EXHIBIT 10.1.4
SERVICING AGREEMENT, DATED AS OF SEPTEMBER 25, 2001, BETWEEN ▇▇▇▇▇▇▇
SACHS MORTGAGE COMPANY AND COUNTRYWIDE HOME LOANS SERVICING LP
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SERVICING AGREEMENT
between
COUNTRYWIDE HOME LOANS, INC.
(Servicer)
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
(Owner)
Dated as of September 25, 2001
Fixed & Adjustable-Rate First Lien Residential Mortgage Loans
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DESCRIPTION OF ATTACHMENTS
Exhibit A MORTGAGE LOAN SCHEDULE
Exhibit B LIST OF COLLATERAL DOCUMENTS
Exhibit C LIST OF DOCUMENTS IN CREDIT FILE
Exhibit D FORM OF GUARANTY
SERVICING AGREEMENT
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THIS SERVICING AGREEMENT (this "Agreement") dated as of September
25, 2001, is by and between COUNTRYWIDE HOME LOANS, INC., in its capacity
as servicer (the "Servicer"), and ▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY, and its
successors and assigns, as owner (the "Owner").
PRELIMINARY STATEMENT
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WHEREAS, the Owner has acquired certain fixed and adjustable-rate
first lien residential mortgage loans;
WHEREAS, the Servicer is in the business of providing primary
servicing of mortgage loans and owns the right to service the Mortgage
Loans (as hereinafter defined) listed on the Mortgage Loan Schedule (as
hereinafter defined);
WHEREAS, the Owner has requested the Servicer to service certain
fixed and adjustable-rate first lien residential mortgage loans held by the
Owner and the Servicer has agreed to service, as an independent contractor,
such mortgage loans for the Owner on the terms and conditions set forth
herein; and
WHEREAS, the Servicer and the Owner desire to prescribe the terms
and conditions regarding the management, servicing, and control of such
mortgage loans.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Servicer and
the Owner agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Acceptable Servicing Procedures: The procedures, including prudent
collection and loan administration procedures, and standard of care
employed by prudent mortgage servicers. Such standard of care (i) shall not
be lower than that the Servicer customarily employs and exercises in
servicing and administering similar mortgage loans for its own account,
(ii) shall be in accordance with the requirements of the Servicer's
policies and procedures, (iii) shall be, at a minimum, at least as prudent
as the requirements of ▇▇▇▇▇▇ ▇▇▇ as set forth from time to time in the
▇▇▇▇▇▇ Mae Selling and Servicing Guide, as amended from time to time, and
(iv) shall be in full compliance with all federal, state and local laws,
ordinances, rules and regulations.
Agreement: This Servicing Agreement, including all exhibits and
schedules hereto, and all amendments hereof and supplements hereto.
Ancillary Income: All income if any, derived from any Mortgage
Loan, including but not limited to late charges, fees received with respect
to checks or bank drafts returned by the related bank for non-sufficient
funds, assumption fees, speed pay fees, Prepayment Charges, reconveyance
and demand statement fees, loan modification fees and reamortization fees.
Applicable Requirements: The (i) terms of the Mortgage and
Mortgage Note related to each Mortgage Loan, (ii) the federal, state, local
and foreign laws, statutes, rules, regulations, ordinances, standards,
requirements, administrative rulings, orders and processes pertaining to
Mortgage Loans, including but not limited to those pertaining to the
processing, origination and servicing of the Mortgage Loans and the
servicer's policies and procedures, (iii) the requirements of a Primary
Mortgage Insurer (if any) or HUD/FHA or VA (if applicable) with respect to
the processing, origination, insuring, servicing or filing of claims in
connection with the Mortgage Loans, (iv) the requirements of the Owner as
set forth in this Agreement, and (v) the reasonable and customary mortgage
servicing practices of prudent mortgage lending institutions which service
mortgage loans of the same type as the Mortgage Loans in the jurisdictions
in which the related Mortgaged Properties are located.
ARM Loan: A Mortgage Loan as to which the related Mortgage Note
provides that the Mortgage Interest Rate may be adjusted periodically.
Assignment of Mortgage: An assignment of mortgage, notice of
transfer, or equivalent instrument, in recordable form, sufficient under
and complying with the laws of the jurisdiction wherein the related
Mortgaged Property is located to reflect of record the sale of the Mortgage
Loan to the assignee named therein.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii)
a day on which banking or savings and loan institutions in the States of
New York or California are authorized or obligated by law or executive
order to be closed.
Code: The Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto.
Collateral Documents: With respect to any Mortgage Loan, the
mortgage loan documents pertaining to such Mortgage Loan which are
specified in Exhibit B hereto and any additional mortgage documents
pertaining to such Mortgage Loan required to be added to the related
Collateral File pursuant to the terms of this Agreement.
Collateral File: With respect to any Mortgage Loan, the file
pertaining to such Mortgage Loan that contains each of the related
Collateral Documents.
Condemnation Proceeds: All awards or settlements in respect of a
taking of all or part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation.
Consents: shall mean the unconditional written consent or
approval, as necessary, of an Investor and any applicable Insurer to the
Servicer's servicing of the Mortgage Loans hereunder.
Credit File: With respect to any Mortgage Loan, a file pertaining
to such Mortgage Loan and containing copies of the mortgage loan documents
described on Exhibit C attached hereto, the credit documentation relating
to the origination of such Mortgage Loan and copies of the Collateral
Documents. Each Credit File shall be delivered to the Servicer by the Owner
and maintained by the Servicer (either on paper or on microfilm or any
other comparable medium), and shall be delivered to the Owner as soon as
practicable upon request.
Custodial Account: The account or accounts created and maintained
pursuant to Section 3.4 of this Agreement which account(s) shall be an
Eligible Account.
Custodian: With respect to any Mortgage Loan and the related
Collateral File, JPMorgan Chase Bank and any successor custodian under any
custodial agreement which may be entered into between JPMorgan Chase Bank or
any subsequent Owner and the custodian named therein regarding the
warehousing and safekeeping of such Collateral File.
Cut off Date: The first day of the month in which the Effective
Date occurs.
Default: Any condition or circumstance that is, or with notice or
the lapse of time or both, would become, an Event of Default.
Determination Date: With respect to any Remittance Date, the 15th
day of the month of the related Remittance Date or if such 15th day is not
a Business Day, the Business Day immediately following such 15th day.
Due Date: With respect to any Mortgage Loan, the day of the month
on which Monthly Payments on such Mortgage Loan are due, exclusive of any
days of grace.
Due Period: With respect to each Remittance Date, the period
beginning on the second day of the month immediately preceding the month of
such Remittance Date and ending on the first day of the month of such
Remittance Date, provided, however, with respect to the first Remittance
Date, the period beginning on the 1st day of September, 2001 and ending on
the 1st day of October, 2001.
Effective Date: September 2, 2001.
Eligible Account: An account or accounts maintained with a
Qualified Depository.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 3.6.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, if any, fire and
hazard insurance premiums, and other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to any Mortgage Loan.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 7.1.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇, formerly known as the Federal National
Mortgage Association, or any successor thereto.
FHA: Federal Housing Administration or any successor thereto.
Fidelity Bond: A fidelity bond to be obtained by the Servicer
pursuant to Section 3.12.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac, formerly known as the Federal Home Loan
Mortgage Corporation or any successor thereto.
Government Mortgage Loan: a Mortgage Loan that is guaranteed by
the VA or insured by FHA.
Gross Margin: With respect to each ARM Loan, the fixed percentage
amount set forth in the related Mortgage Note as shown in the Mortgage Loan
Schedule, which amount is added to the Index in accordance with the terms
of the related Mortgage Note to determine on each Interest Rate Adjustment
Date the Mortgage Interest Rate for such Mortgage Loan.
Guaranty: A guaranty agreement substantially in the form of
Exhibit D attached hereto.
Index: With respect to any ARM Loan, the index set forth in the
applicable Mortgage Note which is added to the Gross Margin to determine
the Mortgage Interest Rate on each Interest Rate Adjustment Date. In the
event the Index becomes unavailable for any reason, the Servicer shall
select an alternative index, in accordance with the terms of the Mortgage
Note, and such alternative index shall thereafter be the Index for such
Mortgage Loan.
Insurance Proceeds: Proceeds of any Primary Mortgage Insurance
Policy, any FHA or VA Insurance Policy, any title policy, any hazard
insurance policy or any other insurance policy covering a Mortgage Loan or
the related Mortgaged Property, including any amounts required to be
deposited in the Custodial Account pursuant to Section 3.10, to the extent
such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with
Acceptable Servicing Procedures and Section 3.14.
Insurer: The FHA or VA, as applicable, any private mortgage
insurer issuing a Primary Mortgage Insurance Policy, any insurer or
guarantor under any standard hazard, flood, earthquake or title insurance
policy and any certificate insurer pertaining to the Mortgage Loans.
Interest Rate Adjustment Date: As to any ARM Loan, the date
specified in a Mortgage Note on which the Mortgage Interest Rate for the
related Mortgage Loan is subject to adjustment.
Investor: With respect to any Mortgage Loan, a Person who has a
beneficial interest in, or is a record owner of, such Mortgage Loan or any
trustee acting on behalf of any such Person.
Late Collections: With respect to any Mortgage Loan, all amounts
(other than Monthly Advances) received during any Due Period, whether as
late payments of Monthly Payments or as Insurance Proceeds, Liquidation
Proceeds, Condemnation Proceeds or otherwise, which represent late payments
or collections of Monthly Payments due but delinquent for a previous Due
Period and not previously recovered.
LGC: Loan Guaranty Certificate issued by the VA as a guarantee
that the federal government will repay to the lender a specified percentage
of the loan balance in the event of the borrower's default.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of the Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or in connection with the sale of the Mortgaged Property if the
Mortgaged Property is acquired in satisfaction of the Mortgage.
Losses: Any claims, penalties, fines, forfeitures, damages,
liabilities, losses and expenses, including reasonable attorneys' fees.
Maturity Date: With respect to any Mortgage Loan, the maturity
date of the related Mortgage Note and Mortgage as specified therein.
MIC: Mortgage Insurance Certificate issued by FHA as evidence that
a mortgage has been insured and that a contract of mortgage insurance
exists between FHA and the lender.
Monthly Advance: Commencing with each Monthly Payment due on or
after the Effective Date, the portion of each Monthly Payment that is
delinquent with respect to each Mortgage Loan at the close of business on
the Determination Date required to be advanced by the Servicer pursuant to
Section 4.3 on the Business Day immediately preceding the Remittance Date
of the related month.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan which is payable by a Mortgagor from time to
time under the related Mortgage Note.
Mortgage: The mortgage, mortgage deed, deed of trust or other
instrument creating a first lien on or first priority ownership interest in
an estate in fee simple in real property securing a Mortgage Note including
any riders, addenda, assumption agreements or modifications relating
thereto.
Mortgage Interest Rate: As to each Mortgage Loan, the annual rate
at which interest accrues on such Mortgage Loan
Mortgage Loan: An individual mortgage loan that is subject to the
terms of this Agreement, identified on the Mortgage Loan Schedule.
