan Schedule), the purchase
price for such Mortgage Loans, the Closing Date and the Servicing Fee Rate.
Purchase Proceeds: The amount paid on the related Closing Date by the
Purchaser to Countrywide in exchange for the Mortgage Loan Package purchased on
such Closing Date as set forth in the applicable Purchase Confirmation.
Purchaser: The Person identified as the "Purchaser" in the preamble to this
Agreement or its successor in interest or any successor or assign to the
Purchaser under this Agreement as herein provided. Any reference to "Purchaser"
as used herein shall be deemed to include any designee of the Purchaser, so long
as such designation was made in accordance with the limitations set forth in
Section 8.07.
Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, which insurer is approved in such
capacity by an Agency.
Qualified Substitute Mortgage Loan: A mortgage loan that must, on the date
of such substitution, (i) have an unpaid principal balance, after deduction of
all scheduled payments due in the month of substitution (or if more than one (1)
mortgage loan is being substituted, an aggregate principal balance), not in
excess of the unpaid principal balance of the repurchased Mortgage Loan (the
amount of any shortfall will be deposited in the Custodial Account by
Countrywide in the month of substitution); (ii) have a Mortgage Interest Rate
not less than, and not more than 1% greater than, the Mortgage Interest Rate of
the repurchased Mortgage Loan; (iii) have a remaining term to maturity not
greater than, and not more than one year less than, the maturity date of the
repurchased Mortgage Loan; (iv) comply with each representation and warranty
(respecting individual Mortgage Loans) set forth in Section 3.02 hereof; (v)
shall be the same type as the Mortgage Loan (i.e., a Convertible Mortgage Loan
or a Fixed Rate Mortgage Loan).
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement shall be removed from this Agreement and
reconstituted as part of a Whole Loan Transfer or a Pass-Through Transfer
pursuant to Section 8.07 hereof. The Reconstitution Date shall be such date
which the Purchaser shall designate. On such date, the Mortgage Loans
transferred shall cease to be covered by this Agreement and Countrywide's
servicing responsibilities shall cease under this Agreement with respect to the
related transferred Mortgage Loans.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The eighteenth (18th) day of any month, beginning with the
month next following the month in which the related Cut-off Date occurs, or if
such eighteenth (18th) day is not a Business Day, the first Business Day
immediately following.
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REO Disposition: The final sale by Countrywide of any REO Property or the
transfer of the management of such REO Property to the Purchaser as set forth in
Section 4.13.
REO Property: A Mortgaged Property acquired by Countrywide on behalf of the
Purchaser as described in Section 4.13.
Repurchase Price: With respect to any Mortgage Loan, a price equal to (i)
the Stated Principal Balance of the Mortgage Loan plus (ii) interest on such
Stated Principal Balance at the Mortgage Loan Remittance Rate from the last date
through which interest has been paid and distributed to the Purchaser to the
date of repurchase, less amounts received or advanced in respect of such
repurchased Mortgage Loan which such amounts are being held in the Custodial
Account for distribution in the month of repurchase, plus (iii) any cost and
damages incurred by the trust in connection with any violation by such Mortgage
Loan of any predatory or abusive lending law.
Securities Act of 1933 or the 1933 Act: The Securities Act of 1933, as
amended.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance by Countrywide of its servicing
obligations, including the cost of (i) the preservation, restoration and
protection of the Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, (iii) the management and liquidation of the
REO Property, (iv) with respect to Government Mortgage Loans, amounts advanced
to the Purchaser for which Countrywide may be entitled to receive reimbursement
from a government agency and (v) compliance with the obligations under this
Agreement including Section 4.09.
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual
fee the Purchaser shall pay to Countrywide, which shall, for a period of one
full month, be equal to one-twelfth of the product of (i) the Servicing Fee Rate
and (ii) the Stated Principal Balance of such Mortgage Loan. Such fee shall be
payable monthly, computed on the basis of the same principal amount and period
respecting which any related interest payment on a Mortgage Loan is computed.
The obligation of the Purchaser to pay the Servicing Fee is limited to, and the
Servicing Fee is payable solely from, the interest portion of such Monthly
Payment collected by Countrywide, or as otherwise provided herein. Subject to
the foregoing, and with respect to each Mortgage Loan, Countrywide shall be
entitled to receive its Servicing Fee through the disposition of any related REO
Property and the Servicing Fee payable with respect to any REO Property shall be
based on the Stated Principal Balance of the related Mortgage Loan at the time
of foreclosure.
Servicing Fee Rate: With respect to any Mortgage Loan, the rate per annum
set forth in the applicable Trade Confirmation or Purchase Confirmation.
Servicing LP: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns, in its capacity as servicer
hereunder.
Servicing Officer: Any officer of Countrywide involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished by Countrywide to Purchaser upon
request, as such list may from time to time be amended.
9
Stated Principal Balance: With respect to each Mortgage Loan as of any date
of determination: (i) the unpaid principal balance of the Mortgage Loan at the
related Cut-off Date after giving effect to payments of principal due on or
before such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal or advances in lieu thereof.
Trade Confirmation: A letter agreement substantially in the form of Exhibit
D hereto executed by Countrywide and the Purchaser prior to the applicable
Closing Date confirming the terms of a prospective purchase and sale of a
Mortgage Loan Package.
Transaction Documents: With respect to any Mortgage Loan, the related Trade
Confirmation, the related Purchase Confirmation and this Agreement.
Underwriting Guidelines: As defined in the respective Trade Confirmation.
Updated LTV: With respect to any Mortgage Loan, the outstanding principal
balance of such Mortgage Loan as of the date of determination divided by the
value of the related Mortgaged Property as determined by a recent appraisal of
the Mortgaged Property.
VA: The Department of Veterans Affairs.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a third party which sale or transfer is not a
Pass-Through Transfer.
ARTICLE II.
PRE-CLOSING AND CLOSING PROCEDURES
SECTION 2.01 DUE DILIGENCE BY THE PURCHASER.
(a) Review of Credit File. Prior to the Closing Date, Countrywide shall
make available to the Purchaser the Credit File for each Preliminary Mortgage
Loan in the related Preliminary Mortgage Loan Package. The Purchaser shall have
the right to review the Credit File for each such Preliminary Mortgage Loan, at
Countrywide's offices or such other location agreed upon by the Purchaser and
Countrywide, for the purpose of determining whether each Preliminary Mortgage
Loan conforms in all material respects to the applicable terms contained in the
Transaction Documents, which determination shall be made in the Purchaser's
reasonable and good faith discretion. In the event that the Purchaser rejects
any Preliminary Mortgage Loan based on such review, Countrywide shall have the
right, in its sole discretion, to substitute replacement Preliminary Mortgage
Loans satisfying the requirements set forth above, and the Purchaser shall have
the right to review any such replacement Preliminary Mortgage Loan(s) in the
manner contemplated above. The Purchaser shall use its reasonable best efforts
to conduct its due diligence, and to convey the results thereof to Countrywide,
within the time and in the manner necessary to permit Countrywide to rebut or
cure any Preliminary Mortgage Loan or to substitute replacement Preliminary
Mortgage Loans as permitted herein.
(b) Rejection of Preliminary Mortgage Loans. Without limiting the
generality of the foregoing, in the event that the Purchaser rejects Preliminary
Mortgage Loans (i) comprising more than fifteen percent (15%) of the related
Preliminary Mortgage Loan Package (as measured by unpaid principal balance), or
(ii) for reasons other than as permitted under this Agreement or the Trade
Confirmation, Countrywide may, in its reasonable and good faith discretion,
rescind its
10
offer to sell any of the Preliminary Mortgage Loans relating thereto to the
Purchaser and Countrywide shall have no liability therefor.
SECTION 2.02 IDENTIFICATION OF MORTGAGE LOAN PACKAGE.
At least three (3) Business Days prior to the Closing Date, the Purchaser
shall identify those Preliminary Mortgage Loans that the Purchaser intends to be
included in the Mortgage Loan Package.
SECTION 2.03 POST-CLOSING DUE DILIGENCE.
In the event that the Purchaser fails to complete its due diligence, as
contemplated in Section 2.01, with respect to any Preliminary Mortgage Loan, the
Purchaser and Countrywide may nonetheless mutually agree to the purchase and
sale of such Mortgage Loan as contemplated hereunder, and upon such mutual
agreement, if the Purchaser provides notice to Countrywide of such Mortgage Loan
and such Mortgage Loan is identified as such in the Purchase Confirmation (as
used therein, the "Pending Mortgage Loans"), the Purchaser shall have the right
to review the related Credit File for such Mortgage Loan within ten (10)
Business Days after the Closing Date and, based on such review and within such
ten (10) Business Days period, request that Countrywide repurchase any Pending
Mortgage Loan that the Purchaser reasonably and in good faith contends does not
conform in all material respects to the applicable terms of the Transaction
Documents. Countrywide shall have ten (10) Business Days from the date of its
receipt of such request to either (a) repurchase such Mortgage Loan at the
purchase price for such Mortgage Loan (as calculated under the related
Transaction Documents, as applicable) plus accrued and unpaid interest, or (b)
provide evidence reasonably satisfactory to the Purchaser that such Mortgage
Loan does in fact conform to the terms of the Transaction Documents, as
applicable. In the event that Countrywide must repurchase any Mortgage Loan in
accordance with this Section 2.03 or pursuant to any other applicable term
contained in the Transaction Documents, Countrywide may, at its option,
substitute replacement Mortgage Loans conforming in all material respects to the
applicable terms contained in the related Transaction Documents. The rights and
remedies set forth in this Section 2.03 are in addition to those set forth in
Section 3.03.
SECTION 2.04 CREDIT DOCUMENT DEFICIENCIES IDENTIFIED DURING DUE DILIGENCE.
If, with respect to a Mortgage Loan Package, the related Purchase
Confirmation identifies any Mortgage Loan for which the related Credit File is
missing material documentation (as used therein, the "Missing Credit
Documents"), Countrywide agrees to use its best efforts to procure each such
Missing Credit Document within thirty (30) days following a written notice of
such deficiency. In the event of a default by a Mortgagor or any material
impairment of the Mortgaged Property, in either case directly arising from a
breach of Countrywide's obligation to deliver the Missing Credit Document within
the time specified above, Countrywide shall repurchase such Mortgage Loan at the
Repurchase Price.
SECTION 2.05 DELIVERY OF COLLATERAL FILES.
(a) Custodial Agreement. Countrywide shall, on or before three (3) Business
Days prior to the related Closing Date, deliver and release to the Custodian the
Collateral File for each Mortgage Loan in the Mortgage Loan Package and shall
execute, and cause the Custodian to execute, the Custodial Agreement.
Countrywide shall pay all fees and expenses of the Custodian
11
prior to the related Closing Date; however, it is understood that after the
related Closing Date, the Purchaser shall be solely responsible for fees and
expenses of the Custodian.
(b) Missing Collateral Documents. In the event that any of the original
Collateral Documents set forth in clauses (3) through (7) of Exhibit A hereto
are not delivered to the Custodian on or before the Closing Date (each, a
"Missing Collateral Document"), then Countrywide shall have (i) with respect to
any Missing Collateral Document sent for recording, nine (9) months from the
related Closing Date, or (ii) with respect to all other Missing Collateral
Documents, one-hundred twenty (120) days from the Closing Date, to deliver to
the Purchaser such Missing Collateral Documents; provided, however, that with
respect to any Government Mortgage Loan, Countrywide agrees to procure each such
Missing Collateral Document within sixty (60) days following the FHA's or the
VA's, as applicable, deadline for procuring such documents. In the event the
public recording office is delayed in returning any original document,
Countrywide shall deliver to the Custodian within one hundred eighty (180) days
of its submission for recordation, a copy of such document and an Officer's
Certificate, which shall (i) identify the recorded document; (ii) state that the
recorded document has not been delivered to the Custodian due solely a delay by
the public recording office, and (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation. Notwithstanding the foregoing, Countrywide shall not
be deemed to be in breach of this Agreement if its failure to deliver to the
Purchaser any Missing Collateral Document within the time specified above is due
solely to (i) the failure of the applicable recorder's office to return a
Missing Collateral Document that was sent for recording or (ii) the failure of
the title insurer to issue and deliver the original mortgagee title policy,
except where such refusal to issue the policy is based on a claim that the title
insurer is under no obligation to issue such policy. However, if Countrywide
cannot deliver such original or clerk-certified copy of any document submitted
for recordation to the appropriate public recording office within the specified
time for any reason, within thirty (30) days after receipt of written
notification of such failure from the Purchaser, Countrywide shall repurchase
the related Mortgage Loan at the price and in the manner specified in Section
3.03.
(c) Other Documents. Countrywide shall forward to the Purchaser in a timely
manner any original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance with
this Agreement upon execution and, if applicable, recordation thereof.
SECTION 2.06 PURCHASE CONFIRMATION.
Upon confirmation with the Purchaser of a Mortgage Loan Package,
Countrywide shall prepare and deliver to the Purchaser for execution the related
Purchase Confirmation, executed by an authorized signatory of Countrywide.
SECTION 2.07 CLOSING.
The Closing of each Mortgage Loan Package shall take place on the related
Closing Date and shall be subject to the satisfaction of each of the following
conditions, unless otherwise waived by the prejudiced party(ies):
(a) All of the representations and warranties of Countrywide under this
Agreement shall be true and correct in all material respects as of the related
Closing Date and no event shall
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have occurred that, with notice or the passage of time, would constitute a
default under this Agreement;
(b) All of the representations and warranties of the Purchaser under this
Agreement shall be true and correct in all material respects as of the related
Closing Date and no event shall have occurred that, with notice or the passage
of time, would constitute a default under this Agreement; and
(c) Both parties shall have executed the related Purchase Confirmation and
Custodial Agreement.
SECTION 2.08 PAYMENT OF THE PURCHASE PROCEEDS.
Subject to the conditions set forth in Section 2.07, and in consideration
for the Mortgage Loan Package to be purchased by the Purchaser on the related
Closing Date, the Purchaser shall pay to Countrywide on such Closing Date the
Purchase Proceeds by wire transfer of immediately available funds to the account
designated by Countrywide on or before the Funding Deadline.
SECTION 2.09 ENTITLEMENT TO PAYMENTS ON THE MORTGAGE LOANS.
With respect to any Mortgage Loan purchased hereunder, the Purchaser shall
be entitled to (a) all scheduled principal due after the related Cut-off Date;
(b) all other recoveries of principal collected after the related Cut-off Date,
except for (i) recoveries of principal collected after the Cut-off Date and
prior to the Closing Date that are reflected in the Mortgage Loan Schedule, and
(ii) all scheduled payments of principal due on or before the related Cut-off
Date; and (c) all payments of interest on such Mortgage Loan net of interest at
the Servicing Fee Rate and the LPMI Fee, if applicable (minus that portion of
any such payment that is allocable to the period prior to the related Cut-off
Date).
SECTION 2.10 PAYMENT OF COSTS AND EXPENSES.
The Purchaser and Countrywide shall each bear its own costs and expenses in
connection with the purchase and sale of the Mortgage Loans including any
commissions due its sales personnel, the legal fees and expenses of its
attorneys and any due diligence expenses. Without limiting the generality of the
foregoing, any costs and expenses incurred in connection with recording the
Assignment of Mortgage or any subsequent assignment thereof shall be paid for by
the Purchaser.
SECTION 2.11 MERS MORTGAGE LOANS AND THE MERS SYSTEM.
