HMB ACCEPTANCE CORP., as Depositor WELLS FARGO BANK, N.A., as Securities Administrator and Master Servicer HOMEBANC MORTGAGE CORPORATION, as Seller and Servicer WILMINGTON TRUST COMPANY, as Delaware Trustee and U.S. BANK NATIONAL ASSOCIATION, as...
EXECUTION
HMB
ACCEPTANCE CORP., as Depositor
XXXXX
FARGO BANK, N.A.,
as
Securities Administrator and Master Servicer
HOMEBANC
MORTGAGE CORPORATION, as Seller and Servicer
WILMINGTON
TRUST COMPANY, as Delaware Trustee
and
U.S.
BANK
NATIONAL ASSOCIATION, as Trustee
___________________________
Dated
as
of March 1, 2007
___________________________
HOMEBANC
MORTGAGE TRUST 2007-1
MORTGAGE
PASS-THROUGH CERTIFICATES
Page
|
ARTICLE
I DEFINITIONS
|
9
|
|
|
Section
1.01.
|
Definitions
|
9
|
|
Section
1.02.
|
Calculations
With Respect to the Mortgage Loans
|
50
|
|
Section
1.03.
|
Calculations
With Respect to Group I Accrued Interest
|
50
|
|
ARTICLE
IA
|
50
|
|
|
Section
1A.01.
|
Name
of Trust
|
50
|
|
Section
1A.02.
|
Office
|
50
|
|
Section
1A.03.
|
Declaration
of Trust
|
50
|
|
Section
1A.04.
|
Purpose
and Powers
|
51
|
|
Section
1A.05.
|
Liability
of the Certificateholders
|
51
|
|
Section
1A.06.
|
Title
To Trust Property
|
51
|
|
Section
1A.07.
|
Situs
of Trust
|
51
|
|
Section
1A.08.
|
The
Delaware Trustee
|
51
|
|
Section
1A.09
|
Separateness
Provisions
|
53
|
|
Section
1A.10
|
Assets
of the Trust
|
54
|
|
ARTICLE
II CONVEYANCE OF MORTGAGE LOANS
|
54
|
|
|
Section
2.01.
|
Creation
and Declaration of Trust; Conveyance of Mortgage Loans.
|
54
|
|
Section
2.02.
|
Acceptance
of Trust Estate; Review of Documentation
|
58
|
|
Section
2.03.
|
Grant
Clause.
|
59
|
|
Section
2.04.
|
Covenant
of Seller with Respect to Certificates.
|
61
|
|
ARTICLE
III REPRESENTATIONS AND WARRANTIES
|
61
|
|
|
Section
3.01.
|
Representations
and Warranties of the Depositor and the Seller
|
61
|
|
Section
3.02.
|
Discovery
of Breach
|
63
|
|
Section
3.03.
|
Repurchase,
Purchase or Substitution of Mortgage Loans
|
64
|
|
ARTICLE
IV ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS BY THE
SERVICER
|
65
|
|
|
Section
4.01.
|
Servicer
to Perform Servicing Responsibilities.
|
65
|
|
Section
4.02.
|
Servicing
of the Mortgage Loans.
|
66
|
|
Section
4.03.
|
Payments
to the Master Servicer.
|
79
|
i
|
Section
4.04.
|
General
Servicing Procedures.
|
81
|
|
Section
4.05.
|
Representations,
Warranties and Agreements.
|
83
|
|
Section
4.06.
|
The
Servicer.
|
86
|
|
Section
4.07.
|
Termination
for Cause
|
88
|
|
Section
4.08.
|
Successor
to Servicer
|
90
|
|
Section
4.09.
|
Subservicers
and Subservicing Agreements.
|
91
|
|
ARTICLE
V ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY THE
MASTER
SERVICER AND THE SECURITIES ADMINISTRATOR
|
92
|
|
|
Section
5.01.
|
Duties
of the Master Servicer; Representations and Warranties
|
92
|
|
Section
5.02.
|
Master
Servicer Fidelity Bond and Master Servicer Errors and Omissions
Insurance
Policy.
|
94
|
|
Section
5.03.
|
Master
Servicer’s Financial Statements and Related
Information
|
95
|
|
Section
5.04.
|
Power
to Act; Procedures.
|
95
|
|
Section
5.05.
|
Enforcement
of Servicer’s and Master Servicer’s Obligations
|
96
|
|
Section
5.06.
|
Collection
Account.
|
97
|
|
Section
5.07.
|
Application
of Funds in the Collection Account
|
98
|
|
Section
5.08.
|
Reports
to Trustee and Certificateholders.
|
100
|
|
Section
5.09.
|
Termination
of Servicer; Successor Servicers.
|
104
|
|
Section
5.10.
|
Master
Servicer Liable for Enforcement
|
105
|
|
Section
5.11.
|
Assumption
of Master Servicing by Trustee.
|
105
|
|
Section
5.12.
|
Release
of Mortgage Files.
|
105
|
|
Section
5.13.
|
Documents,
Records and Funds in Possession of Master Servicer to be Held for
Trustee.
|
106
|
|
Section
5.14.
|
Opinion
|
108
|
|
Section
5.15.
|
Trustee
To Retain Possession of Certain Insurance Policies and
Documents
|
108
|
|
Section
5.16.
|
Compensation
to the Master Servicer
|
108
|
|
Section
5.17.
|
Merger
or Consolidation
|
109
|
|
Section
5.18.
|
Resignation
of Master Servicer
|
109
|
|
Section
5.19.
|
Assignment
or Delegation of Duties by the Master Servicer
|
109
|
|
Section
5.20.
|
Limitation
on Liability of the Master Servicer and Others.
|
109
|
|
Section
5.21.
|
Indemnification;
Third Party Claims
|
110
|
|
Section
5.22.
|
Alternative
Index
|
111
|
|
Section
5.23.
|
Transfer
of Servicing
|
111
|
|
Section
5.24.
|
Compliance
with Safeguarding Customer Information Requirements
|
112
|
|
Section
5.25.
|
REO
Property.
|
112
|
|
ARTICLE
VI THE CERTIFICATES; DEPOSITS AND DISTRIBUTIONS TO HOLDERS OF
CERTIFICATES
|
113
|
|
|
Section
6.01.
|
The
Certificates.
|
113
|
|
Section
6.02.
|
Certificate
Register; Registration of Transfer and Exchange of
Certificates.
|
114
|
|
Section
6.03.
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
118
|
|
Section
6.04.
|
Persons
Deemed Owners.
|
119
|
ii
|
Section
6.05.
|
Access
to List of Certificateholders’ Names and Addresses.
|
119
|
|
Section
6.06.
|
Maintenance
of Office or Agency.
|
119
|
|
Section
6.07.
|
The
Certificate Account.
|
119
|
|
Section
6.08.
|
Distributions
from the Certificate Account
|
120
|
|
Section
6.09.
|
Allocation
of Losses.
|
126
|
|
Section
6.10.
|
Control
of the Trust Accounts
|
128
|
|
Section
6.11.
|
Monthly
Advances by Master Servicer and Servicer
|
132
|
|
ARTICLE
VII THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
|
133
|
|
|
Section
7.01.
|
Duties
of Trustee and the Securities Administrator.
|
133
|
|
Section
7.02.
|
Certain
Matters Affecting the Trustee and the Securities
Administrator.
|
134
|
|
Section
7.03.
|
Neither
Trustee nor Securities Administrator Liable for Certificates or
Mortgage
Loans.
|
136
|
|
Section
7.04.
|
Trustee
and Securities Administrator May Own Certificates.
|
136
|
|
Section
7.05.
|
Fees
and Expenses of the Trustee, the Securities Administrator and
Others.
|
136
|
|
Section
7.06.
|
Eligibility
Requirements for the Trustee and the Securities
Administrator.
|
137
|
|
Section
7.07.
|
Resignation
and Removal of Trustee or Securities Administrator.
|
138
|
|
Section
7.08.
|
Successor
Trustee or Securities Administrator.
|
139
|
|
Section
7.09.
|
Merger
or Consolidation of Trustee or Securities Administrator.
|
139
|
|
Section
7.10.
|
Appointment
of Co-Trustee or Separate Trustee.
|
139
|
|
Section
7.11.
|
Tax
Matters.
|
141
|
|
ARTICLE
VIII ANNUAL COMPLIANCE MATTERS
|
142
|
|
|
Section
8.01.
|
Assessments
of Compliance and Attestation Reports.
|
142
|
|
Section
8.02.
|
Annual
Compliance Statement.
|
143
|
|
Section
8.03.
|
Xxxxxxxx-Xxxxx
Certification.
|
144
|
|
Section
8.04.
|
Reports
Filed with Securities and Exchange Commission.
|
144
|
|
Section
8.05.
|
Additional
Information.
|
149
|
|
Section
8.06.
|
Intention
of the Parties and Interpretation.
|
149
|
|
Section
8.07.
|
Indemnification.
|
150
|
|
ARTICLE
IX
|
151
|
|
|
MASTER
SERVICER EVENTS OF DEFAULT
|
151
|
|
|
Section
9.01.
|
Master
Servicer Events of Default; Trustee To Act; Appointment of
Successor
|
151
|
|
Section
9.02.
|
Additional
Remedies of Trustee Upon Event of Default
|
155
|
|
Section
9.03.
|
Waiver
of Defaults
|
155
|
|
Section
9.04.
|
Notification
to Holders
|
155
|
iii
|
Section
9.05.
|
Directions
by Certificateholders and Duties of Trustee During Master Servicer
Event
of Default
|
155
|
|
Section
9.06.
|
Action
Upon Certain Failures of the Master Servicer and Upon Master Servicer
Event of Default
|
156
|
|
ARTICLE
X TERMINATION
|
156
|
|
|
Section
10.01.
|
Termination
|
156
|
|
Section
10.02.
|
Termination
Prior to Maturity Date; Optional Redemption
|
156
|
|
Section
10.03.
|
Certain
Notices upon Final Distribution
|
157
|
|
Section
10.04.
|
Additional
Termination Requirements.
|
158
|
|
ARTICLE
XI REMIC ADMINISTRATION
|
158
|
|
|
Section
11.01.
|
REMIC
Administration.
|
158
|
|
Section
11.02.
|
Prohibited
Transactions and Activities.
|
161
|
|
Section
11.03.
|
Indemnification
with Respect to Certain Taxes and Loss of REMIC Status.
|
161
|
|
ARTICLE
XII MISCELLANEOUS PROVISIONS
|
162
|
|
|
Section
12.01.
|
Binding
Nature of Agreement; Assignment
|
162
|
|
Section
12.02.
|
Entire
Agreement
|
162
|
|
Section
12.03.
|
Amendment.
|
162
|
|
Section
12.04.
|
Acts
of Certificateholders
|
163
|
|
Section
12.05.
|
Recordation
of Agreement
|
163
|
|
Section
12.06.
|
Governing
Law; Submission to Jurisdiction
|
163
|
|
Section
12.07.
|
Notices
|
164
|
|
Section
12.08.
|
Severability
of Provisions
|
166
|
|
Section
12.09.
|
Indulgences;
No Waivers
|
166
|
|
Section
12.10.
|
Headings
Not To Affect Interpretation
|
166
|
|
Section
12.11.
|
Benefits
of Agreement
|
166
|
|
Section
12.12.
|
Special
Notices to the Rating Agencies.
|
167
|
|
Section
12.13.
|
Counterparts
|
167
|
iv
ATTACHMENTS
|
Exhibit
A
|
Forms
of Certificates
|
|
Exhibit
B-1
|
Form
of Transferor Certificate
|
|
Exhibit
B-2
|
Form
of Investment Letter
|
|
Exhibit
B-3
|
Form
of Rule 144A Letter
|
|
Exhibit
B-4
|
ERISA
Affidavit
|
|
Exhibit
B-5
|
Residual
Transfer Affidavit
|
|
Exhibit
B-6
|
Residual
Transferee Affidavit
|
|
Exhibit
C
|
Custodial
Account Letter Agreement
|
|
Exhibit
D
|
Escrow
Account Letter Agreement
|
|
Exhibit
E
|
Standard
Layout For Monthly Defaulted Loan
Report
|
|
Exhibit
F
|
Relevant
Servicing Criteria
|
|
Exhibit
G
|
Back-up
Certification
|
|
Exhibit
H
|
Additional
10-D Disclosure
|
|
Exhibit
I
|
Additional
10-K Disclosure
|
|
Exhibit
J
|
Form
8-K Disclosure
|
|
Exhibit
K
|
Additional
Disclosure Notification
|
|
Exhibit
L
|
Servicing
Fee Schedule
|
|
Exhibit
M
|
Form
of Certificate of Trust
|
|
Exhibit
N
|
List
of Transaction Parties
|
|
Schedule
A
|
Mortgage
Loan Schedule
|
v
This
POOLING AND SERVICING AGREEMENT, dated as of March 1, 2007 (this “Agreement” or
this “Pooling and Servicing Agreement”), is by and among HMB ACCEPTANCE CORP., a
Delaware corporation, as depositor (the “Depositor”), U.S. BANK NATIONAL
ASSOCIATION, as trustee (the “Trustee”), XXXXX FARGO BANK, N.A., as securities
administrator (in such capacity, the “Securities Administrator”) and master
servicer (in such capacity, the “Master Servicer”), HOMEBANC MORTGAGE
CORPORATION, a Georgia corporation, as seller (in such capacity, the “Seller”)
and as servicer (in such capacity, the “Servicer”) and WILMINGTON TRUST COMPANY,
a Delaware banking corporation, as Delaware trustee (the “Delaware
Trustee”).
PRELIMINARY
STATEMENT
The
Depositor has acquired the Mortgage Loans from the Seller, and at the Closing
Date is the owner of the Mortgage Loans and the other property being conveyed
by
it to the Trustee hereunder for inclusion in the Trust Estate. On the Closing
Date, the Depositor will acquire the Certificates from the Trust, as
consideration for its transfer to the Trust of the Mortgage Loans and the other
property constituting the Trust Estate. The Depositor has duly authorized the
execution and delivery of this Agreement to provide for the conveyance to the
Trustee of the Mortgage Loans and the other property constituting the Trust
Estate. All covenants and agreements made by the Seller in the Mortgage Loan
Purchase Agreement and by the Depositor, the Master Servicer, the Servicer,
the
Securities Administrator and the Trustee herein with respect to the Mortgage
Loans and the other property constituting the Trust Estate are for the benefit
of the Holders from time to time of the Certificates. The Depositor, the
Trustee, the Master Servicer, the Servicer and the Securities Administrator
are
entering into this Agreement, and the Trustee is accepting the Trust Estate,
for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
As
provided herein, an election shall be made that portions of the Trust Fund
be
treated for federal income tax purposes as comprising four real estate mortgage
investment conduits under Section 860D of the Code (each a “REMIC” or, in the
alternative, Lower-Tier REMIC I, Lower-Tier REMIC II, REMIC 2 and REMIC 3 (REMIC
3 also being referred to as the “Upper Tier REMIC”)). Any inconsistencies or
ambiguities in this Agreement or in the administration of this Agreement shall
be resolved in a manner that preserves the validity of such REMIC
elections.
Each
Certificate, other than the Class R Certificates, represents ownership of a
regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions.
The Class R Certificate represents ownership of the sole Class of residual
interest in each REMIC for purposes of the REMIC Provisions.
The
Upper
Tier REMIC shall hold as its assets the several uncertificated interests in
REMIC 2, other than the LT2-R Interest, and each such interest is hereby
designated as a regular interest in REMIC 2 for purposes of the REMIC
Provisions. REMIC 2 shall hold as its assets the several Classes of
uncertificated interests in Lower-Tier REMIC I and Lower-Tier REMIC II, other
than the LT-RI and LTR-II Interests, and each such interest is hereby designated
as a regular interest in Lower-Tier REMIC I or Lower-Tier REMIC II, as
applicable, for purposes of the REMIC Provisions. Lower-Tier REMIC I shall
hold
as its assets the Pool I Mortgage Loans and any related assets and Lower Tier
REMIC II shall hold as assets the Pool II Mortgage Loans and related assets.
The
startup day for each REMIC created hereby for purposes of the REMIC Provisions
is the Closing Date. In addition, for purposes of the REMIC Provisions, the
latest possible maturity date for each regular interest in each REMIC created
hereby is the Latest Possible Maturity Date.
Lower-Tier
REMIC I
The
following table sets forth (or describes) the designation, interest rate, and
initial principal balance for each interest in Lower-Tier REMIC I, each of
which, other than the LT-RI Interest, is hereby designated as a regular interest
(each, a “REMIC LT-I Regular Interest).
|
REMIC
LTI Designation
|
REMIC
LTI
Interest
Rate
|
Initial
Principal
Balance
|
Related
Loan Group
|
|||
|
LTI-1-Senior
|
(1)
|
$ 155,874,201.62
|
Loan
Group I-1
|
|||
|
LTI-1-Sub
|
(1)
|
$ 115,436.38
|
Loan
Group I-1
|
|||
|
LT1-2-Senior
|
(2)
|
$ 63,373,205.63
|
Loan
Group I-2
|
|||
|
LTI-2-Sub
|
(2)
|
$ 46,931.37
|
Loan
Group I-2
|
|||
|
LTI-3-Senior
|
(3)
|
$ 25,791,154.43
|
Loan
Group I-3
|
|||
|
LTI-3-Sub
|
(3)
|
$ 19,102.57
|
Loan
Group I-3
|
|||
|
LT-RI
|
(4)
|
(4)
|
NA
|
____________________
|
(1)
|
The
interest rate with respect
to any Distribution Date (and the related Interest Accrual Period)
for
each of these REMIC LT-I Regular Interests is a per annum rate equal
to
the weighted average of the Net Mortgage Rates of the Mortgage Loans
in
Loan Group I-1 as of the first day of the related Collection
Period.
|
|
(2)
|
The
interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for each of these REMIC LT-I Regular Interests
is
a per annum rate equal to the weighted average of the Net Mortgage
Rates
of the Mortgage Loans in Loan Group I-2 as of the first day of the
related
Collection Period.
|
|
(3)
|
The
interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for each of these REMIC LT-I Interests is
a per
annum rate equal to the weighted average of the Net Mortgage Rates
of the
Mortgage Loans in Loan Group I-3 as of the first day of the related
Collection Period.
|
|
(4)
|
The
Class LT-RI Interest is the sole residual interest in Lower-Tier
REMIC I.
It does not have an interest rate or a principal
balance.
|
On
each
Distribution Date, the Paying Agent shall first pay or charge as an expense
of
Lower-Tier REMIC I all expenses of the Trust associated with Pool I for such
Distribution Date.
On
each
Distribution Date, the Paying Agent shall distribute the remaining Available
Funds with respect to the Mortgage Loans in Loan Group I-1, Loan Group I-2,
and
Loan Group I-3 in the following order or priority:
(i)
First, to the LTI-1-Sub, LTI-2-Sub, and LTI-3-Sub Interests as
follows:
|
1.
|
To
the LTI-Sub-1 Interest until its principal balance equals one percent
of
the Subordinate Component for Loan Group I-1 for the immediately
succeeding Distribution Date;
|
2
|
2.
|
To
the LTI-Sub-2 Interest until its principal balance equals one percent
of
the Subordinate Component for Loan Group I-2 for the immediately
succeeding Distribution Date
|
|
3.
|
To
the LTI-Sub-3 Interest until its principal balance equals one percent
of
the Subordinate Component for Loan Group I-3 for the immediately
succeeding Distribution Date;
|
|
4.
|
To
the LTI-1 Sub, LTI-2-Sub, and LTI-3-Sub Interests the amount necessary
to
cause the ratio of the principal balance of each such REMIC LT-I
Regular
Interest to each of the other REMIC LT-I Regular Interests having
“Sub” in
its designation to equal the ratio of the Subordinate Component for
the
related Loan Group for the immediately succeeding Distribution Date
to the
aggregate of the Subordinate Components of the other Loan Groups
for the
immediately succeeding Distribution
Date;
|
(ii)
Second, concurrently to the LTI-1 Senior, LTI-2 Senior, and LTI-3 Senior
Interests until the principal balance of each such REMIC LT-I Regular Interest
equals the excess of the Loan Group Balance for the related Loan Group on the
last day of the related Collection Period after taking into account all payments
received during such Collection Period over the principal balance of the LTI-1
Sub Interest, in the case of the LTI-1 Senior Interest, the LTI-2 Sub Interest,
in the case of the LTI-2 Senior Interest, and the LTI-3 Sub Interest, in the
case of the LTI-3 Senior Interest, after taking into account distributions
made
pursuant to priority (i) above on such Distribution Date;
(iii)
Third, as interest at the rates described above on each of the REMIC LT-I
Regular Interests
(iv)
Fourth, any remaining amounts, to the LT-RI Interest.
All
Realized Losses on the Pool I Mortgage Loans shall be allocated among the REMIC
LT-I Regular Interests in the same manner that principal distributions are
allocated.
Lower-Tier
REMIC II
The
following table sets forth (or describes) the designation, interest rate, and
initial principal balance for each interest in Lower-Tier REMIC I, each of
which, other than the LT-RII Interest, is hereby designated as a regular
interest (each, a “REMIC LT-II Regular Interest).
|
Lower-Tier
REMIC
II
Designation
|
Lower-Tier
REMIC-II
Interest
Rate
|
Initial
Principal
Balance
|
Corresponding
Class
of
Certificates
|
|||
|
LTII-A
|
(1)
|
$ 21,984,000.00
|
Class
II-A
|
|||
|
LTII-M-1
|
(1)
|
$ 1,657,000.00
|
Class
II-M-1
|
|||
|
LTII-M-2
|
(1)
|
$ 1,123,000.00
|
Class
II-M-2
|
|||
|
LTII-B
|
(1)
|
$ 1,041,000.00
|
Class
I-B
|
|||
|
LTII-Q
|
(1)
|
$ 28,983,796.00
|
N/A
|
|||
|
LT-RII
|
(2)
|
(2)
|
3
|
(1)
|
The
interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for each of these REMIC LT-II Regular Interests
is a per annum rate equal to the weighted average of the Net Mortgage
Rates of the Pool II Mortgage Loans as of the first day of the related
Collection Period.
|
|
(2)
|
The
LT-RII is the sole residual interest in Lower-Tier REMIC II. It does
not
have an interest rate or a principal
balance.
|
On
each
Distribution Date, the Paying Agent shall first pay or charge as an expense
of
Lower-Tier REMIC II all expenses of the Trust associated with Pool II for such
Distribution Date.
On
each
Distribution Date, the Paying Agent shall distribute the Group II Interest
Funds
among the REMIC LT-II Regular Interests as interest at the rates described
above, provided, however, that interest that accrues on the LTII-Q Interest
shall be deferred on any Distribution Date in an amount equal to one-half of
the
increase in the Group II Overcollateralization Amount on such Distribution
Date
and interest so deferred shall be distributed as principal according to priority
1 below.
On
each
Distribution Date, the Paying Agent shall distribute the Group II Principal
Distribution Amount in the following order or priority:
|
1.
|
First,
to each of the LTII-A, LTII-M-1, LTII-M-2, and LTII-B Interests until
the
principal balance of each such REMIC LT-II Regular Interest equals
one-half the Class Principal Amount of the Corresponding Class of
Certificates immediately after such Distribution
Date;
|
|
2.
|
Second,
to the LT-II Q Interest any remaining
amounts.
|
All
Realized Losses on the Pool II Mortgage Loans shall be allocated among the
REMIC
LT-I Regular Interests in the same manner that principal distributions are
allocated.
REMIC
2
The
following table sets forth (or describes) the designation, interest rate, and
initial principal balance for each interest in REMIC 2, each of which, other
than the LT-R2 Interest, is hereby designated as a regular interest (each,
a
“REMIC 2 Regular Interest).
|
REMIC
2 Lower
Tier
Class Designation
|
REMIC
2 Lower
Tier
Interest Rate
|
Initial
Principal
Balance
|
Corresponding
Class
of
Certificates
|
|||
|
LTI-1A-1
|
(1)
|
$ 116,992,000.00
|
Class
I-1A-1
|
|||
|
LTI-1A-2
|
(1)
|
$ 27,454,000.00
|
Class
I-1A-2
|
|||
|
LTI-2A-1
|
(2)
|
$ 54,034,000.00
|
Class
I-2A-1
|
|||
|
LTI-2A-2
|
(2)
|
$ 4,693,000.00
|
Class
I-2A-2
|
|||
|
LTI-3A-1
|
(3)
|
$ 21,990,000.00
|
Class
I-3A-1
|
|||
|
LTI-3A-2
|
(3)
|
$ 1,910,000.00
|
Class
X-0X-0
|
0
|
XXX-X-0
|
(4)
|
$ 5,517,000.00
|
Class
X-X-0
|
|||
|
XXX-X-0
|
(4)
|
$ 4,045,000.00
|
Class
X-X-0
|
|||
|
XXX-X-0
|
(4)
|
$ 3,066,000.00
|
Class
X-X-0
|
|||
|
XXX-X-0
|
(4)
|
$ 3,310,000.00
|
Class
X-X-0
|
|||
|
XXX-X-0
|
(4)
|
$ 1,227,000.00
|
Class
X-X-0
|
|||
|
XXX-X-0
|
(4)
|
$ 982,032.00
|
Class
I-B-6
|
|||
|
LTII-A
|
(5)
|
$ 43,968,000.00
|
Class
II-A
|
|||
|
LTII-M-1
|
(5)
|
$ 3,314,000.00
|
Class
II-M-1
|
|||
|
LTII-M-2
|
(5)
|
$ 2,246,000.00
|
Class
II-M-2
|
|||
|
LTII-B
|
(5)
|
$ 2,082,000.00
|
Class
II-B
|
|||
|
LTII-X
|
(6)
|
(6)
|
Class
II-X
|
|||
|
LT-R2
|
(7)
|
(7)
|
N/A
|
______________________
|
(1)
|
The
interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for each of these REMIC 2 Regular Interests
is a
per annum rate equal to the weighted average of the Net Mortgage
Rates of
the Mortgage Loans in Loan Group I-1 as of the first day of the related
Collection Period.
|
|
(2)
|
The
interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for each of these REMIC 2 Regular Interests
is a
per annum rate equal to the weighted average of the Net Mortgage
Rates of
the Mortgage Loans in Loan Group I-2 as of the first day of the related
Collection Period.
|
|
(3)
|
The
interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for each of these REMIC 2 Regular Interests
is a
per annum rate equal to the weighted average of the Net Mortgage
Rates of
the Mortgage Loans in Loan Group I-3 as of the first day of the related
Collection Period.
|
|
(4)
|
The
interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for each of these REMIC 2 Regular Interests
is a
per annum rate equal to the weighted average of the interest rates
on the
LTI-1-Sub, LTI-2-Sub, and LTI-3-Sub Interests for such Distribution
Date,
weighted based on their relative principal balances before taking
into
account any distributions on such Distribution
Date.
|
|
(5)
|
The
interest rate with respect to any Distribution Date (and the related
Interest Accrual Period) for each of these REMIC 2 Regular Interests
is a
per annum rate equal to the Group II Certificate Interest Rate on
the
Corresponding Class of Certificates for such Distribution
Date.
|
|
(6)
|
The
LTII-X Interest comprises two components, one of which has an initial
principal balance of $3,178,796 on which no interest will accrue.
The
second component is a notional component having a notional balance
on any
Distribution Date equal to the sum of the principal balances of the
REMIC
LT-II Regular Interests. The LTII-X Interest shall accrue interest
for
each Interest Accrual Period at a per annum rate equal to the excess,
if
any, of (i) the weighted average of the interest rates on the REMIC
LT-II
Regular Interests for such Distribution Date (the weighted average
of the
Net Mortgage Rates on the Pool II Mortgage Loans as of the first
day of
the related Collection Period) over (ii) the Adjusted REMIC II WAC.