Mortgage Loan Remittance Rate: with respect to each Mortgage Loan,
the interest rate payable to the Owner on each Remittance Date which shall
equal the Mortgage Interest Rate less the Servicing Fee and any pool
insurance policy premiums, if applicable.
Mortgage Loan Schedule: The schedule attached hereto as Exhibit A
that lists each of the Mortgage Loans serviced by the Servicer pursuant to
this Agreement.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage, including any riders, addenda, assumption
agreements or modifications relating thereto.
Mortgaged Property: The property securing a Mortgage Note pursuant
to the related Mortgage.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Servicing Advance: Any portion of any Servicing
Advance previously made or proposed to be made in respect of a Mortgage
Loan by the Servicer hereunder which, in the good faith judgment of the
Servicer, will not be ultimately recoverable from Late Collections.
Officers' Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President,
and by the Treasurer, the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Servicer, and delivered to the Owner as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Servicer or an affiliate thereof, reasonably acceptable to
the Owner.
Owner: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company or any permitted successor
owner of any of the Mortgage Loans.
Pass-Through Transfer: The sale or transfer of some or all of the
Mortgage Loans to a REMIC or other trust to be formed as part of a publicly
or privately traded pass-through transaction retaining the Servicer as
"servicer" thereunder.
Permitted Instruments: Any one or more of the following
obligations or securities:
(i) direct obligations of, or obligations fully
guaranteed as to principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations
are backed by the full faith and credit of the United States;
(ii) repurchase obligations with respect to any
security described in clause (i) above, provided that the
unsecured long-term obligations of the party agreeing to
repurchase such obligations are at the time rated by Standard &
Poor's Corporation in one of its three highest rating categories;
(iii) federal funds, certificates of deposit,
time deposits, and bankers' acceptances of any bank or trust
company incorporated under the laws of the United States or any
state, provided that the long-term debt obligations of such bank
or trust company (or, in the case of the principal bank in a bank
holding company system, the long-term debt obligations of the bank
holding company) at the date of acquisition thereof have been
rated by Standard & Poor's Corporation in one of its three highest
rating categories;
(iv) commercial paper of any corporation
incorporated under the laws of the United States or any state
thereof which on the date of acquisition has been rated by
Standard & Poor's Corporation in its highest short-term rating
category; and
(v) any other obligation or security acceptable
to Standard & Poor's Corporation in respect of mortgage
pass-through certificates rated in one of its three highest rating
categories, as evidenced by a letter from Standard & Poor's
Corporation to such effect.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Prepayment Charge: With respect to any Mortgage Loan, the
prepayment premium or charge, if any, required under the terms of the
related Mortgage Note to be paid in connection with a Principal Prepayment,
to the extent permitted by applicable law.
Primary Mortgage Insurance Policy: With respect to any Mortgage
Loan, the policy of primary mortgage guaranty insurance (including all
endorsements thereto), if any, issued with respect to such Mortgage Loan,
or any replacement policy.
Primary Mortgage Insurer: The named insurer under any Primary
Mortgage Insurance Policy.
Prime: As of any date of determination, the annual interest rate,
adjusted daily, published from time to time in The Wall Street Journal
(Western Edition) as the "PRIME RATE" in the "MONEY RATES" section.
Principal Prepayment: Any payment or other recovery of principal
on a Mortgage Loan (other than Condemnation Proceeds, Insurance Proceeds,
and Liquidation Proceeds) which is received on or after September 1, 2001
in advance of its scheduled Due Date (not including any prepayment charge
or premium thereon), and 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.
Qualified Depository: (i) A depository, the long-term unsecured
debt obligations of which are rated by ▇▇▇▇▇'▇ Investors Service, Inc. or
Standard & Poor's Ratings Services, a division of ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. (or a comparable rating agency) in one of its two highest rating
categories at the time of any deposit therein, or (ii) a depository, the
deposits of which are fully insured by FDIC or (iii) the corporate trust
department of a national bank; provided that they maintain a rating by
Standard & Poor's Ratings Services, a division of ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. (or a comparable rating agency) in the highest rating categories for
short term debt obligations.
Reconstitution Agreements: The agreement or agreements entered
into by the Servicer and the Owner 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. Such agreement or agreements shall prescribe the rights and
obligations of the Servicer in servicing the related Mortgage Loans.
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 5.8 hereof. On such date, the
Mortgage Loans transferred shall cease to be covered by this Agreement and
the Servicer shall cease to service those Mortgage Loans under this
Agreement in accordance with the termination provisions set forth in
Section 5.8 hereof.
Remittance Advice Date: The 10th day of each month or, if such
10th day is not a Business Day, the first Business Day immediately
following such day.
Remittance Date: With respect to each Mortgage Loan: the
eighteenth (18th) day of any month, beginning with the eighteenth (18th)
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 day.
REO Property: A Mortgaged Property acquired in foreclosure or by
deed in lieu of foreclosure, as described in Section 3.13.
Servicer: Countrywide Home Loans, Inc., a New York corporation or
its permitted successor in interest or any successor to the Servicer under
this Agreement appointed as herein provided.
Servicing Advances: All customary, reasonable, and necessary "out
of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) that are incurred by the Servicer in the performance of its
servicing obligations hereunder, including, but not limited to, the cost of
(i) the preservation, restoration, and protection of the Mortgaged
Property, (ii) any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage, and (iv) compliance with the obligations of this Agreement,
including without limitation under Sections 3.8 and 3.17.
Servicing Fee: With respect to each Mortgage Loan being serviced
and administered pursuant to this Agreement, the amount of the annual fee
payable to the Servicer as compensation for servicing and administering
such Mortgage Loan and for managing and disposing of REO Property in
accordance with the terms of this Agreement. For each Mortgage Loan, such
fee shall, for a period of one full month, be equal to one-twelfth of the
product of (i) the Servicing Fee Rate, multiplied by (ii) the outstanding
Unpaid Principal Balance of such Mortgage Loan as of the first day of such
month, and shall be payable in accordance with Section 5.3. With respect to
any REO Property that is being managed by the Servicer in accordance with
Section 3.13 of this Agreement, such fee shall be payable through and until
the disposition of such REO Property or the transfer of the REO Property to
the Owner for management by the Owner, and the amount of such fee shall be
based upon the Unpaid Principal Balance of the related Mortgage Loan at the
time of the related foreclosure.
Servicing Fee Rate: As to (i) each Mortgage Loan that is an ARM
Loan, .375% per annum, and (ii) each Mortgage Loan that is not an ARM Loan,
.25% per annum.
Servicing File: As to each Mortgage Loan, the copies of the
Collateral Documents, as well as the credit and closing packages,
disclosures, copies of the all other files, books, records and documents
necessary to (a) establish the eligibility of the Mortgage Loan for
insurance by an Insurer, if any; and/or (b) service the Mortgage Loan in
accordance with Acceptable Servicing Procedures, including the documents
listed on Exhibit B hereto, some of which maybe held by the Custodian.
Unpaid Principal Balance: As to each Mortgage Loan, as of any date
of determination, the outstanding principal balance of such Mortgage Loan
as of the close of business on the Cut-off Date related to such Mortgage
Loan, minus (i) the principal portion of all payments made by or on behalf
of the Mortgagor on or before the Cut-off Date; and (ii) the principal
portion of all payments made by or on behalf of the Mortgagor after the
Cut-off Date.
VA: The Department of Veterans' Affairs.
Whole Loan Transfer: The sale or transfer by the Owner of some or
all of the Mortgage Loans in a whole loan or participation certificate
format pursuant to a Reconstitution Agreement retaining the Servicer as
"servicer" thereunder.
ARTICLE II
[INTENTIONALLY LEFT BLANK]
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.1 Identification of Mortgage Loans; Servicer to Act as Servicer
(a) The Servicer, as independent contract servicer, shall commence
servicing and administering each Mortgage Loan on behalf of the Owner from
and after the Cut-off Date in accordance with the terms and conditions of
this Agreement and Acceptable Servicing Procedures. Except as otherwise
expressly provided in this Agreement, the Servicer shall have full power
and authority, acting alone, to do any and all things reasonably consistent
with the terms of this Agreement, including but not limited to, all action
permitted or required to be taken under any related Primary Mortgage
Insurance Policy, LGC or MIC. The Servicer shall service the Government
Mortgage Loans in accordance with the guidelines of the applicable
governing agency, including the FHA or VA, as applicable and shall comply
with all the rules and regulations as set forth by each applicable agency.
The Servicer shall at all times act in the best interests of the Owner in
performing its obligations under this Agreement.
(b) The documents comprising the Collateral File relating to each
Mortgage Loan serviced hereunder and that are retained by the Servicer
pursuant to the terms hereof, together with all other documents with
respect to each such Mortgage Loan which are prepared by or which come into
the possession of the Servicer, shall immediately vest in the Owner and
shall be held and maintained in trust by the Servicer at the will of the
Owner and in a custodial capacity only. The documents comprising each
Collateral File and all related documents which come into the possession of
the Servicer and are so held by the Servicer shall be segregated from the
other books and records of the Servicer and shall be appropriately marked
to clearly reflect the ownership interest of the Owner in such Collateral
File and related documents. The Servicer shall release its custody of any
such documents only in accordance with written instructions from the Owner,
unless such release is required as incidental to the Servicer's servicing
of the Mortgage Loans.
(c) Consistent with the terms of this Agreement and any applicable
HUD and VA guidelines, the Servicer 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
Servicer's reasonable and prudent determination, such waiver, modification,
variation, postponement or indulgence is in the best interests of and is
not materially adverse to the Owner and will not result in the impairment
of coverage under any LGC or MIC; provided, however, that the Servicer may
not, without the prior written consent of the Owner, (i) waive any
Prepayment Charge in full or in part, (ii) permit any modification with
respect to any Mortgage Loan that would change the Mortgage Interest Rate
(other than by adjustments required by the terms of the related Mortgage
Note), (iii) forgive the payment of any principal or interest, (iv) reduce
the outstanding principal amount (except to reflect actual payments of
principal), (v) except other than pursuant to the terms of the Mortgage
Loan, make any advances of additional principal, or (vi) extend the final
maturity date on such Mortgage Loan. Without limiting the generality of the
foregoing, the Servicer is hereby authorized and empowered to execute and
deliver on behalf of itself and the Owner in connection with any Mortgage
Loan all instruments of satisfaction, cancellation or full release upon
receipt by the Servicer of payment in full of the Unpaid Principal Balance
or, with the prior written consent of the Owner, partial release or
discharge, and all other comparable instruments with respect to the
Mortgage Loans and the Mortgaged Properties. If reasonably required by the
Servicer, the Owner shall furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties under this Agreement.
(d) As to each ARM Loan, the Servicer shall make periodic Mortgage
Interest Rate and Monthly Payment adjustments, as applicable, in strict
compliance with (i) the terms of the Mortgage and Mortgage Note, (ii) all
applicable law, and (iii) Acceptable Servicing Procedures and any
applicable FHA or VA guidelines, rules or regulations.
