Exhibit 99.4
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MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK, USA
Purchaser
COUNTRYWIDE HOME LOANS, INC.
Seller and Servicer
Dated as of November 1, 2004
Conventional Fixed and Adjustable Rate "A" Quality Mortgage Loans
[_______________2004]
First Liens
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TABLE OF CONTENTS
Page
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SECTION 1. Definitions.................................................. 1
SECTION 2. [Intentionally Omitted]...................................... 16
SECTION 3. [Intentionally Omitted]...................................... 16
SECTION 4. [Intentionally Omitted]...................................... 16
SECTION 5. [Intentionally Omitted]...................................... 17
SECTION 6. [Intentionally Omitted]...................................... 17
SECTION 7. [Intentionally Omitted]...................................... 19
SECTION 8. [Intentionally Omitted]...................................... 32
SECTION 9. Closing Documents............................................ 33
SECTION 10. Costs........................................................ 34
SECTION 11. Seller's Servicing Obligations............................... 34
SECTION 12. Removal of Mortgage Loans from Inclusion under This Agreement
Upon a Whole Loan Transfer or a Pass-Through Transfer on One
or More Reconstitution Dates................................. 34
The Seller................................................... 36
SECTION 13. Default...................................................... 38
SECTION 14. Termination.................................................. 40
SECTION 15. Successor to the Seller...................................... 40
SECTION 16. Financial Statements ........................................ 41
SECTION 17. Mandatory Delivery........................................... 41
SECTION 18. Notices...................................................... 42
SECTION 19. Severability Clause.......................................... 42
SECTION 20. Counterparts................................................. 43
SECTION 21. Governing Law................................................ 43
SECTION 22. Intention of the Parties..................................... 43
SECTION 23. Successors and Assigns....................................... 43
SECTION 24. Waivers...................................................... 43
SECTION 25. Exhibits..................................................... 43
SECTION 26. Nonsolicitation.............................................. 43
SECTION 27. General Interpretive Principles.............................. 44
SECTION 28. Reproduction of Documents.................................... 44
SECTION 29. Further Agreements........................................... 45
SECTION 30. Protection of Confidential Information....................... 45
SECTION 31. Survival..................................................... 45
SECTION 32.
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EXHIBITS
EXHIBIT 1 SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 2 FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 3 SECURITY RELEASE CERTIFICATION
EXHIBIT 4 FORM OF WARRANTY ▇▇▇▇ OF SALE
EXHIBIT 5 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 6 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 7 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 8 SERVICING ADDENDUM
EXHIBIT 9 FORM OF TRADE CONFIRMATION
SCHEDULE I FINAL MORTGAGE LOAN SCHEDULE
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MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT (the
"Agreement"), dated as of November 1, 2004, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank,
USA, having an office at 4 World Financial Center, 9th floor, New York, New York
10080 (the "Initial Purchaser", and the Initial Purchaser or the Person, if any,
to which the Initial Purchaser has assigned its rights and obligations hereunder
as Purchaser with respect to a Mortgage Loan, and each of their respective
successors and assigns, the "Purchaser") and Countrywide Home Loans, Inc.,
having an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Seller").
WITNESSETH:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain conventional fixed and adjustable rate residential first lien
mortgage loans, (the "Mortgage Loans") as described herein on a
servicing-retained basis, and which shall be delivered in groups of whole loans
on various dates as provided in the related Trade Confirmation (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust or
other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Final Mortgage Loan Schedule for
the related Mortgage Loan Package, which is to be annexed hereto on each Closing
Date as Schedule I;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner of
the conveyance, servicing and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the Seller,
the Purchaser desires to sell some or all of the Mortgage Loans to one or more
purchasers as a whole loan transfer in a whole loan or participation format or a
public or private mortgage-backed securities transaction;
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller agree
as follows:
SECTION 1. Definitions. For purposes of this Agreement the following
capitalized terms shall have the respective meanings set forth below.
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for the
adjustment of the Mortgage Interest Rate payable in respect thereto.
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan,
the date set forth in the related Mortgage Note on which the Mortgage Interest
Rate on such Adjustable Rate Mortgage Loan is adjusted in accordance with the
terms of the related Mortgage Note.
Agreement: This Master Mortgage Loan Purchase and Servicing Agreement
including all exhibits, schedules, amendments and supplements hereto.
Appraised Value: With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser who met the minimum requirements of FNMA or FHLMC, and (ii) the
purchase price paid for the related Mortgaged Property by the Mortgagor with the
proceeds of the Mortgage Loan, provided, however, in the case of a Refinanced
Mortgage Loan, such value of the Mortgaged Property is based solely upon the
value determined by an appraisal made for the originator of such Refinanced
Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by an
appraiser who met the minimum requirements of FNMA or FHLMC.
Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form, sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to give record notice of the sale of the Mortgage to the Purchaser.
Balloon Loan: A Mortgage Loan identified on the Mortgage Loan Schedule
as a balloon mortgage loan.
Business Day: Any day other than a Saturday or Sunday, or a day on
which banking and savings and loan institutions in the State of California, or
the state in which the Seller's servicing operations are located, or the State
of New York are authorized or obligated by law or executive order to be closed.
Buydown Mortgage Loan: A Mortgage Loan in which buydown funds are used
to pay a portion of the interest payable on the Mortgage Loan for a specified
period of time.
Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of which
were in excess of the principal balance of any existing first mortgage on the
related Mortgaged Property and related closing costs, and were used to pay any
such existing first mortgage, related closing costs and subordinate mortgages on
the related Mortgaged Property.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase and the Seller from time to time shall sell to the
Purchaser, the Mortgage Loans listed on the related Final Mortgage Loan Schedule
with respect to the related Mortgage Loan Package.
Closing Documents: With respect to any Closing Date, the documents
required pursuant to Section 9.
Code: The Internal Revenue Code of 1986, or any successor statute
thereto.
Combined Loan-to-Value Ratio or CLTV: With respect to any Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the sum
of (a) the original principal balance of the Mortgage Loan, plus (b) the unpaid
principal balance of any related subordinate mortgage loan or loans secured by
the Mortgaged Property, and the denominator of which is the Appraised Value of
the related Mortgaged Property.
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Condemnation Proceeds: All awards, compensation and settlements in
respect of a taking of all or part of a Mortgaged Property by exercise of the
power of condemnation or the right of eminent domain.
Convertible Mortgage Loan: A Mortgage Loan that by its terms and
subject to certain conditions contained in the related Mortgage or Mortgage Note
allows the Mortgagor to convert the adjustable Mortgage Interest Rate on such
Mortgage Loan to a fixed Mortgage Interest Rate.
Credit Score: The credit score of the Mortgagor provided by an
organization providing credit scores at the time of the origination of a
Mortgage Loan. If two credit scores are obtained, the Credit Score shall be the
lower of the two credit scores. If three credit scores are obtained, the Credit
Score shall be the middle of the three credit scores.
Custodial Account: One or more accounts created and maintained
pursuant to Exhibit 8, which accounts shall be held as a special deposit by the
depository institution maintaining such accounts in a fiduciary capacity,
separate and apart from its funds or general assets and shall not be held in any
capacity that would create a debtor-creditor relationship between the depository
institution maintaining the accounts and the Seller or Purchaser.
Custodial Agreement: The agreement between the Initial Purchaser and
the Custodian, governing the retention of the originals of the Mortgage Loan
Documents.
Custodian: The custodian designated by the Initial Purchaser under the
Custodial Agreement, or its successor in interest or assigns, or any successor
to the Custodian under the Custodial Agreement.
Cut-off Date: The first day of the month in which the related Closing
Date occurs or as otherwise set forth in the related Trade Confirmation.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.
Determination Date: With respect to each Remittance Date, the
fifteenth (15th) day of the calendar month in which such Remittance Date occurs
or, if such fifteenth (15th) day is not a Business Day, the Business Day
immediately following such fifteenth (15th) day.
Due Date: With respect to each Remittance Date, the first day of the
calendar month in which such Remittance Date occurs, which is the day on which
the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the Remittance
Date and ending on the first day of the month of the Remittance Date.
Eligible Account: A Custodial Account maintained with a depository
institution whose deposits are insured by the Bank Insurance Fund or the Savings
Association Insurance Fund of the FDIC, the unsecured and uncollateralized debt
obligations of which shall be rated
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"AA" or better by S&P and "Aa2"or better by Moody's and in the highest
short-term rating category by S&P and the highest short term rating category by
Moody's, and which is either (i) a federal savings and loan association duly
organized, validly existing and in good standing under the federal banking laws,
(ii) an institution duly organized, validly existing and in good standing under
the applicable banking laws of any state; or (iii) a national banking
association duly organized, validly existing and in good standing under the
federal banking laws.
Eligible Investment: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than the
Remittance Date in each month:
(1) direct obligations of or obligations fully guaranteed by, (i) the
United States of America, or (ii) 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;
(2) federal funds, demand, money market, or time deposits in,
certificates of deposits of, or banker's acceptances issued by any
depository institution or trust company incorporated or organized
under the laws of the United States of America or any state thereof,
subject to supervision and examination by federal and/or state banking
authorities, and, at the time of such investment or contractual
commitment providing for such investment, whose commercial paper or
other short-term debt obligations (or, in the case of a depository
institution or trust company that is a subsidiary of a holding
company, the commercial paper or other short-term debt obligations of
such holding company) is rated "P-1" by Moody's and "A-1" by S&P and
whose long-term debt obligations (or, in the case of a depository
institution that is a subsidiary of a holding company, the long-term
debt obligations of such holding company) are rated at least "Aa2" by
▇▇▇▇▇'▇ and "AA" by S&P (collectively, with all other rating
categories set out in this paragraph, the "Investment Ratings").
Notwithstanding the foregoing, Eligible Investments shall not include
(i) "stripped securities," (ii) any investments which contractually may return
less than the unpaid principal balance therefor, or (iii) a direct purchase of
commercial paper from the issuer.
Escrow Account: One or more accounts created and maintained pursuant
to Exhibit 8.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents, Primary Insurance Policy premiums, fire
and hazard insurance premiums and other payments required to be escrowed by the
Mortgagor with the Mortgagee pursuant to the terms of any Mortgage Note or
Mortgage.
Event of Default: Any one of the events enumerated in Subsection
14.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
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FHLMC: The Federal Home Loan Mortgage Corporation or any successor
thereto.
Final Mortgage Loan Schedule: With respect to each Mortgage Loan
Package, the schedule of Mortgage Loans to be annexed hereto as Schedule I (or a
supplement thereto) on each Closing Date for the Mortgage Loan Package delivered
on such Closing Date in both hard copy and floppy disk, such schedule setting
forth the following information with respect to each Mortgage Loan in the
Mortgage Loan Package:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's first and last name;
(3) the street address of the Mortgaged Property including the state
and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged
Property;
(6) the original months to maturity;
(7) the original date of the Mortgage Loan and the remaining months
to maturity from the Cut-off Date, based on the original
amortization schedule;
(8) the Loan-to-Value Ratio or Combined Loan-to-Value Ratio, if
applicable, at origination;
(9) the Mortgage Interest Rate in effect immediately following the
Cut-off Date;
(10) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(11) the stated maturity date;
(12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment as of the Cut-off Date;
(14) the last Due Date on which a Monthly Payment was actually applied
to the unpaid Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the close
of business on the Cut-off Date;
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(17) with respect to each Adjustable Rate Mortgage Loan, the first
Mortgage Interest Rate Adjustment Date and the number of months
between each Adjustment Date thereafter;
(18) with respect to each Adjustable Rate Mortgage Loan, the number of
days prior to the origination date and each Adjustment Date
thereafter, whereby the Index is determined;
(19) with respect to each Adjustable Rate Mortgage Loan, the Gross
Margin;
(20) with respect to each Adjustable Rate Mortgage Loan, the Periodic
Rate Cap;
(21) with respect to each Adjustable Rate Mortgage Loan, the Initial
Rate Cap;
(22) a code indicating the purpose of the loan (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing);
(23) with respect to each Adjustable Rate Mortgage Loan, the Maximum
Mortgage Interest Rate under the terms of the Mortgage Note;
(24) with respect to each Adjustable Rate Mortgage Loan, the Minimum
Mortgage Interest Rate under the terms of the Mortgage Note;
(25) the Mortgage Interest Rate at origination;
(26) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date immediately following the Cut-off Date;
(27) with respect to each Adjustable Rate Mortgage Loan, the Index and
the number of decimal places to which the Index is rounded;
(28) a code indicating whether the Mortgage Loan is an Adjustable Rate
Mortgage Loan or a Fixed Rate Mortgage Loan;
(29) a code indicating the documentation style (i.e., full,
alternative or reduced);
(30) a code indicating if the Mortgage Loan is subject to a Primary
Insurance Policy;
(31) a code indicating whether the Mortgage Loan is a Buydown Mortgage
Loan;
(32) a code indicating the product type of the Mortgage Loan (e.g.,
3/1, 5/1, 7/1, 10/1, 15 year fixed, 30 year fixed, 15/30 balloon,
etc.);
(33) code indicating whether the Mortgage Loan is subject to a
Prepayment Charge and the term of such Prepayment Charge;
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(34) the Appraised Value of the Mortgaged Property;
(35) the sale price of the Mortgaged Property, if applicable;
(36) a code indicating whether the Mortgaged Property is subject to a
second lien at origination of the First Lien Mortgage Loan;
(37) the Credit Score of the Mortgagor;
(38) the Mortgagor's debt to income ratio;
(39) the risk grade for each Mortgage Loan;
(40) with respect to each Adjustable Rate Mortgage Loan, the date on
which the Monthly Payment is changed to the extent that it is
different than the Adjustment Date; and
(41) with respect to each Adjustable Rate Mortgage Loan, to the extent
that such Mortgage Loan is an interest only loan, the number of
months/years whereby the scheduled payment payable by a Mortgagor
under the related Mortgage Note on each Due Date includes only
interest payments.
