Exhibit 99.12(c)
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Execution Version
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
Purchaser
WACHOVIA MORTGAGE CORPORATION
Seller
FIRST AMENDED AND RESTATED SELLER'S PURCHASE, WARRANTIES AND
SERVICING AGREEMENT
Dated as of June 1, 2006
63209.000007 CHARLOTTE 130069v16
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Defined Terms...............................................................................1
ARTICLE II SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION OF MORTGAGE FILES; BOOKS AND
RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF MORTGAGE LOAN DOCUMENTS..................................15
Section 2.01. Agreement to Purchase......................................................................15
Section 2.02. Purchase Price.............................................................................15
Section 2.03. Servicing of Mortgage Loans................................................................16
Section 2.04. Record Title and Possession of Mortgage Files; Maintenance of Servicing Files..............16
Section 2.05. Books and Records..........................................................................17
Section 2.06. Transfer of Mortgage Loans.................................................................17
Section 2.07. Delivery of Mortgage Loan Documents........................................................17
Section 2.08. Quality Control Procedures.................................................................18
Section 2.09. Closing....................................................................................18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER; REPURCHASE; REVIEW OF MORTGAGE LOANS...................19
Section 3.01. Representations and Warranties of the Seller...............................................19
Section 3.02. Representations and Warranties as to Individual Mortgage Loans.............................22
Section 3.03. Repurchase; Substitution...................................................................35
Section 3.04. Repurchase of Mortgage Loans with First Payment Defaults...................................37
Section 3.05. Purchase Price Protection..................................................................37
ARTICLE IV ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS....................................................38
Section 4.01. The Seller to Act as Servicer..............................................................38
Section 4.02. Collection of Mortgage Loan Payments.......................................................39
Section 4.03. Realization Upon Defaulted Mortgage Loans..................................................40
Section 4.04. Establishment of Custodial Accounts; Deposits in Custodial Accounts........................41
Section 4.05. Permitted Withdrawals from the Custodial Account...........................................42
Section 4.06. Establishment of Escrow Accounts; Deposits in Accounts.....................................43
Section 4.07. Permitted Withdrawals from the Escrow Account..............................................44
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Section 4.08. Payment of Taxes, Insurance and Charges; Maintenance of Primary Mortgage
Insurance; Collections Thereunder..........................................................45
Section 4.09. Transfer of Accounts.......................................................................46
Section 4.10. Maintenance of Hazard Insurance............................................................46
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy........................................47
Section 4.12. Maintenance of Fidelity Bond and Errors and Omissions Insurance............................47
Section 4.13. Title, Management and Disposition of REO Property..........................................48
Section 4.14. Notification of Maturity Date..............................................................49
ARTICLE V PAYMENTS TO THE PURCHASER..............................................................................49
Section 5.01. Distributions..............................................................................49
Section 5.02. Statements to the Purchaser................................................................50
Section 5.03. Monthly Advances by the Seller.............................................................51
Section 5.04. Liquidation Reports........................................................................51
ARTICLE VI GENERAL SERVICING PROCEDURES..........................................................................51
Section 6.01. Assumption Agreements......................................................................51
Section 6.02. Satisfaction of Mortgages and Release of Mortgage Files....................................52
Section 6.03. Servicing Compensation.....................................................................53
Section 6.04. Annual Statement as to Compliance..........................................................53
Section 6.05. Annual Independent Certified Public Accountants' Servicing Report..........................54
Section 6.06. Purchaser's Right to Examine Seller Records................................................54
Section 6.07. Seller Shall Provide Information as Reasonably Required....................................55
ARTICLE VII THE SELLER...........................................................................................55
Section 7.01. Indemnification; Third Party Claims........................................................55
Section 7.02. Merger or Consolidation of the Seller......................................................56
Section 7.03. Limitation on Liability of the Seller and Others...........................................56
Section 7.04. Seller Not to Resign.......................................................................57
Section 7.05. No Transfer of Servicing...................................................................57
ARTICLE VIII DEFAULT 57
Section 8.01. Events of Default..........................................................................57
