GOLDMAN SACHS MORTGAGE COMPANY Purchaser and NATIONAL CITY MORTGAGE CO. Company
Execution
Copy
XXXXXXX
XXXXX MORTGAGE COMPANY
Purchaser
and
NATIONAL
CITY MORTGAGE CO.
Company
SECOND
AMENDED AND RESTATED
FLOW
SELLER’S WARRANTIES AND SERVICING AGREEMENT
Dated
as of January 1, 2006
Adjustable
Rate Pools
TABLE
OF
CONTENTS
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ARTICLE
I
|
DEFINITIONS
|
2
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Section
1.1.
|
Definitions
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2
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ARTICLE
II
|
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS;
DELIVERY OF DOCUMENTS
|
12
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|
Section
2.1.
|
Conveyance
of Mortgage Loans; Possession of Mortgage Files; Maintenance of Servicing
Files
|
12
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Section
2.2.
|
Books
and Records; Transfers of Mortgage Loans
|
13
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||
|
Section
2.3.
|
Delivery
of Documents
|
14
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Section
2.4.
|
Mortgage
Schedule
|
16
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Section
2.5.
|
Examination
of Mortgage Files
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16
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Section
2.6.
|
Representations,
Warranties and Agreements of the Company
|
17
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Section
2.7.
|
Representation,
Warranties and Agreement of Purchaser
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17
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Section
2.8.
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Closing
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19
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Section
2.9.
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Closing
Documents
|
19
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ARTICLE
III
|
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
|
20
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|
Section
3.1.
|
Company
Representations and Warranties
|
20
|
||
|
Section
3.2.
|
Representations
and Warranties Regarding Individual Mortgage Loans
|
22
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|
Section
3.3.
|
Xxxxxxxxxx
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00
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ARTICLE
IV
|
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
|
36
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|
Section
4.1.
|
Company
to Act as Servicer
|
36
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||
|
Section
4.2.
|
Liquidation
of Mortgage Loans
|
37
|
||
|
Section
4.3.
|
Collection
of Mortgage Loan Payments
|
38
|
i
|
Section
4.4.
|
Establishment
of and Deposits to Custodial Account
|
38
|
||
|
Section
4.5.
|
Permitted
Withdrawals From Custodial Account
|
40
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|
Section
4.6.
|
Establishment
of and Deposits to Escrow Account
|
41
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||
|
Section
4.7.
|
Permitted
Withdrawals From Escrow Account
|
42
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|
Section
4.8.
|
Payment
of Taxes, Insurance and Other Charges
|
43
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|
Section
4.9.
|
Protection
of Accounts
|
43
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||
|
Section
4.10.
|
Maintenance
of Hazard Insurance
|
43
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||
|
Section
4.11.
|
Maintenance
of Primary Mortgage Insurance Policy; Claims
|
45
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||
|
Section
4.12.
|
Maintenance
of Mortgage Impairment Insurance.
|
46
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||
|
Section
4.13.
|
Maintenance
of Fidelity Bond and Errors and Omissions Insurance
|
46
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|
Section
4.14.
|
Inspections
|
47
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|
Section
4.15.
|
Restoration
of Mortgaged Property
|
47
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Section
4.16.
|
Claims
|
47
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||
|
Section
4.17.
|
Title,
Management and Disposition of REO Property
|
48
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|
Section
4.18.
|
Real
Estate Owned Reports
|
49
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Section
4.19.
|
Liquidation
Reports
|
49
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|
Section
4.20.
|
Reports
of Foreclosures and Abandonments of Mortgaged Property
|
49
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Section
4.21.
|
Fair
Credit Reporting Act
|
50
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ARTICLE
V
|
PAYMENTS
TO PURCHASER
|
50
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Section
5.1.
|
Remittances
|
50
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|
Section
5.2.
|
Statements
to Purchaser
|
50
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||
|
Section
5.3.
|
Monthly
Advances by Company
|
51
|
ii
|
ARTICLE
VI
|
GENERAL
SERVICING PROCEDURES
|
52
|
||
|
Section
6.1.
|
Transfers
of Mortgaged Property
|
52
|
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|
Section
6.2.
|
Satisfaction
of Mortgages and Release of Mortgage Files
|
53
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||
|
Section
6.3.
|
Servicing
Compensation
|
53
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||
|
Section
6.4.
|
Annual
Statement as to Compliance
|
53
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|
Section
6.5.
|
Annual
Independent Public Accountants’ Servicing Report
|
54
|
||
|
Section
6.6.
|
Right
to Examine Company Records
|
54
|
||
|
Section
6.7.
|
Compliance
with REMIC Provisions
|
54
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|
ARTICLE
VII
|
COMPANY
TO COOPERATE
|
55
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|
Section
7.1.
|
Provision
of Information
|
55
|
||
|
Section
7.2.
|
Financial
Statements; Servicing Facility
|
55
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|
ARTICLE
VIII
|
THE
COMPANY
|
55
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|
Section
8.1.
|
Indemnification;
Third Party Claims
|
55
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|
Section
8.2.
|
Merger
or Consolidation of the Company
|
56
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||
|
Section
8.3.
|
Limitation
on Liability of Company and Others
|
56
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|
Section
8.4.
|
Limitation
on Resignation and Assignment by Company
|
57
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|
ARTICLE
IX
|
PASS-THROUGH
TRANSFER
|
58
|
||
|
Section
9.1.
|
Removal
of Mortgage Loans from Inclusion Under this Agreement Upon a Pass-Through
Transfer
|
58
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|
ARTICLE
X
|
DEFAULT
|
60
|
||
|
Section
10.1.
|
Events
of Default
|
60
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||
|
Section
10.2.
|
Waiver
of Defaults
|
62
|
||
|
ARTICLE
XX
|
XXXXXXXXXXX
|
00
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|
Section
11.1.
|
Termination
|
62
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Section
11.2.
|
Termination
Without Cause
|
62
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||
|
Section
11.3.
|
Termination
With Cause
|
62
|
iii
|
ARTICLE
XII
|
MISCELLANEOUS
PROVISIONS
|
63
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|
Section
12.1.
|
Successor
to Company
|
63
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|
Section
12.2.
|
Amendment
|
64
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|
Section
12.3.
|
Governing
Law
|
64
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|
Section
12.4.
|
Duration
of Agreement
|
64
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|
Section
12.5.
|
Notices
|
64
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|
Section
12.6.
|
Severability
of Provisions
|
65
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||
|
Section
12.7.
|
Relationship
of Parties
|
65
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|
Section
12.8.
|
Execution;
Successors and Assigns
|
66
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||
|
Section
12.9.
|
Recordation
of Assignments of Mortgage
|
66
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||
|
Section
12.10.
|
Assignment
by Purchaser
|
66
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||
|
Section
12.11.
|
Solicitation
of Mortgagor
|
66
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|
ARTICLE
XIII
|
COMPLIANCE
WITH REGULATION AB
|
67
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|
Section
13.1
|
Intent
of the Parties; Reasonableness
|
67
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|
Section
13.2
|
Additional
Representations and Warranties of the Company
|
68
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|
Section
13.3
|
Information
to Be Provided by the Company
|
69
|
||
|
Section
13.4
|
Servicer
Compliance Statement
|
74
|
||
|
Section
13.5
|
Report
on Assessment of Compliance and Attestation
|
75
|
||
|
Section
13.6
|
Use
of Subservicers and Subcontractors
|
76
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|
Section
13.7
|
Indemnification;
Remedies
|
77
|
EXHIBITS
Exhibit
A Mortgage
Loan Schedule
Exhibit
B Contents
of Each Mortgage Loan File
Exhibit
C Form
of
Custodial Agreement
Exhibit
D Form
of
Opinion of Counsel
Exhibit
E Items
to
Be Included in Monthly Remittance Advice
Exhibit
F Form
of
Assignment and Assumption Agreement
Exhibit
G Form
of
Seller’s Officer’s Certificate
Exhibit
H Form
of
Annual Certification
Exhibit
I Form
of
Warranty Xxxx of Sale
Exhibit
J Company
Guide
Exhibit
K Servicing
Criteria to be Addressed in Assessment of Compliance
iv
Execution
Copy
This
is
an Second Amended and Restated Flow Seller’s Warranties and Servicing Agreement
for various residential first mortgage loans, dated and effective as of January
1, 2006, and is executed between Xxxxxxx Xxxxx Mortgage Company, as purchaser
(the “Purchaser”),
and
National City Mortgage Co., as seller and servicer (the “Company”).
WITNESSETH
WHEREAS,
the Company is engaged in the business of, among other things, making loans
to
individuals, the repayment of which is secured by first lien mortgages on such
individuals’ residences (each, a “Mortgage
Loan”)
and
selling such Mortgage Loans to investors;
WHEREAS,
the Purchaser is engaged in the business of, among other things, purchasing
Mortgage Loans for its own account;
WHEREAS,
the Company has established certain terms, conditions and loan programs, as
described in the Company’s Underwriting Guidelines (the “Company
Guide”)
and
the Purchaser is willing to purchase Mortgage Loans that comply with such terms,
conditions and loan programs. The applicable provisions of the Company Guide
are
attached hereto as Exhibit J;
WHEREAS,
the Purchaser and the Company are parties to that certain Second Amended and
Restated Flow Seller’s Warranties and Servicing Agreement, dated as of May 1,
2003, as amended (the “Original
Agreement”),
pursuant to which the Company will make adjustable rate Mortgage Loans which
meet the applicable provisions of the Company Guide, and the Purchaser will,
from time to time, purchase such Mortgage Loans from the Company, provided
the
parties agree on the price, date and other conditions or considerations as
set
forth in this Agreement;
WHEREAS,
the Purchaser and the Company wish to prescribe the terms and manner of purchase
by the Purchaser and sale by the Company of the adjustable rate Mortgage Loans,
and the management and servicing of such Mortgage Loans by the Company, as
the
servicer, in this Agreement; and
WHEREAS,
at the present time, the Purchaser and the Company desire to amend the Original
Agreement to make certain modifications as set forth herein with respect to
all
Mortgage Loans acquired pursuant to this Agreement or the Original Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Purchaser and the Company agree to amend and restate
this Agreement in its entirety as follows:
ARTICLE
I
DEFINITIONS
Section
1.1. Definitions.
Whenever
used herein, the following words and phrases, unless the content otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those customary mortgage servicing practices
of
prudent mortgage lending institutions which service mortgage loans of the same
type as such Mortgage Loan in the jurisdiction where the related Mortgaged
Property is located.
Agreement:
This
Second Amended and Restated Flow Seller’s Warranties and Servicing Agreement and
all amendments hereof and supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraised
Value:
With
respect to any Mortgage Loan, the lesser of (i) the value set forth on the
appraisal made in connection with the origination of the related Mortgage Loan
as the value of the related Mortgage Property, or (ii) the purchase price paid
for the Mortgage Property, provided, however, in the case of a refinanced
Mortgage Loan, such value shall be based solely on the appraisal made in
connection with the refinance of such Mortgage Loan.
Applicable
Law:
All
provisions of statutes, rules and regulations, interpretations and orders of
governmental bodies or regulatory agencies applicable to a Person, and all
orders and decrees of all courts and arbitrators in proceedings or actions
in
which the Person in question is a party.
Assignment
of Mortgage
or
Assignment:
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 or its designated assignee.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the states where the parties are located are authorized
or obligated by law or executive order to be closed.
Closing
Date:
Each
date that the Purchaser purchases Mortgage Loans from the Company
hereunder.
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.
2
Commitment
Letter:
With
respect to any pool of Mortgage Loans purchased and sold on any Closing Date,
the letter agreement between the Purchaser and the Company (including any
exhibits, schedules and attachments thereto), setting forth the terms and
conditions of such transaction and describing the Mortgage Loans to be purchased
by the Purchaser on such Closing Date. A Commitment Letter may relate to more
than one pool of Mortgage Loans to be purchased on one or more Closing Dates
hereunder.
Commission:
The
United States Securities and Exchange Commission.
Company:
National City Mortgage Co., or its successor in interest or assigns, or any
successor to the Company under this Agreement appointed as herein
provided.
Company
Certification:
The
certification delivered by the Company in a form substantially similar to
Exhibit H of this Agreement.
Company
Employees:
The
meaning assigned to such term in Section 4.13.
Company
Information:
As
defined in Section 13.7(a).
Company
Guide:
As
defined in the third recital to this Agreement.
Condemnation
Proceeds:
All
awards or settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
Covered
Loan:
A
Mortgage Loan categorized as Covered pursuant to Appendix E of Standard &
Poor’s Glossary.
Custodial
Account:
The
separate account or accounts created and maintained pursuant to Section
4.4.
Custodial
Agreement:
The
agreement governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other Mortgage Loan Documents, a form
of
which is annexed hereto as Exhibit C.
Custodian:
The
custodian under a Custodial Agreement, or its successor in interest or assigns,
or any successor to the Custodian under such Custodial Agreement as provided
therein.
Cut-off
Date:
The
first day of the month in which the respective Closing Date occurs.
Deemed
Material Breach Representation:
Each
representation and warranty identified as such in Section 3.2.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
3
Determination
Date:
The day
preceding the Remittance Date, or if such day is not a Business Day, the
preceding Business Day.
Due
Date:
The
first 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 in which such Remittance Date occurs and ending on
(and including) the first day of the month in which such Remittance Date
occurs.
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Company pursuant
to Section 4.13.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section 4.6.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other related document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in Section 10.1.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
FDIC:
The
Federal Deposit Insurance Corporation, and its successors.
FHLMC:
Federal
Home Loan Mortgage Corporation, and its successors.
Fidelity
Bond:
A
fidelity bond to be maintained by the Company pursuant to Section
4.12.
First
Remittance Date:
With
respect to each Closing Date, the Remittance Date occurring in the calendar
month immediately following the month in which such Closing Date
occurs.
FNMA:
Federal
National Mortgage Association, and its successors.
High
Cost Loan:
A
Mortgage Loan classified as (a) a “high cost” loan under the Home Ownership and
Equity Protection Act of 1994, (b) a “high cost home,” “threshold,” “covered,”
(excluding New Jersey “Covered Home Loans” as that term is defined in clause (1)
of the definition of that term in the New Jersey Home Ownership Security Act
of
2002), “high risk home,” “predatory” or similar loan under any other applicable
state, federal or local law (or a similarly classified loan using different
terminology under a law imposing heightened regulatory scrutiny or additional
legal liability for residential mortgage loans having high interest rates,
points and/or fees) or (c) a Mortgage Loan categorized as High Cost pursuant
to
Appendix E of Standard & Poor’s Glossary. For avoidance of doubt, the
parties agree that this definition shall apply to any law regardless of whether
such law is presently, or in the future becomes, the subject of judicial review
or litigation.
4
Home
Loan:
A
Mortgage Loan categorized as Home Loan pursuant to Appendix E of Standard &
Poor’s Glossary.
Index:
With
respect to each Mortgage Loan, a rate per annum set forth on the Mortgage Loan
Schedule.
Insurance
Proceeds:
Proceeds of any mortgage insurance, title policy, hazard policy or other
insurance policy covering a Mortgage Loan, 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 the Company
would follow in servicing mortgage loans held for its own account.
Interest
Rate Adjustment Date:
With
respect to each Mortgage Loan, the date specified in the related Mortgage Note
and the Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Lifetime
Rate Cap:
The
provision of each Mortgage Note which provides for an absolute maximum Mortgage
Interest Rate thereunder, as specified for each Mortgage Loan in the Mortgage
Loan Schedule. The Mortgage Interest Rate during the terms of each Mortgage
Loan
shall not at any time exceed the Mortgage Interest Rate at the time of
origination of such Mortgage Loan by more than the amount per annum set forth
on
the Mortgage Loan Schedule.
Liquidation
Proceeds:
Cash
(other than Insurance Proceeds or Condemnation Proceeds) received in connection
with the liquidation of a defaulted Mortgage Loan, whether through the sale
or
assignment of such Mortgage Loan, trustee’s sale, foreclosure sale, sale of REO
Property, or otherwise, or the sale of the related Mortgaged Property if the
Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
Loan-to-Value
Ratio:
With
respect to any Mortgage Loan, the ratio of the original loan amount of the
Mortgage Loan at its origination or refinancing, as applicable, to the Appraised
Value of the Mortgaged Property.
Monthly
Advance:
The
portion of each Monthly Payment that is delinquent with respect to each Mortgage
Loan at the close of business on the Determination Date required to be advanced
by the Company pursuant to Section 5.3 on the Business Day immediately preceding
the Remittance Date of the related month.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage
Loan.
Monthly
Remittance Advice:
The
meaning assigned to such term in Section 5.2.
5
Mortgage:
The
mortgage, deed of trust or other instrument and riders thereto securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit B annexed
hereto, and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note in accordance with the
provisions of the Mortgage Note.
Mortgage
Loan:
An
individual Adjustable Rate Mortgage Loan which is the subject of this Agreement,
each Adjustable Rate Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Adjustable Rate Mortgage
Loan includes without limitation the Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds, and all other rights, benefits, proceeds
and
obligations arising from or in connection with such Adjustable Rate Mortgage
Loan.
Mortgage
Loan Documents:
With
respect to a Mortgage Loan, the original related Mortgage Note with applicable
addenda and riders, the original related security instrument and the originals
of any required addenda and riders, the original related Assignment and any
original intervening related Assignments, the original related title insurance
policy, and the related appraisal report.
Mortgage
Loan Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to the
Purchaser, which shall be equal to the Mortgage Interest Rate minus the
Servicing Fee Rate.
Mortgage
Loan Schedule:
A
schedule of Mortgage Loans prepared and identified on each Closing Date, such
schedule setting forth the following information with respect to each Mortgage
Loan: (1) the Company’s Mortgage Loan number; (2) the address, city, state and
zip code of the Mortgaged Property; (3) a code indicating whether the Mortgaged
Property is a single family residence, two-family residence, three-family
residence, four-family residence or planned unit development; (4) the purpose
of
the Mortgage Loan; (5) the current Mortgage Interest Rate; (6) the Payment;
(7)
the original term to maturity; (8) the scheduled maturity date (and, if
different, the stated maturity date indicated on the Mortgage Note on its date
of origination); (9) the principal balance of the Mortgage Loan as of the
Cut-off Date after deduction of payments of principal due on or before the
Cut-off Date whether or not collected; (10) the Loan-to-Value Ratio; (11) the
due date of the Mortgage Loan; (12) whether the Mortgage Loan is insured by
a
Primary Mortgage Insurance Policy; (13) the CPI twelve month pay string; (14)
a
field indicating whether such Mortgage Loan is a Home Loan and (15) (a) the
first Interest Rate Adjustment Date and the Interest Rate Adjustment Date
frequency, (b) the gross margin, (c) the Lifetime Rate Cap under the terms
of
the Mortgage Note, (d) the minimum Mortgage Interest Rate under the terms of
the
Mortgage Note, (e) the Periodic Rate Cap; (f) the first Interest Rate Adjustment
Date immediately following the related Cut-off Date, and (g) the Index on which
the Mortgage Interest Rate is based.
6
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage
and riders thereto.
Mortgaged
Property:
The
real property securing repayment of the debt evidenced by a Mortgage
Note.
Mortgagor:
The
obligor on a Mortgage Note.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President, a Vice President, an Assistant Vice President, the Treasurer,
the
Secretary or one of the Assistant Treasurers or Assistant Secretaries of the
Company, 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 Company, reasonably
acceptable to the Purchaser.
Periodic
Rate Cap:
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 Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Mortgage Loan is the rate set forth
on
the Mortgage Loan Schedule.
Person:
Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
Predatory
Mortgage Loan:
Any
mortgage loan that is classified as having terms that result in costs to the
Mortgagor in excess of a specified limit pursuant to any federal, state or
local
law or regulation that imposes liability on any purchaser or assignee of such
mortgage loan. Predatory Mortgage Loans shall include, without limitation,
mortgage loans designated as “high cost,” “high-cost home loans,” "covered"
loans, “predatory loans” and any designations of similar import in the
applicable federal, state or local statute.
Primary
Mortgage Insurance Policy:
Each
policy of primary mortgage insurance represented to be in effect pursuant to
Section 3.2(xxxii), or any replacement policy therefor obtained by the Servicer
pursuant to Section 4.8.
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as the
average rate in The Wall Street Journal.
Principal
Balance:
As to
each Mortgage Loan, (i) the actual outstanding principal balance of the Mortgage
Loan at the Cut-off Date after giving effect to payments of principal due on
or
before such date, whether or not received, minus (ii) all amounts attributable
to principal collected from or on behalf of the Mortgagor, including the
principal portion of Liquidation Proceeds, Condemnation Proceeds, and Insurance
Proceeds.
7
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, including any prepayment penalty or premium
thereon and 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:
With
respect to each Remittance Date, the period commencing on the first day of
the
month preceding the month in which such Remittance Date occurs, and ending
on
the last day of such month.
Purchase
Price:
The
purchase price specified in the Commitment Letter.
Purchaser:
Xxxxxxx
Xxxxx Mortgage Company, or its successor in interest or any successor to the
Purchaser under this Agreement as herein provided.
Qualified
Correspondent:
Any
Person from which the Company purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Company and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Company, in accordance with underwriting guidelines designated by the
Company (“Designated Guidelines”) or guidelines that do not vary materially from
such Designated Guidelines; (ii) such Mortgage Loans were in fact underwritten
as described in clause (i) above and were acquired by the Company within one
hundred eighty (180) days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Company in origination of mortgage loans of the same type as the Mortgage Loans
for the Company’s own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Company on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Company; and (iv) the Company employed, at the time such Mortgage Loans were
acquired by the Company, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage
loans
properly applied the underwriting criteria designated by the Company. For the
avoidance of doubt, a “Qualified Correspondent” includes a “table broker” or
mortgage lender that originates loans underwritten and funded by the Company
or
an Affiliate of the Company to the Designated Guidelines.
Qualification
Defect:
With
respect to a Mortgage Loan, (a) a defective document in the Mortgage File,
(b)
the absence of a document in the Mortgage File, or (c) the breach of any
representation, warranty or covenant with respect to the Mortgage Loan made
by
the Company, but, in each case, only if the affected Mortgage Loan would cease
to qualify as a “qualified mortgage” for purposes of the REMIC Provisions.
8
Qualified
Depository:
A
federal or state chartered depository institution, the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations
of
such holding company) are rated A-1 by Standard & Poor’s Ratings Group and
Prime-1 by Xxxxx’x Investors Service, Inc. (or a comparable rating if another
rating agency is specified by the Purchaser by written notice to the Company)
at
the time any deposits are held on deposit therein; provided however,
that in
the event any of the Mortgage Loans are subject to a Securitization Transaction,
the Company agrees that the holding company or other entity which maintains
any
accounts subject to this definition, shall satisfy the rating requirements
established by any Rating Agency which rates securities issued as part of the
Securitization Transaction.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business and approved as an
insurer by FNMA.
Rating
Agency:
Xxxxx’x
Investors Service, Inc., Standard & Poor’s Ratings Group, division of The
XxXxxx-Xxxx Companies, Fitch, Inc (doing business as “Fitch
Ratings”),
or
any other nationally recognized statistical credit rating agency rating any
security issued in connection with any Securitization Transaction.
Reconstitution:
Any
Securitization Transaction or Whole Loan Transfer.
Reconstitution
Agreement:
Any
servicing agreement relating to a Reconstitution.
Reconstitution
Date:
The
date on which any or all of the Mortgage Loans serviced under this Agreement
shall be reconstituted as part of a Securitization Transaction or Whole Loan
Transfer pursuant to Section 9.1 hereof. The Reconstitution Date shall be such
date the Purchaser shall designate in writing to the Company.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
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.
9
Remittance
Advice Date:
The
10th Business Day of each month or, if such 10th day is not a Business Day,
the
first Business Day immediately succeeding such date.
Remittance
Date:
The
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately preceding such date) of any month, beginning with the First
Remittance Date.
REO
Disposition:
The
final sale by the Company of any REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to Section
4.16.
REO
Property:
A
Mortgaged Property acquired by the Company on behalf of the Purchaser through
foreclosure or by deed in lieu of foreclosure, as described in Section
4.16.
Repurchase
Price:
Unless
agreed otherwise by the Purchaser and the Company (including without limitation
as set forth in the Commitment Letter), a price equal to (i) the Scheduled
Principal Balance of the Mortgage Loan plus
(ii)
interest on such Scheduled Principal Balance at the Mortgage Loan Remittance
Rate from the date on which interest has last been paid and distributed to
the
Purchaser to the last day of the month of repurchase, less
amounts
received or advanced in respect of such repurchased Mortgage Loan which are
being held in the Custodial Account for distribution in the month of repurchase,
to the extent such amounts are actually paid to the Purchaser upon the
repurchase of the related Mortgage Loan plus
(iii)
any costs and damages, including reasonable attorneys' fees and costs, incurred
by the trust in the applicable Securitization Transaction in connection with
any
violation by the Mortgage Loan of any predatory or abusive lending
law.
Scheduled
Principal Balance:
As to
each Mortgage Loan, (i) the principal balance of the Mortgage Loan at the
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 collected
by
the Company as servicer hereunder or advanced and distributed to the Purchaser
with respect to the related Mortgage Loan representing payments or recoveries
of
principal or advances made in lieu thereof.
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (1) a sale or other transfer of some or all of
the
Mortgage Loans directly or indirectly to an issuing entity in connection with
an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Servicer:
As
defined in Section 13.3(c).
10
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses other
than Monthly Advances (including reasonable attorney’s fees and disbursements)
incurred in the performance by the Company of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration
and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of
any
REO Property and (d) compliance with the obligations under Section
4.8.
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the per annum fee the Purchaser
shall pay to the Company, which shall, for a period of one full month, be equal
to one-twelfth of the product of (a) the Servicing Fee Rate and (b) the
Scheduled Principal Balance of such Mortgage Loan. Such fee shall be payable
monthly, computed on the basis of the same principal amount and same period
for
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 (including recoveries
with respect to interest from Liquidation Proceeds, to the extent permitted
by
Section 4.5) of such Monthly Payment collected by the Company, or as otherwise
provided under Section 4.5.
Servicing
Fee Rate:
0.25%
per annum for each Mortgage Loan.
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Company consisting
of
originals of all documents in the Mortgage File which are not delivered to
the
Custodian and copies of the Mortgage Loan Documents listed in the Custodial
Agreement the originals of which are delivered to the Custodian pursuant to
Section 2.3.