With respect to the Mortgage Loan Package in the aggregate, the Final Mortgage
Loan Schedule shall set forth the following information, as of the related
Cut-off Date:
(42) the number of Mortgage Loans;
(43) the current principal balance of the Mortgage Loans;
(44) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and
(45) the weighted average maturity of the Mortgage Loans.
Schedule I hereto shall be supplemented as of each Closing Date to reflect the
addition of the Final Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller pursuant to this Agreement), a determination made by the Seller
that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Seller, in its reasonable good faith judgment, expects to
be finally recoverable in respect thereof have been so recovered. The Seller
shall maintain records, prepared by a servicing officer of the Seller, of each
Final Recovery Determination.
First Lien: With respect to each Mortgaged Property, the lien of the
mortgage, deed of trust or other instrument securing a Mortgage Note which
creates a first lien on the Mortgaged Property.
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Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term of
such Mortgage Loan.
Flood Zone Service Contract: A transferable contract maintained for
the Mortgaged Property with a nationally recognized flood zone service provider
for the purpose of obtaining the current flood zone status relating to such
Mortgaged Property.
FNMA: ▇▇▇▇▇▇ ▇▇▇ or any successor thereto.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note that is added to
the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note to determine the new Mortgage Interest Rate for such Mortgage
Loan.
HUD: The United States Department of Housing and Urban Development or
any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
set forth in the related Mortgage Note for the purpose of calculating the
interest rate thereon.
Initial Closing Date: The Closing Date on which the Initial Purchaser
purchases and the Seller sells the first Mortgage Loan Package hereunder.
Initial Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA, or any successor.
Initial Rate Cap: With respect to each Adjustable Rate Mortgage Loan
and the initial Adjustment Date therefor, a number of percentage points per
annum that is set forth in the related Mortgage Note, which is the amount by
which the Mortgage Interest Rate for such Adjustable Rate Mortgage Loan may
increase or decrease on the initial Adjustment Date.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Liquidation Proceeds: Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received in connection with the liquidation of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or otherwise,
other than amounts received following the acquisition of REO Property.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan as of
any date of determination, the ratio on such date of the outstanding principal
amount of the Mortgage Loan, to the Appraised Value of the Mortgaged Property.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Final Mortgage Loan
Schedule and in the related Mortgage Note and is the maximum interest rate to
which the Mortgage Interest Rate on such Mortgage Loan may be increased on any
Adjustment Date.
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MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Final Mortgage Loan
Schedule and in the related Mortgage Note and is the minimum interest rate to
which the Mortgage Interest Rate on such Mortgage Loan may be decreased on any
Adjustment Date.
MIN: The Mortgage Identification Number for any MERS Loan.
MOM Loan: Any Loan as to which MERS is acting as mortgagee, solely as
nominee for the originator of such Loan and its successors and assigns.
Monthly Advance: The aggregate of the advances made by the Seller on
any Distribution Date pursuant to Subsection 11.30 of the Servicing Addendum.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
combined payment of principal and interest payable by a Mortgagor under the
related Mortgage Note on each Due Date.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on Mortgaged Property securing the Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or beneficiary.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit 5 annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement or the related Trade
Confirmation.
Mortgage Interest Rate: With respect to each Fixed Rate Mortgage Loan,
the fixed annual rate of interest provided for in the related Mortgage Note and,
with respect to each Adjustable Rate Mortgage Loan, the annual rate that
interest accrues on such Adjustable Rate Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each first lien, residential mortgage loan, sold,
assigned and transferred to the Purchaser pursuant to this Agreement and the
related Trade Confirmation and identified on the Final Mortgage Loan Schedule
annexed to this Agreement on such Closing Date, which Mortgage Loan includes
without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
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Proceeds, REO Disposition proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The following documents:
(1) The original Mortgage Note endorsed, "Pay to the order of
____________________________________________, without recourse" and signed
in the name of the Seller by an authorized officer of the Seller. If the
Mortgage Loan was acquired by the Seller in a merger or other type of
acquisition, the endorsement must be by "[Seller], successor [by merger to
or in interest to, as applicable] [name of predecessor]"; and if the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the endorsement must be by "[Seller], successor in
interest to [previous name]." The Mortgage Note shall include all
intervening endorsements showing a complete chain of title from the
originator to the Seller;
(2) Except as provided below and for each Mortgage Loan that is not a
MERS Loan, the original recorded Mortgage, with evidence of recording
thereon, or, if the original Mortgage has not yet been returned from the
recording office, a copy of the original Mortgage certified by the Seller
to be a true copy of the original of the Mortgage that has been delivered
for recording in the appropriate recording office of the jurisdiction in
which the Mortgaged Property is located and in the case of each MERS Loan,
the original Mortgage, noting the presence of the MIN of the Loan and
either language indicating that the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage and
the assignment thereof to MERS, with evidence of recording indicated
thereon, or a copy of the Mortgage certified by the public recording office
in which such Mortgage has been recorded;
(3) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage, executed in blank. If the Mortgage
Loan was acquired by the Seller in a merger or other type of acquisition,
the assignment must be by "[Seller], successor [by merger to or in interest
to, as applicable] [name of predecessor]"; and in the event that the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the assignment must be by "[Seller], successor in
interest to [previous name]";
(4) The original policy of title insurance (or a preliminary title
report if the original title insurance policy has not been received from
the title insurance company);
(5) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment
has not yet been returned from the recording office, a copy of such
assignment certified to be a true copy of the original of the assignment
which has been sent for recording in the appropriate jurisdiction in which
the Mortgaged Property is located;
(6) With respect to a Mortgage Loan that, according to the Final
Mortgage Loan Schedule is covered by a primary mortgage insurance policy,
the original or a copy of the policy of primary mortgage insurance; and
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(7) Originals of all assumption and modification agreements, if any.
Mortgage Loan Package: The Mortgage Loans listed on a Final Mortgage
Loan Schedule, delivered to the Custodian and the Purchaser at least five (5)
Business Days prior to the related Closing Date and attached to this Agreement
as Schedule I on the related Closing Date.
Mortgage Note: The original executed note or other evidence of the
Mortgage Loan indebtedness of a Mortgagor.
Mortgaged Property: The Mortgagor's real property securing repayment
of a related Mortgage Note, consisting of a fee simple interest in a single
parcel of real property improved by a Residential Dwelling.
Mortgagor: The obligor on a Mortgage Note, the owner of the Mortgaged
Property and the grantor or mortgagor named in the related Mortgage and such
grantor's or mortgagor's successor's in title to the Mortgaged Property.
Net Mortgage Interest Rate: With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Interest Rate for such Mortgage
Loan minus the Servicing Fee Rate.
Nonrecoverable Monthly Advance: Any Monthly Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Seller, will not, or, in the case of a
proposed Monthly Advance, would not be, ultimately recoverable from related late
payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Person on behalf of whom such certificate is being
delivered.
Opinion of Counsel: A written opinion of counsel, who may be salaried
counsel for the Person on behalf of whom the opinion is being given, reasonably
acceptable to each Person to whom such opinion is addressed.
Pass-Through Transfer: The sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a trust to be formed as part of a publicly
issued or privately placed mortgage-backed securities transaction.
Payment Clearing Account: An Eligible Account created and maintained
pursuant to Exhibit 8.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan
and any Adjustment Date therefor, a number of percentage points per annum that
is set forth in the related Mortgage Note, which is the maximum amount by which
the Mortgage Interest Rate for such Adjustable Rate Mortgage Loan may increase
(without regard to the Maximum Mortgage
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Interest Rate) or decrease (without regard to the Minimum Mortgage Interest
Rate) on such Adjustment Date from the Mortgage Interest Rate in effect
immediately prior to such Adjustment Date.
Person: An individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Preliminary Mortgage Loan Schedule:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's first and last name;
(3) the Mortgage Interest Rate at origination;
(4) the Mortgage Interest Rate in effect immediately following the
Cut-off Date;
(5) the original months to maturity;
(6) the original date of the Mortgage Loan and the remaining months
to maturity from the Cut-off Date, based on the original
amortization schedule;
(7) the stated maturity date;
(8) the amount of the Monthly Payment at origination;
(9) the amount of the Monthly Payment as of the Cut-off Date;
(10) the Stated Principal Balance of the Mortgage Loan as of the close
of business on the Cut-off Date;
(11) a code indicating whether the Mortgaged Property is
owner-occupied;
(12) a code indicating the documentation style;
(13) a code indicating whether the Mortgaged Property is subject to a
second lien at origination of the First Lien Mortgage Loan;
(14) the debt to income ratio; and
(15) the Credit Score.
Preliminary Servicing Period: With respect to any Mortgage Loans, the
period commencing on the related Closing Date and ending on the date the Seller
enters into Reconstitution Agreements which amend or restate the servicing
provisions of this Agreement.
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Prepayment Charge: With respect to any Mortgage Loan, any prepayment
penalty or premium thereon payable in connection with a principal prepayment on
such Mortgage Loan pursuant to the terms of the related Mortgage Note.
Primary Insurance Policy: A policy of primary mortgage guaranty
insurance issued by a Qualified Insurer.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Charge, which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller pursuant to the related Trade Confirmation in exchange
for the Mortgage Loans purchased on such Closing Date as calculated as provided
in Section 4.
Qualified Depository: Any institution offering an Eligible Account.
Qualified Insurer: Any insurer which meets the requirements of FNMA or
FHLMC.
Qualified Substitute Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Interest Rate not
less than (and not more than one percentage point in excess of) the Mortgage
Interest Rate of the Deleted Mortgage Loan, (iii) have a net Mortgage Interest
Rate not less than (and not more than one percentage point in excess of) the net
Mortgage Interest Rate of the Deleted Mortgage Loan, (iv) have a remaining terms
to maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (v) have the same Due Date as the Due Date on the Deleted
Mortgage Loan, (vi) have a Loan-to-Value Ratio as of the date of substitution
equal to or lower than the Loan-to-Value Ratio of the Deleted Mortgage Loan as
of such date, (vii) be covered under a Primary Insurance Policy if such
Qualified Substitute Mortgage Loan has a Loan-to-Value Ratio in excess of 80%,
(viii) conform to each representation and warranty set forth in Subsection 7.02
of this Agreement and (ix) be the same type of mortgage loan (i.e. fixed or
adjustable rate with the same Gross Margin and Index as the Deleted Mortgage
Loan). In the event that one or more mortgage loans are substituted for one or
more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates, the Net Mortgage Rates described in
clause (iii) hereof shall be satisfied as to each such mortgage loan, the terms
described in clause (iv) shall be determined on the basis of weighted average
remaining terms to maturity, the Loan-to-Value Ratios described in clause (vi)
hereof shall be satisfied as to each such mortgage loan and, except to the
extent otherwise provided in this sentence, the representations and warranties
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described in clause (viii) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds of
which are not in excess of the existing first mortgage loan on the related
Mortgaged Property and related closing costs, and were used exclusively to
satisfy the then existing first mortgage loan of the Mortgagor on the related
Mortgaged Property and to pay related closing costs.
Reconstitution Agreements: The agreement or agreements entered into by
the Seller and the Purchaser and/or certain third parties on the Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in connection with a Whole Loan Transfer or a Pass-Through Transfer
as provided in Section 12.
Reconstitution Date: The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Whole Loan Transfer or Pass-Through
Transfer pursuant to Section 12 hereof.
Record Date: With respect to each Remittance Date, the last Business
Day of the month immediately preceding the month in which such Remittance Date
occurs.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to
REMICs, which appear in Sections 860A through 860G of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: The eighteenth (18th) day of each month, commencing
on the eighteenth day of the month next following the month in which the related
Cut-off Date occurs, or if such eighteenth (18th) day is not a Business Day, the
first Business Day immediately following such eighteenth (18th) day.
REO Disposition: The final sale by the Seller of any REO Property.
REO Property: A Mortgaged Property acquired as a result of the
liquidation of a Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, a price equal to
(i) the Stated Principal Balance of such Mortgage Loan, plus (ii) interest on
such Stated Principal Balance at the Mortgage Interest Rate from and including
the last Due Date through which interest has been paid by or on behalf of the
Mortgagor to the first day of the month following the date of repurchase, less
amounts received in respect of such repurchased Mortgage Loan which are being
held in the Custodial Account for distribution in connection with such Mortgage
Loan.
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Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a FNMA eligible condominium project, or (iv) a
detached one-family dwelling in a planned unit development, none of which is a
cooperative, mobile or manufactured home.
Servicing Addendum: The terms and conditions attached hereto as
Exhibit 8 which will govern the servicing of the Mortgage Loans by Seller during
the Preliminary Servicing Period.