Section 8.02. Waiver of Defaults.........................................................................59
ARTICLE IX TERMINATION...........................................................................................59
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Section 9.01. Termination................................................................................59
ARTICLE X RECONSTITUTION OF MORTGAGE LOANS.......................................................................60
Section 10.01. Reconstitution of Mortgage Loans...........................................................60
ARTICLE XI MISCELLANEOUS PROVISIONS..............................................................................62
Section 11.01. Successor to the Seller....................................................................62
Section 11.02. Amendment..................................................................................63
Section 11.03. Recordation of Agreement...................................................................63
Section 11.04. Governing Law..............................................................................64
Section 11.05. Notices....................................................................................64
Section 11.06. Severability of Provisions.................................................................65
Section 11.07. Exhibits...................................................................................65
Section 11.08. General Interpretive Principles............................................................65
Section 11.09. Reproduction of Documents..................................................................66
Section 11.10. Confidentiality of Information.............................................................66
Section 11.11. Recordation of Assignments of Mortgage.....................................................67
Section 11.12. Assignment by Purchaser....................................................................67
Section 11.13. No Partnership.............................................................................67
Section 11.14. Execution; Successors and Assigns..........................................................67
Section 11.15. Entire Agreement...........................................................................68
Section 11.16. No Solicitation............................................................................68
Section 11.17. Costs......................................................................................68
Section 11.18. Protection of Mortgagor Personal Information...............................................69
EXHIBITS
A-1 Contents of Mortgage File
A-2 Contents of Servicing File
B Form of Custodial Account Letter Agreement
C Form of Escrow Account Letter Agreement
D Form of Assignment, Assumption and Recognition Agreement
E Form of Assignment and Conveyance
F Request for Release of Documents and Receipt
G Form of S-50Y Report
H Form of P-4DL Report
I Form of Indemnification and Contribution Agreement
J Form of Annual Certification
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This is a First Amended and Restated Seller's Purchase, Warranties
and Servicing Agreement, dated as of June 1, 2006 and is executed by and
between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., as purchaser (the "Purchaser"),
and Wachovia Mortgage Corporation, as seller and servicer (in such capacity,
the "Seller").
WITNESSETH:
WHEREAS, the Purchaser and the Seller are parties to that certain
Seller's Purchase, Warranties and Servicing Agreement, dated as of June 1,
2004 (the "Original Purchase Agreement"), the Purchaser has heretofore agreed
to purchase from the Seller and the Seller has heretofore agreed to sell to
the Purchaser certain Mortgage Loans, servicing rights retained, from time to
time, pursuant to the terms of letter agreements by and between the Seller and
the Purchaser (each, a "Purchase Price and Terms Letter");
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed
of trust or other security instrument creating a first or second lien on a
residential dwelling located in the jurisdiction indicated on the related
Mortgage Loan Schedule, which is annexed to the related Assignment and
Conveyance. The Mortgage Loans as described herein shall be delivered in
groups of whole loans (each, a "Mortgage Loan Package") on various dates as
provided herein (each, a "Closing Date");
WHEREAS, the Purchaser and the Seller wish to prescribe the
representations and warranties of the Seller with respect to itself, the
Mortgage Loans and the management, servicing and control of the Mortgage Loans
by the Seller; and
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend and restate the Original Purchase Agreement to make certain
modifications as set forth herein with respect to all Mortgage Loans acquired
pursuant to this Agreement or the Original Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Purchaser and the
Seller agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meaning
specified in this Article:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices (including collection procedures) of
prudent mortgage banking institutions which service mortgage loans of the same
type as such Mortgage Loan in the jurisdiction where the related Mortgaged
Property is located, and which are in accordance with ▇▇▇▇▇▇ Mae servicing
practices and procedures, for MBS pool mortgages, as defined in the ▇▇▇▇▇▇ ▇▇▇
Guides, including future updates.
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Adjustable Rate Mortgage Loan: A Mortgage Loan as to which the
related Mortgage Note provides that the Mortgage Interest Rate may be adjusted
periodically.
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan,
the date set forth in the related Mortgage Note on which the Mortgage Interest
Rate on the Mortgage Loan is adjusted in accordance with the terms of the
Mortgage Note.
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 ▇▇▇▇▇▇ Mae Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This First Amended and Restated Seller's Purchase,
Warranties and Servicing Agreement including all exhibits hereto, amendments
hereof and supplements hereto.
