FLOW SERVICING AGREEMENT
among
XXXXXXX XXXXX CREDIT CORPORATION
Owner
XXXXXXX XXXXX MORTGAGE LENDING, INC.
Owner
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer
Dated as of August 8, 2006
RESIDENTIAL HOME EQUITY LINE OF CREDIT
MORTGAGE LOANS
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.................................................... 1
Section 1.01 Definitions................................................ 1
ARTICLE II SERVICING..................................................... 18
Section 2.01 Servicer to Act as Servicer................................ 18
Section 2.02 Liquidation of Mortgage Loans.............................. 21
Section 2.03 Collection of Mortgage Loan Payments....................... 22
Section 2.04 Establishment of and Deposits to Custodial Account......... 22
Section 2.05 Permitted Withdrawals From Custodial Account............... 24
Section 2.06 Establishment of and Deposits to Escrow Account............ 25
Section 2.07 Permitted Withdrawals From Escrow Account.................. 26
Section 2.08 Payment of Taxes, Insurance and Other Charges.............. 26
Section 2.09 Protection of Accounts..................................... 27
Section 2.10 Maintenance of Hazard Insurance............................ 27
Section 2.11 Maintenance of Mortgage Impairment Insurance............... 29
Section 2.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.................................................. 29
Section 2.13 Inspections................................................ 30
Section 2.14 Restoration of Mortgaged Property.......................... 30
Section 2.15 Title, Management and Disposition of REO Property.......... 31
Section 2.16 Permitted Withdrawals with Respect to REO Property......... 32
Section 2.17 Real Estate Owned Reports.................................. 32
Section 2.18 Liquidation Reports and Losses............................. 32
Section 2.19 Reports of Foreclosures and Abandonments of Mortgaged
Property................................................... 33
Section 2.20 Notification of Adjustments................................ 33
Section 2.21 Recordation of Assignments of Mortgage..................... 33
Section 2.22 HELOC Disbursements........................................ 33
Section 2.23 Credit Reporting........................................... 34
Section 2.24 Superior Liens............................................. 34
Section 2.25 Charge off Analysis........................................ 35
Section 2.26 Tax and Flood Service Contracts............................ 35
ARTICLE III DISTRIBUTION AND REPORTING................................... 37
Section 3.01 Remittances................................................ 37
Section 3.02 Monthly Reports to Owner.................................. 37
Section 3.03 Reimbursement of Advances.................................. 38
Section 3.04 No Monthly Advances........................................ 38
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ARTICLE IV GENERAL SERVICING PROCEDURES.................................. 40
Section 4.01 Transfers of Mortgaged Property............................ 40
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files.... 41
Section 4.03 Servicing Compensation..................................... 42
Section 4.04 Annual Statement as to Compliance.......................... 42
Section 4.05 Annual Independent Public Accountants' Servicing Report.... 43
Section 4.06 Sarbanes Oxley Certification............................... 43
Section 4.07 Right to Examine Servicer Records.......................... 43
Section 4.08 Compliance with Xxxxx-Xxxxx-Xxxxxx Act of 1999............. 43
Section 4.09 On-Line Access............................................. 44
Section 4.10 Report on Assessment of Compliance and Attestation......... 44
Section 4.11 Use of Subservicers and Subcontractors..................... 45
ARTICLE V SERVICER TO COOPERATE.......................................... 47
Section 5.01 Provision of Information................................... 47
Section 5.02 Financial Statements; Servicing Facilities................. 47
ARTICLE VI TERMINATION................................................... 53
Section 6.01 Termination................................................ 53
Section 6.02 Transfer of Servicing...................................... 53
ARTICLE VII BOOKS AND RECORDS............................................ 56
Section 7.01 Possession of Servicing Files Prior to the related Transfer
Date....................................................... 56
ARTICLE VIII INDEMNIFICATION AND ASSIGNMENT.............................. 58
Section 8.01 Indemnification............................................ 58
Section 8.02 Limitation on Liability of Servicer and Others............. 62
Section 8.03 Limitation on Resignation and Assignment by Servicer....... 62
Section 8.04 Assignment by Owner........................................ 63
Section 8.05 Merger or Consolidation of the Servicer.................... 64
ARTICLE IX REPRESENTATIONS, WARRANTIES AND COVENANTS OF OWNER............ 65
Section 9.01 Organization and Good Standing; Licensing.................. 65
Section 9.02 Authorization; Binding Obligations......................... 65
Section 9.03 No Consent Required........................................ 65
Section 9.04 No Violations.............................................. 65
Section 9.05 Litigation................................................. 66
Section 9.06 Compliance................................................. 66
Section 9.07 Accuracy of Information.................................... 66
Section 9.08 Litigation with respect to the Mortgage.................... 66
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Section 9.09 Origination of the Mortgage Loan........................... 66
Section 9.10 Taxes, Insurance and Other Assessments..................... 67
Section 9.11 HOEPA Loans................................................ 67
Section 9.12 Seller Representations & Warranties........................ 67
Section 9.13 High Cost Loans............................................ 67
ARTICLE X REPRESENTATIONS AND WARRANTIES OF SERVICER..................... 68
Section 10.01 Due Organization and Authority............................. 68
Section 10.02 Ordinary Course of Business................................ 68
Section 10.03 No Conflicts............................................... 68
Section 10.04 Ability to Service......................................... 69
Section 10.05 Ability to Perform......................................... 69
Section 10.06 No Litigation Pending...................................... 69
Section 10.07 No Consent Required........................................ 69
Section 10.08 No Untrue Information...................................... 69
Section 10.09 Additional Representations and Warranties of the Servicer.. 70
ARTICLE XI DEFAULT....................................................... 71
Section 11.01 Events of Default.......................................... 71
Section 11.02 Waiver of Defaults......................................... 73
Section 11.03 Servicer's Notice of Breach by Owner....................... 73
ARTICLE XII CLOSING...................................................... 74
Section 12.01 Closing Documents.......................................... 74
ARTICLE XIII MISCELLANEOUS PROVISIONS.................................... 74
Section 13.01 Notices.................................................... 74
Section 13.02 Waivers.................................................... 75
Section 13.03 Entire Agreement; Amendment................................ 75
Section 13.04 Execution; Binding Effect.................................. 76
Section 13.05 Headings................................................... 76
Section 13.06 Applicable Law............................................. 76
Section 13.07 Relationship of Parties.................................... 76
Section 13.08 Severability of Provisions................................. 76
Section 13.09 Recordation of Assignments of Mortgage..................... 76
Section 13.10 Exhibits................................................... 77
Section 13.11 Counterparts............................................... 77
Section 13.12 Reserved................................................... 77
Section 13.13 Cooperation of Servicer with a Reconstitution.............. 77
Section 13.14 Trademarks................................................. 80
Section 13.15 Confidentiality of Information............................. 80
Section 13.16 [Reserved]................................................. 81
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Section 13.17 Waiver of Trial by Jury.................................... 81
Section 13.18 LIMITATION OF DAMAGES...................................... 81
Section 13.19 SUBMISSION TO JURISDICTION; WAIVERS........................ 81
ARTICLE XIV COMPLIANCE WITH REGULATION AB................................ 82
Section 14.01 Intent of the Parties; Reasonableness...................... 82
EXHIBITS
EXHIBIT 1 FORM OF MONTHLY REPORTS
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
EXHIBIT 7 FORM OF OFFICER'S CERTIFICATE
EXHIBIT 8 MORTGAGE LOAN DOCUMENTS
EXHIBIT 9 COMMITMENT LETTER
EXHIBIT 10 FORM OF ANNUAL CERTIFICATION
EXHIBIT 11 FORM OF POWER OF ATTORNEY
EXHIBIT 12 SERVICING CRITERIA
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FLOW SERVICING AGREEMENT
This Flow Servicing Agreement ("Flow Servicing Agreement" or
"Agreement") is entered into as of August 8, 2006, by and among COUNTRYWIDE HOME
LOANS SERVICING LP, a Texas limited partnership (the "Servicer") and XXXXXXX
XXXXX CREDIT CORPORATION, a Delaware corporation, and XXXXXXX XXXXX MORTGAGE
LENDING, INC., a Delaware corporation (collectively with Xxxxxxx Xxxxx Credit
Corporation, the "Owner").
WHEREAS, the Owner has purchased and may, from time to time, purchase
conventional, residential, subordinate lien home equity line of credit mortgage
loans (the "Mortgage Loans") from various originators to be delivered as whole
loans on a servicing released basis pursuant to the related Purchase Agreement
(as defined below) by and between the Owner and Seller (as defined below); and
WHEREAS, the Servicer regularly services residential mortgage loans,
and is or will be servicing the Mortgage Loans pursuant to one or more other
servicing agreements between the Owner and Servicer; and
WHEREAS, the Owner may from time to time desire that some or all of
the Mortgage Loans be serviced pursuant to the terms of this Agreement, and the
Servicer has agreed to service and administer the Mortgage Loans that become
subject to this Agreement, and the parties desire to provide the terms and
conditions of such servicing by the Servicer.
NOW, THEREFORE, in consideration of the mutual premises and agreements
set forth herein and for other good and valuable consideration, the receipt and
the sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The following terms are defined as follows:
Accepted Servicing Practices: With respect to any Mortgage Loan or REO
Property, each of (a) those mortgage servicing practices (including collection
procedures) of prudent mortgage lending institutions which service mortgage
loans of the same type as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located and in compliance with all applicable
federal, state and local laws which (i) servicing practices are in compliance
with all federal, state and local laws and regulations, (ii) shall be in
accordance with the Servicer's policies and procedures as amended from time to
time for mortgage loans of the same type, (iii) are in accordance with the terms
of the Mortgage and the Mortgage Note and (iv)
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shall be in compliance with investor guidelines and at a minimum based on the
requirements set forth from time to time by Xxxxxx Mae and Xxxxxxx Mac.
Active Mortgage Loan: A Mortgage Loan with an unpaid principal balance
or a Mortgage Loan on which there remains customary servicing activities to be
performed including but not limited to HELOC Mortgage Loans with an active line;
provided however, normal year-end reporting and certain required disclosures
such as GLBA notifications shall not be servicing functions which cause a loan
to be considered an Active Mortgage Loan for paid-off or liquidated loans.
Actual/Actual Basis: Remittance to the Owner or its designee which
requires the Servicer to remit to the Owner or such designee the actual interest
and actual principal collected from each Mortgagor.
Additional Balance: With reference to any HELOC Mortgage Loan, the
aggregate amount of all Draws by the Mortgagor under the relevant Credit Line
Agreement after the cut-off date for the Mortgage Loan.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Amortization Event: As defined in the Indenture for the related
Securitization Transfer.
Ancillary Income: All income derived from the Mortgage Loans other
than payments of principal, interest and Escrow Payments (excluding line
termination fees and prepayment penalties attributable to the Mortgage Loans)
and including but not limited to all late charges, interest received on funds
deposited in the Custodial Account or any Escrow Account (subject to applicable
law), minimum balance fees and any amounts paid by a Mortgagor to Servicer for
"no cost" HELOC Mortgage Loan fees on account of the failure of the Mortgagor to
comply with the terms of the Credit Line Agreement, assumption fees,
reconveyance fees, subordination fees, SpeedPay fees, Mortgage Pay on the Web,
ACH fees, demand statement fees, annual maintenance and renewal fees on home
equity lines, modification fees, if any, reinstatement fees, fees received with
respect to checks on bank drafts returned by the related bank for insufficient
funds, assumption fees and other similar types of fees arising from or in
connection with any Mortgage Loan to the extent not otherwise payable to the
Mortgagor under applicable law or pursuant to the terms of the related Mortgage
Note.
Appraised Value: With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the
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time of origination of the Mortgage Loan by an appraiser who met the minimum
requirements of Xxxxxx Mae and Xxxxxxx Mac, and (ii) the purchase price paid for
the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan, provided, however, in the case of a refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the value determined
by an appraisal made for the originator of such refinanced Mortgage Loan at the
time of origination of such Refinanced Mortgage Loan by an appraiser who met the
minimum requirements of Xxxxxx Mae and Xxxxxxx Mac.
Asset Balance: On any day for any Mortgage Loan, other than a
liquidated mortgage loan, the total unpaid outstanding principal balance on such
date including the aggregate amount of all Draws by the Mortgagor.
Assignment, Assumption, and Recognition Agreement: The document
substantially in the form of Exhibit 6, to be executed by the Owner, the
Servicer, and the assignee of the Owner in connection with the transfer,
conveyance, grant, sale or assignment, of a Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Owner.
Best's: The current Best's Key Rating Guide.
BPO: A broker price opinion.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions are closed in the States
of California, New York or Texas.
Charged Off Loan: Any Mortgage Loan that is charged off by the
Servicer pursuant to Section 2.25.
Class G Certificate Holder: The holder of Class G certificates issued
by the trust in a Securitization Transfer or any equivalent class of securities
which is required to reimburse Servicer for HELOC Draw Advances.
Code: Internal Revenue Code of 1986, as amended.
Commission: The federal Securities and Exchange Commission.
Commitment Letter: With respect to each Mortgage Loan Package, that
certain letter agreement, substantially in the form of Exhibit 9 hereto, to be
entered into between Owner and the Servicer setting forth certain business terms
relating to the Mortgage Loans in the Mortgage Loan Package subject to this
Agreement and when such Mortgage Loans are subject to a Reconstitution Agreement
for the Mortgage Loan Package.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent
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domain or condemnation, to the extent not required to be released to a Mortgagor
in accordance with the terms of the related Mortgage Loan Documents.
Cost of Funds: With respect to Servicing Advances and HELOC Draw
Advances made by the Servicer, an amount equal to one-twelfth of the product of
the average daily balance of (a) Servicing Advances, HELOC Draw Advances and
other advances outstanding and (b) the Cost of Funds Index.
Cost of Funds Index: A per annum rate equal to (a) London interbank
offered rate for one-month United States dollar deposits as such rate appears on
the Telerate Page 3750, as of the first Business Day of such calendar month, and
(b) and one hundred (100) basis points. If the rate expressed in clause (a)
above is unavailable, the Servicer shall select a comparable source mutually
agreeable to Servicer and Owner from which to determine such rate.
Countrywide: Countrywide Home Loans Servicing LP.
Credit Limit: The maximum potential Asset Balance for each Mortgage
Loan permitted under the terms of the related Credit Line Agreement.
Credit Line Agreement: The related credit line account agreement for a
HELOC Mortgage Loan executed by the related Mortgagor and any amendment or
modification of it.
Cut-off Date: The date set forth in the related Purchase Agreement.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 2.04.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents.
Custodian: The custodian of the Mortgage Loan Documents as specified
under the related Custodial Agreement.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: The last day of the month preceding the related
Remittance Date.
Draw: For any HELOC Mortgage Loan means an additional borrowing by the
Mortgagor after the initial funding, in accordance with the related Mortgage
Note.
Due Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to amounts collected by the Servicer and
required to be remitted to the Owner on each Remittance Date, the period
commencing on the first day of the
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month and ending on the last day of the calendar month preceding the month of
the Remittance Date.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than one day prior to the Remittance Date in each month (or such other
date as permitted under this Agreement):
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America
or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America ("Direct Obligations");
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution
or trust company (including U.S. subsidiaries of foreign depositories)
incorporated or organized under the laws of the United States of America or
any state thereof and subject to supervision and examination by federal or
state banking authorities, so long as at the time of such investment or the
contractual commitment providing for such investment the commercial paper
or other short-term debt obligations of such depository institution or
trust company (or, in the case of a depository institution or trust company
which is the principal subsidiary of a holding company, the commercial
paper or other short-term debt or deposit obligations of such holding
company or deposit institution, as the case may be) have been rated by each
Rating Agency in its highest short-term rating category or one of its two
highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by Xxxxxx Xxx or Xxxxxxx Mac with any registered
broker/dealer subject to Securities Investors' Protection Corporation
jurisdiction or any commercial bank insured by the FDIC, if such
broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any state thereof which have a credit rating from each Rating Agency, at
the time of investment or the contractual commitment providing for such
investment, at least equal to one of the two highest long-term credit
rating categories of each Rating Agency; provided, however, that securities
issued by any particular corporation will not be Eligible Investments to
the extent that investment therein will cause the then outstanding
principal amount of securities issued by such corporation to exceed 20% of
the aggregate principal amount of all Eligible Investments in the Custodial
Accounts and the Escrow Accounts; provided, further, that such securities
will not be Eligible Investments if they are published as being under
review with negative implications from either Rating Agency;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 180 days after the date of issuance thereof)
rated by each Rating Agency in its highest short-term rating category;
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(vi) certificates or receipts representing direct ownership interests
in future interest or principal payments on obligations of the United
States of America or its agencies or instrumentalities (which obligations
are backed by the full faith and credit of the United States of America)
held by a custodian in safekeeping on behalf of the holders of such
receipts; and
(vii) any other demand, money market, common trust fund or time
deposit or obligation, or interest-bearing or other security or investment
rated in the highest rating category by each Rating Agency;
provided, however, that (a) any such instrument shall be acceptable to
the Rating Agencies, and (b) no such instrument shall be an Eligible Investment
if such instrument evidences either (i) a right to receive only interest
payments with respect to the obligations underlying such instrument, or (ii)
both principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Notwithstanding the foregoing, Eligible Investments shall not include
(i) "stripped securities," (ii) any investments which contractually may return
less than the unpaid principal balance therefor, or (iii) a direct purchase of
commercial paper from the issuer.
Eligible Mortgage Loan: A HELOC Mortgage Loan that can be serviced by
Servicer without any system enhancements or procedural changes.
Environmental Problem Property: A Mortgaged Property or REO Property
that is in violation of any environmental law, rule or regulation.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Servicer pursuant to Section 2.12.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 2.06.
Escrow Payment: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 11.01.
Excluded Amount: As defined in the Indenture for the related
Securitization Transfer.
Xxxxxx Mae: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
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Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer
pursuant to Section 2.12.
First Lien Mortgage Loan: A Mortgage Loan which has a first lien deed
of trust or mortgage on a related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to a Purchase Agreement.
Flood Zone Service Contract: A transferable contract maintained for a
Mortgaged Property with a nationally recognized flood zone service provider for
the purpose of obtaining the current flood zone status relating to such
Mortgaged Property.
Foreclosure Commencement: The delivery of the applicable file to the
Servicer's foreclosure counsel for initiation of foreclosure proceedings.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: Shall have the meaning set forth in Section
13.13.
GLBA: Xxxxx-Xxxxx-Xxxxxx Act.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which amount is
added to the Index in accordance with the terms of the related Mortgage Note to
determine on each Interest Rate Adjustment Date the Mortgage Interest Rate for
such Mortgage Loan.
HELOC Draw Advance: Any amount advanced by Servicer in connection with
a Draw request from a Mortgagor pursuant to Section 2.22 of this Agreement.
HELOC Mortgage Loan: A home equity line of credit Mortgage Loan which
has a second deed of trust or mortgage on a related Mortgaged Property.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994, as amended, or (b) a
"high cost," "threshold," "covered" (provided however the "covered"
classification does not apply to loans defined under the New Jersey Home
Ownership Act of 2002 ("NJHOA") as a "covered home loan" provided further that
such "covered home loan" is not also defined as a "high-cost home loan" under
NJHOA), "predatory" or similar loan under any other applicable state, federal or
local law (or a similarly classified loan using different terminology under a
law imposing
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heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees).
HOEPA: The federal Home Ownership and Equity Protection Act of 1994,
as amended.
HOEPA Loan: A Mortgage Loan which (a) the Owner has identified to the
Servicer in the Mortgage Loan Schedule as being subject to HOEPA, or (b) which
the Servicer discovers is subject to HOEPA.
Indenture: With respect to any Securitization Transfer, the related
indenture executed in connection with the issuance of the related
mortgage-backed securities, including any annex thereto.
Index: With respect to each Adjustable Rate Mortgage Loan, the index
set forth in the related Mortgage Note.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan, to the lesser of (a) the appraised value of the Mortgaged
Property at origination or (b) if the Mortgage Loan was made to finance the
acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property.
Master Servicer: With respect to any Securitization Transaction, the
"master servicer," if any, identified in the related transaction documents.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
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MERS Mortgage Loan: Any Mortgage Loan as to which the related mortgage
or assignment of Mortgage has been recorded in the name of MERS, as agent for
the holder from time to time of the Mortgage Note and which is identified as a
MERS Mortgage Loan on the related Mortgage Loan Schedule.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number of Mortgage Loans registered
with MERS on the MERS(R) System.
MLML: Xxxxxxx Xxxxx Mortgage Lending, Inc. acting in its individual
capacity.
MOM Loan: Any Mortgage Loan where MERS acts as the mortgagee of record
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
Monthly Advance: With respect to any non-HELOC Mortgage Loan included
in a Securitization Transaction, any advance related to prepayment interest
shortfalls, compensating interest on payoffs or delinquent payments to investors
which require scheduled interest and scheduled principal payments each month.
Monthly Payment: The scheduled monthly payment of principal and/or
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien, as applicable, on an
unsubordinated estate in fee simple in real property securing the Mortgage Note;
except that with respect to real property located in jurisdictions in which the
use of leasehold estates for residential properties is a widely-accepted
practice, the mortgage, deed of trust or other instrument securing the Mortgage
Note may secure and create a first or second lien, as applicable, upon a
leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to as the Mortgage File in Exhibit 8 annexed hereto, and any additional
documents required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 2.11.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual mortgage loan to be serviced pursuant to
this Agreement, as identified on the Mortgage Loan Schedule, which mortgage loan
shall be an Eligible Mortgage Loan and includes without limitation Additional
Balances with respect to a
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HELOC Mortgage Loan, the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such mortgage loan excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents listed on Exhibit 8 attached
hereto pertaining to any Mortgage Loan.
Mortgage Loan Package: A pool of Mortgage Loans to be serviced by the
Servicer hereunder and subject to the applicable Commitment Letter.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Owner, which shall be equal to the
Mortgage Interest Rate minus the Servicing Fee.