(a) Notwithstanding anything contained in this Agreement to the contrary,
with respect to any MERS Mortgage Loan sold to the Purchaser by Countrywide
pursuant to this Agreement, Countrywide shall cause the registration of such
MERS Mortgage Loan to be changed on the MERS System to reflect the Purchaser as
the beneficial owner of such MERS Mortgage Loan. The foregoing obligation of
Countrywide shall be in lieu of Countrywide delivering to the Purchaser an
Assignment of Mortgage for such MERS Mortgage Loan. With respect to the Mortgage
and intervening assignments related to any MERS Mortgage Loan, Countrywide
shall, in accordance with Section 2.05, provide the Purchaser with the original
Mortgage with evidence of registration with MERS and, as applicable, the
originals of all
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intervening assignments of the Mortgage with evidence of recording thereon prior
to the registration of the Mortgage Loan with the MERS System.
(b) In connection with the MERS System, Countrywide is hereby authorized
and empowered, in its own name, to register, or change the registration of any
MERS Mortgage Loan to effectuate such registration. Further, Countrywide is
authorized to cause the removal of any MERS Mortgage Loan from such
registration, and to execute and deliver on behalf of itself and the Purchaser,
any and all instruments of assignment and comparable instruments with respect to
any registration and/or removal of such MERS Mortgage Loan on or from the MERS
System.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
SECTION 3.01. REPRESENTATIONS AND WARRANTIES RESPECTING COUNTRYWIDE.
Countrywide represents, warrants and covenants to the Purchaser that, as of
each Closing Date:
(a) Organization and Standing. Countrywide is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and is qualified and licensed to transact business in and is in good
standing under the laws of each state where each Mortgaged Property is located
to the extent necessary to ensure the enforceability of each Mortgage Loan and
the servicing of the Mortgage Loan in accordance with the terms of this
Agreement;
(b) Due Authority. Countrywide has the full power and authority to (i)
perform and enter into and consummate all transactions contemplated by this
Agreement and (ii) to sell each Mortgage Loan; the execution, delivery and
performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by Countrywide and the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of
Countrywide; and all requisite corporate action has been taken by Countrywide to
make this Agreement valid and binding upon Countrywide in accordance with its
terms;
(c) No Conflict. Neither the acquisition or origination of the Mortgage
Loans by Countrywide, the sale of the Mortgage Loans to the Purchaser, the
consummation of the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or provisions of
Countrywide's certificate of incorporation or by-laws or result in a material
breach of any legal restriction or any material agreement or instrument to which
Countrywide is now a party or by which it is bound, or constitute a material
default or result in an acceleration under any of the foregoing, or result in
the violation of any material law, rule, regulation, order, judgment or decree
to which Countrywide or its property is subject;
(d) Approved Seller. Countrywide is an approved seller/servicer for each
Agency in good standing and is a mortgagee approved by the Secretary of HUD. No
event has occurred, including a change in insurance coverage, which would make
Countrywide unable to comply with Xxxxxx Xxx, Xxxxxxx Mac or HUD eligibility
requirements;
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(e) No Pending Litigation. There is no action, suit, proceeding,
investigation or litigation pending or, to Countrywide's knowledge, threatened,
which either in any one instance or in the aggregate, if determined adversely to
Countrywide would materially and adversely affect the sale of the Mortgage Loans
to the Purchaser, the ability of Countrywide to service the Mortgage Loans
hereunder in accordance with the terms hereof, or Countrywide's ability to
perform its obligations under this Agreement; and
(f) No Consent Required. No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by Countrywide, of or compliance by Countrywide with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, or if required, such consent, approval, authorization or order has
been obtained prior to the related Closing Date.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES REGARDING INDIVIDUAL MORTGAGE
LOANS.
With respect to each Mortgage Loan (unless otherwise specified below),
Countrywide represents and warrants to the Purchaser as of the related Closing
Date that:
(a) Mortgage Loan Schedule. The information contained in the Mortgage Loan
Schedule and the related electronic data file provided on or one (1) Business
Day prior to the related Closing Date is complete, true and correct in all
material respects;
(b) No Delinquencies or Advances. All payments required to be made prior to
the related Cut-off Date for such Mortgage Loan under the terms of the Mortgage
Note have been made; Countrywide has not advanced funds, or induced, solicited
or knowingly received any advance of funds from a party other than the owner of
the Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan; and there has been no
delinquency of more than thirty (30) days in any payment by the Mortgagor
thereunder during the last twelve (12) months;
(c) Taxes, Assessments, Insurance Premiums and Other Charges. There are no
delinquent taxes, assessments, ground rents, insurance premiums, leasehold
payments, and to the best of Countrywide's knowledge, water charges, sewer rents
or other outstanding charges affecting the related Mortgaged Property;
(d) No Modifications. The terms of the Mortgage Note and the Mortgage have
not been impaired, waived, altered or modified in any respect, except by written
instruments that have been or will be recorded, if necessary to protect the
interests of the Purchaser, and that have been or will be delivered to the
Purchaser, all in accordance with this Agreement. The substance of any such
waiver, alteration or modification has been approved by the primary mortgage
guaranty insurer, if any, and by the title insurer, to the extent required by
the related policy and its terms are reflected on the Mortgage Loan Schedule. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the primary mortgage insurer, if any, and the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Collateral File and the terms of which are reflected in
the Mortgage Loan Schedule if executed prior to the Closing Date;
(e) No Defenses. The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the
15
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;
(f) Hazard and Flood Insurance. All buildings upon the Mortgaged Property
are insured by an insurer acceptable to an Agency against loss by fire, hazards
of extended coverage and such other hazards as are customary in the area where
the Mortgaged Property is located, and such insurer is licensed to do business
in the state where the Mortgaged Property is located. All such insurance
policies contain a standard mortgagee clause naming Countrywide, its successors
and assigns as mortgagee, and all premiums thereon have been paid. If, upon the
origination of the Mortgage Loan, the Mortgaged Property was, or was
subsequently deemed to be, in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available), a flood insurance policy that meets
the requirements of the current guidelines of the Federal Insurance
Administration (or any successor thereto) and conforms to the requirements of an
Agency is in effect. The Mortgage obligates the Mortgagor thereunder to maintain
all such insurance at the Mortgagor's expense and, upon the failure of the
Mortgagor to do so, the holder of the Mortgage is authorized to maintain such
insurance at the Mortgagor's expense and to seek reimbursement therefor from the
Mortgagor;
(g) Compliance with Applicable Law. Each Mortgage Loan at the time of
origination complied in all material respects with applicable local, state and
federal laws including, without limitation, usury, predatory and abusive
lending, truth in lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure laws applicable to the
Mortgage Loan;
(h) No Release of Mortgage. The Mortgage has not been satisfied, canceled,
subordinated, or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such release, cancellation,
subordination or rescission;
(i) Enforceability of Mortgage Documents. The Mortgage Note and the related
Mortgage are genuine and each is the legal, valid and binding obligation of the
maker thereof, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or similar laws;
(j) Valid First Lien. Each related Mortgage is a valid, subsisting and
enforceable first lien on the related Mortgaged Property, including all
improvements on the Mortgaged Property. The lien of the Mortgage is subject only
to:
(i) the lien of current real property taxes and assessments not yet
due and payable;
(ii) if the Mortgaged Property consists of Co-op Shares, any lien for
amounts due to the cooperative housing corporation for unpaid assessments,
or charges or any lien of any assignment of rents or maintenance expenses
secured by the real property owned by the cooperative housing corporation;
(iii) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording that are
acceptable to mortgage
16
lending institutions generally and specifically referred to in the lender's
title insurance policy delivered to the originator of the Mortgage Loan and
that do not adversely affect the Appraised Value (as evidenced by an
appraisal referred to in such definition) of the Mortgaged Property set
forth in such appraisal; and
(iv) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended to
be provided by the Mortgage or the use, enjoyment, value or marketability
of the related Mortgaged Property; and
(k) Disbursements of Proceeds. The proceeds of the Mortgage Loan have been
fully disbursed, and there is no requirement for future advances thereunder, and
any and all requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage Loan and
recording the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;
(l) Sole Owner. Countrywide is the sole owner and holder of the Mortgage
Loan. The Mortgage Loan is not assigned or pledged, and Countrywide has good and
marketable title thereto, and is transferring and selling the Mortgage Loan to
the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest not specifically set forth in the related Mortgage
Loan Schedule and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to the terms of this Agreement;
(m) Title Insurance. Each Mortgage Loan is covered by a lender's title
insurance policy acceptable to an Agency, issued by a title insurer acceptable
to an Agency and qualified to do business in the jurisdiction where the related
Mortgaged Property is located, insuring (subject to the exceptions contained in
Section 3.02(j)(i), (ii) and (iii) above) Countrywide, its successors and
assigns as to the first priority lien of the Mortgage. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
Countrywide is the sole insured of such lender's title insurance policy, and
such lender's title insurance policy is in full force and effect and will be in
full force and effect upon the consummation of the transactions contemplated by
this Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including Countrywide, has
done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy;
(n) No Default. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and Countrywide has not waived any default, breach, violation or
event of acceleration;
(o) No Mechanics' Liens. There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with, the
lien of the related Mortgage;
17
(p) Origination and Collection Practices. The origination, servicing, and
collection practices used by Countrywide with respect to each Mortgage Note and
Mortgage have been in all respects legal, proper, prudent and customary in the
mortgage origination and servicing business. With respect to escrow deposits and
Escrow Payments, if any, all such payments are in the possession of, or under
the control of, Countrywide and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. No escrow deposits or Escrow Payments or other charges or payments due
Countrywide have been capitalized under any Mortgage or the related Mortgage
Note. With respect to Adjustable Rate Mortgage Loans, the terms of the related
Mortgage Notes pertaining to interest adjustments, payment adjustments and
adjustments of the outstanding principal balance, if any, are enforceable, and
all Mortgage Interest Rate adjustments have been made in strict compliance with
state and federal law and the terms of the related Mortgage Note. Any interest
required to be paid pursuant to state and local law has been properly paid and
credited;
(q) No Condemnation or Damage. The Mortgaged Property is free of material
damage and waste and there is no proceeding pending for the total or partial
condemnation thereof;
(r) Customary and Enforceable Provisions. The Mortgage contains customary
and enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property of
the benefits of the security provided thereby including (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure; there is no homestead or other exemption (other than under
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended) available to a
Mortgagor which would interfere with the right to sell the Mortgaged Property at
a trustee's sale or the right to foreclose the Mortgage;
(s) Collateral. The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage;
(t) Appraisal. Unless the Mortgage Loan was underwritten pursuant to one of
Countrywide's streamline documentation programs, the Credit File contains an
appraisal of the related Mortgaged Property signed prior to the approval of the
Mortgage Loan application by an appraiser who meets the minimum requisite
qualifications of an Agency for appraisers, duly appointed by the originator,
that had no interest, direct or indirect in the Mortgaged Property, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan; the appraisal is in a form acceptable to an Agency, with such riders as
are acceptable to such Agency;
(u) Trustee for Deed of Trust. In the event the Mortgage constitutes a deed
of trust, a trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in the Mortgage,
and no fees or expenses are or will become payable by the Purchaser to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(v) Private Mortgage Insurance, FHA Insurance and VA Guarantees. No
Mortgage Loan has an LTV greater than ninety-five percent (95%). Each
Conventional Mortgage Loan with an LTV at origination in excess of eighty
percent (80%) is and will be subject to a PMI Policy, which insures that portion
of the Mortgage Loan over seventy-five percent (75%) of the Appraised Value of
the related Mortgaged Property. All provisions of such PMI Policy have
18
been and are being complied with, such policy is in full force and effect, and
all premiums due thereunder have been paid. Any Mortgage subject to any such PMI
Policy obligates the Mortgagor thereunder to maintain such insurance and to pay
all premiums and charges in connection therewith or, in the case of a lender
paid mortgage insurance policy, the premiums and charges are included in the
Mortgage Interest Rate for the Mortgage Loan. Each Government Mortgage Loan
either has, or will have in due course, a valid and enforceable MIC or LGC, as
applicable and, in each case, all premiums due thereunder have been paid;
(w) Lawfully Occupied. To the best of Countrywide's knowledge, the
Mortgaged Property is lawfully occupied under applicable law. To the best of
Countrywide's knowledge, all inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same including
certificates of occupancy, have been made or obtained from the appropriate
authorities;
(x) Assignment of Mortgage. Except for the absence of recording
information, the Assignment of Mortgage is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located;
(y) Consolidation of Future Advances. Any future advances made to the
Mortgagor prior to the Cut-off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(z) Form of Mortgage Note and Mortgage. The Mortgage Note and Mortgage are
on forms acceptable to an Agency;
(aa) Section 32 Loans. No Mortgage Loan is subject to the Home Ownership
and Equity Protection Act of 1994 or any similar state or local statutes or
regulations related to "high cost" mortgage loans or "predatory" or "abusive"
lending (as such terms are defined in the applicable statute or regulation);
(bb) Security Agreements. Any security agreement, chattel mortgage or
equivalent document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid, subsisting and enforceable first lien and
first priority security interest on the property described therein;
(cc) Location of Improvements; No Encroachments. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the Mortgaged
Property. No improvement located on or being part of the Mortgaged Property is
in violation of any applicable zoning law or regulation;
(dd) Payment Terms. Payments commenced no more than sixty (60) days after
the funds were disbursed to the Mortgagor in connection with the Mortgage Loan.
The Mortgage Loans have an original term to maturity of not more than thirty
(30) years, with interest payable in arrears each month. As to each Adjustable
Rate Mortgage Loan on each applicable Interest Adjustment Date, the Mortgage
Interest Rate adjusts in accordance with the terms of the related Mortgage Note.