Appraised Value: With respect to any Mortgaged Property, the lesser
of (i) the value thereof as determined by an appraisal made for the originator
of the Mortgage Loan at the time of origination of the Mortgage Loan by a
Qualified Appraiser, 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 a Qualified Appraiser.
Assignment and Conveyance: As defined in Section 2.03.
Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form and in blank,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to give record notice of the transfer of the Mortgage.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
a legal holiday in the States of New York or North Carolina, or (iii) a day on
which banks in the States of New York or North Carolina are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates set forth in the related Purchase
Price and Terms Letter on which the Purchaser from time to time shall purchase
and the Seller from time to time shall sell to the Purchaser, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
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Code: The Internal Revenue Code of 1986, as the same may be amended
from time to time (or any successor statute thereto).
Combined Loan-to-Value Ratio or CLTV: As to any Second Lien Loan,
the ratio, expressed as a percentage, of the (a) sum of (i) the original
outstanding principal balance of the Second Lien Loan and (ii) the outstanding
principal balance of any mortgage loan or mortgage loans that are senior or
equal in priority to the Second Lien Loan and which are secured by the same
Mortgaged Property as of the origination date at such Second Lien Loan to (b)
the Appraised Value of the related Mortgaged Property as of the origination of
the Second Lien Loan.
Compensating Interest: For any Remittance Date, the lesser of (i)
the aggregate Servicing Fee payable to the Seller for such Remittance Date and
(ii) the aggregate Prepayment Interest Shortfall for such Remittance Date.
Condemnation Proceeds: All awards, compensation and settlements in
respect of a Mortgaged Property, whether permanent or temporary, partial or
entire, by exercise of the power of eminent domain or condemnation, to the
extent not required to be released to a Mortgagor in accordance with the terms
of the related Mortgage Loan Documents.
Convertible Mortgage Loan: Any Adjustable Rate Mortgage Loan
purchased pursuant to this Agreement as to which the related Mortgage Note
permits the Mortgagor to convert the Mortgage Interest Rate on such Mortgage
Loan to a fixed Mortgage Interest Rate.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the Mortgagor and relating to the stock allocated
to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Co-op Stock: With respect to a Co-op Loan, the single outstanding
class of stock, partnership interest or other ownership instrument in the
related residential cooperative housing corporation.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of the Standard & Poor's Glossary.
Credit Score: The credit score for each Mortgage Loan shall be the
minimum of two credit bureau scores obtained at origination or such other time
by the Seller. If two credit bureau scores are obtained, the Credit Score will
be the lower score. If three credit bureau scores are obtained, the Credit
Score will be the middle of the three. When there is more than one applicant,
the lowest of the applicants' Credit Scores will be used. There is only one
(1) score for any loan regardless of the number of borrowers and/or
applicants.
Custodial Account: Each separate demand account or accounts created
and maintained pursuant to Section 4.04 which shall be entitled "Wachovia
Mortgage Corporation, in trust for the Purchaser, as owner of various whole
loan series" and shall be established as an
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Eligible Account, in the name of the Person that is the "Purchaser" with
respect to the related Mortgage Loans.
Cut-off Date: With respect to each Mortgage Loan Package, the first
Business Day of the month of the related Closing Date, or as otherwise set
forth in the related Purchase Price and Terms Letter.
Determination Date: With respect to each Remittance Date, the 15th
day (or if such 15th day is not a Business Day, the Business Day immediately
preceding such 15th day) of the month in which such Remittance Date occurs.
Due Date: With respect to any Mortgage Loan, the first day of each
month, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of such
Remittance Date and ending on the first day of the month of the Remittance
Date, in both cases, inclusive.