Mortgage Loan Schedule: The schedule of Mortgage Loans with respect to
a Mortgage Loan Package, in a form mutually agreed upon by the Owner and the
Servicer, to be delivered by the Owner to the Servicer, which schedule may
include, but not be limited to, the following information with respect to each
Mortgage Loan: (1) the [name of the Seller and the] Seller's Mortgage Loan
identifying number; (2) the Mortgagor's name; (3) the street address of the
Mortgaged Property including the city, state and zip code; (4) a code indicating
whether the Mortgaged Property is owner-occupied, a second home or investment
property; (5) the number and type of residential units constituting the
Mortgaged Property (i.e. a single family residence, a 2-4 family residence, a
unit in a condominium project or a unit in a planned unit development,
manufactured housing); (6) the original months to maturity or the remaining
months to maturity from the related Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity expressed in the
same manner but based on the actual amortization schedule; (7) the Loan-to-Value
Ratio at origination; (8) with respect to First Lien Loans, the LTV and with
respect to Second Lien Loans, the CLTV; (9) the Mortgage Interest Rate as of the
related Cut-off Date; (10) the date on which the Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (11) the stated maturity date; (12) the amount of the
Monthly Payment as of the related Cut-off Date; (13) the last payment date on
which a Monthly Payment was actually applied to pay interest and the outstanding
principal balance; (14) the original principal amount of the Mortgage Loan; (15)
the principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (16) with respect to Adjustable Rate
Mortgage Loans, the Interest Rate Adjustment Date; (17) with respect to
Adjustable Rate Mortgage Loans, the Gross Margin; (18) with respect to
Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note; (19) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index; (20) with respect to Adjustable Rate Mortgage
Loans, the Periodic Rate Cap under the terms of the Mortgage Note; (21) with
respect to Adjustable Rate Mortgage Loans, the Periodic Rate Floor under the
terms of the Mortgage Note; (22) the type of Mortgage Loan (i.e., Fixed Rate,
Adjustable Rate, First Lien, Second Lien); (23) a code indicating the purpose of
the loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(24) a code indicating the documentation style (i.e. full, alternative or
reduced); (25) whether such Mortgage Loan provides for a Prepayment Penalty;
(26) the Prepayment Penalty period of such Mortgage Loan, if
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applicable; (27) a description of the Prepayment Penalty, if applicable; (28)
the Mortgage Interest Rate as of origination; (29) the credit risk score (FICO
score) at origination; (30) the date of origination; (31) the Mortgage Interest
Rate adjustment percentage; (32) the Mortgage Interest Rate floor; (33) the
Mortgage Interest Rate calculation method (i.e., 30/360, simple interest,
other); (34) a code indicating whether the Mortgage Loan is a Section 32
Mortgage Loan; (35) a code indicating whether the Mortgage Loan is assumable;
(36) a code indicating whether the Mortgage Loan has been modified; (37) the one
year payment history; (38) the Due Date for the first Monthly Payment; (39) the
original Monthly Payment due; (40) with respect to the related Mortgagor, the
debt-to-income ratio; (41) the Appraised Value of the Mortgaged Property; (42)
the sales price of the Mortgaged Property if the Mortgage Loan was originated in
connection with the purchase of the Mortgaged Property; (43) the MERS
identification number, if any; (44) if the Mortgage Loan has borrower paid,
lender paid or deep primary mortgage insurance coverage and, if so, (i) the
insurer's name, (ii) the policy or certification number, (iii) the premium rate
and (iv) the coverage percentage; (45) with respect to Second Lien Loans, the
outstanding principal balance of the superior lien; (46) a code indicating
whether the Mortgage Loan is a subject to a buydown and (47) flood zone and
flood insurance coverage information with respect to each Mortgage Loan (to the
extent know by the Owner). With respect to the Mortgage Loans in the aggregate,
the Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverability Analysis: As defined in Section 3.05.
Nonrecoverable Advance: Any Servicing Advance or Monthly Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property which, in the good faith judgment of the Servicer, will not or, in the
case of a proposed advance, would not, be ultimately recoverable from related
Insurance Proceeds, Liquidation Proceeds or otherwise from such Mortgage Loan or
REO Property. The determination by the Servicer that it has made a
Nonrecoverable Advance or that any proposed Servicing Advance or Monthly
Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced
by an Officer's Certificate delivered to the Owner.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or Vice President and by
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Servicer, and delivered to the Owner.
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Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Servicer, reasonably acceptable to the Owner, provided that any Opinion
of Counsel relating to (a) the qualification of any account required to be
maintained pursuant to this Agreement as an Eligible Account, (b) qualification
of the Mortgage Loans in a REMIC or (c) compliance with the REMIC Provisions,
must be (unless otherwise stated in such Opinion of Counsel) an opinion of
counsel who (i) is in fact independent of the related Servicer and any master
servicer of the related Mortgage Loans, (ii) does not have any material direct
or indirect financial interest in the related Servicer or any master servicer of
the related Mortgage Loans or in an Affiliate of either and (iii) is not
connected with the related Servicer or any master servicer of the Mortgage Loans
as an officer, employee, director or person performing similar functions.
Originator: With respect to a Mortgage Loan, the originator of the
related Mortgage Loan.
Other Fees: With respect to each Mortgage Loan, those fees set forth
in the Commitment Letter for the specific services described therein which shall
include Service Release Fees and REO Management Fees.
Other Insurance Proceeds: Proceeds of any title policy, hazard policy
or other insurance policy covering a Mortgage Loan, other than the Primary
Insurance Policy, if any, to the extent such proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the Mortgagor
in accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own account.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan,
the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase on an Interest
Rate Adjustment Date above the Mortgage Interest Rate previously in effect.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may decrease on an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Prepayment Interest Shortfall Amount: With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part during the
Principal Prepayment Period, the amount, if any by which one month's interest at
the related Mortgage Loan Remittance Rate on such Principal Prepayment exceeds
the amount of interest paid in connection with such Principal Prepayment.
Prepayment Penalty: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any Principal Prepayment pursuant to Section 2.04.
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Primary Insurance Policy: Each policy of primary guaranty of mortgage
insurance issued by an insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac in effect
with respect to any Mortgage Loan, or any replacement policy therefor obtained
by the Servicer pursuant to Section 2.08.
Prime Rate: The prime rate announced to be in effect from time to
time, as published as the average rate in The Wall Street Journal (Northeast
edition).
Principal Balance: For any outstanding HELOC Mortgage Loan as of any
Determination Date, its outstanding principal balance as of the Cut-off Date
plus any Additional Balances in respect of such HELOC Mortgage Loan, reduced by
the principal received on or before the Due Date in the Due Period immediately
preceding such Determination Date. With respect to the liquidation of a HELOC
Mortgage Loan a principal balance of $0.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Principal Prepayment Period: The calendar month preceding the month in
which the related Remittance Date occurs.
Purchase Agreement: The agreement pursuant to which the Owner
purchased the related Mortgage Loans from the related Seller.
Qualified Depository: Either (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company of
which) are rated A-1 by S&P or Prime-1 by Moody's (or a comparable rating if
another rating agency is specified by the Initial Purchaser by written notice to
the Servicer) at the time any amounts are held on deposit therein, (ii) an
account or accounts the deposits in which are fully insured by the FDIC or (iii)
a trust account or accounts maintained with a federal or state chartered
depository institution or trust company acting in its fiduciary capacity.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Owner.
Reconstitution: Either a Whole Loan Transfer or a Securitization
Transfer.
Reconstitution Agreements: As defined in Section 13.13 hereof.
Reconstitution Date: As defined in Section 13.13 hereof.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release
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(Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg.
1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be
provided by the Commission or its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to
a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: With respect to each Mortgage Loan the 18th calendar
day of any month, or if such 18th day is not a Business Day, the following
Business Day.
REO Management Fee: With respect to each REO Property being managed by
Servicer, that fee set forth in the Commitment Letter.
REO Property: A Mortgaged Property acquired by the Servicer on behalf
of the Owner through foreclosure or by deed in lieu of foreclosure, as described
in Section 2.15.
Reporting Date: With respect to each Mortgage Loan the 10th Business
Day of each month.
RESPA: Real Estate Settlement Procedures Act, as amended from time to
time.
Scheduled/Scheduled Basis: Remittance to the Owner or its designee
which requires the Servicer to give the Owner or such designee the scheduled
interest and scheduled principal due, whether or not payments are collected from
the Mortgagor.
Securities Act: The federal Securities Act of 1933, as amended.
Securities Exchange Act: The federal Securities Exchange Act of 1934,
as amended.
Securitization Transaction: Any transaction subject to Regulation AB
involving either (1) a sale or other transfer of some or all of the Mortgage
Loans directly or indirectly to an issuing entity in connection with an issuance
of publicly offered, rated mortgage-backed securities or (2) an issuance of
publicly offered, rated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage Loans.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly issued or
privately placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: With respect to each Mortgage Loan Package, the Seller set
forth in the related Purchase Agreement and related Purchase Price and Terms
Letter.
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Service Release Fee: With respect to each Mortgage Loan, the fee set
forth in the Commitment Letter, payable from Owner to Servicer upon the release
of related servicing from Owner's portfolio serviced by Servicer; provided,
however that such fee shall not be payable if (i) the Mortgage Loan or servicing
rights is transferred to the Servicer or an Affiliate of the Servicer or (ii)
the Mortgage Loan is included in a securitization for which Servicer is a
servicer.
Servicer: Countrywide Home Loans Servicing LP or any entity which
services the Mortgage Loans pursuant to this Agreement or its successor in
interest or any successor or assign to or designee of Servicer under this
Agreement as herein provided and as defined in Section 5.02(b). Unless the
context requires otherwise, all references to "Servicer" in this Agreement shall
be deemed to include such Servicer's successors in interest, assignees or
designees.
Servicer Employees: As defined in Section 2.12 hereof.
Servicer Information: As defined in Section 8.01(c) (i)(A).
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred (regardless if any such advance is not, in the
reasonable determination of the Servicer, a Nonrecoverable Servicing Advance
when made but, thereafter, becomes a Nonrecoverable Servicing Advance) in the
performance by the Servicer of its servicing obligations, including, but not
limited to, the cost of (a) the preservation, restoration and protection of the
Mortgaged Property or REO Property, (b) any fees relating to any enforcement or
judicial proceedings, excluding foreclosures, (c) amounts advanced to correct
defaults on any Mortgage Loan which is senior to the Mortgage Loan and amounts
advanced to keep current or pay off a Mortgage Loan that is senior to the
Mortgage Loan, (d) any appraisals, valuations, broker price opinions,
inspections, or environmental assessments, (e) the management and liquidation of
the Mortgaged Property if the Mortgaged Property is acquired in satisfaction of
the Mortgage, (f) taxes, assessments, water rates, sewer rents, mortgage
insurance premiums, fire and hazard insurance premiums, flood insurance premiums
and other charges which are or may become a lien upon the Mortgaged Property,
and (g) executing and recording instruments of satisfaction, deeds of
reconveyance.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan and any Remittance
Date, an amount equal to the product of (i) one-twelfth of the Servicing Fee
Rate, and (ii) the Stated Principal Balance of such Mortgage Loan as of the
first day of the calendar month preceding the month in which such Distribution
Date occurs. Such fee shall be payable monthly pursuant to Section 4.03 and
shall be pro rated for any portion of a month during which the Mortgage Loan is
serviced by the Servicer under this Agreement. With respect to each Mortgage
Loan, the Servicer shall be entitled to receive accrued and unpaid Servicing
Fees upon disposition of any related REO Property or the date on which the
Mortgage Loan is no longer serviced by Servicer. The Servicer shall be entitled
to the Servicing Fee applicable to foreclosures through and including the month
following the filing of the claim.
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Servicing Fee Rate: With respect to each Mortgage Loan, the servicing
fee rate set forth in the applicable Commitment Letter.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Servicer consisting of originals, if provided, or copies of all documents
in the Mortgage File which are not delivered to the Owner, its designee or the
Custodian and copies of the Mortgage Loan Documents.
Servicing Officer: Any officer of the Servicer involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Owner upon request, as such list may from time to time be amended.
Servicing Rights: Any and all of the following: (a) any and all rights
to service the Mortgage Loans; (b) any payments to or monies received by the
Servicer for servicing the Mortgage Loans; (c) any Ancillary Income with respect
to the Mortgage Loans; (d) all agreements or documents creating, defining or
evidencing any such servicing rights to the extent they relate to such servicing
rights and all rights of the Servicer thereunder; (e) any and all rights to
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid to
the Mortgagors; (f) all accounts and other rights to payment related to any of
the property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Servicing Transfer Date: With respect to a Mortgage Loan Package, the
date on which the physical servicing of the Mortgage Loans in a Mortgage Loan
Package is transferred to the Servicer pursuant to this Agreement, or such other
date as the Owner, the Seller, and the Servicer may mutually agree upon.
Servicing Transfer Schedule: The computer or like records requested by
the Servicer reflecting the status of payments, balances and other pertinent
information with respect to the Mortgage Loans necessary to service the Mortgage
Loans in accordance with this Agreement and the Accepted Servicing Practices.
Special Deposit Account: An account which the Owner and Servicer agree
shall be a special deposit account for the benefit of the related Owner under
applicable law.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the related Cut-off Date after giving effect to
payments of principal collected on or before such date minus (ii) all amounts
previously distributed to the Owner with respect to the related Mortgage Loan
representing payments or recoveries of principal or advances in lieu thereof.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-
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backed securities market) of Mortgage Loans but performs one or more discrete
functions identified in Item 1122(d) of Regulation AB with respect to Mortgage
Loans under the direction or authority of the Servicer or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB; provided, however, that the term "Subservicer" shall
not include any master servicer, or any special servicer engaged at the request
of a Depositor or investor in a Securitization Transaction, nor any "back-up
servicer" or trustee performing servicing functions on behalf of a
Securitization Transaction.
Tax Service Contract: A life-of-loan tax service contract maintained
for a Mortgaged Property with a tax service provider for the purpose of
obtaining current information from local taxing authorities relating to such
Mortgaged Property.
Transfer Date: With respect to a Mortgage Loan, the date on which the
physical servicing of the Mortgage Loans is transferred from the Servicer
pursuant to this Agreement to a successor servicer.
Underwriting Guidelines: The underwriting guidelines of the
Originator, as identified or specified in the related Purchase Agreement.
Whole Loan Transfer: The sale or transfer by Owner of some or all of
the Mortgage Loans in a whole loan or participation format (including, without
limitation, a Xxxxxx Xxx Transfer or Xxxxxxx Mac Transfer) other than a
Securitization Transaction.
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ARTICLE II
SERVICING
Section 2.01 Servicer to Act as Servicer.
With respect to the Mortgage Loans in each Mortgage Loan Package, from
and after the date set forth in the applicable Commitment Letter, the Servicer,
as an independent contractor, shall service and administer the Mortgage Loans,
pursuant to the terms of this Agreement, under the Servicer's name on an
Actual/Actual Basis and shall have full power and authority to do any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable, consistent with the terms of this Agreement and
with Accepted Servicing Practices. The Servicer shall acknowledge by email to
the Owner its receipt of each Mortgage Loan Schedule and the Servicer's
assumption of the servicing responsibilities with respect to the related
Mortgage Loan Package; provided, that each Mortgaged Loan Package will become
subject to this Agreement only upon the execution and delivery of the Commitment
Letter by both the Owner and the Servicer.
Unless provided herein, Owner shall delegate authority to the Servicer
to carry out its servicing and administration duties without obtaining Owner's
prior written approval. Notwithstanding anything in this Agreement to the
contrary, the Servicer shall not (i) permit any modification with respect to any
Mortgage Loan that would change the Mortgage Interest Rate, reduce or increase
the principal balance (except for reductions resulting from actual payments of
principal) or change the final maturity date on such Mortgage Loan (except for
(A) a reduction of interest payments resulting from the application of the
Servicemembers' Civil Relief Act or any similar state laws, or (B) as provided
in the following paragraph, the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Servicer, reasonably
foreseeable) or (ii) except as provided in the following paragraph, waive any
Prepayment Penalty.
Consistent with the terms of this Agreement and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the due dates for the Monthly Payments due
on a Mortgage Note for a period of not greater than 180 days; provided, that any
extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 3.04 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, provided that the Servicer shall not be required to make any such
advances that are Nonrecoverable Advances. Notwithstanding the foregoing, in the
event that any Mortgage Loan is in default or, in the judgment of the Servicer,
such default is reasonably foreseeable, the Servicer, consistent with the
standards set forth in this Agreement and Accepted Servicing Practices, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the
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payment of principal or interest, extend the final maturity date of such
Mortgage Loan or waive, in whole or in part, a Prepayment Penalty), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"); provided, however, that the terms of any
Mortgage Loan may only be waived, modified, varied or forgiven once without the
consent of the Owner while the Mortgage Loan remains outstanding. The Servicer's
analysis supporting any forbearance and the conclusion that any forbearance
meets the standards of this section shall be reflected in writing on Servicer's
system and in the Servicing File. The Servicer is hereby authorized and
empowered to execute and deliver on behalf of itself and the Owner, all
instruments of satisfaction or cancellation, or of partial or full release,
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Properties. If reasonably required by
the Servicer, the Owner shall furnish the Servicer with a fully executed Power
of Attorney and other documents necessary or appropriate to enable Servicer to
carry out its servicing and administrative duties under this Agreement. Servicer
may request the consent of Owner in writing by certified mail, overnight courier
or such other means as may be agreed to by the parties to a course of action
that Servicer proposes to take under this Agreement. Unless Owner shall give
written notice to Servicer that it objects to any recommended course of action
within ten (10) Business Days immediately following the day on which Owner
received Servicer's written consent request (together with its recommended
course of action and relevant supporting documentation), Owner shall be deemed
to have consented to such recommended course of action, and Servicer may take
the action recommended to Owner, unless Servicer determines, in its reasonable
discretion, that such action is no longer prudent or applicable and the Servicer
notifies the Owner of such decision not to act. In the event that Owner shall
object to Servicer's recommended course of action, Servicer shall take such
action as is required by Owner, and Servicer shall have no liability therefor if
it is not negligent in performing such action. Further, to the extent Servicer
has provided Owner with reasonably timely notice, Owner shall indemnify and hold
harmless Servicer from and against any penalty, fine or damages that may result
from Owner's decision to wait for any period of time up to ten (10) Business
Days before providing Servicer with direction as to the course of action to be
taken as permitted in the second immediately preceding sentence. In addition,
notwithstanding the foregoing, the Servicer may also waive, in whole or in part,
a Prepayment Penalty if (i) such Prepayment Penalty is not permitted to be
collected by applicable law, or (ii) the enforceability thereof is limited (1)
by bankruptcy, insolvency, moratorium, receivership or other similar laws
relating to creditor's rights or (2) due to acceleration in connection with a
foreclosure or other involuntary payment. If a Prepayment Penalty is waived
other than as permitted above, then the Servicer is required to deposit the
amount of such waived Prepayment Penalty into the Custodial Account together
with and at the time that the amount prepaid on the related Mortgage Loan is
required to be deposited into the Custodial Account; provided, however, that the
Servicer shall not have an obligation to pay the amount of any uncollected
Prepayment Penalty if the failure to collect such amount is the direct result of
inaccurate or incomplete information on the Mortgage Loan Schedule in effect at
such time. In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, where
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such procedures do not conflict with the requirements of this Agreement, and the
Owner's reliance on the Servicer. In addition, the Servicer shall retain
adequate personnel to effect such servicing and administration of the Mortgage
Loans.
The Owner may sell and transfer, in whole or in part, some or all of
the Mortgage Loans at any time and from time to time (including, without
limitation, in connection with a Securitization Transfer). Upon any such sale,
the Servicer shall execute and deliver an Assignment, Assumption and Recognition
Agreement; provided, that the Servicer shall not be obligated to recognize the
transferee of such Mortgage Loans as the assignee of the rights of the Owner
hereunder with respect to such Mortgage Loans unless such transferee executes
and delivers such Assignment, Assumption and Recognition Agreement. Upon such
execution, the Servicer shall xxxx its books and records to reflect the
ownership of the Mortgage Loans by such transferee. Upon such assignment of
rights and assumption of obligations, the assignee or designee shall accede to
the rights and obligations hereunder of the Owner with respect to the
transferred Mortgage Loans, except as otherwise set forth in the Assignment,
Assumption and Recognition Agreement, and the Owner shall be released from its
obligations hereunder accruing on and after the date of such transfer, but shall
remain liable for any obligations hereunder accruing prior to the date of such
transfer. Notwithstanding the foregoing, there shall not be more than three
Owners of the Mortgage Loans with respect to any particular Mortgage Loan
Package inclusive of the Mortgage Loans included in a Securitization Transfer.
The Servicer shall notify MERS of the ownership interest of Owner in
each MOM Loan through the MORNET system or MIDANET system, as applicable, or any
other comparable system acceptable to MERS. At any time during the term of this
Agreement, Owner may direct Servicer to cause any MOM Loan to be deactivated
from the MERS System.
The Servicing File maintained by the Servicer pursuant to this
Agreement shall be appropriately marked and identified in the Servicer's
computer system to clearly reflect the ownership of the related Mortgage Loan by
the Owner. The Servicer shall release from its custody the contents of any
Servicing File maintained by it only in accordance with this Agreement or MERS
Mortgage Loan to be deactivated from the MERS System. Record title to the
Mortgage Loans shall be retained by the Owner, and possession of any Servicing
Files delivered to the Servicer shall be held in trust for the Owner as the
owner thereof, for the sole purpose of servicing the Mortgage Loans. The
ownership of each Mortgage Loan, including the Mortgage Note, the Mortgage, the
Mortgage Loan Documents, the contents of the related Servicing File and all
rights, benefits, proceeds and obligations arising therefrom or in connection
therewith, is vested in the Owner. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received on or in connection with the
Mortgage Loans and all records or documents with respect to the Mortgage Loans
prepared by or which come into the possession of the Servicer shall be received
and held by the Servicer in trust for the benefit of the Owner as the owner of
the Mortgage Loans. Any portion of the Servicing Files 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 of the Mortgage Loans
by the Owner. The Servicer shall release its custody of the contents of the
Servicing Files only in accordance with written instructions of the Owner,
except when such release is required as incidental to the Servicer's servicing
of the Mortgage Loans. The Servicer shall be responsible for maintaining,
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and shall maintain, a complete set of books and records for the Mortgage Loans
which shall be clearly marked to reflect the ownership of the Mortgage Loans by
the Owner.
The Servicer shall be responsible for the actions of any vendors which
the Servicer utilizes to carry out its obligations hereunder and any fees paid
to such vendors shall be paid by the Servicer from its own funds.
Section 2.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 2.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Servicer shall take such action as the Servicer
shall determine reasonably to be in the best interest of the Owner in accordance
with Accepted Servicing Practices. In the event that any payment due under any
Mortgage Loan is not postponed pursuant to Section 2.01 and remains delinquent
for a period of 90 days or any other default continues for a period of 90 days
beyond the expiration of any grace or cure period (or such other period as is
required by law in the jurisdiction where the related Mortgaged Property is
located) or earlier as determined by the Servicer, the Servicer shall cause a
Foreclosure Commencement in accordance with Accepted Servicing Practices. In
such connection, the Servicer shall from its own funds make all necessary and
proper Servicing Advances, provided, however, that the Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration or preservation of any Mortgaged Property, unless it shall
determine (a) that such preservation, restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan to Owner after
reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it shall
have priority for purposes of withdrawals from the Custodial Account pursuant to
Section 2.05) or through Insurance Proceeds (respecting which it shall have
similar priority). Notwithstanding anything herein to the contrary, no Servicing
Advance shall be required to be made hereunder if such Servicing Advance would,
if made, constitute a Nonrecoverable Advance. The determination by the Servicer
that it has made a Nonrecoverable Advance or that any proposed Servicing Advance
would constitute a Nonrecoverable Advance shall be evidenced by an Officers'
Certificate of the Servicer, delivered to the Owner which details the reasons
for such determination.
The Servicer acknowledges and agrees that it shall take and initiate
any legal actions with respect to any Mortgage Loans and REO Properties,
including, without limitation, any foreclosure actions, acceptance of
deeds-in-lieu of foreclosure, and any collection actions with respect to any
Mortgage Loans or REO Properties on behalf of the Owner, but only in the name of
the Servicer or its nominee and without reference to the Owner. Except as
otherwise required by law or with the consent of the Owner, under no
circumstances shall any such action be taken in the name of, or with any
reference to, the Owner. The Servicer shall provide prior written notice to the
Owner if the Servicer is required by applicable law to take any legal actions
with respect to the Mortgage Loan or REO Properties in the name of, or with
reference to, the Owner.