Servicing
Officer:
Any
officer of the Company involved in or responsible for the administration and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Company to the Purchaser upon request, as such list
may from time to time be amended.
Sponsor:
The
sponsor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Standard
& Poor’s Glossary:
The
Standard & Poor’s LEVELS® Glossary, as may be in effect from time to
time.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Company or a
Subservicer.
11
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Company or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Company under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB;
provided, however, that the term “Subservicer” shall not include any master
servicer, or any special servicer engaged by a Depositor, Purchaser or investor
in a Securitization Transaction, nor any “back-up servicer” or trustee
performing servicing functions on behalf of a Securitization
Transaction.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Company and shall not include a mortgage broker that does not
fund loans.
Warranty
Xxxx of Sale:
A
warranty xxxx of sale with respect to the Mortgage Loans purchased on a Closing
Date in the form annexed hereto as Exhibit I.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS; DELIVERY
OF
DOCUMENTS
Section
2.1. Conveyance
of Mortgage Loans; Possession of Mortgage Files; Maintenance of Servicing
Files.
Company
agrees to sell and Purchaser agrees to purchase, from time to time, those
certain Mortgage Loans identified in a Mortgage Loan Schedule, at the price
and
on the terms set forth herein and in the related Commitment Letter. The
Purchaser, on any Closing Date, shall be obligated to purchase only such
Mortgage Loans set forth in the applicable Mortgage Loan Schedule, subject
to
the terms and conditions of this Agreement and the related Commitment Letter.
Purchaser
will purchase Mortgage Loan(s) from the Company on such Closing Dates as may
be
agreed upon by the Purchaser and the Company. The closing shall, at Purchaser’s
option be either: by telephone, confirmed by letter or wire as the parties
shall
agree; or conducted in person at such place, as the parties shall agree. On
the
Closing Date and subject to the terms and conditions of this Agreement, the
Company will sell, transfer, assign, set over and convey to the Purchaser,
without recourse except as set forth in this Agreement, and the Purchaser will
purchase, all of the right, title and interest of the Company in and to the
Mortgage Loans being conveyed by it hereunder, as identified on the Mortgage
Loan Schedule.
On
the
Closing Date and in accordance with the terms herein, the Purchaser will pay
to
the Company, by wire transfer of immediately available funds, the Purchase
Price, together with interest, if any, accrued from the Cut-off Date through
the
day immediately preceding the Closing Date, according to the instructions to
be
provided by the Company. The Company, simultaneously with the payment of the
Purchase Price, shall execute and deliver to the Purchaser a Warranty Xxxx
of
Sale with respect to the Mortgage Loans in the form annexed hereto as Exhibit
I.
12
The
principal balance of each Mortgage Loan as of the Cut-off Date shall be
determined after application of payments of principal due on or before the
Cut-off Date whether or not collected. Therefore, payments of scheduled
principal and interest prepaid for a Due Date beyond the Cut-off Date shall
not
be applied to the principal balance as of the Cut-off Date. Such prepaid amounts
(minus
interest
at the Servicing Fee Rate) shall be the property of the Purchaser. The Company
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by
the
Company to the Purchaser, and shall remit such amounts as provided in Section
5.1.
Pursuant
to Section 2.3, the Company shall deliver the Mortgage Loan Documents to the
Custodian. The contents of each Mortgage File not delivered to the Custodian
are
and shall be held in trust by the Company for the benefit of the Purchaser
as
the owner thereof. The Company shall maintain a Servicing File consisting of
a
copy of the contents of each Mortgage File and the originals of the documents
in
each Mortgage File not delivered to the Custodian. The possession of each
Servicing File by the Company is at the will of the Purchaser for the sole
purpose of servicing the related Mortgage Loan, and such retention and
possession by the Company is in a custodial capacity only. Upon the sale of
the
Mortgage Loans the ownership of each Mortgage Note, the related Mortgage and
the
related Mortgage File and Servicing File shall vest immediately in the
Purchaser, and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only
in
such custodial capacity. The Company shall release its custody of the contents
of any Servicing File only in accordance with written instructions from the
Purchaser, unless such release is required as incidental to the Company’s
servicing of the Mortgage Loans or is in connection with a repurchase of any
Mortgage Loan pursuant to Sections 2.3, 3.3 or 6.2.
Section
2.2. Books
and Records; Transfers of Mortgage Loans.
From
and after the sale of the Mortgage Loans to the Purchaser all rights arising
out
of the Mortgage Loans including but not limited to all funds received on or
in
connection with the Mortgage Loans, shall be received and held by the Company
in
trust for the benefit of the Purchaser as owner of the Mortgage Loans, and
the
Company shall retain record title to the related Mortgages for the sole purpose
of facilitating the servicing and the supervision of the servicing of the
Mortgage Loans.
The
sale
of each Mortgage Loan shall be reflected on the Company’s balance sheet and
other financial statements as a sale of assets by the Company. The Company
shall
be responsible for maintaining, and shall maintain, a complete set of books
and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Company
shall maintain in its possession, available for inspection by the Purchaser,
or
its designee, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of FNMA or FHLMC, including but not limited to documentation as
to
the method used in determining the applicability of the provisions of the Flood
Disaster Protection Act of 1973, as amended, to the Mortgaged Property,
documentation evidencing insurance coverage and eligibility of any condominium
project for approval by FNMA or FHLMC, and periodic inspection reports as
required by Section 4.13. To the extent that original documents are not required
for purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Company may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the Company
complies with the requirements of the FNMA or FHLMC Selling and Servicing Guide,
as amended from time to time.
13
The
Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Purchaser or its designee the related Servicing
File during the time the Purchaser retains ownership of a Mortgage Loan and
thereafter in accordance with Applicable Law.
The
Company shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe, the Company shall note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made unless
such transfer is in compliance with the terms hereof. For the purposes of this
Agreement, the Company shall be under no obligation to deal with any person
with
respect to this Agreement or the Mortgage Loans unless the books and records
show such person as the owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans, provided,
however,
that in
no event shall there be more than four Persons at any given time having the
status of “Purchaser” hereunder. The Purchaser also shall advise the Company of
the transfer. Upon receipt of notice of the transfer, the Company shall xxxx
its
books and records to reflect the ownership of the Mortgage Loans of such
assignee, and shall release the previous Purchaser from its obligations
hereunder with respect to the Mortgage Loans sold or transferred. If the Company
receives notification of a transfer less than five (5) Business Days before
the
monthly Determination Date, the Company’s duties to remit and report to the new
purchaser(s) as required by Section 5 shall begin with the first Determination
Date after the Reconstitution Date.
Section
2.3. Delivery
of Documents.
Pursuant to the Custodial Agreement delivered to the Purchaser on or before
a
Closing Date, the Company shall deliver and release to the Custodian those
Mortgage Loan Documents as required by the Custodial Agreement and by this
Agreement with respect to each Mortgage Loan being transferred to the Purchaser
on such Closing Date.
The
Custodian shall certify its receipt of all such Mortgage Loan Documents required
to be delivered pursuant to the Custodial Agreement. The Company will be
responsible for the Custodian’s fees and expenses with respect to the delivery
and certification of those Mortgage Loan Documents required to be delivered
pursuant to the Custodial Agreement. The Company will be responsible for the
fees and expenses related to the recording of the initial Assignments of
Mortgage (including any fees and expenses related to any preparation and
recording of any intervening or prior assignments of the Mortgage Loans to
the
Company or to any prior owners of or mortgagees with respect to the Mortgage
Loans). The Purchaser will be responsible for the Custodian’s fees and expenses
with respect to the initial inventory and maintenance of the Mortgage Loans
on
or after the Closing Date, including the costs associated with clearing
exceptions.
14
Within
90
days after each Closing Date, the Company shall deliver to the Custodian each
of
the documents described in Exhibit B not delivered pursuant to the Agreement
with respect to the related Mortgage Loans.
The
Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.1 or 6.1 within one week of their
execution, provided,
however,
that
the Company shall provide the Custodian with a certified true copy of any such
document submitted for recordation within ten (10) days of its execution, and
shall provide the original of any document submitted for recordation or a copy
of such document certified by the appropriate public recording office to be
a
true and complete copy of the original within 60 days of its submission for
recordation.
In
the
event the public recording office is delayed in returning any original document,
the Company shall deliver to the Custodian within 240 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 to a delay by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will
be
delivered to the Custodian. The Company will be required to deliver the document
to the Custodian by the date specified in (iv) above. An extension of the date
specified in (iv) above may be requested from the Purchaser, which consent
shall
not be unreasonably withheld.
Notwithstanding
the foregoing, if the originals or certified copies required in this Section
2.3
are not delivered as required within 90 days following the Closing Date or
as
otherwise extended as set forth above, the related Mortgage Loan shall, upon
request of the Purchaser, be repurchased by the Company in accordance with
Section 3.3 hereof; provided,
however,
that
the foregoing repurchase obligation shall not apply in the event the Company
cannot deliver such items due to a delay caused by the recording office in
the
applicable jurisdiction; provided
that the
Company shall deliver instead a recording receipt of such recording office
or,
if such recording receipt is not available, an Officer’s Certificate from the
Company confirming that such documents have been accepted for recording. Any
such document shall be delivered to the Purchaser or its designee promptly
upon
receipt thereof from the related recording office.
If,
subsequent to the related Closing Date, the Company, the Purchaser or the
Custodian finds any document or documents constituting a part of a Mortgage
File
pertaining to a Mortgage Loan to be defective (or missing) in any material
respect, and such defect or missing document materially and adversely affects
the value of the related Mortgage Loan or the interests of the Purchaser
therein, the party discovering such defect shall promptly so notify the Company.
The Company shall have a period of 90 days after receipt of such written notice
within which to correct or cure any such defect. The Company hereby covenants
and agrees that, if any material defect cannot be corrected or cured, the
Company will, upon the expiration of the applicable cure period described above,
repurchase the related Mortgage Loan in the manner set forth in Section 3.3;
provided,
however,
that
with respect to any Mortgage Loan, if such defect constitutes a Qualification
Defect, any such repurchase must take place within 75 days of the date such
defect is discovered.
15
Notwithstanding
the foregoing, with respect to a Mortgage Loan, if, at the end of such 90-day
period, the Company delivers an Officer’s Certificate to the Purchaser
certifying that the Company is using good faith efforts to correct or cure
such
defect and identifying progress made, then the Purchaser shall grant the Company
an extension to correct or cure such defect. The extension shall not extend
beyond (1) the date that is 75 days after the date the defect is discovered,
or,
(2) if the defect is not a Qualification Defect (as evidenced by an Opinion
of
Counsel), the date that is 30 days beyond the original 90-day cure period.
If
the defect is not a Qualification Defect, additional 30-day extensions may
be
obtained pursuant to the same procedure, as long as the Company demonstrates
continued progress toward a correction or cure; provided
that no
extension shall be granted beyond 180 days from the date on which the Company
received the original notice of the defect.
Notwithstanding
the foregoing, with respect to a Mortgage Loan, the failure of the Purchaser
to
notify the Company of any defective or missing document in a Mortgage File
within such 90-day period, or the failure of the Purchaser to require the
Company to cure or repurchase the related Mortgage Loan upon expiration of
such
90-day period, shall not constitute a waiver of its rights hereunder, including
the rights with respect to a Mortgage Loan, to require the Company to repurchase
the affected Mortgage Loan and the right to indemnification pursuant to Section
3.3 hereof.
Section
2.4. Mortgage
Schedule.
The
Company shall provide the Purchaser with certain information constituting a
listing of the Mortgage Loans to be purchased under this Agreement (the
“Mortgage
Loan Schedule”)
on
each Closing Date substantially in the form attached hereto as Exhibit A. Each
Mortgage Loan Schedule shall conform to the definition of “Mortgage Loan
Schedule” hereunder.
Section
2.5. Examination
of Mortgage Files.
Prior
to each Closing Date, the Company shall (a) deliver to the Purchaser in escrow,
for examination, the Mortgage File for each Mortgage Loan to be transferred
on
such Closing Date, including a copy of the Assignment of Mortgage, pertaining
to
each Mortgage Loan, or (b) make the Mortgage Files available to the Purchaser
for examination at the Company’s offices or such other location as shall
otherwise be agreed upon by the Purchaser and the Company. Such examination
may
be made by the Purchaser, or by any prospective purchaser of the Mortgage Loans
from the Purchaser, at any time before or after the related Closing Date upon
prior reasonable notice to the Company. The fact that the Purchaser or any
prospective purchaser of the Mortgage Loans has conducted or has failed to
conduct any partial or complete examination of the Mortgage Files shall not
affect the Purchaser’s (or any of its successor’s) rights to demand repurchase,
substitution or other relief as provided under this Agreement.
16
Section
2.6. Representations,
Warranties and Agreements of the Company.
The
Company agrees and acknowledges that it shall, as a condition to the
consummation of the transactions contemplated hereby, make the representations
and warranties specified in Sections 3.1 and 3.2 as of the Closing Date for
the
related Mortgage Loans. The Company, without conceding that the Mortgage Loans
are securities, hereby makes the following additional representations,
warranties and agreements which shall be deemed to have been made as of the
Closing Date for the related Mortgage Loans:
(i) neither
the Company nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of any Mortgage Loans, any interest
in
any Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to any Mortgage Loans, any interest in any Mortgage
Loans 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 Securities Act or which would render the disposition of any
Mortgage Loans a violation of Section 5 of the Securities 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;
and
(ii) the
Company has not dealt with any broker or agent or anyone else who might be
entitled to a fee or commission in connection with this transaction other than
the Purchaser.
Section
2.7. Representation,
Warranties and Agreement of Purchaser.
The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall
have
been deemed to have been made as of the Closing Date for the related Mortgage
Loans:
(i) the
Purchaser understands that the Mortgage Loans have not been registered under
the
Securities Act or the securities laws of any state;
(ii) the
Purchaser is acquiring the Mortgage Loans for its own account only and not
for
any other person;
(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;
17
(iv) the
Purchaser has been duly organized and is validly existing as a limited
partnership in good standing under the laws of the State of New York with full
power and authority (corporate and other) to enter into and perform its
obligations under this Agreement;
(v) this
Agreement has been duly executed and delivered by the Purchaser, and, assuming
due authorization, execution and delivery by each of the other parties hereto,
constitutes a legal, valid, and binding agreement of the Purchaser, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting creditors’ rights
generally and to general principles of equity regardless of whether enforcement
is sought in a proceeding in equity or at law;
(vi) the
execution, delivery and performance by the Purchaser of this Agreement and
the
consummation of the transactions contemplated hereby do not require the consent
or approval of, the giving of notice to, the registration with, or the taking
of
any other action in respect of, any state, federal or other governmental
authority or agency, except such as has been obtained, given, effected or taken
prior to the date thereof;
(vii) the
execution and delivery of this Agreement have been duly authorized by all
necessary partnership action on the part of the Purchaser; neither the execution
and delivery by the Purchaser of this Agreement, nor the consummation by the
Purchaser of the transactions herein contemplated, nor compliance by the
Purchaser with the provisions hereof, will conflict with or result in a breach
of, or constitute a default under, any of the provisions of the governing
documents of the Purchaser or any law, governmental rule or regulation or any
material judgment, decree or order binding on the Purchaser or any of its
properties, or any of the provisions of any material indenture, mortgage, deed
of trust, contract or other instrument to which the Purchaser is a party or
by
which it is bound;
(viii) there
are
no actions, suits or proceedings pending or, to the knowledge of the Purchaser,
threatened, before or by any court, administrative agency, arbitrator or
governmental body (A) with respect to any of the transactions contemplated
by
this Agreement or (B) with respect to any other matter that in the judgment
of
the Purchaser will be determined adversely to the Purchaser and will if
determined adversely to the Purchaser materially adversely affect its ability
to
perform its obligations under this Agreement; and
(ix) except
for the sale to the Company, the Purchaser has not assigned or pledged any
Mortgage Note or the related Mortgage or any interest or participation
therein.
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Section
2.8. Closing.
The
closing for the purchase and sale of each pool of Mortgage Loans shall take
place on the related Closing Date. At the Purchaser’s option, each closing shall
be either: by telephone, confirmed by letter or wire as the parties shall agree;
or conducted in person, at such place as the parties shall agree.
Each
closing shall be subject to each of the following conditions:
(i) all
of
the representations and warranties of the Company under this Agreement shall
be
true and correct as of the related Closing Date and no event shall have occurred
which, with notice or the passage of time, would constitute a default under
this
Agreement;
(ii) the
Purchaser shall have received, or the Purchaser’s attorneys shall have received
in escrow, all Closing Documents for the related Mortgage Loans as specified
in
Section 2.9 of this Agreement, in such forms as are agreed upon and acceptable
to the Purchaser, duly executed by all signatories other than the Purchaser
as
required pursuant to the respective terms thereof;
(iii) the
Company shall have delivered and released to the Custodian all documents
required pursuant to this Agreement and the Custodial Agreement,
and
(iv) all
other
terms and conditions of this Agreement shall have been complied
with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Company on each
Closing Date the Purchase Price for the related Mortgage Loans by wire transfer
of immediately available funds to the account designated by the
Company.
Section
2.9. Closing
Documents.
With
respect to each pool of Mortgage Loans, the Closing Documents shall consist
of
fully executed originals of the following documents:
(i) this
Agreement, in two counterparts;
(ii) the
related Custodial Agreement, dated as of the related Cut-off Date, in three
counterparts, in the form attached as Exhibit C to this Agreement;
(iii) the
related Mortgage Loan Schedule, one copy to be attached to each counterpart
of
this Agreement, and to each counterpart of the related Custodial Agreement,
as
the Mortgage Loan Schedule thereto;
(iv) a
Receipt
and Certification, as required under the Custodial Agreement;
19
(v) an
officer’s certificate of the Company substantially in the form of Exhibit G
attached hereto; and
(vi) an
Opinion of Counsel of the Company, in the form of Exhibit D hereto.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
Section
3.1. Company
Representations and Warranties.
The
Company hereby represents and warrants to the Purchaser that, as of each Closing
Date:
(a) Due
Organization and Authority.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Ohio as all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in each state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Company, and in any event the Company is in compliance with
the
laws of any such state to the extent necessary to ensure the enforceability
of
the related Mortgage Loan and the servicing of such Mortgage Loan in accordance
with the terms of this Agreement; the Company has the full corporate power
and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by
the
Company and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Company; and all requisite corporate action has
been taken by the Company to make this Agreement valid and binding upon the
Company in accordance with its terms;
(b) Ordinary
Course of Business.
The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Company, which is in the business of selling
and servicing loans, and the transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Company pursuant to this Agreement are not
subject to the bulk transfer or any similar statutory provisions in effect
in
any applicable jurisdiction;
(c) No
Conflicts.
Neither
the execution and delivery of this Agreement, the acquisition of the Mortgage
Loans by the Company, the sale of the Mortgage Loans to the Purchaser or 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, articles of incorporation or by-laws or any legal
restriction or any agreement or instrument to which the Company is now a party
or by which it is bound, or constitute a default or result in the violation
of
any law, rule, regulation, order, judgment or decree to which the Company or
its
property is subject, or impair the ability of the Purchaser to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans;
20
(d) Ability
to Service.
The
Company is an approved seller/servicer of residential mortgage loans for FNMA
and FHLMC, with the facilities, procedures, and experienced personnel necessary
for the sound servicing of mortgage loans of the same type as the Mortgage
Loans. The Company is in good standing to sell mortgage loans to and service
mortgage loans for FNMA and FHLMC, and no event has occurred, including but
not
limited to a change in insurance coverage, which would make the Company unable
to comply with FNMA or FHLMC eligibility requirements or which would require
notification to FNMA or FHLMC;
(e) Reasonable
Servicing Fee.
The
Company acknowledges and agrees that the Servicing Fee represents reasonable
compensation for performing such services and that the entire Servicing Fee
shall be treated by the Company, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage Loans pursuant
to this Agreement;
(f) Ability
to Perform.
The
Company does not believe, nor does it have any reason or cause to believe,
that
it cannot perform each and every covenant contained in this Agreement. The
Company is solvent and the sale of the Mortgage Loans will not cause the Company
to become insolvent. The sale of the Mortgage Loans is not undertaken to hinder,
delay or defraud any of the Company’s creditors;
(g) No
Litigation Pending.
There
is
no action, suit, proceeding or investigation pending or threatened against
the
Company which, either in any one instance or in the aggregate, may result in
any
material adverse change in the business, operations, financial condition,
properties or assets of the Company, or in any material impairment of the right
or ability of the Company to carry on its business substantially as now
conducted, or lead to any material liability on the part of the Company, or
which would draw into question the validity of this Agreement or the Mortgage
Loans or of any action taken or to be contemplated herein, or which would be
likely to impair materially the ability of the Company to perform under the
terms of this Agreement;
21
(h) 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 Company
of
or compliance by the Company with this Agreement or the sale of the Mortgage
Loans as evidenced by the consummation of the transactions contemplated by
this
Agreement, or if required, such approval has been obtained prior to the Closing
Date;
(i) No
Untrue Information.
Neither
this Agreement nor any statement, report or other document furnished or to
be
furnished pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of fact or omits to state
a
fact necessary to make the statements contained therein not
misleading;
(j) Sale
Treatment.
The
Company has determined that the disposition of the Mortgage Loans pursuant
to
this Agreement will be afforded sale treatment for accounting and tax purposes;
(k) No
Material Change.
There
has
been no material adverse change in the business, operations, financial condition
or assets of the Company since the date of the Company’s most recent financial
statements; and
(l) No
Brokers’ Fees.
The
Company has not dealt with any broker, investment banker, agent or other Person
that may be entitled to any commission or compensation in the connection with
the sale of the Mortgage Loans.
Section
3.2. Representations
and Warranties Regarding Individual Mortgage Loans.
As to
each Mortgage Loan, the Company hereby represents and warrants to the Purchaser
that as of the related Closing Date (except as set forth in (i)
below):
(i) Mortgage
Loans as Described.
The
information set forth in the Mortgage Loan Schedule is true and correct as
of
the related Cut-off Date.
(ii) Payment
History.
All
payments required to be made up to the related Cut-off Date for each Mortgage
Loan under the terms of the Mortgage Note have been made and credited. No
payment under any Mortgage Loan has been 30 days delinquent more than one time
within twelve months prior to the related Closing Date;
22
(iii) No
Outstanding Charges.
There
are
no defaults by the Company or the Mortgagor in complying with the terms of
the
Mortgage Note or Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, which previously became due and
owing have been paid, or an escrow of funds has been established for every
such
item which remains unpaid and which has been assessed but is not yet due and
payable;
(iv) Original
Terms Unmodified.
The
terms
of the Mortgage Note and Mortgage have not been impaired, waived, altered or
modified in any respect, except by a written instrument which has been recorded,
if necessary to protect the interests of the Purchaser, and which has been
delivered to the Purchaser. The substance of any such waiver, alteration or
modification has been approved by the mortgage insurer, if the Mortgage Loan
is
insured, the title insurer, to the extent required by the policy, and its terms
are reflected on the Mortgage Loan Schedule. No Mortgagor has been released,
in
whole or in part;
(v) No
Defenses.
The
Mortgage Loan is not subject to any right of rescission, set-off, counterclaim
or defense, including without limitation the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the
defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(vi) No
Satisfaction 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 satisfaction, release, cancellation, subordination or
rescission;
(vii) Validity
of Mortgage Documents.
The
Mortgage Note and the Mortgage and any other agreement executed and delivered
by
a Mortgagor in connection with a Mortgage Loan are genuine, and each is the
legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms (including, without limitation, any provisions therein
relating to prepayment charges);
23
(viii) No
Fraud.
All
the
documents executed in connection with the Mortgage Loan including, but not
limited to, the Mortgage Note and the Mortgage are free of fraud and any
misrepresentation, are signed by the persons they purport to be signed by,
and
witnessed or, as appropriate, notarized by the persons whose signatures appear
as witnesses or notaries, and each such document constitutes the valid and
binding legal obligation of the signatories and is enforceable in accordance
with its terms;
(ix) Compliance
with Applicable Laws.
Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, predatory and abusive lending laws, equal credit opportunity
and disclosure laws or unfair and deceptive practices laws applicable to the
Mortgage Loan including, without limitation, any provisions relating to
prepayment penalties, have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any such
laws
or regulations, and the Seller shall maintain in its possession, available
for
the Purchaser’s inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements. This representation and
warranty is a Deemed Material Breach Representation;
(x) Location
and Type of Mortgaged Property.
The
Mortgaged Property is located in the state identified in the related Mortgage
Loan Schedule and consists 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 low-rise condominium project, or an individual unit in
a
planned unit development or a de minimis planned unit development which is
in
each case four stories or less, provided, however, that any mobile home (double
wide only) or manufactured dwelling shall conform with the applicable Xxxxxx
Xxx
and Xxxxxxx Mac requirements regarding such dwellings and that no Mortgage
Loan
is secured by a single parcel of real property with a cooperative housing
corporation, a log home or a mobile home erected thereon or by a mixed-use
property, a property in excess of 10 acres, or other unique property types.
As
of the date of origination, no portion of the Mortgaged Property was used for
commercial purposes, and since the date of origination, no portion of the
Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. With respect to any Mortgage Loan secured by a
Mortgaged Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, (ii) the
related manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the Seller
as mortgagee, (iii) the related Mortgaged Property is not located in the state
of New Jersey and (iv) as of the origination date of the related Mortgage Loan,
the related Mortgagor occupied the related manufactured home as its primary
residence. This representation and warranty is a Deemed Material Breach
Representation;
24
(xi) Valid
First Lien.
The
Mortgage is a valid, subsisting and enforceable first lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of
the
Mortgage is subject only to:
A. the
lien
of current real property taxes and assessments not yet due and
payable;
B. covenants,
conditions and restrictions, rights of way, easements and other matters of
the
public record as of the date of recording acceptable to mortgage lending
institutions generally and specifically referred to in the lender’s title
insurance policy or attorney’s title opinion delivered to the originator of the
Mortgage Loan and (i) referred to or otherwise considered in the appraisal
made
for the originator of the Mortgage Loan and (ii) which do not adversely affect
the Appraised Value of the Mortgaged Property set forth in such appraisal;
and
C. other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property;
Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable first lien and first priority security interest
on
the property described therein and the Company has full right to sell and assign
the same to the Purchaser;
(xii) Full
Disbursement of Proceeds.
The
proceeds of the Mortgage Loan have been fully disbursed, except for escrows
established or created due to seasonal weather conditions, and there is no
requirement for future advances thereunder. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of 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;
25
(xiii) Ownership.