Eligible Account: An account established and maintained: (a) within
FDIC insured accounts (or other accounts with comparable insurance coverage
acceptable to the Rating Agencies) created, maintained and monitored by the
Seller so that all funds deposited therein are fully insured, (b) with the
corporate trust department of a financial institution assigned a long-term
debt rating of not less than "A-1" by Standard & Poor's or "Prime-1" by
▇▇▇▇▇'▇ Investors Services, Inc. and, if ownership of the Mortgage Loans is
evidenced by mortgaged backed securities, the equivalent ratings of the rating
agencies, and held such that the rights of the Purchaser and the owner of the
Mortgage Loans shall be fully protected against the claims of any creditors of
the Seller and of any creditors or depositors of the institution in which such
account is maintained or (c) in a separate non-trust account without FDIC or
other insurance in an Eligible Institution. In the event that a Custodial
Account is established pursuant to clause (b) or (c) of the preceding
sentence, the Seller shall provide the Purchaser with written notice on the
Business Day following the date on which the applicable institution fails to
meet the applicable ratings requirements.
Eligible Institution: An institution having (i) the highest
short-term debt rating, and one of the two highest long-term debt ratings of
the Rating Agency; or (ii) with respect to any Custodial Account, an unsecured
long-term debt rating of at least one of the two highest unsecured long-term
debt ratings of the Rating Agencies.
Eligible Investments: Any one or more of the following obligations
or securities:
(a) direct obligations of, and obligations fully guaranteed 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;
(b) (i) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term deposit
rating
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and/or the long-term unsecured debt obligations or deposits of such depository
institution or trust company at the time of such investment or contractual
commitment providing for such investment are rated in one of the two highest
rating categories by each Rating Agency and (ii) any other demand or time
deposit or certificate of deposit that is fully insured by the FDIC;
(c) repurchase obligations with a term not to exceed thirty (30)
days and with respect to (i) any security described in clause (a) above and
entered into with a depository institution or trust company (acting as
principal) described in clause (b)(ii) above;
(d) 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 that are rated in one of the two highest rating categories by
each Rating Agency at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities issued by
any particular corporation will not be Eligible Investments to the extent that
investments therein will cause the then outstanding principal amount of
securities issued by such corporation and held as Eligible Investments to
exceed 10% of the aggregate outstanding principal balances of all of the
Mortgage Loans and Eligible Investments;
(e) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof)
which are rated in one of the two highest rating categories by each Rating
Agency at the time of such investment;
(f) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as evidenced
in writing by each Rating Agency; and
(g) any money market funds the collateral of which consists of
obligations fully guaranteed 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 (which may
include repurchase obligations secured by collateral described in clause (a))
and other securities and which money market funds are rated in one of the two
highest rating categories by each Rating Agency.
provided, however, that no instrument or security shall be an Eligible
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument
or if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
investment or security is purchased at a price greater than par.
Escrow Account: Each separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "Wachovia Mortgage
Corporation, in trust for the Purchaser, as owner of various whole loan series
and various Mortgagors" and shall be established as an Eligible Account, in
the name of the Person that is the "Purchaser" with respect to the related
Mortgage Loans.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance
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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, applicable law or any other related document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 8.01.
▇▇▇▇▇▇ Mae: The entity formerly known as the Federal National
Mortgage Association, or any successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide and all amendments or additions thereto, including, but not
limited to, future updates thereof.
▇▇▇▇▇▇ Mae Transfer: As defined in Section 10.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Seller
pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended and in effect from time to time.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
First Remittance Date: The eighteenth (18th) day of the month
following each respective Closing Date, or if such day is not a Business Day,
the first Business Day immediately thereafter.
Fixed Rate Mortgage Loan: A Mortgage Loan purchased pursuant to this
Agreement which bears a fixed Mortgage Interest Rate during the life of the
loan.
▇▇▇▇▇▇▇ Mac: The entity formerly known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.
▇▇▇▇▇▇▇ Mac Guides: The ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇▇
Mac Servicers' Guide and all amendments or additions thereto, including, but
not limited to, any future updates thereof.
▇▇▇▇▇▇▇ Mac Transfer: As defined in Section 10.01.
GAAP: Generally accepted accounting principles, consistently
applied.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan
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Schedule that is added to the Index on each Adjustment Date in accordance with
the terms of the related Mortgage Note to determine the new Mortgage Interest
Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) classified as a "high cost
home," "threshold," "covered," "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans having high interest rates, points and/or fees), (c) with an "annual
percentage rate" or total "points and fees" payable by the related Mortgagor
(as each such term is calculated under HOEPA) that exceed the thresholds set
forth by HOEPA and its implementing regulations, including 12 C.F.R. ss.