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Notwithstanding the foregoing, all actions must be approved by the
Owner relating to any Mortgaged Property that is determined to be contaminated
by hazardous or toxic substances or wastes.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure, in the event the Servicer has reasonable cause to
believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Owner otherwise requests an environmental
inspection or review of such Mortgaged Property to be conducted by a qualified
inspector the Servicer shall cause the Mortgaged Property to be so inspected.
Upon completion of the inspection, the Servicer shall promptly provide the Owner
with a written report of the environmental inspection.
After reviewing the environmental inspection report, the Owner shall
determine how the Servicer shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Owner directs the Servicer to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all
reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Servicer, the Servicer shall be entitled to
be reimbursed from amounts in the Custodial Account pursuant to Section 2.05
hereof. In the event the Owner directs the Servicer not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall
be reimbursed for all Servicing Advances made with respect to the related
Mortgaged Property from the Custodial Account pursuant to Section 2.05 hereof.
Section 2.03 Collection of Mortgage Loan Payments.
The Servicer shall proceed diligently to collect all payments due
under each of the related Mortgage Loans when the same shall become due and
payable and shall take special care in ascertaining and estimating Escrow
Payments, to the extent applicable, and all other charges that will become due
and payable with respect to the Mortgage Loans and each related Mortgaged
Property, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Notwithstanding anything herein to the contrary, Servicer shall not be required
to institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note, PMI 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 2.04 Establishment of and Deposits to Custodial Account.
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 one or more Custodial Accounts, in the form
of Special Deposit Accounts, titled "Countywide Home Loans Servicing LP, in
trust for [Name of Trust]". The Custodial Account shall be established initially
at Bank of America. Any funds deposited in the Custodial Account
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shall at all times be fully insured to the full extent permitted by the FDIC and
as otherwise acceptable to the Rating Agencies and any amounts therein may be
invested in Eligible Investments. The creation of any Custodial Account shall be
evidenced by a certification in the form of Exhibit 2 hereto, in the case of an
account established with the Servicer, or by a letter agreement in the form of
Exhibit 3 hereto, in the case of an account held by a depository other than the
Servicer. A copy of such certification or letter agreement shall be furnished to
the Owner and, upon request, to any subsequent Owner. In the event Servicer
wishes to establish the Custodial Account at a different depository institution
as a Qualified Depository, Servicer shall seek Owner's approval which approval
shall not be unreasonably withheld.
The Servicer shall deposit in the Custodial Account on or prior to the
second Business Day following receipt thereof, and retain therein, the following
collections received by the Servicer and payments made by the Servicer pursuant
to this Agreement:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage adjusted to
the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds and any amount received with respect to
REO Property;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 2.10 (other than proceeds to be held in the Escrow
Account and applied to the restoration or repair of the Mortgaged Property
or released to the Mortgagor in accordance with Section 2.14), and Section
2.11;
(v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 2.14;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 2.15, 2.20, or 4.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to the related Purchase Agreement.
(viii) any prepayment penalties received with respect to any Mortgage
Loan; and
(ix) any amounts required to be deposited by the Servicer pursuant to
Section 2.11 in connection with the deductible clause in any blanket hazard
insurance policy.
The foregoing requirements for deposit into the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, unless otherwise provided herein, payments in the
nature of Ancillary Income need not be deposited by the Servicer into the
Custodial Account. Any interest paid on funds deposited in
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the Custodial Account by the depository institution shall accrue to the benefit
of the Servicer and the Servicer may retain any such interest.
With respect to any Mortgage Loan subject to a Securitization
Transfer, the Servicer shall establish a separate custodial account for the
related securitization and deposit all amounts that have been or are
subsequently received with respect to such Mortgage Loan into the custodial
account created for the securitization on the date of the Securitization
Transfer, or as soon as possible thereafter (but not to exceed 48 hours after
such date).
Section 2.05 Permitted Withdrawals From Custodial Account.
Subject to Section 3.01, the Servicer shall be entitled to withdraw
funds from the Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner
provided in Section 3.01;
(ii) to pay itself any Servicing Fee and Other Fees (including any
accrued and unpaid Servicing Fees and Other Fees) due and payable to
Servicer from Monthly Payments, Liquidation Proceeds, Insurance Proceeds or
other amounts received with respect to the related Mortgage Loan; (to the
extent the Servicer has not retained the Servicing Fee);
(iii) to reimburse itself for unpaid HELOC Draw Advances pursuant to
Section 3.03;
(iv) to reimburse itself for unreimbursed Servicing Advances (except
to the extent reimbursed pursuant to Section 2.07), any accrued but unpaid
Servicing Fees, Other Fees and for unreimbursed advances of Servicer funds
made pursuant to Section 2.15, the Servicer's right to reimburse itself
pursuant to this subclause (iv) with respect to any Mortgage Loan being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Servicer from
the Mortgagor or otherwise relating to the Mortgage Loan, and it being
understood that, in the case of any such reimbursement, Servicer shall have
the right to reimbursement at such time that a Mortgage Loan is no longer
an Active Mortgage Loan;
(v) to invest funds in Eligible Investments in accordance with Section
2.09;
(vi) following the liquidation of a Mortgage Loan, to reimburse itself
for (a) any unpaid Servicing Fees to the extent not recoverable from
Liquidation Proceeds, Insurance Proceeds or other amounts received with
respect to the related Mortgage Loan under Section 2.05(iii) and (b) any
unpaid Ancillary Income due Servicer on each Mortgage Loan and (c) any
unreimbursed Nonrecoverable Advances made by the Servicer in accordance
with this Agreement;
(vii) [reserved];
(viii) to withdraw funds deposited in the Custodial Account in error;
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(ix) to pay itself any interest earned on funds deposited in the
Custodial Account (all such interest to be withdrawn monthly not later than
each Remittance Date);
(x) to pay itself Cost of Funds in connection with HELOC Draw Advances
and Servicing Advances in accordance with Section 3.03;
(xi) to clear and terminate the Custodial Account upon the termination
of this Agreement; and
(xii) to withdraw Principal Prepayments in part or in full plus any
principal and interest payments due to the Collection Account on a Whole
Loan Transfer or a Securitization Transfer.
Section 2.06 Establishment of and Deposits to Escrow Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of a Special Deposit Account, titled,
"Countrywide Home Loans Servicing LP, in trust for [Name of Trust]". The Escrow
Account shall be initially established at Treasury Bank, N.A. which account
shall be a Special Deposit Account. Funds deposited in the Escrow Accounts may
be drawn on by the Servicer in accordance with Section 2.07. The creation of any
Escrow Account shall be evidenced by a certification in the form of Exhibit 4
hereto, in the case of an account established with the Servicer, or by a letter
agreement in the form of Exhibit 5 hereto, in the case of an account held by a
depository other than the Servicer. A copy of such certification shall be
furnished to the Owner and, upon request, to any subsequent Owner. In the event
Servicer wishes to establish the Escrow Account at a different depository
institution, Servicer shall seek Owner's approval which approval shall not be
unreasonably withheld.
The Servicer shall deposit in the Escrow Account or Accounts on or
prior to the second Business Day following receipt thereof, 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 Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 2.07. Any interest paid on funds deposited in the Escrow Account by the
depository institution shall accrue to the benefit of the Servicer, other than
interest on escrowed funds required by law to be paid to the Mortgagor, and the
Servicer shall be responsible to pay from its own funds interest on escrowed
funds to the Mortgagor notwithstanding that the Escrow Account may be
non-interest bearing or that interest paid thereon is insufficient for such
purposes.
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Section 2.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for
the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advance made by the
Servicer pursuant to Section 2.08 with respect to a related Mortgage Loan,
but only from amounts received on the related Mortgage Loan which represent
late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan or
applicable federal or state law or judicial or administrative ruling;
(iv) for transfer to the Custodial Account in accordance with the
terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged Property
in accordance with the procedures outlined in Section 2.14;
(vi) to pay to the Servicer, or any Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow Account;
(vii) to reimburse itself for any amounts deposited in the Escrow
Account in error;
(viii) to transfer to the Custodial Account any Other Insurance
Proceeds; and
(ix) to clear and terminate the Escrow Account upon the termination of
this Agreement.
Section 2.08 Payment of Taxes, Insurance and Other Charges.
With respect to each First Lien Mortgage Loan that provides for Escrow
Payments to be made, the Servicer shall maintain accurate records reflecting the
status of ground rents, taxes, assessments, water rates and other charges which
are or may become a lien upon the Mortgaged Property and the status of Primary
Insurance Policy premiums and fire and hazard insurance coverage and shall
obtain, from time to time, all bills for the payment of such charges (including
renewal premiums) and shall effect payment thereof prior to the applicable
penalty or termination date and at a time appropriate for securing maximum
discounts allowable, employing for such purpose deposits of the Mortgagor in the
Escrow Account which shall have been estimated and accumulated by the Servicer
in amounts sufficient for such purposes, as allowed under the terms of the
Mortgage.
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To the extent that any First Lien Mortgage Loan does not provide for
Escrow Payments, the Servicer shall determine that any such payments are made by
the Mortgagor when due; provided that, the Servicer shall not make any Servicing
Advance with respect to such Mortgage Loan except to the extent necessary to
protect the lien priority of the related Mortgage Loan or the value of the
related Mortgaged Property. With respect to each First Lien Mortgage Loan that
provides for Escrow Payments, subject to Accepted Servicing Practices, the
Servicer assumes full responsibility for the payment of all such bills and shall
effect payments of all such bills irrespective of the Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make Servicing Advances from its own funds to effect such payments within
the time period required to avoid the loss of the related Mortgaged Property by
foreclosure from a tax or other lien. Notwithstanding the foregoing, if Servicer
reasonably determines that such Servicing Advance would be a Nonrecoverable
Advance, Servicer shall have no obligation to make such Servicing Advance.
Section 2.09 Protection of Accounts.
The Servicer may transfer the Custodial Account or the Escrow Account
to a different Qualified Depository from time to time. Such transfer shall be
made only upon notice to the Owner, which notice shall be provided prior to such
transfer unless such transfer is due to an emergency.
Amounts on deposit in the Custodial Account or Escrow Account may at
the option of the Servicer be invested in Eligible Investments. Any such
Eligible Investment shall mature no later than one day prior to the Remittance
Date in each month; provided, however, that if such Eligible Investment is an
obligation of a Qualified Depository (other than the Servicer) that maintains
the Custodial Account or the Escrow Account, then such Eligible Investment may
mature on the related Remittance Date. Any such Eligible Investment shall be
made in the name of the Servicer in trust for the benefit of the Owner. All
income on or gain realized from any such Eligible Investment shall be for the
benefit of the Servicer and may be withdrawn at any time by the Servicer. Any
losses incurred in respect of any such investment shall be deposited in the
Custodial Account or the Escrow Account, by the Servicer out of its own funds
immediately as realized. If, at any time, the amount on deposit in the Custodial
Account or the Escrow Account exceeds the amount of the applicable FDIC
insurance, such excess above the amount of the applicable FDIC insurance shall
be invested in Eligible Investments.
Section 2.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each First Lien Mortgage
Loan, hazard insurance such that all buildings upon the Mortgaged Property are
insured by a generally acceptable insurer acceptable under the Xxxxxx Xxx Guides
against loss by fire, hazards of extended coverage and such other hazards as are
required to be insured pursuant to the Xxxxxx Mae Guides, in an amount which is
at least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan or (b) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor or the loss
payee from becoming a co-insurer.
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If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is, and shall continue to be, covered by a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration with a generally acceptable insurance carrier
acceptable under the Xxxxxx Xxx Guides in an amount representing coverage not
less than the lesser of (i) the aggregate unpaid principal balance of the
Mortgage Loan, (ii) maximum amount of insurance which is available under the
National Flood Insurance Act of 1968, as amended (regardless of whether the area
in which such Mortgaged Property is located is participating in such program),
or (iii) the full replacement value of the improvements which are part of such
Mortgaged Property. If a Mortgaged Property is located in a special flood hazard
area and is not covered by flood insurance or is covered in an amount less than
the amount required by the National Flood Insurance Act of 1968, as amended, the
Servicer shall notify the related Mortgagor that the Mortgagor must obtain such
flood insurance coverage, and if said Mortgagor fails to obtain the required
flood insurance coverage within forty five (45) days after such notification,
the Servicer shall immediately force place the required flood insurance on the
Mortgagor's behalf. Notwithstanding the foregoing, Servicer shall have no
liability to Owner or any third party for any penalties or fines imposed based
on Servicer's failure to timely notify the Director of FEMA and the flood
insurance provider related to a servicing transfer if Servicer is not provided
with flood insurance information upon the Servicing Transfer Date; provided
that, the Servicer shall have promptly provided Owner with notice of such
missing flood insurance information.
If a First Lien Mortgage Loan 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 Xxxxxx Xxx requirements, 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.
The Servicer shall cause to be maintained on each Mortgaged Property
such other or additional insurance as may be required pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In the event that the Owner or the Servicer shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Servicer shall in accordance with the Xxxxxx
Mae Guides make commercially reasonable efforts to communicate and consult with
the Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the desirability of protection of the Mortgaged Property.
All policies required hereunder shall name the Servicer and its
successors and assigns as a mortgagee and loss payee and shall be endorsed with
non contributory standard or New York mortgagee clauses which shall provide for
at least 30 days prior written notice of any cancellation, reduction in amount
or material change in coverage.
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The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies are acceptable under the Xxxxxx Xxx Guides and
are licensed to do business in the jurisdiction in which the Mortgaged Property
is located. The Servicer shall determine that such policies provide sufficient
risk coverage and amounts as required pursuant to the Xxxxxx Mae Guides, that
they insure the property owner, and that they properly describe the property
address. The Servicer shall furnish to the Mortgagor a formal notice of
expiration of any such insurance in sufficient time for the Mortgagor to arrange
for renewal coverage by the expiration date; provided, however, that in the
event that no such notice is furnished by the Servicer, the Servicer shall
ensure that replacement insurance policies are in place in the required
coverages and the Servicer shall be solely liable for any losses in the event
coverage is not provided.
Pursuant to Section 2.04, any amounts collected by the Servicer under
any such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Servicer's normal servicing procedures as
specified in Section 2.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 2.05.
Section 2.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against losses arising from fire and hazards covered under
extended coverage on all of the Mortgage Loans which is issued by an insurer
having a general policy rating of B:VI or better in Best's Key Rating Guide,
then, to the extent such policy provides coverage in an amount equal to the
amount required pursuant to Section 2.10 and otherwise complies with all other
requirements of Section 2.10, it shall conclusively be deemed to have satisfied
its obligations as set forth in Section 2.10. Any amounts collected by the
Servicer under any such policy relating to a Mortgage Loan shall be deposited in
the Custodial Account subject to withdrawal pursuant to Section 2.05. Such
policy may contain a deductible clause, in which case, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with Section 2.10, and there shall have been a loss which would have
been covered by such policy, the Servicer shall deposit in the Custodial Account
at the time of such loss the amount not otherwise payable under the blanket
policy because of such deductible clause, such amount to be deposited from the
Servicer's funds, without reimbursement therefor. Upon request of the Owner, the
Servicer shall cause to be delivered to the Owner a certified true copy of such
policy and a statement from the insurer thereunder that such policy shall in no
event be terminated or materially modified without 30 days' prior written notice
to the Owner.
Section 2.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Servicer shall maintain with an insurer acceptable to Xxxxxx Xxx
and Xxxxxxx Mac, at its own expense, a blanket Fidelity Bond and an Errors and
Omissions Insurance Policy, with broad coverage on all officers, employees or
other persons acting in any capacity requiring such persons to handle funds,
money, documents or papers relating to the Mortgage Loans
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("Servicer Employees"). Any such Fidelity Bond and Errors and Omissions
Insurance Policy shall be in the form of the Mortgage Banker's Blanket Bond and
shall protect and insure the Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such Servicer
Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy also
shall 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 2.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Servicer from its duties and obligations as set forth in
this Agreement. The minimum coverage under any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be at least equal to the corresponding amounts
required by Xxxxxx Mae in the Xxxxxx Xxx Mortgage-Backed Securities Selling and
Servicing Guide. 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.
Section 2.13 Inspections.
The Servicer shall inspect the Mortgaged Property as often as is
deemed necessary by the Servicer to assure itself that the value of the
Mortgaged Property is being preserved. The Servicer shall document on its
servicing system each such inspection. The costs of such inspections shall be
treated as Servicing Advances for which the Servicer shall be entitled to full
reimbursement for in accordance with Section 2.05(iii). The cost of an
inspection shall be commercially reasonable.
Section 2.14 Restoration of Mortgaged Property.
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 and the terms of this
Agreement. At a minimum, the Servicer shall comply with the following conditions
in connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
(i) the Servicer shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with
respect thereto;
(ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
(iii) the Servicer shall verify that the Mortgage Loan is not in
default; and
(iv) 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.
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Section 2.15 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Servicer on behalf of the Owner and without
reference to the Owner except as otherwise required by law. 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.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Owner solely for the purpose of its prompt disposition and
sale. In consideration therefor, the Owner shall pay the Servicer the REO
Management Fee per month as set forth in the applicable Commitment Letter. The
Servicer, either itself or through an agent selected by the Servicer, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. Pursuant to Accepted Servicing Practices, the
Servicer shall cause each REO Property to be inspected upon the acquisition of
title thereto and, if such REO Property is not sold within one year of
acquisition of title thereto, shall cause each REO Property to be inspected at
least annually thereafter. The Servicer shall attempt to sell the same (and may
temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Servicer deems to
be in the best interest of the Owner in accordance with Accepted Servicing
Practices. The Servicer shall provide the Owner on a monthly basis a report on
the status of each REO Property.
In consideration therefor, the Owner shall pay the Servicer the REO
Management Fee per month as set forth in the applicable Commitment Letter.
The Servicer shall use commercially reasonable efforts to dispose of
the REO Property as soon as possible and shall sell such REO Property in any
event within one year after title has been taken to such REO Property, unless
the Servicer determines, and gives an appropriate notice to the Owner to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall report
monthly to the Owner as to the progress being made in selling such REO Property.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in an amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the National
Flood Insurance Act of 1968, as amended, flood insurance in the amount required
in Section 2.10 hereof. Such costs to maintain appropriate insurance coverage
shall be treated as Servicing Advances for which the Servicer shall be entitled
to full reimbursement in accordance with Section 2.05(iii).
The disposition of REO Property shall be carried out by the Servicer
at such price, and upon such terms and conditions, as the Servicer deems to be
in the best interests of the Owner in accordance with Accepted Servicing
Practices. The proceeds of sale of the REO Property shall be promptly deposited
in the Custodial Account pursuant to the terms of this
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Agreement but not later than the second Business Day following receipt thereof.
As soon as practical thereafter, the expenses of such sale shall be paid and the
Servicer shall reimburse itself for any related unreimbursed Servicing Advances
and unpaid Servicing Fees made pursuant to this Section.
With respect to each REO Property, the Servicer shall hold all funds
collected and received in connection with the operation of the REO Property in
the Custodial Account. The Servicer shall cause to be deposited on or prior to
the second Business Day following the receipt thereof in each Custodial Account
all revenues received with respect to the conservation and disposition of the
related REO Property. Any advances made by Servicer pursuant to this Section
2.15 shall be treated as Servicing Advances for which the Servicer shall be
entitled to full reimbursement for in accordance with Section 2.05(iii).
Section 2.16 Permitted Withdrawals with Respect to REO Property.
The Servicer shall withdraw funds on deposit in the Custodial Account
with respect to each related REO Property necessary for the proper operation,
management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Section 2.10 and the fees of any
managing agent acting on behalf of the Servicer. The Servicer shall obtain the
prior written consent of the Owner for any single repair or single maintenance
expense in excess of $5,000.00 for any REO Property. The Servicer shall make
monthly distributions on each Remittance Date to the Owner of the net cash flow
from the REO Property (which shall equal the revenues from such REO Property net
of the expenses described in Section 2.15 and of any reserves reasonably
required from time to time to be maintained to satisfy anticipated liabilities
for such expenses).
Section 2.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 2.19, the
Servicer shall furnish to the Owner on or before the 15th day of each month a
report with respect to any REO Property covering the operation of such REO
Property for the previous month and the Servicer's efforts in connection with
the sale of such REO Property and any rental of such REO Property incidental to
the sale thereof for the previous month. That statement shall be accompanied by
such other information available to the Servicer as the Owner shall reasonably
request.
Section 2.18 Liquidation Reports and Losses.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Owner pursuant to a deed in lieu of foreclosure, the Servicer
shall submit to the Owner a liquidation report with respect to such Mortgaged
Property. Owner will be responsible for all losses including but not limited to
unrecoverable interest, "out-of-pocket" costs and expenses from either the
Mortgagor or Investor that are normal and customary that occur as the result of
normal business activity associated with owning the loans. Notwithstanding the
above, Owner shall not be responsible for any losses which are the result of
Servicer's failure to provide subservicing consistent with the terms of the
Agreement. Owner shall also be responsible for any losses caused by fraudulent
acts by third parties and are not the result of Servicer's gross negligence.
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Section 2.19 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Servicer shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code.
Section 2.20 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related Interest Rate Adjustment Date
in compliance with the requirements of applicable law and the related Mortgage
and Mortgage Note. The Servicer shall execute and deliver any and all necessary
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. The Servicer shall promptly upon Owner's reasonable written
request, deliver to the Owner such notifications and any additional applicable
data regarding such adjustments and the methods used to calculate and implement
such adjustments. Upon the discovery by the Servicer, or the Owner that the
Servicer has failed to adjust a Mortgage Interest Rate or a Monthly Payment
pursuant to the terms of the related Mortgage Note and Mortgage, the Servicer
shall immediately deposit in the Custodial Account from its own funds, without
the right for reimbursement therefor, the amount of any interest loss caused the
Owner thereby.
Section 2.21 Recordation of Assignments of Mortgage.
Except in connection with Accepted Servicing Practices for defaulted
Mortgage Loans, the Servicer shall not be responsible for the preparation or
recording of the Assignments of Mortgage relating to the Mortgage Loans to the
Owner, the securitization trustee or any other party; provided, however, that in
the event the Servicer agrees to record any mortgage assignment, any expense,
including the fees of third party service providers, incurred by the Servicer in
connection with the preparation and recordation of Assignments of Mortgage shall
be reimbursable by the Owner, or if not reimbursed by the Owner, as a Servicing
Advance. The Servicer shall not be liable for, and shall be indemnified by the
Owner, against any losses, costs, penalties and damages incurred as a result of
incorrect or incomplete, or untimely submission of, Assignments of Mortgages and
applicable recording information, other than with respect to any Assignments of
Mortgages recorded by and on behalf of the Servicer.
Section 2.22 HELOC Disbursements.