The
Company is the sole owner of record and holder of the Mortgage Loan and the
related Mortgage Note and the Mortgage are not assigned or pledged, and the
Company has good and marketable title thereto and has full right and authority
to transfer and sell the Mortgage Loan to the Purchaser. The Company is
transferring the Mortgage Loan free and clear of any and all encumbrances,
liens, pledges, equities, participation interests, claims, charges or security
interests of any nature encumbering such Mortgage Loan;
(xiv) 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
which 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 or 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 any qualification requirements of FNMA or FHLMC, and (2) organized under
the
laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;
(xv) Title
Insurance.
The
Mortgage Loan is covered by an ALTA lender’s title insurance policy or other
generally acceptable form of policy of insurance acceptable to FNMA or FHLMC,
issued by a title insurer acceptable to FNMA or FHLMC and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
the Company, its successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan, subject only
to
the exceptions contained in clauses (1), (2) and (3) of paragraph (xi) of this
Section 3.2, and against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustments to the Mortgage Interest Rate and Monthly Payment;
provided,
however,
that in
the case of any Mortgage Loan secured by a Mortgaged Property located in a
jurisdiction where such policies are generally not available, the Mortgage
Loan
is the subject of an opinion of counsel of the type customarily rendered in
such
jurisdiction in lieu of title insurance. The Company 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 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 Mortgage,
including the Company, has done, by act or omission, anything which would impair
the coverage of such lender’s title insurance policy;
26
(xvi) 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 the law could give rise
to
such liens) affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related Mortgage which
are not insured against by the title insurance policy referenced in Section
(xv)
above;
(xvii) Location
of Improvements; No Encroachments.
Except
as
insured against by the title insurance policy referenced in Section (xv) above,
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;
(xviii) Customary
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, (i) in the case of a Mortgage designated as a deed of trust, by
trustee’s sale, and (ii) otherwise by judicial foreclosure. There is no
homestead or other exemption 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;
(xix) Occupancy
of the Mortgaged Property.
As
of the
date of origination, the Mortgaged Property was lawfully occupied under
Applicable Law;
(xx) No
Additional Collateral.
The
Mortgage Note is not and has not been secured by any collateral, pledged account
or other security except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred
to in
(xi) above;
(xxi) Deeds
of Trust.
In
the
event that 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 Mortgagee to the trustee under the deed of trust,
except in connection with a trustee’s sale after default by the
Mortgagor;
27
(xxii) Transfer
of Mortgage Loans.
The
Assignment is in recordable form and is acceptable for recording under the
laws
of the jurisdiction in which the Mortgaged Property is located;
(xxiii) Mortgaged
Property Undamaged.
The
Mortgaged Property is undamaged by water, fire, earthquake or earth movement,
windstorm, flood, tornado, hurricane or other casualty so as to affect adversely
the value of the Mortgaged Property as security for the Mortgage Loan or the
use
for which the premises were intended;
(xxiv) Collection
Practices; Escrow Deposits.
The
origination and collection practices used with respect to the Mortgage Loan
have
been in accordance with Acceptable Servicing Practices, and have been in all
material respects legal and proper, and in accordance with the terms of the
Mortgage Note and Mortgage. All Escrow Payments have been collected in full
compliance with state and federal law. An escrow of funds is not prohibited
by
Applicable Law and has been established to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Company have been
capitalized under the Mortgage Note;
(xxv) No
Condemnation.
To
the
best of Company’s knowledge, there is no proceeding pending or threatened for
the total or partial condemnation of the related Mortgaged
Property;
(xxvi) The
Appraisal.
The
Mortgage Loan Documents contain an appraisal of the related Mortgaged Property
by an appraiser who had no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof; and whose compensation
is
not affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and the appraiser both satisfy the applicable requirements of FNMA
or
FHLMC;
(xxvii) Insurance.
The
Mortgaged Property securing each Mortgage Loan is insured by an insurer
acceptable to FNMA or FHLMC against loss by fire and such hazards as are covered
under a standard extended coverage endorsement, in an amount which is not less
than the lesser of 100% of the insurable value of the Mortgaged Property and
the
outstanding principal balance of the Mortgage Loan, but in no event less than
the minimum amount necessary to fully compensate for any damage or loss on
a
replacement cost basis; if the Mortgaged Property is a condominium unit, it
is
included under the coverage afforded by a blanket policy for the project; the
insurance policy contains a standard clause naming the originator of such
mortgage loan, its successor and assigns, as insured mortgagee; if upon
origination of the Mortgage Loan, the improvements on the Mortgaged Property
were in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier,
in an
amount representing coverage not less than the least of (A) the outstanding
principal balance of the Mortgage Loan, (B) the full insurable value and
(C) the maximum amount of insurance which was available under the Flood
Disaster Protection Act of 1983, as amended; and the Mortgage obligates the
mortgagor thereunder to maintain all such insurance at the mortgagor’s cost and
expense and the Company has not acted or failed to act so as to impair the
coverage of any such insurance policy or the validity, binding effect and
enforceability thereof;
28
(xxviii) Servicemembers
Civil Relief Act.
The
Mortgagor has not notified the Company, and the Company has no knowledge of
any
relief requested or allowed to the Mortgagor under the Servicemembers Civil
Relief Act as amended, or other similar state statute;”
(xxix) Payment
Terms.
The
Mortgage Note is payable on the first day of each month in equal monthly
installments of principal and interest,(provided
that,
the installments of interest are subject to change due to the adjustments to
the
Mortgage Interest Rate on each Interest Rate Adjustment Date, and interest
is
calculated and payable in arrears) sufficient to amortize the Mortgage Loan
fully by the stated maturity date, over an original term of not more than thirty
years from origination and once the amortization period starts, payments are
calculated to fully amortize by maturity. No Mortgage Loan converts, pursuant
to
the terms of the related Mortgage Note, from having interest accrue on the
principal amount thereof based on an adjustable rate to having interest accrue
based on a fixed rate, and no Mortgage Loan has a shared appreciation or other
contingent interest feature, or permits negative amortization. The Mortgage
Interest Rate, Lifetime Rate Cap, each applicable Periodic Rate Cap and each
applicable Interest Rate Adjustment Date for each Mortgage Loan are as set
forth
for such Mortgage Loan in the Mortgage Loan Schedule;
(xxx) No
Defaults.
Except
with respect to delinquencies identified on the Mortgage Loan Schedule, there
is
no default, breach, violation or event of acceleration existing under any
Mortgage or Mortgage Note and no event that, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration, and the Company has not
waived any default, breach, violation or event of acceleration;
29
(xxxi) Loan-to-Value
Ratio; Modifications; No Foreclosures.
The
Loan-to-Value Ratio of each Mortgage Loan was less than 125% at the time of
its
origination or refinancing, as applicable. No Mortgage Loan is subject to a
written foreclosure agreement or pending foreclosure proceedings;
(xxxii) Primary
Mortgage Insurance.
Each
Mortgage Loan with an LTV at origination in excess of 80% will be subject to
a
Primary Mortgage Insurance Policy, issued by an insurer acceptable to FNMA
or
FHLMC, in at least such amounts as are required by FHLMC or FNMA. All provisions
of such Primary Mortgage Insurance Policy have been and are being complied
with,
such policy is in full force and effect, and all premiums due thereunder have
been paid. Any Mortgage subject to any such Primary Mortgage Insurance Policy
obligates the Mortgagor thereunder to maintain such insurance and to pay all
premiums and charges in connection therewith unless terminable in accordance
with FHLMC standards or Applicable Law;
(xxxiii) Underwriting
Guidelines.
The
Mortgage Loan was underwritten in accordance with the Company’s underwriting
guidelines in effect at the time of origination with exceptions thereto
exercised in a reasonable manner;
(xxxiv) Adverse
Selection.
The
Company used no adverse selection procedures in selecting the Mortgage Loan
from
among the outstanding first-lien residential mortgage loans owned by it which
were available for inclusion in the Mortgage Loans;
(xxxv) No
Bankruptcy.
To
the
best of the Company’s knowledge, no Mortgagor was a debtor in any state or
federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated and as of the related Closing Date, the Company has not received
notice that any Mortgagor is a debtor under any state or federal bankruptcy
or
insolvency proceeding;
(xxxvi) No
Additional Payments.
There
is
no obligation on the part of the Company or any other party to make payments
in
addition to those made by the Mortgagor;
30
(xxxvii) Predatory
Lending Regulations.
No
Mortgage Loan is a High Cost Loan or Covered Loan, as applicable, and no
Mortgage Loan originated on or after October 1, 2002 through March 6, 2003
is
governed by the Georgia Fair Lending Act. No Mortgage Loan is covered by the
Home Ownership and Equity Protection Act of 1994 and no Mortgage Loan is in
violation of any comparable state or local law;
(xxxviii) HOEPA.
No
Mortgage Loan is classified as a Predatory Mortgage Loan under Section 32 of
the
Home Ownership and Equity Protection Act of 1994, as amended, or any similar
state or local law including, without limitation, the Local Law for the City
of
New York, No. 36 relating to predatory lending passed by the New York City
Council on November 20, 2002, as amended from time to time;
(xxxix) Fair
Credit Reporting Act.
The
Company, in its capacity as servicer, has fully furnished, for each Mortgage
Loan, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (or the successors to such credit repositories), on a
monthly basis. The Servicer will transmit full-file credit reporting data for
each Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and that
for
each Mortgage Loan, Servicer agrees it shall report one of the following
statuses each month as follows: new origination, current, delinquent (30-,
60-,
90-days, etc.), foreclosed, or charged-off. This representation and warranty
is
a Deemed Material Breach Representation;
(xl) No
Arbitration.
With
respect to any Mortgage Loan originated on or after August 1, 2004, neither
the
related Mortgage nor the related Mortgage Note requires the Mortgagor to submit
to arbitration to resolve any dispute arising out of or relating in any way
to
the Mortgage Loan transaction. This representation and warranty is a Deemed
Material Breach Representation;
(xli) Balloon
Mortgages
No
Mortgage Loan is a balloon mortgage loan that has an original stated maturity
of
less than seven (7) years;
(xlii) No
Credit Insurance Policies.
In
connection with the origination of any Mortgage Loan, no proceeds from any
Mortgage Loan were used to finance or acquire a single-premium credit life
insurance policy. No Mortgagor was required to purchase any single-premium
credit
insurance
policy (e.g., life,
mortgage, disability, accident,
unemployment,
or
health insurance product)
or debt
cancellation agreement
as a
condition of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium
credit insurance
policy (e.g., life,
mortgage, disability, accident,
unemployment, mortgage,
or
health insurance)
in
connection with the origination of the
Mortgage
Loan; no proceeds from any Mortgage Loan were used to purchase single-premium
credit insurance policies or debt cancellation agreements as part of the
origination of, or as a condition to closing, such
Mortgage
Loan. This representation and warranty is a Deemed Material Breach
Representation;
31
(xliii) Prepayment
Penalties.
The
Mortgage Loan is subject to a prepayment penalty as provided in the related
Mortgage Note except as set forth on the related Mortgage Loan Schedule. With
respect to each Mortgage Loan that has a prepayment penalty feature, each such
prepayment penalty is enforceable and will be enforced by the Seller for the
benefit of the Purchaser, and each prepayment penalty is permitted pursuant
to
federal, state and local law. Each such prepayment penalty is in an amount
not
more than the maximum amount permitted under applicable law and no such
prepayment penalty may be imposed for a term in excess of five (5) years with
respect to Mortgage Loans originated prior to October, 1, 2002. With respect
to
Mortgage Loans originated on or after October 1, 2002, the duration of the
prepayment period shall not exceed three (3) years from the date of the Mortgage
Note unless the Mortgage Loan was modified to reduce the prepayment period
to no
more than three (3) years from the date of such Mortgage Loan and the
Mortgagor was notified in writing of such reduction in prepayment period. With
respect to any Mortgage Loan that contains a provision permitting imposition
of
a premium upon a prepayment prior to maturity: (i) prior to the Mortgage Loan’s
origination, the Mortgagor agreed to such premium in exchange for a monetary
benefit, including but not limited to a rate or fee reduction, (ii) prior to
the
Mortgage Loan’s origination, the Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium and (iii) the
prepayment premium is disclosed to the Mortgagor in the loan documents pursuant
to applicable state, local and federal law. This representation and warranty
is
a Deemed Material Breach Representation;
(xliv) Manufactured
Housing.
With
respect to any Mortgaged Property that constitutes manufactured housing, each
related Mortgage Loan is secured by a "single family residence" within the
meaning of Section 25(e)(10) of the Code. The fair market value of the
manufactured home securing any Mortgage Loan was at least equal to 80% of the
adjusted issue price of the Mortgage Loan at either (i) the date the Mortgage
Loan was originated (as determined pursuant to the REMIC provisions), or (ii)
the date the Mortgage Loan is transferred to the Purchaser;
(xlv) Qualified
Mortgage.
Each
Mortgage Loan is a “qualified mortgage” within Section 860G(a)(3) of the
Code;
32
(xlvi) Origination
Practices.
No
Mortgagor was encouraged or required to select a Mortgage Loan product offered
by the Mortgage Loan’s originator which is a higher cost product designed for
less creditworthy borrowers, unless at the time of the Mortgage Loan’s
origination, such Mortgagor did not qualify taking into account credit history
and debt-to-income ratios for a lower-cost credit product then offered by the
Mortgage Loan’s originator or any affiliate of the Mortgage Loan’s originator.
If, at the time of loan application, the Mortgagor may have qualified for a
lower-cost credit product then offered by any mortgage lending affiliate of
the
Mortgage Loan’s originator, the Mortgage Loan’s originator referred the
Mortgagor’s application to such affiliate for underwriting consideration. This
representation and warranty is a Deemed Material Breach
Representation;
(xlvii) Underwriting
Methodology.
The
methodology used in underwriting the extension of credit for each Mortgage
Loan
employs, in part, objective mathematical principles which relate the Mortgagor’s
income, assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the Mortgagor’s equity in the
collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the Mortgagor had a reasonable ability to
make timely payments on the Mortgage Loan. This representation and warranty
is a
Deemed Material Breach Representation;
(xlviii) Points
and Fees.
No
Mortgagor was charged “points and fees” (whether or not financed) in an amount
greater than (i) $1,000, or (ii) 5% of the principal amount of such Mortgage
Loan, whichever is greater. For purposes of this representation, such 5%
limitation is calculated in accordance with Xxxxxx Mae’s anti-predatory lending
requirements as set forth in the Xxxxxx Mae Guides and “points and fees” (x)
include origination, underwriting, broker and finder fees and charges that
the
mortgagee imposed as a condition of making the Mortgage Loan, whether they
are
paid to the mortgagee or a third party, and (y) exclude bona fide discount
points, fees paid for actual services rendered in connection with the
origination of the Mortgage Loan (such as attorneys’ fees, notaries fees and
fees paid for property appraisals, credit reports, surveys, title examinations
and extracts, flood and tax certifications, and home inspections), the cost
of
mortgage insurance or credit-risk price adjustments, the costs of title, hazard,
and flood insurance policies, state and local transfer taxes or fees, escrow
deposits for the future payment of taxes and insurance premiums, and other
miscellaneous fees and charges that, in total, do not exceed 0.25% of the
principal amount of such Mortgage Loan. This representation and warranty is
a
Deemed Material Breach Representation;
(xlix) Fees
Charges.
All
fees
and charges (including finance charges) and whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing
of
each Mortgage Loan has been disclosed in writing to the Mortgagor in accordance
with applicable state and federal law and regulation. This representation and
warranty is a Deemed Material Breach Representation; and
33
(l) Second
Lien Mortgage Loans.
With
respect to each Second Lien Mortgage Loan: (1) the related first lien Mortgage
Loan does not permit negative amortization; (2) where required or customary
in
the jurisdiction in which the Mortgaged Property is located, the original lender
has filed for record a request for notice of any action by the related senior
lienholder, and the Seller has notified such second lienholder in writing of
the
existence of the Second Lien Mortgage Loan and requested notification of any
action to be taken against the Mortgagor by such senior lienholder; either
(a)
no consent for the Second Lien Mortgage Loan is required by the holder of the
related first lien Mortgage Loan or (b) such consent has been obtained and
is
contained in the related Mortgage File; (3) to the best of Seller’s knowledge,
the related first lien Mortgage Loan is in full force and effect, and there
is
no default, lien, breach, violation or event which would permit acceleration
existing under such first lien Mortgage Loan or 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 which
would permit acceleration under such first lien Mortgage Loan; (4) the related
first lien Mortgage contains a provision which provide for giving notice of
default or breach to the mortgagee under the Mortgage Loan and allows such
mortgagee to cure any default under the related first lien Mortgage; and (5)
the
related Mortgaged Property was the Mortgagor’s principal residence at the time
of the origination of the such Second Lien Mortgage Loan. This representation
and warranty is a Deemed Material Breach Representation.
Section
3.3. Repurchase.
It
is
understood and agreed that the representations and warranties set forth in
Sections 3.1 and 3.2 shall survive the sale of the Mortgage Loans to the
Purchaser and the delivery of the Mortgage Loan Documents to the Custodian
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 Mortgage File. Upon discovery by either
the Company or the Purchaser of a breach of any of the foregoing representations
and warranties which materially and adversely affects the value of the Mortgage
Loans or the interest of the Purchaser (or which materially and adversely
affects the interests of Purchaser in the related Mortgage Loan in the case
of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the
other.
Within
90
days of the earlier of either discovery by or notice to the Company of any
breach of a representation or warranty which materially and adversely affects
the value of the Mortgage Loans, (i) the Company shall use its best efforts
promptly to cure such breach in all material respects and (ii) if such breach
cannot be cured, the Company shall, at the Purchaser’s option, repurchase such
Mortgage Loan at the Repurchase Price. Notwithstanding the above sentence,
(i)
within sixty (60) days of the earlier of either discovery by, or notice to,
the
Company of any breach of the representation and warranty set forth in clause
(xlv) of Section 3.2, the Company shall repurchase such Mortgage Loan at the
Repurchase Price, together with all expenses incurred by the Purchaser as a
result of such repurchase and (ii) any breach of a Deemed Material Breach
Representation shall automatically be deemed to materially and adversely affect
the value of the Mortgage Loan and the interest of the Purchaser therein. In
the
event that a breach shall involve any representation or warranty set forth
in
Section 3.1, and such breach cannot be cured within ninety (90) days of the
earlier of either discovery by or notice to the Company of such breach, all
of
the Mortgage Loans shall, at the Purchaser’s option, be repurchased by the
Company at the Repurchase Price. Any repurchase of a Mortgage Loan or Loans
pursuant to the foregoing provisions of this Section 3.3 shall be accomplished
by deposit in the Custodial Account of the amount of the Repurchase Price as
required in Section 4.4, for distribution to Purchaser on the Remittance Date
for the month following the date of the repurchase, 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 for application
in
accordance with Section 5.1.
34
At
the
time of repurchase, the Purchaser and the Company shall arrange for the
reassignment of the repurchased Mortgage Loans to the Company and the delivery
to the Company of any documents held by the Custodian relating to the
repurchased Mortgage Loans. In the event of a repurchase, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser
that
such repurchase has taken place and amend the Mortgage Loan Schedule to reflect
the withdrawal of the repurchased Mortgage Loans from this
Agreement.
In
addition to such repurchase obligation, the Company 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 breach of the
Company’s representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Company set forth in this
Section 3.3 to cure or repurchase a defective Mortgage Loan and to indemnify
the
Purchaser as provided in this Section 3.3, constitute the sole remedies of
the
Purchaser respecting a breach of the foregoing representations and
warranties.
Any
cause
of action against the Company relating to or arising out of the breach of any
representations and warranties made in Sections 3.1 and 3.2 shall accrue as
to
any Mortgage Loan upon the earliest of (i) discovery of such breach by the
Company or the Purchaser or notice thereof by the Purchaser to the Company,
(ii)
failures by the Company to cure such breach or repurchase such Mortgage Loan
as
specified above, and (iii) demand upon the Company by the Purchaser for
compliance with this Agreement.
35
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.1. Company
to Act as Servicer.
The
Company, as an independent contractor, shall service and administer the Mortgage
Loans and shall have full power and authority, acting alone or through the
utilization of a third party servicing provider, to do any and all things in
connection with such servicing and administration which the Company may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices.
Consistent
with the terms of this Agreement and subject to the REMIC Provisions if the
Mortgage Loans have been transferred to a REMIC, the Company may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Company’s reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser. In the event of any such modification which permits the deferral
of
interest or principal payments on any Mortgage Loan, the Company shall, on
the
Business Day immediately preceding the Remittance Date in any month in which
any
such principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 5.3, the difference
between (a) such month’s principal and one month’s interest at the Mortgage Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Company shall be entitled to reimbursement
for such advances to the same extent as for all other advances made pursuant
to
Section 5.3. Without limiting the generality of the foregoing, the Company
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 Properties. If reasonably required by the Company, the Purchaser
shall
furnish the Company with any powers of attorney and other documents necessary
or
appropriate to enable the Company to carry out its servicing and administrative
duties under this Agreement.
In
servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser’s reliance on the Company.
Section
4.2. Liquidation
of Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 4.1 is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period,
the
Company shall take such action as (1) the Company would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (2) shall be consistent with Accepted Servicing Practices,
and
(3) the Company shall determine prudently to be in the best interest of
Purchaser. In the event that any payment due under any Mortgage Loan is not
postponed pursuant to Section 4.1 and remains delinquent for a period of 30
days
or any other default continues for a period of 30 days beyond the expiration
of
any grace or cure period, the Company shall commence foreclosure proceedings,
the Company shall notify the Purchaser in writing of the Company’s intention to
do so, and the Company shall not commence foreclosure proceedings if the
Purchaser objects to such action within ten (10) Business Days of receiving
such
notice. In the event the Purchaser objects to such foreclosure action, the
Company shall not be required to make Monthly Advances with respect to such
Mortgage Loan, pursuant to Section 5.3, and the Company’s obligation to make
such Monthly Advances shall terminate on the 90th day referred to above. In
such
connection, the Company shall from its own funds make all necessary and proper
Servicing Advances, provided,
however,
that
the Company shall not be required to expend its own funds in connection with
any
foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to the Purchaser after reimbursement to itself for such expenses and (b)
that such expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 4.5) or through Insurance Proceeds
(respecting which it shall have similar priority).
36
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Company 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, the Company shall promptly provide the Purchaser
with
a written report of the environmental inspection.
After
reviewing the environmental inspection report, the Purchaser shall determine
how
the Company 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 the Company to proceed with foreclosure or acceptance of a deed in
lieu
of foreclosure, the Company 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 the Company, the Company shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 4.5 hereof. In the event
the Purchaser directs the Company not to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Company shall be reimbursed for all
Servicing Advances made with respect to the related Mortgaged Property from
the
Custodial Account pursuant to Section 4.5 hereof.
37
Section
4.3. Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, the Company shall proceed diligently to collect all payments
due
under each of the Mortgage Loans when the same shall become due and payable
in
accordance with Accepted Servicing Practices, and shall, in accordance with
RESPA and applicable state law, take special care in ascertaining and estimating
Escrow Payments and all other charges that will become due and payable with
respect to the Mortgage Loan and the Mortgaged Property, to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges
as
and when they become due and payable.
Section
4.4. Establishment
of and Deposits to Custodial Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form
of
time deposit or demand accounts, titled “National City Mortgage Co., in trust
for the Purchaser of Residential Mortgage Loans serviced under a Flow Seller’s
Warranties and Servicing Agreement, dated as of May 1, 2003”, or as otherwise
directed in writing by the Purchaser or its assigns after the Closing Date
in
connection with any Whole Loan Transfer or Securitization Transaction. The
Custodial Account shall be established with a Qualified Depository. Upon request
of the Purchaser and within ten
(10)
days
thereof, the Company shall provide the Purchaser with written confirmation
of
the existence of such Custodial Account. Any funds deposited in the Custodial
Account shall at all times be insured to the fullest extent allowed by
Applicable Law. Funds deposited in the Custodial Account may be drawn on by
the
Company in accordance with Section 4.5.
The
Company shall deposit in the Custodial Account within one Business Day (or
two
Business Days in the case of the amounts described in clauses (iii) through
(v)
below) of the Company’s receipt, and retain therein, the following collections
received by the Company and payments made by the Company after each Cut-off
Date, other than payments of principal and interest due on or before such
Cut-off Date:
(1) all
payments on account of principal on the Mortgage Loans, including all Principal
Prepayments, but not including Payaheads;
(2) all
payments on account of interest on the Mortgage Loans, adjusted to the Mortgage
Loan Remittance Rate;
(3) all
Liquidation Proceeds;
(4) all
Insurance Proceeds including amounts required to be deposited pursuant to
Section 4.10 (other than proceeds to be held in the Escrow Account and applied
to the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 4.14), Section 4.11 and Section
4.15;
38
(5) all
Condemnation Proceeds which are not applied to the restoration or repair of
the
Mortgaged Property or released to the Mortgagor in accordance with Section
4.14;
(6) any
amount required to be deposited in the Custodial Account pursuant to Section
4.1, 5.1, 5.3, 6.1 or 6.2;
(7) any
amounts payable in connection with the repurchase of any Mortgage Loan pursuant
to Section 2.3, 3.3 or 6.2;
(8) with
respect to each Principal Prepayment including, for this purpose, the principal
portion of Insurance Proceeds, Condemnation Proceeds, and Liquidation Proceeds
an amount (to be paid by the Company out of its own funds, but not in excess
of
its aggregate Servicing Fee for the related Due Period) which, when added to
all
amounts allocable to interest received in connection with the Principal
Prepayment, equals one month's interest on the amount of principal so prepaid
at
the Mortgage Loan Remittance Rate;
(9) any
amounts required to be deposited by the Company pursuant to Section 4.11 in
connection with the deductible clause in any blanket hazard insurance policy;
and
(10) any
amounts received with respect to or related to any REO Property and all REO
Disposition Proceeds pursuant to Section 4.16.
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.1, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in
the
Custodial Account by the depository institution shall accrue to the benefit
of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.5. The Company shall
reimburse the Custodial Account for any losses incurred as a result of the
investment of amounts on deposit in the Custodial Account.
Section
4.5. Permitted
Withdrawals From Custodial Account.