Servicing Advances: All customary, reasonable and necessary
"out-of-pocket" costs and expenses incurred by the Seller in the performance of
its servicing obligations, including, but not limited to, the cost of (i)
preservation, restoration and repair of a Mortgaged Property, (ii) any
enforcement or judicial proceedings with respect to a Mortgage Loan, including
foreclosure actions, (iii) the management and liquidation of REO Property, and
(iv) compliance with the obligations under this Agreement.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual servicing fee the Purchaser shall pay to the Seller, which shall, for
each month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate
and (b) the unpaid principal balance of the Mortgage Loan. Such fee shall be
payable monthly, computed on the basis of the same principal amount and period
respectively which any related interest payment on a Mortgage Loan is computed.
The obligation of the Purchaser to pay the Servicing Fee is limited to, and
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds and other proceeds, to the extent permitted
by Section 11.5) of related Monthly Payment collected by the Seller, or as
otherwise proved under Section 11.5. If the Preliminary Servicing Period
includes any partial month, the Servicing Fee for such month shall be pro rated
at a per diem rate based upon a 30-day month.
Servicing Fee Rate: The per annum rate set forth in the related Trade
Confirmation at which the Servicing Fee accrues.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Seller consisting of originals of all documents in the Mortgage File
which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents.
S&P: Standard & Poor's Ratings Services, a Division of the ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or its successor in interest.
Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of the Mortgage Loan as of the Cut-off
Date after giving effect to payments of principal received on or before such
date, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Tax Service Contract: A transferable contract maintained for the
Mortgaged Property with a tax service provider for the purpose of obtaining
current information from local taxing authorities relating to such Mortgaged
Property.
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Trade Confirmation: With respect to any Mortgage Loan Package
purchased and sold on any Closing Date, the letter agreement between the
Purchaser and the Seller, in the form annexed hereto as Exhibit 9 (including any
exhibits, schedules and attachments thereto), setting forth the terms and
conditions of such transaction and describing the Mortgage Loans to be purchased
by the Purchaser on such Closing Date. A Trade Confirmation may relate to more
than one Mortgage Loan Package to be purchased on one or more Closing Dates
hereunder.
Warranty ▇▇▇▇ of Sale: A Warranty ▇▇▇▇ of Sale with respect to the
Mortgage Loans purchased on a Closing Date in the form annexed hereto as Exhibit
4.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a third party, which sale or transfer is not
a Pass-Through Transfer.
SECTION 2. - SECTION 8: INTENTIONALLY OMITTED.
SECTION 9. Closing Documents.
(a) On or before the Initial Closing Date, the Seller shall submit to
the Initial Purchaser fully executed originals of the following documents:
1. this Agreement, in four counterparts;
2. a Custodial Account Certification in the form attached as Exhibit
6 hereto;
3. as Escrow Account Certification in the form attached as Exhibit 7
hereto;
4. evidence of the existence of the Payment Clearing Account;
5. an Officer's Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto;
6. an Opinion of Counsel to the Seller (who may be an employee of
the Seller), in the form of Exhibit 2 hereto; and
7. the Seller's underwriting guidelines.
(b) The Closing Documents for the Mortgage Loans to be purchased on
each Closing Date shall consist of fully executed originals of the following
documents:
1. the related Trade Confirmation;
2. the related Final Mortgage Loan Schedule;
3. an Officer's Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto;
4. if requested by the Initial Purchaser, an Opinion of Counsel to
the Seller (who may be an employee of the Seller), in the form of
Exhibit 2 hereto;
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5. a Security Release Certification, in the form of Exhibit 3 hereto
executed by any Person, as requested by the Initial Purchaser, if
any of the Mortgage Loans are subject to any security interest
immediately prior to the related Closing Date, pledge or
hypothecation for the benefit of such Person;
6. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if any
of the Mortgage Loans were acquired by the Seller by merger or
acquired or originated by the Seller while conducting business
under a name other than its present name, if applicable; and
7. a Warranty ▇▇▇▇ of Sale in the form of Exhibit 4 hereto.
SECTION 10. Costs. The Purchaser shall pay any commissions due its
salesmen and the legal fees and expenses of its attorneys. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans, including without limitation recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 11. Seller's Servicing Obligations. The Seller, as independent
contract servicer, shall service and administer the Mortgage Loans during the
Preliminary Servicing Period in accordance with the terms and provisions set
forth in the Servicing Addendum attached as Exhibit 8, which Servicing Addendum
is incorporated herein by reference.
SECTION 12. Removal of Mortgage Loans from Inclusion under This
Agreement Upon a Whole Loan Transfer or a Pass-Through Transfer on One or More
Reconstitution Dates.
The Seller and the Initial Purchaser agree that with respect to some
or all of the Mortgage Loans, the Initial Purchaser may effect no more than
three (3) of either:
Whole Loan Transfers; and/or Pass-Through Transfers.
With respect to each Whole Loan Transfer or Pass-Through Transfer, as
the case may be, entered into by the Initial Purchaser, the Seller agrees:
(1) to cooperate reasonably with the Purchaser and any prospective
purchaser with respect to all reasonable requests and due
diligence procedures including participating in meetings with
rating agencies, bond insurers and such other parties as the
Purchaser shall designate and participating in meetings with
prospective purchasers of the Mortgage Loans or interests therein
and providing information reasonably requested by such
purchasers;
(2) to execute all Reconstitution Agreements provided that (i) such
Reconstitution Agreements are reasonably acceptable to the
Seller, and (ii) each of the Seller and the Purchaser is given an
opportunity to review and reasonably negotiate in good faith the
content of such documents not specifically referenced or
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provided for herein, and (iii) such Reconstitution Agreements do
not materially diminish Seller' rights or materially increase the
Seller's responsibilities as stated in this Agreement;
(3) with respect to any Whole Loan Transfer or Pass-Through Transfer,
the Seller shall make the representations and warranties
regarding the Seller if such Whole Loan Transfer or Pass-Through
Transfer occurs within 12 months of the related Closing Date;
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(4) to deliver to the Purchaser for inclusion in any prospectus or
other offering material such publicly available information
regarding the Seller, its financial condition and its most
recently publicly disclosed mortgage loan delinquency,
foreclosure and loss experience as shall be requested by the
Purchaser and any additional information which the Seller is
capable of providing without unreasonable effort or expense and
the Seller shall indemnify and hold harmless the Purchaser, each
affiliate designated by the Purchaser and each person who
controls the Purchaser or such affiliate from and against any and
all losses, claims, damages and liabilities arising from, with
respect to information provided by the Seller pursuant to this
Section 12, information on the Final Mortgage Loan Schedule and
information that is otherwise correctly derived from or based on
such Final Mortgage Loan Schedule (collectively, the "Seller
Information"), any untrue statement or alleged untrue statement
of a material fact contained in the Seller Information, or caused
by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading; provided however, the Seller
shall not indemnify the Purchaser for any error, omission,
misstatement, or other errors in Seller Information that are
attributable to or caused by the Purchaser or its agents;
provided further, that the Purchaser, shall indemnify and hold
harmless the Seller, each affiliate designated by the Seller and
each person who controls the Seller or such affiliate from and
against any and all losses, claims, damages and liabilities
arising from, with respect to information that is not Seller
Information, any untrue statement or alleged untrue statement of
a material fact contained in any information in the related
offering documents, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;;
(5) to deliver to the Purchaser and to any Person designated by the
Purchaser, at the Purchaser's expense, such statements and audit
letters of reputable, certified public accountants pertaining to
information provided by the Seller pursuant to clause 4 above as
shall be reasonably requested by the Purchaser;
(6) to deliver to the Purchaser, and to any Person designated by the
Purchaser, such documents and Opinions of Counsel as are
customarily delivered by originators or servicers, as the case
may be, and reasonably determined by the Purchaser to be
necessary in connection with Whole Loan Transfers or Pass-Through
Transfers, as the case may be, such Opinions of Counsel for a
Pass-Through Transfer to be in the form reasonably acceptable to
the Purchaser, it being understood that the cost of any opinions
of outside special counsel that may be required for a Whole Loan
Transfer or Pass-
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Through Transfer, as the case may be, shall be the responsibility
of the Purchaser;
(7) to negotiate and execute one or more subservicing agreements
between the Seller and any master servicer which is generally
considered to be a prudent master servicer in the secondary
mortgage market, designated by the Purchaser after reasonable
consultation with the Seller provided that the Seller is given a
reasonable opportunity to review and reasonably negotiate such
subservicing agreements and such subservicing agreements do not
materially diminish the Seller's rights or materially increase
the Seller's responsibilities as stated in this Agreement and/or
one or more custodial and servicing agreements among the
Purchaser, the Seller and a third party custodian/trustee which
is generally considered to be a prudent custodian/trustee in the
secondary mortgage market designated by the Purchaser after
reasonable consultation with the Seller, in either case for the
purpose of pooling the Mortgage Loans with other Mortgage Loans
for resale or securitization; and
(8) in connection with any securitization of any Mortgage Loans, to
execute a pooling and servicing agreement, provided that such
pooling and servicing agreement does not materially diminish the
Seller' rights or materially increase the Seller's
responsibilities as stated in this Agreement.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan
Transfer or Pass-Through Transfer shall be subject to this Agreement and shall
continue to be serviced for the remainder of the Preliminary Servicing Period in
accordance with the terms of this Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 13. The Seller.
Subsection 13.01. Additional Indemnification by the Seller.
In addition to the indemnification provided in Subsection 7.03, the
Seller shall indemnify the Purchaser and hold the Purchaser harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Seller to service and administer the Mortgage Loans in strict compliance with
the terms of this Agreement. Notwithstanding the foregoing, the Purchaser shall
indemnify the Seller and hold it harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that the Seller
may sustain in any way related to (a) actions or inactions of the Seller which
were taken or omitted upon the instruction or direction of the Purchaser, or (b)
the failure of the Purchaser to perform its obligations under this Agreement,
including the provisions of Subsection 13.03.
Subsection 13.02. Merger or Consolidation of the Seller.
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The Seller shall keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of any of the Mortgage Loans, and to enable the Seller to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall be an institution whose deposits are insured
by the FDIC or a company whose business is the origination and servicing of
mortgage loans, shall be a FNMA or FHLMC approved seller/servicer and shall
satisfy any requirements of Section 16 with respect to the qualifications of a
successor to the Seller.
Subsection 13.03. Limitation on Liability of the Seller and Others.
Neither the Seller nor any of the officers, employees or agents of the
Seller shall be under any liability to the Purchaser for any action taken or for
refraining from the taking of any action in good faith in connection with the
servicing of the Mortgage Loans pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Seller or
any such person against any breach of warranties or representations made herein,
or failure to perform its obligations in compliance with any standard of care
set forth in this Agreement, or any liability which would otherwise be imposed
by reason of any breach of the terms and conditions of this Agreement. The
Seller and any officer, employee or agent of the Seller may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. To the extent the Purchaser
records with the recording office an Assignment of Mortgage which designates the
Purchaser as the holder of record of the Mortgage, the Purchaser agrees that it
shall (i) provide the Seller with immediate notice of any action with respect to
the Mortgage or the related Mortgaged Property and ensure that the proper
department or person at the Seller, designated in writing from the Seller to the
Purchaser, receives such notice; and (ii) immediately complete, sign and return
to the Seller any document reasonably requested by the Seller to comply with its
servicing obligations, including without limitation, any instrument required to
release the Mortgage upon payment in full of the obligation or take any other
action reasonably required by the Seller. The Purchaser further agrees that the
Seller shall have no liability for the Purchaser's failure to comply with
subsections (i) or (ii) in the foregoing sentence. The Seller shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its obligation to sell or duty to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may result in its
incurring any expenses or liability; provided, however, that the Seller may,
with the consent of the Purchaser, undertake any such action which it may deem
necessary or desirable in respect to this Agreement and the rights and duties of
the parties hereto. In such event, the legal expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities
for which the Purchaser shall be liable, and the Seller shall be entitled to
reimbursement therefor from the Purchaser upon written demand except when such
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expenses, costs and liabilities are subject to the Seller's indemnification
under Subsections 7.03 or 13.01.
Subsection 13.04. Seller Not to Resign.
The Seller shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Seller and the Purchaser or upon the determination that its servicing duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Seller in which event the Seller may resign as servicer.
Any such determination permitting the resignation of the Seller as servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Purchaser which Opinion of Counsel shall be in form and substance reasonably
acceptable to the Purchaser and which shall be provided at the cost of the
Seller. No such resignation shall become effective until a successor shall have
assumed the Seller's responsibilities and obligations hereunder in the manner
provided in Section 16.
Subsection 13.05. No Transfer of Servicing.
The Seller acknowledges that the Purchaser has acted in reliance upon
the Seller's independent status, the adequacy of its servicing facilities, plan,
personnel, records and procedures, its integrity, reputation and financial
standing and the continuance thereof. Without in any way limiting the generality
of this Section, the Seller shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Purchaser, which
consent will not be unreasonably withheld. Nothing in this Agreement shall
prohibit or limit the right of the Seller to assign the servicing rights
hereunder to Countrywide Home Loans Servicing LP.