Interest accrued on the LTII-X Interest for any Interest Accrual
Period
will be deferred to the extent of any increase in the Group II
Overcollateralization Amount on the related Distribution Date. Any
interest so deferred shall not itself accrue interest.
|
|
(7)
|
The
Class LT-R2 Interest is the sole residual interest in REMIC 2. It
does not
have an interest rate or a principal
balance.
|
On
each
Distribution Date, all amounts distributed with respect to the REMIC LT-I
Regular Interests and the REMIC LT-II Regular Interests shall first be
distributed on the REMIC 2 Regular Interests as interest at the interest rates
described above, provided that, any interest accrued on the Class LTII-X
Interest shall be deferred to the extent of any increase in the Group II
Overcollateralization Amount on such Distribution Date. Any remaining amounts
shall be distributed first as principal on each REMIC 2 Regular Interest other
than the LTII-X Interest until its principal balance equals the Class Principal
Amount of the Corresponding Class of Certificates immediately after such
Distribution Date, and any remaining amounts shall be distributed in respect
of
the LTII-X Interest.
5
All
Realized Losses on the Mortgage Loans shall be allocated among the REMIC 2
Regular Interests in the same manner that principal distributions are
allocated.
REMIC
3
The
following table sets forth (or describes) the Class designation, Group I
Certificate Interest Rate or the Group II Certificate Interest Rate, initial
Class Principal Amount or Notional Amount and minimum denomination for each
Class of Certificates comprising interests in the Trust Fund created hereunder.
Each Certificate, other than the Class R Certificates represents ownership
of
regular interests in the Upper Tier REMIC.
|
Class
Designation
|
Group
I Certificate
Interest
Rate or Group
II
Certificate Interest
Rate
|
Initial
Class
Principal
or Notional
Amount
($)
|
Minimum
Denomination
|
|||
|
Class
I-1A-1
|
(1)
|
$ 116,992,000.00
|
$ 100,000.00
|
|||
|
Class
I-1A-2
|
(1)
|
$ 27,454,000.00
|
$ 100,000.00
|
|||
|
Class
I-1X
|
(2)
|
$ 144,446,000.00
|
(3)
|
|||
|
Class
I-2A-1
|
(4)
|
$ 54,034,000.00
|
$ 100,000.00
|
|||
|
Class
I-2A-2
|
(4)
|
$ 4,693,000.00
|
$ 100,000.00
|
|||
|
Class
I-2X
|
(5)
|
$ 58,727,000.00
|
(3)
|
|||
|
Class
I-3A-1
|
(6)
|
$ 21,990,000.00
|
$ 100,000.00
|
|||
|
Class
I-3A-2
|
(6)
|
$ 1,910,000.00
|
$ 100,000.00
|
|||
|
Class
I-3X
|
(7)
|
$ 23,900,000.00
|
(3)
|
|||
|
Class
II-A
|
(8)
|
$ 43,968,000.00
|
$ 100,000.00
|
|||
|
Class
I-B-1
|
(9)
|
$ 5,517,000.00
|
$ 100,000.00
|
|||
|
Class
I-B-2
|
(9)
|
$ 4,045,000.00
|
$ 100,000.00
|
|||
|
Class
I-B-3
|
(9)
|
$ 3,066,000.00
|
$ 100,000.00
|
|||
|
Class
I-B-4
|
(9)
|
$ 3,310,000.00
|
$ 100,000.00
|
|||
|
Class
I-B-5
|
(9)
|
$ 1,227,000.00
|
$ 100,000.00
|
|||
|
Class
I-B-6
|
(9)
|
$ 982,032.00
|
$ 100,000.00
|
|||
|
Class
II-M-1
|
(10)
|
$ 3,314,000.00
|
$ 100,000.00
|
|||
|
Class
II-M-2
|
(11)
|
$ 2,246,000.00
|
$ 100,000.00
|
|||
|
Class
II-B
|
(12)
|
$ 2,082,000.00
|
$ 100,000.00
|
|||
|
Class
II-X
|
(13)
|
(13)
|
||||
|
Class
R
|
(14)
|
(14)
|
(14)
|
|||
_________________________
|
(1)
|
On
or prior to the Distribution Date in February 2012, the Group I
Certificate Interest Rate with respect to any Distribution Date (and
the
related Interest Accrual Period) for each of the Class I-1A-1 and
Class
I-1A-2 Certificates is a per annum rate equal to the weighted average
of
the Net Mortgage Rates of the Mortgage Loans in Loan Group I-1, weighted
on the basis of the Scheduled Principal Balances of such Mortgage
Loans as
of the first day of the related Collection Period, minus
approximately 0.543%. After the Distribution Date in February 2012,
the
Group I Certificate Interest Rate with respect to any Distribution
Date
(and the related Interest Accrual Period) for each of the Class I-1A-1
and
Class I-1A-2 Certificates is a per annum rate equal to the weighted
average of the Net Mortgage Rates of the Mortgage Loans in Loan Group
I-1,
weighted on the basis of the Scheduled Principal Balances of such
Mortgage
Loans as of the first day of the related Collection Period.
|
6
|
(2)
|
On
or prior to the Distribution Date in February 2012, the Group I
Certificate Interest Rate with respect to any Distribution Date (and
the
related Interest Accrual Period) for the Class I-1X Certificates
is a per
annum rate equal to approximately 0.543% per annum. After the Distribution
Date in February 2012, the Group I Certificate Interest Rate with
respect
to any Distribution Date (and the related Interest Accrual Period)
for the
Class I-1X Certificates shall be
0.00%.
|
|
(3)
|
The
Class I-1X, Class I-2X and Class I-3X Certificates will be issued
in
minimum Percentage Interests of 10%.
|
|
(4)
|
On
or prior to the Distribution Date in January 2014, the Group I Certificate
Interest Rate with respect to any Distribution Date (and the related
Interest Accrual Period) for each of the Class I-2A-1 and Class I-2A-2
Certificates is a per annum rate equal to the weighted average of
the Net
Mortgage Rates of the Mortgage Loans in Loan Group I-2, weighted
on the
basis of the Scheduled Principal Balances of such Mortgage Loans
as of the
first day of the related Collection Period, minus
approximately 0.644%. After the Distribution Date in January 2014,
the
Group I Certificate Interest Rate with respect to any Distribution
Date
(and the related Interest Accrual Period) for each of the Class I-2A-1
and
Class I-2A-2 Certificates is a per annum rate equal to the weighted
average of the Net Mortgage Rates of the Mortgage Loans in Loan Group
I-2,
weighted on the basis of the Scheduled Principal Balances of such
Mortgage
Loans as of the first day of the related Collection Period.
|
|
(5)
|
On
or prior to the Distribution Date in January
2014,
the Group I Certificate Interest Rate with respect to any Distribution
Date (and the related Interest Accrual Period) for the Class I-2X
Certificates is a per annum rate equal to approximately 0.644% per
annum.
After the Distribution Date in January 2014, the Group I Certificate
Interest Rate with respect to any Distribution Date (and the related
Interest Accrual Period) for the Class I-2X Certificates shall be
0.00%.
|
|
(6)
|
On
or prior to the Distribution Date in February 2017, the Group I
Certificate Interest Rate with respect to any Distribution Date (and
the
related Interest Accrual Period) for each of the Class I-3A-1 and
Class
I-3A-2 Certificates is a per annum rate equal to the weighted average
of
the Net Mortgage Rates of the Mortgage Loans in Loan Group I-3, weighted
on the basis of the Scheduled Principal Balances of such Mortgage
Loans as
of the first day of the related Collection Period, minus
approximately 0.072%. After the Distribution Date in February 2017,
the
Group I Certificate Interest Rate with respect to any Distribution
Date
(and the related Interest Accrual Period) for each of the Class I-3A-1
and
Class I-3A-2 Certificates is a per annum rate equal to the weighted
average Net Mortgage Rate of the Mortgage Loans in Loan Group I-3,
weighted on the basis of the Scheduled Principal Balances of such
Mortgage
Loans as of the first Day of the related Collection Period.
|
|
(7)
|
On
or prior to the Distribution Date in February 2017, the Group I
Certificate Interest Rate with respect to any Distribution Date (and
the
related Interest Accrual Period) for the Class I-3X Certificates
is a per
annum rate equal to approximately 0.072% per annum. After the Distribution
Date in February 2017, the Group I Certificate Interest Rate with
respect
to any Distribution Date (and the related Interest Accrual Period)
for the
Class I-3X Certificates shall be
0.00%.
|
|
(8)
|
The
Group II Certificate Interest Rate with respect to any Distribution
Date
(and the related Interest Accrual Period) for the Class II-A Certificates
is a per annum rate equal to the least of (i) LIBOR + approximately
0.300%, (ii) 11.000% per annum and (iii) the Group II Net WAC Cap
Rate;
provided,
that if the Pool II Mortgage Loans and related property are not purchased
pursuant to Section 10.02 on the Group II Initial Purchase Date,
then with
respect to each subsequent Distribution Date the per annum rate calculated
pursuant to clause (i) above with respect to the Class II-A Certificates
will be LIBOR plus approximately
0.600%.
|
7
|
(9)
|
The
Group I Certificate Interest Rate with respect to any Distribution
Date
(and the related Interest Accrual Period) for each the Group I Subordinate
Certificates is a per annum rate equal to the weighted average of
the
weighted average of the Net Mortgage Rates of the Mortgage Loans
in Loan
Group I-1, Loan Group I-2 and Loan Group I-3, weighted in proportion
to
Subordinate Component for each Loan
Group.
|
|
(10)
|
The
Group II Certificate Interest Rate with respect to any Distribution
Date
(and the related Interest Accrual Period) for the Class II-M-1
Certificates is a per annum rate equal to the least of (i) LIBOR
+
approximately 0.900%, (ii) 11.000% per annum and (iii) the Group
II Net
WAC Cap Rate; provided,
that if the Pool II Mortgage Loans and related property are not purchased
pursuant to Section 10.02 on the Group II Initial Purchase Date,
then with
respect to each subsequent Distribution Date the per annum rate calculated
pursuant to clause (i) above with respect to the Class II-M-1 Certificates
will be LIBOR plus approximately
1.350%.
|
|
(11)
|
The
Group II Certificate Interest Rate with respect to any Distribution
Date
(and the related Interest Accrual Period) for the Class II-M-2
Certificates is a per annum rate equal to the least of (i) LIBOR
+
approximately 2.000%, (ii) 11.000% per annum and (iii) the Group
II Net
WAC Cap Rate; provided,
that if the Pool II Mortgage Loans and related property are not purchased
pursuant to Section 10.02 on the Group II Initial Purchase Date,
then with
respect to each subsequent Distribution Date the per annum rate calculated
pursuant to clause (i) above with respect to the Class II-M-2 Certificates
will be LIBOR plus approximately
3.000%..
|
|
(12)
|
The
Group II Certificate Interest Rate with respect to any Distribution
Date
(and the related Interest Accrual Period) for the Class II-B Certificates
is a per annum rate equal to the least of (i) LIBOR + approximately
2.000%, (ii) 11.000% per annum and (iii) the Group II Net WAC Cap
Rate;
provided,
that if the Pool II Mortgage Loans and related property are not purchased
pursuant to Section 10.02 on the Group II Initial Purchase Date,
then with
respect to each subsequent Distribution Date the per annum rate calculated
pursuant to clause (i) above with respect to the Class II-B Certificates
will be LIBOR plus approximately 3.000%.
|
|
(13)
|
For
any Distribution Date, the Class II-X Certificate shall be entitled
to all
amounts distributable in respect of the LTII-X Interest in REMIC
2 and
shall at all time have economic entitlements identical to those described
for the LTII-X Interest in footnote (6) in the table describing REMIC
2 in
this Preliminary Statement.
|
|
(14)
|
The
Class R Certificate will be issued without a Certificate Principal
Amount
and will not bear interest at a stated rate. The Class R Certificate
represents ownership of the residual interest in the Upper Tier REMIC,
as
well as ownership of the LT-RI, the LT-RII, and Class LT2-R Interests.
The
Class R Certificate will be issued as a single Certificate evidencing
the
entire Percentage Interest in such
Class.
|
As
of the
Cut-off Date, the Mortgage Loans had an aggregate Scheduled Principal Balance
of
$300,008,828.
As
of the
Cut-off Date, the Pool I Mortgage Loans had an aggregate Scheduled Principal
Balance of $245,220,032.
As
of the
Cut-off Date, the Pool II Mortgage Loans had an aggregate Scheduled Principal
Balance of $54,788,796.
8
In
consideration of the mutual agreements herein contained, the Depositor, the
Seller, the Master Servicer, the Trustee, the Securities Administrator, the
Servicer and the Delaware Trustee hereby agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01.Definitions.
The
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
Accepted
Servicing Practices:
With respect to any Mortgage Loan, those mortgage loan servicing practices
(including collection procedures) of prudent mortgage banking institutions
which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located, and which are
in
accordance with Xxxxxx Xxx servicing practices and procedures, for MBS pool
mortgages, as defined in the Xxxxxx Mae Guides including future
updates.
Accountant:
A Person engaged in the practice
of accounting who (except when this Agreement provides that an Accountant must
be Independent) may be employed by or affiliated with the Depositor or an
Affiliate of the Depositor.
Accounts:
Any or all of the Custodial Accounts, the Escrow Accounts, the Collection
Account, the Certificate Account and any other accounts created or maintained
by
the Master Servicer, the Securities Administrator or the Servicer pursuant
to
this Agreement.
Additional
Disclosure Notification:
As defined in Section 8.04(a).
Additional
Form 10-D Disclosure:
As defined in Section 8.04(a).
Additional
Form 10-K Disclosure:
As defined in Section 8.04(b).
Additional
Servicer:
Each
affiliate of a Servicer that Services any of the Mortgage Loans and each Person
that is not an affiliate of any Servicer that Services 10% or more of the
Mortgage Loans.
Adjusted
REMIC II WAC:
For any
Distribution Date (and the related Interest Accrual Period) a per annum rate
equal to the product of (i) two multiplied by (ii) the weighted average of
the
interest rates on the LTI-A, LTII-M-1, LTII-M-2, LTII-B, and LTII-Q Interests
in
Lower-Tier REMIC II weighted in proportion to their principal balances as of
the
first day of the related Interest Accrual Period, and computed by subjecting
the
interest rate on the LTII-Q Interest to a cap of 0.00% and subjecting the
interest rate on each of the LTI-A, LTII-M-1, LTII-M-2, and LTII-B Interests
to
a cap equal to the product of (a) Group II Certificate Interest Rate for the
Corresponding Class of Certificates multiplied by (b) the quotient of the actual
number of days in the Interest Accrual Period Divided by 30.
9
Adjustment
Date:
With respect to any Mortgage Loan, the date on which an adjustment is made
to
the Monthly Payment to correspond to an adjustment in the related Mortgage
Note.
Adverse
REMIC Event:
Either
(i) loss of status as a REMIC, within the meaning of Section 860D of the Code,
for any group of assets identified as a REMIC in the Preliminary Statement
to
this Agreement, or (ii) imposition of any tax, including the tax imposed under
Section 860F(a)(1) on prohibited transactions, and the tax imposed under Section
860G(d) on certain contributions to a REMIC, on any REMIC created hereunder
to
the extent such tax would be payable from assets held as part of the Trust
Estate.
Affiliate:
With respect to any specified Person, any other Person controlling or controlled
by or under common control with such specified Person. For the purposes of
this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.
Aggregate
Pool Balance:
With respect to Pool I, as
of any
date of determination, an amount equal to the aggregate of the Loan Group
Balances of the Mortgage Loans in Loan Group I-1, Loan Group I-2 and Loan Group
I-3 on such date, and with respect to Pool II, as
of any
date of determination, an amount equal to the Pool Balance of Pool II on such
date.
Agreement:
This Pooling and Servicing Agreement and all amendments and supplements
hereto.
Ancillary
Income:
All
income derived from the Mortgage Loans, excluding Servicing
Fees
attributable to the Mortgage Loans and other amounts treated as payment proceeds
of the Mortgage Loans, including but not limited to, late charges, fees received
with respect to checks or bank drafts returned by the related bank for
non-sufficient funds, assumption fees, optional insurance administrative fees
and all other incidental fees and charges.
Appraised
Value:
With respect to any Mortgaged Property, the value thereof as determined by
an
appraisal made for the originator of the Mortgage Loan at the time of
origination of the Mortgage Loan by an appraiser who met the requirements of
the
Servicer and Xxxxxx Xxx, or as determined by use of an automated valuation
model.
Assignment
of Mortgage:
An assignment of Mortgage, notice of transfer or equivalent instrument, in
recordable form, which is sufficient under the laws of the jurisdiction wherein
the related Mortgaged Property is located to reflect of record the sale of
the
Mortgage, which assignment, notice of transfer or equivalent instrument may
be
in the form of one or more blanket assignments covering Mortgages secured by
Mortgaged Properties located in the same county, if permitted by
law.
Authorized
Officer:
Any Person who may execute
an Officer’s Certificate on behalf of the Trust.
Back-up
Certification:
As defined in Section 8.03.
10
Bankruptcy:
As to any Person, the making of an assignment for the benefit of creditors,
the
filing of a voluntary petition in bankruptcy, adjudication as a bankrupt or
insolvent, the entry of an order for relief in a bankruptcy or insolvency
proceeding, the seeking of reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief, or seeking, consenting
to or acquiescing in the appointment of a trustee, receiver or liquidator,
dissolution, or termination, as the case may be, of such Person pursuant to
the
provisions of either the Bankruptcy Code, or any other similar state
laws.
Bankruptcy
Code:
The United States Bankruptcy Code of 1986, as amended.
Bankruptcy
Loss:
Any
loss resulting from a bankruptcy court, in connection with a personal bankruptcy
of a borrower, (1) establishing the value of a Mortgaged Property at an amount
less than the Outstanding Principal Balance of the Mortgage Loan secured by
such
Mortgaged Property or (2) reducing the amount of the Monthly Payment on the
related Mortgage Loan, in each case, as reported by the Servicer to the Master
Servicer.
Book-Entry
Certificates:
Beneficial interests in Certificates designated as “Book-Entry Certificates” in
this Agreement, ownership and transfers of which shall be evidenced or made
through book entries by a Clearing Agency as described in Section 6.02;
provided,
that
after the occurrence of a condition whereupon Definitive Certificates are to
be
issued to Certificate Owners, such Book-Entry Certificates shall no longer
be
“Book-Entry Certificates.” In no event shall the Residual Certificates be
designated as Book-Entry Certificates.
Business
Day:
Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking
institutions in New York, New York or, if other than New York, the city in
which
the Corporate Trust Office of the Trustee is located, or the States of Delaware,
Georgia, Maryland, Massachusetts, Minnesota or Texas are authorized
or obligated by law or executive order to be closed.
Certificate:
Any one of the certificates signed and countersigned by the Securities
Administrator in substantially the forms attached hereto
as Exhibit A.
Certificate
Account:
The account maintained by the Securities Administrator in accordance with the
provisions of Section 6.07.
Certificate
Group:
The Group I-1 Senior Certificates, the Group I-2 Senior Certificates, the Group
1-3 Senior Certificates and the Group II Senior Certificates, as
applicable.
Certificate
of Trust:
The
certificate of trust filed with the Delaware Secretary of State in respect
of
the Trust pursuant to Section 3810 of the DSTS.
Certificate
Owner:
With respect to a Book-Entry Certificate, the Person who is the owner of such
Book-Entry Certificate, as reflected on the books of the Clearing Agency, or
on
the books of a Person maintaining an account with such Clearing Agency (directly
or as an indirect participant, in accordance with the rules of such Clearing
Agency).
11
Certificate
Principal Amount:
With respect to any Group II Senior Certificate or Group II Subordinate
Certificate as of any Distribution Date, the initial Certificate Principal
Amount thereof on the Closing Date, less the amount of all principal
distributions previously distributed with respect to such Certificate and any
Group I Applied Loss Amount previously allocated to such Certificate; provided,
however, that on each Distribution Date on which a Subsequent Recovery is
distributed, the Certificate Principal Amount of any Certificate whose
Certificate Principal Amount has previously been reduced by application of
Group
I Applied Loss Amounts will be increased, in order of seniority, by an amount
(to be applied pro
rata
to all Certificates of such class) equal to the lesser of (1) any Group II
Deferred Amount for each such class immediately prior to such Distribution
Date
and (2) the total amount of any Subsequent Recovery distributed on such
Distribution Date to Certificateholders, after application (for this purpose)
to
any more senior classes of Certificates. The Class II-X and Class II-R
Certificates will be issued without Certificate Principal Amounts. With respect
to any Group I Certificate as of any Distribution Date, the initial Certificate
Principal Amount thereof on the Closing Date, as reduced by (1) all amounts
allocable to principal previously distributed with respect to such Certificate,
(2) the principal portion of all Realized Losses previously allocated to such
Certificate (taking into account the applicable Group I Loss Allocation
Limitation), and (3) solely in the case of a Group I Subordinate Certificate,
such Certificate’s pro
rata
share, if any, of the Group I Subordinate Certificate Writedown Amount for
previous Distribution Dates; provided that, the Certificate Principal Amount
of
any class of Group I Subordinate Certificates with the highest payment priority
to which Realized Losses have been allocated shall be increased by the amount
of
any Subsequent Recoveries on the Pool I Mortgage Loans not previously allocated,
but not by more than the amount of Realized Losses previously allocated to
reduce the Certificate Principal Amount of that Certificate. The Class I-1X,
Class I-2X, Class I-3X and Class R Certificates are issued without Certificate
Principal Amounts.
Certificate
Register
and Certificate
Registrar:
The register
maintained and the registrar appointed pursuant to Section 6.02.
Certificateholder:
The meaning provided in the definition
of “Holder.”
Certification
Parties:
As defined in Section 8.03.
Certifying
Person:
As defined in Section 8.03.
Civil
Relief Act:
The
Servicemembers Civil Relief Act, as such may be amended from time to time,
and
any similar state or local laws.
Class:
All Certificates and, in the case of REMIC 1 and REMIC 2, all Lower Tier
Interests, bearing the same class designation.
Class
II-A Principal Distribution Amount:
With respect to any applicable Distribution Date on or after the Group II
Stepdown Date, as long as a Group II Trigger Event has not occurred with respect
to such Distribution Date, an amount equal to the excess of (x) the aggregate
Class Principal Amount of the Group II Senior Certificates immediately prior
to
such Distribution Date over (y) the Class II-A Target Amount.
12
Class
II-A Target Amount:
The lesser of (a) the product of (i) approximately 57.90% and (ii) the aggregate
Scheduled Principal Balance of the Mortgage Loans in Pool II as of the last
day
of the related Collection Period, and (b) the aggregate Scheduled Principal
Balance of the Pool II Mortgage Loans as of the last day of the related
Collection Period minus the Group II Overcollateralization Floor.
Class
II-B Principal Distribution Amount:
With respect to any applicable Distribution Date on or after the Group II
Stepdown Date, as long as a Group II Trigger Event has not occurred with respect
to such Distribution Date, an amount equal to the lesser of (x) the remaining
Group II Principal Distribution Amount for that Distribution Date after payment
of the Class II-A Principal Distribution Amount, the Class II-M-1 Principal
Distribution Amount and the Class II-M-2 Principal Distribution Amount, and
(y)
the excess, if any, of (A) the sum of (1) the aggregate Class Principal Amount
of the Group II Senior Certificates (after taking into account the payment
of
the Class II-A Principal Distribution Amount for such Distribution Date), (2)
the Class Principal Amount of the Class II-M-1 Certificates (after taking into
account the payment of the Class II-M-1 Principal Distribution Amount for such
Distribution Date), (3) the Class Principal Amount of the Class II-M-2
Certificates (after taking into account the payment of the Class II-M-2
Principal Distribution Amount for such Distribution Date) and (4) the Class
Principal Amount of the Class II-B Certificates immediately prior to such
Distribution Date, over (B) the Class II-B Target Amount.
Class
II-B Target Amount:
The lesser of (a) the product of (i) approximately 85.80% and (ii) the aggregate
Scheduled Principal Balance of the Pool II Mortgage Loans as of the last day
of
the related Collection Period, and (b) the aggregate Scheduled Principal Balance
of the Pool II Mortgage Loans as of the last day of the related Collection
Period minus the Group II Overcollateralization Floor.
Class
II-M-1 Principal Distribution Amount:
With respect to any applicable Distribution Date on or after the Group II
Stepdown Date, as long as a Group II Trigger Event has not occurred with respect
to such Distribution Date, an amount equal to the lesser of (x) the remaining
Group II Principal Distribution Amount for that Distribution Date after payment
of the Class II-A Principal Distribution Amount and (y) the excess, if any,
of
(A) the sum of (1) the aggregate Class Principal Amount of the Group II Senior
Certificates (after taking into account the payment of the Class II-A Principal
Distribution Amount for such Distribution Date) and (2) the Class Principal
Amount of the Class II-M-1 Certificates immediately prior to such Distribution
Date, over (B) the Class II-M-1 Target Amount.
Class
II-M-1 Target Amount:
The lesser of (a) the product of (i) approximately 70.00% and (ii) the aggregate
Scheduled Principal Balance of the Pool II Mortgage Loans as of the last day
of
the related Collection Period, and (b) the aggregate Scheduled Principal Balance
of the Pool II Mortgage Loans as of the last day of the related Collection
Period minus the Group II Overcollateralization Floor.
Class
II-M-2 Principal Distribution Amount:
With respect to any applicable Distribution Date on or after the Group II
Stepdown Date, as long as a Group II Trigger Event has not occurred with respect
to such Distribution Date, an amount equal to the lesser of (x) the remaining
Group II Principal Distribution Amount for that Distribution Date after payment
of the Class II-A Principal Distribution Amount and the Class II-M-1 Principal
Distribution Amount and (y) the excess, if any, of (A) the sum of (1) the
aggregate Class Principal Amount of the Group II Senior Certificates (after
taking into account the payment of the Class II-A Principal Distribution Amount
for such Distribution Date), (2) the Class Principal Amount of the Class II-M-1
Certificates (after taking into account the payment of the Class II-M-1
Principal Distribution Amount for such Distribution Date) and (3) the Class
Principal Amount of the Class II-M-2 Certificates immediately prior to such
Distribution Date, over (B) the Class II-M-2 Target Amount.
13
Class
II-M-2 Target Amount:
The lesser of (a) the product of (i) approximately 78.20% and (ii) the aggregate
Scheduled Principal Balance of the Pool II Mortgage Loans as of the last day
of
the related Collection Period, and (b) the aggregate Scheduled Principal Balance
of the Pool II Mortgage Loans as of the last day of the related Collection
Period minus the Group II Overcollateralization Floor.
Class
II-X Distributable Amount:
With
respect to any Distribution Date, the amount of interest that has accrued on
the
Class II-X Notional Amount, as described in the Preliminary Statement, but
that
has not been distributed prior to such date. In addition, such amount shall
include the initial Group II Overcollateralization Amount of
$3,178,796 to
the
extent such amount has not been distributed on an earlier Distribution Date
as
part of the Group II Overcollateralization Release Amount.
Class
Principal Amount:
With respect to each class of Certificates, the aggregate Certificate Principal
Amount of all certificates of that class.
Class
Principal Amount:
With
respect to each Class of Certificates (other than the Class I-1X, Class I-2X,
Class I-3X and Class R Certificates), the aggregate Certificate Principal Amount
of all Certificates of that Class. With
respect to the Class I-1X, Class I-2X, Class I-3X and Class R Certificates,
zero. With respect to any Lower Tier Interest, the initial Class Principal
Amount as shown or described in the table set forth in the Preliminary Statement
to this Agreement for the issuing REMIC, as reduced by principal distributed
with respect to such Lower Tier Interest and Realized Losses allocated to such
Lower Tier Interest.
Class
R Certificate:
Each Class R Certificate executed by the Securities Administrator, and
authenticated and delivered by the Certificate Registrar, substantially in
the
form annexed hereto as Exhibit A and evidencing the ownership of the Class
LT1-R
Interest, the Class LT2-R Interest and the residual interest in the Upper Tier
REMIC.
Clearing
Agency:
An
organization registered as a “clearing agency” pursuant to Section 17A of the
Exchange Act, as amended. As of the Closing Date, the Clearing Agency shall
be
The Depository Trust Company.
Closing
Date:
March
30, 2007.
Code:
The Internal Revenue Code of 1986, as amended.
14
Collection
Account:
A
separate account maintained by the Master Servicer established in the name
of
the Trustee and for the benefit of the Certificateholders pursuant to Section
5.06.
Collection
Period:
With respect to any Distribution Date, the one-month period commencing on the
second day of the calendar month immediately preceding the month in which such
Distribution Date occurs and ending on the first day
of the month in which such Distribution Date occurs.