Section 3.2 Liquidation of Mortgage Loans
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 or observe any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace
period, the Servicer will proceed diligently to collect all payments due
and shall take such action as it shall reasonably deem to be in the best
interest of the Owner.
Section 3.3 Collection of Mortgage Loan Payments
Continuously from the date hereof until the principal and interest
on all Mortgage Loans being serviced hereunder are paid in full or this
Agreement is otherwise terminated, the Servicer will proceed diligently to
collect all payments due under each of such Mortgage Loans when the same
shall become due and payable. With respect to those Mortgage Loans, if any,
as to which the Servicer collects Escrow Payments, the Servicer will
ascertain or estimate, as the case may be, annual ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums, mortgage
insurance premiums and all other charges that, as provided in any Mortgage,
will become due and payable so that the Escrow Payments payable by the
Mortgagors will be sufficient to pay such charges as and when they become
due and payable. The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a
Mortgage, Mortgage Note, Primary Mortgage Insurance Policy or otherwise or
against any public or governmental authority with respect to a taking or
condemnation) if in its reasonable judgment it believes that it will be
unable to enforce the provision of the Mortgage or other instrument
pursuant to which payment is required.
Section 3.4 Establishment of Custodial Account; Deposits in
Custodial Account
(a) The Servicer shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans separate and apart from any of its
own funds and general assets and shall establish and maintain one or more
Custodial Accounts (collectively, with respect to the accounts maintained
by any one Servicer, its "Custodial Account"), in the form of time deposit
or demand accounts, which may be interest bearing, titled, with respect to
the Servicer, "Countrywide Home Loans, Inc., in trust for ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company as Owner, and any successor Owner.
(b) With respect to each Mortgage Loan, the Servicer shall, upon
receipt (and in all events by not later than the end of the second Business
Day following receipt thereof) and on a daily basis, deposit in the
Custodial Account and retain therein the following payments and collections
received by the Servicer subsequent to the Cut-off Date:
(i) all payments on account of principal,
including Principal Prepayments, actually collected by the
Servicer on the Mortgage Loans;
(ii) all payments on account of interest
actually collected by the Servicer on the Mortgage Loans less the
Servicing Fee;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds, other than
Insurance Proceeds to be held in the Escrow Account and applied to
the restoration and repair of the Mortgaged Property or released
to the Mortgagor in accordance with Acceptable Servicing
Procedures;
(v) all Condemnation Proceeds which are not
released to the Mortgagor in accordance with the Owner's written
consent and Acceptable Servicing Procedures and Section 3.14;
(vi) any amounts with respect to Monthly
Advances required to be deposited in the Custodial Account
pursuant to Section 4.3;
(vii) any amount required to be deposited in the
Custodial Account pursuant to Sections 3.1(c), 3.1(d), 3.4(c),
3.10(a) or (b), 3.11(b), 3.13(c), (d) and (f), and 4.1(b) of this
Agreement; and
(vii) with respect to each Principal Prepayment,
an amount (to be paid by the Servicer out of its own funds without
reimbursement therefor) which, when added to all amounts allocable
to interest received by the Servicer in connection with the
Principal Prepayment, equals one month's interest on the amount of
principal so prepaid at the Mortgage Loan Remittance Rate;
provided, however, that the Servicer's obligation to pay such
amounts shall be limited to an amount equal to one-half of the
Servicing Fee for the related Due Period.
(c) The Servicer may cause the funds on deposit from time to time
in the Custodial Account to be invested in Permitted Instruments, which
investments shall mature not later than the Business Day immediately
preceding the applicable Remittance Date next following the date of such
investment. All such investments shall be made in the name of the Servicer
or its nominee. All income and gain realized from any such investment shall
be for the benefit of the Servicer and shall be subject to its withdrawal
or order from time to time. The Servicer shall indemnify the Owner for any
and all losses incurred in respect of any such investment by the Servicer,
and the amount of any losses incurred in respect of any such investment
shall be deposited in the Custodial Account by the Servicer out if its own
funds immediately, without reimbursement therefor.
(d) It is understood and agreed that payments in the nature of
Ancillary Income need not be deposited by the Servicer in the Custodial
Account.
Section 3.5 Permitted Withdrawals from the Custodial Account
(a) The Servicer may, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) to make payments and distributions to the
Owner in the amounts and in the manner provided for in Section 4.1;
(ii) to reimburse itself for Monthly Advances
made by the Servicer from its own funds pursuant to Section 4.3,
the Servicer's right to reimburse itself pursuant to this
subclause (ii) being limited to amounts received on the related
Mortgage Loan which represent late payments of principal and/or
interest respecting which any such Monthly advance was made and
such other amounts as are collected by the Servicer from the
related Mortgagor or otherwise relating to the Mortgage Loan; (or
to amounts received on the Mortgage Loans as a whole in the event
that such Monthly Advance is made to pay a shortfall in a Monthly
Payment made by a Mortgagor entitled to relief under the Soldiers'
and Sailors' Civil Relief Act of 1940); provided that the Servicer
may reimburse itself from any funds in the Custodial Account for
Monthly Advances which it has determined are nonrecoverable
advances or if all funds with respect to the related Mortgage Loan
have been previously remitted to the Owner;
(iii) to reimburse itself for unreimbursed
Servicing Advances and any unpaid Servicing Fees, Servicer's right
to reimburse itself pursuant to this subclause (ii) with respect
to any Mortgage Loan being limited to related proceeds from
Liquidation Proceeds, Condemnation Proceeds, Primary Mortgage
Insurance Proceeds and Other Insurance Proceeds; provided that the
Servicer may reimburse itself from any funds in the Custodial
Account for Servicing Advances and Servicing Fees if all funds
with respect to the related Mortgage Loan have previously been
remitted to Owner;
(iv) to pay itself any Servicing Fee and other
servicing compensation not paid to the Servicer pursuant to
Section 5.3;
(v) to pay to itself any interest earned on
funds deposited in the Custodial Account;
(vi) if there shall be amounts deposited in the
Custodial Account in error, including the Servicing Fee and other
servicing compensation not required to be deposited therein, to
withdraw such amounts;
(vii) to clear and terminate the Custodial
Account upon the termination of this Agreement in accordance with
Article 8.
Section 3.6 Establishment of Escrow Account; Deposits in Escrow Account;
Escrow Analysis
(a) The Servicer shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts (collectively, with
respect to the accounts maintained by any one Servicer, its "Escrow
Account"), in the form of time deposit or demand accounts, which may be
interest bearing, titled, with respect to the Servicer, "Countrywide Home
Loans, Inc., in trust for ▇▇▇▇▇▇▇ Sachs Mortgage Company, as Owner, and any
successor Owner, and certain Mortgagors." The Escrow Account shall be an
Eligible Account.
(b) The Servicer shall, upon receipt (and in all events by not
later than the end of the second Business Day following deposit in the
Servicer's mortgage receipts clearing account, or sooner if required by
applicable law) and on a daily basis (and in all events by not later than
the end of the second Business Day following deposit in the Servicer's
mortgage receipts clearing account, or sooner if required by applicable
law), deposit in the Escrow Account maintained by the Servicer and retain
therein: (i) all Escrow Payments collected on account of the Mortgage Loans
for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement, and (ii) all amounts representing
proceeds of any hazard insurance policy which are to be applied to the
restoration or repair of any Mortgaged Property. The Servicer shall make
withdrawals from the Escrow Account maintained by the Servicer only in
accordance with Section 3.7. The Servicer shall be entitled to retain any
interest earned on funds deposited in the Escrow Account maintained by the
Servicer other than interest on escrowed funds required by law to be paid
to the Mortgagor and, to the extent required by law, the Servicer shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account maintained by the Servicer may not bear interest or that the
interest earned on such escrowed funds is insufficient for such purpose.
Section 3.7 Permitted Withdrawals from the Escrow Account
Withdrawals from the Escrow Account maintained by the Servicer may
be made by the Servicer only (a) to effect timely payments of taxes,
assessments, water rates, insurance premiums, fire and hazard insurance
premiums or other items constituting Escrow Payments for the related
Mortgage; (b) to reimburse the Servicer for any Servicing Advance made by
the Servicer pursuant to Sections 3.8, 3.10 and 3.11 with respect to a
related Mortgage Loan, the Servicer's right to reimburse itself pursuant to
this clause (b) being limited to the amounts as may be collected by the
Servicer from the related Mortgagor or from the related insurer; (c) to
refund to any Mortgagor any funds found to be in excess of the amounts
required under the terms of the related Mortgage Loan; (d) for transfer to
the Custodial Account in accordance with the terms of this Agreement; (e)
for application to restoration or repair of the related Mortgaged Property
in accordance with the provisions of Section 3.14, (f) to pay to a
Mortgagor, to the extent required by Applicable Requirements, interest on
the funds deposited in the Escrow Account; (g) to pay to itself any
interest earned on funds deposited in the Escrow Account (and not required
to be paid to the related Mortgagor), (h) to remove funds inadvertently
placed in the Escrow Account by the Servicer; or (i) to clear and terminate
the Escrow Account upon the termination of this Agreement, in accordance
with Article 8.
Section 3.8 Payment of Taxes, Insurance and Other Charges
With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of property taxes, assessments and
other charges which are or may become a lien upon the Mortgaged Property
and the status of Primary Mortgage Insurance Policy premiums, if any, and
fire and hazard insurance coverage and flood insurance, all as required
hereunder. If a Mortgage Loan requires Escrow Payments, the Servicer shall
obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date in a manner consistent with
Acceptable Servicing Procedures, employing for such purpose Mortgagor
deposits in the Escrow Account. The Servicer shall, with respect to each
Mortgage Loan for which Escrow Payments are maintained, conduct an escrow
analysis in accordance with industry standard procedures. If a Mortgage
Loan does not require Escrow Payments, or if there are insufficient funds
in the related Escrow Account, the Servicer shall cause all such bills to
be paid on a timely basis and shall from its own funds, if necessary, make
a Servicing Advance to make timely payment of all such bills. The Servicer
shall monitor the payment status of such charges (including renewal
premiums) by the related Mortgagor, and shall effect payment thereof in a
manner consistent with Acceptable Servicing Procedures, and in all events
prior to the foreclosure of any lien against the Mortgaged Property
resulting from non-payment of such property taxes, assessments and other
charges and prior to the termination of any such insurance coverage.
Section 3.9 Transfer of Custodial Accounts and Escrow Accounts
The Servicer may from time to time transfer the Custodial Account
or the Escrow Account maintained by it to a different depository
institution, provided that each such account shall be and remain an
Eligible Account.