As to each Adjustable Rate Mortgage Loan, each Mortgage Note requires a monthly
payment which is sufficient, during the period prior to the first adjustment to
the
19
Mortgage Interest Rate, to fully amortize the outstanding principal balance as
of the first day of such period over the then remaining term of such Mortgage
Note and to pay interest at the related Mortgage Interest Rate. No Mortgage Loan
contains terms or provisions which would result in negative amortization;
(ee) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified Countrywide, and Countrywide has no knowledge, of any relief requested
by or provided to the Mortgagor under the Soldiers' and Sailors' Civil Relief
Act of 1940, as amended, or any similar state law;
(ff) Balloon Payments, Graduated Payments or Contingent Interests. With
respect to any Mortgage Loan which is identified on the Mortgage Loan Schedule
as a Balloon Mortgage Loan, the Mortgage Note is payable in Monthly Payments
based on a thirty (30) year amortization schedule with a final Monthly Payment
substantially greater than the preceding Monthly Payment which is sufficient to
amortize the remaining principal balance of the Balloon Mortgage Loan and such
final Monthly Payment shall not be due prior to one hundred eighty (180) months
following the origination of the Balloon Mortgage Loan. The Mortgage Loan is not
a graduated payment mortgage loan and the Mortgage Loan does not have a shared
appreciation or other contingent interest feature;
(gg) No Bankruptcy. No Mortgagor was a debtor in any state or federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated
and, to the best of Countrywide's knowledge, following the date of origination
of the Mortgage Loan, the Mortgagor with respect to the Mortgage Loan was not a
debtor in any state or federal bankruptcy or insolvency proceeding;
(hh) No Violation of Environmental Laws. To the best of Countrywide's
knowledge, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; and to the best of Countrywide's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation constituting a prerequisite to use and enjoyment of said
property;
(ii) Texas Refinance Mortgage Loans. No Mortgage Loan was originated in the
state of Texas under Article XVI, Section 50(a)(6) of the Texas Constitution (a
"Texas Refinance Loan");
(jj) Georgia Fair Lending Act. No Mortgage Loan secured by property located
in Georgia and originated on or after October 1, 2002 and on or prior to March
7, 2003, meets the definition of a "home loan" under the Georgia Fair Lending
Act;
(kk) Qualified Mortgages. Each Mortgage Loan is a "qualified mortgage"
within Section 860G(a)(3) of the Code;
(ll) Interest Calculation. Interest on each Mortgage Loan is calculated on
the basis of a 360-day year consisting of twelve 30-day months;
(mm) Due on Sale. The Mortgage contains an enforceable provision, to the
extent not prohibited by federal law as of the date of such Mortgage, for the
acceleration of the payment of
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the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder;
(nn) Single Premium Credit Life Insurance. None of the proceeds of the
Mortgage Loan were used to finance single premium credit life insurance
policies;
(oo) Origination/Doing Business. The Mortgage Loan was originated by a
savings and loan association, a savings bank, a commercial bank, a credit union,
an insurance company, or similar institution that is supervised and examined by
a federal or state authority or by a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act. All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (1) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (2) either (A) organized under the laws
of such state, (B) qualified to do business in such state, (C) federal savings
and loan associations or national banks having principal offices in such state,
or (D) not doing business in such state;
(pp) No Fraud. No fraud, error, omission, misrepresentation, or similar
occurrence with respect to a Mortgage Loan has taken place on the part of
Countrywide or to the best of Countrywide's knowledge, the Mortgagor, the
appraiser, any builder, or any developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;
(qq) Location and Type of Mortgaged Property. The Mortgaged Property
consists of a contiguous parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
condominium unit in a condominium project, or an individual unit in a planned
unit development, or in the case of Mortgage Loans secured by Co-op Shares,
leases or occupancy agreements, provided, however, that any condominium project
or planned unit development shall conform with the applicable requirements of an
Agency regarding such dwellings, and no residence or dwelling is a mobile home
or a manufactured dwelling. As of the respective appraisal date for each
Mortgaged Property, no portion of the Mortgaged Property was being used for
commercial purposes. If the Mortgaged Property is a condominium unit or a
planned unit development (other than a de minimus planned unit development) such
condominium or planned unit development project meets eligibility requirements
of an Agency or is located in a condominium or planned unit development project
which has received project approval of an Agency;
(rr) Underwriting. Each Mortgage Loan was generally underwritten in
accordance with the Underwriting Guidelines;
(ss) Buy-down Mortgage Loans. The Mortgage Loan is not subject to a
buy-down agreement;
(tt) Prepayment Penalties. If the Mortgage Loan is a Mortgage Loan subject
to a prepayment premium, enforcing the Mortgagor's obligation to pay the
prepayment premium in connection with the Principal Prepayment will not violate
any applicable state or local statute, regulation, or rule;
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(uu) The Mortgagor. The Mortgagor is one or more natural persons and/or
trustees for an Illinois land trust or a trustee under a "living trust" and such
"living trust" is in compliance with Xxxxxx Xxx or Xxxxxxx Mac guidelines. In
the event the Mortgagor is a trustee, the borrower is a natural person; and
(vv) Leaseholds. The Mortgage Loan is not secured by a leasehold interest
in the Mortgaged Property.
SECTION 3.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES.
(a) Notice of Breach. The representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Collateral Documents or
Credit File. Upon discovery by either Countrywide or the Purchaser of a breach
of any of the foregoing representations and warranties that materially and
adversely affects the value of one or more of the related Mortgage Loans, the
party discovering such breach shall give prompt written notice to the other. Any
such breach or missing Collateral Document that causes a Mortgage Loan not to be
a "qualified mortgage" within the meaning of Section 860G(a)(3) of the Code
shall be deemed to materially and adversely affect the value of such Mortgage
Loan.
(b) Cure or Repurchase. Within ninety (90) days from the earlier of either
discovery by or notice to Countrywide of a breach of a representation or
warranty that materially and adversely affects the value of a Mortgage Loan or
the Mortgage Loans, Countrywide shall use its best efforts to cure such breach
in all material respects, and, if such breach cannot be cured, Countrywide
shall, at the Purchaser's option, repurchase such Mortgage Loan at the
Repurchase Price. In the event that a breach shall involve any representation or
warranty set forth in Section 3.01 and such breach cannot be cured within ninety
(90) days of the earlier of either discovery by or notice to Countrywide of such
breach, all of the Mortgage Loans shall, at the Purchaser's option, be
repurchased by Countrywide at the Repurchase Price.
(c) Substitution or Repurchase. If the breach shall involve a
representation or warranty set forth in Section 3.02, Countrywide may, rather
than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan
and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If
Countrywide has no Qualified Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage Loan. Notwithstanding any of the foregoing, if a breach would
cause the Mortgage Loan to be other than a "qualified mortgage," as defined in
Section 860G(a)(3) of the Code, any such repurchase or substitution must occur
within sixty (60) days from the date the breach was discovered unless such
breach is cured during such period. Any repurchase of a Mortgage Loan(s)
pursuant to the provisions of this Section 3.03 shall be accomplished by deposit
in the Custodial Account of the amount of the Repurchase Price for distribution
to the Purchaser on the next scheduled Remittance Date, after deducting
therefrom any amount received in respect of such repurchased Mortgage Loan or
Loans and being held in the Custodial Account for future distribution. At the
time of repurchase or substitution, the Purchaser and Countrywide shall arrange
for the reassignment of such Mortgage Loan and release of the related Collateral
File to Countrywide and the delivery to Countrywide of any documents held by the
Purchaser or its designee relating to such Mortgage Loan. In the event
Countrywide determines to substitute a Qualified Substitute Mortgage Loan for a
repurchased Mortgage Loan, Countrywide shall, simultaneously with such
reassignment, give written notice
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to the Purchaser that substitution has taken place and identify the Qualified
Substitute Mortgage Loan(s). In connection with any such substitution,
Countrywide shall be deemed to have made as to such Qualified Substitute
Mortgage Loan(s) the representations and warranties except that all such
representations and warranties set forth in this Agreement shall be deemed made
as of the date of such substitution. Countrywide shall effect such substitution
by delivering to the Purchaser the Collateral Documents for such Qualified
Substitute Mortgage Loan(s). Countrywide shall deposit in the Custodial Account
the Monthly Payment less the Servicing Fee due on such Qualified Substitute
Mortgage Loan(s) in the month following the date of such substitution. Monthly
Payments due with respect to Qualified Substitute Mortgage Loans in the month of
substitution shall be retained by Countrywide. For the month of substitution,
distributions to the Purchaser shall include the Monthly Payment due on any
substituted Mortgage Loan in the month of substitution, and Countrywide shall
thereafter be entitled to retain all amounts subsequently received by
Countrywide in respect of such substituted Mortgage Loan.
For any month in which Countrywide substitutes a Qualified Substitute
Mortgage Loan for a repurchased Mortgage Loan, Countrywide shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all substituted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by Countrywide in the month of
substitution pursuant to Section 5.01. Accordingly, on the date of such
substitution, Countrywide shall deposit from its own funds into the Custodial
Account an amount equal to the amount of such shortfall.
(d) Indemnification. In addition to such repurchase or substitution
obligation, Countrywide shall indemnify the Purchaser and hold it harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded
upon, or resulting from, a material breach of the representations and warranties
of Countrywide contained in Sections 3.01 and 3.02.
(e) Sole Remedy. With respect to the breach of a representation and
warranty set forth in Section 3.02 with respect to a Mortgage Loan, the
obligation under this Section 3.03 of Countrywide to cure, repurchase or replace
such Mortgage Loan and to indemnify the Purchaser shall constitute the sole
remedies against Countrywide respecting such breach available to the Purchaser.
(f) Accrual of Cause of Action. Any cause of action against Countrywide
relating to or arising out of the breach of any representations and warranties
made in Sections 3.01 or 3.02 shall accrue as to any Mortgage Loan upon (i)
discovery of such breach by the Purchaser or notice thereof by Countrywide to
the Purchaser, (ii) failure by Countrywide to cure such breach or repurchase
such Mortgage Loan as specified above, and (iii) demand upon Countrywide by the
Purchaser for compliance with the relevant provisions of this Agreement.
SECTION 3.04 REPURCHASE OF CONVERTIBLE MORTGAGE LOANS.
In the event a Mortgagor exercises the option to convert a Convertible
Mortgage Loan to a Fixed Rate Mortgage Loan in accordance with the terms of the
related Mortgage Note, Countrywide shall repurchase such Convertible Mortgage
Loan within thirty (30) days of such conversion taking effect at a price equal
to on hundred percent (100%) of the unpaid principal
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balance of such Convertible Mortgage Loan at the time of such conversion plus
accrued interest thereon through the last day of the month of repurchase at the
Mortgage Loan Remittance Rate; provided, however, no interest shall be due and
payable if a Convertible Mortgage Loan is repurchased on the first day of a
month. Any repurchase of a Convertible Mortgage Loan(s) pursuant to the
foregoing provisions of this Section 3.04 shall be accomplished by deposit in
the Custodial Account of the amount of said repurchase price for distribution to
the Purchaser on the next scheduled Remittance Date.
SECTION 3.05 REPRESENTATIONS AND WARRANTIES RESPECTING THE PURCHASER.
The Purchaser represents, warrants and covenants to Countrywide that, as of
each Closing Date:
(a) Organization and Standing. The Purchaser is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and is qualified to transact business in and is in good standing under
the laws of each state in which the nature of the business transacted by it or
the character of the properties owned or leased by it requires such
qualification;
(b) Due Authority. The Purchaser has the full power and authority to
perform, and to enter into and consummate, all transactions contemplated by this
Agreement; the Purchaser has the full power and authority to purchase and hold
each Mortgage Loan;
(c) No Conflict. Neither the acquisition of the Mortgage Loans by the
Purchaser pursuant to this Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, will conflict with or result in a breach of any of
the terms, conditions or provisions of the Purchaser's charter or by-laws or
result in a material breach of any legal restriction or any material agreement
or instrument to which the Purchaser is now a party or by which it is bound, or
constitute a material default or result in an acceleration under any of the
foregoing, or result in the violation of any material law, rule, regulation,
order, judgment or decree to which the Purchaser or its property is subject;
(d) No Pending Litigation. There is no action, suit, proceeding,
investigation or litigation pending or, to the Purchaser's knowledge,
threatened, which either in any one instance or in the aggregate, if determined
adversely to the Purchaser would adversely affect the purchase of the Mortgage
Loans by the Purchaser hereunder, or the Purchaser's ability to perform its
obligations under this Agreement; and
(e) No Consent Required. No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Purchaser of or compliance by the Purchaser with this
Agreement or the consummation of the transactions contemplated by this Agreement
(including, but not limited to, any approval from HUD), or if required, such
consent, approval, authorization or order has been obtained prior to the related
Closing Date.
(f) Securities. Without conceding that the Mortgage Loans are securities,
the Purchaser hereby makes the following representations, warranties and
agreements, which shall have been deemed to have been made as of each Closing
Date:
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(i) the Purchaser understands that the Mortgage Loans have not been
registered under the 1933 Act or the securities laws of any state;
(ii) the Purchaser is acquiring the Mortgage Loans for its own account
without a view towards a public distribution;
(iii) the Purchaser considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Mortgage Loans;
(iv) the Purchaser has been furnished with all information regarding
the Mortgage Loans which it has requested from Countrywide; and
(v) neither the Purchaser nor anyone acting on its behalf offered,
transferred, pledged, sold or otherwise disposed of any Mortgage Loan, any
interest in any Mortgage Loan or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Mortgage Loan, any interest in any Mortgage Loan or any
other similar security from, or otherwise approached or negotiated with
respect to any Mortgage Loan, any interest in any Mortgage Loan or any
other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action which would constitute a distribution of the
Mortgage Loans under the 1933 Act or which would render the disposition of
any Mortgage Loan a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it authorized or
will it authorize any person to act, in such manner with respect to the
Mortgage Loans.
SECTION 3.06 INDEMNIFICATION BY THE PURCHASER.
The Purchaser shall indemnify Countrywide and hold it harmless against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and other costs and expenses resulting from
any claim, demand, defense or assertion based on or grounded upon, or resulting
from, a breach of the Purchaser's representations and warranties contained in
Section 3.05 above.
ARTICLE IV.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 4.01 COUNTRYWIDE TO ACT AS SERVICER.
Countrywide, as independent contract servicer, shall service and administer
Mortgage Loans sold pursuant to this Agreement in accordance with the Accepted
Servicing Practices and the terms of this Agreement and shall have full power
and authority, acting alone, to do or cause to be done any and all things, in
connection with such servicing and administration, that Countrywide may deem
necessary or desirable and consistent with the terms of this Agreement. In
servicing and administering the Mortgage Loans, Countrywide shall employ
procedures in accordance with the customary and usual standards of practice of
prudent mortgage servicers. Notwithstanding anything to the contrary contained
herein, in servicing and administering Government Mortgage Loans, Countrywide
shall not take, or fail to take, any action that would result in the denial of
coverage under any LGC or MIC, as applicable. Without limiting the generality of
the foregoing, with respect to any Government Mortgage Loan, Countrywide shall
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be permitted to deviate from the servicing practices set forth herein if such
deviation would be consistent with the servicing practices employed in
connection with any similar mortgage loan constituting a part of a GNMA
mortgage-backed security.
In accordance with the terms of this Agreement, Countrywide may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in Countrywide's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser; provided, however, that Countrywide shall not permit any
modification, waiver, or forbearance with respect to any Mortgage Loan that
would decrease the Mortgage Interest Rate (other than by adjustments required by
the terms of the Mortgage Note), result in the denial of coverage under a PMI
Policy, LGC or MIC, defer or forgive the payment of any principal or interest
payments, reduce the outstanding principal amount (except for actual payments of
principal), make future advances or extend the final maturity date on such
Mortgage Loan without the Purchaser's consent or otherwise constitute a
"significant modification" within the meaning of Treasury Regulations Section
1.860G-2(b). Countrywide may permit forbearance or allow for suspension of
Monthly Payments for up to one hundred twenty (120) days if the Mortgagor is in
default or Countrywide determines in its reasonable discretion, that default is
imminent and if Countrywide determines that granting such forbearance or
suspension is in the best interest of the Purchaser. If any modification,
forbearance or suspension permitted hereunder allows the deferral of interest or
principal payments on any Mortgage Loan, Countrywide shall include in each
remittance for any month in which any such principal or interest payment has
been deferred (without giving effect to such modification, forbearance or
suspension) an amount equal to such month's principal and one (1) month's
interest at the Mortgage Loan Remittance Rate on the then unpaid principal
balance of the Mortgage Loan and shall be entitled to reimbursement for such
advances only to the same extent as for Monthly Advances made pursuant to
Section 5.03. Countrywide shall notify the Purchaser, in writing, of any
modification, waiver, forbearance or amendment of any term of any Mortgage Loan
and the date thereof, and shall deliver to the Purchaser (or, at the direction
of the Purchaser, the Custodian) for deposit in the related Mortgage File, an
original counterpart of the agreement relating to such modification, waiver,
forbearance or amendment, promptly (and in any event within thirty (30) days)
following the execution thereof; provided, however, that if any such
modification, waiver, forbearance or amendment is required by applicable law to
be recorded, Countrywide (i) shall deliver to the Purchaser a copy thereof and
(ii) shall deliver to the Purchaser such document, with evidence of recordation
upon receipt thereof from the public recording office.