Commission:
The United States Securities and Exchange Commission.
Compensating
Interest Payment:
With
respect to any Distribution Date, payments made by the Servicer or the Master
Servicer in an amount equal to the lesser of (x) the aggregate Prepayment
Interest Shortfall Amount with respect to such Distribution Date and (y) the
aggregate Servicing
Fee
payable
to the Servicer or the aggregate master servicing compensation payable to the
Master Servicer, as applicable, in respect of such Distribution
Date.
Condemnation
Proceeds:
All
awards of 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.
Control:
The meaning specified in Section 8-106 of the Delaware UCC.
Corporate
Trust Office:
With
respect to (i) the Securities Administrator and the Certificate Registrar,
the
principal corporate trust office of the Securities Administrator which, for
purposes of presentment of Certificates for transfer and exchange and final
payment, is located at Xxxxx Fargo Bank, N.A., Sixth Street and Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, and for all other purposes is located
at
X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or for overnight deliveries, at 0000
Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 21045), Attention: Client Manager (HomeBanc
2007-1); and (iii) the Trustee, the principal office of the Trustee at which
at
any particular time its corporate trust business shall be administered, which
office at the date of execution of this Agreement is located at Xxx Xxxxxxx
Xxxxxx, 0xx
Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Corporate Trust Office Trust
Services/HomeBanc 2007-1,
or at
such other address as the Trustee may designate from time to time by notice
to
the Certificateholders, or the principal corporate trust office of any successor
Trustee at the address designated by such successor Trustee by notice to the
Certificateholders.
Corresponding
Class:
The
Class of Certificates that corresponds to a class of interests in REMIC 2 as
provided in the Preliminary Statement.
Custodial
Account:
The
separate custodial account (other than an Escrow Account) established and
maintained by the Servicer pursuant to Section 4.02(d) of this Agreement.
Custodial
Agreement:
The
custodial agreement dated as of March 1, 2007, relating to the custody of
certain of the Mortgage Loans, among the Custodian, the Master Servicer, the
Depositor and the Trustee.
15
Custodian:
The
custodian appointed pursuant to the Custodial Agreement, and any successor
thereto. The initial Custodian is U.S. Bank National Association.
Custodian
Fee:
The
certification, safekeeping and release fee payable by the Master Servicer on
behalf of the Trust to the Custodian from income on funds held in the Collection
Account as provided in Section 5.07 and pursuant to the terms of the separate
fee letter agreement for HomeBanc Mortgage Trust 2007-1 Mortgage Pass-Through
Certificates.
Cut-off
Date:
March
1, 2007.
Cut-off
Date Balance:
The
Pool I Cut-off Date Balance and the Pool II Cut-off Date Balance, as
applicable.
Deficient
Valuation:
With
respect to any Mortgage Loan, a valuation of the Mortgaged Property by a court
of competent jurisdiction in an amount less than the unpaid principal balance
of
the Mortgage Loan secured by such Mortgaged Property.
Definitive
Certificate:
A
Certificate of any Class issued in definitive, fully registered, certificated
form.
Delaware
Trustee:
Wilmington Trust Company, not in its individual capacity but solely as trustee,
and its successors and assigns.
Delaware
Trustee Fee:
The
annual ongoing fee payable by the Master Servicer on behalf of the Trust to
the
Delaware Trustee from income on funds held in the Collection
Account.
Delaware
UCC:
The
Uniform Commercial Code as in effect in the State of Delaware.
Deleted
Mortgage Loan:
A
Mortgage Loan that is repurchased from the Trust Estate pursuant to the terms
hereof or as to which one or more Qualifying Substitute Mortgage Loans are
substituted therefor.
Delinquent:
For
reporting purposes, in accordance with the MBA method, a Mortgage Loan is
“delinquent” when any payment contractually due thereon has not been made by the
close of business on the Due Date therefor. Such Mortgage Loan is “30 days
Delinquent” if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was first due, or, if there is no such corresponding day
(e.g.,
as when
a 30-day month follows a 31-day month in which a payment was due on the 31st
day
of such month), then on the last day of such immediately succeeding month.
Similarly for “60 days Delinquent” and the second immediately succeeding month
and “90 days Delinquent” and the third immediately succeeding
month.
Depositor:
HMB
Acceptance Corp., a Delaware corporation.
Depository:
The
initial Depository shall be The Depository Trust Company, the nominee of which
is Cede & Co., as the registered Holder of the Book-Entry Certificates. The
Depository shall at all times be a “clearing corporation” as defined in Section
8-102(a)(5) of the Uniform Commercial Code of the State of New
York.
16
Depository
Agreement:
The
agreement dated March 30, 2007, between the Trust and The Depository Trust
Company, as the initial Clearing Agency, relating to the Book-Entry
Certificates.
Depository
Participant:
A
broker, dealer, bank or other financial institution or other Person for whom
from time to time a Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
Determination
Date:
With
respect to each Distribution Date, the 15th day of the related calendar month,
or, if such day is not a Business Day, the immediately preceding Business
Day.
Disqualified
Non-U.S. Person:
With
respect to a Class R Certificate, any Non-U.S. Person or agent thereof
other than (i) a Non-U.S. Person that holds the Class R Certificate in
connection with the conduct of a trade or business within the United States
and
has furnished the transferor and the Securities Administrator with an effective
IRS Form W-8ECI or (ii) a Non-U.S. Person that has delivered to both the
transferor and the Securities Administrator an opinion of a nationally
recognized tax counsel to the effect that the transfer of the Class R
Certificate to it is in accordance with the requirements of the Code and the
regulations promulgated thereunder and that such transfer of the Class R
Certificate will not be disregarded for federal income tax
purposes.
Disqualified
Organization:
A
“disqualified organization” as defined in Section 860E(e)(5) of the
Code.
Distribution
Date:
The
25th day of each month or, if such 25th day is not a Business Day, the next
succeeding Business Day, commencing in April 2007.
Due
Date:
With
respect to each Mortgage Loan, the date in each month on which the related
Monthly Payment is due, exclusive of any days of grace, if such due date is
the
first day of a month; otherwise, the first day of the following month or such
other date as is specified in this Agreement.
Eligible
Account:
Either
(i) an account or accounts maintained with a federal or state chartered
depository institution or trust company that complies with the definition of
Eligible Institution or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by such corporation, provided
that any
such deposits not so insured shall be maintained in an account at a depository
institution or trust company whose commercial paper or other short term debt
obligations (or, in the case of a depository institution or trust company which
is the principal subsidiary of a holding company, the commercial paper or other
short term debt or deposit obligations of such holding company or depository
institution, as the case may be) have been rated by each Rating Agency in its
highest short-term rating category, or (iii) a segregated trust account or
accounts (which shall be a “special deposit account”) maintained with the
Securities Administrator or any other federal or state chartered depository
institution or trust company, acting in its fiduciary capacity, in a manner
acceptable to the Rating Agencies. Eligible Accounts may bear
interest.
17
Eligible
Institution:
Any of
the following:
|
(i)
|
An
institution whose:
|
(A) commercial
paper, short-term debt obligations, or other short-term deposits are rated
at
least “A-1+” and “P-1” or long-term unsecured debt obligations are rated at
least “AA-” or “Aa3” by S&P and Xxxxx’x, respectively (or assigned
comparable ratings by the other Rating Agencies), if the amounts on deposit
are
to be held in the account for no more than 365 days; or
(B) commercial
paper, short-term debt obligations, demand deposits, or other short-term
deposits are rated at least “A-2” and “P-1” by S&P and Xxxxx’x, respectively
(or assigned comparable ratings by the other Rating Agencies), if the amounts
on
deposit are to be held in the account for no more than 30 days and are not
intended to be used as credit enhancement. Upon the loss of the required rating
set forth in this clause (ii), the accounts shall be transferred immediately
to
accounts which have the required rating. Furthermore, commingling by the
Servicer is acceptable at the A-2 and P-1 rating level if the Servicer is a
bank, thrift or depository and provided the Servicer has the capability to
immediately segregate funds and commence remittance to an Eligible Account
upon
a downgrade; or
(ii) the
corporate trust department of a federal depositor institution or state-chartered
depositor institution subject to regulations regarding fiduciary funds on
deposit similar to Title 12 of the U.S. Code of Federal Regulation Section
9.10(b), which, in either case, has corporate trust powers and is acting in
its
fiduciary capacity.
Eligible
Investments:
Any one
or more of the following obligations or securities:
(i) direct
obligations of, and obligations fully guaranteed as to timely payment of
principal and interest by, the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America (“Direct
Obligations”);
(ii) federal
funds, or demand and time deposits in, certificates of deposits of, or bankers’
acceptances issued by, any depository institution or trust company (including
U.S. subsidiaries of foreign depositories and the Trustee or the Securities
Administrator or any agent of the Trustee or the Securities Administrator,
acting in its respective commercial capacity) incorporated or organized under
the laws of the United States of America or any state thereof and subject to
supervision and examination by federal or state banking authorities, so long
as
at the time of investment or the contractual commitment providing for such
investment the commercial paper or other short-term debt obligations of such
depository institution or trust company (or, in the case of a depository
institution or trust company which is the principal subsidiary of a holding
company, the commercial paper or other short-term debt or deposit obligations
of
such holding company or deposit institution, as the case may be) have been
rated
by each Rating Agency in its highest short-term rating category or one of its
two highest long-term rating categories;
18
(iii) repurchase
agreements collateralized by Direct Obligations or securities guaranteed by
Xxxxxx Xxx, Xxxxxx Xxx or Xxxxxxx Mac with any registered broker/dealer subject
to Securities Investors’ Protection Corporation jurisdiction or any commercial
bank insured by the FDIC, if such broker/dealer or bank has an uninsured,
unsecured and unguaranteed obligation rated by each Rating Agency in its highest
short-term rating category, provided that both parties to the transaction treat
it as a secured borrowing under FAS 140.
(iv) securities
bearing interest or sold at a discount issued by any corporation incorporated
under the laws of the United States of America or any state thereof which have
a
credit rating from each Rating Agency, at the time of investment or the
contractual commitment providing for such investment, at least equal to one
of
the two highest long-term credit rating categories of each Rating Agency;
provided,
however,
that
securities issued by any particular corporation will not be Eligible Investments
to the extent that investment therein will cause the then outstanding principal
amount of securities issued by such corporation and held as part of the Trust
Estate to exceed 20% of the sum of the Pool Balance and the aggregate principal
amount of all Eligible Investments in the Collection Account; provided,
further,
that
such securities will not be Eligible Investments if they are published as being
under review with negative implications from any Rating Agency;
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than 180 days after the date of issuance thereof) rated by each Rating Agency
in
its highest short-term rating category;
(vi) a
Qualified GIC;
(vii) certificates
or receipts representing direct ownership interests in future interest or
principal payments on obligations of the United States of America or its
agencies or instrumentalities (which obligations are backed by the full faith
and credit of the United States of America) held by a custodian in safekeeping
on behalf of the holders of such receipts; and
(viii) any
other
demand, money market, common trust fund or time deposit or obligation, or
interest-bearing or other security or investment (including those managed or
advised by the Trustee, the Master Servicer, the Securities Administrator,
or
any Affiliate thereof), provided that the security or investment is with the
limitations of paragraph 35.c(6) of FAS 140 and (A) rated in the highest rating
category by each Rating Agency or (B) that would not adversely affect the then
current rating assigned by each Rating Agency of any of the Certificates. Such
investments in this subsection (viii) may include money market mutual funds
or
common trust fund, including any fund for which Xxxxx Fargo Bank, N.A. (the
“Bank”) in its capacity other than as the Master Servicer, the Securities
Administrator or an affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (x) the Bank, the Trustee, the Master Servicer or any
affiliate thereof charges and collects fees and expenses from such funds for
services rendered, (y) the Bank, the Trustee, the Securities Administrator,
the
Master Servicer or any affiliate thereof charges and collects fees and expenses
for services rendered pursuant to this Agreement, and (z) services performed
for
such funds and pursuant to this Agreement may converge at any time. The Bank
or
an affiliate thereof is specifically authorized to charge and collect from
the
Trust Estate such fees as are collected from all investors in such funds for
services rendered to such funds (but not to exceed investment earnings
thereon);
19
provided,
however,
that no
such instrument shall be an Eligible Investment if such instrument evidences
either (i) a right to receive only interest payments with respect to the
obligations underlying such instrument, or (ii) both principal and interest
payments derived from obligations underlying such instrument and the principal
and interest payments with respect to such instrument provide a yield to
maturity of greater than 120% of the yield to maturity at par of such underlying
obligations, provided
that any
such investment will be a “permitted investment” within the meaning of Section
860G(a)(5) of the Code.
Entitlement
Holder:
The
meaning specified in Section 8-102(a)(7) of the Delaware UCC.
Entitlement
Order:
The
meaning specified in Section 8-102(a)(8) of the Delaware UCC (i.e.,
generally, orders directing the transfer or redemption of any Financial
Asset).
ERISA:
The
Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying
Underwriting:
A best
efforts or firm commitment underwriting or private placement that meets the
requirements of an Underwriter’s Exemption.
ERISA-Restricted
Certificates:
Each of
the Class I-1X, I-2A-2, Class I-2X, Class I-3A-2, Class I-3X, Class I-B-1,
Class
I-B-2, Class I-B-3, Class I-B-4, Class I-B-5, Class I-B-6, Class II-M-1, Class
II-M-2, Class II-B, Class II-X and Class R Certificates and any Certificate
that
is not rated at least either “BBB-” or “Ba3” at the time of its
acquisition.
Errors
and Omissions Insurance:
Errors
and Omissions Insurance to be maintained by the Servicer in accordance with
Section 4.02.
Escrow
Account:
The
separate escrow account (other than a Custodial Account) established and
maintained by the Servicer pursuant to Section 4.02(f) of this Agreement.
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 document.
Event
of Default:
Any
Master Servicer Event of Default or Servicer Event of Default.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
20
Xxxxxx
Xxx:
Xxxxxx
Xxx, a federally chartered and privately owned corporation organized and
existing under the Federal National Mortgage Association Charter Act, or any
successor thereto.
Xxxxxx
Mae Guide(s):
The
Xxxxxx Xxx Selling Guide and the Xxxxxx Mae Servicing Guide and all amendments
or additions thereto.
FAS
140:
Statement of Financial Accounting Standards No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities.
FDIC:
The
Federal Deposit Insurance Corporation or any successor thereto.
FHA
Regulations:
Regulations promulgated by HUD under the National Housing Act, codified in
24
Code of Federal Regulations, and other HUD issuances relating to FHA loans,
including the related handbooks, circulars, notices and mortgagee
letters.
Final
Scheduled Distribution Date:
With
respect to each Class of the Group I Certificates, the Distribution Date
occurring in April, 2047. With respect to each Class of the Group II
Certificates, the Distribution Date occurring in May, 2037.
Financial
Asset:
The
meaning specified in Section 8-102(a) of the Delaware UCC.
FHA:
United
States Federal Housing Administration.
Final
Certification:
As
defined in Section 2.02(c).
Fitch:
Fitch,
Inc., or any successor in interest.
Form
8-K Disclosure Information:
As
defined in Section 8.04(c).
Xxxxxxx
Mac:
The
Federal Home Loan Mortgage Corporation, a corporate instrumentality of the
United States created and existing under Title III of the Emergency Home Finance
Act of 1970, as amended, or any successor thereto.
Xxxxxx
Mae:
The
Government National Mortgage Association, a wholly owned corporate
instrumentality of the United States within HUD.
Gross
Margin:
With
respect to a Mortgage Loan, a fixed percentage amount specified in the related
mortgage note that is added to an index to determine the related Mortgage
Rate.
Group
I Accrued Interest:
With
respect to the Group I Certificates of any Class on any Distribution Date,
is
equal to the amount of interest accrued during the related Interest Accrual
Period at the applicable Group I Certificate Interest Rate on the Class
Principal Amount, or in the case of the Interest Only Certificates, the Notional
Amount, of such Group I Certificate immediately prior to such Distribution
Date,
less
(1) in
the case of a Group I Senior Certificate, such Certificate’s share of (a)
Prepayment Interest Shortfalls on the Mortgage Loans in the related Loan Group,
to the extent not covered by Compensating Interest Payments paid by the Servicer
or the Master Servicer, (b) interest shortfalls on the Mortgage Loans in the
related Loan Group resulting from the application of the Relief Act or similar
state law and (c) after the Group I Cross-Over Date, the interest portion of
any
Realized Losses on the Mortgage Loans in the related Loan Group and (2) in
the
case of a Group I Subordinate Certificate, such Certificate’s share of (a)
Prepayment Interest Shortfalls on the Mortgage Loans in the related Loan Group,
to the extent not covered by Compensating Interest Payments paid by the Servicer
or the Master Servicer, (b) interest shortfalls on the Mortgage Loans in the
related Loan Group resulting from the application of the Relief Act or similar
state law and (c) the interest portion of any Realized Losses on the Mortgage
Loans in the related Loan Group. Prepayment Interest Shortfalls and interest
shortfalls resulting from the application of the Relief Act will be allocated
among the Group I Certificates in proportion to the amount of Group I Accrued
Interest that would have been allocated thereto in the absence of such
shortfalls. Group I Accrued Interest is calculated on the basis of a 360-day
year consisting of twelve 30-day months. No Group I Accrued Interest will be
payable with respect to any class of Group I Certificates or Interest Only
Certificates after the Distribution Date on which the outstanding Class
Principal Amount or Notional Amount of such Group I Certificate or Interest
Only
Certificate, as applicable, has been reduced to zero.
21
Group
I Allocable Share:
With
respect to any Class of Group I Subordinate Certificates on any Distribution
Date will generally equal such Class’s pro
rata
share
(based on the Class Principal Amount of each Class entitled thereto) of the
sum
of each of the components of the definition of Group I Subordinate Optimal
Principal Amount; provided,
that
except as described in the succeeding sentence, no Class of Group I Subordinate
Certificates (other than the Class of Group I Subordinate Certificates
outstanding with the lowest numerical designation) shall be entitled on any
Distribution Date to receive distributions pursuant to clauses (2), (3) and
(5)
of the definition of Group I Subordinate Optimal Principal Amount unless the
Group I Class Prepayment Distribution Trigger for the related Class is satisfied
for such Distribution Date. If on any Distribution Date the Class Principal
Amount of any Class of Group I Subordinate Certificates for which the related
Group I Class Prepayment Distribution Trigger was satisfied on such Distribution
Date is reduced to zero, any amounts distributable to such Class pursuant to
clauses (2), (3) and (5) of the definition of Group I Subordinate Optimal
Principal Amount, to the extent of such Class’s remaining Group I Allocable
Share, shall be distributed to the remaining Classes of Group I Subordinate
Certificates in reduction of their respective Class Principal Amounts,
sequentially, in the order of their numerical class designations.
Group
I Applied Loss Amount:
With
respect to any Distribution Date, the amount, if any, by which (x) the aggregate
Certificate Principal Amount of the Group I Certificates after giving effect
to
all distributions on such Distribution Date, but before giving effect to any
application of the Group I Applied Loss Amount with respect to such date,
exceeds (y) the Aggregate Pool Balance for Loan Group I for such Distribution
Date.
Group
I Available Funds:
For any
Distribution Date and each of Loan Group I-1, Loan Group I-2 and Loan Group
I-3,
an amount which generally includes, (1) all previously undistributed payments
on
account of principal (including the principal portion of Monthly Payments,
Principal Prepayments and the principal amount of Net Liquidation Proceeds,
Subsequent Recoveries and the proceeds of any purchase of Pool I Mortgage Loans
by the Seller or the Servicer) and all previously undistributed payments on
account of interest received after the Cut-off Date and on or prior to the
related Determination Date, in each case, from the Mortgage Loans in the related
Loan Group, (2) any Monthly Advances made by a Servicer or Master Servicer
and
Compensating Interest Payments made by the Servicer or the Master Servicer
for
such Distribution Date in respect of the mortgage loans in the related Loan
Group and (3) any amounts reimbursed by the Master Servicer in connection with
losses on certain eligible investments, net fees payable to, and amounts
reimbursable to, the Master Servicer, the Servicer, the Trustee, the Delaware
Trustee, the Securities Administrator and the Custodian as provided in the
Pooling and Servicing Agreement and investment earnings on amounts on deposit
in
the Certificate Account to the extent allocable to such Loan Group.
Additionally, the Depositor shall deposit $100 into the Certificate Account
which shall be paid to the holders of the Class R Certificates on the first
Distribution Date.
22
Group
I Certificate Interest Rate:
With
respect to each Class of Group I Certificates and any Distribution Date, the
applicable per annum rate set forth or described under the heading “REMIC 3” in
the Preliminary Statement hereto.
Group
I Certificates:
The
Group I Senior Certificates and the Group I Subordinate
Certificates.
Group
I Cross-Over Date:
The
distribution date on which the Class Principal Amounts of the Group I
Subordinate Certificates are reduced to zero.
Group
I Initial Purchase Date:
The
first Distribution Date following the month in which the Pool Balance for Pool
I
is less than 10% of the Pool I Cut-off Date Balance.
Group
I Interest Shortfalls:
With
respect to any Distribution Date and each Pool I Mortgage Loan that during
the
related Prepayment Period was the subject of a Principal Prepayment or
constitutes a Relief Act Mortgage Loan, an amount determined as
follows:
(1) Partial
principal prepayments received during the relevant Prepayment Period: The
difference between (i) one month’s interest at the applicable Net Mortgage Rate
on the amount of such prepayment and (ii) the amount of interest of such
prepayment (adjusted to the applicable Net Mortgage Rate) received at the time
of such prepayment;
(2) Principal
prepayments in full received during the relevant Prepayment Period: The
difference between (i) one month’s interest at the applicable Net Mortgage Rate
on the Scheduled Principal Balance of such Mortgage Loan immediately prior
to
such prepayment and (ii) the amount of interest of such prepayment (adjusted
to
the applicable Net Mortgage Rate) received at the time of such prepayment;
and
(3) Relief
Act Mortgage Loans: As to any Relief Act Mortgage Loan, the excess of (i) 30
days’ interest (or, in the case of a principal prepayment in full, interest to
the date of prepayment) on the Scheduled Principal Balance thereof (or, in
the
case of a principal prepayment in part, on the amount so prepaid) at the related
Net Mortgage Rate over (ii) 30 days’ interest (or, in the case of a principal
prepayment in full, interest to the date of prepayment) on such Scheduled
Principal Balance (or, in the case of a Principal Prepayment in part, on the
amount so prepaid) at the Net Mortgage Rate required to be paid by the Mortgagor
as limited by application of the Relief Act.
23
Group
I Loss Allocation Limitation:
As defined in Section 6.09(d).
Group
I Net Interest Shortfall:
With
respect to any Distribution Date, the Group I Interest Shortfall, if any, for
such Distribution Date net of Compensating Interest Payments made with respect
to such Distribution Date.
Group
I Original Subordinate Principal Balance:
The aggregate Class Principal Amount of the Group I Subordinate Certificates
as
of the Closing Date.
Group
I Senior Certificates:
The
Group I-1 Senior Certificates, the Group I-2 Senior Certificates and the Group
I-3 Senior Certificates.
Group
I Senior Optimal Principal Amount:
With
respect to each of the Group I -1, Group I-2 and Group I-3 Senior Certificates,
other than the Interest Only Certificates, and each Distribution Date, will
be
an amount equal to the sum of the following (but in no event greater than the
aggregate Class Principal Amounts of each of the Group I-1, Group I-2 and Group
I-3 Senior Certificates as applicable, immediately prior to such Distribution
Date):
(A) the
applicable Group I Senior Percentage of the principal portion of all Monthly
Payments due on the Mortgage Loans in the related Loan Group on the related
Due
Date, as specified in the amortization schedule at the time applicable thereto
(after adjustment for previous principal prepayments but before any adjustment
to such amortization schedule by reason of any bankruptcy or similar proceeding
or any moratorium or similar waiver or grace period);
(B) the
applicable Group I Senior Prepayment Percentage of the Scheduled Principal
Balance of each Mortgage Loan in the related Loan Group which was the subject
of
a prepayment in full received by the Servicer during the applicable Prepayment
Period;
(C) the
applicable Group I Senior Prepayment Percentage of all partial prepayments
allocated to principal received during the applicable Prepayment
Period;
(D) the
lesser of (a) the applicable Group I Senior Prepayment Percentage of the sum
of
(i) all Net Liquidation Proceeds allocable to principal received in respect
of
each Mortgage Loan in the related Loan Group which became a Liquidated Mortgage
Loan during the related Prepayment Period (other than Mortgage Loans described
in the immediately following clause (ii)) and all Subsequent Recoveries received
in respect of each Liquidated Mortgage Loan in the related Loan Group during
the
related Collection Period and (ii) the Scheduled Principal Balance of each
such
Mortgage Loan in the related Loan Group purchased by an insurer from the Trustee
during the related Prepayment Period pursuant to the related primary mortgage
insurance policy, if any, or otherwise; and (b) the applicable Group I Senior
Percentage of the sum of (i) the Scheduled Principal Balance of each Mortgage
Loan in the related Loan Group which became a Liquidated Mortgage Loan during
the related Prepayment Period (other than the mortgage loans described in the
immediately following clause (ii)) and all Subsequent Recoveries received during
the related Collection Period and (ii) the Scheduled Principal Balance of each
such Mortgage Loan in the related Loan Group that was purchased by an insurer
from the Trustee during the related Prepayment Period pursuant to the related
primary mortgage insurance policy, if any or otherwise; and
24
(E) the
applicable Group I Senior Prepayment Percentage of the sum of (a) the Scheduled
Principal Balance of each Mortgage Loan in the related Loan Group which was
repurchased by the Sponsor in connection with such Distribution Date and (b)
the
excess, if any, of the Scheduled Principal Balance of each Mortgage Loan in
the
related Loan Group that has been replaced by the Sponsor with a Qualified
Substitute Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement in
connection with such Distribution Date over the Scheduled Principal Balance
of
each such Qualified Substitute Mortgage Loan.
Group
I Senior Percentage:
With
respect to each Loan Group, the lesser of (a) 100% and (b) the percentage
(carried to six places rounded up) obtained by dividing the aggregate Class
Principal Amount of the Group I Senior Certificates related to such Loan Group,
other than the Interest Only Certificates, immediately prior to such
Distribution Date, by the aggregate Scheduled Principal Balance of the Mortgage
Loans in such Loan Group as of the beginning of the related Collection Period.
The initial Group I Senior Percentage for each Loan Group will be equal to
approximately 92.60%.
Group
I Senior Prepayment Percentage:
The
Group I Senior Prepayment Percentage for the Group I-1, Group I-2 and Group
I-3
Senior Certificates, other than the Interest Only Certificates, on any
Distribution Date occurring during the periods set forth below will be as
follows:
|
Period
(dates inclusive)
|
Group
I Senior Prepayment Percentage
|
|
April
25, 2007 - March 25, 2014
|
100%
|
|
April
25, 2014 - March 25, 2015
|
Group
I Senior Percentage for the related Group I Senior Certificates plus
70%
of the related Group I Subordinate Percentage.
|
|
April
25, 2015 - March 25, 2016
|
Group
I Senior Percentage for the related Group I Senior Certificates plus
60%
of the related Group I Subordinate Percentage.
|
|
April
25, 2016 - March 25, 2017
|
Group
I Senior Percentage for the related Group I Senior Certificates plus
40%
of the related Group I Subordinate Percentage.
|
|
April
25, 2017 - March 25, 2018
|
Group
I Senior Percentage for the related Group I Senior Certificates plus
20%
of the related Group I Subordinate Percentage.
|
|
April
25, 2018 and thereafter
|
Group
I Senior Percentage for the related Group I Senior
Certificates.
|
25
Any
scheduled reduction to the Group I-1, Group I-2 and Group I-3 Senior Prepayment
Percentage for the Group I Senior Certificates shall not be made as of any
Distribution Date unless, as of the last day of the month preceding such
Distribution Date (1) the aggregate Scheduled Principal Balance of the Mortgage
Loans delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and bankruptcy and such Mortgage Loans with respect to
which the related Mortgaged Property has been acquired by the Trust) averaged
over the last six months, as a percentage of the aggregate Class Principal
Amount of the Group I Subordinate Certificates does not exceed 50% and (2)
cumulative Realized Losses on the Mortgage Loans do not exceed (a) 30% of the
aggregate Class Principal Amount of the Group I Original Subordinate Principal
Balance if such Distribution Date occurs between and including April 2014 and
March 2015, (b) 35% of the Group I Original Subordinate Principal Balance if
such Distribution Date occurs between and including April 2015 and March 2016,
(c) 40% of the Group I Original Subordinate Principal Balance if such
Distribution Date occurs between and including April 2016 and March 2017, (d)
45% of the Group I Original Subordinate Principal Balance if such Distribution
Date occurs between and including April 2017 and March 2018, and (e) 50% of the
Group I Original Subordinate Principal Balance if such Distribution Date occurs
during or after April 2018.