SECTION 14. Default. Subsection
14.01. Events of Default.
In case one or more of the following Events of Default by the Seller
shall occur and be continuing, that is to say:
(i) any failure by the Seller to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of two Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Seller by the Purchaser; or
(ii) failure on the part of the Seller duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Seller set forth in this Agreement which continues unremedied for a period of
thirty (30) days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Seller by the
Purchaser; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency,
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bankruptcy, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Seller and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty (60) days; or
(iv) the Seller shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Seller or relating to all or substantially all of its property; or
(v) the Seller shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) failure by the Seller to be in compliance with the "doing
business" or licensing laws of any jurisdiction where a Mortgaged Property is
located which continues unremedied for a period of thirty (30) days; or
(vii) the Seller ceases to meet the qualifications of either a FNMA or
FHLMC seller/servicer which continues unremedied for a period of thirty (30)
days; or
(viii) subject to the provisions of this Agreement, the Seller
attempts, without the consent of the Purchaser, to sell or otherwise dispose of
all or substantially all of its property or assets or to assign this Agreement
or the servicing responsibilities hereunder or to delegate its duties hereunder
or any portion thereof; or
(ix) failure by the Seller to duly perform, within the required time
period, its obligations under Sections 11.25, 11.26 and 11.27 of the Servicing
Addendum which failure continues unremedied for a period of thirty (30) days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by any party to this Agreement or
by any master servicer responsible for master servicing the Mortgage Loans
pursuant to a securitization of such Mortgage Loans;
then, and in each and every such case, so long as an Event of Default
shall not have been remedied, the Purchaser, by notice in writing to the Seller
may, in addition to whatever rights the Purchaser may have at law or equity to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Seller as servicer under this Agreement. On or
after the receipt by the Seller of such written notice, all authority and power
of the Seller to service the Mortgage Loans under this Agreement shall on the
date set forth in such notice pass to and be vested in the successor appointed
pursuant to Section 16.
Subsection 14.02. Waiver of Defaults.
The Purchaser may waive any default by the Seller in the performance
of its obligations hereunder and its consequences. Upon any such waiver of a
past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been
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remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.
SECTION 15. Termination. The respective obligations and
responsibilities of the Seller, as servicer, shall terminate upon the
distribution to the Purchaser of the final payment or liquidation with respect
to the last Mortgage Loan (or advances of same by the Seller) or the disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure with
respect to the last Mortgage Loan and the remittance of all funds due hereunder
unless terminated with respect to all or a portion of the Mortgage Loans on an
earlier date at the option of the Purchaser pursuant to Section 14. Upon written
request from the Purchaser in connection with any such termination, the Seller
shall prepare, execute and deliver, any and all documents and other instruments,
place in the Purchaser's possession all Mortgage Files, and do or accomplish all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise, at the
Seller's sole expense. The Seller agrees to cooperate with the Purchaser and
such successor in effecting the termination of the Seller's responsibilities and
rights hereunder as servicer, including, without limitation, the transfer to
such successor for administration by it of all cash amounts which shall at the
time be credited by the Seller to the Custodial Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
SECTION 16. Successor to the Seller. Prior to termination of the
Seller's responsibilities and duties under this Agreement pursuant to Section
12, 13, 14 or 15, the Purchaser shall (i) succeed to and assume all of the
Seller's responsibilities, rights, duties and obligations under this Agreement,
or (ii) appoint a successor which shall succeed to all rights and assume all of
the responsibilities, duties and liabilities of the Seller as servicer under
this Agreement. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree. In the event
that the Seller's duties, responsibilities and liabilities as servicer under
this Agreement should be terminated pursuant to the aforementioned Sections, the
Seller shall discharge such duties and responsibilities during the period from
the date it acquires knowledge of such termination until the effective date
thereof with the same degree of diligence and prudence which it is obligated to
exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of the Purchaser or such
successor. The termination of the Seller as servicer pursuant to the
aforementioned Sections shall not become effective until a successor shall be
appointed pursuant to this Section 16 and shall in no event relieve the Seller
of the representations and warranties made pursuant to Subsections 7.01 and 7.02
and the remedies available to the Purchaser under Subsection 7.03 or 7.04, it
being understood and agreed that the provisions of such Subsections 7.01, 7.02,
7.03 and 7.04 shall be applicable to the Seller notwithstanding any such
resignation or termination of the Seller, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Seller and to the Purchaser an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Seller, with like effect as if originally named as a party to this Agreement
provided, however, that such successor shall not assume, any and all liabilities
arising out of the Seller's acts as servicer. Any termination of the Seller as
servicer pursuant to
-24-
Section 12, 13, 14 or 15 shall not affect any claims that the Purchaser may have
against the Seller arising prior to any such termination or resignation or
remedies with respect to such claims.
If any of the Mortgage Loans are MERS Loans, in connection with the
termination or resignation of the Seller hereunder, either (i) the successor
shall represent and warrant that it is a member of MERS in good standing and
shall agree to comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans that are registered
with MERS, or (ii) the Seller shall cooperate with the successor either (x) in
causing MERS to execute and deliver an assignment of Mortgage in recordable form
to transfer the Mortgage from MERS to the Purchaser and to execute and deliver
such other notices, documents and other instruments as may be necessary or
desirable to effect a transfer of such Loan or servicing of such Mortgage Loan
on the MERS System to the successor or (y) in causing MERS to designate on the
MERS System the successor as the servicer of such Mortgage Loan.
The Seller shall timely deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Mortgage Files and related
documents and statements held by it hereunder and the Seller shall account for
all funds. The Seller shall execute and deliver such instruments and do such
other things all as may reasonably be required to more fully and definitely vest
and confirm in the successor all such rights, powers, duties, responsibilities,
obligations and liabilities of the Seller as servicer. The successor shall
reimburse the Seller for amounts the Seller actually expended as servicer
pursuant to this Agreement which would otherwise have been recovered by the
Seller pursuant to this Agreement but for the appointment of the successor
servicer.
SECTION 17. Financial Statements. The Seller understands that in
connection with the Purchaser's marketing of the Mortgage Loans, the Purchaser
shall make available to prospective purchasers financial statements of the
Seller and the Seller's parent company, if applicable, for the most recently
completed three fiscal years respecting which such statements are available. The
Seller also shall make available any comparable interim statements to the extent
any such statements have been prepared by the Seller (and are available upon
request to members or stockholders of the Seller or the public at large). The
Seller, if it has not already done so, agrees to furnish promptly to the
Purchaser copies of the statements specified above. The Seller also shall make
available information on its servicing performance with respect to mortgage
loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to knowledgeable
financial, accounting, origination and servicing officers of the Seller for the
purpose of answering questions asked by any prospective purchaser regarding
recent developments affecting the Seller, its loan origination or servicing
practices or the financial statements of the Seller.
SECTION 18. Mandatory Delivery. The sale and delivery of each Mortgage
Loan on or before the related Closing Date is mandatory from and after the date
of the execution of the related Trade Confirmation, it being specifically
understood and agreed that each Mortgage Loan is unique and identifiable on the
date hereof and that an award of money damages would be insufficient to
compensate the Initial Purchaser for the losses and damages incurred by the
Initial Purchaser (including damages to prospective purchasers of the Mortgage
-25-
Loans) in the event of the Seller's failure to deliver (i) each of the related
Mortgage Loans, (ii) one or more Qualified Substitute Mortgage Loans delivered
pursuant to Section 7, or (iii) one or more Mortgage Loans otherwise acceptable
to the Initial Purchaser on or before the related Closing Date. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION 19. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other party at the address as follows:
(i) if to the Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA
4 World Financial Center, 9th floor
New York, New York 10080
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
(ii) if to the Seller:
Countrywide Home Loans, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, EVP
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 20. Severability Clause. Any part, provision, representation
or warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the
-26-
economic effect of which is nearly as possible the same as the economic effect
of this Agreement without regard to such invalidity.
SECTION 21. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument.
SECTION 22. Governing Law. The Agreement shall be construed in
accordance with the laws of the State of New York without regard to any
conflicts of law provisions and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with the laws of the State
of New York, except to the extent preempted by Federal law.
SECTION 23. Intention of the Parties. It is the intention of the
parties that the Initial Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans and not a debt instrument of the Seller or another security.
Accordingly, the parties hereto each intend to treat the transaction for Federal
income tax purposes as a sale by the Seller, and a purchase by the Purchaser, of
the Mortgage Loans. The Initial Purchaser shall have the right to review the
Mortgage Loans and the related Mortgage File to determine the characteristics of
the Mortgage Loans which shall affect the Federal income tax consequences of
owning the Mortgage Loans and the Seller shall cooperate with all reasonable
requests made by the Initial Purchaser in the course of such review.
SECTION 24. Successors and Assigns. This Agreement shall bind and
inure to the benefit of and be enforceable by the Seller and the Purchaser and
the respective successors and assigns of the Seller and the Purchaser. The
Purchaser may, subject to the terms of this Agreement, sell and transfer one or
more of the Mortgage Loans; provided, however, that the transferee will not be
deemed to be the "Purchaser" hereunder unless such transferee shall agree in
writing to be bound by the terms of this Agreement and an original counterpart
of the document evidencing such agreement shall have been executed by the
Purchaser and the transferee and delivered to the Seller. Notwithstanding the
foregoing, no transfer shall be effective if such transfer would result in there
being more than three (3) "Purchasers" outstanding hereunder with respect to any
Mortgage Loan Package. This Agreement shall not be assigned, pledged or
hypothecated by the Seller to a third party without the consent of the
Purchaser.
SECTION 25. Waivers. No term or provision of this Agreement may be
waived or modified unless such waiver or modification is in writing and signed
by the party against whom such waiver or modification is sought to be enforced.
SECTION 26. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
SECTION 27. Nonsolicitation. From and after the related Closing Date,
the Seller hereby agrees that the Seller will not take any action or permit or
cause any action to be taken by any of its agents or affiliates, or by any
independent contractors or independent mortgage brokerage companies on the
Seller's behalf, to personally, by telephone or mail, solicit
-27-
the Mortgagor under any Mortgage Loan for the purpose of refinancing such
Mortgage Loan; provided, that the Seller may solicit any Mortgagor for whom the
Seller or its affiliates have received a request for verification of mortgage, a
request for demand for payoff, a Mortgagor-initiated written or verbal
communication indicating a desire to prepay the related Mortgage Loan, or the
Mortgagor initiates a title search, provided further, it is understood and
agreed that promotions undertaken by the Seller or any of its affiliates which
(i) concern optional insurance products or other additional products or (ii) are
directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation nor is the Seller
prohibited from responding to unsolicited requests or inquiries made by a
Mortgagor or an agent of a Mortgagor. Notwithstanding the foregoing, the
following solicitations, if undertaken by the Seller or any affiliate of the
Seller, shall not be prohibited: (i) solicitations that are directed to the
general public at large, including, without limitation, mass mailings based on
commercially acquired mailing lists and newspaper, radio, television and other
mass media advertisements and (ii) borrower messages included on, and statement
inserts provided with, the monthly statements sent to mortgagors; provided,
however, that similar messages and inserts are sent to the borrowers of other
mortgage loans serviced by the Seller or any affiliate of the Seller.
SECTION 28. General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 29. Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in
-28-
evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such reproduction
was made by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
SECTION 30. Further Agreements. The Seller and the Purchaser each
agree to execute and deliver to the other such reasonable and appropriate
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
SECTION 31. Protection of Confidential Information. The Seller will
keep confidential and will not, without the Purchaser's written consent, divulge
to any party the Purchase Price of the Mortgage Loans, except to the extent that
it is appropriate to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies.
SECTION 32. Survival. The Seller agrees that the representations,
warranties and agreements made by the Seller herein and in any certificate or
other instrument delivered pursuant hereto shall be deemed to be relied upon by
the Purchaser, notwithstanding any investigation heretofore or hereafter made by
the Purchaser or on the Purchaser's behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery and payment for the Mortgage
Loans for each Transaction.
SECTION 33. Conflicts. The Purchaser and the Seller agree that in the
event of a conflict between this Agreement and the related Trade Confirmation,
the related Trade Confirmation shall control. In the event of a breach of any
term in the related Trade Confirmation the Purchaser and the Seller shall be
entitled to all remedies set forth in this Agreement.
-29-
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
(Seller)
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK, USA
(Initial Purchaser)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-30-
EXHIBIT 1
SELLER'S OFFICER'S CERTIFICATE
I, _______________________________________________, hereby certify
that I am the duly elected __________________________________ of Countrywide
Home Loans, Inc., a ___________________________________ (the "Seller"), and
further certify, on behalf of the Seller as follows:
1. Attached hereto as Attachment I are a true and correct copy of the
Certificate of Incorporation and by-laws of the Seller as are in full force
and effect on the date hereof.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Seller are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the Seller,
signed (a) the Master Mortgage Loan Purchase and Servicing Agreement (the
"Purchase Agreement"), dated as of November 1, 2004, by and between the
Seller and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA (the "Purchaser"); (b) the Trade
Confirmation, dated ____________ 2004, between the Seller and the Purchaser
(the "Trade Confirmation"); and (c) any other document delivered prior
hereto or on the date hereof in connection with the sale and servicing of
the Mortgage Loans in accordance with the Purchase Agreement and the Trade
Confirmation was, at the respective times of such signing and delivery, and
is as of the date hereof, duly elected or appointed, qualified and acting
as such officer or attorney-in-fact, and the signatures of such persons
appearing on such documents are their genuine signatures.