Without limiting the generality of the foregoing, Countrywide shall
continue, and is hereby authorized and empowered to execute and deliver on
behalf of itself and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. If reasonably required by Countrywide, the Purchaser shall
furnish Countrywide with any powers of attorney and other documents necessary or
appropriate to enable Countrywide to carry out its servicing and administrative
duties under this Agreement.
SECTION 4.02 COLLECTION OF MORTGAGE LOAN PAYMENTS.
Countrywide shall make reasonable efforts, in accordance with the Accepted
Servicing Practices and this Agreement, to collect all payments due under each
Mortgage Loan and shall
26
exercise reasonable care in ascertaining and estimating Escrow Payments and all
other charges that will become due and payable with respect to the Mortgage Loan
and Mortgaged Property.
SECTION 4.03 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) Foreclosure. In accordance with Accepted Servicing Practices,
Countrywide shall use reasonable efforts to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments. Countrywide
shall use reasonable efforts to realize upon defaulted Mortgage Loans, in such
manner as will maximize the receipt of principal and interest by the Purchaser,
taking into account, among other things, the timing of foreclosure proceedings.
The foregoing is subject to the provisions that, in any case in which Mortgaged
Property shall have suffered damage, Countrywide shall not be required to expend
its own funds toward the restoration of such property unless it shall determine
in its discretion (i) that such restoration will increase the proceeds of
liquidation of the related Mortgage Loan to the Purchaser after reimbursement to
itself for such expenses, and (ii) that such expenses will be recoverable by
Countrywide through PMI Proceeds, Government Insurance Proceeds, Other Insurance
Proceeds or Liquidation Proceeds from the related Mortgaged Property.
Countrywide shall notify the Purchaser in writing of the commencement of
foreclosure proceedings. Such notice may be contained in the reports prepared by
Countrywide and delivered to the Purchaser pursuant to the terms and conditions
of this Agreement. Countrywide shall be responsible for all costs and expenses
incurred by it in any foreclosure proceedings; provided, however, that it shall
be entitled to reimbursement thereof from proceeds from the related Mortgaged
Property.
Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
Countrywide has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, Countrywide shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser shall
determine how Countrywide shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Purchaser directs Countrywide to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, Countrywide shall be reimbursed for
all reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse Countrywide, Countrywide shall be entitled to be
reimbursed from amounts in the Custodial Account pursuant to Section 4.05
hereof. In the event the Purchaser directs Countrywide not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, Countrywide shall be
reimbursed for all Servicing Advances made with respect to the related Mortgaged
Property from the Custodial Account pursuant to Section 4.05 hereof.
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SECTION 4.04 ESTABLISHMENT OF CUSTODIAL ACCOUNTS; DEPOSITS IN CUSTODIAL
ACCOUNTS.
Countrywide shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one (1) or more Custodial
Accounts, in the form of time deposit or demand accounts, titled "[Countrywide],
in trust for Banc of America Mortgage Capital Corporation and/or subsequent
purchasers of Mortgage Loans - P&I." Countrywide shall provide the Purchaser
with written evidence of the creation of such Custodial Account(s) upon the
request of the Purchaser.
Countrywide shall deposit in the Custodial Account within two (2) Business
Days, and retain therein, the following payments and collections received or
made by it subsequent to the Cut-off Date, or received by it prior to the
Cut-off Date but allocable to a period subsequent thereto, other than in respect
of principal and interest on the Mortgage Loans due on or before the Cut-off
Date:
(a) all payments on account of principal, including Principal Prepayments,
on the Mortgage Loans;
(b) all payments on account of interest on the Mortgage Loans, adjusted to
the Mortgage Loan Remittance Rate;
(c) all proceeds from a Cash Liquidation;
(d) all PMI Proceeds, Government Insurance Proceeds and Other Insurance
Proceeds, including amounts required to be deposited pursuant to Sections 4.08
and 4.10, other than proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the Accepted
Servicing Practices, the loan documents or applicable law;
(e) all Condemnation Proceeds affecting any Mortgaged Property that are not
released to the Mortgagor in accordance with the Accepted Servicing Practices,
the loan documents or applicable law;
(f) all Monthly Advances;
(g) all proceeds of any Mortgage Loan repurchased in accordance with
Section 3.03 or 3.04, and any amount required to be deposited by Countrywide in
connection with any shortfall in principal amount of the Qualified Substitute
Mortgage Loans and the repurchased Mortgage Loans as required pursuant to
Section 3.03;
(h) any amounts required to be deposited by Countrywide pursuant to Section
4.10 in connection with the deductible clause in any blanket hazard insurance
policy (such deposit shall be made from Countrywide's own funds, without
reimbursement therefor);
(i) the Prepayment Interest Shortfall Amount, if any, for the month of
distribution (such deposit shall be made from Countrywide's own funds, without
reimbursement therefor up to a maximum amount per month equal to the lesser of
(a) one-twelfth of the product of (i) the Servicing Fee Rate and (ii) the Stated
Principal Balance of such Mortgage Loans, or (b) the aggregate Servicing Fee
actually received for such month for the Mortgage Loans); and
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(j) any amounts required to be deposited by Countrywide in connection with
any REO Property pursuant to Section 4.13.
The foregoing requirements for deposit in the Custodial Account are
exclusive. The Purchaser understands and agrees that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
prepayment penalties and assumption fees (to the extent permitted by Section
4.16) need not be deposited by Countrywide in the Custodial Account. Any
interest paid by the depository institution on funds deposited in the Custodial
Account shall accrue to the benefit of Countrywide and Countrywide shall be
entitled to retain and withdraw such interest from the Custodial Account
pursuant to Section 4.05(d). All funds required to be deposited in the Custodial
Account shall be held in trust for the Purchaser until withdrawn in accordance
with Section 4.05.
SECTION 4.05 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT.
Countrywide may, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(a) to make payments to the Purchaser in the amounts and in the manner
provided for in Sections 5.01 and 5.03;
(b) to reimburse itself for Monthly Advances (Countrywide's reimbursement
for Monthly Advances shall be limited to amounts received on the related
Mortgage Loan (or to amounts received on the Mortgage Loans as a whole if the
Monthly Advance is made due to a shortfall in a Monthly Payment made by a
Mortgagor entitled to relief under the Soldiers' and Sailors' Civil Relief Act
of 1940) which represent Late Collections, net of the related Servicing Fee and
LPMI Fee, if applicable. Countrywide's right to reimbursement hereunder shall be
prior to the rights of the Purchaser, except that, where Countrywide is required
to repurchase a Mortgage Loan pursuant to Sections 3.03 or 3.04 or Countrywide
is required to remit a sum pursuant to the applicable provision of Section 4.17,
Countrywide's right to such reimbursement shall be subsequent to the payment to
the Purchaser of the Repurchase Price and all other amounts required to be paid
to the Purchaser with respect to such Mortgage Loans. Notwithstanding the
foregoing, Countrywide may reimburse itself for Monthly Advances from any funds
in the Custodial Account if it has determined that such funds are nonrecoverable
advances or if all funds, with respect to the related Mortgage Loan, have
previously been remitted to the Purchaser);
(c) to reimburse itself for unreimbursed Servicing Advances and any unpaid
Servicing Fees (Countrywide's reimbursement for Servicing Advances and/or
Servicing Fees hereunder with respect to any Mortgage Loan shall be limited to
proceeds from Cash Liquidation, Liquidation Proceeds, Condemnation Proceeds, PMI
Proceeds, Government Insurance Proceeds and Other Insurance Proceeds; provided,
however, that Countrywide may reimburse itself for Servicing Advances and
Servicing Fees from any funds in the Custodial Account if all funds, with
respect to the related Mortgage Loan, have previously been remitted to the
Purchaser. Notwithstanding the foregoing, with respect to each Government
Mortgage Loan, Countrywide shall not be entitled to reimbursement of any
Servicing Advances that constitute losses and expenses for which an issuer of
GNMA securities would be responsible, pursuant to Chapter 4 of the GNMA Handbook
5500.2, if such Government Mortgage Loan had been included in a GNMA security);
29
(d) to pay to itself as servicing compensation (i) any interest earned on
funds in the Custodial Account (all such interest to be withdrawn monthly not
later than each Remittance Date), and (ii) the Servicing Fee and the LPMI Fee,
if applicable, from that portion of any payment or recovery of interest on a
particular Mortgage Loan;
(e) to pay to itself, with respect to each Mortgage Loan that has been
repurchased pursuant to Section 3.03 or 3.04, all amounts received but not
distributed as of the date on which the related Repurchase Price is determined;
(f) to reimburse itself for any amounts deposited in the Custodial Account
in error; and
(g) to clear and terminate the Custodial Account upon the termination of
this Agreement.
SECTION 4.06 ESTABLISHMENT OF ESCROW ACCOUNTS; DEPOSITS IN ESCROW ACCOUNTS.
Countrywide shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one (1) or more Escrow Accounts in the form of time deposit or demand
accounts, which accounts shall be Eligible Accounts, titled "[Countrywide], in
trust for Banc of America Mortgage Capital Corporation and/or subsequent
purchasers of Mortgage Loans and various mortgagors - T&I." Countrywide shall
provide the Purchaser with written evidence of the creation of such Escrow
Account(s) upon the request of the Purchaser.
Countrywide shall deposit in the Escrow Account(s) within two (2) Business
Days, and retain therein, (a) all Escrow Payments collected on account of the
Mortgage Loans, and (b) all Other Insurance Proceeds that are to be applied to
the restoration or repair of any Mortgaged Property. Countrywide shall make
withdrawals therefrom only to effect such payments as are required under this
Agreement, and for such other purposes in accordance with Section 4.07.
Countrywide shall be entitled to retain any interest paid by the depository
institution on funds deposited in the Escrow Account except interest on escrowed
funds required by law to be paid to the Mortgagor. Countrywide shall pay
Mortgagor interest on the escrowed funds at the rate required by law
notwithstanding that the Escrow Account is non-interest bearing or the interest
paid by the depository institution thereon is insufficient to pay the Mortgagor
interest at the rate required by law.
SECTION 4.07 PERMITTED WITHDRAWALS FROM ESCROW ACCOUNT.
Countrywide may, from time to time, withdraw funds from the Escrow
Account(s) for the following purposes: (a) to effect timely payments of ground
rents, taxes, assessments, water rates, mortgage insurance premiums, PMI Policy
premiums, if applicable, and comparable items; (b) to reimburse Countrywide for
any Servicing Advance made by Countrywide with respect to a related Mortgage
Loan; provided, however, that such reimbursement shall only be made from amounts
received on the related Mortgage Loan that represent late payments or
collections of Escrow Payments thereunder; (c) to refund to the Mortgagor any
funds as may be determined to be overages; (d) for transfer to the Custodial
Account in accordance with the terms of this Agreement; (e) for application to
restoration or repair of the Mortgaged Property; (f) to pay to Countrywide, or
to the Mortgagors to the extent required by law, any interest paid on the funds
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deposited in the Escrow Account; (g) to reimburse itself for any amounts
deposited in the Escrow Account in error; or (h) to clear and terminate the
Escrow Account on the termination of this Agreement.
SECTION 4.08 TRANSFER OF ACCOUNTS.
Countrywide may transfer the Custodial Account or the Escrow Account to a
different depository institution from time to time provided that such Custodial
Account and Escrow Account shall at all times be Eligible Accounts. Countrywide
shall notify the Purchaser of any such transfer within five (5) days thereafter.
SECTION 4.09 PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES; MAINTENANCE OF
PMI POLICIES; COLLECTIONS THEREUNDER.
With respect to each Mortgage Loan, Countrywide shall maintain accurate
records reflecting the status of (a) ground rents, taxes, assessments, water
rates and other charges that are or may become a lien upon the Mortgaged
Property; (b) primary mortgage insurance premiums; (c) with respect to Mortgage
Loans insured by the FHA, mortgage insurance premiums, and (d) fire and hazard
insurance premiums. Countrywide shall obtain, from time to time, all bills for
the payment of such charges, including renewal premiums, and shall effect
payment thereof prior to the applicable penalty or termination date and at a
time appropriate for securing maximum discounts allowable using Escrow Payments
which shall have been estimated and accumulated by Countrywide in amounts
sufficient for such purposes. To the extent that the Mortgage does not provide
for Escrow Payments, Countrywide shall determine that any such payments are made
by the Mortgagor at the time they first become due. Countrywide assumes full
responsibility for the timely payment of all such bills and shall effect timely
payments of all such bills, irrespective of the Mortgagor's faithful performance
in the payment of same or the making of the Escrow Payments, and shall make
advances from its own funds to effect such payments.
Countrywide will maintain in full force and effect, a PMI Policy conforming
in all respects to the description set forth in Section 3.02(v), issued by an
insurer described in that Section, with respect to each Mortgage Loan for which
such coverage is herein required. Such coverage will be maintained until the LTV
or the Updated LTV of the related Mortgage Loan is reduced to 80% or less in the
case of a Mortgage Loan having a LTV at origination in excess of 80%.
Countrywide will not cancel or refuse to renew any PMI Policy in effect on the
Closing Date that is required to be kept in force under this Agreement unless a
replacement PMI Policy is obtained from and maintained with an insurer that is
approved by an Agency. Countrywide shall not take any action that would result
in non-coverage under any applicable PMI Policy of any loss that, but for the
actions of Countrywide, would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered into
pursuant to Section 4.16, Countrywide shall promptly notify the insurer under
the related PMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such policy and shall take all actions that may
be required by such insurer as a condition to the continuation of coverage under
the PMI Policy. If such PMI Policy is terminated as a result of such assumption
or substitution of liability, Countrywide shall obtain a replacement PMI Policy
as provided above.
Unless otherwise provided in the related Purchase Confirmation, no Mortgage
Loan has in effect as of the Closing Date any mortgage pool insurance policy or
other credit enhancement, except for any PMI Policy, MIC or LGC and the
insurance or guarantee relating thereto, as
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applicable (excluding such exception, the "Credit Enhancement"), and Countrywide
shall not be required to take into consideration the existence of any such
Credit Enhancement for the purposes of performing its servicing obligations
hereunder. If the Purchaser shall at any time after the related Closing Date
notify Countrywide in writing of its desire to obtain any such Credit
Enhancement, the Purchaser and Countrywide shall thereafter negotiate in good
faith for the procurement and servicing of such Credit Enhancement.
SECTION 4.10 MAINTENANCE OF HAZARD INSURANCE.