In
addition, if on any Distribution Date the current weighted average of the Group
I Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Group I Subordinate Percentages, and (a) the aggregate
Scheduled Principal Balance of the Mortgage Loans delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and
bankruptcy and such Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the last six months,
as
a percentage of the aggregate Class Principal Amount of the Group I Subordinate
Certificates does not exceed 50% and (b)(i) on or prior to the Distribution
Date
occurring in March 2010, cumulative Realized Losses on the Mortgage Loans as
of
the end of the related Prepayment Period do not exceed 20% of the Group I
Original Subordinate Principal Balance and (ii) after the Distribution Date
occurring in March 2010, cumulative Realized Losses on the Mortgage Loans as
of
the end of the related Prepayment Period do not exceed 30% of the Group I
Original Subordinate Principal Balance, then, in each case, the Group I Senior
Prepayment Percentages for the Group I-1, Group I-2 and Group I-3 Senior
Certificates for such Distribution Date will equal the Group I Senior Percentage
for the Group I-1, Group I-2 and Group I-3 Senior Certificates, respectively;
provided, however, if on such Distribution Date the current weighted average
of
the Group I Subordinate Percentages is equal to or greater than two times the
initial weighted average of the Group; I Subordinate Percentages on or prior
to
the Distribution Date occurring in March 2010 and the above delinquency and
loss
tests are met, then the Group I Senior Prepayment Percentages for the Group
I-1,
Group I-2 and Group I-3 Senior Certificates for such Distribution Date will
equal the Group I Senior Percentage for the Group I-1, Group I-2 and Group
I-3
Senior Certificates, respectively, plus 50% of the related Group I Subordinate
Percentage on such Distribution Date.
Notwithstanding
the foregoing, if, on any Distribution Date, the percentage, the numerator
of
which is the aggregate Class Principal Amount of the Group I Senior Certificates
immediately preceding such Distribution Date, and the denominator of which
is
the Scheduled Principal Balance of the Mortgage Loans as of the beginning of
the
related Collection Period, exceeds such percentage as of the Cut-off Date,
then
the Group I Senior Prepayment Percentage with respect to the Group I Senior
Certificates for such Distribution Date will equal 100%.
26
Group
I Subordinate Certificate Writedown Amount:
With
respect to the Group I Subordinate Certificates, the amount by which (x) the
sum
of the Class Principal Amounts of the Group I Certificates (after giving effect
to the distribution of principal and the allocation of Realized Losses in
reduction of the Class Principal Amounts of the Group I Certificates on such
Distribution Date) exceeds (y) the Scheduled Principal Balances of the Pool
I
Mortgage Loans on the Due Date related to such Distribution Date.
Group
I Subordinate Certificates:
The
Class I-B-1, Class I-B-2, Class I-B-3, Class I-B-4, Class I-B-5 and Class I-B-6
Certificates.
Group
I Subordinate Optimal Principal Amount:
With
respect to the Group I Subordinate Certificates and each Distribution Date
will
be an amount equal to the sum of the following from each Loan Group (but in
no
event greater than the aggregate Class Principal Amounts of the Group I
Subordinate Certificates immediately prior to such Distribution
Date):
(1) the
applicable Group I Subordinate Percentage of the principal portion of all
Monthly Payments due on each Mortgage Loan in the related Loan Group on the
related Due Date, as specified in the amortization schedule at the time
applicable thereto (after adjustment for previous principal prepayments but
before any adjustment to such amortization schedule by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace
period);
(2) the
applicable Group I Subordinate Prepayment Percentage of the Scheduled Principal
Balance of each Mortgage Loan in the related Loan Group which was the subject
of
a prepayment in full received by the Servicer during the applicable Prepayment
Period;
(3) the
applicable Group I Subordinate Prepayment Percentage of all partial prepayments
of principal received during the applicable Prepayment Period for each Mortgage
Loan in the related Loan Group;
(4) the
excess, if any, of (a) the Net Liquidation Proceeds allocable to principal
received during the related Prepayment Period in respect of each Liquidated
Mortgage Loan in the related Loan Group and all Subsequent Recoveries received
in respect of each Liquidated Mortgage Loan in the related Loan Group during
the
related Prepayment Period over (b) the sum of the amounts distributable to
the
holders of the related Group I Senior Certificates pursuant to clause (4) of
the
definition of “Group I Senior Optimal Principal Amount” on such distribution
date;
(5) the
applicable Group I Subordinate Prepayment Percentage of the sum of (a) the
Scheduled Principal Balance of each Mortgage Loan in the related Loan Group
which was repurchased by the Sponsor in connection with such Distribution Date
and (b) the difference, if any, between the Scheduled Principal Balance of
each
Mortgage Loan in the related Loan Group that has been replaced by the Sponsor
with a substitute mortgage loan pursuant to the Mortgage Loan Purchase Agreement
in connection with such Distribution Date and the Scheduled Principal Balance
of
each such substitute mortgage loan; and
27
(6) on
the
Distribution Date on which the Class Principal Amounts of the related Group
I
Senior Certificates have all been reduced to zero, 100% of any applicable Group
I Senior Optimal Principal Amount.
Group
I Subordinate Percentage:
As of
any Distribution Date and with respect to any Loan Group, 100% minus the related
Group I Senior Percentage for the Group I Senior Certificates related to such
Loan Group. The initial Group I Subordinate Percentage for each Loan Group
will
be equal to approximately 7.40%.
Group
I Subordinate Prepayment Percentage:
As of
any Distribution Date and with respect to any Loan Group, 100% minus the related
Group I Senior Prepayment Percentage for such Loan Group, except that on any
Distribution Date after the Class Principal Amount of each Class of Group I
Senior Certificates of the related Group I Certificate Group have each been
reduced to zero, if (A) the weighted average of the Group I Subordinate
Percentages on such Distribution Date equals or exceeds two times the initial
weighted average of the Group I Subordinate Percentages and (B) the aggregate
Scheduled Principal Balance of the Pool I Mortgage Loans delinquent 60 days
or
more (including for this purpose any such Mortgage Loans in foreclosure and
bankruptcy and Pool I Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the last six months,
as
a percentage of the sum of the aggregate Class Principal Amount of the Group
I
Subordinate Certificates does not exceed 50%, the Group I Subordinate Prepayment
Percentage for the Group I Subordinate Certificates with respect to such Loan
Group will equal 100%. If the above test is not satisfied on any Distribution
Date after the Class Principal Amount of each Class of Group I Senior
Certificates of the related Group I Certificate Group have each been reduced
to
zero and any Group I Senior Certificates are still outstanding, then the Group
I
Subordinate Prepayment Percentage with respect to such Loan Group shall equal
zero for such Distribution Date.
Group
I-1 Senior Certificates:
The
Class I-1A-1 and Class I-1A-2 Certificates.
Group
I-2 Senior Certificates:
The
Class I-2A-1 and Class I-2A-2 Certificates.
Group
I-3 Senior Certificates:
The
Class I-3A-1 and Class I-3A-2 Certificates.
Group
II Applied Loss Amount:
With
respect to any Distribution Date, the amount, if any, by which (x) the aggregate
Certificate Principal Amount of the Group II Certificates after giving effect
to
all distributions on such Distribution Date, but before giving effect to any
application of the Group II Applied Loss Amount with respect to such date,
exceeds (y) the Aggregate Pool Balance for Loan Group II for such Distribution
Date.
Group
II Basis Risk Carryover Amounts:
For any
Distribution Date, the sum of (i) if the Group II Certificate Interest Rate
for
a Class of Group II Certificates is calculated based on the Group II Net WAC
Cap
Rate, the excess, if any, of (a) the amount of Accrued Interest calculated
using
the lesser of (x) One-month LIBOR plus the related margin and (y) 11.000% over
(b) the amount of Accrued Interest calculated using a Group II Certificate
Interest Rate equal to the related Group II Net WAC Cap Rate for such
Distribution Date and (ii) the Group II Basis Risk Carryforward Amount for
all
previous Distribution Dates not previously paid plus interest thereon at the
related Group II Certificate Interest Rate.
28
Group
II Carryforward Interest:
With respect to any Distribution Date and each class of Group II Senior or
Group
II Subordinate Certificates, the sum of (i) the amount, if any, by which (x)
the
sum of (A) Group II Current Interest for such class for the immediately
preceding Distribution Date and (B) any unpaid Group II Carryforward Interest
for such class from previous Distribution Dates exceeds (y) the amount
distributed in respect of interest on such class on such immediately preceding
Distribution Date, and (ii) interest on such amount for the related Interest
Accrual Period at the applicable Group II Certificate Interest
Rate.
Group
II Certificate Interest Rate:
With
respect to each Class of Group II Certificates and any Distribution Date, the
applicable per annum rate set forth or described under the heading “REMIC 3” in
the Preliminary Statement hereto.
Group
II Certificates:
The
Group II Senior Certificates and the Group II Subordinate
Certificates.
Group
II Cumulative Loss Trigger Event:
A Group
II Cumulative Loss Trigger Event shall have occurred with respect to any
Distribution Date beginning in April 2009 if the fraction, expressed as a
percentage, obtained by dividing (x) the aggregate amount of Realized Losses
incurred on the Pool II Mortgage Loans from the Cut-off Date through the last
day of the related Collection Period by (y) the Cut-off Date Balance, exceeds
the applicable percentage described below with respect to such Distribution
Date:
|
Distribution
Date
|
Loss
Percentage
|
|
April
2009 through March 2010
|
2.25%
|
|
April
2010 through March 2011
|
2.75%
|
|
April
2011 through March 2012
|
3.75%
|
|
April
2012 through March 2013
|
4.25%
|
|
April
2013 and thereafter
|
4.50%
|
Group
II Current Interest:
With
respect to each Class of Group II Certificates and any Distribution Date, the
aggregate amount of interest accrued at the applicable Group II Certificate
Interest Rate during the related Interest Accrual Period on the Class Principal
Amount of such Class immediately prior to such Distribution Date.
Group
II Deferred Amount:
With
respect to any Distribution Date and each Class of the Group II Certificates,
the amount by which (x) the aggregate of Group II Applied Loss Amounts
previously applied in reduction of the Class Principal Amount thereof pursuant
to Section 6.09 hereof exceeds (y) the sum of (1) the aggregate of amounts
previously reimbursed in respect thereof and (2) the amount by which the Class
Principal Amount of such Certificate has been increased due to any Subsequent
Recovery.
29
Group
II Delinquency Event:
A Group
II Delinquency Event shall have occurred with respect to any Distribution Date
if the Group II Rolling Three Month Delinquency Rate as of the last day of
the
immediately preceding calendar month equals or exceeds 19.00% of the Group
II
Senior Enhancement Percentage for the prior Distribution Date.
Group
II Delinquency Rate:
With
respect to any calendar month, the fraction, expressed as a percentage, the
numerator of which is the aggregate Scheduled Principal Balance of all Pool
II
Mortgage Loans 60 days Delinquent or more (including all foreclosures,
bankruptcies and REO Properties) as of the close of business on the last day
of
such month and as reported by the Servicer to the Master Servicer, and the
denominator of which is the Pool
Balance
of Pool
II as of the close of business on the last day of such month.
Group
II Extra Principal Distribution Amount:
For any
Distribution Date, is the lesser of (x) the Group II Monthly Excess Cashflow
for
such Distribution Date and (y) the Group II Overcollateralization Deficiency
for
such Distribution Date.
Group
II Initial Purchase Date:
The
first Distribution Date following the month in which the Pool Balance for Pool
II is less than 10% of the Pool II Cut-off Date Balance.
Group
II Interest Funds:
With
respect to any Distribution Date and Pool II, the sum of (1) all interest
received or advanced by the Servicer or the Master Servicer for the related
Collection Period and available in the Certificate Account on that Distribution
Date with respect to the Pool II Mortgage Loans, (2) all Compensating Interest
Payments paid with respect to the Pool II Mortgage Loans that were prepaid
during the related Prepayment Period, (3) the portion of any purchase price
or
other amount paid with respect to the Pool II Mortgage Loans allocable to
interest; net of any fees or other amounts reimbursable to the Master Servicer,
the Servicer, the Securities Administrator, the Trustee, the Custodian and
the
Delaware Trustee as provided in the Agreements to the extent allocable to Pool
II and (4) with respect to the Distribution Date in April 2007, the Initial
Group II Interest Deposit.
Group
II Monthly Excess Cashflow:
With
respect to any Distribution Date, the sum of (1) the Group II
Overcollateralization Release Amount, (2) Group II Monthly Excess Interest
and
(3) the Group II Monthly Excess Principal.
Group
II Monthly Excess Interest:
With
respect to any Distribution Date, the amount of Group II Interest Funds
remaining after application pursuant to clauses (1) and (2) of Section
6.08(g).
Group
II Monthly Excess Principal:
With
respect to any Distribution Date, the Group II Principal Distribution Amount
remaining after application pursuant to any of clauses (1) and (2) under Section
6.08(h)(i) and Clauses (1) through (4) under Section 6.08(h)(ii).
Group
II Net WAC Cap Rate:
With
respect to any Distribution Date and the Group II Certificates, a per annum
rate
equal to the product of (1) the quotient of (a) 30 divided by (b) the actual
number of days in the Interest Accrual Period, multiplied by (2) the weighted
average of the Net Mortgage Rates of the Pool II Mortgage Loans as of the first
day of the related Collection Period, weighted on the basis of their stated
principal balances as of such first day of the related Collection
Period.
30
Group
II Overcollateralization Amount:
For any
Distribution Date, the amount, if any, by which (1) the aggregate Scheduled
Principal Balance of the Pool II Mortgage Loans exceeds (2) the aggregate Class
Principal Amount of the Group II Senior and Group II Subordinate Certificates
as
of such Distribution Date after giving effect to the reduction on such
Distribution Date of the Class Principal Amounts of the Group II Senior and
Group II Subordinate Certificates resulting from the distribution of Group
II
Principal Funds for Pool II on such Distribution Date.
Group
II Overcollateralization Deficiency:
With
respect to any Distribution Date, the amount, if any, by which (1) the Group
II
Overcollateralization Target Amount for such Distribution Date exceeds (2)
the
Group II Overcollateralization Amount for such Distribution Date, calculated
for
this purpose after giving effect to the reduction on such Distribution Date
of
the Class Principal Amounts of the Group II Senior Certificates and Group II
Subordinate Certificates resulting from the distribution of Group II Principal
Funds for Pool II on such Distribution Date.
Group
II Overcollateralization Floor:
Approximately 0.50% of the Pool II Cut-off Date Balance.
Group
II Overcollateralization Release Amount:
With
respect to any Distribution Date and Pool II, the lesser of (x) the Group II
Principal Funds for such Distribution Date and (y) the excess, if any, of (1)
the Group II Overcollateralization Amount for such Distribution Date (assuming
that 100% of such Group II Principal Funds is applied as a principal
distribution on such Distribution Date) over (2) the Group II
Overcollateralization Target Amount for such Distribution Date (with the amount
determined pursuant to this clause (y) deemed to be $0 if the Group II
Overcollateralization Amount is less than or equal to the Group II
Overcollateralization Target Amount on that Distribution Date).
Group
II Overcollateralization Target Amount:
With
respect to any Distribution Date and Pool II, (a) prior to the Group II Stepdown
Date, approximately 7.10% of the aggregate Scheduled Principal Balance of the
Pool II Mortgage Loans as of the Cut-off Date, (b) on or after the Group II
Stepdown Date and if a Group II Trigger Event is not in effect, the greater
of
(i) approximately 14.20% of the then current aggregate Scheduled Principal
Balance of the Pool II Mortgage Loans as of the last day of the related
Collection Period and (ii) the Group II Overcollateralization Floor and (c)
on
or after the Group II Stepdown Date and if a Group II Trigger Event is in
effect, the Group II Overcollateralization Target Amount for the immediately
preceding Distribution Date.
Group
II Principal Distribution Amount:
With
respect to any Distribution Date and Pool II, the Group II Principal Funds
for
Pool II for such Distribution Date minus
(b) the
portion of the Overcollateralization Release Amount attributable to Pool II
(based on the related Pool Balance).
31
Group
II Principal Funds:
With
respect to any Distribution Date and Pool II, the sum of (1) the principal
portion of all scheduled monthly payments on the Pool II Mortgage Loans due
on
the related Due Date, to the extent received or advanced, (2) the principal
portion of all proceeds of the repurchase of a Mortgage Loan from Pool II (or,
in the case of a substitution, certain amounts representing a principal
adjustment) as required by the Mortgage Loan Purchase Agreement during the
preceding calendar month, (3) the principal portion of all other unscheduled
collections received during the preceding calendar month in respect of the
Pool
II Mortgage Loans, including full and partial prepayments, the proceeds of
any
purchase of Pool II Mortgage Loans by the Seller or the Servicer, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds and Subsequent Recoveries;
net of any fees payable to, and other amounts reimbursable to, the Master
Servicer, the Servicer, the Securities Administrator, the Trustee, the Custodian
and the Delaware Trustee as provided in the Agreements (to the extent not
reimbursed from Group II Interest Funds) to the extent allocable to Pool II,
and
(4) with respect to the Distribution Date in April 2007, the Initial Group
II
Principal Deposit.
Group
II Rolling Three Month Delinquency Rate:
With
respect to any Distribution Date, the average of the Group II Delinquency Rates
for each of the three (or one and two, in the case of the first and second
Distribution Dates, respectively) immediately preceding months.
Group
II Senior Certificates:
The
Class II-A Certificates.
Group
II Senior Enhancement Percentage:
With
respect to any Distribution Date, the fraction, expressed as a percentage,
the
numerator of which is the sum of the aggregate Class Principal Amount of the
Group II Subordinate Certificates and the Group II Overcollateralization Amount
(which, for purposes of this definition only, will not be less than zero) after
giving effect to distributions on such Distribution Date, and the denominator
of
which is the Pool Balance for Pool II for such Distribution Date.
Group
II Stepdown Date:
The
earlier to occur of (i) the first Distribution Date following the Distribution
Date on which the aggregate Class Principal Amount of the Senior Certificates
has been reduced to zero and (ii) the later to occur of (a) the Distribution
Date occurring in April 2010 and (b) the first Distribution Date on which the
Senior Enhancement Percentage (calculated for this purpose after giving effect
to payments or other recoveries in respect of the Mortgage Loans during the
related Collection Period but before giving effect to distributions on the
Certificates on such Distribution Date) is greater than or equal to
approximately 42.10%.
Group
II Step-up Date:
The
first Distribution Date after the Pool II Initial Purchase Date.
Group
II Subordinate Certificates:
The
Class II-M-1, Class II-M-2 and Class II-B Certificates.
Group
II Trigger Event:
A Group
II Trigger Event will have occurred with respect to any Distribution Date if
(a)
a Group II Delinquency Event has occurred for such Distribution Date or (b)
a
Group II Cumulative Loss Trigger Event has occurred for such Distribution
Date.
Guidelines:
As
defined in Section 4.02(p).
32
Holder
or
Certificateholder:
The
registered owner of any Certificate as recorded on the books of the Certificate
Registrar except that, solely for the purposes of taking any action or giving
any consent pursuant to this Agreement, any Certificate registered in the name
of the Depositor, the Trustee, the Securities Administrator, the Master
Servicer, the Servicer, any Subservicer retained by the Servicer, or any
Affiliate thereof shall be deemed not to be outstanding in determining whether
the requisite percentage necessary to effect any such consent has been obtained,
except that, in determining whether the Trustee and the Securities Administrator
shall be protected in relying upon any such consent, only Certificates which
a
Responsible Officer of the Trustee knows to be so owned shall be disregarded.
The Trustee may request and conclusively rely on certifications by the
Depositor, the Securities Administrator, the Master Servicer or the Servicer
in
determining whether any Certificates are registered to an Affiliate of the
Depositor, the Securities Administrator, the Master Servicer or the
Servicer.
HUD:
The
United States Department of Housing and Urban Development, or any successor
thereto and including the Federal Housing Commissioner and the Secretary of
Housing and Urban Development where appropriate under the FHA
Regulations.
Independent:
When
used with respect to any Accountants, a Person who is “independent” within the
meaning of Rule 2-01(b) of the Securities and Exchange Commission’s Regulation
S-X. When used with respect to any other Person, a Person who (a) is in fact
independent of another specified Person and any Affiliate of such other Person,
(b) does not have any material direct financial interest in such other Person
or
any Affiliate of such other Person, and (c) is not connected with such other
Person or any Affiliate of such other Person as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar
functions.
Index:
Either
the Six-Month LIBOR Index or the One-Year LIBOR Index.
Initial
Certification:
As
defined in Section 2.02(a).
Initial
Group II Interest Deposit:
$923.54.
Initial
Group II Principal Deposit:
$84,750.00.
Insurance
Policy:
Any
primary mortgage insurance policy, standard hazard insurance policy, flood
insurance policy, earthquake insurance policy or title insurance policy relating
to the Mortgage Loans or the Mortgaged Properties, to be in effect as of the
Closing Date or thereafter during the term of this Agreement.
Insurance
Proceeds:
Any
amounts paid by an insurer under a primary mortgage insurance policy, any
standard hazard insurance policy, flood insurance policy, title insurance policy
or any other insurance policy relating to the Mortgage Loans or related
mortgaged properties other than amounts to cover expenses incurred by the
Servicer in connection with procuring such proceeds, applied to the restoration
and repair of the related Mortgaged Property or to be paid to the borrower
pursuant to the related Mortgage Note or state law.
33
Interest
Accrual Period:
With respect to any Distribution Date and any class of Group I Senior
Certificates or Group I Subordinate Certificates or any of the REMIC LT-I
Regular Interests, REMIC LT-II Regular Interests, or REMIC 2 Regular Interests,
the calendar month immediately preceding the month in which such Distribution
Date occurs. With respect to any Distribution Date and any class of Group II
Senior Certificates or Group II Subordinate Certificates, the period beginning
on the immediately preceding Distribution Date (or on the Closing Date, in
the
case of the first Interest Accrual Period) and ending on the day immediately
preceding the related Distribution Date.
Interim
Certification:
As
defined in Section 2.02(b).
Item
1122 Responsible Party:
As
defined in Section 8.07.
Latest
Possible Maturity Date:
The
Distribution Date occurring in April 2042.
Lender
Paid Mortgage Insurance Rate:
The
Lender Paid Mortgage Insurance Rate shall be a rate per annum equal to the
percentage shown on the Mortgage Loan Schedule.
Lender
Primary Mortgage Insurance Policy or LPMI Policy:
Any
Primary Mortgage Insurance Policy for which premiums are paid by the
Servicer.
LIBOR
Business Day:
Any day
on which banks in London, England and The City of New York are open and
conducting transactions in foreign currency and exchange.
LIBOR
Determination Date:
The
second LIBOR Business Day immediately preceding the commencement of each
Interest Accrual Period for any Group II Certificates.
Liquidated
Mortgage Loan:
Any
defaulted Mortgage Loan as to which the Servicer has determined that all amounts
that it expects to recover from or on account of such Mortgage Loan have been
recovered, as reported by the Servicer to the Master Servicer, and any Second
Lien Mortgage Loan that is 180 or more days delinquent in payment.
Liquidation
Expenses:
Expenses that are incurred by the Master Servicer or the Servicer, as
applicable, in connection with the liquidation of any defaulted Mortgage Loan
and are not recoverable under the applicable primary mortgage insurance policy,
if any, including, without limitation, foreclosure and rehabilitation expenses,
legal expenses and unreimbursed amounts, if any, expended pursuant to Sections
4.02(c), 4.02(j) or 4.02(o).
Liquidation
Proceeds: Cash
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, payment in full, discounted payoff or otherwise, or the sale
of the related REO Property, if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan
Group:
Loan
Group I-1, Loan Group I-2 or Loan Group I-3, as the context
requires.
34
Loan
Group I-1:
The
loan group consisting of conventional first lien, hybrid Mortgage Loans with
interest rates that have an initial fixed rate period of five years and
thereafter adjust on a semi-annual or annual basis.
Loan
Group I-2:
The
loan group consisting of conventional first lien, hybrid mortgage loans with
interest rates that have an initial fixed rate period of seven years and
thereafter adjust on a semi-annual or annual basis.
Loan
Group I-3:
The
loan group consisting of conventional first lien, hybrid mortgage loans with
interest rates that have an initial fixed rate period of ten years and
thereafter adjust on a semi-annual or annual basis.
Loan
Group Balance:
With
respect to each of Loan Group I-1, Loan Group I-2 and Loan Group I-3 and any
date of determination, the aggregate Scheduled Principal Balance of the Mortgage
Loans in that Loan Group as of such date.
Loan-to-Value
Ratio:
With
respect to a Mortgage Loan, at any time, the ratio, expressed as a percentage,
of the principal balance of such Mortgage Loan as of the applicable date of
determination, to (a) in the case of a purchase, the lesser of the sale price
of
the Mortgaged Property and its appraised value at the time of sale or (b) in
the
case of a refinancing or modification, the appraised value of the Mortgaged
Property at the time of the refinancing or modification.
Lower-Tier
REMIC I:
As
described in the Preliminary Statement.
Lower-Tier
REMIC II:
As
described in the Preliminary Statement.
Majority
Certificateholders:
Until
such time as the sum of the Class Principal Amounts of all Classes of
Certificates (other than the Class R, Class I-1X, Class I-2X, Class I-3X and
Class II-X Certificates) has been reduced to zero, the holder or holders of
in
excess of 50% of the aggregate Class Principal Amount of all Classes of
Certificates; and thereafter, the holder of the Class R
Certificate.
Margin:
With
respect to each adjustable rate Mortgage Loan, the fixed percentage amount
set
forth in each related Mortgage Note which is added to the Index in order to
determine the related Mortgage Rate, as set forth in the Mortgage Loan
Schedule.
Master
Servicer:
Xxxxx
Fargo Bank, N.A., or any successor in interest, or if any successor master
servicer shall be appointed as herein provided, then such successor master
servicer.
Master
Servicer Errors and Omission Insurance Policy:
Any
errors and omission insurance policy required to be obtained by the Master
Servicer satisfying the requirements of Section 5.02.
Master
Servicer Event of Default:
Any one
of the conditions or circumstances enumerated in Section 9.01(a).
35
Master
Servicer Fidelity Bond:
Any
fidelity bond to be maintained by the Servicer in accordance with Section
5.02.
Master
Servicer Remittance Date:
With
respect to each Distribution Date, the Business Day immediately preceding such
Distribution Date.
Material
Defect:
With
respect to any Mortgage Loan, as defined in Section 2.02(c) hereof.
Maximum
Mortgage Rate:
The
maximum level to which a Mortgage Rate can adjust in accordance with its terms,
regardless of changes in the Index.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or
any
successor in interest thereto.
MERS
Mortgage Loan:
Any
Mortgage Loan as to which the related Mortgage, or an Assignment of Mortgage,
has been or will be recorded in the name of MERS, as nominee for the holder
from
time to time of the Mortgage Note.
MIN:
The
Mortgage Identification Number for Mortgage Loans registered with MERS on the
MERS® System.
Minimum
Lifetime Mortgage Rate:
The
minimum level to which a Mortgage Rate can adjust in accordance with its terms,
regardless of changes in the Index.
Monthly
Advance:
An
advance made by the Servicer pursuant to Section 4.03(c) or the Master Servicer
pursuant to Section 6.11, as applicable, with respect to delinquent payments
of
principal and interest on the Mortgage Loans, adjusted to the related Net
Mortgage Rate.