Servicer shall process all Draw requests and release funds to
Mortgagors in accordance with the terms of this Section 2.22. Such Draws
advanced by Servicer shall be considered HELOC Draw Advances under the terms of
this Agreement. Upon receipt by Servicer or its designee of a Servicer issued
HELOC disbursement check drawn on a HELOC Mortgage Loan, Servicer shall cause
the release of funds in the amount of the Draw, which shall be posted as a debit
to the related HELOC Mortgage Loan unless: (a) the Available Credit under the
HELOC Mortgage Loan is less than the amount of the check; (b) any payment due
under the terms of the related Mortgage Note is delinquent; (c) foreclosure
proceedings have commenced on the Mortgaged Property; (d) the Mortgagor is in
bankruptcy; (e) the Mortgagor has placed a
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valid and timely stop payment on the check; (f) the available credit needed to
post the check is based on a principal payment to the loan that has not yet
cleared the bank; (g) the check is a duplicate of a check that has already been
posted; (h) the signature on the check or wire transfer does not match the
signature on file with the Servicer; (i) other reasons deemed appropriate by
Servicer for refusal to cause the release of such funds; or (j) the ability to
Draw has been suspended, terminated or has expired under Applicable Law and the
Mortgage Loan Documents. Servicer covenants that in processing Draw requests it
will comply with the terms of the Credit Line Agreement, Accepted Servicing
Practices and applicable law, including, but not limited to, Regulation X, 00
XXX Section 226.5b. Servicer shall notify the related Mortgagor of all rejected
Draw requests. In addition, Servicer will notify Mortgagor of any suspension or
termination of the Credit Line in accordance with the Mortgage Loans Documents,
applicable law.
With respect to each HELOC Mortgage Loan, Servicer will process Draw
requests up through the Transfer Date based on information in the Servicer's
loan administration system as of such date. Owner agrees to reimburse Servicer
with respect to the funding of any Draw request on or after the Transfer Date in
accordance with Section 3.03. Servicer shall have no obligation to process a
Draw request thirty (30) days or more after the Transfer Date and Owner shall
indemnify and hold Servicer harmless from and against any and all damages
arising from third-party claims with respect to the funding of any Draw request
prior to or after the Transfer Date. Lastly, Servicer shall not be liable for
any losses incurred by Owner in connection with the funding of any Draw request
that is determined to be fraudulent and not caused by any negligence by
Servicer.
Section 2.23 Credit Reporting.
The Servicer shall fully furnish, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information on the Mortgagor credit files to Equifax, Experian and Trans Union
Credit Information Company (or their respective successors) on a monthly basis
and in accordance with applicable federal, state and local laws.
The Servicer will transmit full file credit reporting data for each
Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and that for each
Mortgage Loan, Servicer agrees that it shall report one of the following
statuses each month as follows: new origination, current, delinquent (30, 60, 90
days, etc.), foreclosed, or charged off.
Section 2.24 Superior Liens.
If the Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by the superior
lien, or has declared or intends to declare a default under the superior
mortgage or the promissory note secured thereby, or has filed or intends to file
an election to have the Mortgaged Property sold or foreclosed, the Servicer
shall take whatever actions are necessary to protect the interests of the Owner,
and/or to preserve the security of the related Mortgage Loan, subject to any
requirements applicable to real estate mortgage investment conduits pursuant to
the Internal Revenue Code. The Servicer shall make a Servicing Advance of the
funds necessary to cure the default or reinstate the superior lien if the
Servicer determines that such Servicing Advance is in the best interests of the
Owner and would be in accordance with Accepted Servicing Practices. The Servicer
shall not make such a
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Servicing Advance except to the extent that it determines that such advance
would not be a Nonrecoverable Servicing Advance from Liquidation Proceeds on the
related Mortgage Loan. The Servicer shall thereafter take such action as is
necessary to recover the amount so advanced.
Section 2.25 Charge off Analysis.
Once a month, the Servicer will analyze, utilizing its internal
proprietary models, all Mortgage Loans that are greater than 150 days delinquent
(excluding those on a forbearance plan or court approved bankruptcy payment
plan) to determine if any such Mortgage Loans should be charged off. With
respect to any Charged Off Loan, if Servicer determines in its reasonable
discretion that it is not economically advantageous to pursue foreclosure
proceedings or other liquidation of the related Mortgaged Property, the Servicer
will charge off Mortgage Loans and will not make Servicer Advances at such time
that the Mortgage Loan is 180 days delinquent; provided, however, that the
Servicer shall have no obligation to charge off any Mortgage Loan that is in
bankruptcy or subject to a pending workout or repayment plan.
Once a Mortgage Loan has been charged off, Servicer will discontinue
making Servicing Advances and HELOC Draw Advances, Servicer will not be entitled
to any additional servicing compensation, the Charged Off Loan will give rise to
a Realized Loss, and Servicer will follow the procedures described in the
following paragraphs.
Servicer will not be entitled to any Servicing Fees or reimbursement
of expenses incurred after such charge off date. Servicer will only be entitled
to previously accrued Servicing Fees on any such Charged Off Loans and will not
be entitled to receive any future unaccrued Servicing Fees or expenses from
collections on such Charged Off Loans as of the charge off date. In addition,
upon such charge off, the Owner shall reimburse the Servicer for any outstanding
and unreimbursed HELOC Draw Advances, Servicing Advances, and any other
outstanding, unreimbursed fees and costs of the Servicer with respect to such
Delinquent Mortgage Loan.
Any Charged Off Loan will be transferred to the Owner's designated
successor servicer after such time that the Mortgage Loan is 180 days delinquent
subject to any applicable Service Release Fees charged by Servicer.
With respect to any Charged Off Loan, the Trustee, upon receipt of a
notification from Servicer, shall release to the Owner the related Mortgage File
and shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as Servicer shall furnish to it and as shall be
necessary to vest in the Owner any released Mortgage Loan and the Trustee shall
have no further responsibility with regard to such Mortgage File (it being
understood that the Trustee shall have no responsibility for determining the
sufficiency of such assignment for its intended purpose).
Section 2.26 Tax and Flood Service Contracts.
The Servicer, at Owner's expense, shall cause each First Lien Mortgage
Loan which is transferred to the Servicer for servicing to be covered by (a) a
Tax Service Contract and (b) a Flood Zone Service Contract. The Servicer, at
Owner's expense, shall cause to be
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maintained on any second lien Mortgage Loan which is transferred to the Servicer
for servicing a Flood Zone Service Contract. Owner shall provide Servicer or
cause to be provided to Servicer Flood Zone information within the Servicing
Transfer Schedule. If any such Mortgage Loan is missing a Tax Service Contract
or Flood Zone Service Contract, as applicable, at the time of the Service
Transfer Date, Servicer shall place such Tax Service Contract or Flood Service
Contract, as applicable, and shall be entitled to charge Owner its standard fee
associated with acquiring such contracts; provided, however, that Servicer shall
provide written notice to Owner of any such Tax Service Contracts or Flood
Service Contracts that Servicer determines to be missing as of the Servicing
Transfer Date.
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ARTICLE III
DISTRIBUTION AND REPORTING
Section 3.01 Remittances.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Owner (a) all amounts deposited in the
Custodial Account related to the Due Period (net of charges against or
withdrawals from the Custodial Account pursuant to Section 2.05), plus (b) all
amounts, if any, which the Servicer is obligated to remit pursuant to Section
3.04, minus (c) any amounts attributable to Principal Prepayments received after
the applicable Principal Prepayment Period which amounts shall be remitted on
the following Remittance Date, together with any additional interest required to
be deposited in the Custodial Account in connection with such Principal
Prepayment in accordance with Section 2.04(viii), and minus (d) any amount
attributable to Monthly Payments collected but due on a Due Date or Dates
subsequent to the first day of the month in which such Remittance Date occurs,
which amounts shall be remitted on the following Remittance Date.
Section 3.02 Monthly Reports to Owner.
Not later than the Reporting Date of each month, the Servicer shall
furnish to the Owner standard monthly reports as set forth on Exhibit 1 attached
hereto (or such other format as is mutually agreed) in electronic medium
mutually acceptable to the parties as of the related Determination Date. Such
monthly reports shall be in electronic format and include mortgage loan
information electronically generated through Servicer's loan administration
servicing system including, but not limited to: (i) the actual balance as of the
last day of the related Due Period; (ii) all Principal Prepayments applied to
the Mortgagor's account during the related Principal Prepayment Period; (iii)
principal and interest collections received during the related Due Period; (iv)
the amounts of the monthly collection that are to be remitted to Owner; (v) an
identification of Mortgage Loans that are thirty (30), sixty (60) or ninety (90)
days or more delinquent as of the end of the prior month with respect to Monthly
Payments; Mortgage Loans that are in foreclosure or bankruptcy; (vi) REO
Properties; (vii) HELOC Draw Advances; (viii) available Credit Limit; and (ix)
Credit Limit.
In addition, on or before March 31st of each calendar year, the
Servicer shall furnish to each Person who was an Owner at any time during such
calendar year an annual statement in accordance with the requirements of
applicable federal income tax law as to the aggregate of remittances for the
applicable portion of such year.
Such obligation of the Servicer shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Internal Revenue Code as from time
to time are in force.
The Servicer shall prepare and file any and all tax returns,
information statements or other filings required to be delivered to any
governmental taxing authority or to the Owner pursuant to any applicable law
with respect to the Mortgage Loans and the transactions
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contemplated hereby. In addition, the Servicer shall provide the Owner with such
information concerning the Mortgage Loans as is necessary for the Owner to
prepare its federal income tax return as the Owner may reasonably request from
time to time and which is reasonably available to the Servicer.
Section 3.03 Reimbursement of Advances.
Except as otherwise provided herein, the Servicer shall be entitled to
first priority reimbursement pursuant to Section 2.05 hereof for Servicing
Advances (i) from recoveries from the related Mortgagor (ii) from all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) and (iii) from Owner on each Transfer Date
with respect to the related Mortgage Loan. Owner shall pay the Servicer on each
Remittance Date Cost of Funds in connection with any Servicing Advances accrued
through and including the last day of the month prior to the Remittance Date.
Servicer shall seek reimbursement for HELOC Draw Advances in the
following order: (1) the Servicer shall apply principal collections from the
same Due Period (i.e., January collections would reduce January draws); (2) the
Servicer shall notify the Master Servicer on the Remittance Date of the net
amount of Draws due to the Servicer as of the end of the prior Due Period and
the Master Servicer or Securities Administrator shall remit available principal
collections on the next Distribution Date in respect of any mortgages forming
part of the mortgage pool (including mortgages which are not HELOC Mortgage
Loans) in an amount equal to unreimbursed draws due to the Servicer; (3) the
Master Servicer will notify the Class G Certificateholder of any amounts due to
the Servicer after application of amounts in clauses (1) and (2) and the Class G
Certificateholder shall be required to remit to the Master Servicer or
Securities Administrator any amount due up to an amount set forth in the
Indenture (i. e., the 0.5% limitation) and the Master Servicer or Securities
Administrator shall remit such amounts to the Servicer on the Distribution Date;
and (4) to the extent that the Class G Certificateholder does not remit any
amounts due to the Servicer because the total funding limit permitted in respect
of the Class G Certificateholder has been reached or an Amortization Event has
occurred, MLML (or Countrywide if mutually agreed to by MLML and Countrywide)
shall remit such amounts, as a funding of the Excluded Amounts, to the Servicer
either directly or as holder of the Class G Certificate through the trust or
other issuing entity related to the Securitization Transfer; provided, that if
the Servicer has been notified that an Amortization Event is in effect, the
Servicer shall be reimbursed pursuant to clause (4). MLML agrees that if it
fails to fulfill its obligation as the Class G Certificateholder to advance
amounts owed to the trust for reimbursement to the Servicer, that the Servicer
may enforce such obligation directly against MLML. MLML shall wire such unpaid
HELOC Draw Advances within ten (10) days of Servicer's request for
reimbursement. MLML shall pay Servicer Cost of Funds in connection with any
unpaid HELOC Draw Advances (to the extent all reimbursement remedies have been
exhausted as set forth herein) not reimbursed to Servicer on each Remittance
Date.
Section 3.04 No Monthly Advances.
Except as set forth in the Assignment, Assumption and Recognition
Agreement, the Servicer shall not be required to advance for prepayment interest
shortfalls, compensating
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interest on payoffs or delinquent payments to investors which require scheduled
interest and scheduled principal payments each month.
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ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property.
The Servicer shall be required to enforce any "due-on-sale" provision
contained in any Mortgage or Mortgage Note and to deny assumption by the person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Servicer shall, to the extent
it has knowledge of such conveyance, exercise its rights to accelerate the
maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Servicer shall not exercise such rights if
prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause, the Servicer, shall, to the extent
permitted by applicable law, enter into (i) an assumption and modification
agreement with the person to whom such property has been conveyed, pursuant to
which such person becomes liable under the Mortgage Note and the original
Mortgagor remains liable thereon or (ii) in the event the Servicer is unable
under applicable law to require that the original Mortgagor remain liable under
the Mortgage Note and the Servicer has the prior consent of the primary mortgage
guarantee insurer, a substitution of liability agreement with the purchaser of
the Mortgaged Property pursuant to which the original Mortgagor is released from
liability and the purchaser of the Mortgaged Property is substituted as
Mortgagor and becomes liable under the Mortgage Note. If an assumption fee is
collected by the Servicer for entering into an assumption agreement, such fee
will be retained by the Servicer as additional servicing compensation. In
connection with any such assumption, neither the Mortgage Interest Rate borne by
the related Mortgage Note, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Servicer shall
inquire diligently into the creditworthiness of the proposed transferee, and
shall follow Accepted Servicing Practices and the underwriting practices and
procedures of prudent mortgage lenders in the respective states where the
Mortgage Properties are located including but not limited to Servicer conducting
a review of the credit and financial capacity of the individual receiving the
property, and may approve the assumption if it believes the recipient is capable
of assuming the mortgage obligations. If the credit of the proposed transferee
does not satisfy the relevant underwriting criteria and the transfer of
ownership actually occurs, the Servicer diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate
the maturity of the Mortgage Loan.
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Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files.
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 shall notify the Owner in the Monthly
Remittance Advice as provided in Section 3.02, and may request the release of
any Mortgage Loan Documents from the Owner in accordance with this Section 4.02
hereof. The Servicer shall obtain discharge of the related Mortgage Loan as of
record within any related time limit required by applicable law.
In connection with any instrument of satisfaction or deed of
reconveyance, the Servicer shall be entitled to a reconveyance fee. Such
reconveyance fee shall only be reimbursable to Servicer by Owner to the extent
the reconveyance fee is uncollectible from the Mortgagor based on the terms of
the security instrument or in the Servicer's reasonable opinion that such fee is
not allowable by statute.
Servicer shall have no liability for third party delays (unless such
third party is an affiliate of the Servicer) that may result in assessed
penalties. To the extent applicable, Servicer shall xxxx Owner for any
reconveyance fees and recording fees uncollectible from the Mortgagor in
connection with any instrument of satisfaction or deed of reconveyance. Upon
receipt of such request, the Owner or its designee shall within five (5)
Business Days release or cause to be released the related Mortgage Loan
Documents to Servicer and Servicer shall prepare and process any satisfaction or
release. If Owner or its designee or the Custodian does not release the related
Mortgage Loan Documents to Servicer within five (5) Business Days of receipt of
request to do so, Servicer may retain a third party to complete the reconveyance
and charge Owner the actual cost of services provided by such third party.
Servicer shall have no liability for third party delays that may result in
assessed penalties.
If the Servicer satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage (or such
lesser amount in connection with a discounted payoff accepted by the Servicer
with respect to a defaulted Mortgage Loan or Servicer accepts a payment amount
which is greater than $50 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
deposit the shortfall amount of the unpaid indebtedness in the Custodial Account
within five (5) Business Days of receipt of such demand by the Owner. Based on
Accepted Servicing Practices, if Servicer accepts a payment amount which is $50
or less of the indebtedness, Owner shall reimburse Servicer for such shortfall
amount within five (5) Business Days of receipt of such demand from the
Servicer.
The Servicer shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 2.12 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.
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Section 4.03 Servicing Compensation.
As consideration for servicing the Mortgage Loans, the Servicer shall
be entitled to retain from the monthly remittance to Owner the applicable
Servicing Fee and Other Fees Servicer is entitled to each month. The obligation
of the Owner to pay, and the Servicer's right to withdraw or retain, the
Servicing Fee and Other Fees with regard to such Mortgage Loan shall be limited
to Monthly Payments collected by the Servicer on such Mortgage Loan; provided,
however, such Servicing Fees shall accrue and shall be payable to Servicer from
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other
amounts as may be collected by the Servicer from the Mortgagor or otherwise
relating to the Mortgage Loan, and it being understood that, Servicer shall have
the right to payment of such unpaid Servicing Fees at such time that a Mortgage
Loan is no longer an Active Mortgage Loan on Servicer's system. To the extent
the Servicer is unable to pay itself the accrued and unpaid Servicing Fee and
Other Fees from interest payment on the Mortgage Loans, the Servicer shall be
entitled to xxxx Owner for the shortfall each month and Owner shall reimburse
the Servicer within five (5) Business Days of receipt of such invoice.
Additional servicing compensation in the form of Ancillary Income
shall be retained by the Servicer to the extent not required to be deposited in
the Custodial Account. 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 thereof except as specifically provided for
herein.
Notwithstanding anything set forth in this section related to
Ancillary Income, the Servicer shall not collect from the Mortgagor, pass
through as an advance or as a liquidation expense any charges other than bona
fide fees, which fees must be in compliance with local law. Servicer can not add
on a processing, or review fee or any additional fee, xxxx up or otherwise
directly make a profit on or from services or activities rendered by a third
party or affiliate (examples include but not limited to: letters and notices,
force placed insurance, BPOs, appraisals, inspections, property preservation
costs). Servicer may collect any third party fees which are charged in
accordance with Accepted Servicing Practices.
Section 4.04 Annual Statement as to Compliance.
So long as any Mortgage Loans are being serviced hereunder, or were
serviced hereunder during the prior calendar year, on or before March 5 of each
calendar year, commencing in 2007, the Servicer shall deliver to the Owner,
Master Servicer and any Depositor a statement of compliance addressed to the
Owner, Master Servicer and such Depositor and signed by an authorized officer of
the Servicer, to the effect that (i) a review of the Servicer's servicing
activities during the immediately preceding calendar year (or applicable portion
thereof) and of its performance under the provisions of this Agreement and any
applicable Reconstitution Agreement during such period has been made under such
officer's supervision and (ii) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all of its obligations under this
Agreement and any applicable Reconstitution Agreement in all material respects
throughout such calendar year (or applicable portion thereof) or, if there has
been a failure to fulfill any such obligation in any material respect,
specifically identifying each such failure known to such officer, the nature and
the status of the cure thereof.
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Section 4.05 Annual Independent Public Accountants' Servicing Report.
So long as any Mortgage Loans are being serviced hereunder, or were
serviced hereunder during the prior calendar year, on or before March 5th of
each year beginning March 5, 2007 the Servicer shall deliver to the Owner, any
Master Servicer and any Depositor a report by a registered public accounting
firm that attests to, and reports on, the assessment made and delivered by the
Servicer pursuant to Section 4.10 (a)(i), as required by Rules 13a-18 and 15d-18
of the Securities Exchange Act and Item 1122 of Regulation AB, which attestation
shall be in accordance with Rule 1-02(a)(3) and Rule 2-02(g) of Regulation S-X
under the Securities Act and the Securities Exchange Act.
Section 4.06 Sarbanes Oxley Certification
On or before March 5 of each calendar year commencing in 2007, the
Servicer shall deliver, or if required by Regulation AB, cause each Subservicer
or each Subcontractor described in Section 4.10(a)(iii) of this Agreement to
deliver to the Owner, the Depositor in the Securitization Transaction, the
Master Servicer (if any), or any other Person that will be responsible for
signing the certification (a "Sarbanes Certification") required by Rules
13a-14(d) and 15d(14) under the Exchange Act (pursuant to Section 302 of the
Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed issuer with respect to
a Securitization Transaction a certification signed by the appropriate officer
of the Servicer in the form attached hereto as Exhibit 10; provided that such
certification delivered by the Company may not be filed as an exhibit to, or
included in, any filing with the Commission. The Servicer acknowledges that one
of the parties identified above may rely on the certification provided by the
Servicer pursuant to such clause in signing a Sarbanes Certification and filing
such with the Commission. None of the Owner, any Depositor or any Master
Servicer will request delivery of a certification unless a Depositor is required
under the Securities Exchange Act to file an annual report on Form 10-K or any
amendment thereto with respect to an issuing entity whose asset pool includes
Mortgage Loans.
Section 4.07 Right to Examine Servicer Records.
The Owner shall have the right during the term of this Agreement to
examine and audit any and all of the books, records, or other information of the
Servicer, whether held by the Servicer or by another on its behalf, with respect
to or concerning this Agreement or the Mortgage Loans, during normal business
hours, no more than twice a year, upon reasonable advance notice and at the sole
cost and expense of the Owner; provided, however, that unless otherwise required
by law, the Servicer shall not be required to provide access to such information
if the provision thereof would violate any law, confidentiality agreement or
legal obligation of the Servicer, or would compromise the Servicer's information
disclosure and security policies, including the legal right to privacy of any
Mortgagor.
Section 4.08 Compliance with Xxxxx-Xxxxx-Xxxxxx Act of 1999.
With respect to each Mortgage Loan and the related Mortgagor, the
Servicer shall comply with Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all
applicable regulations and
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guidelines promulgated thereunder, and the Servicer shall provide all notices
required thereunder, using the notice language supplied by the initial Owner.
Section 4.09 On-Line Access
The Servicer shall permit the Owner as owner of the servicing rights,
internet access to certain computer screens in the Servicer's loan
administration computer system which contain Mortgage Loan information. The
Servicer shall update such Mortgage Loan information on a "real time" basis. The
Servicer shall provide the Owner with access to the system, as well as the tools
to create and administer log-in identifications and passwords for each of its
authorized users. In accessing the Servicer's computerized loan administration
system, the Owner agrees that it will: (i) only log-in with the identification
assigned by the Servicer; (ii) correctly and completely log-off the system
immediately upon completion of each session of service; (iii) not allow any
unauthorized employee or agent of the Owner to use the assigned log-in
identification or improperly access the Servicer's computer system; (iv) keep
the assigned log-in identification and all other information enabling such
access strictly confidential; (v) not access, or attempt to access any Servicer
systems or data other than that which is specifically authorized; (vi) not
intentionally spread viruses or other malicious computer codes to the Servicer's
computer systems; (vii) not copy or infringe upon any content contained on the
Servicer's loan administration computer system; (viii) designate in writing an
administrator (an "Owner Administrator") who shall review on an annual basis the
list of employees or agents of the Owner who have been authorized to access the
Servicer's loan administration computer system and assigned log-in
identifications and passwords (each an "Authorized User"); (ix) require the
Owner Administrator in conducting its review to ensure that each Authorized User
is currently an employee or agent of the Owner and whose employment or function
as agent of the Owner requires the Authorized User to have continued access to
the Servicer's loan administration computer system; (x) require the Owner
Administrator to remove from the list of Authorized Users, and deny access to,
any individual who is not currently an employee or agent of the Owner or whose
employment or function as agent no longer requires such employee or agent of the
Owner to remain an Authorized User and to have access to the Servicer's loan
administration computer system, and (xi) deliver to the Servicer on or before
the end of the month following each anniversary of the date of execution of this
Agreement, beginning on the first such anniversary following the execution of
this Agreement, a notice stating that the Owner Administrator has conducted the
review of the list of Authorized Users required by clause (viii) above, and has
updated the list of Authorized Users as required by clause (ix) above.