Section 3.10 Maintenance of Hazard Insurance
The Servicer shall cause to be maintained, with an insurer
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac for each Mortgage Loan (or FHA or
VA, as applicable, with respect to each Government Mortgage Loan) serviced
by it, fire and hazard insurance with extended coverage customary in the
area where the Mortgaged Property is located, in an amount which is at
least equal to the lesser of (i) 100% of the maximum insurable value of the
improvements securing the Mortgage Loan or (ii) the Unpaid Principal
Balance of the Mortgage Loan. If the Mortgaged Property is in an area then
identified on a flood hazard boundary map or flood insurance rate map
issued by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance is available), the Servicer 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. Such flood insurance shall be in an amount
representing coverage not less than the least of (i) the outstanding
principal balance of the Mortgage Loan, (ii) the full insurable value of
the improvements securing such Mortgage Loan or (iii) the maximum amount of
insurance available under the National Flood Insurance Act of 1968 and the
Flood Disaster Protection Act of 1973, each as amended. The Servicer shall
also maintain on each REO Property with an insurer acceptable to ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac (or FHA or VA, as applicable, with respect to each
Government Mortgage Loan) (x) fire and hazard insurance with extended
coverage in an amount that is at least equal to the maximum insurable value
of the improvements securing the Mortgage Loan that are a part of such
property, (y) liability insurance and (z) to the extent required and
available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973, each as amended, or other applicable
federal law, flood insurance in an amount as provided above. Any amounts
collected by the Servicer under any such policies shall be paid over or
applied by the Servicer in accordance with Acceptable Servicing Procedures
for the restoration or repair of the Mortgaged Property subject to the
related Mortgage, for release to the Mortgagor in accordance with
Acceptable Servicing Procedures, or for application in reduction of the
Mortgage Loan. Any such amounts shall be deposited in the Custodial Account
and subject to withdrawal pursuant to Section 3.5. It is understood and
agreed that no earthquake or other additional insurance is required to be
maintained by the Servicer hereunder in connection with any Mortgage Loan
or Mortgaged Property, other than pursuant to applicable laws and
regulations that are at any time in force and require such additional
insurance. All policies required hereunder shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer, and shall provide for
at least 30 days prior written notice to the Servicer of any cancellation,
reduction in amount, or material change in coverage. The Servicer shall not
interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent upon any policy renewal; provided, however, upon
any such policy renewal, the Servicer shall not accept any such insurance
policies, unless the insurers are acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
(or FHA or VA, as applicable, with respect to each Government Mortgage
Loan) and are licensed to do business in the jurisdiction in which the
Mortgaged Property is located.
In the event a hazard insurance policy shall be in danger of being
terminated, or in the event the insurer shall cease to be acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac (or FHA or VA, as applicable, with respect to
each Government Mortgage Loan), the Servicer shall notify the Owner and the
related Mortgagor, and shall use its best efforts, as permitted by
applicable law, to obtain from another Insurer acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac (or FHA or VA, as applicable, with respect tp to each
Government Mortgage Loan) a replacement hazard insurance policy
substantially and materially similar in all respects to the original
policy. In no event, however, shall a Mortgage Loan be without a hazard
insurance policy at any time.
If a Mortgage is secured by a unit in a condominium project, the
Servicer shall verify that the coverage required of the owner's
association, including hazard, flood, liability, and fidelity coverage, is
being maintained in accordance with then current requirements of ▇▇▇▇▇▇
Mae, ▇▇▇▇▇▇▇ Mac or FHA or VA, as applicable, with respect to each
Government Mortgage Loan, and secure from the owner's association its
agreement to notify the Servicer promptly of any change in the insurance
coverage or of any condemnation or casualty loss that may have a material
effect on the value of the Mortgaged Property as security.
Section 3.11 Maintenance of Primary Mortgage Insurance Policies;
Collections Thereunder
(a) The parties acknowledge that not all Mortgage Loans will be
covered by Primary Mortgage Insurance. In the event that any Mortgage Loans
are or become covered by Primary Mortgage Insurance, the provisions set
forth below shall apply.
(b) If a Mortgage Loan is covered by a Primary Mortgage Insurance
Policy as of the Cut-off Date, or if a Mortgage Loan becomes covered by a
Primary Mortgage Insurance Policy, the Servicer shall cause the premium for
each such Primary Mortgage Insurance Policy, beginning with the premium due
after the Cut-off Date in the case of any Mortgage Loan covered by a
Primary Insurance Policy prior to the Cut-off Date, to be paid on a timely
basis and shall from its own funds, if necessary, make a Servicing Advance
to pay the premium on a timely basis. The Servicer will not cancel or
refuse to renew any such Primary Mortgage Insurance Policy that is required
to be kept in force under any Mortgage and pursuant to this subsection, or
pursuant to subsection 3.11(c) below, unless a replacement Primary Mortgage
Insurance Policy for such canceled or non renewed policy is obtained from
and maintained with an insurer that satisfies the standards set forth in
this subsection. The Servicer shall not take any action or fail to take any
action that would result in non-coverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the
Servicer, would have been covered thereunder. In connection with any
assumption or substitution agreement entered into or to be entered into
pursuant to Section 4.1, the Servicer shall promptly notify the insurer
under the related Primary Mortgage Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of
such policy and shall take all actions which may be required by such
insurer as a condition to the continuation of coverage under such Primary
Mortgage Insurance Policy. If such Primary Mortgage Insurance Policy is
terminated as a result of such assumption or substitution of liability, the
Servicer shall obtain a replacement Primary Mortgage Insurance Policy as
provided above.
(c) As part of its activities as servicer of the Mortgage Loans,
the Servicer agrees to prepare and present, on behalf of itself and the
Owner, claims under any Primary Mortgage Insurance Policy in a timely
fashion in accordance with the terms thereof and, in this regard, to take
such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policy respecting a defaulted Mortgage Loan.
Pursuant to Section 3.4, any amounts collected by the Servicer under any
Primary Mortgage Insurance Policy shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 3.5, and remitted to the
Owner on the appropriate Remittance Date.
Section 3.12 Fidelity Bond; Errors and Omissions Insurance
The Servicer shall maintain, at its own expense, with responsible
companies that meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, a
blanket fidelity bond and an errors and omissions insurance policy, with
broad coverage on all officers, employees, agents and other persons acting
in any capacity requiring such persons to handle funds, money, documents or
papers relating to the Mortgage Loans (collectively, the "Servicer
Employees"). Any such 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 Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions, failure to maintain any
insurance policies required pursuant to this Agreement, and negligent acts
of such Servicer Employees. Such fidelity bond shall also protect and
insure the Servicer against losses in connection with the release or
satisfaction of a Mortgage Loan without having obtained payment in full of
the indebtedness secured thereby. No provision of this Section 3.12
requiring such fidelity bond and errors and omissions insurance shall
diminish or relieve the Servicer from its duties and obligations as set
forth in this Agreement. The terms of any such fidelity bond and errors and
omissions insurance policy shall be at least equal to the corresponding
amounts required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Selling and Servicing
Guide, or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac Seller's and Servicer's Guide,
as amended or restated from time to time by FHA or VA, as applicable, with
respect to each Government Mortgage Loan. Upon the request of the Owner,
the Servicer shall cause to be delivered to the Owner a certified true copy
of such fidelity bond and errors and omissions insurance policy and a
statement from the surety and the insurer that such fidelity bond and
errors and omissions insurance policy shall in no event be terminated or
materially modified without 30 days prior written notice to the Owner.
Section 3.13 Title, Management and Disposition of Real Estate Owned
(a) In the event that title to any Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure ("REO Property"), the deed
or certificate of sale shall be taken in the name of the Servicer for the
benefit of the Owner or, in the event the Owner is not authorized or
permitted to hold title to real property in the state where the REO
Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an Opinion of Counsel obtained by the Servicer
from any attorney duly licensed to practice law in the state where the REO
Property is located. The Person or Persons holding such title other than
the Owner shall acknowledge in writing that such title is being held as
nominee for the Owner.
(b) The Servicer shall manage, conserve, protect, and operate each
REO Property solely for the purpose of its prompt disposition and sale. The
Servicer shall either itself or through an agent selected by the Servicer,
manage, conserve, protect, and operate the REO Property in accordance with
Acceptable Servicing Procedures. The Servicer shall attempt to sell the
same (and may temporarily rent the same) on such terms and conditions as
the Servicer deems to be in the best interest of the Owner. In the event
that the Owner elects to manage an REO Property, the Owner shall, prior to
assuming such management, reimburse the Servicer for all unreimbursed
Servicing Advances Nonrecoverable Servicing Advances and Servicing Fees
related to such REO Property.
(c) The Servicer shall hold all funds collected and received in
connection with the operation of REO Property separate and apart from its
own funds or general assets, in the Custodial Account.
(d) The Servicer shall deposit, or cause to be deposited, on a
daily basis (and in all events by not later than the end of the second
Business Day following receipt thereof) in the Custodial Account
maintained by it all revenues received with respect to the conservation and
disposition of any REO Property for distribution to the Owner pursuant to
the provisions of Section 4.1.
(e) The Servicer shall also maintain on each REO Property fire and
hazard insurance with extended coverage, liability insurance, and flood
insurance in accordance with the provisions of Sections 3.8 and 3.10
hereof.
(f) The Servicer shall undertake to sell the REO Property at such
price and upon such terms and conditions as the Owner shall approve. The
proceeds of sale of the REO Property shall be promptly deposited in the
Custodial Account and the Servicer shall ▇▇▇▇ the Owner in accordance with
Section 3.5(b) for such expenses and for any related unreimbursed Servicing
Advances, unreimbursed Nonrecoverable Servicing Advances, unpaid Servicing
Fees, unpaid property management fees.
Section 3.14 Application of Proceeds of Insurance to Repair or Restoration
The Servicer shall collect the proceeds from all policies of
insurance required to be maintained pursuant to Section 3.10 with respect
to all losses that may occur. The Servicer may remit such proceeds to the
Mortgagor toward the restoration or repair of the related property in a
manner, and shall otherwise take such actions in connection with such
restoration and repair, as shall be consistent with Acceptable Servicing
Procedures.
The Servicer need not obtain the approval of the Owner prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor
to be applied to the restoration or repair of the Mortgaged Property if
such release is in accordance with Accepted Servicing Practices. For claims
greater than the lesser of $15,000 or any amount prescribed by applicable
FHA or VA guidelines, at a minimum the Servicer shall comply with the
following conditions in connection with any such release of Insurance
Proceeds or Condemnation Proceeds:
(1) The Servicer shall receive satisfactory
independent verification of completion of
repairs and issuance of any required approvals
with respect thereto;
(2) the Servicer shall take all steps necessary to
preserve the priority of the lien of the
Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and
materialmen's liens;
(3) the Servicer shall verify that the Mortgage Loan
is not in default; and
(4) pending repairs or restoration, the Servicer
shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
If the Owner is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a
claim in the name of the Owner.