Monthly
Payment:
With
respect to any Mortgage Loan and any month, the scheduled payment or payments of
principal and interest due during such month on such Mortgage Loan, which either
is payable by a mortgagor in such month under the related mortgage note, or
in
the case of any Mortgaged Property acquired through foreclosure or deed-in-lieu
of foreclosure, would otherwise have been payable under the related Mortgage
Note, in each case, as reduced by any Bankruptcy Loss.
Moody’s:
Xxxxx’x
Investors Service, Inc., or any successor in interest.
Mortgage:
A
mortgage, deed of trust or other instrument encumbering a fee simple interest
in
real property securing a Mortgage Note.
Mortgage
Bankers’ Blanket Bond:
The
fidelity bond developed by the Mortgage Bankers Association of America and
its
members used to protect a mortgage lender/servicer against errors and omissions,
mortgage impairment and losses arising from the dishonest, fraudulent and
criminal acts of its management and employees.
36
Mortgage
File:
The
mortgage documents listed in Section 2.01(b) pertaining to a particular Mortgage
Loan required to be delivered to the Trustee (or the Custodian) pursuant to
this
Agreement.
Mortgage
Loan:
The
conventional, adjustable rate, first lien residential mortgage loans sold by
the
Seller to the Depositor pursuant to the Mortgage Loan Purchase Agreement and
subsequently transferred by the Depositor to the Trust Estate pursuant to this
Agreement.
Mortgage
Loan Documents:
As
defined in Section 2.01(b).
Mortgage
Loan Purchase Agreement:
The
mortgage loan purchase agreement dated as of March 1, 2007, between the Seller
and the Depositor.
Mortgage
Loan Schedule:
The
schedule attached hereto as Schedule A, which shall identify each Mortgage
Loan,
as such schedule may be amended from time to time to reflect the addition of
Mortgage Loans to, or the deletion of Mortgage Loans from, the Trust.
The
Depositor shall be responsible for providing the Master Servicer and the
Custodian on behalf of the Trustee with all amendments to the Mortgage Loan
Schedule.
Mortgage
Note:
The
original executed note or other evidence of the indebtedness of a Mortgagor
secured under the Mortgage Loan.
Mortgage
Pool:
A pool
of Mortgage Loans in the Trust Estate, including Pool I and Pool II, as the
context requires.
Mortgage
Rate:
With
respect to any Mortgage Loan, its applicable interest rate determined as
provided in the related mortgage note, as reduced by any Relief Act
Reduction.
Mortgaged
Property:
With
respect to any Mortgage Loan, the underlying real property securing such
Mortgage Loan.
Mortgagor:
The
obligor on a Mortgage Note.
Net
Liquidation Proceeds:
All
amounts, net of (1) unreimbursed expenses and (2) unreimbursed Monthly Advances
and Servicing Advances, received and retained in connection with the liquidation
of defaulted Mortgage Loans, through Insurance Proceeds or Condemnation
Proceeds, by foreclosure or otherwise, together with any net proceeds received
on a monthly basis with respect to any Mortgaged Properties acquired by
foreclosure or deed in lieu of foreclosure.
Net
Mortgage Rate:
With
respect to any Mortgage Loan at any time, the Mortgage Rate thereof reduced
by
the Servicing Fee Rate for such Mortgage Loan.
Non-MERS
Mortgage Loan:
Any
Mortgage Loan other than a MERS Mortgage Loan.
Non-Permitted
Transferee:
A
Person other than a Permitted Transferee.
37
Nonrecoverable
Advance:
Any
advance previously made by the Servicer pursuant to Section 4.03(c) or by the
Master Servicer pursuant to Section 6.11 or any Servicing Advance which, in
the
good faith judgment of the Servicer or the Master Servicer, as applicable,
may
not be ultimately recoverable by the Servicer or the Master Servicer from
Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds or otherwise.
The determination by the Servicer or the Master Servicer, as applicable, that
it
has made a Nonrecoverable Advance, shall be evidenced by an Officer's
Certificate of the Servicer or the Master Servicer, as applicable, delivered
to
the Trustee and the Master Servicer (in the case of the Servicer) and detailing
the reasons for such determination
Notional
Amount:
With
respect to the Class I-1X Certificates, as of any date of determination, is
equal to the aggregate Class Principal Amount of the Class I-1A-1 Certificates
and Class I-1A-2 Certificates. With
respect to the Class I-2X Certificates, as of any date of determination, is
equal to the aggregate Class Principal Amount of the Class I-2A-1 Certificates
and Class I-2A-2 Certificates.
With
respect to the Class I-3X Certificates, as of any date of determination, is
equal to the aggregate Class Principal Amount of the Class I-3A-1 Certificates
and Class I-3A-2 Certificates.
Reference to the Notional Amount of the Interest Only Certificates is solely
for
convenience in calculations and does not represent the right to receive any
distributions allocable to principal.
Offering
Document:
The
Prospectus.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board, any Vice Chairman, the
President, any Executive Vice President, any Senior Vice President, any Vice
President or any Assistant Vice President of a Person.
One-Month
LIBOR or One-Month LIBOR Index:
The
Interest Settlement Rate for U.S. dollar deposits of one-month maturity set
by
the BBA as of 11:00 a.m. (London time) on the LIBOR Determination
Date.
One-Year
LIBOR Index:
The
interbank offered rates for twelve-month United States dollar deposits in the
London market, calculated as provided in the related mortgage note.
Operative
Agreements:
This
Agreement, the Mortgage Loan Purchase Agreement, the Custodial Agreement, the
Depository Agreement and each other document contemplated by any of the
foregoing to which the Depositor, the Seller, the Master Servicer, the Servicer,
the Securities Administrator, the Delaware Trustee, the Trustee or the Custodian
is a party.
Opinion
of Counsel:
A
written opinion of counsel, reasonably acceptable in form and substance to
the
Seller, the Securities Administrator, the Trustee
and/or
the
Master Servicer, as applicable, and who may be in-house or outside counsel
to
the Seller, the Servicer, the Depositor, the Master Servicer, the Securities
Administrator or the Trustee
but
which
must be Independent outside counsel with respect to any such opinion of counsel
concerning federal income tax or ERISA matters.
Original
Trust Agreement:
The
trust agreement, dated as of March 29, 2007, among the Depositor, the Trustee
and the Delaware Trustee.
38
Outstanding
Principal Balance:
With
respect to a Mortgage Loan, the principal balance of such Mortgage Loan
remaining to be paid by the borrower or, in the case of an REO Property, the
principal balance of the related Mortgage Loan remaining to be paid by the
borrower at the time such property was acquired by or on behalf of the
Trust.
Ownership
Interest:
As to
any Residual Certificate, any ownership interest in such Certificate including
any interest in such Certificate as the Holder thereof and any other interest
therein, whether direct or indirect, legal or beneficial.
Payahead:
Any
Monthly Payment intended by the related borrower to be applied in a Collection
Period subsequent to the Collection Period in which such payment was
received.
Paying
Agent:
Initially,
the Securities Administrator, in its capacity as paying agent under this
Agreement, or any successor to the Securities Administrator in such
capacity.
PCAOB
means
the Public Company Accounting Oversight Board.
Percentage
Interest:
With
respect to any Certificate, its percentage interest in the undivided beneficial
ownership interest in the assets of the Trust evidenced by all Certificates
of
the same Class as such Certificate. With respect to any Certificate other than
the Class II-X or Class R Certificates, the Percentage Interest evidenced
thereby shall equal the initial Certificate Principal Amount (or
Notional Amount)
thereof
divided by the initial Class Principal Amount (or Notional Amount) of all
Certificates of the same Class. With respect to the Class II-X and Class R
Certificates, the Percentage Interest evidenced thereby shall be as specified
on
the face thereof, or otherwise be equal to 100%.
Periodic
Cap:
With
respect to each Mortgage Loan, the maximum adjustment that can be made to the
Mortgage Rate on each Adjustment Date in accordance with its terms, regardless
of changes in the Index.
Permitted
Transferee:
Any
Person other than (i) the United States, any State or political subdivision
thereof, or any agency or instrumentality of any of the foregoing, (ii) a
foreign government, international organization or any agency or instrumentality
of either of the foregoing, (iii) an organization (except certain farmers’
cooperatives described in Section 521 of the Code) which is exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511
of the Code on unrelated business taxable income) on any excess inclusions
(as
defined in Section 860E(c)(1) of the Code) with respect to any Residual
Certificate, (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, (v) a Person that is a Disqualified
Non-U.S. Person or a U.S. Person with respect to whom income from a Residual
Certificate is attributable to a foreign permanent establishment or fixed base,
within the meaning of an applicable income tax treaty, of such Person or any
other U.S. Person, (vi) an “electing large partnership” within the meaning
of Section 775 of the Code and (vii) any other Person so designated by
the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause any REMIC to fail
to
qualify as a REMIC at any time that the Certificates are outstanding. The terms
“United States”, “State” and “international organization” shall have the
meanings set forth in Section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States
or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of Xxxxxxx Mac, a majority
of its board of directors is not selected by such government unit.
39
Person:
Any
individual, corporation, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pool:
Pool I
or Pool II, as the context requires.
Pool
I:
The
mortgage pool consisting of Loan Group I-1, Loan Group I-2 and Loan Group
I-3.
Pool
I
Cut-off Date Balance:
With
respect to the Pool I Mortgage Loans, approximately $245,220,032.
Pool
I
Mortgage Loans:
The
conventional, adjustable rate, first lien residential mortgage loans in Pool
I
sold by the Seller to the Depositor pursuant to the Mortgage Loan Purchase
Agreement and subsequently transferred by the Depositor to the Trust pursuant
to
the Pooling and Servicing Agreement.
Pool
I
Termination Price:
The
sum, as calculated by the Servicer, of (a) 100% of the aggregate Outstanding
Principal Balance of the Pool I Mortgage Loans, plus Group I Accrued Interest
thereon at the applicable Mortgage Rate, (b) the fair market value of the REO
Property and all other property being purchased, (c) any unreimbursed Servicing
Advances relating to Pool I, (d) any costs and damages incurred by the Trust
as
a result of violation of any applicable federal, state or local predatory or
abusive lending law in connection with the origination of any Pool Mortgage
Loan
and (e) all other amounts to be paid or reimbursed to the Master Servicer,
the
Securities Administrator, the Delaware Trustee, the Trustee and the Custodian
under the Operative Agreements allocable to Pool I.
Pool
II:
The
mortgage pool consisting of conventional second lien, fixed and adjustable
rate
Mortgage Loans.
Pool
II Cut-off Date Balance:
With
respect to the Pool II Mortgage Loans, approximately $54,788,796.
Pool
II Mortgage Loans:
The
conventional, fixed and adjustable rate, second lien residential mortgage loans
in Pool II sold by the Seller to the Depositor pursuant to the Mortgage Loan
Purchase Agreement and subsequently transferred by the Depositor to the Trust
pursuant to the Pooling and Servicing Agreement.
Pool
II Termination Price:
The
sum, as calculated by the Servicer, of (a) 100% of the aggregate Outstanding
Principal Balance of the Pool II Mortgage Loans, plus Group II Accrued Interest
thereon at the applicable Mortgage Rate, (b) the fair market value of the REO
Property and all other property being purchased, (c) any unreimbursed Servicing
Advances relating to Pool II, (d) any costs and damages incurred by the Trust
as
a result of violation of any applicable federal, state or local predatory or
abusive lending law in connection with the origination of any Pool II Mortgage
Loan and (e) all other amounts to be paid or reimbursed to the Master Servicer,
the Securities Administrator, the Delaware Trustee, the Trustee and the
Custodian under the Operative Agreements allocable to Pool II.
40
Pool
Balance:
With
respect to each Mortgage Pool and any date of determination, the aggregate
Scheduled Principal Balance of the Mortgage Loans in that Mortgage Pool as
of
such date.
Pool
Percentage:
With
respect to each Mortgage Pool and any Distribution Date, the fraction, expressed
as a percentage, the numerator of which is the Pool Balance for such Mortgage
Pool for such date and the denominator of which is the Aggregate Pool Balance
for such date.
Prepayment
Interest Shortfall:
The
amount by which one month's interest at the Mortgage Rate (as reduced by the
Servicing Fee Rate) on a Mortgage Loan as to which a voluntary prepayment has
been made exceeds the amount of interest actually received in connection with
such prepayment.
Prepayment
Period:
With
respect to any Distribution Date, the immediately preceding calendar
month.
Primary
Mortgage Insurance Policy:
Any
primary mortgage guaranty insurance policy issued in connection with a Mortgage
Loan which provides compensation to a Mortgage Note holder in the event of
default by the obligor under such Mortgage Note or the related Mortgage, or
any
replacement policy therefor through the related Interest Accrual Period for
such
Class relating to a Distribution Date.
Prime
Rate:
The
prime rate of the United States money center commercial banks as published
in
The
Wall Street Journal,
Northeast Edition.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date to the extent that it is not accompanied
by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment, including
Insurance Proceeds and Repurchase Proceeds, but excluding the principal portion
of Net Liquidation Proceeds received at the time a mortgage loan becomes a
Liquidated Mortgage Loan.
Proceeding:
Any
suit in equity, action at law or other judicial or administrative
proceeding.
Prospectus:
The
prospectus supplement dated March 29, 2007, together with the accompanying
prospectus dated March 28, 2007, relating to the Class
I-1A-1, Class I-1A-2, Class I-2A-1, Class I-2A-2, Class I-3A-1, Class I-3A-2,
Class I-1X, Class I-2X, Class I-3X, Class II-A, Class I-B-1, Class I-B-2, Class
I-B-3, Class II-M-1, Class II-M-2 and Class II-B Certificates.
41
Purchase
Price:
With
respect to the purchase of a Mortgage Loan or related REO Property pursuant
to
this Agreement, an amount equal to the sum of (a) 100% of the unpaid principal
balance of such Mortgage Loan, (b) accrued interest thereon at the applicable
Mortgage Rate, from the date as to which interest was last paid to (but not
including) the Due Date in the Collection Period immediately preceding the
related Distribution Date, (c) the amount of any costs and damages incurred
by
the Trust in connection with any violation of any applicable federal, state
or
local predatory or abusive lending law in connection with the origination of
such Mortgage Loan and (d) the fair market value of all other property being
purchased. The Servicer and the Master Servicer shall be reimbursed from the
Purchase Price for any Mortgage Loan or related REO Property for any Monthly
Advances and Servicing Advances made or other amounts advanced with respect
to
such Mortgage Loan that are reimbursable to the Servicer or the Master Servicer
under this Agreement, together with any accrued and unpaid compensation due
to
the Servicer or the Master Servicer hereunder.
Qualified
GIC:
A
guaranteed investment contract or surety bond providing for the investment
of
funds in the Collection Account and insuring a minimum, fixed or floating rate
of return on investments of such funds, which contract or surety bond
shall:
(i) be
an
obligation of an insurance company or other corporation whose long-term debt
is
rated by each Rating Agency in one of its two highest rating categories or,
if
such insurance company has no long-term debt, whose claims paying ability is
rated by each Rating Agency in one of its two highest rating categories, and
whose short-term debt is rated by each Rating Agency in its highest rating
category;
(ii) provide
that the Master Servicer on behalf of the Trustee may exercise all of the rights
under such contract or surety bond without the necessity of taking any action
by
any other Person;
(iii) provide
that if at any time the then current credit standing of the obligor under such
guaranteed investment contract is such that continued investment pursuant to
such contract of funds would result in a downgrading of any rating of the
Certificates, the Securities Administrator shall terminate such contract without
penalty and be entitled to the return of all funds previously invested
thereunder, together with Group I Accrued Interest thereon at the interest
rate
provided under such contract to the date of delivery of such funds to the
Securities Administrator;
(iv) provide
that the Trustee’s interest therein shall be transferable to any successor
trustee hereunder; and
(v) provide
that the funds reinvested thereunder and Group I Accrued Interest thereon be
returnable to the Collection Account not later than the Business Day prior
to
any Distribution Date.
Qualified
Insurer:
An
insurance company duly qualified as such under the laws of the states in which
the related Mortgaged Properties are located, duly authorized and licensed
in
such states to transact the applicable insurance business and to write the
insurance provided and whose claims paying ability is rated by each Rating
Agency in its highest rating category or whose selection as an insurer will
not
adversely affect the rating of the Certificates.
42
Qualifying
Substitute Mortgage Loan:
A
mortgage loan (i) which has an Outstanding Principal Balance not greater nor
materially less than the Mortgage Loan for which it is to be substituted; (ii)
which has a Mortgage Rate and Net Mortgage Rate not less than, and not
materially greater than, such Mortgage Loan; (iii) which has a maturity date
not
materially earlier or later than such Mortgage Loan and not later than the
latest maturity date of any Mortgage Loan; (iv) which is of the same property
type and occupancy type as such Mortgage Loan; (v) with respect to a Mortgage
Loan, which has a Loan-to-Value Ratio not greater than the Loan-to-Value Ratio
of such Mortgage Loan; (vi) which is current in payment of principal and
interest as of the date of substitution; (vii) as to which the payment terms
do
not vary in any material respect from the payment terms of the Mortgage Loan
for
which it is to be substituted and (viii) which has a Gross Margin and Maximum
Mortgage Rate no less than those of such Mortgage Loan, has the same Index
and
interval between Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime
Mortgage Rate no lower than that of such Mortgage Loan.
Rating
Agency:
Each of
Xxxxx’x and S&P.
Realized
Loss:
With
respect to a Mortgage Loan, (1) a Bankruptcy Loss or (2) as to any Liquidated
Mortgage Loan, the unpaid principal balance thereof plus accrued and unpaid
interest thereon at the mortgage rate through the last day of the month of
liquidation less the Net Liquidation Proceeds with respect to such Mortgage
Loan
and the related Mortgaged Property. In addition, to the extent the Servicer
received with respect to any Mortgage Loan, the amount of the Realized Loss
with
respect to that Mortgage Loan will be reduced to the extent such Subsequent
Recoveries are applied to reduce the Class Principal Amount, in the case of
the
Group I Certificates (other than the Class I-1X, Class I-2X and Class I-3X
Certificates), or the Certificate Principal Amount, in the case of the Group
II
Certificates, as applicable.
Record
Date:
For
each class of Certificates other than the Group II Senior Certificates and
the
Group II Subordinate Certificates, and each Distribution Date, will be the
close
of business on the last Business Day of the calendar month preceding such
Distribution Date. For each class of Group II Senior Certificates and the Group
II Subordinate Certificates and each Distribution Date, will be the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that if any such Certificates is no longer a Book-Entry
Certificate, the “Record Date” for such class of Certificates shall be the close
of business on the last Business Day of the calendar month preceding such
Distribution Date.
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 clarifications and interpretations 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.
43
Relevant
Servicing Criteria:
The
Servicing Criteria applicable to each party, as set forth on Exhibit F attached
hereto. Multiple parties can have responsibility for the same Relevant Servicing
Criteria. With respect to a Servicing Function Participant engaged by the Master
Servicer, the Securities Administrator, the Custodian or the Servicer, the
term
“Relevant Servicing Criteria” may refer to a portion of the Relevant Servicing
Criteria applicable to such parties.
Relevant
UCC:
The
Uniform Commercial Code as in effect in the applicable
jurisdiction.
Relief
Act:
The
Servicemembers Civil Relief Act, or similar state or local law.
Relief
Act Mortgage Loan:
Any
Mortgage Loan as to which the Scheduled Payment thereof has been reduced due
to
the application of the Relief Act.
Relief
Act Reduction:
With
respect to a Mortgage Loan, a reduction of the applicable Mortgage Rate by
application of the Relief Act.
REMIC:
Each
pool of assets in the Trust Estate designated as a REMIC pursuant to the
Preliminary Statement.
REMIC
2:
As
described in the Preliminary Statement.
REMIC
3:
As
described in the Preliminary Statement.
REMIC
Provisions:
The
provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at sections 860A through 860G of Subchapter
M
of Chapter 1 of the Code, and related provisions, and regulations, including
proposed regulations and rulings, and administrative pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
REO
Property:
A
Mortgaged Property acquired by the Servicer through foreclosure or deed-in-lieu
of foreclosure in connection with a defaulted Mortgage Loan or otherwise treated
as having been acquired pursuant to the REMIC Provisions.
Reportable
Event:
As
defined in Section 8.04(c).
Reporting
Servicer:
As
defined in Section 8.04(b).
Repurchase
Proceeds:
The
purchase price proceeds in connection with any repurchase of a Mortgage Loan
by
the Seller and any cash deposit in connection with the substitution of a
Mortgage Loan.
Request
for Release:
A
request for release in the form attached as Exhibit Seven to the Custodial
Agreement.
Residual
Certificate:
The
Class R Certificate.
44
Residual
Equity Interest of the Trust:
The
Class II-X Distributable Amount together with the amounts distributable to
the
Class R Certificate under Section 6.08.
Responsible
Officer:
Any
vice president, any assistant vice president, any assistant secretary, any
associate, any assistant treasurer, or any other officer of the Trustee or
the
Securities Administrator, as applicable, customarily performing functions
similar to those performed by any of the above-designated officers and, in
each
case, having direct responsibility for the administration of the Operative
Agreements and also, with respect to a particular matter, any other officer
to
whom such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject.
Restricted
Certificates:
Each of
the Class M-2, Class B-1, Class X and Class R Certificates.
Rule
144A:
Rule
144A of the Securities Act.
S&P:
Standard & Poor’s, a division of The XxXxxx-Xxxx Companies, Inc., or any
successor in interest.
Xxxxxxxx-Xxxxx
Act:
The
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations of the Commission
promulgated thereunder (including any interpretations thereof by the
Commission’s staff).
Xxxxxxxx-Xxxxx
Certification:
A
written certification covering the activities of all Servicing Function
Participants and signed by an officer of the Master Servicer that complies
with
(i) the Xxxxxxxx-Xxxxx Act of 2002, as amended from time to time, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time;
provided that if, after the Closing Date (a) the Xxxxxxxx-Xxxxx Act of 2002
is
amended, (b) the rules referred to in clause (ii) are modified or superseded
by
any subsequent statement, rule or regulation of the Commission or any statement
of a division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects the form
or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Xxxxxxxx-Xxxxx Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.
Scheduled
Principal Balance:
With
respect to any Mortgage Loan and any Distribution Date (1) the unpaid principal
balance of such mortgage loan as of the close of business on the related Due
Date (giving effect to the principal payment to be made on such Due Date and
irrespective of any delinquency in its payment), as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any bankruptcy or similar proceeding
occurring after the Cut-off Date (other than a Deficient Valuation) or any
moratorium or similar waiver or grace period) less (2) any Principal Prepayments
and the principal portion of any Net Liquidation Proceeds received during or
prior to the immediately preceding Prepayment Period; provided
that the
Scheduled Principal Balance of any Liquidated Mortgage Loan is
zero.
45
Second
Lien Mortgage Loans:
Mortgage Loans secured by mortgages or deeds of trust or similar security
instruments creating a second lien on the related Mortgaged
Property.
Securities
Act:
The
Securities Act of 1933, as amended.
Securities
Administrator:
Xxxxx
Fargo Bank, N.A., not in its individual capacity but solely as securities
administrator, or any successor in interest.
Securities
Intermediary:
The
Person acting as Securities Intermediary under this Agreement (which is the
Securities Administrator), its successor in interest, and any successor
Securities Intermediary appointed pursuant to Section 6.10.
Security
Entitlement:
The
meaning specified in Section 8-102(a)(17) of the New York UCC.
Seller:
HomeBanc Mortgage Corporation.
Senior
Certificates:
The
Group
I Senior Certificates and the Group II Senior Certificates.
Servicer:
HomeBanc Mortgage Corporation, or its successor in interest or assigns or any
successor to the Servicer under this Agreement as herein provided.
Servicer
Errors and Omission Insurance Policy:
Any
errors and omission insurance policy required to be obtained by the Servicer
satisfying the requirements of Section 4.02(l).
Servicer
Event of Default:
Any one
of the conditions or circumstances enumerated in Section 4.07 with respect
to
the Servicer.
Servicer
Fidelity Bond:
Any
fidelity bond to be maintained by the Servicer in accordance with Section
4.02(l).
Servicer
Remittance Date:
The
18th day of any month, or if such 18th day is not a Business Day, the first
Business Day immediately preceding such 18th day.
Service(s)(ing):
In
accordance with Regulation AB, the act of servicing and administering the
Mortgage Loans or any other assets of the Trust Estate by an entity that meets
the definition of “servicer” set forth in Item 1101 of Regulation AB and is
subject to the disclosure requirements set forth in 1108 of Regulation AB.
Any
uncapitalized occurrence of this term shall have the meaning commonly understood
by participants in the residential mortgage-backed securitization
market.
Servicing
Account:
The
custodial account maintained by the Servicer on behalf of the Trust for
collection of principal and interest on the Mortgage Loans.
46
Servicing
Advances:
All
reasonable and customary “out-of-pocket” costs and expenses, including costs and
expenses of foreclosures (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (1) the preservation,
restoration, inspection and protection of the Mortgaged Properties, (2) any
enforcement or judicial proceedings and (3) the management and liquidation
of
Mortgaged Properties acquired in satisfaction of the related
mortgage.
Servicing
Criteria:
The
criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as such
may
be amended from time to time.
Servicing
Fee:
The
monthly fee calculated at the Servicing Fee Rate on the Outstanding Principal
Balance of each Mortgage Loan, including any Liquidated Mortgage
Loan.
Servicing
Fee Rate:
With
respect to any Mortgage Loan, the corresponding servicing
fee rate set forth on the schedule in Exhibit L.
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Servicer, which may
be
in electronic media so long as original documents are not required for purposes
of realization of Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds, consisting of all documents in the Mortgage File which are not
delivered to the Custodian, the originals of such mortgage loan documents which
are held in trust for the Trustee by the Servicer.
Servicing
Function Participant:
Any
Subservicer or Subcontractor, other than the Servicer, the Master Servicer,
the
Trustee, the Custodian and the Securities Administrator, that is participating
in the servicing function within the meaning of Regulation AB, unless such
Person’s activities relate only to 5% or less of the Mortgage
Loans.
Servicing
Officer:
Any
officer of the Servicer involved in or responsible for, the administration
and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Servicer to the Master Servicer upon request, as
such
list may from time to time be amended.
Six-Month
LIBOR Index:
The
interbank offered rates for six-month United States dollar deposits in the
London market, calculated as provided in the related mortgage note.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing 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 Servicer (or a Subservicer of the Servicer),
the Master Servicer, the Trustee or the Securities Administrator.
Subordinate
Certificates:
The
Group I Subordinate Certificates and the Group II Subordinate
Certificates.
Subservicer:
Any
Person that (i) services Mortgage Loans on behalf of the Servicer, the Master
Servicer, the Securities Administrator, the Trustee or the Custodian and (ii)
is
responsible for the performance (whether directly or through subservicers or
Subcontractors) of Servicing functions required to be performed under this
Agreement, any related Servicing Agreement or any sub-servicing agreement that
are identified in Item 1122(d) of Regulation AB.
47
Subsequent
Recovery:
Any
amount recovered by a Servicer or the Master Servicer with respect to a
Liquidated Mortgage Loan with respect to which a Realized Loss was incurred
after the liquidation or disposition of such Mortgage Loan.
Substitution
Amount:
The
amount, if any, by which the Scheduled Principal Balance of a Deleted Mortgage
Loan exceeds the Scheduled Principal Balance of the related Qualifying
Substitute Mortgage Loan, or aggregate Scheduled Principal Balance, if
applicable, plus
unpaid
interest thereon, any related unpaid Monthly Advances or Servicing Advances
or
unpaid Servicing Fees and the amount of any costs and damages incurred by the
Trust associated with a violation of any applicable federal, state or local
predatory or abusive lending law in connection with the origination of such
Deleted Mortgage Loan.
Tax
Matters Person:
The
“tax matters person” as specified in the REMIC Provisions.
10-K
Filing Deadline:
As
defined in Section 8.04(b).
Title
Insurance Policy:
A title
insurance policy maintained with respect to a Mortgage Loan.
Trust:
HomeBanc Mortgage Trust 2007-1, the Delaware statutory trust governed
hereunder.
Trust
Account Property:
The
Trust Accounts, all amounts and investments held from time to time in the Trust
Accounts (whether in the form of deposit accounts, physical property, book-entry
securities, uncertificated securities, securities entitlements, investment
property or otherwise) and all proceeds of the foregoing.