The Servicer shall have no liability to the Owner in the event that
access to the Servicer's loan administration system becomes limited or otherwise
unavailable during periods of heavy use, upgrades, maintenance to address
security concerns or otherwise provided that the Servicer shall have delivered
to the Owner the monthly reports described in Section 3.02 no later than the
Reporting Date.
Section 4.10 Report on Assessment of Compliance and Attestation.
(a) On or before March 5th of each calendar year, commencing in 2007, the
Servicer shall:
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i) deliver to the Owner, any Master Servicer and any Depositor a
report regarding the Servicer's assessment of compliance with the
Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Securities
Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Owner, the Master Servicer and such Depositor
and signed by an authorized officer of the Servicer, and shall
address each of the applicable Servicing Criteria specified on
Exhibit 12 hereto (wherein "investor" shall mean the "Master
Servicer");
ii) deliver to the Owner, any Master Servicer and any Depositor a
report of a registered public accounting firm that attests to,
and reports on, the assessment of compliance made by the Servicer
and delivered pursuant to the preceding paragraph. Such
attestation shall be in accordance with Rules 1-02(a)(3) and
2-02(g) of Regulation S-X under the Securities Act and the
Securities Exchange Act;
iii) if required pursuant to Regulation AB, cause each Subservicer,
and each Subcontractor determined by the Servicer pursuant to
Section 4.11(b) to be "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB (each, a
"Participating Entity"), to deliver to the Owner, Master Servicer
and any Depositor an assessment of compliance and accountants'
attestation as and when provided in paragraphs (a) and (b) of
this Section; and
(b) Each assessment of compliance provided by a Subservicer pursuant to
Section 4.10(a)(iii) shall address each of the Servicing Criteria
specified Exhibit 12 hereto (wherein "investor" shall mean the "Master
Servicer") or, in the case of a Subservicer subsequently appointed as
such, on or prior to the date of such appointment. An assessment of
compliance provided by a Subcontractor pursuant to Section
4.10(a)(iii) need not address any elements of the Servicing Criteria
other than those specified by the Servicer pursuant to Section 4.11.
(c) If reasonably requested by the Owner or any Master Servicer, the
Servicer shall provide to the Owner or any Master Servicer evidence of
the authorization of the person signing the certificate or statement
provided pursuant to Section 4.04, Section 4.06 and Section 4.10(a)and
4.10(b) of this Agreement.
Section 4.11 Use of Subservicers and Subcontractors.
The Servicer shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Servicer as servicer under
this Agreement or any Reconstitution Agreement unless the Servicer complies with
the provisions of paragraph (a) of this Section. The Servicer shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Servicer as servicer under this Agreement
or any Reconstitution Agreement unless the Servicer complies with the provisions
of paragraph (b) of this Section.
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(a) It shall not be necessary for the Servicer to seek the consent of the
Owner, any Master Servicer or any depositor to the utilization of any
Subservicer. If required by Regulation AB, the Servicer shall cause
any Subservicer used by the Servicer (or by any Subservicer) for the
benefit of the Owner and any depositor to comply with the provisions
of this Section and with Sections 10.09, 5.02(b) and (d), 4.04, 4.10
and 4.06 of this Agreement to the same extent as if such subservicer
were the Servicer, and to provide the information required with
respect to such Subservicer under Section 5.02(c) of this Agreement.
The Servicer shall be responsible for obtaining from each Subservicer
and delivering to the Owner, any Master Servicer and any depositor any
servicer compliance statement required to be delivered by such
Subservicer under Section 4.04, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section
4.10 and Section 4.06 and any certification required to be delivered
to the Person that will be responsible for signing the Sarbanes
Certification under Section 4.06 as and when required to be delivered.
(b) It shall not be necessary for the Servicer to seek the consent of the
Owner, the Master Servicer or any depositor to the utilization of any
Subcontractor. If required by Regulation AB, the Servicer shall
promptly upon request provide to the Owner, the Master Servicer and
any depositor (or any designee of the depositor, such as a master
servicer or administrator) a written description of the role and
function of each Subcontractor utilized by the Servicer or any
Subservicer, specifying (i) the identity of each such Subcontractor,
(ii) which (if any) of such Subcontractors are Participating Entities,
and (iii) which elements of the Servicing Criteria will be addressed
in assessments of compliance provided by each Participating Entity
identified pursuant to clause (ii) of this paragraph.
The Servicer shall cause any such Subcontractor used by the Servicer
(or by any Subservicer) for the benefit of the Owner and any depositor to comply
with the provisions of Sections 4.10 and 4.06 of this Agreement to the same
extent as if such subservicer were the Servicer. The Servicer shall be
responsible for obtaining from each Participating Entity and delivering to the
Owner and any depositor any assessment of compliance and attestation required to
be delivered by such Participating Entity under Section Sections 4.10 and 4.06,
in each case as and when required to be delivered.
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ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information.
During the term of this Agreement, the Servicer shall furnish to the
Owner all reports required hereunder, and such other periodic, special, or other
reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate with respect to the Owner or the purposes
of this Agreement to the extent such reports or information are readily
accessible to the Servicer without undue expense. All such reports or
information shall be provided by and in accordance with all reasonable
instructions and directions which the Owner may give and to the extent the
Servicer incurs any material cost or expense related to this Section 5.01 not
otherwise required to be incurred pursuant to this Agreement, such expense shall
be at the sole cost and expense of the Owner.
The Servicer shall execute and deliver all such instruments and take
all such action as the Owner may reasonably request from time to time to the
extent such action is in accordance with Accepted Servicing Practices, in order
to effectuate the purposes and to carry out the terms of this Agreement.
Section 5.02 Financial Statements; Servicing Facilities.
In connection with marketing the Mortgage Loans or a proposed
Reconstitution, the Owner shall make available to a prospective purchaser
audited financial statements of the consolidated group that includes the
Servicer for the most recently completed three fiscal years for which such
statements are available, as well as a Consolidated Statement of Condition at
the end of the last two fiscal years for which such statements are available
covered by any Consolidated Statement of Operations. The Servicer also shall
make available any comparable interim statements to the extent any such
statements have been prepared by or on behalf of the corporate group that
includes the Servicer (and are available upon request to the public at large).
The Servicer shall furnish to the Owner or a prospective purchaser copies of the
statements specified above.
The Servicer shall make available to the Owner or any prospective
purchaser a knowledgeable representative for the purpose of answering questions
respecting recent developments affecting the Servicer or the financial
statements of the corporate group that includes the Servicer, and to permit any
prospective purchaser (upon reasonable notice) to inspect the Servicer's
servicing facilities (no more than 6 times per year unless mutually agreed to
between the parties) for the purpose of satisfying such prospective purchaser
that the Servicer has the ability to service the Mortgage Loans as provided in
this Agreement provided that such access is necessary, reasonable, or
appropriate with respect to the Owner or the purposes of this Agreement to the
extent such access or information are readily accessible to the Servicer without
undue expense.
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In connection with any Securitization Transaction the Servicer shall
(i) within ten Business Days following request by the Owner or any Depositor,
provide to the Owner and such Depositor (or cause each Subservicer to provide),
in writing, reasonably required for compliance with Regulation AB, the
information and materials specified in subsections (a), (b) and (e) of this
Section 5.02, and (ii) as promptly as practicable following notice to or
discovery by the Servicer, provide to the Owner and any depositor (as required
by Regulation AB) the information specified in paragraph (c) of this Section.
(a) If so requested by the Owner or any depositor, the Servicer shall
provide such information regarding such Servicer and each Subservicer
as is requested for the purpose of compliance with Items 1103(a)(1),
1117 and 1119 of Regulation AB. Such information shall include, at a
minimum:
(i) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the
Servicer and each Subservicer; and
(ii) a description of any affiliation or relationship
between the Servicer, each Subservicer and any of the following
parties to a Securitization, as such parties are identified to
the Servicer by the Owner or any Depositor in writing within 10
days in advance of such Securitization:
(1) any servicer;
(2) any trustee;
(3) any originator;
(4) any significant obligor;
(5) any enhancement or support provider; and
(6) any other material transaction party.
(b) If reasonably requested by the Owner or any depositor, the Servicer
shall provide such information regarding the Servicer, as servicer of
the Mortgage Loans, and each Subservicer (each of the Servicer and
each Subservicer, for purposes of this paragraph, a "Servicer"), as is
reasonably requested for the purpose of compliance with Items 1108,
1117 and 1119 of Regulation AB. Such information shall include, at a
minimum:
(i) the Servicer's form of organization;
(ii) a description of how long the Servicer has been
servicing residential mortgage loans; a general discussion of the
Servicer's experience in servicing assets of any type as well as
a more detailed discussion of the Servicer's experience in, and
procedures for, the servicing function it will perform under this
Agreement and any Reconstitution Agreements; information
regarding the size, composition and growth of the Servicer's
portfolio of residential mortgage loans of a type similar to the
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Mortgage Loans and information on factors related to the Servicer
that may be material, in the good faith judgment of the Owner or
any depositor, to any analysis of the servicing of the Mortgage
Loans or the related asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of mortgage loans
of a type similar to the Mortgage Loans involving the
Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing
during the three-year period immediately preceding the
related Securitization Transaction;
(2) the extent of outsourcing the Servicer utilizes;
(3) whether there has been previous disclosure of
material noncompliance with the applicable servicing
criteria with respect to other securitizations of
residential mortgage loans involving the Servicer as a
servicer during the three-year period immediately preceding
the related Securitization Transaction;
(4) whether the Servicer has been terminated as
servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a
servicing performance test or trigger; and
(5) such other information as the Owner or any
depositor may reasonably request for the purpose of
compliance with Item 1108(b)(2) of Regulation AB;
(iii) a description of any material changes during the
three-year period immediately preceding the related
Securitization to the Servicer's policies or procedures with
respect to the servicing function it will perform under this
Agreement and any Reconstitution Agreements for mortgage loans of
a type similar to the Mortgage Loans;
(iv) information regarding the Servicer's financial
condition, to the extent that there is a material risk that an
adverse financial event or circumstance involving the Servicer
could have a material adverse effect on the performance by the
Servicer of its
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servicing obligations under this Agreement or any Reconstitution
Agreement;
(v) information regarding advances made by the Servicer on
the Mortgage Loans and the Servicer's overall servicing portfolio
of residential mortgage loans for the three-year period
immediately preceding the related Securitization Transaction,
which may be limited to a statement by an authorized officer of
the Servicer to the effect that the Servicer has made all
advances required to be made on residential mortgage loans
serviced by it during such period, or, if such statement would
not be accurate, information regarding the percentage and type of
advances not made as required, and the reasons for such failure
to advance;
(vi) a description of the Servicer's processes and
procedures designed to address any special or unique factors
involved in servicing loans of a similar type as the Mortgage
Loans;
(vii) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as
through liquidation of mortgaged properties, sale of defaulted
mortgage loans or workouts; and
(viii) information as to how the Servicer defines or
determines delinquencies and charge-offs, including the effect of
any grace period, re-aging, restructuring, partial payments
considered current or other practices with respect to delinquency
and loss experience.
(ix) a brief description of any material legal or
governmental proceedings pending (or known to be contemplated by
a governmental authority) against the Servicer; and
(x) a description of any affiliation or relationship between
the Servicer and any of the following parties to a Securitization
Transaction, as such parties are identified to the Servicer by
the Purchaser or any Depositor in writing in advance of such
Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
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(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(c) For the purpose of assisting the Depositor in satisfying its reporting
obligation under the Securities Exchange Act with respect to any class
of asset-backed securities, the Servicer shall (or shall cause each
Subservicer to) provide prompt notice to the Owner and any Depositor
in writing of (1) any merger, consolidation or sale of substantially
all of the assets of the Servicer, (2) the Servicer's entry into an
agreement with a Subservicer or a Participating Entity to perform or
assist in the performance of any of the Servicer's obligations under
the Agreement or any Reconstitution Agreement that qualifies as an
"entry into a material definitive agreement" under Item 1.01 of the
form 8-K, (3) any Event of Default under the terms of this Agreement
or any Reconstitution Agreement to the extent the Servicer has not
received notice from the Owner, Master Servicer or Depositor of such
Event of Default, and (4) any material litigation or governmental
proceedings involving the Servicer or any Subservicer and (ii) a brief
description of the events in clauses (1), (2), (3) and (4) as set
forth herein.
(d) As a condition to the succession to the Servicer or any Subservicer as
servicer or subservicer under this Agreement or any applicable
Reconstitution Agreement by any Person (i) into which the Servicer or
such Subservicer may be merged or consolidated, or (ii) which may be
appointed as a successor to the Servicer or any Subservicer, the
Servicer shall provide to the Owner and any depositor, at least
fifteen (15) calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Owner and any
depositor of such succession or appointment and (y) in writing, all
information reasonably requested by the Owner or any depositor in
order to comply with its reporting obligation under Item 6.02 of Form
8-K with respect to any class of asset-backed securities.
(e) The Servicer shall provide to the Owner and any Depositor a
description of any affiliation or relationship required to be
disclosed under Item 1119 between the Servicer, and Subservicer and
any of the parties listed in Items 1119 (a)(1)-(6) of Regulation AB
that develops following the closing date of a Securitization
Transaction (other than an affiliation or relationship that the Owner,
the Depositor or the issuing entity is required to disclose under Item
1119 of Regulation AB) no later than 15 calendar days prior to the
date the Depositor is required to file its Form 10-K disclosing such
affiliation or relationship. For purposes of the foregoing, the
Servicer (1) shall be entitled to assume that the parties to the
Securitization Transaction with whom affiliations or relations must be
disclosed are the same as on the closing date if it provides a written
request (which may be by e-mail) to the Depositor, requesting such
confirmation and either obtains such confirmation or receives no
response within three (3) Business Days, (2) shall not be obligated to
disclose any affiliations or relationships that may develop after the
closing date for the Securitization Transaction with any parties not
identified to the Servicer pursuant to clause (D) of paragraph (i) of
this Section 5.02(e), and (3) shall be entitled to rely upon any
written identification of parties provided by the Depositor or the
Owner.
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(f) Not later than ten days prior to the deadline for the filing of any
distribution report on Form 10-D in respect of any Securitization
Transaction that includes any of the Mortgage Loans serviced by the
Servicer or any Subservicer, the Servicer or such Subservicer, as
applicable, shall, to the extent the Servicer or such Subservicer has
knowledge, provide to the party responsible for filing such report)
notice of the occurrence of any of the following events along with all
information, data, and materials related thereto as may be required to
be included in the related distribution report on Form 10-D (as
specified in the provisions of Regulation AB referenced below):
(i) any material modifications, extensions or waivers of
Mortgage Loan terms, fees, penalties or payments during the
distribution period or that have been cumulatively been material
over time (Item 1121(a)(11) of Regulation AB);
(ii) material breaches of Mortgage Loan representations or
warranties or transaction covenants under the this Agreement
(Item 1121(a)(12) of Regulation AB); and
(iii) information regarding any Mortgage Loan changes (such
as, additions, substitutions or repurchases) and with respect to
a mortgage loan that the Servicer has substituted as a
replacement for a Mortgage Loan ("Substituted Mortgage Loan"),
the origination, underwriting and, if applicable, other Servicer
criteria for the acquisition or selection of such Substituted
Mortgage Loan (Item 1121(a)(14) of Regulation AB).
Notwithstanding the provisions of this Section 5.02(f)(iii), the
Owner shall provide all information described in this subsection
(iii) directly to the party responsible for filing such report).
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ARTICLE VI
TERMINATION
Section 6.01 Termination.
(a) This Agreement shall terminate upon either: (i) with respect to
one or more Mortgage Loans, upon a Reconstitution pursuant to Section 13.13
affecting such Mortgage Loans (unless otherwise provided in the related
Reconstitution Agreements), (ii) the termination of the Servicer pursuant to
Section 8.03 or 11.01, (iii) the later of the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or the
disposition of any REO Property with respect to the last Mortgage Loan and the
remittance of all funds due hereunder; or (iv) mutual consent of the Servicer
and the Owner in writing.
(b) In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to this Section
6.01, the Servicer shall discharge such duties and responsibilities during the
period from the date it acquires knowledge of such termination until the
effective date thereof (provided, that the Servicer shall have no obligations to
service the Mortgage Loan after the date which is 60 days from the date of such
termination) 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. Following any such termination, the Owner shall act diligently to
retain a successor servicer.
(c) To the extent Servicer continues to service such Mortgage Loans
after the date the unpaid principal balance of the HELOC Mortgage Loans is less
than 10% of the original principal balance of the HELOC Mortgage Loans in the
related securitization, Servicer shall be entitled to a market servicing fee
rate as mutually agreed upon between Owner and Servicer which servicing fee
shall not exceed 50 basis points.
Section 6.02 Transfer of Servicing.
On the Transfer Date or upon any termination of the Servicer as
Servicer pursuant to Section 6.01, the Owner, or its designee, shall assume all
servicing responsibilities related to, and the Servicer shall cease all
servicing responsibilities related to the Mortgage Loans.
Owner shall provide Servicer a minimum of twenty (20) days prior
written notice of the Transfer Date. Any Mortgage Loan service released by
Servicer shall be released on actual balances as of the Transfer Date. Upon
receipt of such notification from Owner the Servicer shall, at its sole cost and
expense, take such steps as may be necessary or appropriate to effectuate and
evidence the transfer of the servicing of the related Mortgage Loan(s) to the
Successor Servicer on the Transfer Date, including but not limited to the
following:
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(a) Notice to Mortgagors. The Servicer shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Owner, or its designee, in
accordance with RESPA.
(b) [Reserved].
(c) Servicing Advances. The Servicer shall be entitled to be
reimbursed for all unreimbursed Servicing Advances and any other advances made
by the Servicer pursuant to this Agreement with respect to any Mortgage Loan on
the related Transfer Date, but only if the servicer after the related Transfer
Date is not the Servicer or an affiliate. In addition, the Owner shall cause the
Servicer to be reimbursed for any accrued and unpaid Servicing Fees, unpaid
Ancillary Income, Other Fees and for any trailing expenses representing
Servicing Advances for which invoices are received by the Servicer after the
Transfer Date. The Owner shall cause the Servicer to be reimbursed for such
trailing expenses within five (5) Business Days of receipt of such invoice. The
obligations of the Owner set forth in this subsection shall not be assigned to
any trust in connection with any Securitization Transaction.
(d) Notice to Taxing Authorities and Insurance Companies. The Servicer
shall transmit to the applicable taxing authorities and insurance companies
(including primary mortgage insurance policy insurers, if applicable) and/or
agents, notification of the transfer of the servicing to the Owner, or its
designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Owner from and after the related Transfer
Date.
(e) Delivery of Servicing Records. The Servicer shall forward to the
Owner, or its designee, all servicing records and the Servicing File in the
Servicer's possession relating to each related Mortgage Loan.
(f) Escrow Payments. The Servicer shall provide the Owner, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Servicer shall also provide the Owner with
an accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Owner to reconcile the amount of such payment
with the accounts of the Mortgage Loans. Additionally, the Servicer shall wire
transfer to the Owner the amount of any agency, trustee or prepaid Mortgage Loan
payments and all other similar amounts held by the Servicer.
(g) Payoffs and Assumptions. The Servicer shall provide to the Owner,
or its designee, copies of all assumption and payoff statements generated by the
Seller or the Servicer on the related Mortgage Loans from the related Cut-off
Date to the related Transfer Date.
(h) Mortgage Payments Received Prior to the Related Transfer Date.
Prior to the related Transfer Date all payments received by the Servicer on each
related Mortgage Loan shall be properly applied to the account of the particular
Mortgagor.
(i) Mortgage Payments Received After Transfer Date. The amount of any
related Monthly Payments received by the Servicer after the related Transfer
Date shall be forwarded to the Owner or its designee within two (2) Business
Days after the date of receipt. The Servicer shall notify the Owner or its
designee of the particulars of the payment, which notification
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requirement shall be satisfied if the Servicer forwards with its payment
sufficient information to permit appropriate processing of the payment by the
Owner or its designee. The Servicer shall assume full responsibility for the
necessary and appropriate legal application of such Monthly Payments received by
the Servicer after the related Transfer Date with respect to related Mortgage
Loans then in foreclosure or bankruptcy; provided, for purposes of this
Agreement, necessary and appropriate legal application of such Monthly Payments
shall include, but not be limited to, endorsement of a Monthly Payment to the
Owner with the particulars of the payment such as the account number, dollar
amount, date received and any special Mortgagor application instructions and the
Servicer shall comply with the foregoing requirements with respect to all
Monthly Payments received by the it after the related Transfer Date.
(j) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the related Transfer Date and discovered after the related
Transfer Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the related
Transfer Date cannot be identified and said misapplied payment has resulted
in a shortage in a Custodial Account or Escrow Account, and such misapplied
payment was the direct result of the Servicer's error, the Servicer shall
be liable for the amount of such shortage. In such case, the Servicer shall
reimburse the Owner for the amount of such shortage within ten (10) days
after receipt of written demand therefor from the Owner;
(iv) If a misapplied payment which occurred prior to the related
Transfer Date has created an improper Purchase Price as the result of an
inaccurate outstanding principal balance and such misapplied payment was
the direct result of the Servicer's error, a check shall be issued to the
party shorted by the improper payment application within ten (10) days
after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 6.02(j)
shall be accompanied by a statement indicating the Owner Mortgage Loan
identification number and an explanation of the allocation of any such
payments.
(vi) Books and Records. On the related Transfer Date, the books,
records and accounts of the Servicer with respect to the related Mortgage
Loans shall be in accordance with all Accepted Servicing Practices.
On the related Transfer Date, the Servicer shall comply with all of
the provisions of this Agreement to effect a complete transfer of the servicing
with respect to the related Mortgage Loans. Except as otherwise provided in this
Agreement, on the related Transfer Date for each related Mortgage Loan, this
Agreement, except for Articles VI, VIII, IX, X and XIV and Section 13.12 which
shall survive the related Transfer Date, shall terminate with respect to such
Mortgage Loan.
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ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the related
Transfer Date.
Prior to the related Transfer Date, the contents of each Servicing
File are and shall be held in trust by the Servicer for the benefit of the Owner
as the owner thereof. The Servicer shall maintain in the Servicing File a hard
or electronic copy, if available, of each Mortgage Loan Document received by
Owner or Owner's designee and the originals or copies of documents not delivered
to the Owner in Servicer's possession received during the term of this
Agreement. The possession of the Servicing File by the Servicer is at the will
of the Owner for the sole purpose of servicing the related Mortgage Loan,
pursuant to this Agreement, and such retention and possession by the Servicer is
in its capacity as Servicer only and at the election of the Owner. The Servicer
shall release its custody of the contents of any Servicing File 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
pursuant to this Agreement, or is in connection with a repurchase of any
Mortgage Loan by the related Seller pursuant to the related Purchase Agreement.