Countrywide shall cause to be maintained, for each Mortgage Loan, fire and
hazard insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in an amount that is equal to the lesser of (a)
the maximum insurable value of the improvements securing such Mortgage Loan or
(b) the greater of (i) the unpaid principal balance of the Mortgage Loan, and
(ii) the percentage such that the proceeds thereof shall be sufficient to
prevent the Mortgagor and/or the Mortgagee from becoming a co-insurer. In the
event a hazard insurance policy shall be in danger of being terminated, or in
the event the insurer shall cease to be acceptable to an Agency, Countrywide
shall notify the Purchaser and the related Mortgagor, and shall use its best
efforts, as permitted by applicable law, to assure that a replacement hazard
insurance policy substantially and materially similar in all respects to the
original policy is obtained from a qualified insurer. If the Mortgaged Property
is in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards and such flood insurance has
been made available, Countrywide shall cause to be maintained a flood insurance
policy meeting the requirements of the current guidelines of the National Flood
Insurance Administration program (or any successor thereto) with a generally
acceptable insurance carrier and with coverage in an amount not less than the
lesser of (x) the unpaid principal balance of the Mortgage Loan; (y) full
replacement value of the improvements which are a part of the Mortgaged
Property; or (z) the maximum amount of insurance which is available under the
National Flood Insurance Reform Act of 1994. Countrywide shall also maintain on
REO Property, (1) fire and hazard insurance with extended coverage in an amount
that is not less than the maximum insurable value of the improvements that are a
part of such property; (2) liability insurance; and (3) to the extent required
and available under the National Flood Insurance Reform Act of 1994, flood
insurance in an amount as provided above. Countrywide shall deposit in the
Custodial Account all amounts collected under any such policies except (A)
amounts to be deposited in the Escrow Account and applied to the restoration or
repair of the Mortgaged Property or REO Property and (B) amounts to be released
to the Mortgagor in accordance with the Accepted Servicing Practices. The
Purchaser understands and agrees that no earthquake or other additional
insurance on property acquired in respect of the Mortgage Loan shall be
maintained by Countrywide or Mortgagor. All policies required hereunder shall be
endorsed with standard mortgagee clauses with loss payable to Countrywide and
shall provide for at least thirty (30) days prior written notice to Countrywide
of any cancellation, reduction in the amount of coverage or material change in
coverage. Countrywide shall not interfere with the Mortgagor's freedom of choice
in selecting either the insurance carrier or agent; provided, however, that
Countrywide shall only accept insurance policies from insurance companies
acceptable to an Agency and licensed to do business in the state wherein the
property subject to the policy is located.
SECTION 4.11 BUSINESS CONTINUITY PLAN/DISASTER RECOVERY.
Countrywide shall establish and maintain contingency plans, recovery plans
and proper risk controls to ensure Countrywide's continued performance under
this Agreement. The plans
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must be in place within thirty (30) calendar days after the Closing Date of this
Agreement and shall include, but not be limited to, testing, control functions,
accountability and corrective actions to be implemented, if necessary.
Countrywide agrees to make copies or summaries of the plans available to the
Purchaser or its regulators upon request.
SECTION 4.12 FIDELITY BOND; ERRORS AND OMISSIONS INSURANCE.
Countrywide shall maintain, at its own expense, a blanket Fidelity Bond and
an errors and omissions insurance policy with responsible companies, with broad
coverage of all officers, employees or other persons acting in any capacity with
regard to the Mortgage Loan who handle funds, money, documents or papers
relating to the Mortgage Loan. The Fidelity Bond and errors and omissions
insurance shall be in the form of the Mortgage Banker's Blanket Bond and shall
protect and insure Countrywide against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of its officers,
employees and agents. Such Fidelity Bond shall also protect and insure
Countrywide against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 4.12 shall diminish
or relieve Countrywide from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such Fidelity Bond and errors and
omissions insurance policy shall be at least equal to the corresponding amounts
required by an Agency for an approved seller/servicer.
SECTION 4.13 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
(a) Title. In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of Countrywide for the benefit of the Purchaser, or
in the event the Purchaser is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such
Person(s) as shall be consistent with an Opinion of Counsel obtained by
Countrywide from an attorney duly licensed to practice law in the state where
the REO Property is located. Any Person(s) holding such title other than the
Purchaser shall acknowledge in writing that such title is being held as nominee
for the benefit of the Purchaser.
(b) Management. Countrywide shall either itself or through an agent
selected by Countrywide, manage, conserve, protect and operate each REO Property
in the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account. Countrywide shall cause each REO
Property to be inspected promptly upon the acquisition of title thereto and
shall cause each REO Property to be inspected at least annually thereafter or
more frequently as required by the circumstances. Countrywide shall make or
cause to be made a written report of each such inspection. Such reports shall be
retained in the Credit File and copies thereof shall be forwarded by Countrywide
to the Purchaser within five (5) days of the Purchaser's request therefor.
Countrywide shall promptly attempt to sell the REO Property (and may temporarily
rent the same) on such terms and conditions as Countrywide deems to be in the
best interest of the Purchaser. Countrywide shall deposit, or cause to be
deposited, within two (2) Business Days of receipt, in the Custodial Account all
revenues received with respect to each REO Property and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of each REO
Property, including the cost of maintaining any hazard insurance pursuant to
Section 4.10 hereof and the fees of any managing agent acting on
33
behalf of Countrywide. Notwithstanding anything contained in this Agreement to
the contrary, upon written notice to Countrywide, the Purchaser may elect to
assume the management and control of any REO Property; provided, however, that
prior to giving effect to such election, the Purchaser shall reimburse
Countrywide for all previously unreimbursed or unpaid Monthly Advances,
Servicing Advances and Servicing Fees related to such REO Property.
(c) Disposition. Subject to the following paragraph, Countrywide shall use
reasonable efforts to dispose of each REO Property as soon as possible and shall
sell each REO Property no later than one (1) year after title to such REO
Property has been obtained, unless Countrywide determines, and gives an
appropriate notice to the Purchaser, that a longer period is necessary for the
orderly disposition of any REO Property. If a period longer than one (1) year is
necessary to sell any REO Property, Countrywide shall, if requested by the
Purchaser, report monthly to the Purchaser as to the progress being made in
selling such REO Property.
Each REO Disposition shall be carried out by Countrywide at such price and
upon such terms and conditions as Countrywide deems to be in a manner that
maximizes the net present value of the recovery to the Purchaser. If, as of the
date title to any REO Property was acquired by Countrywide, there were
outstanding unreimbursed Servicing Advances, Monthly Advances or Servicing Fees
with respect to the REO Property or the related Mortgage Loan, Countrywide, upon
an REO Disposition of such REO Property, shall be entitled to reimbursement for
any related unreimbursed Servicing Advances, Monthly Advances and Servicing Fees
from proceeds received in connection with such REO Disposition. The proceeds
from the REO Disposition, net of any payment to Countrywide as provided above,
shall be deposited in the Custodial Account and distributed to the Purchaser in
accordance with Section 5.01.
SECTION 4.14 NOTIFICATION OF ADJUSTMENTS.
With respect to each Adjustable Rate Mortgage Loan, Countrywide shall
adjust the Mortgage Interest Rate on the related Interest Adjustment Date and
shall adjust the Monthly Payment on the related Payment Adjustment Date in
compliance with the requirements of applicable law and the related Mortgage and
Mortgage Note. If, pursuant to the terms of the Mortgage Note, another index is
selected for determining the Mortgage Interest Rate because the original index
is no longer available, the same index will be used with respect to each
Mortgage Note which requires a new index to be selected, provided that such
selection does not conflict with the terms of the related Mortgage Note.
Countrywide shall execute and deliver any and all necessary notices required
under applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Interest Rate and the Monthly Payment adjustments.
Countrywide shall promptly, upon written request therefor, deliver to the
Purchaser such notifications and any additional applicable data regarding such
adjustments and the methods used to calculate and implement such adjustments.
Upon the discovery by Countrywide or the Purchaser that Countrywide has failed
to adjust a Mortgage Interest Rate or a Monthly Payment pursuant to the terms of
the related Mortgage Note and Mortgage, Countrywide shall immediately deposit in
the Custodial Account, from its own funds, the amount of any interest loss
caused the Purchaser thereby without reimbursement therefor.
SECTION 4.15 NOTIFICATION OF MATURITY DATE.
With respect to each Balloon Mortgage Loan, Countrywide shall execute and
deliver to the Mortgagor any and all necessary notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
maturity date and final balloon payment.
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SECTION 4.16 ASSUMPTION AGREEMENTS.
Countrywide shall, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that
Countrywide shall not exercise any such right if prohibited from doing so by law
or the terms of the Mortgage Note or if the exercise of such right would impair
or threaten to impair any recovery under the related PMI Policy, if any. If
Countrywide reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause, Countrywide shall enter into an assumption agreement
with the Person to whom the Mortgaged Property has been conveyed or is proposed
to be conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. Where an assumption is allowed pursuant to this Section 4.16,
the Purchaser authorizes Countrywide, with the prior written consent of the
primary mortgage insurer, if any, to enter into a substitution of liability
agreement with the Person to whom the Mortgaged Property has been conveyed or is
proposed to be conveyed pursuant to which the original Mortgagor is released
from liability and such Person is substituted as Mortgagor and becomes liable
under the related Mortgage Note. Any such substitution of liability agreement
shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of liability,
Countrywide shall follow the underwriting practices and procedures employed by
Countrywide for mortgage loans originated by Countrywide for its own account in
effect at the time such assumption or substitution is made. With respect to an
assumption or substitution of liability, the Mortgage Interest Rate borne by the
related Mortgage Note, the term of the Mortgage Loan and the outstanding
principal amount of the Mortgage Loan shall not be changed. Countrywide shall
notify the Purchaser that any such substitution of liability or assumption
agreement has been completed by forwarding to the Purchaser or its designee the
original of any such substitution of liability or assumption agreement, which
document shall be added to the related Collateral File and shall, for all
purposes, be considered a part of such Collateral File to the same extent as all
other documents and instruments constituting a part thereof.
Notwithstanding anything to the contrary contained herein, Countrywide
shall not be deemed to be in default, breach or any other violation of its
obligations hereunder by reason of any assumption of a Mortgage Loan by
operation of law or any assumption that Countrywide may be restricted by law
from preventing, for any reason whatsoever. For purposes of this Section 4.16,
the term "assumption" is deemed to also include a sale of the Mortgaged Property
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
SECTION 4.17 SATISFACTION OF MORTGAGES AND RELEASE OF COLLATERAL FILES.
Upon the payment in full of any Mortgage Loan, or the receipt by
Countrywide of a notification that payment in full will be escrowed in a manner
customary for such purposes, Countrywide shall immediately notify the Purchaser.
Such notice shall include a statement to the effect that all amounts received or
to be received in connection with such payment, which are required to be
deposited in the Custodial Account pursuant to Section 4.04, have been or will
be so deposited and shall request delivery to it of the portion of the
Collateral File held by the
35
Purchaser or the Custodian. Upon receipt of such notice and request, the
Purchaser, or its designee, shall within five (5) Business Days release or cause
to be released to Countrywide the related Collateral Documents and Countrywide
shall prepare and process any satisfaction or release. In the event that the
Purchaser fails to release or cause to be released to Countrywide the related
Collateral Documents within five (5) Business Days of Countrywide's request
therefor, the Purchaser shall be liable to Countrywide for any additional
expenses or costs, including, but not limited to, outsourcing fees and
penalties, incurred by Countrywide resulting from such failure. No expense
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Custodial Account.
In the event Countrywide satisfies or releases a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage or should
it otherwise prejudice any right the Purchaser may have under the mortgage
instruments, Countrywide, upon written demand, shall remit to the Purchaser the
then unpaid principal balance of the related Mortgage Loan by deposit thereof in
the Custodial Account. Countrywide shall maintain the Fidelity Bond insuring
Countrywide against any loss it may sustain with respect to any Mortgage Loan
not satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the service or foreclosure of a
Mortgage Loan, including for the purpose of collection under any PMI Policy, the
Purchaser, its designee, or the Custodian shall, within five (5) Business Days
of Countrywide's request and delivery to the Purchaser, its designee, or the
Custodian of a servicing receipt signed by a Servicing Officer, release or cause
to be released to Countrywide the portion of the Collateral File held by the
Purchaser, its designee, or the Custodian. Pursuant to the servicing receipt,
Countrywide shall be obligated to return to the Purchaser, its designee, or the
Custodian the related Collateral File when Countrywide no longer needs such
file, unless the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Custodial Account or
the Collateral File or such document has been delivered to an attorney, or to a
public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially. In the event that
the Purchaser fails to release or cause to be released to Countrywide the
portion of the Collateral File held by the Purchaser or its designee within five
(5) Business Days of Countrywide's request therefor, the Purchaser shall be
liable to Countrywide for any additional expenses or costs, including, but not
limited to, outsourcing fees and penalties, incurred by Countrywide resulting
from such failure. Upon receipt of notice from Countrywide stating that such
Mortgage Loan was liquidated, the Purchaser shall release Countrywide from its
obligations under the related servicing receipt.
SECTION 4.18 SERVICING COMPENSATION.
As compensation for its services hereunder, Countrywide shall be entitled
to withdraw from the Custodial Account, or to retain from interest payments on
the Mortgage Loans, the amounts provided for as Servicing Fees. Except as
otherwise provided hereunder, the obligation of the Purchaser to pay the
Servicing Fee is limited to, and payable solely from, the interest portion of
the Monthly Payments. Notwithstanding the foregoing, with respect to the payment
of the Servicing Fee for any month, the aggregate Servicing Fee shall be reduced
(but not less than zero) by an amount equal to the Prepayment Interest Shortfall
for the related Due Period. Additional servicing compensation in the form of
assumption fees (as provided in Section 4.16), late payment charges, prepayment
penalties or otherwise shall be retained by Countrywide to the extent not
required to be deposited in the Custodial Account. Countrywide shall be required
to
36
pay all expenses incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement therefor except as
specifically provided herein.
ARTICLE V.
PROVISIONS OF PAYMENTS AND REPORTS TO PURCHASER
SECTION 5.01 DISTRIBUTIONS.
On each Remittance Date, Countrywide shall distribute to the Purchaser (a)
all amounts credited to the Custodial Account as of the close of business on the
preceding Determination Date, net of charges against or withdrawals from the
Custodial Account pursuant to Section 4.05; plus (b) all Monthly Advances, if
any, that Countrywide is obligated to distribute pursuant to Section 5.03; minus
(c) any amounts attributable to Principal Prepayments received after the related
Principal Prepayment Period; minus (d) any amounts attributable to Monthly
Payments collected but due on a Due Date or Dates subsequent to the preceding
Determination Date. It is understood that, by operation of Section 4.04, the
remittance on the first Remittance Date is to include principal collected after
the Cut-off Date through the preceding Determination Date plus interest,
adjusted to the Mortgage Loan Remittance Rate, collected through such
Determination Date exclusive of any portion thereof allocable to the period
prior to the Cut-off Date, with the adjustments specified in (b), (c) and (d)
above.
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SECTION 5.02 PERIODIC REPORTS TO THE PURCHASER.
(a) Monthly Reports. Not later than the fifth (5th) Business Day following
the Principal Prepayment Period, Countrywide shall furnish to the Purchaser via
any electronic medium a monthly report in a form reasonably acceptable to the
Purchaser, which report shall include with respect to each Mortgage Loan the
following loan-level information: (i) the scheduled balance as of the last day
of the related Due Period, (ii) all Principal Prepayments applied to the
Mortgagor's account during the related Principal Prepayment Period, (iii) the
delinquency and bankruptcy status of the Mortgage Loan, if applicable, (iv)
actual unpaid principal balance, (v) the date through which Monthly Payments
have been made; (vi) the current Mortgage Interest Rate, (vii) Mortgage Interest
Rate net of the Servicing Fee and the LPMI fee and (viii) the amount being
remitted.
(b) Miscellaneous Reports. Upon the foreclosure sale of any Mortgaged
Property or the acquisition thereof by the Purchaser pursuant to a deed-in-lieu
of foreclosure, Countrywide shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property, which report may be included with any
other reports prepared by Countrywide and delivered to the Purchaser pursuant to
the terms and conditions of this Agreement. With respect to any REO Property,
and upon the request of the Purchaser, Countrywide shall furnish to the
Purchaser a statement describing Countrywide's efforts during the previous month
in connection with the sale of such REO Property, including any rental of such
REO Property incidental to the sale thereof and an operating statement.