226.32(a)(1)(i) or (d) categorized as High Cost pursuant to Appendix E of
Standard & Poor's Glossary. For avoidance of doubt, the parties agree that
this definition shall apply to any law regardless of whether such law is
presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as a Home Loan pursuant to
Appendix E of the Standard & Poor's Glossary.
HUD: The United States Department of Housing and Urban Development
or any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the Mortgage Interest Rate thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Only Mortgage Loan: A Mortgage Loan that only requires
payments of interest for a period of time specified in the related Mortgage
Note.
Liquidation Proceeds: Amounts received in connection with the
partial or complete liquidation of a defaulted Mortgage Loan, whether through
the sale or assignment of such Mortgage Loan, trustee's sale, foreclosure sale
or otherwise, or in connection with the sale of the Mortgaged Property if the
Mortgaged Property is acquired in satisfaction of the Mortgage.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the Mortgage Loan to the Appraised Value of the Mortgaged Property at
origination.
Manufactured Home Mortgage Loan: A single family residential unit
that is constructed in a factory in sections in accordance with the Federal
Manufactured Home Construction and Safety Standards adopted on July 15, 1976,
by the Department of Housing and Urban Development ("HUD Code"), as amended in
2000, which preempts state and local building codes. Each unit is identified
by the presence of a HUD Plate/Compliance Certificate label. The sections are
then transported to the site and joined together and affixed to a pre-built
permanent foundation (which satisfies the manufacturer's requirements and all
state, county, and
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local building codes and regulations). The manufactured home is built on a
non-removable, permanent frame chassis that supports the complete unit of
walls, floors, and roof. The underneath part of the home may have running gear
(wheels, axles, and brakes) that enable it to be transported to the permanent
site. The wheels and hitch are removed prior to anchoring the unit to the
permanent foundation. The manufactured home must be classified as real estate
and taxed accordingly. The permanent foundation may be on land owned by the
mortgager or may be on leased land.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the maximum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be increased on any
Adjustment Date.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the minimum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be decreased on any
Adjustment Date.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Advance: The payment required to be made by the Seller with
respect to any Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage
Loan pursuant to the terms of the related Mortgage Note.
Mortgage: With respect to any Mortgage Loan that is not a Co-op
Loan, the mortgage, deed of trust or other instrument securing a Mortgage Note
which creates a first or second lien 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 upon a leasehold estate of the Mortgagor. With respect to
a Co-op Loan, the related Security Agreement.
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Mortgage File: With respect to each Mortgage Loan, the documents
pertaining thereto specified in Exhibit A-1 and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: As to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan in accordance with the provisions
of the related Mortgage Note.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set
forth in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this
Agreement being identified on the related Mortgage Loan Schedule, which
Mortgage Loan includes without limitation the Mortgage File, the Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition Proceeds, any escrow accounts related to
the Mortgage Loan, 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 contained in a Mortgage File.
Mortgage Loan Package: As defined in the Recitals to this Agreement.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the Mortgage Interest Rate less the related Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) 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
Mortgagor is self-employed; (5) a code indicating whether the Mortgaged
Property is owner-occupied; (6) the number of units and type of residential
property constituting the Mortgaged Property; (7) 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; (8) with respect to each First Lien Loan, the LTV at origination,
and with respect to each Second Lien Loan, the CLTV at origination; (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 first payment date; (13) the amount of the
Monthly Payment as of the related Cut-off Date; (14) the last payment date on
which a payment was actually applied to the outstanding principal balance;
(15) the original principal amount of the Mortgage Loan; (16) 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; (17) with respect to each Adjustable Rate
Mortgage Loan, the Adjustment Date; (18) with respect to each Adjustable Rate
Mortgage Loan, the Gross Margin; (19) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate Cap under the terms of