The
Company shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(1) to
make
payments to the Purchaser in the amounts and in the manner provided for in
Section 5.1;
(2) to
reimburse itself for Monthly Advances of the Company’s funds made pursuant to
Section 5.3, the Company’s right to reimburse itself pursuant to this subclause
(2) being limited to amounts received on the related Mortgage Loan which
represent late payments of principal and/or interest respecting which any such
advance was made, it being understood that, in the case of any such
reimbursement, the Company’s right thereto shall be prior to the rights of the
Purchaser, except that, where the Company is required to repurchase a Mortgage
Loan pursuant to Section 2.3, 3.3 or 6.2, the Company’s right to such
reimbursement shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to such sections and all other amounts required to
be
paid to the Purchaser with respect to such Mortgage Loan;
39
(3) to
reimburse itself for unreimbursed Servicing Advances, and for any unpaid
Servicing Fees, the Company’s right to reimburse itself pursuant to this
subclause (3) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other
amounts as may be collected by the Company from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of any
such
reimbursement, the Company’s right thereto shall be prior to the rights of
Purchaser, except that where the Company is required to repurchase a Mortgage
Loan pursuant to Section 2.3, 3.3 or 6.2, in which case the Company’s right to
such reimbursement shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to such sections and all other amounts required to
be
paid to the Purchaser with respect to such Mortgage Loan;
(4) to
pay
itself as servicing compensation any interest on funds deposited in the
Custodial Account;
(5) to
reimburse itself for expenses incurred to the extent reimbursable pursuant
to
Section 8.1;
(6) to
pay
any amount required to be paid pursuant to Section 4.16 related to any REO
Property, it being understood that, in the case of any such expenditure or
withdrawal related to a particular REO Property, the amount of such expenditure
or withdrawal from the Custodial Account shall be limited to amounts on deposit
in the Custodial Account with respect to the related REO Property;
(7) to
reimburse itself for any Servicing Advances or REO expenses after liquidation
of
the Mortgaged Property not otherwise reimbursed above;
(8) to
reimburse the trustee with respect to any Securitization Transaction for any
unreimbursed Monthly Advances or Servicing Advances made by the Trustee, as
applicable, the right to reimbursement pursuant to this subclause (8) with
respect to any Mortgage Loan being limited to related Liquidation Proceeds,
proceeds of REO Dispositions, Condemnation Proceeds, Insurance Proceeds and
such
other amounts as may be collected by the Company from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of such
reimbursement, such trustee’s right thereto shall be prior to the rights of the
Company to reimbursement under (2) and (3), and prior to the rights of the
Purchaser under (1);
40
(9) to
remove
funds inadvertently placed in the Custodial Account by the Company;
and
(10) to
clear
and terminate the Custodial Account upon the termination of this
Agreement.
In
the
event that the Custodial Account is interest bearing, on each Remittance Date,
the Company shall withdraw all interest earned on funds on deposit in the
Custodial Account. The Company may use such withdrawn funds only for the
purposes described in this Section 4.5.
Section
4.6. Establishment
of and Deposits to Escrow Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any of its
own funds and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled, “National City
Mortgage Co., in trust for the Purchaser under the Flow Seller’s Warranties and
Servicing Agreement dated as of May 1, 2003 and/or subsequent purchasers of
Mortgage Loans.” The Escrow Accounts shall be established with a Qualified
Depository, in a manner which shall provide maximum available insurance
thereunder. Upon request of the Purchaser and within ten
(10)
days
thereof, the Company shall provide the Purchaser with written confirmation
of
the existence of such Escrow Account. Funds deposited in the Escrow Account
may
be drawn on by the Company in accordance with Section 4.7.
The
Company shall deposit in the Escrow Account or Accounts within two (2) Business
Days of the Company’s receipt, and retain therein:
(1) all
Escrow Payments collected on account of the Mortgage Loans, for the purpose
of
effecting timely payment of any such items as required under the terms of this
Agreement;
(2) all
amounts representing Insurance Proceeds or Condemnation Proceeds which are
to be
applied to the restoration or repair of any Mortgaged Property; and
(3) all
amounts representing proceeds of any Primary Mortgage Insurance Policy.
The
Company shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 4.7.
The
Company shall be entitled to retain any interest paid on funds deposited in
the
Escrow Account by the depository institution, other than interest on escrowed
funds required by law to be paid to the Mortgagor. To the extent required by
law, the Company shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes. Notwithstanding the
forgoing, the Company shall be responsible to reimburse the Purchaser for any
losses incurred as a result of the investment of amounts on deposit in the
Escrow Account.
41
Section
4.7. Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Company
only:
(1) to
effect
timely payments of ground rents, taxes, assessments, water rates, mortgage
insurance premiums, condominium charges, fire and hazard insurance premiums
or
other items constituting Escrow Payments for the related Mortgage;
(2) to
reimburse the Company for any Servicing Advances made by the Company pursuant
to
Section 4.8 with respect to a related Mortgage Loan, but only from amounts
received on the related Mortgage Loan which represent late collections of Escrow
Payments thereunder;
(3) to
refund
to any Mortgagor any funds found to be in excess of the amounts required under
the terms of the related Mortgage Loan;
(4) for
transfer to the Custodial Account and application to reduce the principal
balance of the Mortgage Loan in accordance with the terms of the related
Mortgage and Mortgage Note;
(5) for
application to restoration or repair of the Mortgaged Property in accordance
with the procedures outlined in Section 4.14;
(6) to
pay to
the Company, or any Mortgagor to the extent required by law, any interest paid
on the funds deposited in the Escrow Account;
(7) to
remove
funds inadvertently placed in the Escrow Account by the Company;
(8) to
apply
the proceeds of Primary Mortgage Insurance as if such proceeds were payments
on,
or Liquidation Proceeds of, the related Mortgage Loan, as the case may be;
and
(9) to
clear
and terminate the Escrow Account on the termination of this
Agreement.
42
Section
4.8. Payment
of Taxes, Insurance and Other Charges.
With
respect to each Mortgage Loan, the Company shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and fire and hazard insurance coverage and shall obtain, from time
to
time, all bills for the payment of such charges (including renewal premiums)
and
shall effect payment thereof prior to the applicable penalty or termination
date, employing for such purpose deposits of the Mortgagor in the Escrow Account
which shall have been estimated and accumulated by the Company in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage. The
Company assumes full responsibility for the timely payment of all such bills
and
shall effect timely payment of all such charges irrespective of each Mortgagor’s
faithful performance in the payment of same of the making of the Escrow
Payments, and the Company shall make advances from its own funds to effect
such
payments.
Section
4.9. Protection
of Accounts.
The
Company may transfer the Custodial Account or the Escrow Account to a different
Qualified Depository from time to time, upon prior written notice to the
Purchaser.
Section
4.10. Maintenance
of Hazard Insurance.
The
Company shall cause to be maintained for each Mortgage Loan hazard insurance
such that all buildings upon the Mortgaged Property are insured by an insurer
acceptable to FNMA or FHLMC, against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located, in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements securing such Mortgage Loan and
(ii)
the greater of (a) the outstanding principal balance of the Mortgage Loan and
(b) an amount such that the proceeds thereof shall be sufficient to prevent
the
Mortgagor or the loss payee 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 FNMA or FHLMC, the Company shall notify
the Purchaser and the related Mortgagor, and shall use its best efforts, as
permitted by Applicable Law, to obtain from another Qualified Insurer a
replacement hazard insurance policy substantially and materially similar in
all
respects to the original policy. In no event, however, shall a Mortgage Loan
be
without a hazard insurance policy at any time, subject only to Section 4.11
hereof.
If
upon
origination of the Mortgage Loan, the related Mortgaged Property was located
in
an area identified by the Flood Emergency Management Agency as having special
flood hazards (and such flood insurance has been made available) a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier acceptable to FNMA or FHLMC, in an amount representing
coverage equal to the lesser of (i) the minimum amount required, under the
terms
of coverage, to compensate for any damage or loss on a replacement cost basis
(or the unpaid balance of the mortgage if replacement cost coverage is not
available for the type of building insured) and (ii) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973,
as
amended.
43
If
a
Mortgage is secured by a unit in a condominium project, the Company shall verify
that the coverage required of the owner’s association, including hazard, flood,
liability, and fidelity coverage, is being maintained in accordance with then
current FNMA or FHLMC requirements, secure from the owner’s association its
agreement to notify the Company promptly of any change in the insurance coverage
or of any condemnation or casualty loss that may have a material effect on
the
value of the Mortgaged Property as security.
In
the
event that any Purchaser or the Company shall determine that the Mortgaged
Property should be insured against loss or damage by hazards and risks not
covered by the insurance required to be maintained by the Mortgagor pursuant
to
the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor’s attention the desirability of protection of the Mortgaged
Property.
All
policies required hereunder shall name the Company as loss payee and shall
be
endorsed with standard or union mortgagee clauses, without contribution, which
shall provide for at least 30 days prior written notice of any cancellation,
reduction in amount or material change in coverage.
The
Company shall not interfere with the Mortgagor’s freedom of choice in selecting
either his insurance carrier or agent, provided,
however,
that
the Company shall not accept any such insurance policies from insurance
companies unless such companies are acceptable to FNMA and FHLMC and are
licensed to do business in the jurisdiction in which the Mortgaged Property
is
located. The Company shall determine that such policies provide sufficient
risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address.
Pursuant
to Section 4.4, any amounts collected by the Company under any such policies
(other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the related Mortgaged Property, or property acquired
in
liquidation of the Mortgage Loan, or to be released to the Mortgagor, in
accordance with the Company’s normal servicing procedures as specified in
Section 4.14) shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.5.
With
respect to each Mortgage Loan with a LTV in excess of 80%, the Company shall,
without any cost to the Purchaser, maintain or cause the Mortgagor to maintain
in full force and effect a Primary Mortgage Insurance Policy insuring that
portion of the Mortgage Loan in excess of a percentage in conformance with
FNMA
and FHLMC requirements. The Company shall pay or shall cause the Mortgagor
to
pay the premium thereon on a timely basis, at least until the LTV of such
Mortgage Loan is reduced to 80%, or such amount as required by Applicable Law,
or such other amount as FNMA and FHLMC permits for cancellation of mortgage
insurance. In the event that such Primary Mortgage Insurance Policy shall be
terminated, the Company shall obtain from another insurer a comparable
replacement policy, with a total coverage equal to the remaining coverage of
such terminated Primary Mortgage Insurance Policy. If the insurer shall cease
to
be a qualified insurer, the Company shall determine whether recoveries under
the
Primary Mortgage Insurance Policy are jeopardized for reasons related to the
financial condition of such insurer, it being understood that the Company shall
in no event have any responsibility or liability for any failure to recover
under the Primary Mortgage Insurance Policy for such reason. If the Company
determines that recoveries are so jeopardized, it shall notify the Purchaser
and
the Mortgagor, if required, and obtain from another qualified insurer a
replacement insurance policy. The Company shall not take any action which would
result in noncoverage under any applicable Primary Mortgage Insurance Policy
of
any loss which, but for the actions of the Company would have been covered
thereunder. In connection with any assumption or substitution agreement entered
into or to be entered into pursuant to Subsection 6.1, the Company shall
promptly notify the insurer under the related Primary Mortgage Insurance Policy,
if any, of such assumption or substitution of liability in accordance with
the
terms of such Primary Mortgage Insurance Policy and shall take all actions
which
may be required by such insurer as a condition to the continuation of coverage
under such Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance
Policy is terminated as a result of such assumption or substitution of
liability, the Company shall obtain a replacement Primary Mortgage Insurance
Policy as provided above.
44
In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
Primary Mortgage Insurance Policy in a timely fashion in accordance with the
terms of such Primary Mortgage Insurance Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to Section
4.6,
any amounts collected by the Company under any Primary Mortgage Insurance Policy
shall be deposited in the Escrow Account, subject to withdrawal pursuant to
Section 4.7.
Section
4.12. Maintenance
of Mortgage Impairment Insurance.
In
the
event that the Company shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage
on
all of the Mortgage Loans, then, to the extent such policy provides coverage
in
an amount equal to the amount required pursuant to Section 4.10 and otherwise
complies with all other requirements of Section 4.10, it shall conclusively
be
deemed to have satisfied its obligations as set forth in Section 4.10. The
Company shall prepare and make any claims on the blanket policy as deemed
necessary by the Company in accordance with Accepted Servicing Practices. Any
amounts collected by the Company under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section 4.5. Such policy may contain a deductible clause, in which case,
in
the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 4.10, and there shall have been a
loss
which would have been covered by such policy, the Company shall deposit in
the
Custodial Account at the time of such loss the amount not otherwise payable
under the blanket policy because of such deductible clause, such amount to
be
deposited from the Company’s funds, without reimbursement therefor. Upon request
of any Purchaser, the Company shall cause to be delivered to such Purchaser
a
certified true copy of such policy and a statement from the insurer thereunder
that such policy shall in no event be terminated or materially modified without
30 days’ prior written notice to such Purchaser.
45
Section
4.13. Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Company shall maintain with responsible companies, at its own expense, a blanket
Fidelity Bond and an Errors and Omissions Insurance Policy, with broad coverage
on all officers, employees or other persons acting in any capacity requiring
such persons to handle funds, money, documents or papers relating to the
Mortgage Loans (“Company
Employees”).
Any
such Fidelity Bond and Errors and Omissions Insurance Policy shall be in the
form of the Mortgage Banker’s Blanket Bond and shall protect and insure the
Company against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such Company Employees. Such Fidelity Bond
and Errors and Omissions Insurance Policy also shall protect and insure the
Company against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.13 requiring such Fidelity
Bond
and Errors and Omissions Insurance Policy shall diminish or relieve the Company
from its duties and obligations as set forth in this Agreement. The minimum
coverage under any such bond and insurance policy shall be at least equal to
the
amounts acceptable to FNMA or FHLMC. Upon the request of any Purchaser, the
Company shall cause to be delivered to such Purchaser a certified true copy
of
such fidelity bond and insurance policy and a statement from the surety and
the
insurer that such fidelity bond and insurance policy shall in no event be
terminated or materially modified without 30 days’ prior written notice to the
Purchaser.
Section
4.14. Inspections.
If
any
Mortgage Loan is more than 75 days delinquent, the Company or its agent
immediately shall inspect the Mortgaged Property and shall conduct subsequent
inspections in accordance with Accepted Servicing Practices or as may be
required by the primary mortgage guaranty insurer. The Company shall keep a
written report of each such inspection.
Section
4.15. Restoration
of Mortgaged Property.
The
Company need not obtain the approval of the Purchaser prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. For claims greater than $15,000,
at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
46
(i) The
Company shall receive satisfactory independent verification of completion of
repairs and issuance of any required approvals with respect
thereto;
(ii) the
Company shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens;
(iii) the
Company shall verify that the Mortgage Loan is not in default; and
(iv) pending
repairs or restoration, the Company shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
If
the
Purchaser is named as an additional loss payee, the Company is hereby empowered
to endorse any loss draft issued in respect of such a claim in the name of
the
Purchaser.
Section
4.16. Claims.
In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer in a
timely fashion and, in this regard, to take such action as shall be necessary
to
permit recovery respecting a defaulted Mortgage Loan. Pursuant to Section 4.4,
any amounts collected by the Company under any guaranty shall be deposited
in
the Custodial Account, subject to withdrawal pursuant to Section
4.5.
Section
4.17. Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the Company, or in the event the Company 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, or the perfection of the ownership or security
interest of the Purchaser in such REO Property would be adversely effected,
the
deed or certificate of sale shall be taken in the name of such Person or Persons
as shall be consistent with an Opinion of Counsel obtained by the Company from
any attorney duly licensed to practice law in the state where the REO Property
is located. The Person or Persons holding such title other than the Purchaser
shall acknowledge in writing that such title is being held as nominee for the
Purchaser.
The
Company shall manage, conserve, protect and operate each REO Property for the
Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for
its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same
(and
may temporarily rent the same for a period not greater than one year, except
as
otherwise provided below) on such terms and conditions as the Company deems
to
be in the best interest of the Purchaser.
47
The
Company shall use its best efforts to dispose of the REO Property as soon as
possible and shall sell such REO Property in any event within one year after
title has been taken to such REO Property, unless (i) a REMIC election has
not
been made with respect to the arrangement under which the Mortgage Loans and
the
REO Property are held, and (ii) the Company determines, and gives an appropriate
notice to the Purchaser to such effect, that a longer period is necessary for
the orderly liquidation of such REO Property; provided however,
that
the Company agrees not to sell or dispose of any such Mortgage Loan to a person
who acquires such Mortgage Loan using a purchase money mortgage. If a period
longer than one year is permitted under the foregoing sentence and is necessary
to sell any REO Property, the Company shall report monthly to the Purchaser
as
to the progress being made in selling such REO Property.
The
Company shall also maintain on each REO Property fire and hazard insurance
with
extended coverage in an amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability insurance
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required
above.
The
disposition of REO Property shall be carried out by the Company at such price,
and upon such terms and conditions, as the Company deems to be in the best
interests of the Purchaser. The proceeds of sale of the REO Property shall be
promptly deposited in the Custodial Account. As soon as practical thereafter
the
expenses of such sale shall be paid and the Company shall reimburse itself
for
any related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to Section 5.3. On the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Purchaser.
The
Company shall withdraw the Custodial Account funds necessary for the proper
operation management and maintenance of the REO Property, including the cost
of
maintaining any hazard insurance pursuant to Section 4.10 and the fees of any
managing agent of the Company, or the Company itself. The Company shall make
monthly distributions on each Remittance Date to the Purchaser of the net cash
flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in the Section 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section
4.18. Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 5.2, the Company shall furnish
to the Purchaser on or before the Remittance Date each month a statement with
respect to any REO Property covering the operation of such REO Property for
the
previous month and the Company’s efforts in connection with the sale of such REO
Property and any rental of such REO Property incidental to the sale thereof
for
the previous month. That statement shall be accompanied by such other
information as the Purchaser shall reasonably request.
48
Section
4.19. Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Purchaser pursuant to a deed in lieu of foreclosure, the Company shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged
Property.
Section
4.20. Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Company
shall
report such foreclosure or abandonment as required pursuant to Section 6050J
of
the Code. The Company shall file information reports with respect to the receipt
of mortgage interest received in a trade or business and information returns
relating to cancellation of indebtedness income with respect to any Mortgaged
Property as required by the Code. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by the Code.
Section
4.21. Fair
Credit Reporting Act.
For
each
Mortgage Loan, the Servicer shall furnish, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files,
to
Equifax, Experian, and Trans Union Credit Information Company, or their
successors, on a monthly basis. The Servicer shall provide evidence of such
monthly reporting to the Purchaser upon request.
ARTICLE
V
PAYMENTS
TO PURCHASER
Section
5.1. Remittances.
On
each
Remittance Date the Company shall remit by wire transfer of immediately
available funds to the Purchaser (a) all amounts deposited in the Custodial
Account as of the close of business on the Determination Date (net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.5),
plus
(b) all
amounts, if any, which the Company is obligated to distribute pursuant to
Section 5.3, minus
(c) any
amounts attributable to Principal Prepayments received after the applicable
Principal Prepayment Period which amounts shall be remitted on the following
Remittance Date, together with any additional interest required to be deposited
in the Custodial Account in connection with such Principal Prepayment in
accordance with Section 4.4(viii); and minus
(d) any
amounts attributable to Monthly Payments collected but due on a Due Date or
Dates subsequent to the first day of the month of the Remittance
Date.
With
respect to any remittance received by the Purchaser after the date on which
such
payment was due, the Company shall pay to the Purchaser interest on any such
late payment at an annual rate equal to the Prime Rate, adjusted as of the
date
of each charge, plus
two
percentage points, but in no event greater than the maximum amount permitted
by
Applicable Law. Such interest shall be deposited in the Custodial Account by
the
Company on the date such late payment is made and shall cover the period
commencing with the day following such second Business Day and ending with
the
Business Day on which such payment is made, both inclusive. Such interest shall
be remitted along with the distribution payable on the next succeeding
Remittance Date. The payment by the Company of any such interest shall not
be
deemed an extension of time for payment or a waiver of any Event of Default
by
the Company.
49
Section
5.2. Statements
to Purchaser.
Not
later
than the Remittance Advice Date, the Company shall furnish to the Purchaser
a
Monthly Remittance Advice, including the information set forth in Exhibit E
attached hereto, with a trial balance report attached thereto, as to the period
ending on the last day of the preceding month, in a form to be agreed upon
by
the Purchaser and the Company.
Section
5.3. Monthly
Advances by Company.
On
the
Business Day immediately preceding each Remittance Date, the Company shall
deposit in the Custodial Account from its own funds or from amounts held for
future distribution an amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close
of
business on the Determination Date immediately preceding such Remittance Date
or
which were deferred pursuant to Section 4.1. Any amounts held for future
distribution and so used shall be replaced by the Company by deposit in the
Custodial Account on or before any future Remittance Date if funds in the
Custodial Account on such Remittance Date shall be less than payments to the
Purchaser required to be made on such Remittance Date. The Company shall have
the right to deduct delinquent payments from amounts held for future
distribution as long as the Company, its parent, or their respective successors
hereunder has a long-term credit rating of at least “A” by Fitch, Inc. (doing
business as Fitch Ratings), “A” by Standard & Poor’s Ratings Group, a
division of The XxXxxx-Xxxx Companies, Inc., and “A2” by Xxxxx’x Investors
Service, Inc. If the long-term credit rating of the Company, its parent, or
their respective successors hereunder are at any time below the ratings set
forth in the directly preceding sentence, the Company shall no longer be
permitted to make any advances from amounts held for future distribution, and
instead shall be required to make all advances from its own funds. The Company’s
obligation to make such Monthly Advances as to any Mortgage Loan will continue
through the last Monthly Payment due prior to the payment in full of the
Mortgage Loan, or through the earlier of: (i) the last Remittance Date prior
to
the Remittance Date for the distribution of all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the Mortgage Loan and (ii) the Remittance Date prior to the
date
the Mortgage Loan is converted to REO Property, provided, however,
that if
requested by a Rating Agency in connection with a Securitization Transaction,
the Company shall be obligated to make such advances through the Remittance
Date
prior to the date on which cash is received in connection with the liquidation
of REO Property; provided,
however,
that
such obligation shall cease if the Company determines, in its sole reasonable
opinion, that advances with respect to such Mortgage Loan are non-recoverable
by
the Company from Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds, or otherwise with respect to a particular Mortgage Loan. In the event
that the Company determines that any such advances are non-recoverable, the
Company shall provide the Purchaser with a certificate signed by two officers
of
the Company evidencing such determination.
50
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.1. Transfers
of Mortgaged Property.
The
Company shall use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note and to deny assumption by the person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Company shall, to the extent
it
has knowledge of such conveyance, exercise its rights to accelerate the maturity
of such Mortgage Loan under the “due-on-sale” clause applicable thereto,
provided, however, that the Company shall not exercise such rights if prohibited
by law from doing so.
If
the
Company reasonably believes it is unable under Applicable Law to enforce such
“due-on-sale” clause, the Company shall enter into (i) an assumption and
modification agreement with the person to whom such property has been conveyed,
pursuant to which such person becomes liable under the Mortgage Note and the
original Mortgagor remains liable thereon or (ii) in the event the Company
is
unable under Applicable Law to require that the original Mortgagor remain liable
under the Mortgage Note and the Company has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is
released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage
Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser’s consent.
To
the
extent that any Mortgage Loan is assumable, the Company shall inquire diligently
into the credit worthiness of the proposed transferee, and shall use the
underwriting criteria for approving the credit of the proposed transferee which
are used with respect to underwriting mortgage loans of the same type as the
Mortgage Loans. If the credit of the proposed transferee does not meet such
underwriting criteria, the Company diligently shall, to the extent permitted
by
the Mortgage or the Mortgage Note and by Applicable Law, accelerate the maturity
of the Mortgage Loan.
51
Section
6.2. Satisfaction
of Mortgages and Release of Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, the Company shall notify the Purchaser
in
the Monthly Remittance Advice as provided in Section 5.2, and may request the
release of any Mortgage Loan Documents.
If
the
Company satisfies or releases a Mortgage without first having obtained payment
in full of the indebtedness secured by the Mortgage or should the Company
otherwise prejudice any rights the Purchaser may have under the mortgage
instruments, upon written demand of the Purchaser, the Company shall repurchase
the related Mortgage Loan at the Repurchase Price by deposit thereof in the
Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Company shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 4.12 insuring the Company against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section
6.3. Servicing
Compensation.
As
compensation for its services hereunder, the Company shall be entitled to
withdraw from the Custodial Account or to retain from interest payments on
the
Mortgage Loans the amount of its Servicing Fee. The Servicing Fee shall be
payable monthly and shall be computed on the basis of the same unpaid scheduled
principal balance and for the period respecting which any related interest
payment on a Mortgage Loan is computed. The obligation of the Purchaser to
pay
the Servicing Fee is limited to, and payable solely from, the interest portion
of such Monthly Payments.
Additional
servicing compensation in the form of assumption fees, to the extent provided
in
Section 6.1, and late payment charges shall be retained by the Company to the
extent not required to be deposited in the Custodial Account. The Company shall
be required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement thereof except
as specifically provided for herein.
Section
6.4. Annual
Statement as to Compliance.
The
Company shall deliver to the Purchaser on or before March 15 each year,
beginning March 15, 2006, an Officer’s Certificate, stating that (i) a review of
the activities of the Company during the preceding calendar year and of
performance under this Agreement has been made under such officer’s supervision,
and (ii) the Company has complied with the provisions of this Agreement or
similar agreements, and (iii) to the best of such officer’s knowledge, based on
such review, the Company has fulfilled all its obligations under this Agreement
or similar agreements throughout such year, or, if there has been a default
in
the fulfillment of any such obligation, specifying each such default known
to
such officer and the nature and status thereof and the action being taken by
the
Company to cure such default.
52
Section
6.5. Annual
Independent Public Accountants’ Servicing Report.
On
or
before March 15 of each year beginning March 15, 2006, the Company, 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 each Purchaser to the effect that such firm has examined certain documents
and records relating to the servicing of the mortgage loans similar in nature
and that such firm is of the opinion that the provisions of this or similar
agreements have been complied with, and that, on the basis of such examination
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance therewith,
except for (i) such exceptions as such firm shall believe to be immaterial,
and
(ii) such other exceptions as shall be set forth in such statement. By providing
Purchaser a copy of a Uniform Single Attestation Program Report from their
independent public accountant’s on an annual basis, the Company shall be
considered to have fulfilled its obligations under this Section
6.5.
Section
6.6. Right
to Examine Company Records.