Countrywide shall also provide the Purchaser with such information concerning
the Mortgage Loans as is necessary for the Purchaser to prepare its federal
income tax return and as the Purchaser may reasonably request from time to time.
The Purchaser agrees to pay for all reasonable out-of-pocket expenses incurred
by Countrywide in connection with complying with any request made by the
Purchaser hereunder if such information is not customarily provided by
Countrywide in the ordinary course of servicing mortgage loans similar to the
Mortgage Loans.
SECTION 5.03 MONTHLY ADVANCES BY COUNTRYWIDE.
Not later than the close of business on the Determination Date preceding
each Remittance Date, Countrywide shall deposit in the Custodial Account an
amount equal to all payments not previously advanced by Countrywide, whether or
not deferred pursuant to Section 5.01, of principal (due after the Cut-off Date)
and interest not allocable to the period prior to the Cut-off Date, adjusted to
the Mortgage Loan Remittance Rate, which were due on a Mortgage Loan and
delinquent as of the close of business on the Business Day prior to the related
Determination Date. Notwithstanding anything to the contrary herein, Countrywide
may use amounts on deposit in the Custodial Account for future distribution to
the Purchaser to satisfy its obligation, if any, to deposit delinquent amounts
pursuant to the preceding sentence. To the extent Countrywide uses any funds
being held for future distribution to the Purchaser to satisfy its obligations
under this Section 5.03, Countrywide shall deposit in the Custodial Account an
amount equal to such used funds no later than the Determination Date prior to
the following Remittance Date to the extent that funds in the Custodial Account
on such Remittance Date are less than the amounts to be remitted to the
Purchaser pursuant to Section 5.01.
Countrywide's obligation to make such advances as to any Mortgage Loan will
continue through the earliest of: (a) the last Monthly Payment due prior to the
payment in full of the Mortgage Loan; (b) the Remittance Date prior to the
Remittance Date for the distribution of any Liquidation Proceeds, Other
Insurance Proceeds or Condemnation Proceeds which, in the case
38
of Other Insurance Proceeds and Condemnation Proceeds, satisfy in full the
indebtedness of such Mortgage Loan; or (c) the Remittance Date prior to the date
the Mortgage Loan is converted to REO Property; provided, however, with respect
to any Government Mortgage Loan that is converted to REO Property, Countrywide's
obligation to make such advances will continue in accordance with the applicable
governmental agency's guidelines. In no event shall Countrywide be obligated to
make an advance under this Section 5.03 if at the time of such advance it
reasonably determines that such advance will be unrecoverable.
SECTION 5.04 ANNUAL STATEMENT AS TO COMPLIANCE.
Countrywide shall deliver to the Purchaser on or before March 15th of each
year, beginning in the year following the Closing Date, an Officers' Certificate
stating, as to each signatory thereof, that (a) a review of the activities of
Countrywide during the preceding calendar year and of performance under this
Agreement has been made under such officers' supervision, and (b) to the best of
such officers' knowledge, based on such review, Countrywide has fulfilled all of
its obligations under this Agreement throughout such year, or, if there has been
a default in the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof. Countrywide
shall provide the Purchaser with copies of such statements upon request.
SECTION 5.05 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' SERVICING
REPORT.
On or before March 15th of each year, beginning in the year following the
Closing Date, Countrywide at its expense shall cause a firm of independent
public accountants, which is a member of the American Institute of Certified
Public Accountants, to furnish a statement to the Purchaser to the effect that
such firm has examined certain documents and records relating to Countrywide's
servicing of mortgage loans of the same type as the Mortgage Loans, pursuant to
this Agreement or servicing agreements substantially similar to this Agreement,
and that, on the basis of such examination, conducted substantially in
accordance with the Uniform Single Audit Program for Mortgage Bankers, such firm
is of the opinion that Countrywide's servicing has been conducted in compliance
with this Agreement or such servicing agreements examined pursuant to this
Section 5.05 except for (a) such exceptions as such firm shall believe to be
immaterial, and (b) such other exceptions as shall be set forth in such
statement. Countrywide shall provide the Purchaser with copies of such
statements upon request.
SECTION 5.06 PURCHASER'S ACCESS TO COUNTRYWIDE'S RECORDS.
The Purchaser shall have access upon reasonable notice to Countrywide,
during regular business hours or at such other times as might be reasonable
under applicable circumstances, to any and all of the books and records of
Countrywide that relate to the performance or observance by Countrywide of the
terms, covenants or conditions of this Agreement. Further, Countrywide hereby
authorizes the Purchaser, in connection with a sale of the Mortgage Loans, to
make available to prospective purchasers a Consolidated Statement of Operations
of Countrywide, or its parent company, prepared by or at the request of
Countrywide for the most recently completed three (3) fiscal years for which
such a statement is available as well as a Consolidated Statement of Condition
at the end of the last two (2) fiscal years covered by such Consolidated
Statement of Operations. Countrywide also agrees to make available to any
prospective purchaser, upon reasonable notice and during normal business hours,
a knowledgeable financial or accounting officer for the purpose of answering
questions respecting Countrywide's ability to
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perform under this Agreement. The Purchaser agrees to reimburse Countrywide for
any out-of-pocket costs incurred by Countrywide in connection with its
obligations under this Section 5.06.
SECTION 5.07 COMPLIANCE WITH REMIC PROVISIONS.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, Countrywide shall not take
any action, cause the REMIC to take any action, or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of the REMIC as a REMIC
or (ii) result in the imposition of a tax upon the REMIC (including but not
limited to the tax on "prohibited transactions" as defined in Section 860 (a)
(2) of the Code and the tax on "contributions" to a REMIC set forth in Section
860(d) of the Code) unless Countrywide has received an Opinion of Counsel (at
the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such REMIC status or result in the
imposition of any such tax.
ARTICLE VI.
COVENANTS BY COUNTRYWIDE
SECTION 6.01 INDEMNIFICATION BY COUNTRYWIDE.
Countrywide shall indemnify the Purchaser and hold it harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary attorneys' fees and related costs, judgments, and any other costs,
fees and expenses that the Purchaser may sustain in any way related to the
failure of Countrywide to perform its obligations hereunder including its
obligations to service and administer the Mortgage Loans in compliance with the
terms of this Agreement. Notwithstanding the foregoing, the Purchaser shall
indemnify Countrywide and hold it harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that
Countrywide may sustain in any way related to (a) actions or inactions of
Countrywide which were taken or omitted upon the instruction or direction of the
Purchaser, or (b) the failure of the Purchaser to perform its obligations
hereunder, including subsections (i) and (ii) in Section 6.04.
SECTION 6.02 THIRD PARTY CLAIMS.
Countrywide and the Purchaser shall immediately notify the other if a claim
is made upon such party by a third party with respect to this Agreement or the
Mortgage Loans. Upon the prior written consent of the Purchaser, which consent
shall not be unreasonably withheld, Countrywide shall assume the defense of any
such claim and pay all expenses in connection therewith, including attorneys'
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against it or the Purchaser in respect of such claim. The Purchaser
shall promptly reimburse Countrywide for all amounts advanced by it pursuant to
the preceding sentence except when as a result of such claim Countrywide is
otherwise required to indemnify the Purchaser pursuant to Section 6.01 hereof.
SECTION 6.03 MERGER OR CONSOLIDATION OF COUNTRYWIDE.
Countrywide shall keep in full effect its existence, rights and franchises
as a corporation under the laws of the United States or under the laws of one of
the states thereof, and will obtain
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and preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, or any of the Mortgage Loans, and
to perform its duties under this Agreement.
Notwithstanding anything to the contrary contained herein, any Person into
which Countrywide may be merged or consolidated, or any corporation resulting
from any merger, conversion or consolidation to which Countrywide shall be a
party, or any Person succeeding to the business of Countrywide, shall be the
successor of Countrywide hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, however,
that the successor or surviving Person shall be an institution whose deposits
are insured by FDIC or a company whose business is the origination and servicing
of mortgage loans, unless otherwise consented to by the Purchaser, which consent
shall not be unreasonably withheld, and shall be qualified to service mortgage
loans on behalf of an Agency.
SECTION 6.04 LIMITATION ON LIABILITY OF COUNTRYWIDE AND OTHERS.
Neither Countrywide nor any of the officers, employees or agents of
Countrywide shall be under any liability to the Purchaser for any action taken,
or for refraining from taking any action, in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect Countrywide or any such person against any breach of
warranties or representations made herein, or the failure to perform its
obligations in compliance with any standard of care set forth in this Agreement,
or any liability which would otherwise be imposed by reason of any breach of the
terms and conditions of this Agreement. Countrywide and any officer, employee or
agent of Countrywide may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. Notwithstanding anything to the contrary contained in this
Agreement, unless one or more Event of Default by Countrywide shall occur and
shall not have been remedied within the time limits set forth in Section 7.01(a)
of this Agreement, the Purchaser shall not record or cause to be recorded an
Assignment of Mortgage with the recording office. To the extent the Purchaser
records with the recording office as permitted herein an Assignment of Mortgage
which designates the Purchaser as the holder of record of the Mortgage, the
Purchaser agrees that it shall (i) provide Countrywide with immediate notice of
any action with respect to the Mortgage or the related Mortgaged Property and
ensure that the proper department or person at Countrywide receives such notice;
and (ii) immediately complete, sign and return to Countrywide any document
reasonably requested by Countrywide to comply with its servicing obligations,
including without limitation, any instrument required to release the Mortgage
upon payment in full of the obligation or take any other action reasonably
required by Countrywide. The Purchaser further agrees that Countrywide shall
have no liability for the Purchaser's failure to comply with the subsections (i)
or (ii) in the foregoing sentence. Countrywide shall have no liability to the
Purchaser and shall not be under any obligation to appear in, prosecute or
defend any legal action which is not incidental to its duties to service the
Mortgage Loans in accordance with this Agreement and which in its opinion may
involve it in any expenses or liability; provided, however, that Countrywide
may, with the consent of the Purchaser, undertake any such action which it may
deem necessary or desirable to protect the Purchaser's interests in the Mortgage
Loans. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities for which
the Purchaser will be liable, and Countrywide shall be entitled to be reimbursed
therefor from the Purchaser upon written demand except when such expenses, costs
and liabilities are subject to Countrywide's indemnification under Section 6.01.
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SECTION 6.05 NO TRANSFER OF SERVICING.
Countrywide acknowledges that the Purchaser acts in reliance upon
Countrywide's independent status, the adequacy of its servicing facilities,
plant, personnel, records and procedures, its integrity, reputation and
financial standing and the continuance thereof. Without in any way limiting the
generality of this Section, Countrywide shall not assign this Agreement or the
servicing rights hereunder, without the prior written approval of the Purchaser,
which consent may not be unreasonably withheld; provided, however, that nothing
in this Agreement shall limit the right of Countrywide to assign the servicing
rights hereunder to Servicing LP.
SECTION 6.06 PROVISION OF INFORMATION.
During the term of this Agreement, Countrywide shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies or
originals of any documents contained in the Credit File for each Mortgage Loan
provided for herein. All such reports, documents or information shall be
provided by and in accordance with all reasonable instructions and directions
which the Purchaser shall give in writing. In addition, during the term of this
Agreement, Countrywide shall provide to the OCC and to comparable regulatory
authorities supervising the Purchaser or any of Purchaser's assigns (including
beneficial owners of securities issued in Pass-Through Transfers backed by the
Mortgage Loans) and the examiners and supervisory agents of the OCC and such
other authorities, access to the documentation required by applicable
regulations of the OCC and other comparable regulatory authorities supervising
the Purchaser or any of its assigns with respect to the Mortgage Loans. Such
access shall be upon reasonable and prior written request and during normal
business hours at the offices designated by Countrywide. To the extent the
Purchaser, any of Purchaser's assigns, or the examiners and supervisory agents
of the OCC request reports, documents, information, or other cooperation not
generally provided by Countrywide to its other investors or readily available to
Countrywide, the Purchaser shall be liable for and shall pay all reasonable
out-of-pocket costs and expenses incurred by Countrywide in providing such
additional reports, documents, information, or other cooperation.
ARTICLE VII.
TERMINATION OF COUNTRYWIDE AS SERVICER
SECTION 7.01 TERMINATION DUE TO AN EVENT OF DEFAULT.
(a) Each of the following shall be an Event of Default by Countrywide if it
shall occur and, if applicable, be continuing for the period of time set forth
therein:
(i) any failure by Countrywide to remit to the Purchaser any payment
required to be made under the terms of this Agreement which such failure
continues unremedied for a period of three (3) Business Days after the date
upon which written notice of such failure, requiring the same to be
remedied, shall have been given to Countrywide by the Purchaser; or
(ii) any failure on the part of Countrywide to duly observe or perform
in any material respect any of the covenants or agreements on the part of
Countrywide set forth in this Agreement, including but not limited to
breach by Countrywide of any one or more of the representations,
warranties, and covenants of Countrywide as set forth in Section 3.01 of
this Agreement, or in the Custodial Agreement, if any, which continues
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unremedied for a period of thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given to Countrywide by the Purchaser; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against Countrywide and
such decree or order shall have remained in force undischarged or unstayed
for a period of sixty (60) days; or
(iv) Countrywide shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating
to Countrywide or of or relating to all or substantially all of its
property; or
(v) Countrywide shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations, or completely ceases its business operations for a period of
five (5) consecutive Business Days; or
(vi) failure by Countrywide to maintain its license to do business in
any jurisdiction where the Mortgaged Property is located if such license is
required; or
(vii) Countrywide ceases to meet the servicer eligibility
qualifications of both Agencies; or
(viii) Countrywide attempts to assign this Agreement or all of its
servicing responsibilities or duties hereunder or any portion thereof in
violation of Section 6.05.
If Countrywide obtains knowledge of an Event of Default, it shall promptly
notify the Purchaser. In case one or more Events of Default by Countrywide shall
occur and shall not have been remedied, the Purchaser, by notice in writing to
Countrywide may, in addition to whatever rights the Purchaser may have at law or
equity to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of Countrywide under this Agreement and
in and to the Mortgage Loans and the proceeds thereof. On or after the receipt
by Countrywide of such written notice, all authority and power of Countrywide
under this Agreement, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Purchaser. Upon written request from the
Purchaser, Countrywide shall prepare, execute and deliver, any and all documents
and other instruments and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at Countrywide's sole expense. Countrywide
agrees to cooperate with the Purchaser in effecting the termination of
Countrywide's responsibilities and rights hereunder, including the transfer to
the Purchaser, for administration by it, of all cash amounts which shall at the
time be credited by Countrywide to the Custodial Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
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(b) Waiver of Event of Default. Upon written notice, the Purchaser may
waive any default by Countrywide in the performance of Countrywide's obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Events of Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto except to the extent expressly so waived.
SECTION 7.02 TERMINATION WITHOUT CAUSE.
The Purchaser may terminate, any servicing rights Countrywide may have
hereunder with respect to any Mortgage Loan Package, without cause as provided
in this Section 7.02. Any such notice of termination shall be in writing and
delivered to Countrywide by registered mail as provided in Section 8.01 at least
sixty (60) days prior to such termination date.