4. Attached hereto as Attachment II is a true and correct copy of the
resolutions duly adopted by the board of directors of the Seller on
_________________________________, 2004 (the "Resolutions") with respect to
the authorization and approval of the sale and servicing of the Mortgage
Loans; said Resolutions have not been amended, modified, annulled or
revoked and are in full force and effect on the date hereof.
5. Attached hereto as Attachment III is a Certificate of Good Standing
of the Seller dated ____________________________, 2004. No event has
occurred since ________________________________________, 2004 which has
affected the good standing of the Seller under the laws of the State of
Utah.
6. All of the representations and warranties of the Seller contained
in Subsections 7.01 and 7.02 of the Purchase Agreement were true and
correct in all material respects as of the date of the Purchase Agreement
and are true and correct in all material respects as of the date hereof.
7. The Seller has performed all of its duties and has satisfied all
the material conditions on its part to be performed or satisfied prior to
the related Closing Date pursuant to the Purchase Agreement and the related
Trade Confirmation.
All capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Seller.
Dated: ________ Seal]
COUNTRYWIDE HOME LOANS, INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title: [ ]
-------------------------------
I, __________________________________, Secretary of the Seller, hereby
certify that __________________________________________ is the duly elected,
qualified and acting Vice President of the Seller and that the signature
appearing above is genuine.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: _______________________
Seal]
COUNTRYWIDE HOME LOANS, INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title: [Assistant] Secretary
E-35-2
EXHIBIT 2
[FORM OF OPINION OF COUNSEL TO THE SELLER]
_______________________
(Date)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA
4 World Financial ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Master Mortgage Loan Purchase and Servicing Agreement, dated as
of November 1, 2004
Gentlemen:
I have acted as counsel to Countrywide Home Loans, Inc., a
__________________________________ (the "Seller"), in connection with the sale
of certain mortgage loans by the Seller to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA (the
"Purchaser") pursuant to the Master Mortgage Loan Purchase and Servicing
Agreement, dated as of November 1, 2004, between the Seller and the Purchaser
(the "Purchase Agreement") [and the Trade Confirmation, dated
_______________________ , 2004, between the Seller and the Purchaser (the "Trade
Confirmation")]. Capitalized terms not otherwise defined herein have the
meanings set forth in the Purchase Agreement.
I connection with rendering this opinion letter, I, or attorneys
working under my direction, have examined, among other things, originals,
certified copies or copies otherwise identified to my satisfaction as being true
copies of the following:
A. The Purchase Agreement;
B. [The Trade Confirmation;]
C. The Seller's Certificate of Incorporation and by-laws, as amended
to date; and
D Resolutions adopted by the Board of Directors of the Seller with
specific reference to actions relating to the transactions
covered by this opinion (the "Board Resolutions").
For the purpose of rendering this opinion, I have made such
documentary, factual and legal examinations as I deemed necessary under the
circumstances. As to factual matters, I have relied upon statements,
certificates and other assurances of public officials and of officers and other
representatives of the Seller, and upon such other certificates as I deemed
appropriate, which factual matters have not been independently established or
verified by me. I have also assumed, among other things, the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to me as originals, and the conformity to
original documents of all documents submitted to me as copies and the
authenticity of the originals of such copied documents.
On the basis of and subject to the foregoing examination, and in
reliance thereon, and subject to the assumptions, qualifications, exceptions and
limitations expressed herein, I am of the opinion that:
1. The Seller has been duly incorporated and is validly existing and
in good standing under the laws of the State of Utah with corporate power and
authority to own its properties and conduct its business as presently conducted
by it. The Seller has the corporate power and authority to service the Mortgage
Loans, and to execute, deliver, and perform its obligations under the Purchase
Agreement [and the Trade Confirmation] (sometimes collectively, the
"Agreements").
2. The Purchase Agreement [and the Trade Confirmation] have been duly
and validly authorized, executed and delivered by the Seller.
3. The Purchase Agreement [and the Trade Confirmation] constitute
valid, legal and binding obligations of the Seller, enforceable against the
Seller in accordance with their respective terms.
4. No consent, approval, authorization or order of any state or
federal court or government agency or body is required for the execution,
delivery and performance by the Seller of the Purchase Agreement [and the Trade
Confirmation], or the consummation of the transactions contemplated by the
Purchase Agreement [and the Trade Confirmation], except for those consents,
approvals, authorizations or orders which previously have been obtained.
5. Neither the servicing of the Mortgage Loans by the Seller as
provided in the Purchase Agreement [and the Trade Confirmation,] nor the
fulfillment of the terms of or the consummation of any other transactions
contemplated in the Purchase Agreement [and the Trade Confirmation] will result
in a breach of any term or provision of the [certificate of incorporation or
by-laws][certificate of limited partnership or limited partnership agreement] of
the Seller, or, to the best of my knowledge, will conflict with, result in a
breach or violation of, or constitute a default under, (i) the terms of any
indenture or other agreement or instrument known to me to which the Seller is a
party or by which it is bound, (ii) any State of Utah or federal statute or
regulation applicable to the Seller, or (iii) any order of any State of Utah or
federal court, regulatory body, administrative agency or governmental body
having jurisdiction over the Seller, except in any such case where the default,
breach or violation would not have a material adverse effect on the Seller or
its ability to perform its obligations under the Purchase Agreement.
6. There is no action, suit, proceeding or investigation pending or,
to the best of my knowledge, threatened against the Seller which, in my
judgment, either in any one instance or in the aggregate, would draw into
question the validity of the Purchase Agreement or which would be likely to
impair materially the ability of the Seller to perform under the terms of the
Purchase Agreement.
E-2-2
7. The sale of each Mortgage Note and Mortgage as and in the manner
contemplated by the Purchase Agreement is sufficient fully to transfer to the
Purchaser all right, title and interest of the Seller thereto as noteholder and
mortgagee.
8. The Assignments of Mortgage are in recordable form and upon
completion will be acceptable for recording under the laws of the State of Utah.
When endorsed, as provided in the Purchase Agreement, the Mortgage Notes will be
duly endorsed under Utah law.
The opinions above are subject to the following additional
assumptions, exceptions, qualifications and limitations:
A. I have assumed that all parties to the Agreements other than the
Seller have all requisite power and authority to execute, deliver and perform
their respective obligations under each of the Agreements, and that the
Agreements have been duly authorized by all necessary corporate action on the
part of such parties, have been executed and delivered by such parties and
constitute the legal, valid and binding obligations of such parties.
B. My opinion expressed in paragraphs 3 and 7 above is subject to the
qualifications that (i) the enforceability of the Agreements may be limited by
the effect of laws relating to (1) bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, including, without limitation, the effect of
statutory or other laws regarding fraudulent conveyances or preferential
transfers, and (2) general principles of equity upon the specific enforceability
of any of the remedies, covenants or other provisions of the Agreements and upon
the availability of injunctive relief or other equitable remedies and the
application of principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) as such principles relate to,
limit or affect the enforcement of creditors' rights generally and the
discretion of the court before which any proceeding for such enforcement may be
brought; and (ii) I express no opinion herein with respect to the validity,
legality, binding effect or enforceability of (a) provisions for indemnification
in the Agreements to the extent such provisions may be held to be unenforceable
as contrary to public policy or (b) Section 18 of the Purchase Agreement.
C. I have assumed, without independent check or certification, that
there are no agreements or understandings among the Seller, the Purchaser and
any other party which would expand, modify or otherwise affect the terms of the
documents described herein or the respective rights or obligations of the
parties thereunder.
I am admitted to practice in the State of Utah, and I render no
opinion herein as to matters involving the laws of any jurisdiction other than
the State of Utah and the Federal laws of the United States of America.
Very truly yours
E-2-3
EXHIBIT 3
SECURITY RELEASE CERTIFICATION I.
Release of Security Interest
_________________________________________________, hereby relinquishes
any and all right, title and interest it may have in and to the Mortgage Loans
described in Exhibit A attached hereto upon purchase thereof by ▇▇▇▇▇▇▇ ▇▇▇▇▇
Bank, USA from the Seller named below pursuant to that certain Master Mortgage
Loan Purchase and Servicing Agreement, dated as of November 1, 2004, as of the
date and time of receipt by _________________________________________ of
$___________________ for such Mortgage Loans (the "Date and Time of Sale"), and
certifies that all notes, mortgages, assignments and other documents in its
possession relating to such Mortgage Loans have been delivered and released to
the Seller named below or its designees as of the Date and Time of Sale.
Name and Address of Financial Institution
_____________________________________
(Name)
_____________________________________
(Address) By:
II. Certification of Release
The Seller named below hereby certifies to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA
that, as of the Date and Time of Sale of the above mentioned Mortgage Loans to
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA, the security interests in the Mortgage Loans released
by the above named corporation comprise all security interests relating to or
affecting any and all such Mortgage Loans. The Seller warrants that, as of such
time, there are and will be no other security interests affecting any or all of
such Mortgage Loans.
COUNTRYWIDE HOME LOANS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 4
WARRANTY ▇▇▇▇ OF SALE
On this __________ day of _____________, 2004, Countrywide Home Loans,
Inc. ("Seller") as the Seller under that certain Master Mortgage Loan Purchase
and Servicing Agreement, dated as of November 1, 2004 (the "Agreement") does
hereby sell, transfer, assign, set over and convey to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA as
Purchaser under the Agreement, without recourse, but subject to the terms of the
Agreement, all rights, title and interest of the Seller in and to the Mortgage
Loans listed on the Final Mortgage Loan Schedule attached hereto, together with
the related Mortgage Files and all rights and obligations arising under the
documents contained therein. Pursuant to Subsection 6.03 of the Agreement, the
Seller has delivered to the Custodian the documents for each Mortgage Loan to be
purchased as set forth in the Agreement. The contents of each related Servicing
File required to be retained by the Seller to service the Mortgage Loans
pursuant to the Agreement and thus not delivered to the Purchaser are and shall
be held in trust by the Seller for the benefit of the Purchaser as the owner
thereof. The Seller's possession of any portion of each such Servicing File is
at the will of the Purchaser for the sole purpose of facilitating servicing of
the related Mortgage Loan pursuant to the Agreement, and such retention and
possession by the Seller shall be in a custodial capacity only. The ownership of
each Mortgage Note, Mortgage, and the contents of the Mortgage File and
Servicing File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or which come
into the possession of the Seller shall immediately vest in the Purchaser and
shall be retained and maintained, in trust, by the Seller at the will of the
Purchaser in such custodial capacity only.
The Seller confirms to the Purchaser that the representation and
warranties set forth in Subsections 7.01 and 7.02 of the Agreement and in the
Trade Confirmation are true and correct as of the date hereof, and that all
statements made in the Seller's Officer's Certificates and all Attachments
thereto remain complete, true and correct in all respects as of the date hereof,
and makes the following additional representations and warranties to the
Purchaser, which additional representations and warranties are hereby
incorporated into Subsection 7.02 of the Agreement:
(1) When measured by aggregate Stated Principal Balance as of the
Cut-off Date, no more than _______________________ percent (__%)
of the Mortgage Loans are Rate/Term Refinancings and no more than
____________________________ percent (__%) of the Mortgage Loans
are Cash-Out Refinancings.
(2) When measured by aggregate Stated Principal Balance as of the
Cut-off Date, (i) no less than _______________________ percent
(__%) of the Mortgage Loans are secured by detached one-family
dwellings or detached one-family dwellings in planned unit
developments, (ii) no more than
___________________________________________ percent (__%) of the
Mortgage Loans are secured by attached one-family dwellings in a
planned unit development, (iii) no more than
________________________________ percent (__%) of the Mortgage
Loans are secured by individual condominium units, and (iv) no
more than ____________________ percent (__%)
of the Mortgage Loans are secured by detached two-to-four family
dwellings;
(3) When measured by aggregate Stated Principal Balance as of the
Cut-off Date, no more than _____________________________ percent
(__%) of the Mortgage Loans had Loan-to-Value Ratio at
origination in excess of 80%, and the weighted average
Loan-to-Value Ratio for all Mortgage Loans at origination did not
exceed __%;
(4) With respect to all of the Mortgage Loans, at the time that the
Mortgage Loan was made, the Mortgagor represented that the
Mortgagor would occupy the Mortgaged Property as the Mortgagor's
primary residence;
(5) No Mortgage Loan had a principal balance at origination in excess
of $_______________________ and the average principal balance of
the Mortgage Loans on the Cut-off Date was not in excess of
$__________________________. When measured by the aggregate
Stated Principal Balance as of the Cut-off Date, no more than
___________________________________ percent __% of the Mortgage
Loans had a principal balance at origination in excess of
$__________________________;
(6) Each Mortgage Loan has a Mortgage Interest Rate of at least
_____________ percent ____%. The Mortgage Loans have a weighted
average Mortgage Interest Rate of ______ % as of the Cut-off
Date;
(7) All of the Mortgage Loans had an original term to maturity of 30
years; and
(8) When measured by aggregate Closing Date Principal Balance as of
the Cut-off Date, no more than five percent (5%) of the Mortgage
Loans are secured by Mortgaged Properties located in the same
United States postal zip code.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
COUNTRYWIDE HOME LOANS, INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 5
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the Seller or delivered to the
Custodian:
(1) Mortgage Loan Documents.
(2) Residential loan application.
(3) Mortgage Loan closing statement.
(4) Verification of employment and income.
(5) Verification of acceptable evidence of source and amount of
downpayment.
(6) Credit report on Mortgagor.
(7) Residential appraisal report.