Trust
Accounts:
The
Collection Account and the Certificate Account.
Trust
Estate:
The
assets of the Trust, which assets consist of all accounts, accounts receivable,
contract rights, general intangibles, chattel paper, instruments, documents,
money, deposit accounts, certificates of deposit, goods, notes, drafts, letters
of credit, advices of credit, investment property, uncertificated securities
claims and rights to payment of any and every kind consisting of, arising from
or relating to any of the following: (a) the Mortgage Loans listed in the
Mortgage Loan Schedule, and interest and principal due and payable thereon
after
the Cut-off Date, but not including interest and principal due and payable
on
any Mortgage Loans on or before the Cut-off Date, together with the Mortgage
Files relating to such Mortgage Loans; (b) any Insurance Proceeds, REO Property,
Liquidation Proceeds and other recoveries (in each case, subject to clause
(a)
above), (c) the Trust Accounts, the Servicing Account, any Custodial Account,
any Escrow Account and all amounts deposited therein pursuant to the applicable
provisions of this Agreement, (d) any Insurance Policies, (e) the rights of
the
Depositor under the Mortgage Loan Purchase Agreement, and (f) all income,
revenues, issues, products, revisions, substitutions, replacements, profits,
rents and all cash and non-cash proceeds of the foregoing.
48
Trustee:
U.S.
Bank National Association, not in its individual capacity but solely as Trustee,
or any successor in interest.
Trustee
Fee:
The
annual on-going fee payable by the Master Servicer on behalf of the Trust to
the
Trustee from income on funds held in the Collection Account as provided in
Section 5.07 and pursuant to the terms of the separate fee letter agreement
for
HomeBanc Mortgage Trust 2007-1 Mortgage Pass-Through Certificates.
UCC:
The
Uniform Commercial Code as enacted in the relevant jurisdiction.
Underwriter’s
Exemption:
Prohibited Transaction Exemption 2007-5, 72 Fed. Reg. 13130 (2007), as amended
(or any successor thereto), or any substantially similar administrative
exemption granted by the U.S. Department of Labor.
Underwriter:
Bear,
Xxxxxxx & Co. Inc.
Upper
Tier REMIC:
REMIC
3.
U.S.
Person:
(i) A citizen or resident of the United States; (ii) a corporation (or
entity treated as a corporation for tax purposes) created or organized in the
United States or under the laws of the United States or of any State thereof,
including, for this purpose, the District of Columbia; (iii) a partnership
(or entity treated as a partnership for tax purposes) organized in the United
States or under the laws of the United States or of any State thereof,
including, for this purpose, the District of Columbia (unless provided otherwise
by future Treasury regulations); (iv) an estate whose income is includible
in gross income for United States income tax purposes regardless of its source;
or (v) a trust, if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more U.S.
Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue
to
be U.S. Persons.
Voting
Interests:
The
portion of the voting rights of all the Certificates that is allocated to any
Certificate for purposes of the voting provisions of this Agreement. At all
times during the term of this Agreement, 98% of all Voting Interests shall
be
allocated to the Senior Certificates and the Subordinate Certificates; provided,
however, that no Voting Interests shall be allocated to any Certificate held
by
the Seller or an Affiliate of the Seller for any vote relating to (a) changing
the permitted activities of the Trust, (b) amending the definition of “Eligible
Investments” or (c) amending the definition of “Trust Estate.” Voting Interests
shall be allocated among such Certificates based on the product of (i) 98%
and
(ii) the fraction, expressed as a percentage, the numerator of which is the
aggregate Class Principal Amount of all Certificates then outstanding and the
denominator of which is the Pool Balance then outstanding. The remainder of
the
Voting Interests not otherwise allocated below shall be allocated to the Class
R
Certificate. At all times during the term of this Agreement, 1% of all Voting
Interests shall be allocated to each of the Class II-X and Class R Certificates,
while they remain outstanding; provided, however, that no Voting Interests
shall
be allocated to the Class II-X or Class R Certificate if it is held by the
Seller or an Affiliate of the Seller for any vote relating to (a) changing
the
permitted activities of the Trust, (b) amending the definition of “Eligible
Investments” or (c) amending the definition of “Trust Estate.” Voting Interests
shall be allocated among the other Classes of Certificates (and among the
Certificates within each such Class) in proportion to their Class Principal
Amounts (or Certificate Principal Amounts) or Percentage Interests.
49
Section
1.02.Calculations
With Respect to the Mortgage Loans.
Calculations required to be made pursuant to this Agreement with respect to
any
Mortgage Loan in the Trust Estate shall be made based upon current information
as to the terms of the Mortgage Loans and reports of payments received from
the
Mortgagor on such Mortgage Loans provided by the Servicer to the Master
Servicer.
Section
1.03.Calculations
With Respect to Group I Accrued Interest.
Group I
Accrued Interest, if any, on any Certificate shall be calculated based upon
a
360-day year consisting of twelve 30-day months.
ARTICLE
IA
ORGANIZATION
OF TRUST
Section
1A.01. Name
of Trust.
The
name of the Trust formed under the Original Trust Agreement and the Certificate
of Trust is “HomeBanc Mortgage Trust 2007-1,” in which name the Trustee may
conduct the business and affairs of the Trust, make and execute contracts and
agreements on behalf of the Trust and xxx and be sued.
Section
1A.02. Office.
The
office of the Trust shall be in care of the Trustee. The office of the Trust
shall be located at its Corporate Trust Office, or at such other address as
the
Trustee may designate by written notice to the Certificateholders, each Rating
Agency and the other parties to this Agreement.
Section
1A.03. Declaration
of Trust.
Under
the Original Trust Agreement and effective as of the date hereof, the Depositor
appointed U.S. Bank National Association, as Trustee of the Trust, to have
all
the rights powers and duties set forth herein. Under the Original Trust
Agreement and effective as of the date hereof, the Depositor appointed
Wilmington Trust Company to act as Delaware Trustee. It is the intention of
the
parties hereto that the Trust constitute a statutory trust under Chapter 38
of
Title 12 of the Delaware Code, 12 Del.
Code§ 3801
et
seq.,
as the
same may be amended from time to time (the “Delaware Statutory Trust Statute” or
“DSTS”), and that this Agreement amends and restates in its entirety the
Original Trust Agreement and constitutes the governing instrument of such
statutory trust. Effective as of the date hereof, the Trustee shall have all
rights, powers and duties set forth in the Delaware Statutory Trust Statute
with
respect to accomplishing the purposes of the Trust (except those duties
expressly required to be performed by the Delaware Trustee hereunder). It is
hereby confirmed that the Trustee and the Delaware Trustee were authorized
to
execute the Original Trust Agreement and to file a Certificate of Trust in
substantially the form of Exhibit M with the Secretary of State of the State
of
Delaware, on behalf of the Trust.
50
Section
1A.04. Purpose
and Powers.
The
purposes of the Trust are (i) to issue the Certificates and to sell the
Certificates to or at the direction of the Depositor; (ii) with the proceeds
of
the sale of the Certificates, to purchase the Mortgage Loans and all related
assets and to pay any organizational start-up and transactional expenses of
the
Trust; (iii) to enter into this Agreement and to perform its obligations
hereunder; (iv) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and (v) subject
to
compliance with this Agreement, to engage in such other activities as may be
required in connection with the conservation of the assets of the Trust and
the
making of distributions to the Certificateholders. The Trust is hereby
authorized to engage in the foregoing activities. The Trust shall not engage
in
any activity other than in connection with the foregoing or other than as
required or authorized by the terms of this Agreement.
Section
1A.05. Liability
of the Certificateholders.
The
Certificateholders shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
Section
1A.06. Title
To Trust Property.
Legal
title to the assets of the Trust shall be vested at all times in the Trust
as a
separate legal entity except where applicable law in any jurisdiction requires
title to any part of the Trust to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Trustee, a co-trustee and/or
a
separate trustee, as the case may be, and in each case on behalf of the Trust.
The Certificateholders shall not have legal title to any part of the assets
of
the Trust. No transfer by operation of law or otherwise of any interest of
the
Certificateholders shall operate to terminate this Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to
it of
any part of the assets of the Trust. The Trustee, in such capacity and in its
capacity as Custodian, is hereby authorized to hold all assets of the Trust
on
behalf of the Trust, for the benefit of the Certificateholders. The Holders
of
the Class II-X and Class R Certificates shall hold the Residual Equity Interest
of the Trust.
Section
1A.07. Situs
of Trust.
The
Trust will be located in the State of Delaware and administered in the States
of
Delaware, Massachusetts, Maryland and Minnesota. Nothing herein shall restrict
or prohibit the Trustee from having employees within or without the State of
Delaware. The Trust may also be qualified to do business in the State of New
York.
Section
1A.08. The
Delaware Trustee.
(a) The Delaware Trustee is appointed to serve as the trustee of the
Trust in the State of Delaware for the sole purpose of satisfying the
requirement of Section 3807(a) of the DSTS that the Trust have at least one
trustee with a principal place of business in the State of Delaware. It is
understood and agreed by the parties hereto that the Delaware Trustee shall
have
none of the duties, obligations or liabilities of the Trustee.
(b) The
duties of the Delaware Trustee shall be limited to (i) accepting legal process
served on the Trust in the State of Delaware and (ii) the execution of any
certificates required to be filed with the Secretary of State of the State
of
Delaware which the Delaware Trustee is required to execute under Section 3811
of
the DSTS. To the extent that, at law or in equity, the Delaware Trustee has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or the Certificateholders, it is hereby understood and agreed by the
other
parties hereto that such duties and liabilities are replaced by the duties
and
liabilities of the Delaware Trustee expressly set forth in this Agreement.
The
Delaware Trustee shall have no liability for the acts or omissions of the
Trustee. Except as provided above, the Delaware Trustee shall not be deemed
a
trustee and shall have no management responsibilities or owe any fiduciary
duties to the Trust or the Certificateholders.
51
(c) The
Delaware Trustee may be removed by the Trustee upon 30 days prior written notice
to the Delaware Trustee. The Delaware Trustee may resign upon 30 days prior
written notice to the Trustee. No resignation or removal of the Delaware Trustee
shall be effective except upon the appointment of a successor Delaware Trustee.
If no successor has been appointed within such 30 day period, the Delaware
Trustee or the Trustee may, at the expense of the Trust, petition a court to
appoint a successor Delaware Trustee.
(d) Any
Person into which the Delaware Trustee may be merged or with which it may be
consolidated, or any Person resulting from any merger or consolidation to which
the Delaware Trustee shall be a party, or any Person which succeeds to all
or
substantially all of the corporate trust business of the Delaware Trustee,
shall
be the successor Delaware Trustee under this Agreement without the execution,
delivery or filing of any paper or instrument or further act to be done on
the
part of the parties hereto, except as may be required by applicable
law.
(e) The
Delaware Trustee shall be entitled to all of the same rights, protections
indemnities and immunities under this Agreement and with respect to the Trust
as
the Trustee. No amendment or waiver of any provision of this Agreement which
adversely affects the Delaware Trustee shall be effective against it without
its
prior written consent.
The
Delaware Trustee shall not be liable for the acts or omissions of the Trustee,
nor shall the Delaware Trustee be liable for supervising or monitoring the
performance and the duties and obligations of the Trustee or the Trust under
this Agreement or any related document. The Delaware Trustee shall not be
personally liable under any circumstances, except for its own willful
misconduct, bad faith or gross negligence. In particular, but not by way of
limitation:
(i) the
Delaware Trustee shall not be personally liable for any error of judgment made
in good faith;
(ii)
no
provision of this Agreement shall require the Delaware Trustee to expend or
risk
its personal funds or otherwise incur any financial liability in the performance
of its rights or powers hereunder, if the Delaware Trustee shall have reasonable
grounds for believing that the payment of such funds or adequate indemnity
against such risk or liability is not reasonably assured or provided to
it;
(iii)
under no
circumstances shall the Delaware Trustee be personally liable for any
representation, warranty, covenant, agreement, or indebtedness of the
Trust;
52
(iv)
the
Delaware Trustee shall not be personally responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by
any
other party hereto;
(v)
the
Delaware Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper reasonably believed by it
to be
genuine and reasonably believed by it to be signed by the proper party or
parties. The Delaware Trustee may accept a certified copy of a resolution of
the
board of directors or other governing body of any corporate party as conclusive
evidence that such resolution has been duly adopted by such body and that the
same is in full force and effect. As to any fact or matter the manner of
ascertainment of which is not specifically prescribed herein, the Delaware
Trustee may for all purposes hereof rely on a certificate, signed by the
Trustee, the Securities Administrator or the Master Servicer, as applicable,
as
to such fact or matter, and such certificate shall constitute full protection
to
the Delaware Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon;
(vi)
in the
exercise or administration of the Trust hereunder, the Delaware Trustee (a)
may
act directly or through agents or attorneys pursuant to agreements entered
into
with any of them, and the Delaware Trustee shall not be liable for the default
or misconduct of such agents or attorneys if such agents or attorneys shall
have
been selected by the Delaware Trustee in good faith and with due care and (b)
may consult with counsel, accountants and other skilled persons to be selected
by it in good faith and with due care and employed by it, and it shall not
be
liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled
persons; and
(vii)
except
as expressly provided in this Section 1A.08, in accepting and performing the
trusts hereby created the Delaware Trustee acts solely as trustee hereunder
and
not in its individual capacity, and all persons having any claim against the
Delaware Trustee by reason of the transactions contemplated by this Agreement
shall look only to the Trust for payment or satisfaction thereof.
(f) In
the
event of the appointment of a successor Delaware Trustee, such successor shall
cause an amendment to the Certificate of Trust to be filed with the Secretary
of
State of the State of Delaware in accordance with Section 3810(b) of the DSTS,
indicating the change of such Delaware Trustee’s identity. In addition, until
the termination of the Trust and this Agreement, the Delaware Trustee shall
at
all times fulfill the requirements of the DSTS.
(g) Upon
written notification from the Securities Administrator that the Trust has been
terminated in accordance with Article X, the Delaware Trustee shall cause the
Certificate of Trust to be cancelled by filing a certificate of cancellation
with the Secretary of State of the State of Delaware in accordance with Section
3810(d) of the DSTS.
Section
1A.09 Separateness
Provisions.
The
Trust shall not commingle its assets with those of any other entity. The Trust
shall maintain its financial and accounting books and records separate from
those of any other entity. Except as expressly set forth herein, the Trust
shall
pay its indebtedness, operating expenses and liabilities from its own funds,
and
the Trust shall neither incur any indebtedness nor pay the indebtedness,
operating expenses and liabilities of any other entity. The Trust shall not
engage in any dissolution, liquidation, consolidation, merger or sale of assets
except as specifically provided for herein. The Trust shall maintain appropriate
minutes or other records of all appropriate actions and shall maintain its
office separate from the offices of the Depositor or any of its Affiliates.
The
Trust shall not engage in any business activity other than as contemplated
by
this Agreement and related documentation. The Trust shall not form, or cause
to
be formed, any subsidiaries and shall not own or acquire any asset other than
as
contemplated by this Agreement and related documentation. Other than as
contemplated by this Agreement and related documentation, the Trust shall not
follow the directions or instructions of the Depositor. The Trust shall hold
itself out as a separate entity from the Depositor, the Certificateholders
and
any of their Affiliates, conduct its own business in its own name and use
stationery, invoices, checks or other business forms under its own name and
not
that of any Certificateholder, Affiliate, or other person. The Trust shall
observe all formalities required under the Delaware Statutory Trust Statute.
The
Trust shall not hold out its credit as being available to satisfy the
obligations of any other person or entity. The Trust shall not acquire the
obligations or securities of its Affiliates or the Seller. Other than as
contemplated by this Agreement and related documentation, the Trust shall not
pledge its assets for the benefit of any other person or entity. The Trust
shall
correct any known misunderstanding regarding its separate identity. The Trust
shall not identify itself as a division of any other person or entity. The
Trust
shall maintain adequate capital in light of its contemplated business
operations. The Trust shall conduct business with its affiliates on an
arm’s-length basis.
53
For
accounting purposes, the Trust shall be treated as an entity separate and
distinct from any Certificateholder. The pricing and other material terms of
all
transactions and agreements to which the Trust is a party shall be intrinsically
fair to all parties thereto. This Agreement is and shall be the only agreement
among the parties hereto with respect to the creation, operation and termination
of the Trust.
Section
1A.10 Assets
of the Trust.
The
assets of the Trust shall be limited to the assets described in the definition
of “Trust Estate.”
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS
Section
2.01. Creation
and Declaration of Trust; Conveyance of Mortgage Loans.
(a) Mortgage
Loans.
As of
the Closing Date, the Depositor concurrently with
the
execution and delivery of this Agreement, does hereby transfer, assign, set
over, deposit with and otherwise convey to the Trust, without recourse, subject
to Section 3.01, in trust, all the right, title and interest of the Depositor
in
and to all accounts, accounts receivable, contract rights, general intangibles,
chattel paper, instruments, documents, money, deposit accounts, certificates
of
deposit, goods, notes, drafts, letters of credit, advices of credit, investment
property, uncertificated securities claims and rights to payment of any and
every kind consisting of, arising from or relating to any of the following:
(a) the Mortgage Loans listed in the Mortgage Loan Schedule, and all
interest and principal due and payable thereon after the Cut-off Date, but
not
including interest and principal due and payable on any Mortgage Loans on or
before the Cut-off Date, together with the Mortgage Files relating to such
Mortgage Loans, (b) any Insurance Proceeds, REO Property, Liquidation Proceeds
and other recoveries (in each case, subject to clause (a) above), (c) all Escrow
Payments, (d) any Insurance Policies, (e) the rights of the Depositor under
the
Mortgage Loan Purchase Agreement, (f) the Depositor’s security interest in any
collateral pledged to secure the Mortgage Loans, including the Mortgaged
Properties, and (g) all income, revenues, issues, products, revisions,
substitutions, replacements, profits, rents and all cash and non-cash proceeds
of the foregoing to have and to hold, in trust; and the Trustee declares that,
subject to the review provided for in Section 2.02, it has received and shall
hold the Trust Estate, as Trustee, in trust, for the benefit and use of the
Certificateholders and for the purposes and subject to the terms and conditions
set forth in this Agreement, and, concurrently with such receipt, the Trust
has
issued and delivered the Certificates to or upon the order of the Depositor,
in
exchange for the Mortgage Loans and the other property of the Trust
Estate.
54
Concurrently
with the execution and delivery of this Agreement, the Depositor does hereby
assign to the Trustee all of its rights and interest under the Mortgage Loan
Purchase Agreement but without delegation of any of its obligations thereunder.
The Trustee hereby accepts such assignment, and shall be entitled to exercise
all the rights of the Depositor under the Mortgage Loan Purchase Agreement
as
if, for such purpose, it were the Depositor. Upon the issuance of the
Certificates, ownership in the Trust Estate shall be vested in the Trustee
for
the benefit of the Certificateholders. The foregoing sale, transfer, assignment,
set-over, deposit and conveyance does not and is not intended to result in
creation or assumption by the Trustee of any obligation of the Depositor, the
Seller, or any other Person in connection with the Mortgage Loans or any other
agreement or instrument relating thereto except as specifically set forth
herein.
It
is
agreed and understood by the Seller, the Depositor and the Trustee (and the
Depositor so represents and recognizes) that it is not intended that any
Mortgage Loan to be included in the Trust Estate be (i) a "High-Cost Home Loan"
as defined in the New Jersey Home Ownership Act effective November 27, 2003,
(ii) a "High-Cost Home Loan" as defined in the New Mexico Home Loan Protection
Act effective January 1, 2004, (iii) a "High-Cost Home Mortgage Loan" as defined
in the Massachusetts Predatory Home Loan Practices Act effective November 7,
2004 or (iv) a "High Cost Home Loan" as defined in the Indiana Home Loan
Practices Act effective January 1, 2005.
(b) In
connection with such transfer and assignment of the Mortgage Loans, the
Depositor does hereby deliver to, and deposit with, or cause to be delivered
to
and deposited with, the Trustee, and/or the Custodian acting on the Trustee’s
behalf, the following documents or instruments (collectively, the “Mortgage Loan
Documents”) with respect to each Mortgage Loan so transferred and assigned (as
to each, a “Mortgage File”):
(i) the
original Mortgage Note, endorsed either (A) in blank or (B) to the order of
the
Trustee in the form of the Form of Endorsement set forth in Exhibit Two to
the
Custodial Agreement, or with respect to any lost Mortgage Note, an original
lost
note affidavit, in the form set forth in Exhibit Three to the Custodial
Agreement, stating that the original Mortgage Note was lost, misplaced or
destroyed, together with a copy of the related Mortgage Note;
55
(ii) except
as
provided below, the original Mortgage with evidence of recording thereon (if
the
related Mortgage Loan is a MERS Mortgage Loan, the Mortgage shall note the
MIN
and contain language that such Mortgage Loan is a MERS Mortgage Loan). If in
connection with any Mortgage Loan, the Servicer 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 Servicer 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 Servicer
stating that such Mortgage has been delivered to the appropriate public
recording office for recordation and that the original recorded Mortgage or
a
copy of such Mortgage certified by such public recording office to be a true
and
complete copy of the original recorded Mortgage will be promptly delivered
to
the Custodian upon receipt thereof by the Servicer; or (ii) in the case of
a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage with the recording information thereon certified
by such public recording office to be a true and complete copy of the original
recorded Mortgage;
(iii) with
respect to each Non-MERS Mortgage Loan, an original Assignment of Mortgage
(which may be in the form of a blanket assignment if permitted in the
jurisdiction where the Mortgaged Property is located) with evidence of recording
thereon unless an Opinion of Counsel described in clause (c) below is delivered
to the Trustee and the Rating Agencies, in which case, the Assignment of
Mortgage shall be in form and substance acceptable for recording. The Mortgage
shall be assigned either (A) in blank, without recourse, or (B) to “U.S. Bank
National Association, as Trustee of the HomeBanc Mortgage Trust 2007-1 Mortgage
Pass-Through Certificates,” without recourse;
(iv) an
original copy of any intervening assignment of Mortgage showing a complete
chain
of assignments or, in the case of an intervening assignment that has not been
received by the Servicer from the public recording office, an Officer’s
Certificate of the Servicer stating that such intervening assignment has been
delivered to the appropriate public recording office for recordation and that
the original recorded intervening assignment or 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 will be promptly delivered
to the Custodian upon receipt thereof by the Servicer, or in the case of an
intervening assignment where a public recording office retains the original
recorded intervening assignment, a copy of such intervening assignment with
the
recording information thereon certified by such public recording office to
be a
true and complete copy of the original recorded intervening assignment; or
in
the case of an intervening assignment that has been lost, a written Opinion
of
Counsel for the Seller that such original intervening assignment is not required
to enforce the Trustee’s interest in the Mortgage Loans;
56
(v) the
original or a certified copy of lender’s Title Insurance Policy (or, in lieu
thereof, a commitment to issue such Title Insurance Policy, with an original
or
a certified copy of such Title Insurance Policy to follow as soon after the
Closing Date as reasonably practicable) or attorney’s opinion of title and
abstract of title;
(vi) the
original or copy of the policy or certificate of primary mortgage guaranty
insurance, to the extent available, if any;
(vii) the
original or copies of each assumption, modification, written assurance or
substitution agreement, if any, or as to any such agreement which cannot be
delivered prior to the Closing Date because of a delay caused by the public
recording office where such assumption, modification or substitution agreement
has been delivered for recordation, a photocopy of such assumption, modification
or substitution agreement, pending delivery of the original thereof, together
with an Officer’s Certificate of the Depositor certifying that the copy of such
assumption, modification or substitution agreement delivered to the Custodian
is
a true copy and that the original of such agreement has been forwarded to the
public recording office; and
(viii) the
original of any security agreement or equivalent instrument executed in
connection with the Mortgage or as to any security agreement or equivalent
instrument that cannot be delivered on or prior to the Closing Date because
of a
delay caused by the public recording office where such document has been
delivered for recordation, a photocopy of such document, pending delivery of
the
original thereof, together with an Officer’s Certificate of the Depositor
certifying that the copy of such security agreement, chattel mortgage or their
equivalent delivered to the Custodian is a true copy and that the original
of
such document has been forwarded to the public recording office.
The
Depositor and the Seller acknowledge and agree that the form of endorsement
attached to the Custodial Agreement as Exhibit Two to the Custodial Agreement
is
intended to effect the transfer to the Trustee, for the benefit of the
Certificateholders, of the Mortgage Notes and the Mortgages.
(c) Assignments
of Mortgage with respect to each Non-MERS Mortgage Loan shall be recorded;
provided,
however,
that
such Assignments of Mortgage need not be recorded if, on or prior to the Closing
Date, the Seller delivers an Opinion of Counsel (which must be Independent
counsel) acceptable to the Rating Agencies, to the effect that recording in
such
states is not required to protect the Trustee’s interest in the related Non-MERS
Mortgage Loans.
(d) In
instances where a Title Insurance Policy is required to be delivered to the
Trustee or the Custodian on behalf of the Trustee under clause (b)(vi) above
and
is not so delivered, the Seller will provide a copy of such Title Insurance
Policy to the Trustee, or to the Custodian on behalf of the Trustee no later
than ninety (90) days of the receipt by the Seller of the recorded documents
from the applicable public recording office.
57
(e) For
Mortgage Loans (if any) that have been prepaid in full after the Cut-off Date
and prior to the Closing Date, the Depositor, in lieu of delivering the above
documents, herewith delivers to the Trustee, or to the Custodian on behalf
of
the Trustee, an Officer’s Certificate which shall include a statement to the
effect that all amounts received in connection with such prepayment that are
required to be deposited in the Collection Account pursuant to Section 5.06
have
been so deposited. All original documents that are not delivered to the Trustee
or the Custodian on behalf of the Trustee shall be held by the Servicer in
trust
for the benefit of the Trustee and the Certificateholders.
Section
2.02.Acceptance
of Trust Estate; Review of Documentation.
(a) Subject
to the provisions of Section 2.01, the Trustee acknowledges receipt of the
assets transferred by the Depositor of the assets included in the Trust Estate
and has directed that the documents referred to in Section 2.01 and all other
assets included in the definition of “Trust Estate” be delivered to the Trustee
(or the Custodian) on its behalf.
The
Trustee, by execution and delivery hereof, acknowledges receipt by it or by
the
Custodian on its behalf of the Mortgage Files pertaining to the Mortgage Loans
listed on the Mortgage Loan Schedule, subject to review thereof by the Trustee,
or by the Custodian on behalf of the Trustee, under this Section 2.02. The
Trustee, or the Custodian on behalf of the Trustee, will execute and deliver
to
the Depositor, the Master Servicer, the Servicer (and the Trustee if delivered
by the Custodian) on the Closing Date an Initial Certification, subject
to any exceptions listed on the exception report attached thereto, in
the
form annexed to the Custodial Agreement as Exhibit Four (the “Initial
Certification”).
(b) Within
90
days after the Closing Date, the Trustee or the Custodian on behalf of the
Trustee, will, for the benefit of Certificateholders, review each Mortgage
File
to ascertain that all required documents set forth in Section 2.01 have been
received and appear on their face to contain the requisite signatures by or
on
behalf of the respective parties thereto, and shall deliver to the Depositor,
the Seller (and the Trustee if delivered by the Custodian) an Interim
Certification subject to any exceptions listed on the exception report attached
thereto in the form annexed to the Custodial Agreement as Exhibit Five to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan prepaid in full or any specifically identified
in
such certification as not covered by such certification), (i) all of the
applicable documents specified in Section 2.01(b) are in its possession and
(ii)
such documents have been reviewed by it and appear to relate to such Mortgage
Loan (the “Interim Certification”). The Trustee, or the Custodian on behalf of
the Trustee, shall determine whether such documents are executed and endorsed,
but shall be under no duty or obligation to inspect, review or examine any
such
documents, instruments, certificates or other papers to determine that the
same
are valid, binding, legally effective, properly endorsed, genuine, enforceable
or appropriate for the represented purpose or that they have actually been
recorded or are in recordable form or that they are other than what they purport
to be on their face. Neither the Trustee nor the Custodian shall have any
responsibility for verifying the genuineness or the legal effectiveness of
or
authority for any signatures of or on behalf of any party or endorser or for
the
perfection or priority of any document.