In the event the servicing rights with respect to a Mortgage Loan Package
are terminated pursuant to this Section 7.02, Countrywide shall be entitled to
receive, as liquidated damages, upon the transfer of the servicing rights, an
amount equal to the sum of (i) the greater of (A) two and one-half percent (2
1/2%) of the aggregate outstanding principal amount of the Mortgage Loans, or
(B) the fair market value of the servicing rights, each as of the termination
date, plus (ii) all reasonable costs and expenses incurred by Countrywide in
managing the transfer of the servicing. The fair market value of the servicing
rights shall be determined based on the average of three (3) bids made by
experienced evaluators unaffiliated to the Purchaser or Countrywide and chosen
as follows: (X) one by the Purchaser, (Y) one by Countrywide, and (Z) one by
mutual agreement of the evaluators chosen by the Purchaser and Countrywide,
pursuant to (X) and (Y) above.
SECTION 7.03 TERMINATION BY OTHER MEANS.
The respective obligations and responsibilities of Countrywide shall
terminate with respect to any Mortgage Loan Package upon the first to occur of:
(a) the later of the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or the disposition of all REO
Property in such Mortgage Loan Package and the remittance of all funds due
hereunder; (b) by mutual consent of Countrywide and the Purchaser in writing;
(c) the repurchase by Countrywide of all outstanding Mortgage Loans and REO
Property in a Mortgage Loan Package at a price equal to (i) in the case of a
Mortgage Loan, 100% of the Stated Principal Balance of each Mortgage Loan on the
date of such repurchase plus accrued interest thereon through the last day of
the month of repurchase, and (ii) in the case of REO Property, the lesser of (1)
100% of the Stated Principal Balance of the Mortgage Loan encumbering the
Mortgaged Property at the time such Mortgaged Property was acquired and became
REO Property or (2) the fair market value of such REO Property at the time of
repurchase; or (d) the Pass-Through Transfer of the last Mortgage Loan in such
Mortgage Loan Package.
The right of Countrywide to repurchase all outstanding Mortgage Loans in a
Mortgage Loan Package pursuant to (c) above shall be conditional upon (i) the
outstanding Stated Principal Balances of such Mortgage Loans at the time of any
such repurchase aggregating less than five percent (5%) of the aggregate Stated
Principal Balances of the Mortgage Loans on the related Cut-off Date, and (ii)
the determination by Countrywide that the reasonable costs and expenses incurred
by Countrywide in the performance of its servicing obligations hereunder with
respect to such Mortgage Loans exceed the benefits accruing to Countrywide
therefrom.
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ARTICLE VIII.
MISCELLANEOUS
SECTION 8.01 NOTICES.
All demands, notices and communications required to be provided hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, postage prepaid, and return receipt requested, or,
if by other means, when received by the other party at the address as follows:
(i) to Countrywide:
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx, Executive Vice President
With copy to: General Counsel
(ii) the Purchaser:
To the address and contact set forth in the related Purchase
Confirmation
or such other address as may hereafter be furnished to the other party by
like notice. Any such demand, notice or communication hereunder shall be deemed
to have been received on the date delivered to or received at the premises of
the addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 8.02 SALE TREATMENT.
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of the Mortgage
Loans by Countrywide and not a pledge of the Mortgage Loans by Countrywide to
the Purchaser to secure a debt or other obligation of Countrywide. Consequently,
the sale of each Mortgage Loan shall be reflected as a sale on Countrywide's
business records, tax returns and financial statements. Accordingly, Countrywide
and the Purchaser shall each treat the transaction for federal income tax
purposes as a sale by Countrywide, and a purchase by the Purchaser, of the
Mortgage Loans.
SECTION 8.03 EXHIBITS.
The Exhibits to this Agreement and each Trade Confirmation and Purchase
Confirmation executed by Countrywide and the Purchaser are hereby incorporated
and made a part hereof and are an integral part of this Agreement.
SECTION 8.04 GENERAL INTERPRETIVE PRINCIPLES.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;
45
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other Subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration; and
(g) reference to the Transaction Documents or any other document referenced
herein shall include all exhibits, schedules or other supplements thereto.
SECTION 8.05 REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements, certificates
and other information previously or hereafter furnished, may be reproduced by
any photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 8.06 FURTHER AGREEMENTS.
Countrywide shall execute and deliver to the Purchaser and the Purchaser
shall be required to execute and deliver to Countrywide such reasonable and
appropriate additional documents, instruments or agreements as may be necessary
or appropriate to effectuate the purposes of this Agreement.
SECTION 8.07 ASSIGNMENT OF MORTGAGE LOANS BY THE PURCHASER; WHOLE LOAN
TRANSFER; PASS-THROUGH TRANSFERS.
(a) The Purchaser may, subject to the terms of this Agreement, sell and
transfer one or more of the Mortgage Loans; provided, however, that the
transferee will not be deemed to be the Purchaser hereunder unless such
transferee shall agree in writing to be bound by the terms of this Agreement and
an original counterpart of the document evidencing such agreement shall have
been executed by the Purchaser and the transferee and delivered to Countrywide.
Notwithstanding the foregoing, no transfer shall be effective if such transfer
would result in there being more than four (4) "Purchasers" outstanding
hereunder with respect to any Mortgage Loan Package. Any trust to which Mortgage
Loans may be transferred pursuant to Section 8.07(b) hereunder shall constitute
a single Purchaser for the purposes of the preceding sentence.
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(b) The Purchaser and Countrywide agree that with respect to some or all of
the Mortgage Loans, the Purchaser, at its sole option, but subject to the
limitations set forth in Section 8.07(a) hereof, may effect Pass-Through
Transfers, retaining Countrywide as the servicer thereof or subservicer if a
master servicer is employed, or as applicable the "seller/servicer." On the
related Reconstitution Date, the Mortgage Loans transferred shall cease to be
covered by this Agreement; provided, however, that, in the event that any
Mortgage Loan transferred pursuant to this Section 8.07 is rejected by the
related transferee, Countrywide shall continue to service such rejected Mortgage
Loan on behalf of the Purchaser in accordance with the terms and provisions of
this Agreement. Countrywide shall cooperate with the Purchaser in connection
with each Whole Loan Transfer or Pass-Through Transfer in accordance with this
Section 8.07. In connection therewith Countrywide shall:
(i) negotiate in good faith and execute any assignment, assumption and
recognition agreement or seller/servicer agreement reasonably required to
effectuate the Whole Loan Transfer or Pass-Through Transfer, provided such
agreement creates no greater obligation or cost on the part of Countrywide
than otherwise set forth in this Agreement, and provided further that
Countrywide shall be entitled to a servicing fee under that agreement at a
rate per annum no less than the Servicing Fee Rate; and
(ii) provide as applicable:
(A) information pertaining to Countrywide of the type and scope
customarily included in offering documents for residential
mortgage-backed securities transactions involving multiple loan
originators; and
(B) such opinions of counsel, letters from auditors, and
certificates of public officials or officers of Countrywide as are
reasonably believed necessary by the trustee, any rating agency or the
Purchaser, as the case may be, in connection with such Whole Loan
Transfer or Pass-Through Transfer. The Purchaser or another party to
such Whole Loan Transfer or Pass-Through Transfer shall pay all third
party costs associated with the preparation of the information
described in clause (ii)(A) above and the delivery of any opinions,
letters or certificates described in this clause (ii)(B). Countrywide
shall not be required to execute any seller/servicer agreement unless
a draft of the agreement is provided to Countrywide at least 10 days
before the Reconstitution Date, or such longer period as may
reasonably be required for Countrywide and its counsel to review and
comment on the agreement.
(c) In connection with any Whole Loan Transfer or Pass-Through Transfer,
Countrywide shall not be required to "bring down" any of the representations and
warranties in Section 3.02 (i.e., the representations and warranties only speak
as of the applicable date set forth in this Agreement), or, except as provided
in the following sentence, to make any other representations or warranties
whatsoever. Upon request, Countrywide will bring down the representations and
warranties in Section 3.01 to a date no later than the related Reconstitution
Date, or make new representations and warranties comparable in all material
respects to those in Section 3.01 or make representations and warranties (1)
that Countrywide has serviced the Mortgage Loans in accordance with the terms of
this Agreement and provided accurate statements to the Purchaser pursuant to
Section 5.02 of this Agreement, and (2) that Countrywide has taken no action nor
omitted to take any required action the omission of which would have the effect
of impairing any mortgage insurance or guarantee on the Mortgage Loans, and (3)
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regarding the accuracy of the information provided to the Purchaser by
Countrywide on or before the closing date of the applicable Whole Loan Transfer
or Pass-Through Transfer.
(d) All Mortgage Loans not sold or transferred pursuant to Pass-Through
Transfers shall remain subject to this Agreement and shall continue to be
serviced in accordance with the terms of this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
(e) With respect to any Mortgage Loans that are subject to a Pass-Through
Transfer or other securitization transaction, to the extent that either of the
Purchaser, any master servicer which is master servicing loans in connection
with such transaction (a "Master Servicer"), or any related depositor (a
"Depositor") is required under the Xxxxxxxx-Xxxxx Act of 2002 (the
"Xxxxxxxx-Xxxxx Act") to prepare and file a certification pursuant to Section
302 of the Xxxxxxxx-Xxxxx Act, on or before March 15, 2004, and March 1 of each
year thereafter, an officer of Countrywide shall, prior to the deadline for such
certification, execute and deliver an Officer's Certificate, in the form
attached hereto as Exhibit F, to such Purchaser, Master Servicer, or Depositor,
as the case may be, for the benefit of such entity.
(f) Countrywide shall indemnify and hold harmless such Purchaser, Master
Servicer, or Depositor, as the case may be (any such party, an "Indemnified
Party") from and against any losses, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach by Countrywide or any of its officers,
directors, or agents of its obligations under Section 8.07(e); provided,
however, that Countrywide shall not be obligated to indemnify or hold harmless
any Indemnified Party from or against any losses, damages, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments and other costs
and expenses arising out of or based upon the negligence, bad faith or willful
misconduct of such Indemnified Party.
SECTION 8.08 CONFLICTS BETWEEN TRANSACTION DOCUMENTS.
In the event of any conflict, inconsistency or ambiguity between the terms
and conditions of this Agreement and either the related Trade Confirmation or
the related Purchase Confirmation, the terms of the related Purchase
Confirmation shall control. In the event of any conflict, inconsistency or
ambiguity between the terms and conditions of the Trade Confirmation and the
Purchase Confirmation, the terms of the Purchase Confirmation shall control.
SECTION 8.09 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements entered into and wholly
performed within that state.
SECTION 8.10 SEVERABILITY CLAUSE.
Any part, provision, representation or warranty of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan
48
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to an amendment to this Agreement which places each party in the
same or as economic position as each party would have been in except for such
invalidity.
SECTION 8.11 SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of and be enforceable by
Countrywide and the Purchaser and the respective permitted successors and
assigns of Countrywide and the Purchaser. Except as specifically set forth in
Section 8.07 above, the Purchaser may not assign this Agreement to any Person
without Countrywide's prior written consent, which consent shall not be
unreasonably withheld.
SECTION 8.12 CONFIDENTIALITY.
Countrywide and the Purchaser acknowledge and agree that the terms of the
Transaction Documents shall be kept confidential and their contents will not be
divulged to any party without the other party's consent, except to the extent
that it is appropriate for Countrywide and the Purchaser to do so in working
with legal counsel, auditors, taxing authorities, or other governmental
agencies.
The Purchaser and Countrywide shall comply with any and all federal and
state laws, rules, and regulations governing or relating to the confidentiality
and security of "nonpublic personal information" (as such term is defined in the
Xxxxx-Xxxxx-Xxxxxx Act ("GLBA")), including, without limitation, the GLBA. The
Purchaser and Countrywide shall implement such physical and other security
measures as shall be necessary to (a) ensure the security and confidentiality of
any "nonpublic personal information" that is disclosed in any manner or for any
purpose to either party and that pertains to any "Customers" or "consumers" (as
such terms are defined in GLBA) pertaining to the Mortgage Loans, (b) protect
against any threats or hazards to the security and integrity of such "nonpublic
personal information," and (c) protect against any unauthorized access to or use
of such "nonpublic personal information." Both parties represent and warrant
that they have implemented appropriate measures to meet the objectives of
Section 501(b) of the GLBA and of the applicable standards adopted pursuant
thereto. Upon request, and to the extent there is no violation of applicable
laws or regulations, either party shall provide information to the other party,
including, without limitation, any regulatory or supervising authorities, and
allow the confirmation of the party's satisfaction of its obligations as
required under this Section. Without limitation, such information may include
audits, summaries of test results, and other equivalent evaluations.
SECTION 8.13 SOLICITATION OF MORTGAGORS.
From and after the Closing Date, Countrywide hereby agrees that Countrywide
will not take any action or permit or cause any action to be taken by any of
their agents or affiliates, or by any independent contractors or independent
mortgage brokerage companies on Countrywide's behalf, to personally, by
telephone or mail, solicit the Mortgagor under any Mortgage Loan for the purpose
of refinancing such Mortgage Loan; provided, that Countrywide may solicit any
Mortgagor for whom Countrywide or it affiliates have received a request for
verification of
49
Mortgage, a request for demand for payoff, a Mortgagor-initiated written or
verbal communication indicating a desire to prepay the related Mortgage Loan, or
the Mortgagor initiates a title search, provided further, it is understood and
agreed that promotions undertaken by Countrywide or any of their affiliates
which (i) concern optional insurance products or other additional projects or
(ii) are directed to the general public at large, including, without limitation,
mass mailings based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation nor is Countrywide
prohibited from responding to unsolicited requests or inquiries made by a
Mortgagor or an agent of a Mortgagor. Notwith-standing the foregoing, the
following solicitations, if undertaken by Countrywide or any affiliate of
Countrywide, shall not be prohibited: (i) solicitations that are directed to the
general public at large, including, without limitation, mass mailings based on
commercially acquired mailing lists and newspaper, radio, television and other
mass media advertisements and (ii) borrower messages included on, and statement
inserts provided with, the monthly statements sent to Mortgagors; provided,
however, that similar messages and inserts are sent to the borrowers of other
mortgage loans serviced by Countrywide or any affiliate of Countrywide.
SECTION 8.14 RELATIONSHIP OF THE PARTIES.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of
Countrywide shall be rendered as an independent contractor and not as agent for
the Purchaser.
[INTENTIONALLY LEFT BLANK]
50
SECTION 8.15 ENTIRE AGREEMENT.
This Agreement and the related Trade Confirmation and Purchase Confirmation
constitute the entire understanding between the parties hereto with respect to
each Mortgage Loan Package and supersede all prior or contemporaneous oral or
written communications regarding same. Countrywide and the Purchaser understand
and agree that no employee, agent or other representative of Countrywide or the
Purchaser has any authority to bind such party with regard to any statement,
representation, warranty or other expression unless said statement,
representation, warranty or other expression is specifically included within the
express terms of this Agreement or the related Trade Confirmation or Purchase
Confirmation. Neither this Agreement nor the related Trade Confirmation or
Purchase Confirmation shall be modified, amended or in any way altered except by
an instrument in writing signed by both parties.
(SIGNATURE PAGE TO FOLLOW)
51
IN WITNESS WHEREOF, Countrywide and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the date first above written.
COUNTRYWIDE HOME LOANS, INC.,
Countrywide
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
BANC OF AMERICA MORTGAGE CAPITAL
CORPORATION,
the Purchaser
By: /s/ Xxxxx X. Good
------------------------------------
Name: Xxxxx X. Good
Title: Vice President
52
EXHIBIT A
COLLATERAL DOCUMENTS
(1) Mortgage Note: The original Mortgage Note (or, with respect to no more than
one percent (1%) of the unpaid principal balance of the Mortgage Loans as
of the related Cut-off Date, a lost note affidavit in a form acceptable to
an Agency) bearing all intervening endorsements, endorsed "Pay to the order
of _____________, without recourse" and signed in the name of Countrywide
by an authorized officer (provided that, in the event that the Mortgage
Loan was acquired by Countrywide in a merger, the signature must be in the
following form: "Countrywide, successor by merger to [name of
predecessor]"; and in the event that the Mortgage Loan was acquired or
originated by Countrywide while doing business under another name, the
signature must be in the following form: "Countrywide", formerly known as
[previous name]").