(8) Photograph of the Mortgaged Property.
(9) Survey of the Mortgaged Property.
(10) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title
policy, i.e., map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
(11) All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
(12) If available, termite report, structural engineer's report, water
potability and septic certification.
(13) Sales Contract, if applicable.
(14) Hazard insurance policy.
(15) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files,
correspondence, current and historical computerized data files,
and all other processing, underwriting and closing papers and
records which are customarily contained in a mortgage loan file
and which are required to document the Mortgage Loan or to
service the Mortgage Loan.
(16) Amortization schedule, if available.
EXHIBIT 6
CUSTODIAL ACCOUNT CERTIFICATION
To: _________________________________
_________________________________ __________________________________, 2004
_________________________________
(the "Depository")
As Seller under the Master Mortgage Loan Purchase and Servicing
Agreement, (the "Agreement") dated as of November 1, 2004, we hereby authorize
and request you to establish an account, as a Custodial Account, to be
designated as "Countrywide Home Loans, Inc., as Servicer, in trust for ▇▇▇▇▇▇▇
▇▇▇▇▇ Bank, USA" All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Seller in accordance with the Agreement. You
may refuse any deposit which would result in violation of the requirement that
the account be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to us.
COUNTRYWIDE HOME LOANS, INC. (Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
The undersigned, as Depository, hereby certifies that the
above-described account has been established as a Custodial Account pursuant to
the Agreement under Account Number ___________________ at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above. The full amount deposited at any time in the account will be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT 7
ESCROW ACCOUNT CERTIFICATION
____________________, 2004
To: _________________________________
_________________________________
_________________________________
(the "Depository")
As Seller under the Master Mortgage Loan Purchase and Servicing
Agreement, (the "Agreement") dated as of November 1, 2004, we hereby authorize
and request you to establish an account, as an Escrow Account, to be designated
as "Countrywide Home Loans, Inc., in trust for the Purchaser and various
Mortgagors, Fixed and Adjustable Rate Mortgage Loans." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the Seller
in accordance with the Agreement. You may refuse any deposit which would result
in violation of the requirement that the account be fully insured as described
below. This letter is submitted to you in duplicate. Please execute and return
one original to us.
COUNTRYWIDE HOME LOANS, INC. (Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
The undersigned, as Depository, hereby certifies that the
above-described account has been established as an Escrow Account pursuant to
the Agreement under Account Number ____________________ at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above. The full amount deposited at any time in the account will be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT 8
SERVICING ADDENDUM
Section 11.01. Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and shall have
full power and authority, acting alone, to do or cause to be done any and all
things in connection with such servicing and administration which the Seller may
deem necessary or desirable and consistent with the terms of this Agreement.
Consistent with the terms of this Agreement, the Seller may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Seller's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser; provided, however, that the Seller shall not, without the prior
written consent of the Purchaser, permit any modification with respect to any
Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive the
payment thereof or of any principal or interest payments, reduce the outstanding
principal amount (except for actual payments of principal), make additional
advances of additional principal or extend the final maturity date on such
Mortgage Loan. Without limiting the generality of the foregoing, the Seller
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself, and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. If reasonably required by the Seller, the Purchaser shall
furnish the Seller with any powers of attorney and other documents necessary or
appropriate to enable the Seller to carry out its servicing and administrative
duties under this Agreement.
In servicing and administering the Mortgage Loans, the Seller shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the Purchaser's reliance
on the Seller.
Section 11.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans serviced by Seller are paid in full, the Seller shall proceed
diligently to collect all payments due under each Mortgage Loan serviced by
Seller when the same shall become due and payable and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any related Primary 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 Seller shall take special care in ascertaining
and estimating annual ground rents, taxes, assessments, water rates, fire and
hazard insurance premiums, mortgage insurance premiums, and all other charges
that, as provided in the Mortgage, will
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become due and payable to the end that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become due
and payable.
Section 11.03. Realization Upon Defaulted Mortgage Loans.
(a) The Seller shall use its best efforts, consistent with the
procedures that the Seller would use in servicing loans for its own account, to
foreclose upon or otherwise comparably convert the ownership of such Mortgaged
Properties 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 11.01. The Seller shall use its best efforts to realize upon defaulted
Mortgage Loans in such a manner as will maximize the receipt of principal and
interest by the Purchaser, taking into account, among other things, the timing
of foreclosure proceedings. The foregoing is subject to the provisions that, in
any case in which Mortgaged Property shall have suffered damage, the Seller
shall not be required to expend its own funds toward the restoration of such
property in excess of $2,000 unless it shall determine in its discretion (i)
that such restoration will increase the proceeds of liquidation of the related
Mortgage Loan to Purchaser after reimbursement to itself for such expenses, and
(ii) that such expenses will be recoverable by the Seller through Insurance
Proceeds or Liquidation Proceeds from the related Mortgaged Property, as
contemplated in Section 11.06. In the event that any payment due under any
Mortgage Loan is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period, the
Seller shall take such action as it shall deem to be in the best interest of the
Purchaser. In the event that any payment due under any Mortgage Loan remains
delinquent for a period of ninety (90) days or more, the Seller shall commence
foreclosure proceedings. The Seller shall notify the Purchaser in writing of the
commencement of foreclosure proceedings. In such connection, the Seller shall be
responsible for all costs and expenses incurred by it in any such proceedings;
provided, however, that it shall be entitled to reimbursement thereof from the
related Mortgaged Property, as contemplated in Section 11.06.
(b) Notwithstanding the foregoing provisions of this Section 11.03,
with respect to any Mortgage Loan as to which the Seller has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property the Seller shall not either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action,
with respect to, such Mortgaged Property if, as a result of any such action, the
Purchaser would be considered to hold title to, to be a mortgagee-in-possession
of, or to be an owner or operator of such Mortgaged Property within the meaning
of the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Seller has
also previously determined, based on its reasonable judgment and a prudent
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Purchaser to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
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(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present for
which such action could be required, that it would be in the best
economic interest of the Purchaser to take such actions with respect
to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 11.03 shall be advanced by the Seller, subject to the Seller's right to
be reimbursed therefor from the Custodial Account as provided in Section 11.06.
If the Seller determines, as described above, that it is in the best
economic interest of the Purchaser to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials affecting any such Mortgaged Property, then the Seller
shall take such action as it deems to be in the best economic interest of the
Purchaser. The cost of any such compliance, containment, cleanup or remediation
shall be advanced by the Seller, subject to the Seller's right to be reimbursed
therefor from the Custodial Account as provided in Section 11.06.
(c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds in respect of any Mortgage Loan, will
be applied in the following order of priority: first, to reimburse the Seller
for any related unreimbursed Servicing Advances, pursuant to Section 11.06;
second, to accrued and unpaid interest on the Mortgage Loan, to the date of the
Final Recovery Determination, or to the Due Date prior to the Remittance Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Seller as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
Section 11.04. Establishment of Payment Clearing Accounts.
(a) The Seller shall maintain one or more Payment Clearing Accounts for the
deposit of all funds collected in connection with the Mortgage Loans. The Seller
shall deposit in the Payment Clearing Account prior to the opening of business
on the Business Day following the day on which such amounts are received by the
Seller, all payments and collections received in connection with the Mortgage
Loans subsequent to the Cut-off Date or prior to the Cut-off Date but allocable
to a period subsequent to such date. The funds deposited and held in the Payment
Clearing Account may be commingled with other funds, including the proceeds of
other mortgage loans or funds serviced for other investors or for the Seller's
own portfolio. The Seller shall transfer funds deposited into the Payment
Clearing Account to the Custodial Accounts and Escrow Accounts, as provided in
Sections 11.05 and 11.07, within two (2) Business Days.
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The Seller's account agreement for the Payment Clearing Account shall
provide that such account is a special deposit, required to be segregated and
held by the depository institution maintaining such account in a fiduciary
capacity, separate and apart from the institution's own funds and general assets
and that the account shall not be held in any capacity that would create a
debtor-creditor relationship between the institution and the Seller or the
Purchaser. At all times, Purchaser shall be the sole beneficial owner of the
funds in the Payment Clearing Accounts received in connection with the Mortgage
Loans and Seller's possession or control of any such funds shall be solely in
Seller's capacity as collecting agent for Purchaser.
Section 11.05 Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
(a) The Seller shall establish and maintain one or more Custodial
Accounts for the deposit of funds specified in Section 11.05(b) collected in
connection with the Mortgage Loans.
(b) The Seller shall transfer the following funds into the applicable
Custodial Account within two (2) Business Days of receipt:
(i) all payments on account of principal on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Sections 11.11 and 11.12, 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 the Seller's normal
servicing procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with
the Seller's normal servicing procedures, the loan documents
or applicable law;
(vi) all Monthly Advances;
(vii) all proceeds of any Mortgage Loan repurchased in accordance
with Subsections 7.03 and 7.04 and all amounts required to
be deposited by the Seller in connection with shortfalls in
principal amount of Qualified Substitute Mortgage Loans
pursuant to Subsection 7.03;
(viii) any amounts required to be deposited by the Seller
pursuant to Section 11.12 in connection with the deductible
clause in any blanket hazard insurance policy. Such deposit
shall be made from the Seller's own funds, without
reimbursement therefor;
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(ix) any amounts required to be deposited by the Seller in
connection with any REO Property pursuant to Section 11.14;
(x) any amounts required to be deposited in the Custodial
Account pursuant to Sections 11.20 or 11.21; and
(xi) with respect to each Principal Prepayment, an amount (to be
paid by the Seller out of its own funds without
reimbursement therefor) which, when added to all amounts
allocable to interest received in connection with such
Principal Prepayment, equals one month's interest on the
amount of principal so prepaid at the Mortgage Interest
Rate.
The foregoing requirements for deposit in the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
Prepayment Charges, assumption fees and similar fees and charges, to the extent
permitted by Section 11.01, need not be deposited by the Seller in the Custodial
Account. Each Custodial Account shall be an Eligible Account. The Seller shall
give notice to the Purchaser of the location of the Custodial Account when
established and prior to any change thereto.
Any amounts held in the Custodial Account may be, but are not required
to be, invested by the Seller. Any such investment by the Seller must be in
Eligible Investments. Any interest or other income on Eligible Investments shall
accrue to the benefit of the Seller and the Seller shall be entitled to retain
and withdraw such funds from the Custodial Account pursuant to Section 11.06.
Other than such interest or other income received on Eligible Investments, no
other amounts may be commingled in the Custodial Account. The Seller shall
promptly deposit in the Custodial Account from its own funds, without any right
of reimbursement, the full amount of any losses on its investment of funds in
the Custodial Account.
(c) Without limiting the foregoing, the funds in the Custodial
Accounts shall at all times be segregated and held separate and apart from the
Seller's own funds and general assets and from any other funds or assets
collected or held by the Seller on behalf of third parties. The Seller's account
agreement for each Custodial Account shall provide that such account is a
special deposit, required to be segregated and held by the depository
institution maintaining such account in a fiduciary capacity, separate and apart
from the institution's own funds and general assets and that the account shall
not be held in any capacity that would create a debtor-creditor relationship
between the institution and the Seller or the Purchaser. Each Custodial Account
shall be evidenced by a Custodial Account Certification in the form of Exhibit 6
and shall be entitled "Countrywide Home Loans, Inc., as servicer, in trust for
the Purchaser". At all times, the Purchaser shall be the sole beneficial owner
of all funds in the Custodial Accounts. Seller's possession or control of any
such funds shall be solely in Seller's capacity as collecting agent for the
Purchaser.
Section 11.06 Withdrawals From Custodial Accounts.
The Seller may, from time to time, withdraw from the Custodial Account
for the following purposes:
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(i) to make distributions to the Purchaser in the amounts and in the
manner provided for in Section 11.15;
(ii) to reimburse itself for Monthly Advances, the Seller'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) respecting which any such advance was made it being
understood that, in the case of such reimbursement, the Seller's right thereto
shall be prior to the rights of Purchaser, except that, where the Seller is
required to repurchase a Mortgage Loan, pursuant to Subsection 7.03, the
Seller's right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to Subsection 7.03, and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loans;
(iii) to reimburse itself for unreimbursed Servicing Advances, the
Seller's right to reimburse itself pursuant to this subclause (iii) with respect
to any Mortgage Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be collected by the
Seller from the Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of such reimbursement, the Seller's right thereto
shall be prior to the rights of the Purchaser, except that, where the Seller is
required to repurchase a Mortgage Loan, pursuant to Subsection 7.03, the
Seller's right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to Subsection 7.03 and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loans;
(iv) to pay to itself pursuant to Section 11.23 as servicing
compensation (a) any interest earned on funds in the Custodial Account (all such
interest to be withdrawn monthly not later than each Remittance Date), and (b)
the Servicing Fee from that portion of any payment or recovery attributable to
interest on a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that has been
repurchased pursuant to Subsection 7.03, all amounts received thereon and not
distributed as of the date on which the related Repurchase Price is determined;
(vi) to reimburse the Seller for any Monthly Advance previously made
which the Seller has determined to be a Nonrecoverable Monthly Advance;
(vii) to pay, or to reimburse itself for advances in respect of,
expenses incurred in connection with any Mortgage Loan pursuant to Section
11.03(b), but only to the extent of amounts received in respect of the Mortgage
Loans to which such expense is attributable;
(viii) to clear and terminate the Custodial Account on the termination
of this Agreement; and
(ix) to reimburse itself for any amounts deposited in the Custodial
Account in error.