The
Purchaser, or its designee, shall have the right to examine and audit any and
all of the books, records, or other information of the Company, whether held
by
the Company or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times
as
may be reasonable under applicable circumstances, upon reasonable advance
notice. The Purchaser shall pay its own travel expenses associated with such
examination.
Section
6.7. Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Company 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 Section 860G(a)(2) of the Code
and the tax on “contributions” to a REMIC set forth in Section 860(D) of the
Code) unless the Company 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
VII
COMPANY
TO COOPERATE
Section
7.1. Provision
of Information.
During
the term of this Agreement, the Company shall furnish to the Purchaser such
periodic, special, or other reports or information, and copies or originals
of
any documents contained in the Servicing File for each Mortgage Loan provided
for herein. All other special reports or information not provided for herein
as
shall be necessary, reasonable, or appropriate with respect to the Purchaser
or
any regulatory agency will be provided at the Purchaser’s expense. All such
reports, documents or information shall be provided by and in accordance with
all reasonable instructions and directions which the Purchaser may
give.
53
The
Company shall execute and deliver all such instruments and take all such action
as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this
Agreement.
Section
7.2. Financial
Statements; Servicing Facility.
In
connection with marketing the Mortgage Loans, the Purchaser may make available
to a prospective Purchaser a Consolidated Statement of Operations of the Company
for the most recently completed two fiscal years for which such a statement
is
available, as well as a Consolidated Statement of Condition at the end of the
last two fiscal years covered by such Consolidated Statement of Operations.
The
Company also shall make available any comparable interim statements to the
extent any such statements have been prepared by or on behalf of the Company
(and are available upon request to members or stockholders of the Company or
to
the public at large).
The
Company also shall make available to the Purchaser or prospective Purchaser,
within a reasonable period after request, a knowledgeable financial or
accounting officer for the purpose of answering questions respecting recent
developments affecting the Company or the financial statements of the Company,
and to permit any prospective Purchaser to inspect the Company’s servicing
facilities for the purpose of satisfying such prospective Purchaser that the
Company has the ability to service the Mortgage Loans as provided in this
Agreement.
ARTICLE
VIII
THE
COMPANY
Section
8.1. Indemnification;
Third Party Claims.
The
Company shall indemnify the Purchaser 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 the Purchaser may sustain in any way related to the failure of the Company
to perform its duties and service the Mortgage Loans in strict compliance with
the terms of this Agreement. The Company immediately shall notify the Purchaser
if a claim is made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the Purchaser) the
defense of any such claim and pay all expenses in connection therewith,
including counsel 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 Company shall follow any written instructions received from the
Purchaser in connection with such claim. The Purchaser promptly shall reimburse
the Company for all costs, fees or expenses advanced by it pursuant to this
paragraph except when the claim in any way results from, relates to or arises
out of any liability, obligation, act or omission of the Company, including
without limitation, the Company’s indemnification obligation under Section 3.3
and this Section 8.1, any repurchase obligation of the Company hereunder
including Sections 2.3, 3.3 and 6.2, or the failure of the Company to service
and administer the Mortgage Loans and otherwise perform its obligations
hereunder in strict compliance with the terms of this Agreement.
54
Section
8.2. Merger
or Consolidation of the Company.
The
Company shall keep in full effect its existence, rights and franchises as a
corporation, and shall obtain and preserve its qualification to do business
as a
foreign corporation in each jurisdiction in which such qualification is or
shall
be necessary to protect the validity and enforceability of this Agreement or
any
of the Mortgage Loans and to perform its duties under this
Agreement.
Any
person into which the Company may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company,
shall
be the successor of the Company hereunder, without the execution or filing
of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided,
however,
that
the successor or surviving Person shall be an institution which is a
FNMA/FHLMC-approved company in good standing. Furthermore, in the event the
Company transfers or otherwise disposes of all or substantially all of its
assets to an affiliate of the Company, such affiliate shall satisfy the
condition above, and shall also be fully liable to the Purchaser for all of
the
Company’s obligations and liabilities hereunder.
Section
8.3. Limitation
on Liability of Company and Others.
Neither
the Company nor any of the directors, officers, employees or agents of the
Company shall be under any liability to the Purchaser for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided,
however,
that
this provision shall not protect the Company or any such person against any
breach of warranties or representations made herein, or failure to perform
its
obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement. The Company and any director, officer, employee or agent of the
Company may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Company 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 expense or liability, provided,
however,
that
the Company may, with the consent of the Purchaser, undertake any such action
which it may deem necessary or desirable in respect to this Agreement and the
rights and duties of the parties hereto. In such event, the Company shall be
entitled to reimbursement from the Purchaser of the reasonable legal expenses
and costs of such action.
55
Section
8.4. Limitation
on Resignation and Assignment by Company.
The
Purchaser has entered into this Agreement with the Company and subsequent
Purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Company, and the representations as to the adequacy of its
servicing facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore,
the
Company shall neither assign this Agreement or the servicing hereunder, nor
delegate its rights or duties hereunder or any portion hereof, nor sell or
otherwise dispose of all of its property or assets without the prior written
consent of the Purchaser, which consent shall not be unreasonably
withheld.
The
Company shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
Applicable Law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced
by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company’s responsibilities and obligations hereunder in the manner provided in
Section 12.1.
Without
in any way limiting the generality of this Section 8.4, in the event that the
Company either shall assign this Agreement or the servicing responsibilities
hereunder or delegate its duties hereunder or any portion thereof; or sell
or
otherwise dispose of all or substantially all of its property or assets without
the prior written consent of the Purchaser, then the Purchaser shall have the
right to terminate this Agreement upon notice given as set forth in Section
10.1, without any payment of any penalty or damages and without any liability
whatsoever to the Company or any third party.
ARTICLE
IX
SECURITIZATION
TRANSACTION
Section
9.1. Removal
of Mortgage Loans from Inclusion Under this Agreement Upon a Securitization
Transaction.
The
Purchaser and the Company agree that with respect to some or all of the Mortgage
Loans, the Purchaser, at its sole option, shall effect up to four Whole Loan
Transfers or Securitization Transactions per pool of Mortgage Loans, each such
pool of Mortgage Loans to include ten (10) or more Mortgage Loans unless
otherwise agreed to by the Purchaser and the Company, retaining the Company
as
the Servicer thereof or subservicer if a master servicer is employed, or as
applicable the “seller/servicer”. From and after the Reconstitution Date, the
Mortgage Loans transferred shall remain covered by this Agreement, insofar
as
the Company shall continue to service such Mortgage Loans on behalf of the
Purchaser in accordance with the terms and provisions of this
Agreement.
56
The
Company shall cooperate with the Purchaser in connection with each Whole Loan
Transfer or Securitization Transaction in accordance with this Section 9.1.
In
connection therewith the Company shall:
(a) make
all
representations and warranties with respect to the Mortgage Loans as of the
related Closing Date and with respect to the Company itself as of the closing
date of each Whole Loan Transfer or Securitization Transaction;
(b) negotiate
in good faith and execute any seller/servicer agreements required by the shelf
registrant to effectuate the foregoing provided
such
agreements create no greater obligation or cost on the part of the Company
than
otherwise set forth in this Agreement;
(c) cooperate
with the Purchaser, the depositor and the trustee to satisfy, in connection
with
any Securitization Transaction, the applicable trust’s reporting obligations
under the Exchange Act and Applicable Law;
(d) represent
to the Purchaser, the depositor, the trustee, and the initial purchaser of
the
securities issued in connection with any Securitization Transaction that: (1)
that the Company has serviced the Mortgage Loans in accordance with the terms
of
this Agreement, and has otherwise complied with all covenants and obligations
hereunder, and (2) that the Company has taken no action that would, nor omitted
to take any required action the omission of which would, have the effect of
impairing the mortgage insurance or guarantee on the Mortgage Loans. The Company
also agrees to represent as to the accuracy of any information provided to
the
Purchaser by the Company for inclusion in any prospectus supplement, offering
memorandum or term sheet prepared in connection with any Securitization
Transactions;
(e) deliver
an opinion of counsel (which can be an opinion of in-house counsel to the
Company) reasonably acceptable to the Purchaser; provided
that any
out-of-pocket, third party expenses incurred by the Company in connection with
the foregoing shall be paid by the Purchaser;
(f) provide
as applicable:
(i) any
and
all information and appropriate verification of information which may be
reasonably available to the Company, whether through letters of its auditors
and
counsel or otherwise, as the Purchaser shall request;
(ii) (x)
the
Company Certification executed by a senior officer of the Company responsible
for the servicing of the Mortgage Loans; and (y) such additional statements,
certificates or other similar documents of the Company or reports from the
Company’s accountants in connection with a Securitization Transaction and in
substance as required by Applicable Law; and
57
(iii) such
additional representations, warranties, covenants, opinions of counsel, letters
from auditors, financial description of the Company as servicer for inclusion
in
any offering memorandum to be distributed to potential investors in connection
with a Securitization Transaction with respect to the Mortgage Loans, and
certificates of public officials or officers of the Company as are reasonably
believed necessary by the trustee, any Rating Agency, the Purchaser, as the
case
may be, in connection with such Whole Loan Transfers or Securitization
Transactions. The Purchaser shall pay all third party costs associated with
the
preparation of such information. The Company shall execute any seller/servicer
agreements required within a reasonable period of time after receipt of such
seller/servicer agreements which time shall be sufficient for the Company and
Company’s counsel to review such seller/servicer agreements. Under this
Agreement, the Company shall retain a servicing fee at a rate per annum equal
to
no less than 0.25% per Mortgage Loan; and
(g) indemnify
the Purchaser for any material misstatements contained in the information
provided pursuant to (d) or (f) above.
In
the
event the Purchaser has elected to have the Company hold record title to the
Mortgages, prior to the Reconstitution Date and after the related Closing Date
the Company shall prepare an Assignment in blank or, at the option of the
Purchaser, to the trustee from the Company (to the extent such Assignment has
not been prepared on or before such Closing Date) acceptable to the trustee
for
each Mortgage Loan that is part of the Whole Loan Transfers or Securitization
Transactions. The Purchaser shall pay all preparation and recording costs
associated therewith. The Company shall execute each Assignment, track such
Assignments to ensure they have been recorded and deliver them as required
by
the trustee upon the Company’s receipt thereof. Additionally, the Company shall
prepare and execute, at the direction of the Purchaser, any note endorsements
in
connection with any and all seller/servicer agreements.
ARTICLE
X
DEFAULT
Section
10.1. Events
of Default.
Each
of
the following shall constitute an Event of Default on the part of the
Company:
(i) any
failure by the Company to remit to the Purchaser any payment required to be
made
under the terms of this Agreement which continues unremedied for a period of
three Business Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company by
the
Purchaser; or
58
(ii) failure
by the Company duly to observe or perform in any material respect any other
of
the covenants or agreements on the part of the Company set forth in this
Agreement which continues unremedied for a period of 30 days after the date
on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Company by the Purchaser or by the Custodian;
or
(iii) failure
by the Company to maintain its license to do business in any jurisdiction where
the Mortgaged Property is located if such license is required; or
(iv) 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,
readjustment of debt, including bankruptcy, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Company and such degree or order shall
have
remained in force undischarged or unstayed for a period of 30
days;
or
(v) the
Company shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Company or of or
relating to all or substantially all of its property; or
(vi) the
Company 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,
bankruptcy or reorganization statute, make an assignment for the benefit of
its
creditors, voluntarily suspend payment of its obligations or cease its normal
business operations for three
Business Days; or
(vii) the
Company ceases to meet the qualifications of a FNMA/FHLMC servicer; or
(viii) the
Company attempts to assign its right to servicing compensation hereunder or
to
assign this Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof in violation of Section 8.4; or
(ix) the
taking of any action by the Company, any Company Employee, any Affiliate or
any
director or employee thereof that constitutes fraud or criminal activity in
the
performance of its obligations under this Agreement or the indictment of any
of
the foregoing Persons for criminal activity related to the mortgage origination
or servicing activities of the Company, in each case, where such indictment
materially and adversely affects the ability of the Company to perform its
obligations under this Agreement (subject to the condition that such indictment
is not dismissed within 90
days).
59
In
each
and every such case, so long as an Event of Default shall not have been
remedied, in addition to whatever rights the Purchaser may have at law or equity
to damages, including injunctive relief and specific performance, the Purchaser,
by notice in writing to the Company, may terminate with cause all the rights
and
obligations of the Company under this Agreement and in and to the Mortgage
Loans
and the proceeds thereof.
Upon
receipt by the Company of such written notice, all authority and power of the
Company under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 12.1. Upon written request from any Purchaser, the Company shall
prepare, execute and deliver to the successor entity designated by the Purchaser
any and all documents and other instruments, place in such successor’s
possession all Mortgage Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company’s sole
expense. The Company shall cooperate with the Purchaser and such successor
in
effecting the termination of the Company’s responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
Section
10.2. Waiver
of Defaults.
By
a
written notice, the Purchaser may waive any default by the Company in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE
XI
TERMINATION
Section
11.1. Termination.
This
Agreement shall terminate upon any of: (i) the later of the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder, (ii) mutual consent of
the
Company and the Purchaser in writing or (iii) termination pursuant to Section
10.1, 11.2 or 11.3.
60
Section
11.2. Termination
Without Cause.
The
Purchaser may terminate, at its sole option, any rights the Company may have
hereunder, without cause, as provided in this Section 11.2. Any such notice
of
termination shall be in writing and delivered to the Company and any Rating
Agency at least 30 days prior to the date of such termination by registered
mail
as provided in Section 12.5.
The
Company shall be entitled to receive, as such liquidated damages, upon its
termination as servicer hereunder without cause pursuant to this Section 11.2
an
amount equal to 1.5% of the aggregate outstanding principal amount of the
Mortgage Loans as of the termination date paid by the Purchaser to the Company
with respect to all of the Mortgage Loans.
Section
11.3. Termination
With Cause.
Notwithstanding
any other provision hereof to the contrary, the Purchaser, at its option, may
terminate this Agreement, and any rights the Company may have hereunder, with
cause upon ten (10) Business Days’ prior written notice. For all purposes of
determining “cause” with respect to termination of this Agreement or the rights
of the Company hereunder, such term shall mean, without limitation, termination
upon the occurrence of any Event of Default hereunder which is not cured within
any applicable cure period. In the event of a termination of the Company for
cause under this Section 11.3, no liquidated damages shall be payable to the
Company pursuant to Section 11.2.
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.1. Successor
to Company.
Prior
to
termination of the Company’s responsibilities and duties under this Agreement
pursuant to Sections 8.4, 10.1 or 11.1, the Purchaser shall, (i) succeed to
and
assume all of the Company’s responsibilities, rights, duties and obligations
under this Agreement, or (ii) appoint a successor having the characteristics
set
forth in Section 8.2 and which shall succeed to all rights and assume all of
the
responsibilities, duties and liabilities of the Company under this Agreement
prior to the termination of Company’s responsibilities, duties and liabilities
under this Agreement. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor
out
of payments on Mortgage Loans as it and such successor shall agree. In the
event
that the Company’s duties, responsibilities and liabilities under this Agreement
should be terminated pursuant to the aforementioned sections, the Company shall
discharge such duties and responsibilities during the period from the date
it
acquires knowledge of such termination until the effective date thereof with
the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation
or
removal of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.1
and
shall in no event relieve the Company of the representations and warranties
made
pursuant to Sections 3.1 and 3.2 and the remedies available to the Purchaser
under Sections 2.3, 3.3 and 6.2, it being understood and agreed that the
provisions of such Sections 2.3, 3.1, 3.2, 3.3 and 6.1 shall be applicable
to
the Company notwithstanding any such sale, assignment, resignation or
termination of the Company, or the termination of this Agreement.
61
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Company and to the Purchaser an instrument accepting such appointment,
wherein the successor shall make the representations and warranties set forth
in
Section 3.1, except for the portion of subsection (h) relating to sale of the
mortgage loans and all of subsections (j) and (l) thereof, whereupon such
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Company, with like effect
as if originally named as a party to this Agreement. Any termination or
resignation of the Company or termination of this Agreement pursuant to Section
8.4, 10.1, 11.1, 11.2 or 11.3 shall not affect any claims that any Purchaser
may
have against the Company arising out of the Company’s actions or failure to act
prior to any such termination or resignation.
The
Company shall deliver promptly to the successor servicer the funds in the
Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Company shall account
for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in
the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Company.
Upon
a
successor’s acceptance of appointment as such, the Company shall notify by mail
the Purchaser of such appointment in accordance with the procedures set forth
in
Section 12.5.
Section
12.2. Amendment.
This
Agreement may be amended from time to time by written agreement signed by the
Company and the Purchaser.
Section
12.3. Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of New
York and the obligations, rights and remedies of the parties hereunder shall
be
determined in accordance with such laws.
Each
of
the Company and the Purchaser hereby knowingly, voluntarily and intentionally
waives any and all rights it may have to a trial by jury in respect or any
litigation based on, or arising out of, under, or in connection with, this
Agreement, or any other documents and instruments executed in connection
herewith, or any course of conduct, course of dealing, statements (whether
oral
or written), or actions of the Company or the Purchaser. This provision is
a
material inducement for the Purchaser to enter into this Agreement.
62
Section
12.4. Duration
of Agreement.
This
Agreement shall continue in existence and effect until terminated as herein
provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section
12.5. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
(i) if
to the
Company:
National
City Mortgage Co.
0000
Xxxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
Attn:
Xxxx Case
Telephone:
(000) 000-0000
Telecopy:
(000) 000-0000
or
such
other address as may hereafter be furnished to the Purchaser in writing by
the
Company;
(ii) if
to
Purchaser:
Xxxxxxx
Sachs Mortgage Company
000
Xxxxxx Xxxxxx Xxxxx
Xxxxx
000
Xxxxx
Xx.
Xxxxxxxxxx, XX 00000
Attention:
Xxxxxx Xxxxx
Tel:
(000) 000-0000
Fax:
(000) 000-0000
With
a
copy to:
Xxxxxxx
Sachs Mortgage Company
00
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxxxx
Tel:
(000) 000-0000
Fax:
(000) 000-0000
63
or
such
other address as may hereafter be furnished to the Company in writing by the
Purchaser.
Section
12.6. Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
Section
12.7. Relationship
of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or joint
venture between the parties hereto and the services of the Company shall be
rendered as an independent contractor and not as agent for the
Purchaser.
Section
12.8. Execution;
Successors and Assigns.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Section 8.4, this Agreement shall inure
to
the benefit of and be binding upon, and shall be enforceable by, the Company
and
the Purchaser and their respective successors and assigns, including without
limitation, any trustee appointed by the Purchaser with respect to any Whole
Loan Transfer or Securitization Transaction.
Section
12.9. Recordation
of Assignments of Mortgage.
To
the
extent permitted by Applicable Law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, which recordation shall have been effected
at the Company’s expense in the event recordation is either necessary under
Applicable Law or requested by the Purchaser at its sole option.
Section
12.10. Assignment
by Purchaser.
The
Purchaser shall have the right, without the consent of the Company but subject
to the limit set forth in Section 2.2 hereof, to assign, in whole or in part,
its interest under this Agreement with respect to some or all of the Mortgage
Loans, and designate any person to exercise any rights of the Purchaser
hereunder, by executing an Assignment and Assumption Agreement substantially
in
the form of Exhibit F hereto and the assignee or designee shall accede to the
rights and obligations hereunder of the Purchaser with respect to such Mortgage
Loans. All references to the Purchaser in this Agreement shall be deemed to
include its assignee or designee.
64
Section
12.11. Solicitation
of Mortgagor.
The
Purchaser, its affiliates, successors or assigns shall not, without the prior
written consent of the Company, take any action to solicit or make direct
contact with the Mortgagor under any Mortgage Loan except to the extent required
by the Company’s breach of this Agreement or as required under Applicable Law or
regulatory authority. Notwithstanding any provision of this Agreement to the
contrary, in the event the Purchaser, its affiliates, successors or assigns
fails to obtain such written consent, the Company shall be entitled, in its
sole
discretion, to terminate its obligations and duties under this Agreement. Upon
termination without cause of the servicing rights and obligations under this
Agreement and the transfer of such rights and obligations to the Purchaser
or
Purchaser’s designee, the Company shall be entitled to receive damages as
provided in Section 11.2.
The
Company agrees that, after the Closing Date, it will not take any action to
solicit the refinancing of any Mortgage Loan. It is understood and agreed that
promotions undertaken by the Company or any affiliate of the Company which
are
directed to the general public at large, including, without limitation, mass
mailings based upon commercially acquired mailing lists, newspaper, radio,
television advertisements or from servicing the refinancing needs of a Mortgagor
who, without solicitation, contacts Company in connection with the refinance
of
such Mortgage or Mortgage Loan, shall not constitute solicitation under this
Section. Notwithstanding anything to the contrary, this Section shall not
prohibit the Company from soliciting any Mortgagor to provide other services
including but not limited to credit cards, insurance investments and banking
related services.
ARTICLE
XIII
COMPLIANCE
WITH REGULATION AB
Section
13.1. Intent
of the Parties; Reasonableness.
The
Purchaser and the Company acknowledge and agree that the purpose of Article
XIII
of this Agreement is to facilitate compliance by the Purchaser and any Depositor
with the provisions of Regulation AB and related rules and regulations of the
Commission. Although Regulation AB is applicable by its terms only to offerings
of asset-backed securities that are registered under the Securities Act, the
Company acknowledges that investors in privately offered securities may require
that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings
to
the extent that such comparable disclosure becomes industry standard in similar
transactions.
Neither
the Purchaser nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the provisions of Securities
Act, the Exchange Act and the rules and regulations of the Commission thereunder
(or the provision in a private offering of disclosure comparable to that
required under the Securities Act) that are applicable to any Securitization
Transaction. The Company acknowledges that interpretations of the requirements
of Regulation AB may change over time, whether due to interpretive guidance
provided by the Commission or its staff, consensus among participants in the
asset-backed securities markets, advice of counsel, or otherwise, and agrees
to
cooperate in good faith with the Purchaser or any Depositor, upon a request
made
in good faith, regarding the Company’s delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection
with any Securitization Transaction, the Company shall cooperate as set forth
herein with the Purchaser to deliver to the Purchaser (including any of its
assignees or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or
such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Company, any Subservicer, any Third-Party Originator
and the Mortgage Loans, or the servicing of the Mortgage Loans, reasonably
believed by the Purchaser or any Depositor to be necessary in order to effect
such compliance.
65
The
Purchaser (including any of its assignees or designees) shall cooperate with
the
Company by providing timely notice of requests for information under these
provisions and by reasonably limiting such requests to information required,
in
the Purchaser’s reasonable good faith judgment, to comply with Regulation
AB.
Section
13.2. Additional
Representations and Warranties of the Company.
(a) The
Company shall be deemed to represent to the Purchaser and to any Depositor,
as
of the date on which information is first provided to the Purchaser or any
Depositor under Section 13.03 that, except as disclosed in writing to the
Purchaser or such Depositor prior to such date and unless otherwise disclosed
in
such information provided under Section 13.03: (i) the Company is not aware
and
has not received notice that any default, early amortization or other
performance triggering event has occurred as to any other securitization due
to
any act or failure to act of the Company; (ii) the Company has not been
terminated as servicer in a residential mortgage loan securitization, either
due
to a servicing default or to application of a servicing performance test or
trigger; (iii) no material noncompliance with the applicable servicing criteria
with respect to other securitizations of residential mortgage loans involving
the Company as servicer has been disclosed or reported by the Company; (iv)
no
material changes to the Company’s policies or procedures with respect to the
servicing function it will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the scheduled
closing date of the related Securitization Transaction; (v) there are no aspects
of the Company’s financial condition that could have a material adverse effect
on the performance by the Company of its servicing obligations under this
Agreement or any Reconstitution Agreement; (vi) there are no material legal
or
governmental proceedings pending (or known to be contemplated by government
authorities) against the Company, any Subservicer or any Third-Party Originator;
and (vii) there are no affiliations, relationships or transactions relating
to
the Company, any Subservicer or any Third-Party Originator with respect to
any
Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
66
(b) If
so
requested by the Purchaser or any Depositor on any date following the date
on
which information is first provided to the Purchaser or any Depositor under
Section 13.03, the Company shall, as soon as practicable (and in no event more
than 10 Business Days) following such request, confirm in writing the accuracy
of the representations and warranties set forth in paragraph (a) of this Section
or, if any such representation and warranty is not accurate as of the date
of
such request, provide reasonably adequate disclosure of the pertinent facts,
in
writing, to the requesting party.
Section
13.3. Information
to Be Provided by the Company.
In
connection with any Securitization Transaction the Company shall (i) as promptly
as practicable (and in no event more than 10 Business Days) following request
by
the Purchaser or any Depositor, provide to the Purchaser and such Depositor
(or,
as applicable, cause each Third-Party Originator and each Subservicer to
provide), in writing, or in a mutually agreed upon electronic format, and in
form and substance reasonably satisfactory to the Purchaser and such Depositor,
the information and materials specified in paragraphs (a), (b), (c) and (f)
of
this Section, and (ii) as promptly as practicable following notice to or
discovery by the Company, provide to the Purchaser and any Depositor (in
writing, or in a mutually agreed upon electronic format, and in form and
substance reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (d) of this Section.
(a) If
so
requested by the Purchaser or any Depositor, the Company shall provide (or
cause
each Third-Party Originator or Subservicer, as applicable, to provide) such
information, as mutually agreed upon by the Purchaser or any Depositor and
the
Company (or such Third-Party Originator or Subservicer, as applicable) such
information regarding (i) the Company, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
or
(ii) each Third-Party Originator, and (iii) as applicable, each Subservicer,
as
is requested for the purpose of compliance with Items 1103(a)(1), 1105, 1110,
1117 and 1119 of Regulation AB. Such information shall include, at a
minimum:
A. the
originator’s form of organization;
B. a
description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage loans, which description
shall include a discussion of the originator’s experience in originating
mortgage loans of a similar type as the Mortgage Loans; information regarding
the size and composition of the originator’s origination portfolio; and
information that may be material, in the reasonable good faith judgment of
the
Purchaser or any Depositor, to an analysis of the performance of the Mortgage
Loans, including the originators’ credit-granting or underwriting criteria for
mortgage loans of similar type(s) as the Mortgage Loans and such other
information as the Purchaser or any Depositor may reasonably request for the
purpose of compliance with Item 1110(b)(2) of Regulation AB;
67
C. a
description of any material legal or governmental proceedings pending (or known
to be contemplated by governmental authorities) against the Company, each
Third-Party Originator and each Subservicer; and
D. as
promptly as practicable following notice to the Company (and in no event more
than 10 Business Days), a description of any affiliation or relationship between
the Company, each Third-Party Originator, each Subservicer and any of the
following parties to a Securitization Transaction, as such parties are
identified and noticed to the Company by the Purchaser or any Depositor in
writing in advance of such Securitization Transaction:
(1) the
sponsor;
(2) the
depositor;
(3) the
issuing entity;
(4) any
servicer;
(5) any
trustee;
(6) any
originator;
(7) any
significant obligor;
(8) any
enhancement or support provider; and
(9) any
other
material transaction party.