Section 3.15 Inspections
The Servicer or its authorized representative shall conduct
inspections of Mortgaged Properties at such times and in a manner
consistent with Acceptable Servicing Procedures. For any Mortgage Loan that
is not insured by a Primary Mortgage Insurance Policy, in the event such
Mortgage Loan becomes 45 days delinquent, (a) the Servicer shall inspect
the related Mortgage Property as promptly as practicable after the 45th day
of delinquency, (b) the Servicer may perform an inspection at such other
times and at such intervals as the Servicer deems appropriate and (c) the
Servicer shall immediately perform an inspection upon any abandonment of
the related Mortgaged Property. For any Mortgage Loan that is insured by a
Primary Mortgage Insurance Policy, the Servicer shall inspect the related
Mortgaged Property as directed by the related Primary Insurer; provided,
however, that, at a minimum, in the event the Mortgage Loan becomes 60 days
delinquent, the Servicer shall inspect the related Mortgaged Property prior
to the 90th day of delinquency. The Servicer shall keep a written report of
each such inspection.
Section 3.16 Claims
In connection with its activities as servicer, the Servicer agrees
to prepare and present, on behalf of itself and the Owner, claims to the
FHA or VA, as applicable, under any MIC or LGC in a timely fashion and, in
this regard, to take such action as shall be necessary to permit recovery
respecting a defaulted Government Mortgage Loan. Pursuant to Section 3.4,
any amounts collected by the Servicer under any guaranty or insurance
policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 3.5.
ARTICLE IV
PAYMENTS TO THE OWNER
Section 4.1 Distributions
(a) On each Remittance Date the Servicer shall remit to the Owner
all amounts credited to the Custodial Account as of the close of business
on the preceding Determination Date, net of charges or withdrawals from the
Custodial Account pursuant to Section 3.5 hereof. Each such remittance
shall be made by wire or other electronic funds transfer of immediately
available funds to the account of the Owner according to the written wire
instructions provided by the Owner to the Servicer from time to time.
(b) With respect to any remittance to the Owner made by the
Servicer after the second Business Day following the Business Day on which
such remittance was due, the Servicer shall pay to the Owner interest on
such late remittance at an annual rate equal to Prime plus two percent
(2.0%), but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in the Custodial Account
by the Servicer on the date such late remittance is made and shall cover
the period commencing with the date on which such remittance was due and
ending with the Business Day on which such late remittance is made, both
inclusive. Such interest shall be remitted along with such late remittance.
The payment by the Servicer of any such interest shall not be deemed an
extension of time for payment or a waiver of any Event of Default by the
Servicer.
Section 4.2 Reports
(a) Not later than each Remittance Advice Date, the Servicer shall
furnish to the Owner via any electronic medium a monthly report in a form
reasonable acceptable to institutional buyers of mortgage loans, which
report shall include, without limitation, with respect to each Mortgage
Loan the following loan-level information: (i) the balance due as of the
last day of the related Due Period, (ii) all Principal Prepayments applied
to the Mortgagor's account during the related Due Period, and (iii) the
delinquency and bankruptcy status of the Mortgage Loan, if applicable.
(b) With respect to any REO Property, and upon the request of the
Owner, the Servicer shall furnish to the Owner a statement describing the
Servicer's efforts during the previous month in connection with the sale of
such REO Property, including any rental of such REO Property incidental to
the sale thereof and an operating statement. The Servicer shall also
provide the Owner with such information concerning the Mortgage Loans as is
necessary for Owner to prepare its federal income tax return and as the
Owner may reasonably request from time to time. The Owner agrees to pay for
all reasonable out-of-pocket expenses incurred by the Servicer in
connection with complying with any request made by the Owner hereunder if
such information is not customarily provided by the Servicer in the
ordinary course of servicing mortgage loans similar to the Mortgage Loans.
Section 4.3 Monthly Advances by Servicer
On the Business Day immediately preceding each Remittance Date,
the Servicer shall deposit in the Custodial Account from its own funds or
from amounts held for future distribution an amount equal to all Monthly
Payments (with interest adjusted to the Mortgage Loan Remittance Rate)
which were due on the Mortgage Loans during the applicable Due Period and
which were delinquent at the close of business on the Determination Date
immediately preceding such Remittance Date or which were deferred pursuant
to Section 3.1(c). Any amounts held for future distribution and so used
shall be replaced by the Servicer by deposit in the Custodial Account on or
before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Owner required to be
made on such Remittance Date. The Servicer's obligation to make such
Monthly Advances as to any Mortgage Loan will continue through the last
Monthly Payment due prior to the payment in full of the Mortgage Loan, or
through the earlier of: (i) the last Remittance Date prior to the
Remittance Date for the distribution of all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan; and (ii) the Remittance Date
prior to the date the Mortgage Loan is converted to REO Property, provided
however, that if requested by a Rating Agency in connection with
Pass-Through Transfer, the Company shall be obligated to make such advances
through the Remittance Date prior to the date on which cash is received in
connection with the liquidation of REO Property; provided, however, that
such obligation shall cease if the Servicer determines, in its sole
reasonable opinion, that advances with respect to such Mortgage Loan are
non-recoverable by the Servicer from Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds, or otherwise with respect to a particular
Mortgage Loan. In the event that the Servicer determines that any such
advances are non-recoverable, the Servicer shall provide the Owner with a
certificate signed by two officers of the Servicer evidencing such
determination.
ARTICLE V
GENERAL SERVICING PROCEDURE; COVENANTS;
REPRESENTATIONS AND WARRANTIES
Section 5.1 Assumption Agreements
(a) The Servicer will use its best efforts to enforce any
"due-on-sale" provision contained in any Mortgage or Mortgage Note and to
deny assumption by the person to whom the Mortgaged Property has been or is
about to be sold, whether by absolute conveyance or by contract of sale,
and whether or not the Mortgagor remains liable on the Mortgage and the
Mortgage Note, provided that in accordance with the terms of the Mortgage
Note, the Servicer may permit an assumption if but only if the Owner
approves the creditworthiness of the assuming party. When the Mortgaged
Property has been conveyed by the Mortgagor, the Servicer will, to the
extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale"
clause applicable thereto; provided, however, the Servicer will not
exercise such rights if prohibited by Applicable Requirements from doing so
or if the exercise of such rights would impair or threaten to impair any
recovery under the related Primary Mortgage Insurance Policy, if any, or
under the LGC or MIC, if applicable. If the Servicer reasonably believes it
is unable under Applicable Requirements to enforce such "due-on-sale"
clause, the Servicer will request the written permission of the Primary
Mortgage Insurer, if required to cause the coverage under the Primary
Mortgage Insurance Policy to remain in full force and effect, and the Owner
prior to entering into an assumption and modification agreement with the
person to whom such property has been conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted
by Applicable Requirements, the Mortgagor remains liable thereon. In
connection with any such assumption, the related Mortgage Interest Rate,
the Unpaid Principal Balance, and the term of the Mortgage Loan may not be
changed. If an assumption is allowed pursuant to this Section 5.1(a), the
Servicer, with the prior consent of the Primary Mortgage Insurer, if any,
is authorized to enter into a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged
Property is substituted as Mortgagor and becomes liable under the Mortgage
Note. Any such substitution of liability agreement shall be in lieu of an
assumption agreement.
(b) The Servicer shall follow Acceptable Servicing Procedures
(including underwriting standards) with respect to any such assumption or
substitution of liability. The Servicer shall notify the Owner that any
such substitution of liability or assumption agreement has been completed
by forwarding to the Owner or its designee the original of any such
substitution of liability or assumption agreement, which document shall be
added to the related Collateral File and shall, for all purposes, be
considered a part of such Collateral File to the same extent as all other
documents and instruments constituting a part thereof.
(c) For purposes of this Section 5.1, 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 5.2 Satisfaction of Mortgages and Release of Collateral Files
(a) Upon the payment in full of any Mortgage Loan, or the receipt
by the Servicer of a notification that payment in full will be escrowed in
a manner customary for such purposes, the Servicer (i) shall prepare the
appropriate documents and instruments required to satisfy or release the
lien of the Mortgage in accordance with applicable state law requirements,
(ii) shall promptly and within the time periods appropriate to process the
satisfaction or release within the applicable legal deadlines notify the
Owner of such event and (iii) shall request that the Owner deliver the
required portion of the Collateral File to the Servicer. The Owner shall,
within five (5) Business Days following its receipt of any such
certification and request, send to the Servicer the requested portion of
the Collateral File. Upon receipt of such package, the Servicer shall
prepare and execute the documents and instruments necessary to satisfy or
release the lien of the Mortgage and shall process such satisfaction or
release in accordance with applicable state law requirements. In addition,
if, with respect to any Mortgage Loan that has been paid in full, the Owner
has recorded or caused to be recorded in the appropriate public recording
office of the jurisdiction in which the related Mortgaged Property is
located the related Assignment of Mortgage which designates the Owner as
the holder of record of the Mortgage, the Servicer shall prepare and
deliver to the Owner, together with a request for execution, the documents
and instruments necessary to satisfy or release the lien of the Mortgage.
The Owner shall, within five (5) Business Days following its receipt of any
such request, send to the Servicer the fully-executed documents that were
prepared and requested by the Servicer. Upon receipt of such package, the
Servicer shall process such satisfaction or release in accordance with
applicable state law requirements. In the event that applicable state law
requires that a satisfaction or release be recorded within a shorter time
period than the processes set forth above permits, the Servicer shall
advise the Owner accordingly and shall use reasonable efforts to ensure
that the lien of the Mortgage is released or satisfied in accordance with
applicable state law requirements. The Owner shall assist therewith by
returning to the Servicer the required portion of the Collateral File (and,
if applicable, the executed satisfaction and release documents and
instruments) within the time periods specified by the Servicer. The
Servicer shall not be liable for and the Owner shall indemnify the Servicer
against any third party liability for failure to release the lien of a
Mortgage as required under applicable law to the extent that such failure
was caused by the Owner's breach of its obligations under this Section 5.2.
(b) If the Servicer satisfies or releases a Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage
or should the Servicer otherwise prejudice any rights the Owner may have
under the mortgage instruments, upon written demand of the Owner, the
Servicer shall remit to the Owner the then unpaid principal balance of the
related Mortgage Loan. The Servicer shall maintain the fidelity bond and
errors and omissions insurance policy as provided for in Section 3.12
insuring the Servicer against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth
herein.
Section 5.3 Servicing Compensation
As compensation for its services hereunder, the Servicer shall be
entitled to pay itself the Servicing Fee with respect to each Mortgage Loan
from the gross amount of interest payments on such Mortgage Loan which are
actually received by the Servicer with respect thereto. Additional
servicing compensation in the form of all Ancillary Income which are
actually received by the Servicer may be retained by the Servicer to the
extent not required to be deposited into the Custodial Account pursuant to
the terms of this Agreement. The Servicer 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 in this Agreement.
Section 5.4 Statements as to Compliance
The Servicer will deliver to the Owner, within 90 days of the
Servicer's fiscal year end, an Officers' Certificate for the prior fiscal
year, stating that (i) the Servicer has fully complied with the provisions
of this Agreement, (ii) a review of the activities of the Servicer during
the preceding fiscal year and of performance under this Agreement has been
made under such supervision of the officers signing such Officers'
Certificate, and (iii) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such fiscal year, or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known
to such officers and the nature and status thereof.