The Servicer shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Owner. In
particular, the Servicer shall maintain in its possession, available for
inspection by the Owner or its designee, and shall deliver to the Owner or its
designee upon written demand, evidence of compliance with all federal, state and
local laws, rules and regulations, and requirements of Xxxxxx Xxx, including but
not limited to documentation as to the method used in determining the
applicability of the provisions of the National Flood Insurance Act of 1968, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and eligibility of any condominium project for approval by Xxxxxx Mae and
periodic inspection reports as required by Section 2.13, as applicable.
The Servicer shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Servicer
shall note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be
made unless such transfer is in compliance with the terms hereof. For the
purposes of this Agreement, the Servicer shall be under no obligation to deal
with any Person with respect to this Agreement or the Mortgage Loans unless the
Servicer has been notified of such transfers as provided in this paragraph. The
Owner may sell and transfer, in whole or in part, the Mortgage Loans, provided
that no such sale and transfer shall be binding upon Servicer unless such
transferee shall agree in writing to be bound by the terms of this Agreement,
and an executed copy of the same in the form of an Assignment, Assumption and
Recognition Agreement shall have been delivered to the Servicer or in the case
of a Securitization Transfer, a Reconstitution Agreement is executed by the
Servicer. Upon receipt and execution thereof, the Servicer shall xxxx its books
and records to reflect the ownership of the Mortgage Loans by such assignee, and
the previous Owner shall be released
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from its obligations hereunder attributable to the period after such assignment
to the extent such obligations relate to such Mortgage Loan(s) sold by the
Owner. The Owner may, subject to the terms of this Agreement, sell or transfer
one or more of the Mortgage Loans, provided, however, that there shall not be
more than three owners of the Mortgage Loans with respect to any particular
Mortgage Loan Package inclusive of the Mortgage Loans included in a
Securitization Transfer.
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ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification.
(a) The Servicer agrees to indemnify and hold the Owner and any
successor servicer and their present and former officers, directors and
employees harmless from any liability, claim, loss or damage (including, without
limitation, any reasonable legal fees, judgments or expenses relating to such
liability, claim, loss or damage) to the Owner directly or indirectly resulting
from the Servicer's:
(i) failure to observe and perform any or all of Servicer's
duties, obligations, covenants, agreements contained in this Agreement;
(ii) breach of any representation or warranty made by the
Servicer in this Agreement;
(iii) misuse or wrongful use of any power of attorney granted by
Owner to Servicer; or
(ii) failure to comply with all applicable requirements with
respect to the servicing of the Mortgage Loans as set forth herein.
The Servicer immediately shall notify the Owner if a claim is
made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the consent of the Owner) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Owner or such other person in respect of such claim. The Servicer shall
follow any written instructions received from the Owner in connection with such
claim. For purposes of this Section 8.01(a), "Owner" shall mean the Person then
acting as the Owner under this Agreement and any and all Persons who previously
were "Owners" under this Agreement.
(b) The Owner agrees to indemnify and hold the Servicer and their
present and former officers, directors and employees harmless from any
liability, claim, loss or damage (including without limitation, any reasonable
legal fees, judgments or expenses relating to such liability, claim, loss or
damage) to the Servicer (a) directly or indirectly resulting from the Owner's
failure to observe and perform any or all of the Owner's duties, obligations,
covenants, agreements, warranties or representations contained in this Agreement
or (b) directly resulting from the Servicer taking any legal actions with
respect to any Mortgage Loans and/or REO Properties in the name of the Servicer
and without reference to the Owner, or (c) any act or omission on the part of
the Owner, any prior servicer or any other third party which occurred in
connection with the origination, processing, funding or servicing of a Mortgage
Loan at any time
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prior to the related Servicing Transfer Date, but, in each case, only to the
extent such loss does not result from the failure of the Servicer (i) to observe
and perform any or all of Servicer's duties, obligations, covenants, agreements,
warranties or representations contained in this Agreement or in any other
agreement pursuant to which the Servicer services or has serviced any such
Mortgage Loan; or (ii) to comply with all applicable requirements with respect
to the servicing of the Mortgage Loans as set forth herein or in any other
agreement pursuant to which the Servicer services or has serviced any such
Mortgage Loan.
(c) The Servicer shall indemnify the Owner and each of the following
parties participating in a Securitization Transaction: each sponsor and issuing
entity; each Depositor, each Person responsible for the execution or filing of
any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Securities Exchange Act with respect to
such Securitization Transaction; each Person who controls any of such parties
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Securities Exchange Act); and the respective present and former directors,
officers and employees of each of the foregoing, and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact
contained or alleged to be contained in any written
information, written report, certification or other material
provided in written or in electronic form under Sections
4.04, 4.05, 4.06, 4.10, 4.11, and 5.02 by or on behalf of
the Servicer, or provided under Sections 4.04, 4.05, 4.06,
4.10, 4.11, and 5.02 by or on behalf of any Subservicer or
Participating Entity (collectively, the "Servicer
Information"), or (B) the omission or alleged omission to
state in the Servicer Information a material fact required
to be stated in the Servicer Information or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the
Servicer Information and not to any other information
communicated in connection with a sale or purchase of
securities, without regard to whether the Servicer
Information or any portion thereof is presented together
with or separately from such other information;
(ii) any failure by the Servicer, any Subservicer or
any Subcontractor to deliver any information, report,
certification, accountants' letter or other material when
and as required under Sections 4.04, 4.05, 4.06, 4.10, 4.11,
and 5.02, including any failure by the Servicer to identify
pursuant to Section 4.11(b) any Participating Entity; or
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(iii) any breach by the Servicer of a representation or
warranty set forth in Section 10.09(a) or in a writing
furnished pursuant to Section 10.09(b) and made as of a date
prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by
such closing date, or any breach by the Servicer of a
representation or warranty in a writing furnished pursuant
to Section 10.09(b) to the extent made as of a date
subsequent to such closing date.
In the case of any failure of performance described in
clause (c)(ii) of this Section, the Servicer shall promptly
reimburse the Owner, any Depositor, as applicable, and each
Person responsible for the execution or filing of any report
required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Securities
Exchange Act with respect to such Securitization Transaction, for
all costs reasonably incurred by each such party in order to
obtain the information, report, certification, accountants'
letter or other material not delivered as required by the
Servicer, any Subservicer or any Participating Entity.
(d) (i) Any failure by the Servicer, any Subservicer or any
Participating Entity to deliver any information, report, certification,
accountants' letter or other material when and as required under Sections 4.11
and 5.02, which continues unremedied for three Business Days after receipt by
the Servicer and the applicable Subservicer or Subcontractor, of written notice
of such failure from the Owner, the Master Servicer or the Depositor, shall,
except as provided in clause (ii) of this paragraph, constitute an Event of
Default with respect to the Servicer under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Owner, the Master Servicer or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Servicer as servicer under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding anything in
this Agreement or any applicable Reconstitution Agreement related thereto to the
contrary) of any compensation to the Servicer (and if the Servicer is servicing
any of the Mortgage Loans in a Securitization Transaction to appoint a successor
servicer reasonably acceptable to any Master Servicer for such Securitization
Transaction); provided, however, it is understood that the Servicer shall remain
entitled to receive reimbursement for all unreimbursed Monthly Advances and
Servicing Advances made by the Servicer under this Agreement or any applicable
Reconstitution Agreement; provided that any reimbursement shall be limited to
collection on the related mortgage pool. Notwithstanding anything to the
contrary set forth herein, to the extent that any provision of this Agreement
and/or any applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following termination of the Servicer
as servicer, such provision shall be given effect.
(ii) Any failure by the Servicer, any Subservicer or any
Participating Entity to deliver any information, report, certification
or accountants' letter required under Regulation AB when and as
required under Sections 4.04, 4.05, 4.10(a) or 4.06, including any
failure by the Servicer to identify a Participating
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Entity, which continues unremedied for nine calendar days after
receipt by the Servicer of written notice of such failure from the
Owner, any Master Servicer or Depositor shall constitute an Event of
Default with respect to the Servicer under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Owner, any
Master Servicer or Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Servicer as servicer under
this Agreement and/or any applicable Reconstitution Agreement without
payment (notwithstanding anything in this Agreement to the contrary)
of any compensation to the Servicer; provided, however it is
understood that the Servicer shall remain entitled to receive
reimbursement for all unreimbursed Monthly Advances and Servicing
Advances made by the Servicer under this Agreement or any applicable
Reconstitution Agreement; provided that any reimbursement shall be
limited to collection on the related mortgage pool. Notwithstanding
anything to the contrary set forth herein, to the extent that any
provision of this Agreement and/or any applicable Reconstitution
Agreement expressly provides for the survival of certain rights or
obligations following termination of the Servicer as servicer, such
provision shall be given effect.
(iii) The Servicer shall promptly reimburse the Owner and any
Depositor, as applicable, for all reasonable expenses incurred by the
Owner or such Depositor, as such are incurred, in connection with the
termination of the Servicer as servicer and the transfer of servicing
of the Mortgage Loans to a successor servicer. The provisions of this
paragraph shall not limit whatever rights the Owner or any Depositor
may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in equity or
at law, such as an action for damages, specific performance or
injunctive relief.
(iv) The Owner agrees to indemnify and hold harmless the
Servicer, any Subservicer and any Participating Entity, each Person
who controls any of such parties (within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act), and the
respective present and former directors, officers and employees of
each of the foregoing from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them may
sustain arising out of or based upon any untrue statement or alleged
untrue statement of any material fact contained in any filing with the
Commission or the omission or alleged omission to state in any filing
with the Commission a material fact required to be stated or necessary
to be stated in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue
statement, alleged untrue statement, omission, or alleged omission
relates to any filing with the Commission other than the Servicer
Information.
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(v) If the indemnification provided for herein is unavailable or
insufficient to hold harmless the indemnified party, then the
indemnifying party agrees that it shall contribute to the amount paid
or payable by such indemnified party as a result of any claims,
losses, damages or liabilities uncured by such indemnified party in
such proportion as is appropriate to reflect the relative fault of
such indemnified party on the one hand and the indemnifying party on
the other.
(vi) The indemnifications provided for in this Section shall
survive the termination of Agreement or the termination of any party
to this Agreement.
(vii) The Master Servicer shall be considered a third-party
beneficiary of Sections 4.04, 4.05, 4.06, 4.10, 8.01(c) and 8.01(d)
hereof (with regard to Section 8.01(c), solely with respect to
noncompliance under Section 4.04, 4.05, 4.06 and 4.10 hereof),
entitled to all the rights and benefits hereof as if it were a direct
party to this Agreement.
Section 8.02 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Owner for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment, provided, however, that this
provision shall not protect the Servicer or any such person against any breach
of warranties or representations made herein, its own negligent actions, or
failure to perform its obligations in compliance with any standard of care set
forth in this Agreement, or any liability which would otherwise be imposed by
reason of any breach of the terms and conditions of this Agreement. The Servicer
and any director, 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. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement and which in its opinion may involve it in any expense or
liability, provided, however, that the Servicer may undertake any such action
which it may deem necessary or desirable in respect to this Agreement and the
rights and duties of the parties hereto. In such event, the Servicer shall be
entitled to reimbursement from the Owner of the reasonable legal expenses and
costs of such action.
Section 8.03 Limitation on Resignation and Assignment by Servicer.
The Owner has entered into this Agreement with the Servicer and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Servicer, and the representations as to the adequacy
of its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Servicer shall not assign this Agreement or the servicing
hereunder or delegate its rights or duties hereunder or any portion hereof or
sell or otherwise dispose of all or
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substantially all of its property or assets without the prior written consent of
the Owner, which consent shall be granted or withheld in the reasonable
discretion of the Owner.
The Servicer may, without the consent of the Owner, retain third party
contractors to perform certain servicing and loan administration functions,
including without limitation, hazard insurance administration, tax payment and
administration, flood certification and administration, collection services and
similar functions; provided, that the retention of such contractors by Servicer
shall not limit the obligation of the Servicer to service the Mortgage Loans
pursuant to the terms and conditions of this Agreement.
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 its duties hereunder are no longer permissible under
applicable law 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 which Opinion of
Counsel shall be in form and substance acceptable to the Owner. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided in
Section 6.02.
Notwithstanding any provision in this Agreement to the contrary, the
Servicer may at any time upon notice to the Owner, or trustee in the case of a
Reconstitution, and without the consent of any party, solely in connection with
a financing or other facility (any such arrangement, an "Advance Facility"),
assign as collateral security or pledge to another Person all its rights, title
and interest under this Agreement to its rights to reimbursement of Servicing
Advances.
Section 8.04 Assignment by Owner.
Subject to the limitations and requirements set forth in the third
paragraph of Section 7.01, the Owner shall have the right, to assign, in whole
or in part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the Owner
hereunder, by executing an Assignment, Assumption and Recognition Agreement
substantially in the form of Exhibit 6 attached hereto provided that there shall
not be more than three owners of the Mortgage Loans with respect to any
particular Mortgage Loan Package inclusive of the Mortgage Loans included in a
Securitization Transfer. Upon such assignment of rights and assumption of
obligations, the assignee or designee shall accede to the rights and obligations
hereunder of the Owner with respect to such Mortgage Loans and the Owner as
assignor shall be released from all obligations hereunder with respect to such
Mortgage Loans from and after the date of proper execution and delivery of such
Assignment and Assumption Agreement by the Servicer in accordance with Section
7.01. Notwithstanding the foregoing, the Owner shall not be released from any
liability prior to the assignment of interest to the assignee. All references to
the Owner in this Agreement shall be deemed to include its permitted assignee or
designee.
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Section 8.05 Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights and
franchises as a limited partnership under the laws of the state of its filing
except as permitted herein, 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. Any Person into which the Servicer may be
merged or consolidated, or any corporation resulting from any merger, conversion
or consolidation (including by means of the sale of all or substantially all of
the Servicer's assets to such Person) to which the Servicer shall be a party, or
any Person succeeding to the business 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.
The Servicer shall give 90 days' prior written notice to the Owner to
the extent permitted by applicable law of any such merger, conversion,
consolidation, sale or other disposition to which the Servicer proposes to be a
party. In the event that any successor entity to the Servicer fails to meet the
requirements set forth in this Section 8.04 and the Owner does not consent to
such successor becoming the servicer hereunder, then the Servicer shall have the
right to terminate this Agreement with respect to the Servicer and any such
successor upon notice given as set forth in Section 6.01, without any payment of
any termination penalty or termination damages and without any additional
liability whatsoever to the Servicer or any third party, except for liabilities
accrued under this Agreement prior to the date of termination and for
liabilities resulting from Owner's obligations hereunder, including the payment
of the Servicing Fee pursuant to Section 4.03.
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ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF OWNER
As of the date hereof and on each date on which a Mortgage Loan
package becomes subject to the terms of this Agreement, the Owner warrants and
represents to, and covenants and agrees with, the Servicer as follows:
Section 9.01 Organization and Good Standing; Licensing.
Each Owner is a Delaware corporation duly organized, validly existing
and has the power and authority to own its assets and to transact the business
in which it is currently engaged. Section 9.02 Authorization; Binding
Obligations.
The Owner has the power and authority to make, execute, deliver and
perform this Agreement, and perform all of the transactions contemplated to be
performed by it under this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of the Owner enforceable in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the availability
of equitable remedies.
Section 9.03 No Consent Required.
The Owner is not required to obtain the consent of any other party or
any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except such as have been obtained or made or as to which the failure
to obtain or make will not materially adversely affect the ability of the Owner
to perform all obligations hereunder.
Section 9.04 No Violations.
The execution, delivery and performance of this Agreement by the Owner
will not violate any provision of any existing law or regulation or any order or
decree of any court applicable to the Owner, except for violations that will not
adversely affect the Owner's ability to perform its obligations under this
Agreement or the certificate of incorporation of the Owner, or constitute a
material breach of any mortgage, indenture, contract or other agreement to which
the Owner is a party or by which the Owner may be bound.
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Section 9.05 Litigation.
No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending or to the knowledge of the
Owner threatened, against the Owner or with respect to this Agreement, which if
adversely determined would have a material adverse effect on the transactions
contemplated by this Agreement.
Section 9.06 Compliance.
To the best knowledge of the Owner, the servicing and collection
practices with respect to each Mortgage and the Mortgage Note have been
conducted in all respects in accordance with the terms of the Mortgage Note and
in compliance with all applicable laws and regulations (including, without
limitation, laws related to usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws) and in accordance with the proper, prudent and customary practices in the
mortgage servicing business.
Section 9.07 Accuracy of Information.
To the best knowledge of the Owner, the information received by
Servicer is complete, true and correct in all material respects. To the best
knowledge of the Owner, all servicing records relating to the Mortgage which the
Servicer has received from the Owner or any prior servicer and that are
reasonably necessary for the Servicer to service the Mortgage Loan in accordance
with Acceptable Servicing Practices are true and correct in all material
respects, the unpaid principal balance of the Mortgage is as stated on the prior
servicer's ledger, computer printouts, and records pertaining to the Mortgage
received by the Servicer and any amounts held in trust for the Mortgagor(s) are
the true and correct balances of the accounts related thereto.
Section 9.08 Litigation with respect to the Mortgage.
Other than foreclosure, bankruptcy or an eviction proceeding, or a
claim or lawsuit claiming contractor workmanship deficiencies or failures, to
the best knowledge of the Owner, there is no action, suit, proceeding,
investigation or litigation pending or threatened, with respect to the Mortgage
or the Mortgaged Property.
Section 9.09 Origination of the Mortgage Loan.
The Owner will have received, as of the Servicing Transfer Date, a
representation and warranty in connection with the Owner's purchase of the
Mortgage Loan substantially to the effect that no error, omission,
misrepresentation, negligence, fraud or similar occurrence with respect to a
Mortgage has taken place on the part of any person, including, without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage.
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Section 9.10 Taxes, Insurance and Other Assessments.
To the best knowledge of the Owner, and to the extent not otherwise
disclosed, there are no delinquent taxes, water charges, sewer rents,
assessments, insurance premiums, leasehold payments, including assessments
payable in future installments, or other outstanding charges affecting the
related Mortgaged Property. To the best knowledge of the Owner, and to the
extent not otherwise disclosed, all homeowner association, condominium, PUD or
similar assessments have been timely paid to the appropriate party and properly
accounted for except as otherwise disclosed to the Servicer.
Section 9.11 HOEPA Loans.
None of the Mortgage Loans are HOEPA Loans.
Section 9.12 Seller Representations & Warranties.
The Owner will have received, as of the Servicing Transfer Date, a
representation and warranty in connection with the Owner's purchase of the
Mortgage Loan substantially to the effect that the related Mortgage Note and the
related Mortgage at origination complied in all material respects with
applicable state and federal laws, including all applicable predatory and
abusive lending laws, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, or disclosure
laws applicable to the Mortgage Loan.
Section 9.13 High Cost Loans.
The Owner will have received, as of the Servicing Transfer Date, a
representation and warranty in connection with the Owner's purchase of the
Mortgage Loan substantially to the effect that none of the Mortgage Loans are
classified as (a) "high cost" loans under the Home Ownership and Equity
Protection Act of 1994, or (b) "high cost," "threshold," "covered" or
"predatory" loans under any other applicable federal, state or local law
(including, without limitation, any regulation or ordinance) (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage loans
having interest rates, points and/or fees).
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ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SERVICER
As of the date hereof and on each date on which a Mortgage Loan
package becomes subject to the terms of this Agreement, the Servicer warrants
and represents to, and covenants and agrees with, the Owner as follows:
Section 10.01 Due Organization and Authority.
The Servicer is a Texas limited partnership duly organized, validly
existing and in good standing under the laws of the United States as now being
conducted and is licensed, qualified and in good standing in each state where a
Mortgaged Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Servicer, and in any event the Servicer is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the related
Mortgage Loan in accordance with the terms of this Agreement; the Servicer has
the full power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments or transfer to be delivered pursuant to
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 obligation of the Servicer; and all
requisite action has been taken by the Servicer to make this Agreement valid and
binding upon the Servicer in accordance with its terms;
Section 10.02 Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Servicer.
Section 10.03 No Conflicts.
Neither the execution and delivery of this Agreement, nor the
fulfillment of or compliance with the terms and conditions of this Agreement,
will conflict with or result in a breach of any of the terms, conditions or
provisions of the Servicer's organizational documents or any legal restriction
or any agreement or instrument to which the Servicer is now a party or by which
it is bound, or constitute a default or result in an acceleration under any of
the foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Servicer or its property is subject, or impair
the ability of the Owner to realize on the Mortgage Loans, or impair the value
of the Mortgage Loans.
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Section 10.04 Ability to Service.
The Servicer is an approved seller/servicer of mortgage loans for
Xxxxxx Xxx and is an approved seller of mortgage loans and servicer of all types
of mortgage loans for Xxxxxxx Mac and has the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans and no event has occurred, including but not
limited to a change in insurance coverage, which would make the Servicer unable
to comply with Xxxxxx Xxx or Xxxxxxx Mac eligibility requirements or which would
require notification to either Xxxxxx Mae or Xxxxxxx Mac. The Servicer is in
good standing to enforce and service mortgage loans in the jurisdiction wherein
the Mortgaged Properties are located.
Section 10.05 Ability to Perform.
The Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in this
Agreement.
Section 10.06 No Litigation Pending.
There is no action, suit, proceeding or investigation pending or to
the best of Servicer's knowledge threatened against the Servicer, before any
court, administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Servicer, or in any
material impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted, or in any material liability on the
part of the Servicer, or which would draw into question the validity of this
Agreement, or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Servicer contemplated herein, or which
would be likely to impair materially the ability of the Servicer to perform
under the terms of this Agreement.
Section 10.07 No Consent Required.
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this
Agreement, or the servicing of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the date hereof.
Section 10.08 No Untrue Information.
No statement, report or other document relating to the Servicer
furnished or to be furnished by the Servicer pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement of material fact or omits to state a material fact necessary to make
the statements contained therein not misleading.
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Section 10.09 Additional Representations and Warranties of the
Servicer.
(a) The Servicer shall be deemed to represent to the Owner and to any
Depositor, as of the date on which information is first provided to the Owner or
any Depositor under Section 5.02 that, except as disclosed in writing to the
Owner or such Depositor prior to such date:
(i) the Servicer is not aware and has not received notice that
any default, early amortization or other performance triggering event
has occurred as to any other securitization due to any act or failure
to act of the Servicer;
(ii) the Servicer has not been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing
default or to application of a servicing performance test or trigger;
(ii) no material noncompliance with the applicable servicing
criteria with respect to other securitizations of residential mortgage
loans involving the Servicer as servicer has been disclosed or
reported by the Servicer;
(iv) no material changes to the Servicer's policies or procedures
with respect to the servicing function it will perform under this
Agreement and any Reconstitution Agreement for mortgage loans of a
type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction;
(v) there are no aspects of the Servicer's financial condition
that could have a material adverse effect on the performance by the
Servicer of its servicing obligations under this Agreement or any
Reconstitution Agreement;
(vi) there are no material legal or governmental proceedings
pending (or known to be contemplated) against the Servicer or any
Subservicer; and
(vii) there are no affiliations, relationships or transactions
required to be disclosed under Item 1119 between the Servicer and any
of the parties listed in Section 5.02(a)(ii)(1)-(6) which are
identified in writing by the Owner or Depositor in advance of the
Securitization Transaction pursuant to Section 5.02(a)(ii) of this
Agreement.