68
(b) If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Company, if the Company is an originator of Mortgage
Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall
be
prepared by the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3)
of Regulation AB. To the extent that there is reasonably available to the
Company (or Third-Party Originator) Static Pool Information with respect to
more
than one mortgage loan type, the Purchaser or any Depositor shall be entitled
to
specify whether some or all of such information shall be provided pursuant
to
this paragraph. The content of such Static Pool Information may be in the form
customarily provided by the Company, and need not be customized for the
Purchaser or any Depositor. Such Static Pool Information for each vintage
origination year or prior securitized pool, as applicable, shall be presented
in
increments no less frequently than quarterly over the life of the mortgage
loans
included in the vintage origination year or prior securitized pool. The most
recent periodic increment must be as of a date no later than 135 days prior
to
the date of the prospectus or other offering document in which the Static Pool
Information is to be included or incorporated by reference. The Static Pool
Information shall be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document format (pdf)
file, or other such electronic format as mutually agreed upon by the Purchaser
or the Depositor and the Company, as applicable.
Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an omission
to include therein information required to be provided pursuant to such
paragraph), the Company shall provide corrected Static Pool Information to
the
Purchaser or any Depositor, as applicable, in the same format in which Static
Pool Information was previously provided to such party by the
Company.
If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense of
the
Purchaser or Depositor, as applicable (to the extent of any additional
incremental expense associated with delivery pursuant to this Agreement), such
agreed-upon procedures letters of certified public accountants reasonably
acceptable to the Purchaser or Depositor, as applicable, pertaining
to Static Pool Information relating to prior securitized pools for
securitizations closed on or after January 1, 2006 or, in the case of Static
Pool Information with respect to the Company’s or Third-Party Originator’s
originations or purchases, to calendar months commencing January 1,
2006,
as the
Purchaser or such Depositor shall reasonably request. Such statements and
letters shall be addressed to and be for the benefit of such parties as the
Purchaser or such Depositor shall designate, which may include, by way of
example, any Sponsor, any Depositor and any broker dealer acting as underwriter,
placement agent or initial purchaser with respect to a Securitization
Transaction, and shall also be addressed to and for the benefit of the Company
and such Third-Party Originator; provided, however, that the procedures and
work
to be performed by such certified public accountants shall not create an undue
disruption or burden on the business operations of the Company, unless such
standards and letters become standard in the industry for similar transactions.
Any such statement or letter may take the form of a standard, generally
applicable document accompanied by a reliance letter authorizing reliance by
the
addressees designated by the Purchaser or such Depositor.
69
(c) If
so
requested by the Purchaser or any Depositor, the Company shall provide such
information regarding the Company, as servicer of the Mortgage Loans, and each
Subservicer (each of the Company and each Subservicer, for purposes of this
paragraph, a “Servicer”), as is requested for the purpose of compliance with
Item 1108 of Regulation AB. Such information shall include, at a
minimum:
A. the
Servicer’s form of organization;
B. a
description of how long the Servicer has been servicing residential mortgage
loans; a general discussion of the Servicer’s experience in servicing assets of
any type as well as a more detailed discussion of the Servicer’s experience in,
and procedures for, the servicing function it will perform under this Agreement
and any Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer’s portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the Servicer
that may be material, in the reasonable good faith judgment of the Purchaser
or
any Depositor, to any analysis of the servicing of the Mortgage Loans or the
related asset-backed securities, as applicable, including, without
limitation:
(1) whether
any prior securitizations of mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing during the three-year
period immediately preceding the scheduled closing date of the related
Securitization Transaction;
(2) the
extent of outsourcing the Servicer utilizes;
(3) whether
there has been previous disclosure of material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential mortgage
loans involving the Servicer as a servicer during the three-year period
immediately preceding the scheduled closing date of the related Securitization
Transaction;
(4) whether
the Servicer has been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; and
(5) such
other information as the Purchaser or any Depositor may reasonably request
for
the purpose of compliance with Item 1108(b)(2) of Regulation AB;
70
C. a
description of any material changes during the three-year period immediately
preceding the scheduled closing date of the related Securitization Transaction
to the Servicer’s policies or procedures with respect to the servicing function
it will perform under this Agreement and any Reconstitution Agreements for
mortgage loans of a type similar to the Mortgage Loans;
D. information
regarding the Servicer’s financial condition, to the extent that there is a
material risk that the effect on one or more aspects of servicing resulting
from
such financial condition could have a material impact on pool performance or
the
performance by the Company of its servicing obligations under this Agreement
or
any Reconstitution Agreement;
E. information
regarding advances made by the Servicer on the Mortgage Loans and the Servicer’s
overall servicing portfolio of residential mortgage loans for the three-year
period immediately preceding the scheduled closing date of the related
Securitization Transaction, which may be limited to a statement by an authorized
officer of the Servicer to the effect that the Servicer has made all advances
required to be made on residential mortgage loans serviced by it during such
period, or, if such statement would not be accurate, information regarding
the
percentage and type of advances not made as required, and the reasons for such
failure to advance;
F. a
description of the Servicer’s processes and procedures designed to address any
special or unique factors involved in servicing loans of a similar type as
the
Mortgage Loans;
G. a
description of the Servicer’s processes for handling delinquencies, losses,
bankruptcies and recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts; and
H. information
as to how the Servicer defines or determines delinquencies and charge-offs,
including the effect of any grace period, re-aging, restructuring, partial
payments considered current or other practices with respect to delinquency
and
loss experience.
(d) If
so
requested by the Purchaser or any Depositor for the purpose of satisfying its
reporting obligation under the Exchange Act with respect to any class of
asset-backed securities, the Company shall upon discovery (or shall cause each
Subservicer and Third-Party Originator to so notify upon discovery) (i) notify
the Purchaser and any Depositor in writing of (A) any material litigation or
governmental proceedings pending against the Company, any Subservicer or any
Third-Party Originator, as applicable, and (B) any affiliations or relationships
that develop following the closing date of a Securitization Transaction between
the Company, any Subservicer or any Third-Party Originator and any of the
parties specified in clause (D) of paragraph (a) of this Section (and any other
parties identified in writing by the requesting party) with respect to such
Securitization Transaction, and (ii) provide to the Purchaser and any Depositor
a description of such proceedings, affiliations or relationships.
71
(e) As
a
condition to the succession to the Company or any Subservicer as servicer or
subservicer under this Agreement or any Reconstitution Agreement by any Person
(i) into which the Company or such Subservicer may be merged or consolidated,
or
(ii) which may be appointed as a successor to the Company or any Subservicer,
the Company shall provide to the Purchaser and any Depositor, at least 5
calendar days prior to the effective date of such succession or appointment,
(x)
written notice to the Purchaser and any Depositor of such succession or
appointment and (y) in writing and in form and substance reasonably satisfactory
to the Purchaser and such Depositor, all information reasonably requested by
the
Purchaser or any Depositor in order to comply with its reporting obligation
under Item 6.02 of Form 8-K with respect to the related Securitization
Transaction.
(f) In
addition to such information as the Company, as servicer, is obligated to
provide pursuant to other provisions of this Agreement, if so requested by
the
Purchaser or any Depositor, the Company shall provide such information
reasonably available to the Company regarding the performance or servicing
of
the Mortgage Loans as is reasonably required by the Purchaser or any Depositor
to facilitate preparation of distribution reports in accordance with Item 1121
of Regulation AB and to permit the Purchaser or such Depositor to comply with
the provisions of Regulation AB relating to Static Pool Information regarding
the performance of the Mortgage Loans on the basis of the Purchaser's or such
Depositor's reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB (including without limitation as to the format
and content of such Static Pool Information). Such information shall be provided
concurrently with the monthly reports otherwise required to be delivered by
the
Company under this Agreement or in such other timeframe as Purchaser as
reasonably agreed to, commencing with the first such report due in connection
with the applicable Securitization Transaction.
Section
13.4. Servicer
Compliance Statement.
On
or
before March 1 of each calendar year, commencing in 2007, the Company shall
deliver to the Purchaser and any Depositor a statement of compliance addressed
to the Purchaser and such Depositor and signed by an authorized officer of
the
Company, to the effect that (i) a review of the Company’s activities as Servicer
during the immediately preceding calendar year (or applicable portion thereof)
and of its performance under this Agreement and any applicable Reconstitution
Agreement during such period has been made under such officer’s supervision, and
(ii) to the best of such officers’ knowledge, based on such review, the Company
has fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar
year
(or applicable portion thereof) or, if there has been a failure to fulfill
any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status
thereof.
Section
13.5. Report
on Assessment of Compliance and Attestation.
(a) On
or
before March 1 of each calendar year, commencing in 2007, the Company
shall:
72
(i) deliver
to the Purchaser and any Depositor a report (in form and substance reasonably
satisfactory to the Purchaser and such Depositor) regarding the Company’s
assessment of compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed
to
the Purchaser and such Depositor and signed by an authorized officer of the
Company, and shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit K hereto delivered to the
Purchaser concurrently with the execution of this Agreement;
(ii) deliver
to the Purchaser and any Depositor a report of a registered public accounting
firm reasonably acceptable to the Purchaser and such Depositor that attests
to,
and reports on, the assessment of compliance made by the Company and delivered
pursuant to the preceding paragraph. Such attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act
and
the Exchange Act;
(iii) cause
each Subservicer, and each Subcontractor determined by the Company pursuant
to
Section 13.6(b) to be “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, to deliver to the Purchaser and any
Depositor an assessment of compliance and accountants’ attestation as and when
provided in paragraphs (a) and (b) of this Section; and
(iv) If
requested by the Purchaser or any Depositor not later than February 1 of the
calendar year in which such certification is to be delivered, deliver to the
Purchaser, any Depositor and any other Person that will be responsible for
signing the certification (a “Sarbanes
Certification”)
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant
to
Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a certification in the
form
attached hereto as Exhibit H; provided that such certification delivered by
the
Company may not be filed as an exhibit to, or included in, any offering document
or registration statement unless required by law or regulation.
The
Company acknowledges that the parties identified in clause (a)(iv) above may
rely on the certification provided by the Company pursuant to such clause in
signing a Sarbanes Certification and filing such with the Commission. Neither
the Purchaser nor any Depositor will request delivery of a certification under
clause (a)(iv) above, unless a Depositor is required under the Exchange Act
to
file an annual report on Form 10-K with respect to an issuing entity whose
asset
pool includes Mortgage Loans.
(b) Each
assessment of compliance provided by a Subservicer pursuant to Section
13.5(a)(i) shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit K hereto delivered to the
Purchaser concurrently with the execution of this Agreement or, in the case
of a
Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Subcontractor pursuant
to
Section 13.5(a)(iii) need not address any elements of the Servicing Criteria
other than those specified by the Company pursuant to Section 13.6.
73
Section
13.6. Use
of
Subservicers and Subcontractors.
The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company as servicer under this Agreement
or any Reconstitution Agreement unless the Company complies with the provisions
of paragraph (a) of this Section. The Company shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Company as servicer under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (b) of this Section.
(a) It
shall
not be necessary for the Company to seek the consent of the Purchaser or any
Depositor to the utilization of any Subservicer. The Company shall cause any
Subservicer used by the Company (or by any Subservicer) for the benefit of
the
Purchaser and any Depositor to comply with the provisions of this Section and
with Sections 13.2, 13.3(c) and (e), 13.4, 13.5 and 13.7 of this Agreement
to
the same extent as if such Subservicer were the Company, and to provide the
information required with respect to such Subservicer under Section 13.3(d)
of
this Agreement. The Company shall be responsible for obtaining from each
Subservicer and delivering to the Purchaser and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under Section
13.4, any assessment of compliance and attestation required to be delivered
by
such Subservicer under Section 13.5 and any certification required to be
delivered to the Person that will be responsible for signing the Sarbanes
Certification under Section 13.5 as and when required to be
delivered.
(b) It
shall
not be necessary for the Company to seek the consent of the Purchaser or any
Depositor to the utilization of any Subcontractor. The Company shall promptly
upon request provide to the Purchaser and any Depositor (or any designee of
the
Depositor, such as a master servicer or administrator) a written description
(in
form and substance satisfactory to the Purchaser and such Depositor) of the
role
and function of each Subcontractor utilized by the Company or any Subservicer,
specifying (i) the identity of each such Subcontractor, (ii) which (if any)
of
such Subcontractors are “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (ii) of this paragraph.
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 13.5 and 13.7 of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance
and
attestation required to be delivered by such Subcontractor under Section 13.5,
in each case as and when required to be delivered.
74
Section
13.7. Indemnification;
Remedies.
(a) The
Company shall indemnify the Purchaser, each affiliate of the Purchaser, and
each
of the following parties participating in a Securitization Transaction: each
sponsor and issuing entity; each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction; each broker dealer acting as underwriter,
placement agent or initial purchaser, each Person who controls any of such
parties or the Depositor (within the meaning of Section 15 of the Securities
Act
and Section 20 of the Exchange Act); and the respective present and former
directors, officers, employees and agents of each of the foregoing and of the
Depositor, and shall hold each of them harmless from and against any losses,
damages, penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain arising out of or based upon:
(1)
A. any
untrue statement of a material fact contained or alleged to be contained in
any
information, report, certification, accountants’ letter or other material
provided in written or electronic form under this Article XIII by or on behalf
of the Company, or provided under this Article XIII by or on behalf of any
Subservicer, Subcontractor or Third-Party Originator (collectively, the
“Company
Information”),
or
B.
the
omission or alleged omission to state in the Company Information a material
fact
required to be stated in the Company Information or necessary in order to make
the statements therein, in the light of the circumstances under which they
were
made, not misleading; provided, by way of clarification, that clause (B) of
this
paragraph shall be construed solely by reference to the Company Information
and
not to any other information communicated in connection with a sale or purchase
of securities, without regard to whether the Company Information or any portion
thereof is presented together with or separately from such other
information;
(ii) any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under this Article XIII, including
(except as provided below) any failure by the Company to identify pursuant
to
Section 13.6(b) any Subcontractor “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB; or
(iii) any
breach by the Company of a representation or warranty set forth in Section
13.2(a) or in a writing furnished pursuant to Section 13.2(b) and made as of
a
date prior to the closing date of the related Securitization Transaction, to
the
extent that such breach is not cured by such closing date, or any breach by
the
Company of a representation or warranty in a writing furnished pursuant to
Section 13.2(b) to the extent made as of a date subsequent to such closing
date.
75
In
the
case of any failure of performance described in clause (a)(ii) of this Section,
the Company shall promptly reimburse the Purchaser, any Depositor, as
applicable, and each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Company, any Subservicer,
any
Subcontractor or any Third-Party Originator.
(b) Notification
and Cooperation.
The
parties hereto further agree, and any Indemnified Party not a party hereto
is
deemed to agree, as a condition to its reliance on such indemnification, that
the Company’s indemnification obligations under this Section 13.7 are subject to
the following terms and conditions:
(i) An
Indemnified Party seeking indemnification hereunder shall give written notice
to
the Company within a reasonable time after the Indemnified Party receives notice
or becomes aware of an indemnifiable claim;
(ii) The
Company shall
undertake the defense of the action or claim with counsel or other
representatives of its own choosing and reasonably acceptable to the Indemnified
Party (which counsel shall not, except with the consent of the Indemnified
Party, be counsel to the Indemnifying Party);
(iii) The
Indemnified Party shall have the right to participate and assist in, but not
control, the defense of such claim and employ separate counsel in any action
or
claim at the expense of the Indemnified Party (i.e., at its own expense);
and
(iv) The
Company shall not settle or compromise any claim suit or action against the
Indemnified Party without the express prior written consent of the Indemnified
Party.
(c) With
respect to any breach of this Article 13, the Purchaser shall have the remedies
set forth in this Agreement, including without limitation, Article
10.
(d) Limitations.
Notwithstanding anything in this Agreement to the contrary, in no event shall
the Company be obligated under this Section 13.7 to indemnify an Indemnified
Party otherwise entitled to indemnity hereunder in respect of any indemnifiable
claims or losses that result from the willful misconduct, bad faith or grossly
negligent acts or omissions of the Indemnified Party.
76
Execution
Copy
IN
WITNESS WHEREOF, the Company and the Purchaser have caused their names to be
signed hereto by their respective duly authorized officers as of the day and
year first above written.
| XXXXXXX XXXXX MORTGAGE COMPANY | ||
| |
By:
Xxxxxxx Sachs Real Estate
Funding
Corp., its General Partner
|
|
| By: | ||
| Name: | ||
| Title: | ||
| NATIONAL CITY MORTGAGE CO., | ||
| |
As
seller and servicer
|
|
| By: | ||
| Name: | ||
| Title: | ||
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
See
attached
A-1
EXHIBIT
B
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser and
any prospective Purchaser, and which shall be retained by the Company in the
Servicing File or delivered to the Custodian pursuant to Sections 2.1 and 2.3
of
the Flow Seller’s Warranties and the Servicing Agreement to which this Exhibit
is attached (the “Agreement”):
A. The
original Mortgage Note bearing all intervening endorsements, endorsed “Pay to
the order of ______________, without recourse” and signed in the name of the
Company by an authorized officer (in the event that the Mortgage Loan was
acquired by the Company in a merger, the signature must be in the following
form: “[Company], successor by merger to [name of predecessor]”; and in the
event that the Mortgage Loan was acquired or originated by the Company while
doing business under another name, the signature must be in the following form:
“[Company], formerly know as [previous name]”).
B. The
original of any personal endorsement, surety and/or guaranty agreement executed
in connection with the Mortgage Note, if any.
C. Except
as
set forth below, the original Mortgage, with evidence of recording thereon
or a
certified true and correct copy of the Mortgage sent for recordation. If in
connection with any Mortgage Loan, the Company cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Company shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer’s Certificate of the
Company stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or
a
copy of such Mortgage certified by such public recording office to be a true
and
complete copy of the original recorded Mortgage will be promptly delivered
to
the Custodian upon receipt thereof by the Company; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage 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.
B-1
D. The
originals or certified true copies of all assumption, modification,
consolidation or extension agreements, with evidence of recording noted thereon
if recordation is required to maintain the lien of the mortgage or is otherwise
required, or, if recordation is not so required, an original or copy of any
such
assumption, modification, consolidation or extension agreements.
E. The
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording, from the Company to “______________” or as otherwise
directed by the Purchaser. If the Mortgage Loan was acquired by the Company
in a
merger, the Assignment of Mortgage must be made by “[Company], successor by
merger to [name of predecessor].” If the Mortgage Loan was acquired or
originated by the Company while doing business under another name, the
Assignment of Mortgage must be by “[Company], 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.
F. Originals
or certified true copies of all intervening assignments of the Mortgage
necessary to show a complete chain of title from the original mortgagee to
the
Company, with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Company shall deliver or cause to be delivered
to
the Custodian, a photocopy of such intervening assignment, together with (i)
in
the case of a delay caused by the public recording office, an Officer’s
Certificate of the Company stating that such intervening assignment of mortgage
has been dispatched to the appropriate public recording office for recordation
and that such original recorded intervening assignment of mortgage or a copy
of
such intervening assignment of mortgage certified by the appropriate public
recording office or by the title insurance company that issued the title policy
to be a true and complete copy of the original recorded intervening assignment
of mortgage will be promptly delivered to the Custodian upon receipt thereof
by
the Company; or (ii) in the case of an intervening assignment 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.
B-2
G. The
original mortgage policy of title insurance or evidence of title.
H. Any
security agreement, chattel mortgage or equivalent executed in connection with
the Mortgage.
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items to the extent in the possession of the Company or in the
possession of the Company’s agent(s):
I. Verification
of Mortgage Insurance.
J. The
original hazard insurance policy and, if required by law, flood insurance
policy, in accordance with Section 4.10 of the Agreement.
K. Residential
loan application.
L. Mortgage
Loan closing statement.
M. Verification
of employment and income, unless originated under the Company’s Limited
Documentation program, FNMA Timesaver Plus.
N. Verification
of acceptable evidence of source and amount of down payment.
O. Credit
report on the Mortgagor, if available.
P. Residential
appraisal report.
Q. Photograph
of the Mortgaged Property.
R. Survey
of
the Mortgaged Property, if required by the title company or Applicable
Law.
B-3
S. Copy
of
each instrument necessary to complete identification of any exception set forth
in the exception schedule in the title policy, i.e. map or plat, restrictions,
easements, sewer agreements, home association declarations, etc.
T. All
required disclosure statements.
U. If
available, termite report, structural engineer’s report, water potability and
septic certification.
V. Sales
contract, if applicable.
W. Evidence
of payment of taxes and insurance premiums, insurance claim files,
correspondence, current and historical computerized data files, and all other
processing, underwriting and closing papers and records which are customarily
contained in a mortgage loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.
X. Amortization
schedule, if available.
Y. Original
power of attorney, if applicable.
In
the
event an Officer’s Certificate of the Company is delivered to the Custodian
because of a delay caused by the public recording office in returning any
recorded document, the Company shall deliver to the Custodian, within 240 days
of the Closing Date, 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 to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, and (iv)
specify the date the applicable recorded document will be delivered to the
Custodian. The Company shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An extension
of the date specified in (iv) above may be requested form the Purchaser, which
consent shall not be unreasonably withheld.
B-4
EXHIBIT
C
FORM
OF
CUSTODIAL AGREEMENT
CUSTODIAL
AGREEMENT
CUSTODIAL
AGREEMENT, dated as of April 1, 2003 (the "Agreement"),
among
Xxxxxxx Xxxxx Mortgage Company (the "Purchaser"),
having an address of 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, National City
Mortgage Co., having an address at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
(in
such capacity the "Seller"),
and
JPMorgan Chase Bank having an address at 0000 Xxxxxx Xxxxxx, 00xx xxxxx,
Xxxxxxx, Xxxxx 00000 (the "Custodian").
WITNESSETH:
WHEREAS,
the Purchaser has purchased from the Seller certain one- to four- family,
first-lien, fixed rate residential mortgage loans (the "Mortgage
Loans")
pursuant to the terms and conditions of the Flow Seller's Warranties and
Servicing Agreement, dated as of May 1, 2003 (the "Seller's
Warranties and Servicing Agreement"),
between the Seller and the Purchaser and the Warranty Xxxx of Sale dated April
8, 2003 (Fixed Rate Pool Bid date 2/11/03);
WHEREAS,
the Seller has agreed to sell to the Purchaser, with respect to the Mortgage
Loans, the Mortgage Loans pursuant to the terms and conditions of the Seller's
Warranties and Servicing Agreement;
WHEREAS,
the Mortgage Loans purchased pursuant to the Seller's Warranties and Servicing
Agreement will be serviced by the Seller (in such capacity, the "Servicer")
pursuant to the Seller's Warranties and Servicing Agreement; and
WHEREAS,
the Purchaser desires to have the Custodian take possession of the mortgage
notes for the Mortgage Loans, along with certain other documents specified
herein, as the Custodian of the Purchaser or subsequent purchasers of the
Mortgage Loans, in accordance with the terms and conditions hereof.
NOW
THEREFORE, in consideration of the mutual undertaking herein expressed, the
parties hereto hereby agree as follows:
1. On
or
prior to the Closing Date (as defined in the Seller's Warranties and Servicing
Agreement), the Seller shall deliver and release to the Custodian, subject
to
and in accordance with the relevant section of the Seller's Warranties and
Servicing Agreement, the following documents, pertaining to each of the Mortgage
Loans identified in the Mortgage Loan Schedule (the "Mortgage
Loan Schedule")
a copy
of which Mortgage Loan Schedule is annexed as Exhibit 1 hereto:
(a) the
original executed mortgage note endorsed, "Pay to the order of ______________,
without recourse", or as otherwise directed by the Purchaser, and signed in
the
name of the Seller by an officer of the Seller, or a lost note affidavit with
a
copy of the original mortgage note attached; the mortgage note shall include
all
intervening original endorsements showing a complete chain of title from the
originator to the Seller;
C-1
(b) the
original executed mortgage, or a certified copy thereof, in either case with
evidence of recording noted thereon; the standard Xxxxxx Xxx/FHLMC Condominium
Rider or PUD Rider must be attached to the mortgage if the mortgaged property
is
a condominium or is located in a PUD;
(c) the
original assignment of each mortgage from the Seller to "[in blank]" or as
otherwise directed by the Purchaser;
(d) the
original policy of title insurance, or attorney's opinion of title (accompanied
by an abstract of title), as the case may be, with respect to each Mortgage
Loan;
(e) originals
of any intervening assignments of the mortgage necessary to show a complete
chain of title from the original mortgagee to the Seller with evidence of
recording noted thereon; provided, that such intervening assignments may be
in
the form of blanket assignments, a copy of which, with evidence of recording
noted thereon, shall be acceptable;
(f) originals
of all modification agreements with evidence of recording noted thereon if
recordation is required to maintain the lien of the mortgage or is otherwise
required, or, if recordation is not so required, an original or copy of any
such
modification agreement;
(g) for
each
Mortgage Loan with respect to which the borrower's name as it appears on the
note does not match the borrower's name on the Mortgage Loan Schedule, one
of
the following: (i) the original of the assumption with evidence of recording
thereon if required to maintain the lien of the mortgage or if otherwise
required, or, if recordation is not so required, an original or copy of such
assumption agreement; or (ii) a copy of a marriage certificate, court order,
decree or other document evidencing that the two different names refer to the
same person;
(h) to
the
extent applicable, (x) an original power of attorney with evidence of
recordation thereon if necessary to maintain the lien on the Mortgage or if
the
document to which such power of attorney relates is required to be recorded,
or,
if recordation is not so required, an original of such power of attorney, and
(y) an original guaranty agreement; and
(i) personal
endorsement and/or guaranty agreements for all non-individual loans.
(corporations, partnerships, trusts, estates, etc.)