Section 5.5 Annual Independent Public Accountants' Servicing Report
On or before May 31st of each year, beginning May 31, 2002, the
Servicer at its expense shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Owner to the effect that such
firm has examined certain documents and records relating to the mortgage
servicing operations of the Servicer and that such firm is of the opinion
that on the basis of such examination conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers, nothing
has come to their attention which would indicate that such servicing has
not been conducted in compliance therewith, except for (i) such exceptions
as such firm shall believe to be immaterial and (ii) such other exceptions
as shall be set forth in such statement.
Section 5.6 Owner's Right to Examine Servicer Records, etc.
The Owner shall have the right, at the Owner's expense, except for
immaterial items in the ordinary course of business, to examine and audit
the Servicer's books of account, records, reports, and other papers
relating to (i) the performance by the Servicer of its obligations and
duties under this Agreement, or (ii) the Mortgage Loans, to make copies and
extracts therefrom, and to discuss the affairs, finances, and accounts of
such Servicer relating to such performance with its officers and employees,
all at such reasonable times and places and as often as may be reasonably
requested.
Section 5.7 Consents and Approvals
The Owner shall timely obtain, at its sole cost and expense, the
consents and approvals required by law or pursuant to contract to
consummate the transactions contemplated hereby. All such consents will be
obtained without any cost or expense to the Servicer and will be obtained
without any adverse modification in the terms of any of the agreements
relating to the Mortgage Loans or the imposition of any burdensome
provisions or conditions on the Servicer.
Section 5.8 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
(a) The Servicer and the Owner agree that with respect to
some or all of the Mortgage Loans, the Owner may effect
one or more Whole Loan Transfers and/or one or more
Pass-Through Transfers; provided, however, the Owner
agrees to use commercially reasonable efforts not to
effect a Whole Loan Transfer or a Pass Through Transfer
if the aggregate outstanding principal balance of the
Mortgage Loans subject to such Whole Loan Transfer or
Pass Through Transfer is less that $10,000,000.
Transfers. In connection with a Whole Loan Transfer, the
related Reconstitution Agreement shall provide
that no more than five (5) Persons shall have the status
of "Owner" thereunder.
(b) With respect to each Whole Loan Transfer or Pass-Through
Transfer, as the case may be, entered into by Owner,
Servicer agrees:
(i) to cooperate fully with Owner and any
prospective Owner with respect to all reasonable requests and due
diligence procedures;
(ii) to execute all Reconstitution Agreements
provided that each of the Servicer and the Owner is given an
opportunity to review and reasonably negotiate in good faith the
content of such documents not specifically referenced or provided
herein and provided further that such Reconstitution Agreement
does not materially diminish Servicer's rights or materially
increase Servicer's responsibilities under this Agreement;
(iii) to the extent that any Mortgage Loan is
transferred to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac in a Pass-Through
Transfer, to service such Mortgage Loan pursuant to its servicing
agreement with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, as applicable (provided,
however, that the Servicer shall not be responsible for incurring
out-of-pocket servicing costs or expenses to third parties that
the Servicer does not bear under this Agreement, such as custodial
fees and expenses);
(iv) with respect to any Mortgage Loan that is
subject to a Whole Loan Transfer or a Pass-Through Transfer which
occurs within twelve months of the Effective Date for such
Mortgage Loan, the Servicer shall restate the representations and
warranties regarding the Servicer set forth in Subsection 6.7
hereof, as of the date of such Whole Loan Transfer or Pass-Through
Transfer;
(v) to deliver to the Owner for inclusion in any
prospectus or other offering material such publicly available
information regarding the Servicer, its financial condition and
its most recently publicly disclosed mortgage loan delinquency,
foreclosure and loss experience as shall be reasonably requested
by the Owner, and to deliver to the Owner any non-public,
unaudited financial information regarding the Mortgage Loans as
shall be reasonably requested by the Owner, in which case the
Owner, shall bear the cost of having such information audited by
certified public accountants if the Owner desires such an audit;
provided that in connection with inclusion of any information
provided by the Servicer pursuant to this clause 4 in any
Prospectus Supplement or other offering document, the Servicer and
the Owner shall enter into customary indemnity agreements, which
are generally used in connection with securitization of mortgage
loans similar to the Mortgage Loans subject thereto;
(vi) to deliver to the Owner and to any Person
designated by the Owner, at the Owner's expense, such statements
and audit letters of reputable, certified public accountants
pertaining to information provided by the Servicer pursuant to
clause 4 above as shall be reasonably requested by the Owner;
(vii) to deliver to the Owner, and to any Person
designated by the Owner, such in-house opinions of counsel as are
customarily delivered by originators or servicers of mortgage
loans, as the case may be, in connection with Whole Loan Transfers
or Pass-Through Transfers, as the case may be, it being understood
that the cost of any opinions of outside special counsel that may
be required for a Whole Loan Transfer or Pass-Through Transfer, as
the case may be, shall be the responsibility of the Owner; and
(viii) to cooperate reasonably with the Owner
and any prospective Owner with respect to the preparation of
Mortgage Loan Documents and such other documents, and with respect
to the servicing of the Mortgage Loans in accordance with the
requirements from time to time of the rating agencies rating a
Whole Loan Transfer or Pass-Through Transfer, the credit enhancers
providing credit enhancement thereon and the requirements of the
Owner's shelf registration statement.
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 in accordance with the terms of this
Agreement and with respect thereto this Agreement shall remain in full
force and effect.
ARTICLE VI
THE SERVICER
Section 6.1 Indemnification; Third Party Claims
The Servicer agrees to indemnify and hold harmless the Owner
against any and all Losses that the Owner may sustain in any way related to
the failure of such Servicer to service the Mortgage Loans in compliance
with the terms of this Agreement; provided, however, the Servicer shall not
be liable hereunder with respect to any action or inaction (a) in
accordance with the direction or consent of the Owner or (b) resulting from
the Owner's failure to respond to a request by the Servicer for direction
or consent in accordance with Section 3.1(c) hereof. The Servicer shall
immediately notify the Owner if a claim is made by a third party with
respect to this Agreement or the Mortgage Loans. The Servicer shall assume
(with the written consent of the Owner) the defense of any such claim and
pay all reasonable expenses in connection therewith, including counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which
may be entered against the Servicer or the Owner in respect of such claim.
The Servicer shall follow any written instructions received from the Owner
in connection with any such claim and the Owner shall promptly reimburse
the Servicer for all amounts reasonably advanced by it pursuant to the
preceding sentence, except when the claim (a) is related to the Servicer's
obligations to indemnify the Owner pursuant hereto, (b) results from the
failure of the Servicer to service the Mortgage Loans in compliance with
the terms of this Agreement or (c) results from the Servicer's willful
misconduct, bad faith or negligence in performing its duties under this
Agreement.
The Owner shall indemnify and hold harmless the Servicer against
any and all Losses that the Servicer may sustain as a result of (a) any act
or omission on the part of the Owner, any prior servicer or owner or any
other third party which occurred in connection with the origination,
receiving, processing, funding or servicing of a Mortgage at any time prior
to the Cut-off Date or (b) a breach of any of the Owner's representations,
warranties or covenants or obligations contained herein.
With respect to any Mortgage Loan, in the event that the Owner
records or causes to be recorded in the appropriate public recording office
of the jurisdiction in which the related Mortgaged Property is located the
related Assignment of Mortgage which designates the Owner as the holder of
record of the Mortgage, the Owner shall comply with the provisions of
Section 5.2(a) regarding the execution and delivery of release and
reconveyance documents, and shall immediately complete, sign and return to
the Servicer any additional documents that may be required of the holder of
record of the Mortgage and may be reasonably requested by the Servicer in
order to comply with the Servicer's servicing obligations, and, in its
capacity as the holder of record, shall take such other action as may be
reasonably requested by the Servicer. In addition, if, as a result of the
recording of the related Assignment of Mortgage, the Owner, in its capacity
as the holder of record, receives written notice of any action with respect
to the related Mortgage or the related Mortgaged Property, the Owner shall
send a copy of such notice to the Servicer immediately in accordance with
the provisions of Section 9.8 of this Agreement. The Owner agrees that the
Servicer shall have no liability to the Owner for the Owner's failure to
comply with the provisions set forth in this paragraph.
Section 6.2 Servicer Covenants; Merger or Consolidation of the Servicer
(a) The Servicer covenants that it will keep in full force and
effect its existence, rights and franchises as a corporation, and its
status as a ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, HUD and VA approved servicer in good
standing and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
(b) Any Person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person
succeeding to all or substantially all of the business or assets of the
Servicer (whether or not related to loan servicing), shall be the successor
of the Servicer 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 Servicer shall
not, without the prior written approval of the Owner, be a party to any
such merger, consolidation or conversion, or sell or otherwise dispose of
all or substantially all of its business or assets unless the successor or
surviving person shall be an institution that is a ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac and HUD and VA approved servicer in good standing.
Section 6.3 Limitation on Liability of the Servicer and Others
The Servicer and the directors, officers, employees or agents of
the Servicer shall not be under any liability to the Owner for (a) any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, (b) errors in judgment, or (c) any action or
inaction in accordance with the direction or consent of the Owner;
provided, however, this provision shall not protect the Servicer against
any breach of warranties or representations made herein, any failure to
perform its obligations in accordance with any standard of care set forth
in this Agreement (unless in accordance with the direction or consent of
the Owner), or any liability which would otherwise be imposed by reason of
willful misconduct, bad faith or gross negligence in the performance of its
duties or by reason of any breach of the terms and conditions of the
Agreement. The Servicer and any officer, employee or agent of the Servicer
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. Subject to Section 6.1, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties under this Agreement and which may involve it in
any expense or liability; provided, however, that the Servicer may, with
the consent of the Owner, undertake any such action which it may deem
necessary or desirable with respect to this Agreement and the rights,
duties and the interests 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 Owner will be
liable and the Servicer shall be entitled to be reimbursed therefor from
the Owner unless any such costs or liabilities result from the negligence,
bad faith or willful misfeasance of the Servicer in performing such action.
Section 6.4 Servicer Not to Resign
The Servicer shall not resign from the obligations and duties
hereby imposed on it except by mutual consent of the Servicer and the Owner
or upon the determination that the Servicer's duties hereunder are no
longer permissible under Applicable Requirements and such incapacity cannot
be cured by the Servicer. Any such determination permitting the resignation
of the Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Owner. No such resignation shall become effective until a
successor which satisfies the requirements set forth in Section 9.1 has
assumed the Servicer's responsibilities and obligations hereunder in
accordance with such Section.
Section 6.5 No Transfer of Servicing
The Servicer acknowledges that the Owner has entered into this
Agreement with the Servicer in reliance upon the adequacy of the Servicer's
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 Servicer
shall not either assign this Agreement or the servicing hereunder without
the prior written approval of the Owner in its sole discretion; provided,
however, that, without the Owner's consent, the Servicer may assign its
right and obligations hereunder as the Servicer to any entity that is
directly or indirectly owned or controlled by the Servicer so long as the
Servicer executes a Guaranty pursuant, to which it guarantees the
performance by such entity of all obligations hereunder and such entity is
a HUD and VA approved servicer.