(b) If so requested by the Owner or any Depositor on any date
following the date on which information is first provided to the Owner or any
Depositor under Section 5.02, the Servicer shall, within ten Business Days
following such request, confirm in writing the accuracy of the representations
and warranties set forth in paragraph (a) of this Section or, if any such
representation and warranty is not accurate as of the date of such request,
provide reasonably adequate disclosure of the pertinent facts, in writing, to
the requesting party.
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ARTICLE XI
DEFAULT
Section 11.01 Events of Default.
The following shall constitute an Event of Default under this
Agreement on the part of the Servicer:
(a) any failure by the Servicer to remit to the Owner any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of two (2) Business Days after the date upon which notice of such
failure is given to the Servicer, requiring the same to be remedied, shall have
been given to the Servicer by the Owner; or
(b) the failure by the Servicer duly to observe or perform in any
material respect any of the covenants or agreements on the part of the Servicer
set forth in this Agreement or in the Custodial Agreement which continues
unremedied for a period of thirty (30) days (except that such number of days
shall be fifteen (15) in the case of a failure to pay any premium for any
insurance policy required to be maintained under this Agreement and such number
of days shall be five (5) Business Days in the case of a failure to deliver any
report required to be delivered to the Owner under this Agreement) after the
date on which notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Owner (the date of delivery of such
notice, the "Notice Date"); provided, however, that in the case of a failure
that cannot be cured within thirty (30) days after the Notice Date, the cure
period may be extended if the Servicer can demonstrate to the reasonable
satisfaction of the Owner that the failure can be cured and the Servicer is
diligently pursuing remedial action; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law for the
appointment of a conservator or receiver or liquidator or trustee or other
similar official in any insolvency, bankruptcy, readjustment of debt, marshaling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged, undismissed or
unstayed for a period of 60 days; or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator or trustee or other similar official in any insolvency,
bankruptcy, readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, voluntarily suspend payment of its obligations or take
any corporate action in furtherance of the foregoing; or
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(f) the Servicer attempts to assign its right to servicing
compensation hereunder or the Servicer attempts, without the consent of the
Owner, to sell or otherwise dispose of all or substantially all of its property
or assets or to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof in a manner
not permitted under this Agreement; or
(g) any failure by the Servicer to deposit amounts into the Custodial
Account as required under the terms of this Agreement that is not remedied
within one (1) Business Day; or
(h) any representation or warranty made by the Servicer hereunder
shall prove to be untrue or incomplete in any material respect and continues
unremedied for a period of forty-five (45) days after the discovery of same; or
(i) Servicer fails to maintain its license to do business or service
residential mortgage loans in any jurisdiction where the Mortgaged Properties
are located; or
(j) Servicer shall cease to meet the qualifications to be an approved
servicer for both Xxxxxx Xxx and Xxxxxxx Mac.
In each and every such case, so long as an Event of Default shall not have been
remedied within the time period provided for above, in addition to whatsoever
rights the Owner may have at law or equity to damages, including injunctive
relief and specific performance, the Owner, by notice in writing to the
Servicer, may terminate without compensation all the rights and obligations of
the Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof; provided, however, that upon the occurrence of an event of
described in clause (c), (d) or (e) above, the rights and obligations of the
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof will be automatically terminated.
Upon receipt by the Servicer of such written notice, all authority and
power of the 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 6.02. With respect to any termination of the Servicer
pursuant to this Section 11.01, the Owner shall not pay any Service Release Fee.
Upon written request from the Owner, the Servicer shall prepare, execute and
deliver any and all documents and other instruments, place in such successor's
possession all Mortgage Files to the extent initially provided to the Servicer,
and do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at the Servicer's sole expense or as otherwise provided under
Accepted Servicing Practices. The Servicer agrees to cooperate with the Owner
and such successor in effecting the termination of the 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 Servicer to the Custodial Account or Escrow
Account or thereafter received with respect to the Mortgage Loans. Any and all
costs and expenses in connection with the transmittal of related Mortgage Loan
data and delivery of all servicing records and the Servicing Files in connection
with the transfer of servicing to a successor servicer if the Servicer is
terminated pursuant to this Section 11.01 shall be borne by the Servicer.
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Section 11.02 Waiver of Defaults.
The Owner may waive any default by the Servicer in the performance of
its obligations hereunder and its consequences. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
Section 11.03 Servicer's Notice of Breach by Owner.
If the Servicer becomes aware of any breach by the Owner of any
representation or warranty set forth in Article IX of this Agreement or of any
representation or warranty under the related Purchase Agreement in connection
with a Securitization Trust that materially and adversely affects the interests
of the holders of the related securities, the Servicer shall notify the Owner,
or its assignee, of such breach. The Owner agrees to repurchase such Mortgage
Loan in accordance with the terms of the applicable Purchase Agreement and the
Master Servicer or indenture trustee shall be entitled to enforce such
repurchase obligation directly against the Owner. Notwithstanding the foregoing,
the Servicer shall not be under any obligation to review the terms of the
Purchase Agreement or to monitor the compliance of any Mortgage Loans with the
provisions of the Purchase Agreement and the Servicer shall have no liability
under this Agreement for any failure to notify or to notify in a timely manner.
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ARTICLE XII
CLOSING
Section 12.01 Closing Documents.
The Closing Documents shall consist of fully executed originals of the
following documents: With respect to the execution of this Agreement:
1. this Agreement;
2. a Custodial Account Letter Agreement or a Custodial Account
Certification, as applicable, as required hereunder, in the form of
either Exhibit 2 or 3 hereto;
3. an Escrow Account Letter Agreement or an Escrow Account Certification,
as applicable, as required hereunder, in the form of either Exhibit 4
or 5 hereto;
4. an Officer's Certificate, in the form of Exhibit 7 hereto, with
respect to the Servicer, including all attachments thereto;
5. Powers of Attorney notarized and executed in the form of Exhibit 11
attached hereto;
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Notices.
All notices, requests, demands and other communications which are
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given upon the delivery or mailing thereof, as
the case may be, sent by registered or certified mail, return receipt requested:
(a) If to Owner to:
Xxxxxxx Xxxxx Credit Corporation
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Xxxxxxx Xxxxx Mortgage Lending, Inc.
4 World Xxxxxxxxx Xxxxxx
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Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
With a copy to:
Xxxxxxx Xxxxx Credit Corporation
4 World Financial Center
New York, New York 10080
Attention: General Counsel
(b) If to Servicer:
Countrywide Home Loans Servicing LP
0000 Xxxx Xxxxxx Xx
XX SV2-103A
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Portfolio Services
With a copy to:
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: Legal Department
Section 13.02 Waivers.
Any of the Servicer or the Owner may upon consent of all parties, by
written notice to the others:
(a) Waive compliance with any of the terms, conditions or covenants
required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations of the
others hereunder.
The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other subsequent
breach.
Section 13.03 Entire Agreement; Amendment.
This Agreement, including all documents and exhibits incorporated by
reference herein, constitutes the entire agreement between the parties with
respect to servicing of the Mortgage Loans. This Agreement may be amended and
any provision hereof waived, but, only in writing signed by the party against
whom such enforcement is sought.
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Section 13.04 Execution; Binding Effect.
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 8.02 and 8.03, this
Agreement shall inure to the benefit of and be binding upon the Servicer and the
Owner and their respective permitted successors and assigns.
Section 13.05 Headings.
Headings of the Articles and Sections in this Agreement are for
reference purposes only and shall not be deemed to have any substantive effect.
Section 13.06 Applicable Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA AND THE OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF CALIFORNIA
(WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES), EXCEPT TO THE EXTENT PREEMPTED
BY FEDERAL LAW.
Section 13.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties. The duties and
responsibilities of the Servicer shall be rendered by it as an independent
contractor and not as an agent of the Owner. The Servicer shall have full
control of all of its acts, doings, proceedings, relating to or requisite in
connection with the discharge of its duties and responsibilities under this
Agreement.
Section 13.08 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
Section 13.09 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, and shall be in a form
acceptable for recordation in such public offices.
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Section 13.10 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are integral parts of this Agreement.
Section 13.11 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 13.12 Reserved.
Section 13.13 Cooperation of Servicer with a Reconstitution.
The Servicer and the Owner agree that with respect to some or all of
the Mortgage Loans, after the related Servicing Transfer Date, on one or more
dates (each a "Reconstitution Date") at the Owner's sole option, the Owner may
effect a sale (each, a "Reconstitution") of some or all of the Mortgage Loans
then subject to this Agreement, without recourse, to:
(i) Xxxxxx Mae under its Cash Purchase Program or MBS Program (Special
Servicing Option) (each a "Xxxxxx Xxx Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of one
or more Securitization Transfers.
With respect to each Whole Loan Transfer, Agency Transfer or
Securitization Transfer, as the case may be, entered into by the Owner:
(a) The Servicer agrees to execute (i) in connection with any Agency
Transfer, any and all pool purchase contracts, and/or agreements reasonably
acceptable to the Servicer among the Owner, the Servicer, Xxxxxx Mae or Xxxxxxx
Mac (as the case may be) and any servicer, (ii) in connection with a Whole Loan
Transfer, a warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Servicer, and (iii)
in connection with a Securitization Transfer, a pooling and servicing agreement
in form and substance reasonably acceptable to the Servicer (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements");
provided that provisions of such Reconstitution Agreements will not contain any
substantially greater obligations of, or any substantially lower benefits to,
the Servicer than those contained in this Agreement and each of the Servicer and
Owner is given an opportunity to review and reasonably negotiate in good faith
the content of such provisions (which shall not be more onerous than those
required under this Agreement) including, but not limited to servicing
representations and warranties (dated as of the settlement or closing date in
connection with such Reconstitution
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(each, a "Reconstitution Date")) related to the Mortgage Loans for the period of
time from the date on which the Servicer began servicing the Mortgage Loans
through the Reconstitution Date to the effect that (a) the Servicer has serviced
the Mortgage Loans in accordance with this Agreement and has provided accurate
"paid through" data with respect to the Mortgage Loans to the Owner, (b) except
as reflected in the "paid through" data delivered to the Owner, there is no
payment default existing under any Mortgage or any Mortgage Note as of the
cut-off date for the Reconstitution, and (c) to the best of the Servicer's
knowledge, there is no non-payment default existing under any Mortgage or
Mortgage Note, or any event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a non-payment
default, breach, violation or event which would permit acceleration as of the
closing date for the Reconstitution; and representations and warranties (dated
as of the Reconstitution Date); and, provided, further, that each of the
Servicer and the Owner is given an opportunity to review and reasonably
negotiate in good faith the content of any such documents not specifically
referenced or provided for herein. Servicer shall cooperate in good faith in
negotiating any delinquency and cumulative loss termination triggers in the
pooling and servicing agreement.
(b) With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Owner, the Servicer agrees (1) to cooperate with
the Owner and any prospective purchaser with respect to all reasonable requests
and due diligence procedures including participating in meetings with rating
agencies, bond insurers and such other parties as the Owner shall designate and
participating in meetings with prospective purchasers of the Mortgage Loans or
interests therein and providing information reasonably requested by such
purchasers; (2) to execute, deliver and perform all Reconstitution Agreements
required by the Owner or other participants in the Reconstitution; (3) (a) to
restate the representations and warranties set forth in this Agreement as of the
Reconstitution Date which shall not be more onerous than those required under
this Agreement or (b) make the representations and warranties with respect to
the servicing of the Mortgage Loans set forth in the related selling/servicing
guide of the master servicer or issuer, as the case may be, or such
representations and warranties with respect to the servicing of the Mortgage
Loans as may be required by any Rating Agency or prospective purchaser of the
related securities or such Mortgage Loans, in connection with such
Reconstitution; provided, however, that such representations and warranties
shall not be more onerous than those required under this Agreement. The Servicer
shall use its reasonable best efforts to provide to such master servicer or
issuer, as the case may be, and any other participants in such Reconstitution:
(i) any and all information and appropriate verification of information which
may be reasonably available to the Servicer or its affiliates, whether through
letters of its auditors and counsel or otherwise, as the Owner or any such other
participant shall reasonably request; (ii) subject to the provisions of Section
13.13(b), to execute, deliver and satisfy all conditions set forth in any
indemnity agreement required by the Owner or any such participant. The Servicer
shall indemnify the Owner, each Affiliate designated by the Owner in connection
with a Reconstitution, each Person who controls the Owner or such Affiliate and
the Successor Servicer and hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
each of them may sustain in any way related to any information provided by or on
behalf of the Servicer regarding the Servicer, the Servicer's servicing
practices or performance provided by the Servicer in any offering document
prepared in connection with any Reconstitution (the "Servicer Information"). For
purposes of the previous sentence, "Owner" shall mean the Person then acting as
the Owner under this Agreement and any and all Persons
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who previously were "Owners" under this Agreement and "Successor Servicer" shall
mean the Person then acting as the Successor Servicer under this Agreement and
any and all Persons who previously were "Successor Servicers" under this
Agreement. The Owner shall indemnify the Servicer, each Affiliate designated by
the Servicer and each Person who controls the Servicer or such Affiliate and
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that each of them may sustain
in any way related to any information provided by the Owner in any offering
document prepared in connection with any Reconstitution.
(c) The Servicer shall execute one or more subservicing agreements
between the Servicer and the Owner and/or any master servicer which is generally
considered to be a prudent master servicer in the secondary mortgage market,
designated by the Owner in its sole discretion after consultation with the
Servicer and/or one or more custodial and servicing agreements among the Owner,
the Servicer and a third party custodian/trustee which is generally considered
to be a prudent custodian/trustee in the secondary mortgage market designated by
the Owner in its sole discretion after consultation with the Servicer, in either
case for the purpose of pooling the Mortgage Loans with other mortgage loans not
the subject of this Agreement in connection with a Reconstitution.
(d) Any subservicing agreement, pooling and servicing agreement or
other Reconstitution Agreement executed by the Servicer in connection with a
Pass-Through Transfer of any Mortgage Loans in which the Servicer shall continue
to service the relevant Mortgage Loans may, at the Owner's discretion, contain
contractual provisions including servicing representations and warranties which
in form and substance conform to the representations and warranties in this
Agreement and to secondary market standards for securities backed by mortgage
loans similar to the Mortgage Loans and such provisions with regard to servicing
responsibilities, servicing advances, investor reporting, segregation and
deposit of principal and interest payments, custody of the Mortgage Loans, and
other covenants as are required by the Owner and one or more nationally
recognized rating agencies for "AAA" rated mortgage pass-through transactions
which are "mortgage related securities" for the purposes of the Secondary
Mortgage Market Enhancement Act of 1984, unless otherwise mutually agreed. If a
real estate mortgage investment conduit ("REMIC") election has been made with
respect to the arrangement under which the Mortgage Loans and REO Property are
held, the Servicer shall not take any action, cause the REMIC to take any action
or fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of the REMIC as a REMIC or (ii) result in the imposition of a tax upon
the REMIC (including but not limited to the tax on "prohibited transactions" as
defined in Section 860G(a)(2) of the Code and the tax on "contributions" to a
REMIC set forth in Section 860(D) of the Code) unless the Servicer has received
an Opinion of Counsel (at the expense of the party seeking to take such action)
to the effect that the contemplated action will not endanger such REMIC status
or result in the imposition of any such tax.
(e) Any execution of a subservicing agreement or pooling and servicing
agreement by the Servicer shall be conditioned on the Servicer receiving the
Servicing Fee or such other servicing fee acceptable to Servicer. All Mortgage
Loans not sold or transferred pursuant to a Whole Loan Transfer or Pass-Through
Transfer shall be subject to this Agreement
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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.
(f) Only in the case where the Servicer is a party to a pooling and
servicing agreement or is otherwise the sole servicer in a Pass-Through
Transfer, the Servicer agrees to deliver to the Owner, and to any Person
designated by the Owner, such legal documents and in-house Opinions of Counsel
as are customarily delivered by originators or servicers, as the case may be,
and reasonably determined by the Owner to be necessary in connection with Whole
Loan Transfers or Pass-Through Transfers, as the case may be, such in-house
Opinions of Counsel to be in a form reasonably acceptable to the Owner.
(g) All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect. Any execution of a
Reconstitution Agreement by the Servicer shall be conditioned on the Servicer
receiving the Servicing Fee or such other servicing fee acceptable to Servicer.
Notwithstanding any provision to the contrary in this Agreement, in the event
that the Servicer is the master servicer, servicer or sub-servicer with respect
to a Reconstitution, the Owner agrees that in such Reconstitution any servicing
performance termination triggers shall be included upon approved by the Servicer
in its reasonable discretion.
(h) [Reserved].
(i) [Reserved].
Section 13.14 Trademarks.
The Owner and the Servicer agree that they and their employees,
subcontractors and agents, shall not, without the prior written consent of the
other party in each instance, (i) use in advertising, publicity or otherwise the
name of each and every other party to this Agreement or their Affiliates or any
of their managing directors, partners or employees, nor any trade name,
trademark, trade device, service xxxx, symbol or any abbreviation, contraction
or simulation thereof owned by the other party or their Affiliates, or (ii)
represent, directly or indirectly, any product or any service provided by the
Owner and the Servicer as approved or endorsed by the other parties to this
Agreement or their Affiliates.
Section 13.15 Confidentiality of Information.
If, during the term of this Agreement, Owner requests that Servicer
provide to Owner non-public, confidential information related to Servicer and
other affiliates of Servicer (collectively, "Countrywide"), and if Countrywide,
in its sole discretion agrees to provide this information, the parties agree
that they shall enter into a confidentiality agreement in form and substance
mutually agreeable to the parties prior to the release of such information.
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Section 13.16 [Reserved].
Section 13.17 Waiver of Trial by Jury.
THE SERVICER AND THE OWNER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 13.18 LIMITATION OF DAMAGES.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE PARTIES
AGREE THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER LEGAL OR EQUITABLE
PRINCIPLE, PROVIDED, HOWEVER, THAT SUCH LIMITATION SHALL NOT BE APPLICABLE WITH
RESPECT TO THIRD PARTY CLAIMS MADE AGAINST A PARTY.
Section 13.19 SUBMISSION TO JURISDICTION; WAIVERS.
The Servicer and the Owner hereby irrevocably and unconditionally:
(a) SUBMITS FOR ITSELF IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
-81-
ARTICLE XIV
COMPLIANCE WITH REGULATION AB
Section 14.01 Intent of the Parties; Reasonableness.
The Owner and the Servicer acknowledge and agree that the purpose of
the provisions of this Agreement relating to Regulation AB set forth in Sections
4.04, 4.05, 4.06, 4.10, 4.11, 5.02, 8.01(c), 8.01(d) and 10.09 of this Agreement
is to facilitate compliance by the Owner and any Depositor with the provisions
of Regulation AB and related rules and regulations of the Commission.
Neither the Owner nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Securities Exchange Act and the rules and regulations of the
Commission thereunder and Section 302 of the Xxxxxxxx-Xxxxx Act as set forth
herein. Although Regulation AB is applicable by its terms only to offerings of
asset-backed securities that are registered under the Securities Act, the
parties acknowledge that investors in privately offered securities may require
that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. The parties agree over time to negotiate in good faith
with respect to the provision of comparable disclosure in private offerings. The
Servicer acknowledges that interpretations of the requirements of Regulation AB
may change over time due to interpretive guidance provided by the Commission or
its staff or reasonable advice of counsel acceptable to the Owner and the
Servicer and agrees to negotiate in good faith with the Owner or any Depositor
with regard to any reasonable requests for delivery of information under these
provisions on the basis of established and evolving interpretations of
Regulation AB. In connection with any Securitization Transaction, the Servicer
shall cooperate fully with the Owner to deliver to the Owner (including any of
its assignees or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary to permit the Owner
or such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Servicer or any Subservicer and the Mortgage
Loans, or the servicing of the Mortgage Loans necessary in order to effect such
compliance.
The Owner (including any of its assignees or designees) shall
cooperate with the Servicer by providing sufficient and timely notice of any
information requirements pertaining to a Securitization Transaction. The Owner
will make all reasonable efforts to limit requests for information, reports or
other materials to items required for compliance with Regulation AB, and shall
not request information which is not required for such compliance.
[SIGNATURES APPEAR ON NEXT PAGE]
-82-
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the date
first above written.
XXXXXXX XXXXX CREDIT CORPORATION
(Owner)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXX XXXXX MORTGAGE LENDING, INC.
(Owner)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership (Servicer)
By: COUNTRYWIDE GP, INC., GENERAL
PARTNER
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 1
MONTHLY REPORTS
Remittance
Delinquency
Month End Trial Balance
Accrual Report
DAILY REPORTS
Data Extract
Payoff
HELOC Transaction
Transaction File
Exh. 1-1
EXHIBIT 2
CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 2006
The Servicer hereby certifies that it has established the account
described below as a Custodial Account pursuant to Section 2.04 of the Flow
Servicing Agreement, dated as of August 8, 2006, Residential Home Equity Line of
Credit Mortgage Loans. The Custodial Account shall be a Special Deposit Account.
Title of Account: Countrywide Home Loans Servicing LP, in trust for "Xxxxxxx
Xxxxx Credit Corporation and Xxxxxxx Xxxxx Mortgage Lending,
Inc."
Account Number:
---------------------
Address of office or branch
of the Servicer at which
Account is maintained:
------------------------------
COUNTRYWIDE HOME LOANS SERVICING LP
Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Exh. 2-1
EXHIBIT 3
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 2006
To: ___________________________
___________________________
___________________________
(the "Depository")
As Servicer under the Flow Servicing Agreement, dated as of August 8,
2006 Residential Home Equity Line of Credit Mortgage Loans (the "Agreement"), we
hereby authorize and request you to establish an account, as a Custodial Account
pursuant to Section 2.04 of the Agreement, to be designated "Countrywide Home
Loans Servicing LP, in trust for Xxxxxxx Xxxxx Credit Corporation and Xxxxxxx
Xxxxx Mortgage Lending, Inc." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. You may refuse any deposit
which would result in violation of the requirement that the account be fully
insured as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
COUNTRYWIDE HOME LOANS SERVICING LP
Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Exh. 3-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The Custodial Account shall be a Special Deposit
Account. The full amount deposited at any time in the account will be insured by
the Federal Deposit Insurance Corporation.
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Exh. 3-2
EXHIBIT 4
ESCROW ACCOUNT CERTIFICATION
_________ ___, 2006
________________________ hereby certifies that it has established the
account described below as an Escrow Account pursuant to Section 2.06 of the
Flow Servicing Agreement, dated as of August 8, 2006, Residential Home Equity
Line of Credit Mortgage Loans. The Escrow Account shall be a Special Deposit
Account.
Title of Account: "Countrywide Home Loans Servicing LP, in trust for Xxxxxxx
Xxxxx Credit Corporation and Xxxxxxx Xxxxx Mortgage Lending,
Inc. and various Mortgagors."