Notwithstanding
the foregoing, with respect to any power of attorney, mortgage, assignment,
intervening assignment, assumption agreement, modification agreement or deed
of
sale for which a certified copy is delivered in accordance with the foregoing,
the copy must be certified as true and complete by the appropriate public
recording office, or, if the original has been submitted for recording but
has
not yet been returned from the applicable recording office, an officer of the
Seller must certify the copy as a true copy of the original submitted for
recordation. Copies of blanket intervening assignments, however, need not be
certified.
C-2
2. From
time
to time, the Servicer shall forward to the Custodian additional documents
evidencing an assumption or modification of a Mortgage Loan approved by the
Purchaser and the Servicer. All Mortgage Loan documents held by the Custodian
as
to each Mortgage Loan are referred herein as the "Custodian's Mortgage File."
The Custodian, in its independent capacity, agrees to act as custodian for
the
Purchaser and any successor to the Purchaser in accordance with the terms and
conditions of this Agreement, including upon any securitization of the Mortgage
Loans, as custodian for the trustee (the "Trustee")
under
the securitization trust agreement.
3. With
respect to each Custodian's Mortgage File delivered to the Custodian, the
Custodian is exclusively the Custodian for the Purchaser, and the Purchaser's
successor or assigns. The Custodian shall hold all Custodian's Mortgage Files
for the exclusive use and benefit of the Purchaser and, except as otherwise
provided herein, shall make disposition thereof only in accordance with the
terms of this Agreement and the written instructions of the Purchaser. The
Custodian shall segregate by group (as directed by the Purchaser) and maintain
continuous custody of all Custodian's Mortgage Files received by it in secure
and fire resistant facilities in accordance with customary standards for such
custody.
4. Upon
the
initial sale of the Mortgage Loans, the Custodian shall deliver to the Purchaser
a Custody Receipt in the form annexed hereto as Exhibit 3 (the "Custody
Receipt")
which
includes verification that, except as shown on an exceptions list attached
thereto:
(a) all
documents required to be delivered to it pursuant to Sections 1(a) through
(e)
of this Agreement are in the Custodian's possession; provided, that, the
Custodian shall separately note on the Data Collection Schedule (as defined
below) any Mortgage Loans with respect to which the original note is missing
and
a lost note affidavit and a copy of such note is delivered;
(b) all
documents required to be delivered to it pursuant to Sections 1(f) and 1(g)
of
this Agreement are in the Custodian's possession; provided, that:
(i) the
Custodian shall have no obligation to verify the receipt of any such documents
the existence of which was not made known to the Custodian by the Custodian's
Mortgage File, and
(ii) the
Custodian shall have no obligation to determine whether recordation of any
such
document is necessary;
(c) all
documents required to be delivered to it pursuant to Section 1(i) of this
Agreement are in the Custodian's possession; provided, that, the Custodian
shall
have no obligation to verify the receipt of any such documents the existence
of
which was not made known to the Custodian by the Custodian's Mortgage
File;
C-3
(d) all
powers of attorney and other documents required to be delivered to it pursuant
to Section 1(h) of this Agreement are in the Custodian's possession; provided,
that:
(i) the
Custodian shall have no obligation to verify the receipt of any such documents
the existence of which was not made known to the Custodian by the Custodian's
Mortgage File, and
(ii) the
Custodian shall have no obligation to determine whether recordation of any
such
power of attorney is necessary (except that the Custodian shall conclude that
if
the document to which such power of attorney relates is a mortgage, interim
assignment, assignment or a document that was recorded, then the Custodian
shall
conclude that such power of attorney should have been recorded);
(e) all
documents have been examined by the Custodian and appear regular on their face
and relate to the Mortgage Loans;
(f) based
only on the Custodian's examination of the foregoing documents, the information
set forth on the Mortgage Loan Schedule representing each Mortgage Loan
accurately reflects the following:
(i) Mortgage
Loan number,
(ii) the
first
payment date (acceptable of accurate within 30 days),
(iii) the
maturity date (acceptable of accurate within 30 days),
(iv) the
original loan amount,
(v) the
original interest rate,
(vi) the
full
name of the borrower(s) (acceptable if first and/or middle names are missing
or
initialized (e.g., X.X. Xxxxx would match Xxxxxxx Xxxxx Xxxxx), acceptable
if
first names are shortened or lengthened or nicknames substituted therefor (e.g.,
Xxx for Xxxxxx or Xxxx for Xxxxxxx), acceptable if middle or maiden names are
omitted, acceptable if "Jr.", "Sr.", "II" and similar designations are omitted,
acceptable if discrepancy is a typographical error),
(vii) the
property address, including zip code (acceptable if the first three digits
of
the zip code match), and
(viii) the
original principal and interest payment.
C-4
(g) each
mortgage note has been endorsed and each assignment of mortgage has been
assigned as described in Section 1 hereof; provided, that, the Custodian shall
have no obligation to confirm that the assignments are in recordable
form.
In
making
the verification required by this Section 4, the Custodian may rely conclusively
on the Mortgage Loan Schedule attached hereto, and the Custodian shall have
no
obligation to independently verify the correctness of such Mortgage Loan
Schedule. If any discrepancy exists between the Verified Information and the
Mortgage Loan Schedule, the Custodian shall notify the Purchaser and the
Servicer by attaching a list of such discrepancies to the Final
Certification.
It
is
understood that before delivering the Custody Receipt, the Custodian shall
examine the Mortgage Loan Documents to confirm the following (and shall report
any exceptions to these confirmations in the exceptions report attached to
the
Custody Receipt):
(1) each
mortgage note, mortgage, assumption, modification, guaranty, power of attorney
and deed of sale bears a signature or signatures that appear to be original
and
that purport to be that of the Person or Persons named as the maker and
mortgagor/trustor or, if photocopies are permitted by this Agreement, that
such
copies bear a reproduction of such signature or signatures;
(2) the
principal amount of the indebtedness secured by the mortgage is identical to
the
original principal amount of the note;
(3) the
interest rate shown on the note is identical to the interest rate shown on
the
Mortgage Loan Schedule;
(4) the
assignment of the mortgage from the Seller is in the form required pursuant
to
Section l(c) hereof, and bears the signature of the Seller, that appears to
be
an original and any other necessary party or, if photocopies are permitted
by
this Agreement, such copies bear a reproduction of such signature or signatures;
(5) if
intervening assignments are included in the Custodian's Mortgage File, each
such
intervening assignment bears the signature of the mortgagee and/or the assignor
(and any other necessary party) that appears to be an original or, if
photocopies are permitted by this Agreement, that such copies bear a
reproduction of such signature or signatures; and
(6) the
title
insurance policy or certificate of title is for an amount not less than the
original principal amount of the related note.
(5) Prior
to
August 31, 2003, the Custodian shall deliver to the Purchaser a Final
Certification in the form of Exhibit 4 evidencing the completeness of the
Custodian's Mortgage File for each Mortgage Loan, with any applicable exceptions
noted on such Certification.
C-5
(6) No
later
than the fifth Business Day of each month, commencing in May 2003, the Custodian
shall deliver to the Servicer, GS Mortgage Securities Corp., as depositor and
the Trustee in electronic or hard copy format, as requested by the Purchaser,
the exceptions list required by Section 4 hereof, updated to remove exceptions
cured since the date on which the Custody Receipt was issued pursuant to Section
4 hereof. In the event the Mortgage Loans are securitized, the Custodian will
only be required to deliver the exceptions list upon request. In addition,
such
monthly reports shall list any document with respect to which the Seller
delivered a copy certifying that the original had been sent for recording,
until
such time as the Seller delivers to the Custodian the original of such document
or a copy thereof certified by the appropriate public recording office. The
Data
Collection Schedule shall not be included unless specifically requested in
advance. Except as specifically provided above, the Custodian shall be under
no
duty to review, inspect or examine such documents to determine that any of
them
are enforceable or appropriate for their prescribed purpose. During the life
of
the Mortgage Loans, in the event the Custodian discovers any defect with respect
to the Custodian's Mortgage Files, the Custodian shall give written notice
of
such defect to the Purchaser.
(7) The
Custodian shall hold in its possession and custody at JPMorgan Chase Bank,
0000
Xxxxxx Xxxxxx, 00xx xxxxx, Xxxxxxx, XX 00000, for the Purchaser or any assignee
of the Purchaser, all of the Custodian's Mortgage Files delivered from time
to
time by the Servicer to the Custodian.
(8) From
time
to time and as appropriate for the foreclosure or servicing of the Mortgage
Loans, the Purchaser hereby authorizes the Custodian to release to the Servicer
(or, after securitization of the Mortgage Loans, if so designated by the
Servicer, to the Trustee), within three (3) business days of receipt of either
(i) a written request and receipt of the Servicer in the form attached hereto
as
Exhibit 5(a) executed by one of the authorized signatories set forth on Exhibit
6, as such exhibit may be updated from time to time by the Servicer or (ii)
an
electronic request through the use of an electronic file request system mutually
acceptable to the Custodian and the Servicer, a Custodian's Mortgage File to
the
place indicated in any such written request from the Servicer. A list of
authorized signatures for such written requests has been furnished to the
Custodian by the Servicer. All Custodian's Mortgage Files so released to the
Servicer shall be held by it in trust for the benefit of the Purchaser. The
Servicer shall return to the Custodian the Custodian's Mortgage File when the
Servicer's need therefor in connection with such foreclosure or servicing no
longer exist, unless the Mortgage Loan shall be liquidated or paid in
full.
Servicer
may provide an electronic transmission for release of documents in a form agreed
to in advance of initial transmission by both Servicer and Custodian containing
information readable without intervention by Custodian data processing
operations computer hardware and software staff, and arranged in a record layout
to be specified by Custodian (a "Paperless
Release Request").
Servicer agrees to maintain and control access to electronic signature
information and assumes liability for any unauthorized use thereof. Servicer
also agrees to maintain accurate records of electronic transactions related
to
the Custodial Files. Servicer hereby authorizes Custodian to automatically
append the electronic signature of an Authorized Representative to the
applicable request for release of documents and agrees and acknowledges that
by
appending such Authorized Representatives electronic signature, the Custodian
shall be entitled to rely thereon. For purposes of this Agreement the term
"electronic signature" is defined as an "electronic identifier intended by
the
person using it to have the same force and effect as the use of a manual
signature."
C-6
Servicer
agrees in advance to comply with all Custodian data encryption, security and
record layout standards in connection with any Paperless Release Request as
may
be amended from time to time upon notice from Custodian to Servicer. Custodian
reserves the right to restrict or suspend Servicer's access to the Custodian's
computer systems for maintenance or repairs or for any other reason in
Custodian's sole discretion, provided however that Custodian shall promptly
provide Servicer notice of such restriction or suspension.
Notwithstanding
the foregoing, Servicer is authorized to transmit and Custodian is authorized
to
accept signed facsimile copies of Requests for Release.
(9) Upon
the
repurchase of any Mortgage Loan or the payment or liquidation in full of the
Mortgage Loan, and within three Business Days of receipt by the Custodian of
the
Servicer's request for release, receipt and certification either (i) in the
form
attached hereto as Exhibit 5(b), executed by one of the authorized signatories
set forth on Exhibit 6 as such exhibit may be updated from time to time by
the
Servicer or (ii) through the use of an electronic request system mutually
acceptable to the Custodian and the Servicer (which certification shall include
a statement to the effect that all amounts received in connection with such
repurchase or payment in full or liquidation have been credited to the
Collection Account as provided in the Seller's Warranties and Servicing
Agreement), the Custodian shall release the related Custodian's Mortgage File
to
the Servicer.
(10) Upon
reasonable prior written notice, the Custodian shall permit the Purchaser and
its agents, and servicing officers of the Servicer reasonable access to its
premises during the Custodian's normal business hours to inspect the Custodian's
Mortgage Files and all other documents, records and other papers in possession
or under the control of the Custodian relating to the Mortgage Loans serviced
by
the Servicer. Each such person shall comply with the Custodian's reasonable
standards and procedures for physical security and personal conduct while on
the
Custodian's premises. Any person failing, in the Custodian's sole but reasonable
business judgment, to meet such standards may be removed or denied access to
the
premises. The Purchaser shall be responsible for any reasonable expense in
connection with such examination.
(11) The
Purchaser, with or without cause, or upon failure by the Custodian to perform
or
observe any term of this Agreement, may remove and discharge the Custodian
or
any successor Custodian thereafter appointed from the performance of its duties
under this Agreement upon written notice from the Purchaser to the Custodian
or
the successor Custodian; provided that at least sixty (60) days prior written
notice shall be given with respect to a removal or discharge without cause.
Having given notice of such removal, the Purchaser shall promptly appoint a
successor Custodian to act on its behalf by written instrument, an original
counterpart of which instrument shall be delivered to the Seller and one copy
to
the successor Custodian. In the event of any such removal, the Custodian shall
promptly transfer, to the successor Custodian as directed, all Custodian's
Mortgage Files being administered under this Agreement. Such transfer shall
be
at the Custodian's expense only if the Custodian is discharged and removed
upon
a failure by the Custodian to perform or observe any material terms of this
Agreement; otherwise such transfer shall occur at the expense of the Purchaser.
In any event, the Custodian shall be entitled to the payment of all outstanding
fees and expenses of the Custodian due the Custodian at the time of such removal
by the Purchaser. In the event that the Purchaser removes the Custodian without
cause, any transfer or set-up fees payable to the successor Custodian will
be
payable by the Purchaser. In any event, the reasonable ongoing fees of any
successor Custodian shall be paid by the Purchaser.
C-7
(12) It
is
understood that the Custodian will charge for its services under this agreement
as set forth in a separate agreement between the Custodian and the Purchaser,
the payment of which shall be the sole obligation of the Purchaser.
(13) The
Custodian shall, at its own expense, maintain at all times during the existence
of this Agreement and keep in full force and effect, (a) fidelity insurance,
(b)
errors and omissions insurance, and (c) all risk property insurance. All such
insurance shall be in amounts, with standard coverage and subject to
deductibles, all as is customary for insurance typically maintained by banks
which act as custodian and in an amount and with coverages not less than that
required by the Xxxxxx Xxx. Upon request, the Purchaser will be provided with
certificates of insurance, as specified in this paragraph 13.
(14) The
Custodian may resign as the Custodian hereunder upon at least sixty (60) days
prior written notice to the Purchaser whereupon the Custodian shall deliver
the
Custodian's Mortgage Files to Purchaser, or a designee of the Purchaser, in
accordance with directions from the Purchaser. In the event of such resignation,
or termination, the Purchaser shall pay all outstanding fees and expenses of
the
Custodian and shall appoint a successor Custodian.
(15) For
the
purpose of facilitating the execution of this Custodial Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to
be
an original, and such counterparts shall constitute and be one and the same
instrument.
(16) Upon
the
request of the Purchaser, at any time, the Custodian shall provide to the
Purchaser a list of all of the Mortgage Loans owned by the Purchaser for which
the Custodian holds a Custodian's Mortgage File pursuant to this Agreement.
Such
list may be in the form of a copy of the Mortgage Loan Schedule with manual
deletions to specifically denote any Mortgage Loans paid off, repurchased or
liquidated since the date of this Agreement.
(17) The
duties and obligations of the Custodian shall only be such as are expressly
set
forth in this Agreement or as set forth in a written amendment to this Agreement
executed by the parties hereto or their successors and assigns. In no event
shall the Custodian be liable for special, indirect or consequential damages,
even if advised of this possibility of the same.
(18) All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered, delivered by facsimile
or mailed by first class mail or overnight express mail, postage prepaid, to
the
parties to this agreement at the address listed on Exhibit 2 or such other
address as may hereafter be furnished in writing to each of the parties to
this
Agreement. Any such demand, notice or communication hereunder shall be deemed
to
have been received on the date received, if received prior to 4 p.m. eastern
time, delivered to or received at the premises of the addressee or received
at
the facsimile number of the address, or, if received after 4 p.m. eastern time,
then on the next business day.
C-8
(19) This
Agreement shall be construed in accordance with the laws of the State of New
York, without regard to its conflict of law principles, and the obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws.
(20) The
Custodian shall have no duties or obligation except those expressly stated
in
this Agreement, and such duties or obligations shall be determined solely by
the
express provisions of the Agreement. The Custodian, its officers, directors,
employees, agents or other representatives shall not be personally liable for
any action taken, suffered or omitted by it in good faith and believed by it
to
be authorized or within the discretion or rights or powers conferred upon the
Custodian by this Agreement or in reliance upon any written notice, request,
consent, certificate, order, affidavit, letter, telegram or other document
reasonably believed by it to be genuine and to have been signed or sent by
the
proper party or parties; provided, however, that the provisions of this
paragraph shall not be construed to relieve the Custodian from liability from
its own negligent action, its own negligent failure to act, or its own bad
faith
or willful misconduct or any breach by the Custodian of any of its obligations
hereunder, which breach was due to negligence on the part of the Custodian.
The
Custodian will be regarded as making no representations and having no
responsibilities (except as expressly set forth herein) as to the validity,
sufficiency, value, genuineness, ownership or transferability of any Mortgage
Loan, and will not be required to and will not make any representations as
to
the validity, value or genuineness of any Mortgage Loan. The Custodian shall
not
be obligated to take any legal action hereunder that might in its judgment
involve any expense or liability unless it has been furnished with reasonable
indemnity. The Custodian may rely on and shall be protected in acting in good
faith upon the written instructions of the Purchaser, the Servicer and the
Trustee (if any) and such employees and representatives of the Purchaser, the
Servicer and the Trustee (if any) as each such party may hereinafter designate
in writing. The Custodian may execute any of the powers hereunder or perform
any
duties hereunder either directly or through agents or attorneys; provided,
however, that the execution of such powers by any such agents or attorneys
shall
not diminish or relieve the Custodian for responsibility therefor to the same
degree as if the Custodian itself had executed such powers.
(21) The
Custodian shall be entitled to obtain the advice or opinion of counsel (which
shall be either in house counsel or a nationally recognized outside counsel)
with respect to a matter of law for which the Custodian has a reasonable
question as to the rights and duties relating to the Custodian hereunder and
the
Custodian shall have no liability for any action taken or omitted in conformity
with its good faith reliance on such advice or opinion; provided, however,
that
the provisions of this paragraph shall not relieve the Custodian from liability
from its own negligent selection of counsel.
C-9
(22) This
Agreement (together with the separate fee agreement between the Purchaser and
the Custodian) contains the entire agreement between the parties relating to
the
subject matter hereof and may be amended only by written agreement signed by
the
Purchaser and the Custodian.
(23) The
Purchaser shall have the right, without consent of the Custodian, to assign
its
interest under this Agreement with respect to some or all of the Mortgage Loans,
and designate any person to exercise any rights of the Purchaser hereunder,
and
the assignee or designee shall accede to the rights and obligations hereunder
of
the Purchaser with respect to such Mortgage Loans; provided, however, that
the
Purchaser may not assign its interest to more than five (5) persons without
the
consent of the Custodian, such consent not to be unreasonably withheld. All
references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee. Upon the Custodian's receipt of the written notification,
which shall state the name and address of the transferee and the date of sale
and shall be accompanied by the original Custody Receipt presently outstanding
delivered to the Purchaser, the Custodian shall change its records to reflect
that such transferee is the owner of such Mortgage Loan and shall immediately
issue (i) a new Custody Receipt with respect to a portion of or all of the
Mortgage Loans, as the case may be, in the name of such transferee and (ii)
a
new Custody Receipt with respect to any Mortgage Loans retained by the
Purchaser; provided, that, any Custody Receipt issued after the date of the
initial sale of the Mortgage Loans shall not (1) confirm the accuracy of the
Mortgage Loan Schedule with respect to Verified Information nor (2) include
the
Data Collection Schedule. The Purchaser and the Custodian agree herein that
any
and all such transferees of a Mortgage Loan shall succeed to all the rights
and
obligations of the Purchaser and shall be considered a Purchaser under this
Agreement.
(24) The
Purchaser agrees to indemnify and hold the Custodian, its directors, officers,
agents, employees, and other representatives harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements of any kind or nature whatsoever that may
be
imposed on, incurred by or asserted against it or them in any way arising out
of
this Agreement as a result of any action or failure to act, so long as such
action or failure to act by it or them hereunder does not constitute bad faith,
negligence or willful misconduct of the Custodian or any of its agents,
officers, directors or employees or breach by the Custodian of its obligations
hereunder. The foregoing indemnity shall survive the termination of this
Agreement.
(25) This
Agreement shall inure to the benefit of the successors and assigns of the
parties hereto.
(26) Each
party agrees to keep confidential the existence of this Agreement, the identity
of the parties hereto, and any other term or condition of this Agreement and
the
transactions contemplated hereby, and to use such information solely in order
to
effectuate the purpose of the Agreement; provided, that, each party may provide
confidential information to its employees, agents and affiliates who have a
need
to know such information in order to effectuate the transaction, and provided,
further that such information is identified as confidential non-public
information. In the event that either party or any of its employees, agents
or
affiliates are requested pursuant to, or required by, applicable law, regulation
or legal process to disclose any non-public information, such party will notify
the other promptly prior to any such disclosure so that such party may seek
a
protective order or other appropriate remedy or, in such party's sole
discretion, waive compliance with the terms of this Section 26. In the event
that no such protective order or other remedy is timely obtained, or that such
party waives compliance with the terms of this Section 26, the party required
to
disclose such non-public information or its employees, agents or affiliates
will
furnish only that portion of the non-public information that it is advised
by
counsel is legally required and will exercise all reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded the non-public
information.
C-10
(27) The
Custodian (or any successor thereto) shall at all times (a) be a depository
institution or trust company subject to supervision by federal or state
authority, (b) have a combined capital and surplus of at least $10,000,000,
(c)
be qualified to do business in any jurisdiction in which it holds a Custodian's
Mortgage File, (d) be qualified to act as a custodian for Xxxxxx Xxx, the
Federal Home Loan Mortgage Corporation and the Government National Mortgage
Association, and (e) not be an affiliate of the Purchaser or the Seller, except
insofar as the Purchaser or its assignee gives its prior written
consent.
(28) Upon
the
initial sale of the Mortgage Loans, the Custodian shall deliver to the Purchaser
(a) an opinion of counsel and (b) an officer's certificate, each in form and
substance reasonably satisfactory to the Purchaser.
(29) The
Custodian represents, warrants and covenants that:
(a) The
Custodian is (i) a banking corporation duly organized, validly existing and
in
good standing under the laws of the State of New York and (ii) duly qualified
and in good standing and in possession of all requisite authority, power,
licenses, permits and franchises in order to execute, deliver and comply with
its obligations under the terms of this Agreement;
(b) The
execution, delivery and performance of this Agreement have been duly authorized
by all necessary corporate action and the execution and delivery of this
Agreement by the Custodian in the manner contemplated herein and the performance
of and compliance with the terms hereof by it will not (i) violate, contravene,
or create a default under any applicable laws, licenses, or permits to the
best
of its knowledge, or (ii) violate, contravene or create a default under any
charter document or bylaw of the Custodian or to the best of the Custodian's
knowledge any contract, agreement or instrument to which the Custodian or by
which any of its property may be bound and will not result in the creation
of
any lien, security interest or other charge or encumbrance upon or with respect
to any of its property;
(c) The
execution and delivery of this Agreement by the Custodian and the performance
of
and compliance with its obligations and covenants hereunder do not require
the
consent or approval of any governmental authority or, if such consent or
approval is required, it has been obtained;
C-11
(d) The
Custodian has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the Purchaser and Seller,
constitutes a legal, valid and binding obligation of the Custodian, enforceable
against it in accordance with its terms, except as the enforcement thereof
may
be limited by applicable debtor relief laws and that certain equitable remedies
may not be available regardless of whether enforcement is sought in equity
or
law; and
(e) There
is
no action, suit, proceeding or investigation pending or, to the Custodian's
knowledge, threatened, against the Custodian, which seeks to prevent the
consummation of the transaction contemplated hereby or which, either in any
one
instance or in the aggregate, if determined adversely to the Custodian would
adversely affect the execution, delivery or enforceability of this Agreement,
the ability of the Custodian to perform its obligations hereunder, or have
a
material adverse effect on the financial condition of the
Custodian.
(30) The
Custodian is not responsible for preparing or filing any reports or returns
relating to federal, state or local income taxes with respect to this Agreement,
other than for the Custodian's compensation or for reimbursement of expenses.
The Custodian will be responsible for the transmission of mortgage files and
loan documents, with insurance thereon as provided in the normal course by
the
nationally recognized overnight courier service utilized by the Custodian for
such transmission. At the request of the Purchaser, the Custodian will obtain
and maintain additional insurance with an insurance provider specified by the
Purchaser against loss or damage to such Mortgage Files and loan documents
in
connection with such transmission in an amount specified by the Purchaser.
The
costs and expenses incurred in connection with obtaining and maintaining such
insurance shall be the sole responsibility of the Purchaser. It is expressly
agreed that in no event shall the Custodian have any liability for any losses
or
damages to any person, including, without limitation, the Purchaser or Servicer,
arising out of actions of the Custodian consistent with this Agreement. In
the
absence of any written instructions from the Purchaser with respect to the
transmission of the Custodian's Mortgage Files, the parties hereby agree that
the Custodian may utilize any nationally recognized overnight courier service
and shall be entitled to reimbursement from the Purchaser.
[Signature
page follows]
C-12
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly
authorized officers as of the date first above written.
|
XXXXXXX
SACHS MORTGAGE
COMPANY, as
Purchaser
|
||
| |
By:
|
Xxxxxxx
Xxxxx Real Estate Funding Corp.,
|
|
General
Partner
|
||
| By: | ||
| Name: | ||
| Title: | ||
|
JPMORGAN
CHASE BANK,
as
Custodian
|
||
| By: | ||
| Name: | ||
| Title: | ||
|
NATIONAL
CITY MORTGAGE CO., as Seller/Servicer
|
||
| By: | ||
| Name: | ||
| Title: | ||
C-13
EXHIBIT
D
FORM
OF
OPINION OF COUNSEL
Sale
of
Series
[
] Mortgage Loans by
[ ]
to
Xxxxxxx
Xxxxx Mortgage Company
Dear
Sir/Madam:
I
am
_____ of
[ ]
and have acted as counsel to
[ ]
(the “Company”),
with
respect to certain matters in connection with the sale by the Company of the
mortgage loans (the “Mortgage
Loans”)
pursuant to that certain Flow Seller’s Warranties and Servicing Agreement
designated as Mortgage Loan Series (the “Seller’s
Warranties and Servicing Agreement”)
by and
between the Company and Xxxxxxx Sachs Mortgage Company (the “Purchaser”),
dated
as of
[ ],
2003, which sale is in the form of whole Mortgage Loans. The Mortgage Loans
are
listed on Schedule A to the Warranty Xxxx of Sale issued in connection with
the
Seller’s Warranties and Servicing Agreement. Capitalized terms not otherwise
defined herein have the meanings set forth in the Seller’s Warranties and
Servicing Agreement.