58
(c) If
in the
course of the review described in paragraph (b) above the Trustee or the
Custodian discovers any document or documents constituting a part of a Mortgage
File that is missing, does not appear regular on its face (i.e.,
is
mutilated, damaged, defaced, torn or otherwise physically altered) or appears
to
be unrelated to the Mortgage Loans identified in the Mortgage Loan Schedule,
as
applicable (each, a “Material Defect”), the Trustee or the Custodian,
discovering such Material Defect shall identify the Mortgage Loan to which
such
Material Defect relates in the Interim Certification delivered to the Depositor
and the Master Servicer. Within 90 days of its receipt of such notice, the
Seller shall cure such Material Defect (and, in such event, the Seller shall
provide the Trustee and the Custodian with an Officer’s Certificate confirming
that such cure has been effected). If the Seller does not so cure such Material
Defect, and if a loss has been incurred with respect to such Mortgage Loan
that
would, if such Mortgage Loan were not purchased from the Trust, constitute
a
Realized Loss, and such loss is attributable to the failure of the Seller to
cure such Material Defect, the Seller shall repurchase the related Mortgage
Loan
from the Trust Estate at the Purchase Price. A loss shall be deemed to be
attributable to the failure of the Seller to cure a Material Defect if, as
determined by the Seller acting in good faith, absent such Material Defect,
such
loss would not have been incurred. The Seller may, in lieu of repurchasing
a
Mortgage Loan pursuant to this Section 2.02, substitute for such Mortgage Loan
a
Qualifying Substitute Mortgage Loan in accordance with the provisions of Section
3.03. The failure of the Trustee or the Custodian to deliver the Interim
Certification within 90 days after the Closing Date shall not affect or relieve
the Seller of its obligation to repurchase any Mortgage Loan pursuant to this
Section 2.02 or any other Section of this Agreement requiring the repurchase
of
Mortgage Loans from the Trust.
(d) Within
180 days following the Closing Date, the Trustee, or the Custodian, shall
deliver to the Depositor, the Master Servicer and the Servicer (and the Trustee
if delivered by the Custodian) a Final Certification subject to any exceptions
listed on the exception report attached thereto substantially in the form
attached to the Custodial Agreement as Exhibit Six evidencing the completeness
of the Mortgage Files in its possession or control, with any exceptions noted
thereto (the “Final Certification”).
(e) Nothing
in this Agreement shall be construed to constitute an assumption by the Trust,
the Trustee, the Custodian or the Certificateholders of any unsatisfied duty,
claim or other liability on any Mortgage Loan or to any Mortgagor.
(f) Notwithstanding
anything to the contrary contained herein, each of the parties hereto
acknowledges that the Custodian shall perform the applicable review of the
Mortgage Loans and respective certifications thereof as provided in the
Custodial Agreement.
(g) Upon
execution of this Agreement, the Depositor hereby delivers to the Trustee and
the Trustee acknowledges a receipt of the Mortgage Loan Purchase
Agreement.
(h) For
purposes of the determinations required to be made by the Trustee or the
Custodian pursuant to paragraphs (a) through (d) of this Section 2.02, the
Trustee or the Custodian, as applicable, shall be entitled to conclusively
rely
upon the diskette, tape or other electronic media provided by or on behalf
of
the Seller with respect to the Mortgage Loans.
Section
2.03. Grant
Clause.
59
(a) It
is
intended that the conveyance by the Depositor to the Trustee of the Mortgage
Loans, as provided for in Section 2.01 be construed as a sale by the Depositor
to the Trustee of the Mortgage Loans and other assets in the Trust Estate for
the benefit of the Certificateholders. Further, it is not intended that any
such
conveyance be deemed to be a pledge of the Mortgage Loans by the Depositor
to
the Trustee to secure a debt or other obligation of the Depositor. However,
in
the event that the Mortgage Loans are held to be property of the Depositor
or if
for any reason this Agreement is held or deemed to create a security interest
in
the Mortgage Loans and other assets in the Trust Estate, then it is intended
that (a) this Agreement shall also be deemed to be a security agreement within
the meaning of Articles 8 and 9 of the Delaware UCC (or the Relevant UCC if
not
the Delaware UCC); (b) the conveyances provided for in Section 2.01 shall be
deemed to be (1) a grant by the Depositor to the Trustee of a security interest
in all of the Depositor’s right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired, in and to (A)
the
Mortgage Loans, including the Mortgage Notes, the Mortgages, any related
insurance policies and all other documents in the related Mortgage Files, (B)
all amounts payable pursuant to the Mortgage Loans in accordance with the terms
thereof and (C) any and all general intangibles consisting of, arising from
or
relating to any of the foregoing, and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all Liquidation Proceeds, all Insurance
Proceeds, all amounts from time to time held or invested in the Collection
Account, whether in the form of cash, instruments, securities or other property
and (2) an assignment by the Depositor to the Trustee of any security interest
in any and all of the Depositor’s right (including the power to convey title
thereto), title and interest, whether now owned or hereafter acquired, in and
to
the property described in the foregoing clauses (1)(A) through (C); (c) the
possession by the Trustee or any other agent of the Trustee of Mortgage Notes,
and such other items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be “possession by the secured
party,” or possession by a purchaser or a person designated by such secured
party, for purposes of perfecting the security interest pursuant to the Delaware
UCC and any other Relevant UCC (including, without limitation, Section 9-313,
8-313 or 8-321 thereof); and (d) notifications to persons holding such property,
and acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law.
(b) The
Depositor and, at the Depositor’s direction, the Trustee on behalf of the
Certificateholders shall, to the extent consistent with this Agreement, take
such reasonable actions as may be necessary to ensure that, if this Agreement
were deemed to create a security interest in the Mortgage Loans and the other
property of the Trust Estate, such security interest would be deemed to be
a
perfected security interest of first priority under applicable law and will
be
maintained as such throughout the term of this Agreement. Without limiting
the
generality of the foregoing, the Depositor shall prepare and file any UCC
financing statements that are necessary to perfect the Trustee’s security
interest in or lien on the Mortgage Loans, as evidenced by an Officer’s
Certificate of the Depositor, and furnish a copy of each such filed financing
statement to the Securities Administrator. The Trustee shall prepare and file,
at the expense of the Trust, all filings necessary to maintain the effectiveness
of any original filings necessary under the Relevant UCC to perfect the
Trustee’s security interest in or lien on the Mortgage Loans, including without
limitation (x) continuation statements, and (y) to the extent that a Responsible
Officer of the Trustee has received written notice of such change or transfer,
such other statements as may be occasioned by (1) any change of name of the
Seller, the Depositor or the Trustee, (2) any change of location of the place
of
business or the chief executive office of the Seller or the Depositor or (3)
any
transfer of any interest of the Seller or the Depositor in any Mortgage
Loan.
60
The
Depositor shall not organize under the law of any jurisdiction other than the
state under which each is organized as of the Closing Date (whether changing
its
jurisdiction of organization or organizing under an additional jurisdiction)
without giving thirty (30) days prior written notice of such action to its
immediate and mediate transferee, including the Trustee. Before effecting such
change, the Depositor shall prepare and file in the appropriate filing office
any financing statements or other statements necessary to continue the
perfection of the interests of its immediate and mediate transferees, including
the Trustee, in the Mortgage Loans. In connection with the transactions
contemplated by this Agreement, the Depositor authorizes its immediate or
mediate transferee to file in any filing office any initial financing
statements, any amendments to financing statements, any continuation statements,
or any other statements or filings described in this Section
2.03(b).
(c) The
Depositor shall not take any action inconsistent with the sale by the Depositor
of all of its right, title and interest in and to the Trust Estate and shall
indicate or shall cause to be indicated in its records and records held on
its
behalf that ownership of each Mortgage Loan and the other property of the Trust
Estate is held by the Trustee. In addition, the Depositor shall respond to
any
inquiries from third parties with respect to ownership of a Mortgage Loan or
any
other property of the Trust Estate by stating that it is not the owner of such
Mortgage Loan and that ownership of such Mortgage Loan or other property of
the
Trust Estate is held by the Trustee on behalf of the
Certificateholders.
Section
2.04. Covenant
of Seller with Respect to Certificates.
As of
any date of determination, none of the Seller, its Affiliates or its agents
may,
in the aggregate, hold more than 90% of the aggregate Class Principal Amount
or
Percentage Interests in the Certificates.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Section
3.01.Representations
and Warranties of the Depositor and the Seller.
(a) The
Depositor hereby represents and warrants to the Trustee for the benefit of
Certificateholders, the Securities Administrator, the Master Servicer, the
Seller and the Servicer as of the Closing Date or such other date as is
specified, that:
(i) This
Agreement constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors’ rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);
61
(ii) Immediately
prior to the transfer by the Depositor to the Trust of each Mortgage Loan,
the
Depositor had good and equitable title to each Mortgage Loan (insofar as such
title was conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or other
encumbrance or other interest of any nature;
(iii) As
of the
Closing Date, the Depositor has transferred all right, title and interest in
the
Mortgage Loans to the Trustee on behalf of the Trust;
(iv) The
Depositor has not transferred the Mortgage Loans to the Trust with any intent
to
hinder, delay or defraud any of its creditors; and
(v) The
Depositor has been duly organized and is validly existing as a corporation
in
good standing under the laws of Delaware, with full power and authority to
own
its assets and conduct its business as presently being conducted.
(b) The
Seller hereby represents and warrants to the Trustee for the benefit of
Certificateholders, the Securities Administrator, the Master Servicer and the
Depositor as of the Closing Date or such other date as is specified,
that:
(i) the
Seller is a Georgia corporation, duly organized validly existing and in good
standing under the laws of the State of Georgia, and has the corporate power
to
own its assets and to transact the business in which it is currently engaged.
The Seller is duly qualified to do business as a foreign corporation and is
in
good standing in each jurisdiction in which the character of the business
transacted by it or any properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or
other) of the Seller;
(ii) the
Seller has the corporate power and authority to make, execute, deliver and
perform this Agreement and all of the transactions contemplated under the
Agreement, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of the Seller enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally and by the
availability of equitable remedies;
(iii) the
Seller is not required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration with,
any governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement, except
for
such consent, license, approval or authorization, or registration or
declaration, as shall have been obtained or filed, as the case may be, prior
to
the Closing Date;
(iv) the
execution, delivery and performance of this Agreement by the Seller will not
violate any provision of any existing law or regulation or any order or decree
of any court applicable to the Seller or any provision of the articles of
incorporation or bylaws of the Seller, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Seller is a party
or by which the Seller may be bound; and
62
(v) no
litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending, or to the knowledge of the Seller
threatened, against the Seller or any of its properties or with respect to
this
Agreement which in the opinion of the Seller has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by
this
Agreement.
(c) The
Seller hereby makes for the benefit of the Trustee for the benefit of
Certificateholders, the Securities Administrator, the Master Servicer and the
Depositor as of the Closing Date or such other date as is specified, with
respect to the Mortgage Loans, the representations and warranties set forth
in
Exhibit A of the Mortgage Loan Purchase Agreement.
(d) To
the
extent that any fact, condition or event with respect to a Mortgage Loan
constitutes a breach of a representation or warranty of the Seller under
subsection (c) above or the Mortgage Loan Purchase Agreement, the only right
or
remedy of the Trustee or any Certificateholder hereunder shall be their rights
to enforce the obligations of the Seller under any applicable representation
or
warranty made by it. The Trustee on behalf of the Trust acknowledges that the
Depositor shall have no obligation or liability with respect to any breach
of
any representation or warranty with respect to the Mortgage Loans (except as
set
forth in Section 3.01(a)(ii)) under any circumstances.
Section
3.02.Discovery
of Breach.
It is
understood and agreed that the representations and warranties (i) of the
Depositor set forth in Section 3.01(a), (ii) of the Seller set forth in Section
3.01(b) and (c), and (iii) of the Servicer pursuant to Section 4.05 of this
Agreement, shall each survive delivery of the Mortgage Files and the Assignment
of Mortgage of each Mortgage Loan to the Trustee and shall continue throughout
the term of this Agreement. With
respect to the representations and warranties which are made to the best of
the
Seller’s knowledge, if it is discovered by the Depositor, the Seller, the
Securities Administrator, the Trustee,
the Master Servicer, the Underwriter or the Servicer that the substance of
such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the Mortgage Loans or the interests of the
Certificateholders or the Trustee
therein, notwithstanding such Seller’s lack of knowledge with respect to the
substance of such representation or warranty, remedies for breach will apply
to
such inaccuracy. Any
breach of the representation and warranty set forth in clauses (cc), (ee) and
(ff) of Exhibit A of the Mortgage Loan Purchase Agreement shall be deemed to
materially and adversely affect the interest of the Trust in that Mortgage
Loan,
notwithstanding the Seller’s lack of knowledge with respect to the substance of
such representation and warranty. Upon discovery by any of the Depositor, the
Master Servicer, the Securities Administrator or the Trustee of a breach of
any
of such representations and warranties made by the Seller that adversely and
materially affects the value of the related Mortgage Loan or
the interests of the Certificateholders or the Trustee
therein,
the
party discovering such breach shall give prompt written notice to the other
parties. Within 90 days of the discovery by the Seller of a breach of any
representation or warranty given to the Trustee by the Seller or the Seller’s
receipt of written notice of such a breach, the Seller shall either (a) cure
such breach in all material respects, (b) repurchase such Mortgage Loan or
any
property acquired in respect thereof from the Trustee at the Purchase Price
or
(c) substitute a Qualifying Substitute Mortgage Loan for the affected Mortgage
Loan.
63
Section
3.03.Repurchase,
Purchase or Substitution of Mortgage Loans.
(a) With
respect to any Mortgage Loan repurchased by the Seller pursuant to Section
3.02
of this Agreement, the principal portion of the funds in respect of such
repurchase of a Mortgage Loan will be considered a Principal Prepayment and
the
Purchase Price shall be deposited in the Collection Account. Upon receipt by
the
Securities Administrator of the full amount of the Purchase Price for a Deleted
Mortgage Loan and the receipt by the Trustee of notification thereof, or upon
receipt of notification from the Custodian that it had received the Mortgage
File for a Qualifying Substitute Mortgage Loan substituted for a Deleted
Mortgage Loan (and any applicable Substitution Amount), the Trustee shall
release or cause to be released and reassign to the Depositor or the Seller,
as
applicable, the related Mortgage File for the Deleted Mortgage Loan and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty, as shall be necessary to vest
in
such party or its designee or assignee title to any Deleted Mortgage Loan
released pursuant hereto, free and clear of all security interests, liens and
other encumbrances created by this Agreement, which instruments shall be
prepared by the Servicer and the Trustee shall have no further responsibility
with respect to the Mortgage File relating to such Deleted Mortgage Loan. The
Seller indemnifies and holds the Trust Estate, the Master Servicer, the
Securities Administrator, the Trustee, the Delaware Trustee, the Depositor
and
each Certificateholder harmless against any and all taxes, claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trust Estate, the
Trustee, the Master Servicer, the Securities Administrator, the Delaware
Trustee, the Depositor and any Certificateholder may sustain in connection
with
any actions of such Seller relating to a repurchase of a Mortgage Loan other
than in compliance with the terms of this Section 3.03 and the Mortgage Loan
Purchase Agreement, to the extent that any such action causes an Adverse REMIC
Event.
(b) With
respect to each Qualifying Substitute Mortgage Loan to be delivered to the
Trustee (or the Custodian) in exchange for a Deleted Mortgage Loan: (i) the
Depositor or the Seller, as applicable, must deliver to the Trustee (or a
Custodian) the Mortgage File for the Qualifying Substitute Mortgage Loan
containing the documents set forth in Section 2.01(b) along with a written
certification certifying as to the delivery of such Mortgage File and containing
the granting language set forth in Section 2.01(a); and (ii) the Seller and
the
Depositor will be deemed to have made, with respect to such Qualifying
Substitute Mortgage Loan, each of the representations and warranties made by
it
with respect to the related Deleted Mortgage Loan. As soon as practicable after
the delivery of any Qualifying Substitute Mortgage Loan hereunder, the Trustee,
at the expense of the Depositor and at the direction and with the cooperation
of
the Servicer shall (i) with respect to a Qualifying Substitute Mortgage
Loan that is a Non-MERS Mortgage Loan, cause the Assignment of Mortgage to
be
recorded by the Servicer if required pursuant to Section 2.01(c), or (ii) with
respect to a Qualifying Substitute Mortgage Loan that is a MERS Mortgage Loan,
cause to be taken such actions as are necessary to cause the Trustee (on behalf
of the Trust) to be clearly identified as the owner of each such Mortgage Loan
on the records of MERS if required pursuant to Section 2.01(c). The Trustee
or
its designee shall amend the Mortgage Loan Schedule to reflect the withdrawal
of
any Mortgage Loan from the terms of this Agreement and the Mortgage Loan
Purchase Agreement and the addition, if any, of a Qualified Substitute Mortgage
Loan.
64
(c) Notwithstanding
any other provision of this Agreement, the right to substitute Mortgage Loans
pursuant to this Article III shall be subject to the additional limitations
that
no substitution of a Qualifying Substitute Mortgage Loan for a Deleted Mortgage
Loan shall be made unless the Trustee has received an Opinion of Counsel
addressed to the Trustee (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not cause an
Adverse REMIC Event.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF THE
MORTGAGE
LOANS BY THE SERVICER
Section
4.01. Servicer
to Perform Servicing Responsibilities.
(a) Contract
for Servicing; Possession of Servicing Files.
The
Trustee does hereby contract with the Servicer for the servicing of the Mortgage
Loans for the benefit of the Trust and the Trustee. The Servicer shall maintain
a Servicing File with respect to each Mortgage Loan in order to service such
Mortgage Loans pursuant to this Agreement and each Servicing File delivered
to
the Servicer shall be held in trust by the Servicer for the benefit of the
Trust
and the Trustee. The Servicer’s possession of any portion of the Mortgage Loan
documents shall be at the will of the Trustee for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to this Agreement,
and such retention and possession by the Servicer shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, and the contents
of the Servicing File shall be vested in the Trustee and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by
or
which come into the possession of the Servicer shall immediately vest in the
Trustee and shall be retained and maintained, in trust, by the Servicer at
the
will of the Trustee in such custodial capacity only. The Servicing File retained
by the Servicer pursuant to this Agreement shall be identified in accordance
with the Servicer’s file tracking system to reflect the ownership of the related
Mortgage Loan by the Trustee. The Servicer shall release from its custody the
contents of any Servicing File retained by it only in accordance with this
Agreement.
(b) Books
and Records.
All
rights arising out of the Mortgage Loans shall be vested in the Trustee, subject
to the Servicer’s rights to service and administer the Mortgage Loans hereunder
in accordance with the terms of this Agreement. All funds received on or in
connection with a Mortgage Loan, other than the Servicing Fee and other
compensation and reimbursement to which the Servicer and the Master Servicer
are
entitled as set forth herein, including but not limited to Section 4.04(c),
shall be received and held by them in trust for the benefit of the Trustee
pursuant to the terms of this Agreement.
65
The
Servicer shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.02(a) within one week of their
execution; provided,
however,
that
the Servicer shall provide the Custodian with a Servicer certified true copy
of
any such document submitted for recordation within one week 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 180 days of its submission
for
recordation.
Section
4.02. Servicing
of the Mortgage Loans.
(a) Servicer
to Service.
The
Servicer, acting directly or through one or more Subservicers as provided in
Section 4.09, shall service and administer the Mortgage Loans from and after
the
Closing Date and, except where prior consent of the Master Servicer is required
under this Agreement, in accordance with this Agreement and with Accepted
Servicing Practices, and shall have full power and authority, acting alone,
to
do or cause to be done any and all things in connection with such servicing
and
administration which the Servicer may deem necessary or desirable and consistent
with the terms of this Agreement and with Accepted Servicing Practices and
exercise the same care that it customarily employs for its own account. Except
as set forth in this Agreement, the Servicer shall service the Mortgage Loans
in
strict compliance with the servicing provisions of the Xxxxxx Xxx Guides
(special servicing option), which include, but are not limited to, provisions
regarding the liquidation of Mortgage Loans, the collection of Mortgage Loan
payments, the payment of taxes, insurance and other charges, the maintenance
of
hazard insurance with a Qualified Insurer, the maintenance of mortgage
impairment insurance, the maintenance of fidelity bond and errors and omissions
insurance, inspections, the restoration of Mortgaged Property, the maintenance
of Primary Mortgage Insurance Policies and Lender Primary Mortgage Insurance
Policies, insurance claims, the title, management and disposition of REO
Property, permitted withdrawals with respect to REO Property, liquidation
reports, and reports of foreclosures and abandonments of Mortgaged Property,
the
transfer of Mortgaged Property, the release of Mortgage Files, annual
statements, and examination of records and facilities. In the event of any
conflict, inconsistency or discrepancy between any of the servicing provisions
of this Agreement and any of the servicing provisions of the Xxxxxx Mae Guides,
the provisions of this Agreement shall control and be binding upon the Servicer
and the other parties hereto.
Consistent
with the terms of this Agreement, the Servicer may not waive, modify or vary
any
term of any Mortgage Loan or consent to the postponement of any such term or
in
any manner grant indulgence to any Mortgagor unless (1) such Mortgage Loan
is in
default or (2) if in the Servicer's reasonable and prudent determination such
waiver, modification, postponement or indulgence (a) prevents an event of
default by the borrower from existing that would not be in the best interest
of
the Trust, Trustee and Certificateholders and (b) is not materially adverse
to
the Trust, Trustee and the Certificateholders, provided, however, that unless
the Servicer has obtained the prior written consent of the Master Servicer,
the
Servicer shall not permit any modification with respect to any Mortgage Loan
that would change the Mortgage Rate, defer for more than ninety (90) days or
forgive any payment of principal or interest, reduce or increase the Outstanding
Principal Balance (except for actual payments of principal) or change the final
maturity date on such Mortgage Loan. In the event of any such modification
which
has been agreed to in writing by the Master Servicer and which permits the
deferral of interest or principal payments on any Mortgage Loan, the Servicer
shall, on the Business Day immediately preceding the Servicer 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
4.03(c), the difference between (a) such month's principal and one month's
interest at the Net Mortgage Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor. The Servicer shall
be
entitled to reimbursement for such advances to the same extent as for all other
advances pursuant to Section 4.03. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and empowered,
to prepare, execute and deliver on behalf of itself, the Trust and the Trustee,
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. Notwithstanding anything
herein to the contrary, the Servicer may not enter into a forbearance agreement
or similar arrangement with respect to any Mortgage Loan which runs more than
one hundred eighty (180) days after the first delinquent Due Date. Any such
agreement shall be approved by the Master Servicer and, if required, by the
Primary Mortgage Insurance Policy insurer and Lender Primary Mortgage Insurance
Policy insurer. Notwithstanding anything to the contrary contained in this
Agreement, the Servicer shall not make or permit any modification, waiver or
amendment of any term of any Mortgage Loan that would cause any Adverse REMIC
Event.
66
In
servicing and administering the Mortgage Loans, the Servicer shall employ
Accepted Servicing Practices, giving due consideration to the reliance by the
Trust, Trustee and Certificateholders on the Servicer. Notwithstanding the
appointment of any Subservicer pursuant to Section 4.09, the Servicer shall
remain liable for the performance of all of the servicing obligations and
responsibilities under this Agreement.
(b) Servicer
not to Sell Mortgage Loans.
The
Servicer shall not sell any Mortgage Loan that is included in the Trust Estate,
whether for the purpose of maximizing liquidation proceeds or
otherwise.
(c) Collection
and Liquidation of Mortgage Loans.
Continuously from the date hereof until the date each Mortgage Loan ceases
to be
subject to this Agreement, the Servicer will proceed diligently to collect
all
payments due under each Mortgage Loan when the same shall become due and payable
and shall, to the extent such procedures shall be consistent with this
Agreement, Accepted Servicing Practices, and the terms and provisions of any
related Primary Mortgage Insurance Policy and Lender Primary Mortgage Insurance
Policy, follow such collection procedures as it follows with respect to mortgage
loans comparable to the Mortgage Loans and held for its own account. Further,
the Servicer shall take special care in ascertaining and estimating annual
escrow payments, and all other charges that, as provided in the Mortgage, will
become due and payable, so that the installments payable by the Mortgagors
will
be sufficient to pay such charges as and when they become due and
payable.
67
The
Servicer shall use its best efforts, consistent with the procedures that the
Servicer would use in servicing loans for its own account, consistent with
Accepted Servicing Practices, any Primary Mortgage Insurance Policies and Lender
Primary Mortgage Insurance Policies and the best interest of the Trust, the
Trustee and the Certificateholders, to foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as
come
into and continue in default and as to which no satisfactory arrangements can
be
made for collection of delinquent payments pursuant to Section 4.02(a).
Foreclosure or comparable proceedings shall be initiated within ninety (90)
days
of default for Mortgaged Properties for which no satisfactory arrangements
can
be made for collection of delinquent payments, subject to state and federal
law
and regulation. The Servicer shall use its best efforts to realize upon
defaulted Mortgage Loans in such manner as will maximize the receipt of
principal and interest by the Trust, taking into account, among other things,
the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which a Mortgaged Property shall have suffered
damage, the Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion (i)
that such restoration will increase the proceeds of liquidation of the related
Mortgage Loan to the Trust after reimbursement to itself for such expenses,
and
(ii) that such expenses will be recoverable by the Servicer through Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds from the related
Mortgaged Property, as contemplated in Section 4.02(e). Servicer shall obtain
prior approval of the Master Servicer as to repair or restoration expenses
in
excess of ten thousand dollars ($10,000). The Servicer shall notify the Master
Servicer in writing of the commencement of foreclosure proceedings and not
less
than five (5) days prior to the acceptance or rejection of any offer of
reinstatement. The Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings or functions; provided, however, that
it
shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 4.02(e). 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 Servicer has reasonable cause to believe
that a Mortgaged Property is contaminated by hazardous or toxic substances
or
wastes, or if the Master Servicer or the Trustee otherwise requests an
environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector at the Master
Servicer’s or Trustee’s expense, as applicable. Upon completion of the
inspection, the Servicer shall promptly provide the Master Servicer and the
Trustee with a written report of the environmental inspection. After reviewing
the environmental inspection report, the Master Servicer shall determine how
the
Servicer shall proceed with respect to the Mortgaged Property.
Notwithstanding
the generality of the preceding paragraph, the Servicer shall take such actions
generally in accordance with the Servicer’s established default timeline and in
accordance with Accepted Servicing Practices with respect to each Mortgage
Loan
and Mortgagor for which there is a delinquency until such time as the related
Mortgagor is current with all payments due under the Mortgage Loan.
(d) Establishment
of and Deposits to Custodial Account.
(i) The
Servicer shall segregate and hold all funds collected and received pursuant
to
the Mortgage Loans separate and apart from any of its own funds and general
assets and shall initially establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, each of which accounts
shall be titled “HomeBanc Mortgage Corporation. in trust for U.S. Bank National
Association, as Trustee, for the HomeBanc Mortgage Trust 2007-1 Mortgage
Pass-Through Certificates” and referred to herein as a “Custodial Account.” Each
Custodial Account shall be an Eligible Account. Any funds deposited in the
Custodial Account shall at all times be insured by the FDIC up to the FDIC
insurance limits, or must be invested in Eligible Investments subject to the
provisions of Section 4.02(i) hereof; provided, however that any such Eligible
Investment shall not be sold or disposed of prior to its maturity. Funds
deposited in the Custodial Account may be drawn on by the Servicer in accordance
with Section 4.02(e) hereof. The creation of any Custodial Account shall be
evidenced by a letter agreement in the form of Exhibit C hereto. A
copy of such certification or letter agreement shall be furnished to the
Trustee, the Master Servicer and, upon request, to any subsequent owner of
the
Mortgage Loans. The
Servicer shall deposit or cause to be deposited into the Custodial Account,
no
later than 48 hours after receipt of funds, and retain therein the following
payments and collections received or made by it subsequent to the Cut-off Date,
or received by it prior to the Cut-off Date but allocable to a period subsequent
thereto, other than in respect of principal and interest on the Mortgage Loans
due on or before the Cut-off Date:
68
(1) all
payments
on account of principal, including Principal Prepayments and related penalties,
on the Mortgage Loans;
(2) all
payments on account of interest on the Mortgage Loans adjusted to the Net
Mortgage Rate;
(3) all
Net
Liquidation Proceeds;
(4) any
amounts required to be deposited by the Servicer in connection with any REO
Property pursuant to Section 4.02(o) and in connection therewith, the Servicer
shall provide the Master Servicer with written detail itemizing all of such
amounts;
(5) all
Insurance Proceeds including amounts required to be deposited pursuant to
Section 4.02(j), other than proceeds to be held in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or released
to
the Mortgagor in accordance with Accepted Servicing Practices, the Mortgage
Loan
Documents or applicable law;
(6) all
Condemnation Proceeds affecting any Mortgaged Property which are not released
to
the Mortgagor in accordance with Accepted Servicing Practices, the loan
documents or applicable law;
(7) any
Monthly Advances;
(8) with
respect to each full or partial Principal Prepayment, any Prepayment Interest
Shortfalls, to the extent of the Servicer's aggregate Servicing Fee received
with respect to the related Prepayment Period;
69
(9) any
amounts required to be deposited by the Servicer pursuant to
Section 4.02(j) in connection with the deductible clause in any blanket
hazard insurance policy, such deposit shall be made from the Servicer's own
funds, without reimbursement therefor; and
(10) any
other
amounts
required
to be deposited in the Custodial Account pursuant this Agreement.