Account Number:
-------------------
Address of office or branch
of the Servicer at which
Account is maintained:
--------------------------
--------------------------
--------------------------
--------------------------
COUNTRYWIDE HOME LOANS SERVICING LP
Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exh. 4-1
EXHIBIT 5
ESCROW ACCOUNT LETTER AGREEMENT
_______ ___, 2006
To: ___________________________
___________________________
___________________________
(the "Depository")
As Servicer under the Flow Servicing Agreement, dated as of
________________, Residential Home Equity Line of Credit Mortgage Loans (the
"Agreement"), we hereby authorize and request you to establish an account, as an
Escrow Account pursuant to Section 2.06 of the Agreement, to be designated as
"Countrywide Home Loans Servicing LP, in trust for Xxxxxxx Xxxxx Credit
Corporation and Xxxxxxx Xxxxx Mortgage Lending, Inc., and various Mortgagors."
All deposits in the account shall be subject to withdrawal therefrom by order
signed by the Servicer. You may refuse any deposit which would result in
violation of the requirement that the account be fully insured as described
below. This letter is submitted to you in duplicate. Please execute and return
one original to us.
COUNTRYWIDE HOME LOANS SERVICING LP
Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Exh. 5-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The Escrow Account shall be a Special Deposit
Account. The full amount deposited at any time in the account will be insured by
the Federal Deposit Insurance Corporation.
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Exh. 5-2
EXHIBIT 6
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
To be Inserted by ML
Exh. 6-1
EXHIBIT A TO ASSIGNMENT, ASSUMPTION AGREEMENT
Mortgage Loan Schedule
Exh. 6-2
EXHIBIT 7
COUNTRYWIDE HOME LOANS SERVICING LP
OFFICER'S CERTIFICATE
I, Xxxxxx X. Xxxxxx, hereby certify that I am a duly elected Assistant
Secretary of Countrywide GP, Inc., the sole general partner of Countrywide Home
Loans Servicing LP, a Texas limited partnership (the "Company"), and further
certify, on behalf of the Company as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the partnership agreement of the Company which is in full force and
effect on the date hereof and which has been in effect without amendment,
waiver, rescission or modification.
2. Attached hereto as Exhibit 2 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such standing.
3. Attached hereto as Exhibit 3 is a true, correct and complete copy
of the resolutions of the partnership of the Company authorizing the
Company to execute and deliver the Flow Servicing Agreement, dated as of
August 8, 2006, among the Company, and Xxxxxxx Xxxxx Credit Corporation and
Xxxxxxx Xxxxx Mortgage Lending, Inc. (collectively, the "Owner"), (the
"Flow Servicing Agreement") and such resolutions are in effect on the date
hereof.
4. Each person listed on Exhibit 4 attached hereto who, as an officer
or representative of the Company, signed (a) the Flow Servicing Agreement,
and (b) any other document delivered or on the date hereof in connection
with any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on Exhibit
4, and the signatures of such persons appearing on such documents are their
genuine signatures.
Exh. 7-1
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated: By:
------------------------------ ------------------------------------
Name: Xxxxxx X. Xxxxxx
[Seal] Title: Assistant Secretary
I, Xxxxxxx Xxxxx, an Assistant Secretary of the Company, hereby
certify that Xxxxxx X. Xxxxxx is the duly elected, qualified and acting
Assistant Secretary of the Company and that the signature appearing above is her
genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
------------------------------ ------------------------------------
Name: Xxxxxxx Xxxxx
[Seal] Title: Assistant Secretary
Exh. 7-2
NAME TITLE SIGNATURE
---- ----- ---------
Xxxxxx Xxx Senior Vice President
----------------------------------
----------------------------------- -------------------------------- ----------------------------------
----------------------------------- -------------------------------- ----------------------------------
----------------------------------- -------------------------------- ----------------------------------
----------------------------------- -------------------------------- ----------------------------------
----------------------------------- -------------------------------- ----------------------------------
Exh. 7-3
EXHIBIT 8
MORTGAGE LOAN DOCUMENTS
To the extent in the possession of the Owner or its custodian, the
following documents shall constitute the Mortgage Loan Documents with respect to
each Mortgage Loan:
(a) The original Mortgage Note endorsed, "Pay to the order of
______________, without recourse" and signed in the name of the Seller by
an authorized officer of the Seller. If the Mortgage Loan was acquired by
the Seller in a merger or other type of acquisition, the endorsement must
be by "[Seller], successor [by merger to or in interest to, as applicable]
[name of predecessor]"; and if the Mortgage Loan was acquired or originated
by the Seller while doing business under another name, the endorsement must
be by "[Seller], successor in interest to [previous name]." The Mortgage
Note shall include all intervening endorsements showing a complete chain of
title from the originator to the Seller;
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) Except as provided below and for each Mortgage Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage, with evidence of
recording thereon, or, if the original Mortgage has not yet been returned
from the recording office, a copy of the original Mortgage certified by the
previous owner to be a true copy of the original of the Mortgage that has
been delivered for recording in the appropriate recording office of the
jurisdiction in which the Mortgaged Property is located and in the case of
each MERS Mortgage Loan, the original Mortgage, noting the presence of the
MIN of the Loan and either language indicating that the Mortgage Loan is a
MOM Loan or if the Mortgage Loan was not a MOM Loan at origination, the
original Mortgage and the assignment thereof to MERS, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the
public recording office in which such Mortgage has been recorded;
(d) In the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original Assignment of each Mortgage, executed in blank. If the
Mortgage Loan was acquired by the Seller in a merger or other type of
acquisition, the assignment must be by "[Seller], successor [by merger to
or in interest to, as applicable] [name of predecessor]"; and in the event
that the Mortgage Loan was acquired or originated by the Seller while doing
business under another name, the assignment must be by "[Seller], successor
in interest to [previous name]";
(e) the originals of all assumption and modification agreements, if
any;
(f) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage
must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located or on
direction of the Owner as provided in this Agreement. If the Assignment of
Exh. 8-1
Mortgage is to be recorded, the Mortgage shall be assigned to the Owner or
as directed by the Owner. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of
Mortgage must be made by "[Seller], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Owner
while doing business under another name, the Assignment of Mortgage must be
by "[Seller], formerly known as [previous name]";
(g) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon, or, if the original intervening assignment
has not yet been returned from the recording office, a copy of such
assignment certified to be a true copy of the original of the assignment
which has been sent for recording in the appropriate jurisdiction in which
the Mortgaged Property is located;
(h) If applicable, the original policy of title insurance (or a
preliminary title report if the original title insurance policy has not
been received from the title insurance company);
(i) original powers of attorney, if applicable, or, if in connection
with any Mortgage Loan, the Seller cannot deliver or cause to be delivered
the original power of attorney with evidence of recording thereon, if
applicable, on or prior to the related Servicing Transfer Date because of a
delay caused by the public recording office, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such power of
attorney, together with an Officer's Certificate of the Seller (or
certified by the title company, escrow agent, or closing attorney) stating
that such power of attorney has been dispatched to the appropriate public
recording office for recordation and that the original recorded power of
attorney or a copy of such power of attorney certified by such public
recording office to be a true and complete copy of the original recorded
power of attorney will be promptly delivered to the Custodian upon receipt
thereof by the Seller; and
(i) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
To the extent in the possession of the Owner or its custodian, the
following documents, together with the Mortgage Loan Documents, shall constitute
the Mortgage File with respect to each Mortgage Loan:
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment.
Exh. 8-2
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report, water
potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence,
current and historical computerized data files, and all other processing,
underwriting and closing papers and records which are customarily contained
in a mortgage loan file and which are required to document the Mortgage
Loan or to service the Mortgage Loan.
(o) Amortization schedule, if applicable.
Exh. 8-3
EXHIBIT 9
FORM OF COMMITMENT LETTER
[OWNER]
[DATE]
Countrywide Home Loans Servicing LP
1800 Tapo Canyon, MS SV2-103A
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Portfolio Services
Re: Flow Servicing Agreement dated August 8, 2006 (the "Servicing
Agreement"), between COUNTRYWIDE HOME LOANS SERVICING LP, a Texas
limited partnership (the "Servicer") and XXXXXXX XXXXX CREDIT
CORPORATION, a Delaware corporation, and XXXXXXX XXXXX MORTGAGE
LENDING, INC., a Delaware corporation (collectively with Xxxxxxx
Xxxxx Credit Corporation, the "Owner").
Gentlemen and Ladies:
This letter (this "Commitment Letter") and the Mortgage Loan Schedule
attached hereto as Exhibit A, identifies certain mortgage loans (the "Added
Mortgage Loans") which Owner proposes to add and make subject to the Servicing
Agreement and the business terms under which Servicer agrees to service the
Added Mortgage Loans. This letter also sets forth the fee arrangement including
the Servicing Fee Rate (as defined in the Servicing Agreement), as set forth on
Exhibit B ("Term Sheet").
Upon the mutual execution of this Commitment Letter, the Added
Mortgage Loans shall be deemed to have been made subject to the terms and
conditions of the Servicing Agreement. The transfer and servicing of the Added
Mortgage Loans shall, unless otherwise agreed, occur on the dates specified
herein.
All exhibits hereto are incorporated herein in their entirety. In the
event there exists any inconsistency between the Servicing Agreement and this
Commitment Letter, the latter shall be controlling notwithstanding anything
contained in the Servicing Agreement to the contrary. All capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Servicing Agreement.
[Signature Page Follows]
Exh. 9-1
IN WITNESS WHEREOF, this Agreement has been executed as of the ____
day of ______________.
XXXXXXX XXXXX CREDIT CORPORATION
(Owner)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXX XXXXX MORTGAGE LENDING, INC.
(Owner)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
COUNTRYWIDE HOME LOANS SERVICING LP,
a Texas limited partnership,
as Servicer
By: COUNTRYWIDE GP, INC., general
partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exh. 9-2
EXHIBIT A
Mortgage Loan Schedule
Xxx. 0-0
XXXXXXX X
Xxxx Xxxxx
Xxx. 9-4
EXHIBIT 10
FORM OF ANNUAL CERTIFICATION
Re: Flow Servicing Agreement ("Flow Servicing Agreement" dated as of
August 8, 2006,
Re: Flow Servicing Agreement ("Flow Servicing Agreement") dated as of
August 8, 2006 and among COUNTRYWIDE HOME LOANS SERVICING LP, a Texas
limited partnership (the "Servicer") and XXXXXXX XXXXX CREDIT
CORPORATION, a Delaware corporation, and XXXXXXX XXXXX MORTGAGE
LENDING, INC., a Delaware corporation (collectively with Xxxxxxx Xxxxx
Credit Corporation, the "Owner").
I, ________________________________, the _______________________ of
Countrywide Home Loans Servicing LP (the "Company"), certify to [the Owner],
[the Depositor] or the [Master Servicer] [Securities Administrator] or
[Trustee], and their officers, with the knowledge and intent that they will rely
upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Company's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), and all servicing reports,
officer's certificates and other information relating to the servicing of
the Mortgage Loans by the Company during 200[_] that were delivered by the
Company to the [Depositor] [Master Servicer] [Securities Administrator] or
[Trustee] pursuant to the Agreement (collectively, the "Company Servicing
Information");
(2) Based on my knowledge, the Company Servicing Information, taken as
a whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in the
light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company
Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator] or
[Trustee];
(4) I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations under
the Agreement; and
Exh. 10-1
(5) The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Subservicer or
Subcontractor pursuant to the Agreement, have been provided to the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the [Depositor] [Master
Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports.
Date:
----------------------------------
----------------------------------------
[Signature]
----------------------------------------
[Title]
Exh. 10-2
EXHIBIT 11
FORM OF LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, Citibank, N.A., a national banking
association and having an office for the conduct of business in New York, New
York, solely in its capacity as indenture trustee (in such capacity the
"Indenture Trustee") under the Servicing Agreement, dated as of July 1, 2006, by
and among Wilshire Credit Corporation, as a servicer ("Wilshire" or "Servicer"),
LaSalle Bank National Association, as master servicer (the "Master Servicer")
and as securities administrator (the "Securities Administrator"), Xxxxxxx Xxxxx
Mortgage Investors Trust, Series 0000-XX0 (xxx "Xxxxxxx Xxxxxx"), Xxxxxxxx,
N.A., as indenture trustee (in such capacity, the "Indenture Trustee"), Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (the "Depositor"), and Xxxxxxx
Xxxxx Mortgage Lending, Inc., as sponsor (the "Sponsor") pursuant to which
Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed Securities
Series 2006-SL2 are issued and not in its individual corporate capacity, hereby
constitutes and appoints Countrywide Home Loans Servicing LP, as its true and
lawful attorney-in-fact, in its name, place and stead and for its use and
benefit, to execute and acknowledge in writing or by facsimile stamp or
otherwise all documents customarily and reasonably necessary and appropriate for
the tasks described in items (i) through (viii) below relating to certain
mortgage loans (the "Loans") owned by the undersigned, as Indenture Trustee, as
serviced by Countrywide Home Loans Servicing LP, as the Servicer under the
Servicing Agreement. These Loans are comprised of Mortgages, Deeds of Trust,
Deeds to Secure Debt, Co-ops and other forms of Security Instruments
(collectively the "Security Instruments") and the notes secured thereby (the
"Notes").
i. The Substitution of Trustee(s) in Deeds of Trust and/or Deeds to
Secure Debt in the name of the undersigned, as Indenture Trustee,
ii. The Extension and/or Renewal of Financing Statements in the name of
the undersigned, as Indenture Trustee,
iii. The Satisfaction, Assignment and/or Release of Security Instruments
and/or Financing Statements in the name of the undersigned, as
Indenture Trustee, or the issuance of Deeds of Reconveyance upon
payment in full and/or discharge of the Notes secured thereby,
iv. The Modification and/or Partial Release of Security Instruments,
including the subordination of a Security Instrument to an easement in
favor of an entity with powers of eminent domain.
v. The Assumption of Security Instruments and the Notes secured thereby,
vi. The right to collect, accelerate, initiate suit on and/or foreclose
all Loans, and
Xxx. 00-0
xxx. The right to manage, sell, convey or transfer the real and/or personal
property specified in the Security Instruments.
viii. The endorsement of loss payable drafts or other checks that are
necessary to effectuate proper servicing of the loan or repairs to the
real property encumbered by the Security Instrument.
The undersigned gives to said attorney-in-fact full power and authority to
execute such instruments as if the undersigned were personally present, hereby
ratifying and confirming all that said attorney-in-fact shall lawfully do or
cause to be done by authority hereof. The undersigned also gives to said
attorney-in-fact full power and authority to appoint by subsequent power of
attorney a subservicer (a "Subservicer") to act in its stead so long as the
Indenture Trustee is given prior notice of such appointment. Third parties
without actual notice may rely upon the power granted to said attorney-in-fact
under this Limited Power of Attorney and may assume that, upon the exercise of
such power, all conditions precedent to such exercise of power have been
satisfied and this Power of Attorney has not been revoked unless an Instrument
of Revocation has been recorded.
This limited power of attorney has been executed and is effective as of
this ___ DAY OF _____ 200_ and the same and any subsequent limited power of
attorney given to any Subservicer shall terminate on the date that is the
earlier of (i) one year from the date hereof and (ii) the occurrence of any of
the following events or until revoked in writing by the undersigned provided,
that so long as none of the following events below have occurred or continuing,
the Indenture Trustee shall execute and deliver a replacement power of attorney:
i. the supervision or termination of Countrywide Home Loans Servicing LP
as the Servicer with respect to the Loans serviced under the Servicing
Agreement,
ii. the transfer of servicing from Countrywide Home Loans Servicing LP to
another Servicer with respect to the Loans serviced under the
Servicing Agreement,
iii. the appointment of a receiver or conservator with respect to the
business of the attorney-in-fact or Countrywide Home Loans Servicing
LP, or
iv. the filing of a voluntary or involuntary petition of bankruptcy by the
attorney-in-fact, Countrywide Home Loans Servicing LP, or any of their
creditors.
Notwithstanding the foregoing, the power and the authority given to said
attorney-in-fact or any Subservicer under this Limited Power of Attorney shall
be revoked with respect to a particular Servicing Agreement and the Loans
subject thereto upon the occurrence of:
i. the suspension or termination of Countrywide Home Loans Servicing LP
as the Servicer under such Servicing Agreement; or
ii. the transfer of servicing under such Servicing Agreement from
Countrywide Home Loans Servicing LP to another Servicer.
Xxx. 00-0
Nothing contained herein shall be deemed to amend or modify the related
Servicing Agreement or the respective rights, duties or obligations of the
Indenture Trustee or Countrywide Home Loans Servicing LP thereunder, and nothing
herein shall constitute a waiver of any rights or remedies thereunder. If this
limited power of attorney is revoked or terminated for any reason whatsoever, a
limited power of attorney given by the Servicer to any Subservicer shall be
deemed to be revoked or terminated at the same time.
This Limited Power of Attorney supersedes all prior powers of attorney
given by the undersigned to Countrywide Home Loans Servicing LP for the Loans,
and all such powers and the authority granted thereunder are hereby revoked
effective as of the date of recording of this Limited Power of Attorney.
Exh. 11-3
Countrywide Home Loans Servicing LP Citibank, N.A.,
as Servicer as Indenture Trustee
------------------------------------- ----------------------------------------
Name: Name:
------------------------------- ----------------------------------
Title: Title:
------------------------------ ---------------------------------
Witness: Witness:
------------------------------------- ----------------------------------------
Name:
----------------------------------
Witness: Witness:
------------------------------------- ----------------------------------------
Names:
---------------------------------
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
On _____________ before me, a Notary Public in and for said State,
personally appeared ______________, known to me to be A/AN ________________ of
Citibank, N.A., a national banking association that executed the within
instrument, and also known to me to be the person who executed said instrument
on behalf of such national banking association and acknowledged to me that such
national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
Xxx. 00-0
XXXXX OF _______ )
) SS
COUNTY OF ______ )
On ______________, before me, a Notary Public in and for said State,
personally appeared ______________________, known to me to be a ________________
of Countrywide Home Loans Servicing LP that executed the within instrument, and
also known to me to be the person who executed said instrument on behalf of such
corporation and acknowledged to me that such national banking association
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
]
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Exh. 11-5
EXHIBIT 12
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name of
Subservicer] shall address, at a minimum, the applicable criteria identified
below as "Applicable Servicing Criteria":
SERVICING CRITERIA APPLICABLE
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REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------ ----------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to X
monitor any performance or other triggers and
events of default in accordance with the
transaction agreements.
1122(d)(1)(ii) If any material servicing activities are X
outsourced to third parties, policies and
procedures are instituted to monitor the third
party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements
to maintain a back-up servicer for the mortgage
loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy X
is in effect on the party participating in the
servicing function throughout the reporting
period in the amount of coverage required by and
otherwise in accordance with the terms of the
transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into X
the appropriate custodial bank accounts and
related bank clearing accounts no more than two
business days following receipt, or such other
number of days specified in the transaction
agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf X
of an obligor or to an investor are made only by
authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding X
collections, cash flows or distributions, and
any interest or other fees charged for such
advances, are made, reviewed and approved as
specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such X
as cash reserve accounts or accounts established
as a form of overcollateralization, are
separately maintained (e.g., with respect to
commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a X
federally insured depository institution as set
forth in the transaction agreements. For
purposes of this criterion, "federally insured
depository institution" with respect to a
foreign financial institution means a foreign
financial institution that meets the
requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent X
unauthorized access.
Xxx. 00-0
XXXXXXXXX XXXXXXXX APPLICABLE
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REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------ ----------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis X
for all asset-backed securities related bank
accounts, including custodial accounts and
related bank clearing accounts. These
reconciliations are (A) mathematically accurate;
(B) prepared within 30 calendar days after the
bank statement cutoff date, or such other number
of days specified in the transaction agreements;
(C) reviewed and approved by someone other than
the person who prepared the reconciliation; and
(D) contain explanations for reconciling items.
These reconciling items are resolved within 90
calendar days of their original identification,
or such other number of days specified in the
transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be X
filed with the Commission, are maintained in
accordance with the transaction agreements and
applicable Commission requirements.
Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set
forth in the transaction agreements; (B) provide
information calculated in accordance with the
terms specified in the transaction agreements;
(C) are filed with the Commission as required by
its rules and regulations; and (D) agree with
investors' or the trustee's records as to the
total unpaid principal balance and number of
mortgage loans serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and X
remitted in accordance with timeframes,
distribution priority and other terms set forth
in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted X
within two business days to the Servicer's
investor records, or such other number of days
specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor X
reports agree with cancelled checks, or other
form of payment, or custodial bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is X
maintained as required by the transaction
agreements or related mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are X
safeguarded as required by the transaction
agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the X
asset pool are made, reviewed and approved in
accordance with any conditions or requirements
in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any X
payoffs, made in accordance with the related
mortgage loan documents are posted to the
Servicer's obligor records maintained no more
than two business days after receipt, or such
other number of days specified in the
transaction agreements, and allocated to
principal, interest or other items (e.g.,
escrow) in accordance with the related mortgage
loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage X
loans agree with the Servicer's records with
respect to an obligor's unpaid principal
balance.
Xxx. 00-0
XXXXXXXXX XXXXXXXX APPLICABLE
------------------------------------------------------------------- SERVICING
REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------ ----------
1122(d)(4)(vi) Changes with respect to the terms or status of X
an obligor's mortgage loans (e.g., loan
modifications or re-agings) are made, reviewed
and approved by authorized personnel in
accordance with the transaction agreements and
related pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., X
forbearance plans, modifications and deeds in
lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated,
conducted and concluded in accordance with the
timeframes or other requirements established by
the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are X
maintained during the period a mortgage loan is
delinquent in accordance with the transaction
agreements. Such records are maintained on at
least a monthly basis, or such other period
specified in the transaction agreements, and
describe the entity's activities in monitoring
delinquent mortgage loans including, for
example, phone calls, letters and payment
rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or
unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return X
for mortgage loans with variable rates are
computed based on the related mortgage loan
documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor X
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's
mortgage loan documents, on at least an annual
basis, or such other period specified in the
transaction agreements; (B) interest on such
funds is paid, or credited, to obligors in
accordance with applicable mortgage loan
documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days
of full repayment of the related mortgage loans,
or such other number of days specified in the
transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as X
tax or insurance payments) are made on or before
the related penalty or expiration dates, as
indicated on the appropriate bills or notices
for such payments, provided that such support
has been received by the servicer at least 30
calendar days prior to these dates, or such
other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with X
any payment to be made on behalf of an obligor
are paid from the servicer's funds and not
charged to the obligor, unless the late payment
was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are X
posted within two business days to the obligor's
records maintained by the servicer, or such
other number of days specified in the
transaction agreements.
Xxx. 00-0
0000(x)(0)(xxx) Delinquencies, charge-offs and uncollectible X
accounts are recognized and recorded in
accordance with the transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support,
identified in Item 1114(a)(1) through (3) or
Item 1115 of Regulation AB, is maintained as set
forth in the transaction agreements.
[NAME OF COMPANY] [NAME OF SUBSERVICER]
Date:
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By:
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Name:
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Title:
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Xxx. 00-0