I
have
examined the following documents:
1. the
Seller’s Warranties and Servicing Agreement;
2. the
Custodial Agreement;
3. the
form
of endorsement of the Mortgage Notes; and
4. such
other documents, records and papers as I have deemed necessary and relevant
as a
basis for this opinion.
To
the
extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Seller’s
Warranties and Servicing Agreement. I have assumed the authenticity of all
documents submitted to me as originals, the genuineness of all signatures,
the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based
upon the foregoing, it is my opinion that;
1. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the state of
[ ].
D-1
2. The
Company has the power to engage in the transactions contemplated by the Seller’s
Warranties and Servicing Agreement and the Custodial Agreement and all requisite
power, authority and legal right to execute and deliver the Seller’s Warranties
and Servicing Agreement, the Custodial Agreement and the Mortgage Loans, and
to
perform and observe the terms and conditions of such instruments.
3. Each
person who, as an officer or attorney-in-fact of the Company, signed (a) the
Seller’s Warranties and Servicing Agreement, (b) the Custodial Agreement , and
(c) any other document delivered prior hereto or on the date hereof in
connection with the sale and servicing of the Mortgage Loans in accordance
with
the Seller’s Warranties and Servicing Agreement and the person was, at the
respective times of such signing and delivery, and is, as of the date hereof,
duly elected or appointed, qualified and acting and as such officer or
attorney-in-fact, and the signatures of such persons appearing on such documents
are their genuine signatures.
4. Each
of
the Seller’s Warranties and Servicing Agreement, the Custodial Agreement and the
Mortgage Loans, has been duly authorized, executed and delivered by the Company
and is a legal, valid and binding agreement enforceable in accordance with
its
terms, subject to bankruptcy laws and other similar laws of general application
affecting rights of creditors and subject to the application of the rules of
equity, including those respecting the availability of specific performance,
none of which will materially interfere with the realization of the benefits
provided thereunder or with the Purchaser’s ownership of the Mortgage
Loans.
5. The
Company has been duly authorized to allow any of its officers to execute any
and
all documents by original signature in order to complete the transactions
contemplated by the Seller’s Warranties and Servicing Agreement and the
Custodial Agreement, and by original or facsimile signature in order to execute
the endorsements to the Mortgage Notes and the assignments of the Mortgages,
and
the original or facsimile signature of the officer at the Company executing
the
endorsements to the Mortgage Notes and the assignments of the Mortgages
represents the legal and valid signature of said officer of the
Company.
6. Either
(i) no consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by the
Company of or compliance by the Company with the Seller’s Warranties and
Servicing Agreement, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated by the
Seller’s Warranties and Servicing Agreement, and the Custodial Agreement; or
(ii) any required consent, approval, authorization or order has been obtained
by
the Company.
7. Neither
the consummation of the transactions contemplated by, nor the fulfillment of
the
terms of the Seller’s Warranties and Servicing Agreement and the Custodial
Agreement, will conflict with or results in or will result in a breach of or
constitutes or will constitute a default under the charter or by-laws of the
Company, the terms of any indenture or other agreement or instrument to which
the Company is a party or by which it is bound or to which it is subject, or
violates any statute or order, rule, regulations, writ, injunction or decree
of
any court, governmental authority or regulatory body to which the Company is
subject or by which it is bound.
D-2
8. There
is
no action, suit, proceeding or investigation pending or, to the best of my
knowledge, threatened against the Company which, in my opinion, either in any
one instance or in the aggregate, may result in any material adverse change
in
the business, operations, financial condition, properties or assets of the
Company or in any material impairment of the right or ability of the Company
to
carry on its business substantially as now conducted or in any material
liability on the part of the Company or which would draw into question the
validity of the Seller’s Warranties and Servicing Agreement, and the Custodial
Agreement, or of any action taken or to be taken in connection with the
transactions contemplated thereby, or which would be likely to impair materially
the ability of the Company to perform under the terms of the Seller’s Warranties
and Servicing Agreement and the Custodial Agreement.
9. For
purposes of the foregoing, I have not regarded any legal or governmental
actions, investigations or proceedings to be “threatened” unless the potential
litigant or governmental authority has manifested to the legal department of
the
Company or an employee of the Company responsible for the receipt of process
a
present intention to initiate such proceedings; nor have I regarded any legal
or
governmental actions, investigations or proceedings as including those that
are
conducted by state or federal authorities in connection with their routine
regulatory activities. The sale of each Mortgage Note and Mortgage as and in
the
manner contemplated by the Seller’s Warranties and Servicing Agreement is
sufficient fully to transfer all right, title and interest of the Company
thereto as noteholder and mortgagee, apart from the rights to service the
Mortgage Loans pursuant to the Seller’s Warranties and Servicing
Agreement.
10.
The
form
of endorsement that is to be used with respect to the Mortgage Loans is legally
valid and sufficient to duly endorse the Mortgage Notes to the Purchaser. Upon
the completion of the endorsement of the Mortgage Notes and the completion
of
the assignments of the Mortgages, and the recording thereof, the endorsement
of
the Mortgage Notes, the delivery to the Custodian of the completed assignments
of the Mortgages, and the delivery of the original endorsed Mortgage Notes
to
the Custodian would be sufficient to permit the entity to which such Mortgage
Note is initially endorsed at the Purchaser’s direction, and to whom such
assignment of Mortgages is initially assigned at the Purchaser’s direction, to
avail itself of all protection available under Applicable Law against the claims
of any present or future creditors of the Company, and would be sufficient
to
prevent any other sale, transfer, assignment, pledge or hypothecation of the
Mortgages and the Mortgage Notes by the Company from being enforceable, such
that in a properly presented and argued case under title 11, United States
Code
(the “Bankruptcy
Code”),
in
which the Company were the debtor, a bankruptcy court having jurisdiction over
the Company would consider the transfer of the Mortgage Loans from the Company
to the Purchaser to be a true sale of the Mortgage Loans from the Company to
the
Purchaser and not a secured loan by the Purchaser to the Company and,
accordingly, the Mortgage Loans and the payments and other collections thereon
(other than those at any given time that may be commingled with unrelated funds
held by the Company) and the proceeds thereof transferred to the Purchaser
by
the Company in accordance with the Company’s Warranties and Servicing Agreement
would not be deemed property of the Company’s estate for purposes of Section 541
of the Bankruptcy Code or be subject to the automatic stay provisions of Section
362 of the Bankruptcy Code.
D-3
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which you
initially and directly resell the Mortgage Loans may rely on this opinion as
if
it were addressed to them as of its date.
Sincerely,
D-4
EXHIBIT
E
ITEMS
TO
BE INCLUDED IN MONTHLY REMITTANCE ADVICE
On
each
Closing Date, the Company shall deliver to the Purchaser an initial set-up
report (the “Initial
Set-up Report”),
dated
as of the related Cut-off Date, which shall set forth certain information
regarding the related Mortgage Pool. Such information shall include, without
limitation, the principal balance of each Mortgage Loan, the interest rate,
delinquency status and any other information requested by the Purchaser. For
each month after each Closing Date, the Company shall provide a monthly
remittance advice report (the “Monthly
Remittance Advice Reports”)
to the
Purchaser, which shall set forth for each related Mortgage Loan, the trial
balance, interest rate, delinquency, foreclosure and related default
information, and such other information as may be requested by the Purchaser.
The Initial Set-up Report and the Monthly Remittance Advice Reports will be
delivered in an Excel format or in such other electronic format as agreed to
by
the parties. Each Initial Set-up Report and Monthly Remittance Advice Report
shall contain only such information as is readily available to the Company
and
is mutually agreed to by Company and the Purchaser.
E-1
EXHIBIT
F
FORM
OF
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT made this _____ day of __________________,
200_, among
[ ],
a __________________________ (the “Servicer”),
_________________________ a ________________________ (the “Assignee”),
and
_____________________________, a _______________________ (the “Assignor”).
WHEREAS,
Xxxxxxx Sachs Mortgage Company and the Servicer have entered into a certain
Flow
Seller’s Warranties and Servicing Agreement dated as of
[
], 2003 (the “Servicing
Agreement”),
pursuant to which the Servicer sold certain mortgage loans listed on the
mortgage loan schedule attached as an exhibit to the Servicing
Agreement;
WHEREAS,
the Assignee has agreed on certain terms and conditions to purchase from the
Assignor certain mortgage loans (the “Mortgage
Loans”),
which
Mortgage Loans are subject to the provisions of the Servicing Agreement and
are
listed on the mortgage loan schedule attached as Exhibit
1
hereto
(the “Mortgage
Loan Schedule”);
WHEREAS,
pursuant to a Trust Agreement, dated as of [______ __], 200__ (the “Trust Agreement”),
between GS Mortgage Securities Corp., as Depositor, and [______], as Trustee
(the “Trustee”),
the
Assignee will transfer the Mortgage Loans to the Trustee, together with the
Assignee’s rights in the Sale and Servicing Agreement;
NOW
THEREFORE, in consideration of the mutual promises contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
|
1.
|
Assignment
and Assumption.
|
(a) The
Assignor hereby assigns to the Assignee all of its right, title and interest
in
and to the Mortgage Loans and Servicing Agreement, to the extent relating to
the
Mortgage Loans (other than the rights of the Assignor to indemnification
thereunder), and the Assignee hereby assumes all of the Assignor’s obligations
under the Servicing Agreement, to the extent relating to the Mortgage Loans
from
and after the date hereof, and the Servicer hereby acknowledges such assignment
and assumption and hereby agrees to the release of the Assignor from any
obligations under the Servicing Agreement from and after the date hereof, to
the
extent relating to the Mortgage Loans. Notwithstanding the foregoing, it is
understood that the Assignor is not released from liability for any breaches
of
the representations and warranties made in Section 3.6 of the Servicing
Agreement, and the Assignee is not undertaking any such liability
hereunder.
F-1
(b) The
Assignor represents and warrants to the Assignee that the Assignor has not
taken
any action which would serve to impair or encumber the Assignor’s ownership
interest in the Mortgage Loans since the date of the Servicing
Agreement.
(c) The
Servicer and the Assignor shall have the right to amend, modify or terminate
the
Servicing Agreement without the joinder of the Assignee with respect to mortgage
loans not conveyed to the Assignee hereunder, provided, however, that such
amendment, modification or termination shall not affect or be binding on the
Assignee.
|
2.
|
Accuracy
of Servicing Agreement.
|
The
Servicer and the Assignor represent and warrant to the Assignee that (i)
attached hereto as Exhibit
2
is a
true, accurate and complete copy of the Servicing Agreement, (ii) the Servicing
Agreement is in full force and effect as of the date hereof, (iii) the Servicing
Agreement has not been amended or modified in any respect and (iv) no notice
of
termination has been given to the Servicer under the Servicing
Agreement.
|
3.
|
Recognition
of Purchaser.
|
From
and
after the date hereof, the Servicer shall note the transfer of the Mortgage
Loans to the Assignee in its books and records, shall recognize the Assignee
as
the owner of the Mortgage Loans and shall service the Mortgage Loans for the
benefit of the Assignee pursuant to the Servicing Agreement, the terms of which
are incorporated herein by reference. It is the intention of the Assignor,
Servicer and Assignee that the Servicing Agreement shall be binding upon and
inure to the benefit of the Servicer and the Assignee and their successors
and
assigns.
4.
Representations
and Warranties of the Assignee.
The
Assignee hereby represents and warrants to the Assignor as
follows:
(a) Decision
to Purchase.
The
Assignee represents and warrants that it is a sophisticated investor able to
evaluate the risks and merits of the transactions contemplated hereby, and
that
it has not relied in connection therewith upon any statements or representations
of the Assignor or the Servicer other than those contained in the Servicing
Agreement or this Agreement.
(b) Authority.
The
Assignee hereto represents and warrants that it is duly and legally authorized
to enter into this Agreement and to perform its obligations hereunder and under
the Servicing Agreement.
(c) Enforceability.
The Assignee hereto represents and warrants that this Agreement has been duly
authorized, executed and delivered by it and (assuming due authorization,
execution and delivery thereof by each of the other parties hereto) constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles (regardless of whether
such
enforcement is considered in a proceeding in equity or at law).
F-2
5.
Representations
and Warranties of the Assignor.
The
Assignor hereby represents and warrants to the Assignee as follows:
(a) The
Assignor has been duly organized and is validly existing as a limited
partnership in good standing under the laws of the State of New York with full
power and authority (corporate and other) to enter into and perform its
obligations under the Servicing Agreement and this Assignment Agreement.
(b) This
Assignment Agreement has been duly executed and delivered by the Assignor,
and,
assuming due authorization, execution and delivery by each of the other parties
hereto, constitutes a legal, valid, and binding agreement of the Assignor,
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium, or other similar laws affecting
creditors’ rights generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at law.
(c) The
execution, delivery and performance by the Assignor of this Assignment Agreement
and the consummation of the transactions contemplated thereby do not require
the
consent or approval of, the giving of notice to, the registration with, or
the
taking of any other action in respect of, any state, federal or other
governmental authority or agency, except such as has been obtained, given,
effected or taken prior to the date thereof.
(d) The
execution and delivery of this Assignment Agreement have been duly authorized
by
all necessary corporate action on the part of the Assignor; neither the
execution and delivery by the Assignor of this Assignment Agreement, nor the
consummation by the Assignor of the transactions therein contemplated, nor
compliance by the Assignor with the provisions thereof, will conflict with
or
result in a breach of, or constitute a default under, any of the provisions
of
the governing documents of the Assignor or any law, governmental rule or
regulation or any material judgment, decree or order binding on the Assignor
or
any of its properties, or any of the provisions of any material indenture,
mortgage, deed of trust, contract or other instrument to which the Assignor
is a
party or by which it is bound.
(e) There
are
no actions, suits or proceedings pending or, to the knowledge of the Assignor,
threatened, before or by any court, administrative agency, arbitrator or
governmental body (A) with respect to any of the transactions contemplated
by
this Assignment Agreement or (B) with respect to any other matter that in the
judgment of the Assignor will be determined adversely to the Assignor and will
if determined adversely to the Assignor materially adversely affect its ability
to perform its obligations under this Assignment Agreement.
(f) Except
for the sale to the Assignee, the Assignor has not assigned or pledged any
Mortgage Note or the related Mortgage or any interest or participation
therein.
(g) The
Assignor has not satisfied, canceled, or subordinated in whole or in part,
or
rescinded the Mortgage, and the Assignor has not released the Mortgaged Property
from the lien of the Mortgage, in whole or in part, nor has the Assignor
executed an instrument that would effect any such release, cancellation,
subordination, or rescission. The Assignor has not released any Mortgagor,
in
whole or in part, except in connection with an assumption agreement or other
agreement approved by the related Federal Insurer, to the extent such approval
was required.
F-3
It
is
understood and agreed that the representations and warranties set forth in
this
Section 5 shall survive delivery of the respective Mortgage Files to the
Custodian and shall inure to the benefit of the Assignee and its assigns
notwithstanding any restrictive or qualified endorsement or assignment. Upon
the
discovery by the Assignor or the Assignee and its assigns of a breach of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other parties to this Assignment
Agreement, and in no event later than two (2) Business Days from the date of
such discovery. It is understood and agreed that the obligations of the Assignor
set forth in Section 6 to repurchase a Mortgage Loan constitute the sole
remedies available to the Assignee and its assigns on their behalf respecting
a
breach of the representations and warranties contained in this Section 5. It
is
further understood and agreed that the Assignor shall be deemed not to have
made
the representations and warranties in this Section 5 with respect to, and to
the
extent of, representations and warranties made, as to the matters covered in
this Section 5, by the Servicer in the Servicing Agreement (or any officer’s
certificate delivered pursuant thereto).
It
is
understood and agreed that the Assignor has made no representations or
warranties to the Assignee other than those contained in this Section 5, and
no
other affiliate of the Assignor has made any representations or warranties
of
any kind to the Assignee.
|
6.
|
Repurchase
of Mortgage Loans.
|
Upon
discovery or notice of any breach by the Assignor of any representation,
warranty, or covenant under this Assignment Agreement that materially and
adversely affects the value of any Mortgage Loan or the interest of the Assignee
therein (it being understood that any such defect or breach shall be deemed
to
have materially and adversely affected the value of the related Mortgage Loan
or
the interest of the Assignee therein if the Assignee incurs a loss as a result
of such defect or breach), the Assignee promptly shall request that the Assignor
cure such breach and, if the Assignor does not cure such breach in all material
respects within 60 days from the date on which it is notified of the breach,
the
Assignee may enforce the Assignor’s obligation hereunder to purchase such
Mortgage Loan from the Assignee. Notwithstanding the foregoing, however, if
such
breach is a Qualification Defect, such cure or repurchase must take place within
75 days of the Defect Discovery Date.
In
the
event the Servicer has breached a representation or warranty under the Servicing
Agreement that is substantially identical to a representation or warranty
breached by the Assignor hereunder, the Assignee shall first proceed against
the
Servicer. If the Servicer does not within 60 days after notification of the
breach, take steps to cure such breach (which may include certifying to progress
made and requesting an extension of the time to cure such breach, as permitted
under the Servicing Agreement) or purchase, or substitute for the Mortgage
Loan,
the Trustee shall be entitled to enforce the obligations of the Assignor
hereunder to cure such breach or to purchase the Mortgage Loan from the Trust.
In such event, the Assignor shall succeed to the rights of the Assignee to
enforce the obligations of the Servicer to cure such breach or repurchase such
Mortgage Loan under the terms of the related Servicing Agreement with respect
to
such Mortgage Loan
F-4
Except
as
specifically set forth herein, the Assignee shall have no responsibility to
enforce any provision of this Assignment Agreement, to oversee compliance
hereof, or to take notice of any breach or default thereof.
|
7.
|
Continuing
Effect.
|
Except
as
contemplated hereby, the Servicing Agreement shall remain in full force and
effect in accordance with its terms.
|
8.
|
Governing
Law.
|
THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
|
9.
|
Notices.
|
Any
notices or other communications permitted or required hereunder or under the
Servicing Agreement shall be in writing and shall be deemed conclusively to
have
been given if personally delivered at or mailed by registered mail, postage
prepaid, and return receipt requested or transmitted by telex, telegraph or
telecopier and confirmed by a similar mailed writing, to: (i) in the case of
the
Servicer, [______________________, _____________________] or such address as
may
hereafter be furnished by the Servicer; (ii) in the case of the Assignee,
_________________, _________________, Attention: ________________________,
or
such other address as may hereafter be furnished by the Assignee, and (iii)
in
the case of the Assignor, __________________, Attention: _________________,
or
such other address as may hereafter be furnished by the Assignor.
10. Counterparts.
This
Agreement may be executed in counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same instrument.
|
11.
|
Definitions.
|
Any
capitalized term used but not defined in this Agreement has the same meaning
as
in the Servicing Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.
F-5
|
ASSIGNEE:
|
||
| By: | ||
| Name: | ||
| Title: | ||
|
ASSIGNOR:
|
||
| By: | ||
| Name: | ||
| Title: | ||
| Acknowledged by: | |
|
SERVICER:
|
|
| By: | |
| Name: | |
| Title: | |
F-6
EXHIBIT
G
FORM
OF
SELLER’S OFFICER’S CERTIFICATE
I,
______________________, hereby certify that I am a duly elected [Vice President]
of _____________________________, a corporation organized under the laws of
the
State of _________ (the “Company”)
and
further as follows:
1.
Attached hereto as Exhibit 1 is a true, correct and complete copy of the
Articles of Incorporation of the Company which is in full force and effect
on
the date hereof.
2.
Attached hereto as Exhibit 2 is a true, correct and complete copy of the by-laws
of the Company which are in effect on the date hereof.
3.
The
execution and delivery by the Company of the Flow Seller’s Warranties and
Servicing Agreement, dated as of
[
], 2003 (the “Sale
and Servicing Agreement”)
and
the Custodial Agreement , dated as of
[
], 2003 (the “Custodial Agreement” and, together with the Sale and Servicing
Agreement, the “Agreements”)
are in
the ordinary course of business of the Company.
4.
A true
and correct copy of the resolutions of the board of directors of the Company
that approve, authorize and direct the Company to enter into the Agreements
are
attached hereto as Exhibit 3.
5.
Each
person who, as an officer or representative of the Company, signed (a) the
Sale
and Servicing Agreement, or (b) any other document delivered prior hereto or
on
the date hereof in connection with any transaction described in the Agreements
was, at the respective times of such signing and delivery a duly elected or
appointed, qualified and acting officer or representative of the Company, who
holds the office set forth opposite his or her name on Exhibit 4, and the
signatures of such persons appearing on such documents are their genuine
signatures.
No
proceedings for dissolution, merger, consolidation, liquidation, conservatorship
or receivership of the Company or for the sale of all or substantially all
of
its assets is pending, or to my knowledge threatened, and no such proceeding
is
contemplated by the Company.
G-1
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.
| Dated: |
By:
|
||
|
Title:
|
Vice President |
I,
__________________ the Secretary of __________________________, hereby certify
that _______________________ is a duly elected and acting Vice President of
the
Company and that the signature appearing above is his genuine
signature.
IN
WITNESS WHEREOF, I have hereunto signed my name.
| Dated: |
By:
|
||
|
Title:
|
Secretary |
G-2
EXHIBIT
H
FORM
OF
ANNUAL CERTIFICATION
|
Re:
|
The
[
] agreement dated as of
[
], 200[ ] (the “Agreement”),
among [IDENTIFY PARTIES]
|
I,
________________________________, the _______________________ of National City
Mortgage Co., certify to Xxxxxxx Xxxxx Mortgage Company, [the Depositor], and
the [Master Servicer] [Securities Administrator] [Trustee], and their officers,
with the knowledge and intent that they will rely upon this certification,
that:
(1) I
have
reviewed the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the “Compliance
Statement”),
the
report on assessment of the Company’s compliance with the servicing criteria set
forth in Item 1122(d) of Regulation AB (the “Servicing
Criteria”),
provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
Act of 1934, as amended (the “Exchange
Act”)
and
Item 1122 of Regulation AB (the “Servicing
Assessment”),
the
registered public accounting firm’s attestation report provided in accordance
with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the “Attestation
Report”),
and
all servicing reports, officer’s certificates and other information relating to
the servicing of the Mortgage Loans by the Company during 200[ ] that were
delivered by the Company to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the
“Company
Servicing Information”);
(2) Based
on
my knowledge, the Company Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances under
which such statements were made, not misleading with respect to the period
of
time covered by the Company Servicing Information;
(3) Based
on
my knowledge, all of the Company Servicing Information required to be provided
by the Company under the Agreement has been provided to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee];
(4) I
am
responsible for reviewing the activities performed by the Company as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the
Compliance Statement, the Servicing Assessment or the Attestation Report, the
Company has fulfilled its obligations under the Agreement; and
(5) The
Compliance Statement required to be delivered by the Company pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Company and by any Subservicer or Subcontractor pursuant to
the
Agreement, have been provided to the [Depositor] [Master Servicer]. Any material
instances of noncompliance described in such reports have been disclosed to
the
[Depositor] [Master Servicer]. Any material instance of noncompliance with
the
Servicing Criteria has been disclosed in such reports.
| Date:___________________________________ | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
H-1
EXHIBIT
I
FORM
OF
WARRANTY XXXX OF SALE
On
this
_______ day of ________, 200__, National City Mortgage Co. ("Seller")
as the
Seller under that certain Second Amended and Restated Flow Seller’s Warranties
and Servicing Agreement, dated as of November 1, 2005 (the "Agreement")
does
hereby sell, transfer, assign, set over and convey to Xxxxxxx Xxxxx Mortgage
Company as Purchaser under the Agreement, without recourse, but subject to
the
terms of the Agreement, all rights, title and interest of the Seller in and
to
the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto,
together with the related Mortgage Files and all rights and obligations arising
under the documents contained therein. Pursuant to Section 2.01 of the
Agreement, the Seller has delivered to the Purchaser or its custodian the
Mortgage Loan Documents for each Mortgage Loan to be purchased as set forth
in
the Agreement. The contents of each related Servicing File required to be
maintained and retained by the Seller to service the Mortgage Loans pursuant
to
the Agreement and thus not delivered to the Purchaser are and shall be held
in
trust by the Seller for the benefit of the Purchaser as the owner thereof.
The
Seller’s possession of any portion of each such Servicing File is at the will of
the Purchaser for the sole purpose of facilitating servicing of the related
Mortgage Loan pursuant to the Agreement, and such retention and possession
by
the Seller shall be in a custodial capacity only. The ownership of each Mortgage
Note, Mortgage, and the contents of the Mortgage File and Servicing File is
vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or which come into the
possession of the Seller shall immediately vest in the Purchaser and shall
be
retained and maintained, in trust, by the Seller at the will of the Purchaser
in
such custodial capacity only.
The
Seller confirms to the Purchaser that the representations and warranties set
forth in Sections 2.6, 3.1 and 3.2 of the Agreement are true and correct as
of
the date hereof, and that all statements made in the Sellers' Officer's
Certificate and all attachments thereto remain complete, true and correct in
all
respects as of the date hereof.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreement.
|
NATIONAL
CITY
MORTGAGE CO.
(Seller)
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
I-1
EXHIBIT
J
COMPANY
GUIDE
J-1
EXHIBIT
K
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by National City Mortgage Co. [Name
of
Subservicer] shall address, at a minimum, the criteria identified as below
as
“Applicable Servicing Criteria”:
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
General
Servicing Considerations
|
||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
|
|
|
Cash
Collection and Administration
|
||
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
|
K-1
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction
agreements.
|
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized
access.
|
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
|
K-2
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
Investor
Remittances and Reporting
|
||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
|
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
|
K-3
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
Pool
Asset Administration
|
||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the transaction
agreements or related mortgage loan documents.
|
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
|
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
|
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal
balance.
|
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor’s mortgage loans (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
K-4
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period a
mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
|
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan
documents.
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction
agreements.
|
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
K-5
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
|
K-6
| National City Mortgage Co. [NAME OF SUBSERVICER] | ||
| |
Date: |
|
|
|
||
| By: | ||
| Name: | ||
K-7