The
foregoing requirements for deposit in the Custodial Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of the Servicing Fee and Ancillary Income,
need not be deposited by the Servicer in the Custodial Account. Any interest
paid on funds deposited in the Custodial Account by the depository institution
and any income or appreciation on any investment of such funds shall accrue
to
the benefit of the Servicer and the Servicer shall be entitled to retain and
withdraw such interest from the Custodial Account pursuant to Section 4.02(e).
The
amount of any losses incurred in respect of any such investments shall be
deposited in the Custodial Account by the Servicer out of its own funds, without
any right of reimbursement therefor, immediately as realized.
(ii) The
Servicer agrees that it shall not create, incur or subject any Mortgage Loans,
or any funds that are deposited in any Custodial Account or Escrow Account,
or
any funds that otherwise are or may become due or payable to or for the benefit
of the Trustee, to any claim, lien, security interest, judgment, levy, writ
of
attachment or other encumbrance, nor assert by legal action or otherwise any
claim or right of setoff against any Mortgage Loan or any funds collected on,
or
in connection with, a Mortgage Loan.
(e) Permitted
Withdrawals from Custodial Account.
The
Servicer may, from time to time, withdraw from the Custodial Account for the
following purposes:
(i) to
make
payments to the Master Servicer in the amounts and in the manner provided for
in
Section 4.03(a);
(ii) to
reimburse itself for Monthly Advances, the Servicer's right to reimburse itself
pursuant to this subclause (ii) being limited to amounts received on the related
Mortgage Loan which represent late collections (net of the related Servicing
Fees) of principal and/or interest respecting which any such advance was made,
it being understood that, in the case of such reimbursement, the Servicer's
right thereto shall be prior to the rights of the Certificateholders, except
that, where the Servicer is required to repurchase a Mortgage Loan, pursuant
to
Section 3.03, the Servicer's right to such reimbursement shall be subsequent
to
the payment to the Trust of the Purchase Price pursuant to such Section and
all
other amounts required to be paid to the Trust with respect to such Mortgage
Loan;
(iii) to
reimburse itself for unreimbursed Monthly Advances and Servicing Advances and
any unpaid Servicing Fees (or REO administration fees described in Section
4.02(o)), the Servicer's right to reimburse itself pursuant to this subclause
(3) with respect to any Mortgage Loan being limited to related proceeds from
Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds in accordance
with the relevant provisions of the Xxxxxx Xxx Guides, the Pool I Termination
Price or Pool II Termination Price, as applicable, or as otherwise set forth
in
this Agreement; any recovery shall be made upon liquidation of the REO
Property;
70
(iv) to
pay to
itself as part of its servicing compensation (a) any interest income or
appreciation earned on funds in the Custodial Account (all such interest to
be
withdrawn monthly not later than each Servicer Remittance Date), (b) the
Servicing Fee from that portion of any payment or recovery as to interest with
respect to a particular Mortgage Loan;
(v) to
pay to
itself with respect to each Mortgage Loan that has been repurchased pursuant
to
Section 3.03 all amounts received thereon and not distributed as of the date
on
which the related Purchase Price is determined;
(vi) to
transfer funds to another Eligible Account in accordance with Section 4.02(i)
hereof;
(vii) to
remove
funds inadvertently placed in the Custodial Account by the
Servicer;
(viii) to
clear
and terminate the Custodial Account upon the termination of this Agreement;
and
(ix) to
reimburse itself for any Nonrecoverable Advances and amounts reimbursable
pursuant to Section 4.05(b) and Section 4.06(b).
(f) Establishment
of and Deposits to Escrow Account.
The
Servicer 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 “HomeBanc
Mortgage Corporation in trust for U.S. Bank National Association, as Trustee,
for the HomeBanc Mortgage Trust 2007-1 Mortgage Pass-Through Certificates.” The
Escrow Accounts shall be an Eligible Account. Nothing herein shall require
the
Servicer to compel a Mortgagor to establish an Escrow Account in violation
of
applicable law. Funds deposited in the Escrow Account may be drawn on by the
Servicer in accordance with Section 4.02(g). The creation of any Escrow Account
shall be evidenced by a letter agreement in the form of Exhibit D hereto. A
copy
of such certification or letter agreement shall be furnished to the Master
Servicer.
The
Servicer shall deposit in the Escrow Account or Accounts on a daily basis,
and
in the Escrow Account or Accounts no later than 48 hours after receipt of funds,
and retain therein:
(i) all
Escrow Payments collected on account of the Mortgage Loans, if required, for
the
purpose of effecting timely payment of any such items as required under the
terms of this Agreement to be paid by the related Mortgagor to the
Servicer;
71
(ii) all
Insurance Proceeds which are to be applied to the restoration or repair of
any
Mortgaged Property; and
(iii) all
Servicing Advances for Mortgagors whose Escrow Payments are insufficient to
cover escrow disbursements.
The
Servicer shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 4.02(g).
The Servicer shall be entitled to retain any interest earnings 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 Servicer shall pay interest on escrowed funds to
the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing
or
the interest earnings paid thereon are insufficient for such purposes.
(g) Permitted
Withdrawals from Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Servicer
only:
(i) to
effect
timely payments of ground rents, taxes, assessments, water rates, Primary
Mortgage Insurance Policy premiums, if applicable, condominium charges, fire
and
hazard insurance premiums or other items constituting Escrow Payments for the
related Mortgage;
(ii) to
reimburse the Servicer for any Servicing Advance of an Escrow Payment made
by
the Servicer 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;
(iii) to
refund
to any Mortgagor any funds found to be in excess of the amounts required to
be
escrowed under the terms of the related Mortgage Loan;
(iv) to
the
extent permitted by applicable law, 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;
(v) for
application to restoration or repair of the Mortgaged Property in accordance
with Section 4.02(n);
(vi) to
pay to
the Servicer, or any Mortgagor to the extent required by law, any interest
paid
on the funds deposited in the Escrow Account;
(vii) to
clear
and terminate the Escrow Account on the termination of this Agreement. As part
of its servicing duties, the Servicer shall pay to the Mortgagors interest
on
funds in Escrow Account, to the extent required by law, and to the extent that
interest earned on funds in the Escrow Account is insufficient, shall pay such
interest from its own funds, without any reimbursement therefor;
and
72
(viii) to
pay to
the Mortgagors or other parties Insurance Proceeds deposited in accordance
with
Section 4.02(f).
(h) Payment
of Taxes, Insurance and Other Charges; Maintenance of Primary Mortgage Insurance
Policies; Collections Thereunder.
(i) With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates and
other
charges which are or may become a lien upon the Mortgaged Property and the
status of primary mortgage insurance premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of
such
charges, including renewal premiums and shall effect payment thereof prior
to
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of
the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Servicer in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage or applicable law. To the extent that the Mortgage does
not provide for Escrow Payments, the Servicer shall determine that any such
payments are made by the Mortgagor at the time they first become due. The
Servicer assumes full responsibility for the timely payment of all such bills
and shall effect timely payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments (which will constitute a Servicing Advance).
(ii) The
Servicer will maintain in full force and effect Primary Mortgage Insurance
Policies or Lender Primary Mortgage Insurance Policies issued by a Qualified
Insurer with respect to each Mortgage Loan for which such coverage is herein
required. Such coverage will be terminated only with the approval of the Master
Servicer, or as required by applicable law or regulation. The Servicer will
not
cancel or refuse to renew any Primary Mortgage Insurance Policy or Lender
Primary Mortgage Insurance Policy in effect on the Closing Date that is required
to be kept in force under this Agreement unless a replacement Primary Mortgage
Insurance Policy or Lender Primary Mortgage Insurance Policy for such canceled
or nonrenewed policy is obtained from and maintained with a Qualified Insurer.
The Servicer shall not take any action which would result in non-coverage under
any applicable Primary Mortgage Insurance Policy or Lender Primary Mortgage
Insurance Policy of any loss which, but for the actions of the Servicer would
have been covered thereunder. In connection with any assumption or substitution
agreement entered into or to be entered into pursuant to Section 4.04(a), the
Servicer shall promptly notify the insurer under the related Primary Mortgage
Insurance Policy or Lender Primary Mortgage Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
policy and shall take all actions which may be required by such insurer as
a
condition to the continuation of coverage under the Primary Mortgage Insurance
Policy or Lender Primary Mortgage Insurance Policy. If such Primary Mortgage
Insurance Policy or Lender Primary Mortgage Insurance Policy is terminated
as a
result of such assumption or substitution of liability, the Servicer shall
obtain a replacement Primary Mortgage Insurance Policy or Lender Primary
Mortgage Insurance Policy as provided above.
73
In
connection with its activities as servicer, the Servicer agrees to prepare
and
present, on behalf of itself and the Trust, 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 or Lender 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 or Lender Primary
Mortgage Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 4.02(d), any amounts collected by the Servicer under any Primary
Mortgage Insurance Policy or Lender Primary Mortgage Insurance Policy shall
be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.02(e).
(i) Protection
of Accounts.
The
Servicer may transfer the Custodial Account or the Escrow Account to a different
Eligible Institution from time to time. Such transfer shall be made only upon
obtaining the consent of the Master Servicer, which consent shall not be
withheld unreasonably, and the Servicer shall give notice to the Master Servicer
and the Trustee of any change in the location of the Custodial
Account.
(j) Maintenance
of Hazard Insurance.
The
Servicer shall cause to be maintained for each Mortgage Loan fire and hazard
insurance with extended coverage as is acceptable to Xxxxxx Mae or Xxxxxxx
Mac
and customary in the area where the Mortgaged Property is located in an amount
which is equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan or (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 and/or the
mortgagee from becoming a co-insurer. If required by the Flood Disaster
Protection Act of 1973, as amended, each Mortgage Loan shall be covered by
a
flood insurance policy meeting the requirements of the current guidelines of
the
Federal Insurance Administration in effect with an insurance carrier acceptable
to Xxxxxx Mae or Xxxxxxx Mac, in an amount representing coverage not less than
the least of (i) the Outstanding Principal Balance of the Mortgage Loan, (ii)
the maximum insurable value of the improvements securing such Mortgage Loan
or
(iii) the maximum amount of insurance which is available under the Flood
Disaster Protection Act of 1973, as amended. If at any time during the term
of
the Mortgage Loan, the Servicer determines in accordance with applicable law
and
pursuant to the Xxxxxx Mae Guides that a Mortgaged Property is located in a
special flood hazard area and is not covered by flood insurance or is covered
in
an amount less than the amount required by the Flood Disaster Protection Act
of
1973, as amended, the Servicer shall notify the related Mortgagor that the
Mortgagor must obtain such flood insurance coverage, and if said Mortgagor
fails
to obtain the required flood insurance coverage within forty-five (45) days
after such notification, the Servicer shall immediately force place the required
flood insurance on the Mortgagor's behalf. The Servicer 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, and, to the extent required and available under
the
Flood Disaster Protection Act of 1973, as amended, flood insurance in an amount
as provided above. Any amounts collected by the Servicer under any such policies
other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or REO Property, or released
to
the Mortgagor in accordance with Accepted Servicing Practices, shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.02(e). It is understood and agreed that no other additional insurance need
be
required by the Servicer of the Mortgagor or maintained on property acquired
in
respect of the Mortgage Loan, other than pursuant to this Agreement, the Xxxxxx
Xxx Guides or such applicable state or federal laws and regulations as shall at
any time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee clauses with loss payable
to
the Servicer and its successors and/or assigns and shall provide for at least
thirty (30) days’ prior written notice of any cancellation, reduction in the
amount or material change in coverage to the Servicer. The Servicer shall not
interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent, provided, however, that the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies are Qualified Insurers.
74
(k) Maintenance
of Mortgage Impairment Insurance.
In the
event that the Servicer shall obtain and maintain a blanket policy issued by
an
insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac insuring against hazard losses
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 4.02(j) and
otherwise complies with all other requirements of Section 4.02(j), it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
4.02(j), it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with Section 4.02(j), and there shall have been a loss which
would have been covered by such policy, deposit in the Custodial Account the
amount not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as servicer of the Mortgage Loans,
the
Servicer agrees to prepare and present, on behalf of the Master Servicer and
the
Trustee, claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy. Upon request of the Master Servicer or Trustee,
the Servicer shall cause to be delivered to the Master Servicer or the Trustee,
as applicable, a certified true copy of such policy and shall use its best
efforts to obtain a statement from the insurer thereunder that such policy
shall
in no event be terminated or materially modified without thirty (30) days’ prior
written notice to the Master Servicer and the Trustee.
(l) Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting in any capacity
with regard to the Mortgage Loan to handle funds, money, documents and papers
relating to the Mortgage Loan. The Servicer Fidelity Bond shall be in the form
of the Mortgage Banker's Blanket Bond and shall protect and insure the Servicer
against losses, including forgery, theft, embezzlement and fraud of such
persons. The Servicer Errors and Omissions Insurance Policy shall protect and
insure the Servicer against losses arising out of errors and omissions and
negligent acts of such persons. Such Servicer Errors and Omissions Insurance
Policy shall also protect and insure the Servicer against losses in connection
with the failure to maintain any insurance policies required pursuant to this
Agreement and the release or satisfaction of a Mortgage Loan without having
obtained payment in full of the indebtedness secured thereby. No provision
of
this Section 4.02(l) requiring the Servicer Fidelity Bond or the Servicer Errors
and Omissions Insurance Policy shall diminish or relieve the Servicer 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
corresponding amounts required by Xxxxxx Mae in the Xxxxxx Xxx Guides. Upon
request of the Master Servicer or the Trustee, the Servicer shall deliver to
the
Master Servicer and the Trustee a certificate from the surety and the insurer
as
to the existence of the Servicer Fidelity Bond and the Servicer Errors and
Omissions Insurance Policy and shall obtain a statement from the surety and
the
insurer that such Servicer Fidelity Bond or Servicer Errors and Omissions
Insurance Policy shall in no event be terminated or materially modified without
thirty (30) days prior written notice to the Master Servicer. The Servicer
shall
notify the Master Servicer and the Trustee within five (5) business days of
receipt of notice that such Servicer Fidelity Bond or Servicer Errors and
Omissions Insurance Policy will be, or has been, materially modified or
terminated. The Trustee on behalf of the Trust must be named as a loss payee
on
the Servicer Fidelity Bond and as an additional insured on the Servicer Errors
and Omissions Insurance Policy. Upon request by the Master Servicer, the
Servicer shall provide the Master Servicer with an insurance certificate
certifying coverage under this Section 4.02(l), and will provide an update
to
such certificate upon request, or upon renewal or material modification of
coverage.
75
(m) Inspections.
The
Servicer shall inspect the Mortgaged Property as often as deemed necessary
by
the Servicer to assure itself that the value of the Mortgaged Property is being
preserved. In addition, the Servicer shall inspect the Mortgaged Property and/or
take such other actions as may be necessary or appropriate in accordance with
Accepted Servicing Practices or as may be required by the primary mortgage
guaranty insurer. The Servicer shall keep a written report of each such
inspection.
(n) Restoration
of Mortgaged Property.
The
Servicer need not obtain the approval of the Master Servicer 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. At a minimum, the Servicer shall
comply with the following conditions in connection with any such release of
Insurance Proceeds or Condemnation Proceeds:
(i) the
Servicer shall receive satisfactory independent verification of completion
of
repairs and issuance of any required approvals with respect thereto;
(ii) the
Servicer shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens; and
(iii) pending
repairs or restoration, the Servicer shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
(o) Title,
Management and Disposition of REO Property.
In the
event that title to the Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the Trustee or its designee, or in the event the Trustee or its designee
is not authorized or permitted to hold title to real property in the state
where
the REO Property is located, or would be adversely affected under the “doing
business” or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Servicer from an attorney
duly licensed to practice law in the state where the REO Property is located.
Any Person or Persons holding such title other than the Trustee shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Trustee on behalf of the Trust.
76
The
Servicer shall notify the Master Servicer in accordance with the Xxxxxx Mae
Guides of each acquisition of REO Property upon such acquisition (and, in any
event, shall provide notice of the consummation of any foreclosure sale within
three (3) Business Days from the date the Servicer receives notice of such
consummation), together with a copy of the drive by appraisal or brokers price
opinion of the Mortgaged Property obtained in connection with such acquisition,
and thereafter assume the responsibility for marketing such REO property in
accordance with Accepted Servicing Practices. Thereafter, the Servicer shall
continue to provide certain administrative services to the Master Servicer
relating to such REO Property as set forth in this Section 4.02(o). No Servicing
Fee shall be assessed or otherwise accrue on any REO Property from and after
the
date on which it becomes an REO Property.
The
Servicer shall, either itself or through an agent selected by the Servicer,
and
in accordance with the Xxxxxx Xxx Guides manage, conserve, protect and operate
each REO Property in the same manner that it manages, conserves, protects and
operates other foreclosed property for its own account, and in the same manner
that similar property in the same locality as the REO Property is managed.
The
Servicer shall cause each REO Property to be inspected promptly upon the
acquisition of title thereto and shall cause each REO Property to be inspected
at least monthly thereafter or more frequently as required by the circumstances.
The Servicer shall make or cause to be made a written report of each such
inspection. Such reports shall be retained in the Mortgage File and copies
thereof shall be forwarded by the Servicer to the Master Servicer.
The
Servicer 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 the Servicer determines,
and
gives an appropriate notice to the Master Servicer to such effect, that a longer
period is necessary for the orderly liquidation of such REO Property. If a
longer period than one (1) year is permitted under the foregoing sentence and
is
necessary to sell any REO Property, the Servicer shall report monthly to the
Master Servicer as to the progress being made in selling such REO Property.
Notwithstanding the foregoing, the Servicer shall dispose of such Mortgaged
Property prior to the close of the third taxable year after its acquisition
by
the Trust unless the Trustee and the Securities Administrator shall have been
supplied with an Opinion of Counsel (which shall not be at the expense of any
such recipient) to the effect that the holding by the Trust of such Mortgaged
Property subsequent to such three-year period will not result in an Adverse
REMIC Event, in which case the Trust may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust shall be rented (or allowed to continue to be rented)
or
otherwise used for the production of income by or on behalf of the Trust in
such
a manner or pursuant to any terms that would (i) cause such Mortgaged Property
to fail to qualify as “foreclosure property” within the meaning of Section
860G(a)(8) of the Code or (ii) cause an Adverse REMIC Event, unless the Servicer
has agreed to indemnify and hold harmless the Trust with respect to the
imposition of any such taxes. The Servicer shall prepare for and deliver to
the
Master Servicer a statement with respect to any REO Property that has been
rented showing the aggregate rental income received and all expenses incurred
in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Securities Administrator to comply with
the
reporting requirements of the REMIC Provisions. The net monthly rental income,
if any, from such REO Property shall be deposited in the Collection Account
no
later than the close of business on each Determination Date. No REO Property
shall be marketed for less than the Appraised Value, without the prior consent
of Master Servicer. No REO Property shall be sold for less than ninety five
percent (95%) of its Appraised Value, without the prior consent of Trustee.
All
requests for reimbursement of Servicing Advances shall be in accordance with
the
Xxxxxx Xxx Guides. The disposition of REO Property shall be carried out by
the
Servicer at such price, and upon such terms and conditions, as the Servicer
deems to be in the best interests of the Trust (subject to the above conditions)
only with the prior written consent of the Master Servicer. The Servicer shall
provide monthly reports to the Master Servicer in reference to the status of
the
marketing of the REO Properties.
77
(p) Compliance
with Safeguarding Customer Information Requirements.
The
Servicer has implemented and will maintain security measures designed to meet
the objectives of the Interagency Guidelines Establishing Standards for
Safeguarding Customer Information published in final form on February 1, 2001,
66 Fed. Reg. 8616, and the rules promulgated thereunder, as amended from time
to
time (the “Guidelines”).
(q) Notification
of Maturity Date.
With
respect to each Mortgage Loan, the Servicer shall execute and deliver to the
Mortgagor any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the maturity date
if
required under applicable law.
(r) Purchase
of Modified Mortgage Loans.
The
Servicer may agree to a modification of any Mortgage Loan (the “Modified
Mortgage Loan”) if (i) the modification is in lieu of a refinancing and (ii) the
Mortgage Rate on the Modified Mortgage Loan is approximately a prevailing market
rate for newly-originated mortgage loans having similar terms and (iii) the
Servicer purchases the Modified Mortgage Loan from the Trust as described below.
Effective immediately after the modification, and, in any event, on the same
Business Day on which the modification occurs, all interest of the Trust in
the
Modified Mortgage Loan shall automatically be deemed transferred and assigned
to
the Servicer and all benefits and burdens of ownership thereof, including the
right to Group I Accrued Interest thereon from the date of modification and
the
risk of default thereon, shall pass to the Servicer. The Servicer shall promptly
deliver to the Master Servicer, the Securities Administrator and the Trustee
a
certification of a Servicing Officer to the effect that all requirements of
this
paragraph have been satisfied with respect to the Modified Mortgage Loan. For
federal income tax purposes, the Securities Administrator shall account for
such
purchase as a prepayment in full of the Modified Mortgage Loan.
The
Servicer shall remit the Purchase Price for any Modified Mortgage Loan to the
Master Servicer for deposit into the Collection Account pursuant to Section
5.06(d) within one Business Day after the purchase of the Modified Mortgage
Loan. Upon receipt by the Trustee (or the Custodian) of written notification
of
any such deposit signed by a Servicing Officer, the Trustee shall release to
the
Servicer the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be necessary to vest in the Servicer any
Modified Mortgage Loan previously transferred and assigned pursuant
hereto.
78
Section
4.03. Payments
to the Master Servicer.
(a) Remittances.
On each
Servicer Remittance Date, the Servicer shall remit by wire transfer of
immediately Group I Available Funds to the Master Servicer (i) all amounts
credited to the Custodial Account as of the close of business on the preceding
Determination Date, net of charges against or withdrawals from the Custodial
Account pursuant to Section 4.02(e), plus (ii) all Monthly Advances, if any,
which the Servicer is obligated to remit pursuant to Section 4.03(c), plus,
(iii) Compensating Interest Payments, minus
(iv) any
amounts attributable to Monthly Payments collected but due on a Due Date or
dates subsequent to the preceding Determination Date, which amounts shall be
remitted on the Servicer Remittance Date next succeeding the Collection Period
for such amounts. It is understood that, by operation of Section 4.02(d), the
remittance on the first Servicer Remittance Date with respect to the Mortgage
Loans is to include principal collected after the Cut-off Date through the
preceding Determination Date plus interest, adjusted to the Net Mortgage Rate
collected through such Determination Date exclusive of any portion thereof
allocable to the period prior to the Cut-off Date, with the adjustments
specified in clauses (ii), (iii) and (iv) above.
With
respect to any remittance received by the Master Servicer after the Servicer
Remittance Date, the Servicer shall pay to the Master Servicer interest on
any
such late payment at a per annum rate equal to the Prime Rate, adjusted as
of
the date of each change plus two (2) percentage points, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall cover
the period commencing with the day following the Business Day such payment
was
due and ending with the Business Day on which such payment is made to the Master
Servicer, both inclusive. The payment by the Servicer of any such interest
shall
not be deemed an extension of time for payment or a waiver of any Event of
Default by the Servicer. On each Servicer Remittance Date, the Servicer shall
provide a remittance report detailing all amounts being remitted pursuant to
this Section 4.03(a).
All
remittances required to be made to the Master Servicer shall be made to the
following wire account or to such other account as may be specified by the
Master Servicer from time to time:
Xxxxx
Fargo Bank, NA
San
Francisco, CA
ABA#:
000-000-000
Account
Name: Corporate Trust Clearing
Account
Number: 0000000000
For
further credit to: 53137600,
HomeBanc 2007-1
(b) Statements
to Master Servicer and Securities Administrator.
The
Servicer shall furnish to Master Servicer an individual loan accounting report,
as of the last Business Day of each month, in the Servicer's assigned loan
number order to document Mortgage Loan payment activity on an individual
Mortgage Loan basis. With respect to each month, the corresponding individual
loan accounting report shall be received by the Master Servicer no later than
the fifth Business Day of the following month on a disk or tape or other
computer-readable format in such format as may be mutually agreed upon by both
Master Servicer and Servicer, and no later than the fifth Business Day of the
following month in hard copy, and shall contain the following:
79
(i) With
respect to each Monthly Payment, the amount of such remittance allocable to
principal (including a separate breakdown of any Principal Prepayment, including
the date of such prepayment, and any prepayment penalties or premiums, along
with a detailed report of interest on principal prepayment amounts remitted
in
accordance with Section 4.02(d));
(ii) with
respect to each Monthly Payment, the amount of such remittance allocable to
interest;
(iii) the
amount of servicing compensation received by the Servicer during the prior
distribution period;
(iv) the
aggregate Scheduled Principal Balance of the Mortgage Loans;
(v) the
aggregate of any expenses reimbursed to the Servicer during the prior
distribution period pursuant to Section 4.02(e); and
(vi) The
number and aggregate Outstanding Principal Balances of Mortgage Loans (a)
Delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 days or more and (4)
180
days or more and charged-off; (b) as to which foreclosure has commenced; and
(c)
as to which REO Property has been acquired.
The
Servicer shall provide a monthly remittance report to the Master Servicer in
a
mutually agreeable format. The Servicer shall also provide a default report
containing the information specified in Exhibit E attached hereto with each
such
report.
The
Servicer shall prepare and file any and all information statements or other
filings required to be delivered to any governmental taxing authority or to
the
Master Servicer and the Securities Administrator pursuant to any applicable
law
with respect to the Mortgage Loans and the transactions contemplated hereby.
In
addition, the Servicer shall provide the Master Servicer and the Securities
Administrator with such information as may be requested by it and required
for
the completion of any tax reporting responsibility of the Securities
Administrator within such reasonable time frame as shall enable the Securities
Administrator to timely file each Schedule Q (or other applicable tax report
or
return) required to be filed by it.
(c) Monthly
Advances by Servicer.
Not
later than the close of business on the Business Day preceding each Servicer
Remittance Date, the Servicer shall deposit in the Custodial Account an amount
equal to all payments not previously advanced by the Servicer, whether or not
deferred pursuant to Section 4.03(a), of principal (due after the Cut-off Date)
and interest not allocable to the period prior to the Cut-off Date, adjusted
to
the Net Mortgage Rate, which were due on a Mortgage Loan and delinquent at
the
close of business on the related Determination Date; provided, however, that
the
Servicer may use the Amount Held for Future Distribution (as defined below)
then
on deposit in the Custodial Account to make such Monthly Advances. The Servicer
shall deposit any portion of the Amount Held for Future Distribution used to
pay
Monthly Advances into the Custodial Account on any future Servicer Remittance
Date to the extent that the funds that are available in the Custodial Account
for remittance to the Master Servicer on such Servicer Remittance Date are
less
than the amount of payments required to be made to the Master Servicer on such
Servicer Remittance Date.
80