Section 6.6 Representations and Warranties of the Servicer
(a) The Servicer is a limited partnership, duly organized, validly
existing and in good standing under the laws of the State of Texas, and has
all licenses necessary to carry on its business as now being conducted and
is licensed, qualified and in good standing in the states where the
Mortgaged Properties are located if the laws of such states require
licensing or qualification in order to conduct business of the type
conducted by the Servicer and to the extent necessary to ensure the
servicing of each Mortgage Loan in accordance with this Agreement. The
Servicer has the power and authority to enter into, execute and deliver
this Agreement and all documents and instruments executed and delivered
pursuant hereto and to perform its obligations in accordance therewith. The
execution, delivery and performance of this Agreement by the Servicer and
the consummation of the transactions contemplated hereby, have been duly
and validly authorized. This Agreement evidences the valid, binding and
enforceable obligations of the Servicer.
(b) No consent, approval, authorization, or order of any court or
governmental agency or body relating to the transactions contemplated by
this Agreement is required as to the Servicer or, if required, such
consent, approval, authorization, or order has been or will, prior to the
Cut-off Date, be obtained.
(c) The consummation of the transactions contemplated by this
Agreement, including without limitation the fulfillment of or compliance
with the terms and conditions of this Agreement, are in the ordinary course
of business of the Servicer and will not (i) result in the breach of any
term or provision of the charter or by-laws of the Servicer, (ii) result in
the breach of any term or provision of, or conflict with or constitute a
default under, or result in the acceleration of any obligation under, any
agreement, indenture, loan or credit agreement, or other instrument to
which the Servicer or its property is subject or (iii) result in the
violation of any law, rule, regulation, order, judgment, or decree to which
the Servicer or its property is subject.
(d) The Servicer is an approved servicer of mortgage loans for
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, in good standing. No event has occurred,
including but not limited to a change in insurance coverage, which would
make the Servicer unable to comply with ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac
eligibility requirements.
(e) The Servicer is an approved HUD/FHA mortgagee and VA approved
servicer, with the facilities, procedures, and experienced personnel
necessary for the sound servicing of mortgage loans of the same type as the
Mortgage Loans. No event has occurred, including but not limited to a
change in insurance coverage, which would make the Company unable to comply
with HUD or VA eligibility requirements or which would require notification
to HUD or VA.
(f) The Company acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such services and that
the entire Servicing Fee shall be treated by the Company, for accounting
and tax purposes, as compensation for the servicing and administration of
the Mortgage Loans pursuant to this Agreement.
Section 6.8 Representations and Warranties of the Owner
With respect to the Mortgage Loans, the Owner hereby makes to the
Servicer as of the Cut-off Date each of the representations and warranties
set forth below:
(a) The Owner has all requisite corporate or organizational power,
authority and capacity, to carry on its business as it is now being
conducted, to execute and deliver this Agreement, and to perform all of its
obligations hereunder. The Owner does not believe, nor does it have any
cause or reason to believe, that it cannot perform each and every covenant
contained in this Agreement.
(b) The execution, delivery and performance of this Agreement by
the Owner and the consummation of the transactions contemplated thereby
have been duly and validly authorized by all necessary corporate,
shareholder or other action; this Agreement has been duly and validly
executed and delivered by the Owner, and is a valid and legally binding
agreement of the Owner enforceable against the Owner in accordance with its
terms, subject to bankruptcy, insolvency and similar laws affecting
generally the enforcement of creditor's rights and the discretion of a
court to grant specific performance of contracts. Any requisite consents or
approvals of third parties (including Investors and any other applicable
regulatory authorities) to the execution and delivery of this Agreement or
the performance of the transactions contemplated hereby by the Owner have
been obtained or will be obtained prior to the Cut-off Date or such other
date as expressly provided herein.
ARTICLE VII
DEFAULT
Section 7.1 Events of Default
In case one or more of the following Events of Default by the
Servicer shall occur and be continuing:
(i) any failure by the Servicer to remit to the
Owner when due any payment required to be made under the terms of
this Agreement, which failure continues unremedied for a period of
two (2) days after the due date thereof; the Owner shall use
reasonable efforts to notify the Servicer that it has not received
the payment due, but the Owner's notice shall not be a condition
of the Event of Default; or
(ii) any failure by the Servicer to duly observe
or perform, in any material respect, any other covenant,
obligation or agreement of the Servicer as set forth in this
Agreement, which failure continues unremedied for a period of 30
days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the
Servicer by the Owner; 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,
readjustment of debt, marshaling of assets and liabilities, or
similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such
decree or order shall have remained in force, undischarged or
unstayed for a period of thirty (30) days; or
(iv) the Servicer shall consent to the
appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer
or relating to all or substantially all of the Servicer's
property; or
(v) the Servicer shall admit in writing its
inability to pay its debts 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 obligation or ceases its normal
business operations for three (3) Business Days; or
(vi) failure by the Servicer to maintain its
license to do business in any jurisdiction where a Mortgaged
Property is located if such license is required and such failure
continues unremedied for a period of thirty (30) days;
(vii) the Servicer ceases to meet the
qualifications of a HUD/FHA mortgagee or VA servicer; or
(viii) the Servicer attempts to assign its right
to servicing compensation hereunder or to assign this Agreement or
the servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof in violation of this Agreement,
including Section 6.5.
then, and in each and every such case, so long as such Event of Default
shall not have been remedied, the Owner, by notice in writing to the
Servicer (in each such instance, the "Defaulted Servicer"), may, in
addition to whatever rights the Owner may have at law or equity to damages,
including injunctive relief and specific performance, commence termination
of all of the rights and obligations of the Defaulted Servicer under this
Agreement and may exercise any and all other remedies available at law or
at equity. Upon receipt by the Defaulted Servicer of such written notice
from the Owner stating the intent to terminate the Defaulted Servicer as
servicer under this Agreement as a result of such Event of Default, all
authority and power of the Defaulted Servicer under this Agreement, whether
with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the successor appointed pursuant to Section 9.1. Upon written
request from the Owner, the Defaulted Servicer shall, at its sole expense,
prepare, execute, and deliver to a successor any and all documents and
other instruments, place in such successor's possession all Collateral
Files and Servicing Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, all of which shall be undertaken immediately and shall be
completed as soon as possible and in all events by not later than thirty
(30) Business Days following the Owner's request therefor. The Defaulted
Servicer agrees to cooperate with the Owner and such successor in effecting
the termination of the Defaulted Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to such successor
for administration by it of all cash amounts which shall at the time be
credited by the Defaulted Servicer to the Custodial Account, the Escrow
Account or the REO Account and all other amounts which may thereafter be
received with respect to the Mortgage Loans and to which the Defaulted
Servicer is not entitled pursuant to the terms of this Agreement.
Section 7.2 Waiver of Defaults
The Owner may waive any default by the Defaulted Servicer in the
performance of its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto except
to the extent expressly so waived.
Section 7.3 Survival of Certain Obligations and Liabilities of the
Defaulted Servicer
The representations, warranties, covenants, indemnities and
agreements of the parties provided in this Agreement and the parties'
obligations hereunder shall survive the execution and delivery and the
termination or expiration of this Agreement. Notwithstanding any
termination of the rights and obligations of the Defaulted Servicer
pursuant to this Section 7, the Defaulted Servicer shall remain liable for
any actions of the Defaulted Servicer prior to the effective time of such
termination.
ARTICLE VIII
TERMINATION
Section 8.1 Termination of Agreement
This Agreement shall terminate upon any of: (i) the later of the
distribution to the Owner of final payment or liquidation with respect to
the last Mortgage Loan and each REO Property, 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, (ii) the mutual consent of the parties in writing, or (iii) the
termination of the Servicer pursuant to Section 8.2.
Section 8.2 Termination of the Servicer due to an Event of Default
(a) Upon 30 days' written notice, the Owner may, at its sole
option, upon the occurrence of an Event of Default and in accordance with
Section 7.1, terminate any rights the Servicer may have hereunder. Any such
notice of termination shall be in writing and delivered to the terminated
Servicer (in such instance, the "Terminated Servicer") by registered mail
as provided in Section 9.8 of this Agreement. If the Owner so terminates
the rights of a Terminated Servicer, the Owner with full cooperation of the
Terminated Servicer shall arrange for the transfer of servicing to, at the
Owner's option, the Owner or a third party, and the Terminated Servicer
shall continue servicing, for the Servicing Fee provided herein, the
Mortgage Loans under this Agreement until the Owner gives the Terminated
Servicer notice of the transfer and such transfer has been completed.
(b) The Terminated Servicer agrees to cooperate with the Owner and
such successor in effecting the termination of the Terminated Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the Terminated Servicer to the
Custodial Account, the Escrow Account or the REO Account, or thereafter be
received with respect to the Mortgage Loans and to which the Terminated
Servicer is not entitled pursuant to the terms of this Agreement.
Section 8.3 Termination Without Cause
Upon at least 30 days prior notice, the Owner may terminate, at its sole
option the Servicer without cause. Any such notice of termination shall be
in writing and delivered to the Servicer and any Rating Agency by
registered mail as provided in Section 9.8. In the event the Owner so
chooses to terminate the Servicer, the Servicer shall be entitled to
receive, as liquidated damages, upon its termination as Servicer hereunder
without cause pursuant to this Section 8.3, an amount equal to one and
one-half percent (1 1/2%) of the aggregate outstanding principal amount of
each Mortgage Loan as of the termination date paid by the Owner to the
Servicer.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Successor to the Servicer
(a) Prior to termination of the Servicer's responsibilities and
duties under this Agreement pursuant to Section 6.4, 7.1, 8.1 or 8.2, the
Owner shall either (i) succeed to and assume all of the Servicer's
responsibilities, rights, duties, and obligations under this Agreement from
and after the date of such succession or (ii) appoint a successor to the
Servicer that shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this
Agreement prior to the termination of the Servicer's responsibilities,
duties and liabilities under this Agreement pursuant to Section 8.2 above.
In the event that the Servicer's duties, responsibilities, and liabilities
under this Agreement shall be terminated pursuant to the foregoing
Sections, the Servicer shall discharge such duties and responsibilities,
and be compensated therefor as provided in this Agreement, during the
period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which
it is obligated to exercise under this Agreement and shall take no action
whatsoever that might impair or prejudice the rights or financial condition
of its successor. The resignation or removal of the Servicer pursuant to
the foregoing Sections shall not become effective until a successor shall
have been appointed pursuant to this Section and shall in no event relieve
the Servicer of its non-servicing duties, obligations, covenants,
representations and warranties, it being understood and agreed that the
provisions of Sections 5.10, 6.1, Article 7 and Article 8 shall be
applicable to the Servicer notwithstanding any such resignation or
termination of the Servicer or the termination of this Agreement.