(2) Assignment of Mortgage: The original Assignment of Mortgage in blank for
each Mortgage Loan (except for the insertion of the name of the assignee
and recording information). If the Mortgage Loan was acquired by
Countrywide in a merger, the Assignment of Mortgage must be made by
"[Countrywide], successor by merger to [name of predecessor]." If the
Mortgage Loan was acquired or originated by Countrywide while doing
business under another name, the Assignment of Mortgage must be by
"[Countrywide], formerly know as [previous name]." Subject to the foregoing
and where permitted under the applicable laws of the jurisdiction wherein
the Mortgaged property is located, such Assignments of Mortgage may be made
by blanket assignments for Mortgage Loans secured by the Mortgaged
Properties located in the same county. If the related Mortgage has been
recorded in the name of MERS or its designee, no Assignment of Mortgage
will be required to be prepared or delivered.
(3) Guarantee: The original or certified true copy of any guarantee executed in
connection with the Mortgage Note, if any.
(4) Mortgage: The original Mortgage with evidence of recording thereon or, if
such original Mortgage has not been returned to Countrywide on or prior to
the Closing Date by the public recording office where such Mortgage has
been delivered for recordation, a copy of such Mortgage certified by
Countrywide to be a true and complete copy of the original Mortgage sent
for recordation. In the case of a Mortgage where a public recording office
retains the original recorded Mortgage or in the case where a Mortgage is
lost after recordation in a public recording office, a copy of such
Mortgage certified by such public recording office or by the title
insurance company that issued the title policy to be a true and complete
copy of the original recorded Mortgage.
(5) Modifications: The originals or certified true copies of any documents sent
for recordation of all assumption, modification, consolidation or extension
agreements, with evidence of recording thereon, if any.
A-1
(6) Intervening Assignments: The originals of all intervening assignments of
Mortgage with evidence of recording thereon, provided that such originals
have been returned to Countrywide by the public recording office where such
intervening assignment of Mortgage has been delivered for recordation.
Where a public recording office retains the original recorded intervening
assignment or in the case where an intervening assignment is lost after
recordation in a public recording office, a copy of such intervening
assignment certified by such public recording office to be a true and
complete copy of the original recorded intervening assignment.
(7) Loan Guaranty Certificate: The original Loan Guaranty Certificate, if
applicable.
(8) For each Mortgage Loan secured by Co-op Shares, the originals of the
following documents or instruments:
(A) the stock certificate;
(B) the stock power executed in blank;
(C) the executed proprietary lease;
(D) the executed recognition agreement;
(E) the executed assignment of recognition agreement;
(F) the executed UCC-1 financing statement with evidence of recording
thereon; and
(G) the executed UCC-3 financing statement or other appropriate UCC
financing statements required by state law, evidencing a complete and
unbroken line from the mortgagee to the Trustee with evidence or recording
thereon (or in a form suitable for recordation).
A-2
EXHIBIT B
FORM OF PURCHASE CONFIRMATION
[COUNTRYWIDE LETTERHEAD]
[DATE]
[PURCHASER]
[STREET ADDRESS]
[CITY, STATE AND ZIP]
Attn: [CONTACT, TITLE]
Re: Purchase Confirmation ($x.xmm) (Deal No. xxxx-xxx)
Ladies and Gentlemen:
This purchase confirmation (the "Purchase Confirmation") between
Countrywide Home Loans, Inc. ("Countrywide") and [PURCHASER] ("Purchaser") sets
forth our agreement pursuant to which Purchaser is purchasing, and Countrywide
is selling, on a servicing-retained basis, those certain mortgage loans
identified in Exhibit A hereto and more particularly described herein (the
"Mortgage Loans").
The purchase, sale and servicing of the Mortgage Loans as contemplated
herein shall be governed by that certain Master Mortgage Loan Purchase and
Servicing Agreement dated as of [DATE], between Countrywide and Purchaser (as
amended herein and otherwise, the "Agreement"). By executing this Purchase
Confirmation, each of Countrywide and Purchaser again makes, with respect to
itself and each Mortgage Loan, as applicable, all of the covenants,
representations and warranties made by each such party in the Agreement, except
as the same may be amended by this Purchase Confirmation.
All exhibits hereto are incorporated herein in their entirety. In the event
there exists any inconsistency between the Agreement and this Purchase
Confirmation, the latter shall be controlling notwithstanding anything contained
in the Agreement to the contrary. All capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Agreement.
1. Assignment and Conveyance of Mortgage Loans. Upon Purchaser's payment of
the Purchase Proceeds in accordance with Section 2.08 of the Agreement,
Countrywide shall sell, transfer, assign and convey to Purchaser, without
recourse, but subject to the terms of the Purchase Confirmation and the
Agreement, all of the right, title and interest of Countrywide in and to the
Mortgage Loans, excluding the servicing rights relating thereto. Each Mortgage
Loan shall be serviced by Countrywide pursuant to the terms of the Agreement.
2. Defined Terms. As used in the Agreement, the following defined terms
shall have meanings set forth below with respect to the related Mortgage Loan
Package.
B-1
a. Closing Date: [DATE].
b. Cut-off Date: [DATE].
c. Cut-off Date Balance:
[d. Index: On each Interest Adjustment Date, the applicable index rate
shall be a rate per annum equal to [the weekly average yield on U.S. Treasury
securities adjusted to a constant maturity of one year, as published by the
Board of Governors of the Federal Reserve System in Statistical Release No.
H.15] [the average of interbank offered rates for six-month U.S. dollar
denominated deposits in the London market (LIBOR), as published [in the Wall
Street Journal] [by Xxxxxx Mae] [the 11th District Cost of Funds as made
available by the Federal Home Loan Bank] [the weekly average yield on
certificates of deposit adjusted to a constant maturity of six months as
published by the Board of Governors of the Federal Reserve System in Statistical
Release No. H.15 or a similar publication.]]
e. Missing Credit Documents: As set forth in Exhibit [C] hereto.
Notwithstanding anything contained in Section 2.04 of the Agreement to the
contrary, Countrywide's obligation to repurchase from the Purchaser the Mortgage
Loan related to a Missing Credit Document shall occur only in the event of a
default by a Mortgagor or any material impairment of the Mortgaged Property
directly arising a breach of Countrywide's obligation to deliver the Missing
Credit Document within the time specified in Section 2.04 of the Agreement.
[f. Pending Mortgage Loans: As set forth in Exhibit [C] hereto.]
g. Purchase Proceeds: With respect to [the Mortgage Loans] [each Mortgage
Loan], and as set forth in Exhibit [A] and Exhibit [B] hereto, the sum of (a)
the product of (i) the Cut-off Date Balance of [such Mortgage Loan] [such
Mortgage Loans], and (ii) the purchase price percentage set forth in Exhibit [A]
hereto for such [Mortgage Loan] [Mortgage Loans], and (b) accrued interest from
the Cut-off Date through the day prior to the Closing Date, inclusive.
g. Servicing Fee Rate: [0.25%] [0.375%] [With respect to the period prior
to the initial Interest Adjustment Date, [0.25]% and, thereafter, [0.375]%].
3. Description of Mortgage Loans. Each Mortgage Loan complies with the
specifications set forth below in all material respects.
a. Loan Type: Each Mortgage Loan is a [Conventional] [Government] Mortgage
Loan and a [Adjustable Rate] [Balloon] [Convertible] [Fixed Rate] Mortgage Loan.
x. Xxxx Position: Each Mortgage Loan is secured by a perfected [first]
[second] lien Mortgage.
d. Underwriting Criteria: Each Mortgage Loan [was underwritten generally in
accordance with Countrywide's credit underwriting guidelines in effect at the
time such Mortgage Loan was originated] [conforms to the Xxxxxx Mae or Xxxxxxx
Mac mortgage eligibility criteria (as such criteria applies to Countrywide) and
is eligible for sale to, and securitization by, Xxxxxx Mae or Xxxxxxx Mac]
[conforms in all material respects to the GNMA mortgage eligibility criteria and
is eligible for sale and securitization into a GNMA mortgage-
B-2
backed security] [at the time of origination was underwritten to guidelines
which are consistent with an institutional investor-quality mortgage loan].
B-3
Kindly acknowledge your agreement to the terms of this Purchase
Confirmation by signing in the appropriate space below and returning this
Purchase Confirmation to the undersigned. Telecopy signatures shall be deemed
valid and binding to the same extent as the original.
Sincerely, Agreed to and Accepted by:
COUNTRYWIDE HOME LOANS, INC. [PURCHASER]
By: By:
--------------------------------- ------------------------------------
Name: Xxxxx Xxxxxxx Name:
Title: Executive Vice President Title:
B-4
EXHIBIT A
TO
PURCHASE CONFIRMATION
MORTGAGE LOAN SCHEDULE
(attached)
B-A-1
EXHIBIT B
TO
PURCHASE CONFIRMATION
CALCULATION OF PURCHASE PROCEEDS
(attached)
B-B-1
EXHIBIT C
TO
PURCHASE CONFIRMATION
MISSING CREDIT DOCUMENTS
LOAN COUNT LOAN NUMBER DOCUMENT
---------- ----------- --------
---------- ----------- --------
---------- ----------- --------
---------- ----------- --------
---------- ----------- --------
---------- ----------- --------
B-C-1
EXHIBIT D
TO
PURCHASE CONFIRMATION
PENDING MORTGAGE LOANS
LOAN COUNT LOAN NUMBER DOCUMENT
---------- ----------- --------
---------- ----------- --------
---------- ----------- --------
---------- ----------- --------
---------- ----------- --------
---------- ----------- --------
B-D-1
EXHIBIT C
FORM OF CUSTODIAL AGREEMENT
[CUSTODIAN'S LETTERHEAD]
C-1
EXHIBIT D
FORM OF TRADE CONFIRMATION
[COUNTRYWIDE LETTERHEAD]
[DATE]
[PURCHASER]
[STREET ADDRESS]
[CITY, STATE AND ZIP]
Attn: [CONTACT, TITLE]
Re: Sale of $[AMOUNT] Million of Mortgage Loans to [PURCHASER] (Deal No.
yrmm-xxx)
Ladies and Gentlemen:
This Trade Confirmation confirms the agreement between [PURCHASER]
("Purchaser") and Countrywide Home Loans, Inc. ("Countrywide") pursuant to which
Purchaser has agreed to purchase, and Countrywide has agreed to sell, those
certain mortgage loans [identified][summarized] in Exhibit A hereto (the
"Mortgage Loans"), subject to the terms set forth herein.
Closing Date: _________ __, [year][, provided, however, that the parties
shall use their best efforts to consummate the transaction prior to [DATE].
Commitment Amount: $______________.
Purchase Price: $______________.
Percentage: ____%, subject to adjustment as set forth in Exhibit A.
[Loan-level pricing as set forth in Exhibit A.]
Product: [Jumbo]["A"][A-"]["Alt A"] [Sub-prime] [Conforming] [Conventional]
[Government] [Second Lien/HELOC] [[fixed][(x/1) Index adjustable] rate mortgage
loans]. (undefined terms should not be capitalized)
Underwriting Criteria:
Servicing Rights: RETAINED: Retained by Countrywide and serviced on a
[scheduled/scheduled] [actual/actual] [scheduled][actual] basis for the
servicing fee rate [equal to FEE% per annum][set forth in Exhibit A [for each
Mortgage Loan]]. [ With respect to the period prior to the initial Interest
Adjustment Date, 0.25% and, thereafter, 0.375%].
Prepayment Penalties: [Countrywide] [Purchaser] shall be entitled to any
penalties resulting from the prepayment of any Mortgage Loans by the related
mortgagor(s).
D-1
Documentation: [Assignment of a [type of agreement]] [Industry standard
purchase and servicing agreement.]
Conditions: [Review of Mortgage Loans by Purchaser to confirm conformance
with this Trade Confirmation. Countrywide may, at its option, elect to
substitute comparable mortgage loans for any Mortgage Loans rejected by
Purchaser pursuant to the preceding sentence.]
[Countrywide's sale of the Mortgage Loans is expressly subject to (a) the
review of the Mortgage Loans by Purchaser to confirm conformance with the Trade
Confirmation, and (b) purchase of the Mortgage Loans by Countrywide on or before
the Closing Date from the current owner of the Mortgage Loans (the "Current
Owner"). If either of the foregoing conditions are not satisfied, Countrywide
shall have no liability to Purchaser.]
Non-Circumvent: Countrywide and Purchaser understand and agree that
Countrywide may introduce the owner of the Mortgage Loans to Purchaser, that the
Current Owner is a customer of Countrywide and that such relationship of
Countrywide is confidential. Purchaser agrees, with respect to the Current
Owner, Purchaser will not, for the purpose of purchasing other mortgage loans
[for a period of one year from the Closing Date], communicate with or purchase
such other mortgage loans from the Current Owner unless the Current Owner has
had previous business dealings (other than any transactions involving
Countrywide) with the Current Owner in a similar context.
D-2
Please acknowledge your agreement to the terms and conditions of this Trade
Confirmation by signing in the appropriate space below and returning a copy of
the same to the undersigned. Telecopy signatures shall be deemed valid and
binding to the same extent as the original.
Sincerely, Agreed to and Accepted by:
COUNTRYWIDE HOME LOANS, INC. [PURCHASER]
By: By:
--------------------------------- ------------------------------------
Name: Xxxxx Xxxxxxx Name:
Title: Executive Vice President Title:
D-3
EXHIBIT A
TO
TRADE CONFIRMATION
MORTGAGE LOAN SCHEDULE AND PRICING INFORMATION
(attached)
D-A-1
EXHIBIT B
TO
TRADE CONFIRMATION
UNDERWRITING GUIDELINES
(attached)
D-B-1
EXHIBIT E
FORM OF MORTGAGE LOAN SCHEDULE
E-1
EXHIBIT F
FORM OF OFFICER'S CERTIFICATE
I, [identify certifying individual], certify to the [Purchaser],
[Master Servicer], or [Depositor] [i.e. THE PARTY EXECUTING THE CERTIFICATION
REQUIRED UNDER SECTION 302 OF THE XXXXXXXX-XXXXX ACT OF 2002] that:
(i) Based on my knowledge, the information in the annual statement of
compliance, the annual independent public accountant's servicing
report and all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans conducted
by Countrywide taken as a whole, does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading as of the date of this
certification;
(ii) The servicing information required to be provided by Countrywide
under the Agreement has been provided to the Purchaser [or the Master
Servicer];
(iii) I am is responsible for reviewing the activities performed by
Countrywide under the Agreement and based upon the review required by
the Agreement, and except as disclosed in the annual statement of
compliance or the annual independent public accountant's servicing
report, Countrywide has, as of the date of this certification
fulfilled its obligations under the Agreement; and
(iv) Such officer has disclosed to the Purchaser [orthe Master
Servicer] all significant deficiencies relating to Countrywide's
compliance with the minimum servicing standards in accordance with a
review conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar standard as set forth in the
Agreement.
Dated as of: ________________________ COUNTRYWIDE HOME LOANS, INC.,
Countrywide
By:
------------------------------------
Name:
Title:
F-1