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The Seller shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Custodial Account pursuant to such subclauses (ii) - (vii) above.
Section 11.07. Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
(a) The Seller shall establish one or more Escrow Accounts for the
deposit of Escrow Payments. Seller shall segregate and hold all funds collected
and received in connection with the Mortgage Loans which constitute Escrow
Payments separate and apart from any of its own funds and general assets and
from any other funds or amounts collected or held by the Seller on behalf of
third parties.
(b) The Seller shall transfer into the applicable Escrow Account
within two (2) Business Days of receipt thereof, and retain therein the
following payments and collections:
(i) Mortgagors' Escrow Payments collected in connection with the
Mortgage Loans, for the purpose of effecting timely payment
of any such items as required under the terms of this
Agreement; and
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property.
The Seller shall make withdrawals therefrom only to effect such
payments as are required under this Agreement, and for such other purposes as
shall be as set forth or in accordance with Section 11.08.
(c) Each Escrow Account will be maintained at the expense of the
Seller at a Qualified Depository. Such accounts may be interest-bearing accounts
provided that such accounts comply with all federal state or local laws, any
other requirements of any government or any agency or instrumentality thereof
applicable to the origination and servicing of the Mortgage Loans, the
management of the Mortgage Property, and the provision of services hereunder by
the Seller as well as all local, state and federal laws and regulations
governing interest-bearing accounts and borrower escrow accounts. Each Escrow
Account shall be evidenced by an Escrow Account Certification, in the form of
Exhibit 7 and shall be entitled "Countrywide Home Loans, Inc., as servicer, in
trust for the Purchaser and various Mortgagors, Fixed and Adjustable Rate
Mortgage Loans." The Seller shall ensure that all interest credited to any
account that is not due the respective Mortgager is removed by the Seller within
thirty (30) days of receipt of such interest.
Section 11.08. Withdrawals From Escrow Accounts.
The Seller shall make withdrawals from the applicable Escrow Account
for the following:
(i) to effect timely payments of Mortgagors' Escrow Payments;
(ii) to reimburse the Seller for any Servicing Advance made by
the Seller with respect to a related Mortgage Loan but only
from amounts
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received on the related Mortgage Loan that represent late
payments or collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds determined to be
overages;
(iv) for transfer to the Custodial Account in accordance with the
terms of this Agreement;
(v) for application to restoration or repair of the Mortgaged
Property;
(vi) to pay to the Seller, or to the 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; and
(viii) to reimburse itself for any amounts deposited in the
Escrow Account in error.
The Seller shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution other than
interest on escrowed funds required by law to be paid to the Mortgagor and, to
the extent required by law, the Seller shall pay interest on escrowed funds to
the Mortgagor notwithstanding that the Escrow Account is non-interest bearing or
that interest paid thereon is insufficient for such purposes. If Seller elects
or is required by law to deposit a Mortgagor's Escrow funds into an
interest-bearing account, the Seller shall remain obligated to pay the
Mortgagor's taxes and insurance premiums when due, even if the Mortgagor's
Escrow funds are not withdrawable on demand.
Section 11.09. Payment of Taxes, Insurance and Other Charges;
Maintenance of Primary Insurance Policies; Collections Thereunder.
With respect to each Mortgage Loan, the Seller 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 Insurance Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges, including insurance 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 Seller in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage and applicable law. To the extent that the
Mortgage does not provide for Escrow Payments, the Seller shall determine that
any such payments are made by the Mortgagor at the time they first become due.
The Seller 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.
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If applicable, the Seller shall maintain in full force and effect, a
Primary Insurance Policy, issued by a Qualified Insurer, with respect to each
Mortgage Loan for which such coverage is required. Such coverage shall be
maintained until the Loan-to-Value Ratio of the related Mortgage Loan is reduced
to that amount for which FNMA no longer requires such insurance to be
maintained. The Seller will not cancel or refuse to renew any Primary Insurance
Policy in effect on the Closing Date that is required to be kept in force under
this Agreement unless a replacement Primary Insurance Policy for such cancelled
or non-renewed policy is obtained from and maintained with a Qualified Insurer.
The Seller shall not take any action which would result in non-coverage under
any applicable Primary Insurance Policy of any loss which, but for the actions
of the Seller, would have been covered thereunder. In connection with any
assumption or substitution agreement entered into or to be entered into pursuant
to Section 11.20, the Seller shall promptly notify the insurer under the related
Primary 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 Insurance Policy. If such Primary Insurance Policy is
terminated as a result of such assumption or substitution of liability, the
Seller shall obtain a replacement Primary Insurance Policy as provided above.
In connection with its activities as servicer, the Seller agrees to
prepare and present, on behalf of itself, and the Purchaser, claims to the
insurer under any Primary Insurance Policy, if applicable, in a timely fashion
in accordance with the terms of such policies and, in this regard, to take such
action as shall be necessary to permit recovery under any Primary Insurance
Policy respecting a defaulted Mortgage Loan. Pursuant to Section 11.04, any
amounts collected by the Seller under any Primary Insurance Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
11.06.
Section 11.10 Transfer of Accounts.
The Seller may transfer the Payment Clearing Account, Custodial
Account or the Escrow Account and all funds and investments therein to a
different Qualified Depository from time to time. Such transfer shall be made
only upon prior written notice to the Purchaser. In any case, the Payment
Clearing Account, Custodial Account and Escrow Account shall be Eligible
Accounts.
If any one of the Investment Ratings of a Qualified Depository holding
funds or Eligible Investments in the Payment Clearing Account, Custodial Account
or Escrow Account as an Eligible Account is downgraded by the issuing rating
agency, the Seller shall, within three (3) Business Days of receipt of notice of
the downgrading, transfer all such accounts, funds and Eligible Investments to a
different Qualified Depository in accordance with this Agreement.
Section 11.11 Maintenance of Hazard Insurance.
The Seller shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is at least equal to the
lesser of (i) the amount necessary to fully compensate for any damage or loss to
the improvements which are a part of such property on a replacement cost basis
or (ii) the outstanding principal balance of the Mortgage Loan, in each
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case in an amount not less than such amount as is necessary to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged
Property is in an area identified on a Flood Hazard Boundary Map or Flood
Insurance Rate Map issued by the Flood Emergency Management Agency as having
special flood hazards and such flood insurance has been made available, the
Seller will cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the lesser of (i) the outstanding principal balance of
the Mortgage Loan or (ii) the maximum amount of insurance which is available
under the National Flood Insurance Act of 1968 or the Flood Disaster Protection
Act of 1973, as amended. The Seller also shall maintain on any REO Property,
fire and hazard insurance with extended coverage in an amount which is at least
equal to the lesser of (i) the maximum insurable value of the improvements which
are a part of such property and (ii) the outstanding principal balance of the
related Mortgage Loan at the time it became an REO Property plus accrued
interest at the Mortgage Interest Rate and related Servicing Advances, liability
insurance and, to the extent required and available under the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended,
flood insurance in an amount as provided above. Pursuant to Section 11.04, any
amounts collected by the Seller 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 the Seller's normal servicing procedures, shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 11.06. Any cost
incurred by the Seller in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Purchaser, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance need be required by the Seller or the Mortgagor or
maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Seller, or
upon request to the Purchaser, and shall provide for at least thirty (30) days
prior written notice of any cancellation, reduction in the amount of, or
material change in, coverage to the Seller. The Seller shall not interfere with
the Mortgagor's freedom of choice in selecting either his insurance carrier or
agent, provided, however, that the Seller shall not accept any such insurance
policies from insurance companies unless such companies are acceptable to FNMA
or FHLMC and are licensed to do business in the state wherein the property
subject to the policy is located.
Section 11.12 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Seller shall obtain and maintain a mortgage
impairment or blanket policy issued by an issuer acceptable to FNMA or FHLMC
insuring against hazard losses on all of Mortgaged Properties securing the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 11.11 and otherwise complies
with all other requirements of Section 11.11, the Seller shall conclusively be
deemed to have satisfied its obligations as set forth in Section 11.11, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Seller shall, in the event that there shall not have been maintained on
the related Mortgaged Property or REO Property a policy complying with Section
11.11, and there shall have been one or more
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losses 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 Seller agrees to prepare and present, on behalf of the
Purchaser, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy. Upon request of the Purchaser, the
Seller shall cause to be delivered to the Purchaser a certified true copy of
such policy and a statement from the insurer thereunder that such policy shall
in no event be terminated or materially modified without thirty (30) days prior
written notice to the Purchaser.
Section 11.13 Fidelity Bond, Errors and Omissions Insurance.
The Seller shall maintain, at its own expense, a blanket fidelity bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of FNMA or FHLMC on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The fidelity bond and errors and omissions insurance shall be in
the form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Seller against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such persons. Such fidelity bond shall also
protect and insure the Seller 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 11.13
requiring the fidelity bond and errors and omissions insurance shall diminish or
relieve the Seller 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 FNMA in the FNMA
Servicing Guide or by FHLMC in the FHLMC Sellers' and Servicers' Guide. Upon
request of the Purchaser, the Seller shall cause to be delivered to the
Purchaser a certified true copy of the fidelity bond and insurance policy and a
statement from the surety and the insurer that such fidelity bond or insurance
policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to the Purchaser.
Section 11.14 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 Seller, as servicer, or in the event such
person 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 Seller 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 Purchaser shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Purchaser.
The Seller shall either itself or through an agent selected by the
Seller, manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) 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
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Property is managed. If a REMIC election is or is to be made with respect to the
arrangement under which the Mortgage Loans and any REO Property are held, the
Seller shall manage, conserve, protect and operate each REO Property in a manner
which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or result in the
receipt by such REMIC of any "income from non- permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" within the meaning of Section 860G(c)(2) of the Code. The Seller shall
cause each REO Property to be inspected promptly upon the acquisition of title
thereto and shall cause each REO Property to be inspected at least annually
thereafter. The Seller 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 Seller to the Purchaser. The Seller 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 Seller determines, and gives appropriate notice
to the Purchaser, that a longer period is necessary for the orderly liquidation
of such REO Property. If a period longer than one year is necessary to sell any
REO property, (i) the Seller shall report monthly to the Purchaser as to the
progress being made in selling such REO Property and (ii) if, with the written
consent of the Purchaser, a purchase money mortgage is taken in connection with
such sale, such purchase money mortgage shall name the Seller as mortgagee, and
a separate servicing agreement between the Seller and the Purchaser shall be
entered into with respect to such purchase money mortgage. Notwithstanding the
foregoing, if a REMIC election is made with respect to the arrangement under
which the Mortgage Loans and the REO Property are held, such REO Property shall
be disposed of within two years or such other period as may be permitted under
Section 860G(a)(8) of the Code.
The Seller shall deposit or cause to be deposited, within two (2)
business days in each Custodial Account all revenues received with respect to
the related REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 11.11 hereof and
the fees of any managing agent acting on behalf of the Seller. The Seller shall
maintain separate records with respect to each REO Property identifying all
deposits and withdrawals from the Custodial Account for each REO Property.
The Seller shall furnish to the Purchaser on each Remittance Date, an
operating statement for each REO Property covering the operation of each REO
Property for the previous month. Such operating statement shall be accompanied
by such other information as the Purchaser shall reasonably request.
Each REO Disposition shall be carried out by the Seller at such price
and upon such terms and conditions as the Seller deems to be in the best
interest of the Purchaser only with the prior written consent of the Purchaser.
If as of the date title to any REO Property was acquired by the Seller there
were outstanding unreimbursed Servicing Advances and unpaid servicing fees with
respect to the REO Property, the Seller, upon an REO Disposition of such REO
Property, shall be entitled to reimbursement for any related unreimbursed
Servicing Advances and unpaid servicing fees from proceeds received in
connection with such REO Disposition. The proceeds from the REO Disposition, net
of any payment to the Seller as provided above, shall be deposited in the
Custodial Account and shall be transferred to the
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Custodial Account on the Determination Date in the month following receipt
thereof for distribution on the succeeding Remittance Date in accordance with
Section 11.15.
With respect to each REO Property, the Seller shall segregate and hold
all funds collected and received in connection with the operation of the REO
Property separate and apart from its own funds or general assets and shall
maintain separate records and reports with respect to the funds received and
distributed on an REO Property by REO Property basis.
Section 11.15 Distributions.
On each Remittance Date, the Seller shall distribute to the Purchaser
(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 11.06;. plus (ii) all Monthly Advances, if
any, which the Seller is obligated to distribute pursuant to Section 11.22,
minus (iii) any amounts attributable to Principal Prepayments received after the
last day of the Calendar month immediately preceding the related Remittance Date
and (iv) any amounts attributable to Monthly Prepayments collected but due on a
Due Date or Dates subsequent to the preceding Determination Date.
All distributions made to the Purchaser on each Remittance Date will
be made to the Purchaser of record on the preceding Record Date, and shall be
based on the Mortgage Loans owned and held by the Purchaser, and shall be made
by wire transfer of immediately available funds to the account of the Purchaser
at a bank or other entity having appropriate facilities therefor.