(b) The Servicer shall promptly deliver to the successor (i) the
funds in the Custodial Account and the Escrow Account to which the Owner is
entitled pursuant to the terms of this Agreement, (ii) all other funds to
which the Owner is entitled pursuant to the terms of this Agreement, (iii)
all other amounts which may thereafter be received with respect to the
Mortgage Loans and to which the Servicer is not entitled pursuant to the
terms of this Agreement and (iv) all Collateral Files and Servicing Files
and related documents and statements held by it hereunder. The Servicer
shall account for all funds and shall execute and deliver such instruments
and do such other things as may reasonably be required to more fully and
definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.
(c) Upon a successor's acceptance of appointment as such, the
Owner shall notify the Servicer of such appointment.
Section 9.2 Amendment
This Agreement may be amended from time to time by the parties by
written agreement signed by both of the parties.
Section 9.3 Duration of Agreement
This Agreement shall continue in existence and effect until
terminated as herein provided.
Section 9.4 Governing Law
This Agreement shall be governed by and construed in accordance
with the internal laws of the State of California, without reference to the
choice of law doctrine of such state.
Section 9.5 General Interpretive Principles
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(i) 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;
(ii) accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
generally accepted accounting principles;
(iii) 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;
(iv) a 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;
(v) 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
(vi) the term "include" or "including" shall
mean without limitation by reason of enumeration.
Section 9.6 Reproduction of Documents
This Agreement and all documents relating hereto, including
without limitation (i) consents, waivers, and modifications which may
hereafter be executed, (ii) documents received by any party at the closing,
and (iii) financial statements, certificates, and other information
previously or hereafter furnished, may be reproduced by any photographic,
photostatic, microfilm, microcard, miniature photographic or other similar
process. The parties agree that any such reproduction shall be admissible
in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not
such reproduction was made by a party in the regular course of business,
and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
Section 9.7 Notices
All demands, notices, consents, waivers and other communications
hereunder shall be in writing and shall be deemed to have been duly given
if personally delivered or delivered by facsimile, overnight courier, or
registered mail, postage prepaid, or delivered by telefacsimile, to:
(i) in the case of the Servicer, at the address set forth below or
such other address as may hereafter be furnished to the Owner in writing by
the Servicer:
Countrywide Homes Loans, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Investor Accounting
With a copy to:
Countrywide Home Loans, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
(ii) in the case of the Owner, at the address set forth below, or
such other address as may hereafter be furnished to the Servicer by the
Owner:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and in the case of any subsequent Owner, as set forth in written notice
supplied to the Servicer by such subsequent Owner. All reports that are due
to the Owner from the Servicer pursuant to Section 4.2 shall be deemed to
have been duly given if delivered to the internet address from time to time
provided by the Owner to the Servicer.
Section 9.8 Severability of Provisions
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be held invalid for any reason whatsoever,
then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of
this Agreement and shall in no way affect the validity or enforceability of
the other covenants, agreements, provisions or terms of this Agreement or
the rights of the Owner hereunder. 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
economic effect of which is nearly as possible the same as the economic
effect of this Agreement without regard to such invalidity.
Section 9.9 Disclosure of Relationship
Each party (including the respective affiliates) shall have the
right upon obtaining prior written consent from the other party, from time
to time, to publish, distribute, advertise or otherwise disclose the
relationship and the general services created and performed under this
Agreement; provided, however, such disclosure shall not identify the amount
or nature of fees earned or to be paid hereunder. No disclosure permitted
by this Section 9.10 shall include any Mortgagor information.
Section 9.10 Exhibits and Schedules
The following exhibits and schedules to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this
Agreement:
Exhibit A MORTGAGE LOAN SCHEDULE
Exhibit B LIST OF COLLATERAL DOCUMENTS
Exhibit C LIST OF DOCUMENTS IN CREDIT FILE
Exhibit D FORM OF GUARANTY
Section 9.11 Counterparts; Successors and Assigns
This Agreement may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when
so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same agreement. Subject to Sections
6.4, 6.5, 7.1 and 8.1, this Agreement shall inure to the benefit of and be
binding upon the Servicer, the Owner and their respective successors and
assigns.
Section 9.12 Effect of Headings
The headings in this Agreement are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof.
Section 9.13 Other Agreements Superseded
This Agreement supersedes all prior agreements and understandings
relating to the subject matter hereof.
[signatures start on next page]
IN WITNESS WHEREOF, the Servicer and the Owner have caused their
names to be signed to this Servicing Agreement by their respective officers
thereunto duly authorized as of the day and year first above written.
SERVICER:
COUNTRYWIDE HOME LOANS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
OWNER:
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[attach read-only diskette]
EXHIBIT B
LIST OF COLLATERAL DOCUMENTS
Copy of Note
Copy of Mortgage or Deed of Trust, including all riders
Copy of all riders to Note and Mortgage or Deed of Trust Settlement
statement (HUD 1)
Copy of LGC (if applicable)
Copy of MIC (if applicable)
Copy of PMI Certificate (if applicable)
Copy of the title policy, or title commitment (or similar document)
Appraisal
Flood determination certificate
Hazard Insurance declaration page
Loan application
EXHIBIT C
LIST OF DOCUMENTS IN CREDIT FILE
Original Note
Original Mortgage
Assignment(s) of Mortgage
LGC (if applicable)
MIC (if applicable)
Title policy
PMI Certificate (if applicable)
EXHIBIT D
FORM OF GUARANTY
THIS GUARANTEE (the "Guarantee") is made and entered into as of [DATE] by
Countrywide Home Loans, Inc., a New York corporation ("Guarantor") to and
for the benefit of ▇▇▇▇▇▇▇ Sachs Mortgage Company ("Company").
RECITALS
A. Guarantor intends to assign to Countrywide Home Loans
Servicing LP, a Texas limited partnership ("Servicer")
all of the Guarantor's rights and obligations to service
certain mortgage loans pursuant to that certain Servicing
Agreement dated as of September 27, 2001 by and between
Guarantor and Company (the "Servicing Agreement"); and
B. As a condition precedent to the effectiveness of such
assignment, Guarantor is required to execute and deliver
to Company this Guarantee.
NOW, THEREFORE, in consideration of the above Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Guarantor hereby agrees as follows:
1. Guarantee of Obligations. Guarantor hereby irrevocably and
unconditionally guarantees the prompt, full and faithful
performance, payment and discharge by Servicer of each and every
term, condition, agreement, representation and warranty on the
part of Servicer contained in the Servicing Agreement and the
prompt payment when due of all obligations, indebtedness and
liabilities that the Servicer may have to the Company under the
Servicing Agreement as and when due (collectively and severally,
the "Obligations").
2. Not Affected by Bankruptcy of Servicer. Guarantor irrevocably and
unconditionally guarantees the performance and payment of the
Obligations, upon (a) the dissolution, insolvency or business
failure of, or any assignment for the benefit of creditors by, or
commencement of any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceedings by or against
Servicer, or (b) the appointment of a receiver for, or the
attachment, restraint of or making or levying of any order of
court or legal process affecting, the property of Servicer.
3. Independent Obligation. The obligations of Guarantor hereunder are
independent of the Obligations of Servicer, and a separate action
or actions may be brought and prosecuted against Guarantor whether
or not action is brought against Servicer and whether or not
Servicer is joined in any such action.
4. Primary Obligation. This Guarantee is the primary obligation of
the undersigned. Guarantor waives any right to require Company to
(a) proceed against Servicer or any other party; or (b) pursue any
other remedy in Company's power whatsoever. Company may, at its
election, exercise any right or remedy Company may have against
Servicer, without affecting or impairing in any way the liability
of Guarantor hereunder except to the extent the Obligations have
been performed in full. Guarantor waives any defense arising out
of any such election, even though such election operates to impair
or extinguish any right of reimbursement or subrogation or other
right or remedy of Guarantor against Servicer or any security.
5. Release of Guarantor's Obligation. This Guarantee shall in all
respects be continuing, absolute and unconditional, and shall
remain in full force and effect with respect to Guarantor until
all Obligations shall have been fully performed.
6. Representations and Warranties of Guarantor. Guarantor hereby
represents, warrants and agrees that:
(a) Due Organization. Guarantor (i) is duly organized,
validly existing and in good standing as a corporation
under the laws of the state of its incorporation and is
in good standing as a foreign corporation in each
jurisdiction where its ownership of property or conduct
of business requires such qualification and where failure
to so be in good standing could have a material adverse
effect on Guarantor or its property and/or its business
or on Guarantor's ability to pay or perform the
Obligations or its obligations hereunder; and (b) has the
corporate power and authority and the legal right to own
and operate its property and to conduct business in the
manner in which it does and proposes so to do.
(b) Enforceability. Guarantor has the corporate power and
authority and the legal right to execute, deliver and
perform this Guarantee and has taken all necessary
corporate action to authorize the execution, delivery and
performance of this Guarantee. This Guarantee has been
duly executed and delivered on behalf of Guarantor and
constitutes a legal, valid and binding obligation of
Guarantor, enforceable against Guarantor in accordance
with its terms; and
(c) No Violation. The execution, delivery and performance by
Guarantor of this Guarantee will not violate any
requirement of law or any contractual obligation of
Guarantor to the extent that failure to comply could have
a material adverse effect on Guarantor or its property
and/or its business or on the ability to perform the
Obligations or its obligations hereunder.
7. General.
-------
(a) Entire Agreement. This Guarantee contains the entire
agreement between Guarantor and Company, is the final
expression of their intentions and supersedes all
negotiations, representations, warranties, commitments,
offers, contracts (of any kind or nature, whether oral or
written) prior to or contemporaneous with the execution
hereof. No prior or contemporaneous representations,
warranties, understandings, offers or agreements of any
kind or nature, whether oral or written, have been made
by Company or relied upon by Guarantor in connection with
the execution hereof.
(b) Amendments. No modification, waiver, amendment, discharge
or change of this Guarantee shall be valid unless the
same is in writing and signed by Company.
(c) Costs and Expenses. In addition to the Obligations,
Guarantor agrees to pay all costs and expenses,
including, without limitation, attorneys' fees, incurred
by Company in enforcing this Guarantee in any action or
proceeding arising out of, or relating to, this
Guarantee.
(d) No Assignment. This Guarantee may not be assigned by
Guarantor.
(e) No Waiver. No right or power of Company hereunder shall
be deemed to have been waived by any act or conduct on
the part of Company, or by any neglect to exercise such
right or power, or by any delay in so doing, and every
right or power shall continue in full force and effect
until specifically waived or released by an instrument in
writing executed by Company.
(f) Cooperation. Guarantor agrees to execute any and all
further documents, instruments and agreements as Company
from time to time reasonably requests to evidence
Guarantor's obligations hereunder.
(g) Governing Law. This Guarantee shall be deemed to be made
under and shall be governed by the laws of the State of
New York without reference to principles of conflict of
laws.
IN WITNESS WHEREOF, the undersigned has executed this Guarantee as
of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
By: ____________________________
Name: ____________________________
Title: ____________________________
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