With respect to any remittance received by the Purchaser on or after
the second Business Day following the Business Day on which such payment was
due, the Seller shall pay to the Purchaser interest on any such late payment at
an annual rate equal to the rate of interest as is publicly announced from time
to time at its principal office by JPMorgan, New York, New York, as its prime
lending rate, adjusted as of the date of each change, plus one percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be paid by the Seller to the Purchaser on the date such
late payment is made and shall cover the period commencing with the day
following such second Business Day and ending with the Business Day on which
such payment is made, both inclusive. Such interest shall be remitted along with
such late payment. The payment by the Seller of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the Seller.
Section 11.16 Remittance Reports.
No later than the fifth Business Day of each month, the Seller shall
furnish to the Purchaser or its designee an electronic copy of the determination
data with respect to the related Remittance Date, together with such other
information with respect to the Mortgage Loans as the Purchaser may reasonably
require to allocate distributions made pursuant to this Agreement and provide
appropriate statements with respect to such distributions. In addition to the
information set forth in the Remittance Report, such report shall also set
forth, for each Mortgage Loan, (i) the Mortgage Interest Rate; (ii) the amount
of any shortfall in the Servicing Fee due to delinquencies; (iii) the amount of
any delinquency in the scheduled payment of principal and
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interest delineated at 30 days, 60 days and greater than 90 days past due; and
(iv) such other information as may be reasonably requested by the Purchaser.
Section 11.17 Statements to the Purchaser.
The Seller shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return and as the Purchaser may reasonably request from time
to time. The Purchaser agrees to pay for all reasonable out-of-pocket expenses
incurred by the Seller in connection with complying with any request made by the
Purchaser hereunder if such information is not customarily provided by the
Purchaser in the ordinary course of servicing mortgage loans similar to the
Mortgage Loans.
Section 11.18 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 11.14, with
respect to any REO Property, the Seller shall furnish to the Purchaser a
statement covering the Seller's efforts in connection with the sale of such REO
Property and any rental of such REO Property incidental to the sale thereof for
the previous month, together with the operating statement. Such statement shall
be accompanied by such other information as the Purchaser shall reasonably
request.
Section 11.19 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed-in-lieu of foreclosure, the Seller
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Section 11.20 Assumption Agreements.
The Seller shall, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause applicable thereto; provided, however, that the Seller
shall not exercise any such rights if prohibited by law from doing so or if the
exercise of such rights would impair or threaten to impair any recovery under
the related Primary Insurance Policy, if any. If the Seller reasonably believes
it is unable under applicable law to enforce such "due-on-sale" clause, the
Seller shall enter into an assumption agreement with the person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant to
which such person becomes liable under the Mortgage Note and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. Where
an assumption is allowed pursuant to this Section 11.20, the Seller, with the
prior written consent of the insurer under the Primary Insurance Policy, if any,
is authorized to enter into a substitution of liability agreement with the
person to whom the Mortgaged Property has been conveyed or is proposed to be
conveyed pursuant to which the original Mortgagor is released from liability and
such Person is substituted as Mortgagor and becomes liable under the related
Mortgage Note. Any such substitution of liability agreement shall be in lieu of
an assumption agreement.
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In connection with any such assumption or substitution of liability,
the Seller shall follow the underwriting practices and procedures of prudent
mortgage lenders in the state in which the related Mortgaged Property is
located. With respect to an assumption or substitution of liability, the
Mortgage Interest Rate, the amount of the Monthly Payment, and the final
maturity date of such Mortgage Note may not be changed. The Seller shall notify
the Purchaser that any such substitution of liability or assumption agreement
has been completed by forwarding to the Purchaser the original of any such
substitution of liability or assumption agreement, which document shall be added
to the related Mortgage File and shall, for all purposes, be considered a part
of such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Seller for entering into
an assumption or substitution of liability agreement in excess of 1% of the
outstanding principal balance of the Mortgage Loan shall be deposited in the
Custodial Account pursuant to Section 11.05.
Notwithstanding the foregoing paragraphs of this Section or any other
provision of this Agreement, the Seller shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Seller may be restricted by law from preventing, for any reason whatsoever. For
purposes of this Section 11.20, the term "assumption" is deemed to also include
a sale of the Mortgaged Property subject to the Mortgage that is not accompanied
by an assumption or substitution of liability agreement.
Section 11.21 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Seller of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Seller will immediately notify the Purchaser by
a certification of a servicing officer of the Seller (a "Servicing Officer"),
which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Custodial Account pursuant to Section 11.05 have been or
will be so deposited, and shall request execution of any document necessary to
satisfy the Mortgage Loan and delivery to it the portion of the Mortgage File
held by the Purchaser or the Purchaser's designee. Upon receipt of such
certification and request, the Purchaser shall promptly release the related
mortgage documents to the Seller and the Seller shall prepare and process any
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Purchaser.
In the event the Seller satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Purchaser may have under the
mortgage instruments, the Seller, upon written demand, shall remit to the
Purchaser the then outstanding principal balance of the related Mortgage Loan by
deposit thereof in the Custodial Account. The Seller shall maintain the fidelity
bond insuring the Seller against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the servicing or foreclosure
of the Mortgage Loan, including for this purpose collection under any Primary
Insurance Policy, the Purchaser shall, upon request of the Seller and delivery
to the Purchaser of a servicing receipt
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signed by a Servicing Officer, release the requested portion of the Mortgage
File held by the Purchaser to the Seller. Such servicing receipt shall obligate
the Seller to return the related Mortgage documents to the Purchaser when the
need therefor by the Seller no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Custodial Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Seller has delivered to the Purchaser a certificate of a
Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated, the servicing receipt shall be released by
the Purchaser to the Seller.
Section 11.22 Monthly Advances by the Seller.
(a) Not later than the close of business on the Business Day preceding
each Remittance Date, the Seller shall deposit in the Custodial Account an
amount equal to all payments not previously advanced by the Seller, whether or
not deferred pursuant to Section 11.01, of principal (due after the Cut-off
Date) and interest not allocable to the period prior to the Cut-off Date, at the
Mortgage Interest Rate net of the Servicing Fee, which were due on a Mortgage
Loan and delinquent at the close of business on the related Determination Date.
(b) The obligation of the Seller to make such Monthly Advances is
mandatory, notwithstanding any other provision of this Agreement, and, with
respect to any Mortgage Loan or REO Property, shall continue until a Final
Recovery Determination in connection therewith; provided that, notwithstanding
anything herein to the contrary, no Monthly Advance shall be required to be made
hereunder by the Seller if such Monthly Advance would, if made, constitute a
Nonrecoverable Monthly Advance. The determination by the Seller that it has made
a Nonrecoverable Monthly Advance or that any proposed Monthly Advance, if made,
would constitute a Nonrecoverable Monthly Advance, shall be evidenced by an
Officers' Certificate delivered to the Purchaser.
Section 11.23 Servicing Compensation.
As compensation for its services hereunder, the Seller shall, subject
to Section 11.05(xi), be entitled to withdraw from the Custodial Account or to
retain from interest payments on the Mortgage Loans the amounts provided for as
the Seller's Servicing Fee. Additional servicing compensation in the form of
assumption fees, as provided in Section 11.20, interest earned from the
investment in Eligible Investments of amounts held in Custodial Accounts
pursuant to Section 11.05, Prepayment Charges, and late payment charges and
similar fees and charges shall be retained by the Seller to the extent not
required to be deposited in the Custodial Account. The Seller shall be required
to pay all expenses incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement therefor except as
specifically provided for.
Section 11.24 Notification of Adjustments.
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On each Adjustment Date, the Seller shall make interest rate
adjustments for each Adjustable Rate Mortgage Loan in compliance with the
requirements of the related Mortgage and Mortgage Note. The Seller shall execute
and deliver the notices required by each Mortgage and Mortgage Note regarding
interest rate adjustments. The Seller also shall provide timely notification to
the Purchaser of all applicable data and information regarding such interest
rate adjustments and the Seller's methods of implementing such interest rate
adjustments. Upon the discovery by the Seller or the Purchaser that the Seller
has failed to adjust a Mortgage Interest Rate or a Monthly Payment pursuant to
the terms of the related Mortgage Note and Mortgage, the Seller shall
immediately deposit in the Custodial Account from its own funds the amount of
any interest loss caused thereby without reimbursement therefor.
Section 11.25 Statement as to Compliance.
The Seller will deliver to the Purchaser on or before March 15th of
each year, beginning with March 15, 2005, an Officers' Certificate stating, as
to each signatory thereof, that (i) a review of the activities of the Seller
during the preceding calendar year and of performance under this Agreement has
been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Seller has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof.
Section 11.26 Independent Public Accountants' Servicing Report.
On or before March 1st of each year, beginning with March 15, 2005,
the Seller at its expense shall cause a firm of independent public accountants
(which may also render other services to the Seller) which is a member of the
American Institute of Certified Public Accountants to furnish a statement to the
Purchaser or its designee to the effect that such firm has examined certain
documents and records relating to servicing of mortgage loans by the Seller
generally that may include a sampling of the Mortgage Loans and that, on the
basis of such an examination conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FHLMC, such firm confirms that such servicing has been
conducted in compliance with this Agreement, except for exceptions as such firm
shall believe to be immaterial or such significant exceptions or errors in
records that, in the opinion of such firm, the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FHLMC requires it to report.
Section 11.27 Securitization Certifications.
(a) For so long as (1) the Mortgage Loans are being master serviced by
a master servicer in a Pass-Through Transfer (the "Master Servicer") or serviced
by the Seller in a securitization transaction and (2) an annual certification is
required to be provided by Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, by
March 15, 2005 and by March 1st of each year thereafter (or if not a Business
Day, the immediately preceding Business Day), an officer of the Seller shall
execute and deliver an Officer's Certificate to either the Master Servicer the
depositor or trustee of such securitization for the benefit of either the Master
Servicer, depositor or trustee and its officers, directors and affiliates,
certifying as to the following matters:
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(i) Based on such officer's knowledge, the information in the Annual
Statement of Compliance, the Annual Independent Public Accountant's
Servicing Report and all servicing reports, officer's certificates and
other information relating to the servicing of the Mortgage Loans
submitted to either the Master Servicer, the depositor or the trustee
taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were
made, not misleading as of the date of this certification;
(ii) Based on such officer's knowledge, the servicing information
required to be provided to either the Master Servicer, the depositor
or the trustee by the Seller under this Agreement has been provided to
either the Master Servicer, the depositor or the trustee;
(iii) Such officer is responsible for reviewing the activities
performed by the Seller under this Agreement and based upon such
officer's knowledge and the review required by this Agreement, and
except as disclosed in the Annual Statement of Compliance, the Annual
Independent Public Accountant's Servicing Report and all servicing
reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans submitted to either the Master
Servicer, the depositor or the trustee, the Seller has, as of the date
of this certification fulfilled its obligations under this Agreement;
and
(iv) Such officer has disclosed to the Master Servicer, the depositor
or the trustee all significant deficiencies relating to the Seller's
compliance with the minimum servicing standards in accordance with a
review conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar standard as set forth in this
Agreement.
(b) The Seller shall indemnify and hold harmless either the Master
Servicer, the depositor and the trustee of a securitization and its officers,
directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Seller or any of its officers, directors, agents or affiliates of its
obligations under this Section 11.27, or Sections 11.25 and 11.26 or the bad
faith or willful misconduct of the Seller in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless either the Master Servicer, the depositor or the trustee then the
Seller agrees that it shall contribute to the amount paid or payable by either
the Master Servicer, the depositor or the trustee as a result of the losses,
claims, damages or liabilities of either the Master Servicer, the depositor or
the trustee in such proportion as is appropriate to reflect the relative fault
of either the Master Servicer, the depositor or the trustee on the one hand and
the Seller on the other in connection with a breach of the Seller's obligations
under this Section 11.27, Sections 11.25 and 11.26 or the Seller's bad faith or
willful misconduct in connection therewith; provided, however, that the Seller
shall not be obligated to indemnify or hold harmless the Master Servicer and its
officers, directors, agents and affiliates from or against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses
E-8-18
arising out of or based upon the bad faith or willful misconduct of such Master
Servicer and its officers, directors, agents and affiliates.
Section 11.28 Access to Certain Documentation.
The Seller shall provide to the Office of Thrift Supervision, the FDIC
and any other federal or state banking or insurance regulatory authority that
may exercise authority over the Purchaser access to the documentation regarding
the Mortgage Loans serviced by the Seller required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Seller. In addition, access to the documentation will be provided to the
Purchaser and any Person identified to the Seller by the Purchaser without
charge, upon reasonable request during normal business hours at the offices of
the Seller.
Section 11.29 Reports and Returns to be Filed by the Seller.
The Seller shall file information reports with respect to the receipt
of mortgage interest received in a trade or business, reports of foreclosures
and abandonments of any Mortgaged Property and information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
Section 11.30 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement
under which the Mortgage Loans and REO Property are held, the Seller shall not
take any action, cause the REMIC to take any action or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of the REMIC as a REMIC
or (ii) result in the imposition of a tax upon the REMIC (including but not
limited to the tax on "prohibited transactions" as defined in Section 860F(a)(2)
of the Code and the tax on "contributions" to a REMIC set forth in Section
860G(d) of the Code) unless the Seller has received an Opinion of Counsel (at
the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such REMIC status or result in the
imposition of any such tax.
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EXHIBIT 9
FORM OF TRADE CONFIRMATION
SCHEDULE ONE
FINAL MORTGAGE LOAN SCHEDULE