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the Mortgage Note; (20) with respect to each Mortgage Loan, a code indicating
the type of Index; (21) the type of Mortgage Loan (i.e., Fixed or Adjustable
Rate Mortgage Loan, First or Second Lien Loan); (20) a code indicating the
purpose of the loan (i.e., purchase, rate and term refinance, equity take-out
refinance); (21) a code indicating the documentation style (i.e., full,
alternative or reduced); (22) asset verification (Y/N); (23) the loan credit
classification (as described in the Underwriting Standards); (24) whether such
Mortgage Loan provides for a Prepayment Penalty and, if applicable, the
Prepayment Penalty term; (25) the Mortgage Interest Rate as of origination;
(26) the credit risk score (FICO score); (27) the date of origination; (28)
with respect to Adjustable Rate Mortgage Loans, the Mortgage Interest Rate
adjustment period; (29) with respect to each Adjustable Rate Mortgage Loan,
the Mortgage Interest Rate adjustment percentage; (30) with respect to each
Adjustable Rate Mortgage Loan, the Mortgage Interest Rate Cap as of the first
Adjustment Date; (31) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap subsequent to the first Adjustment Date; (32) the Due Date
for the first Monthly Payment; (33) the original Monthly Payment due; (34) a
code indicating the Primary Mortgage Insurance Policy provider and percentage
of coverage, if applicable; (35) Appraised Value; (36) appraisal type; (37)
appraisal date; (40) a code indicating whether the Mortgage Loans is a
"buydown" loan; and (38) with respect to the related Mortgagor, the
debt-to-income ratio. 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; (4) the
weighted average maturity of the Mortgage Loans; (5) the applicable Cut-off
Date; and (6) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to any Mortgage Loan that is not a
Co-op Loan, the underlying real property securing repayment of the related
Mortgage Note, consisting of a fee simple parcel of real estate or a leasehold
estate, the term of which is equal to or longer than the term of such Mortgage
Note. With respect to a Co-op Loan, the stock allocated to a dwelling unit in
the residential cooperative housing corporation that was pledged to secure
such Co-op Loan and the related Co-op Lease.
Mortgagor: The obligor on a Mortgage Note.
Mortgagor Personal Information: Any information, including, but not
limited to, all personal information about a Mortgagor that is disclosed to
the Seller or the Purchaser by or on behalf of the Mortgagor.
OCC: Office of the Comptroller of the Currency, its successors and
assigns.
Officers' Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Senior Vice President
or a Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Seller, and delivered to
the Purchaser as required by this Agreement.
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Opinion of Counsel: A written opinion of counsel, who may be an
employee of the party on behalf of whom the opinion is being given, reasonably
acceptable to the Purchaser, provided that any Opinion of Counsel relating to
(a) qualification of the Mortgage Loans in a REMIC or (b) 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 Seller and any
servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Seller or any servicer or in an Affiliate
of either and (iii) is not connected with the Seller or any servicer as an
officer, employee, director or person performing similar functions.
OTS: Office of Thrift Supervision or any successor thereto.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan and any Adjustment Date therefor, a number of percentage points per annum
that is set forth in the related Mortgage Loan Schedule and in the related
Mortgage Note, which is the maximum amount by which the Mortgage Interest Rate
for such Mortgage Loan may increase (without regard to the Maximum Mortgage
Interest Rate) or decrease (without regard to the Minimum Mortgage Interest
Rate) on such Adjustment Date from the Mortgage Interest Rate in effect
immediately prior to such Adjustment Date, which may be a different amount
with respect to the first Adjustment Date.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Premium Percentage: With respect to any Mortgage Loan, a percentage
equal to the excess of the Purchase Price Percentage over 100%.
Prepayment Interest Shortfall: As to any Remittance Date and
Principal Prepayment in full, the difference between (i) one full month's
interest at the applicable Mortgage Interest Rate (after giving effect to any
applicable relief act reduction, debt service reduction and deficient
valuation), as reduced by the Servicing Fee Rate, on the outstanding principal
balance of the related Mortgage Loan immediately prior to such Principal
Prepayment and (ii) the amount of interest actually received with respect to
such Mortgage Loan in connection with such Principal Prepayment.
Prepayment Penalty: With respect to each Mortgage Loan, the amount
of any premium or penalty required to be paid by the Mortgagor if the
Mortgagor prepays such Mortgage Loan as provided in the related Mortgage Note
or Mortgage.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
insurance represented to be in effect pursuant to Section 3.02(bb), or any
replacement policy therefor obtained by the Seller pursuant to Section 4.08.
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 Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan which is received in advance of its scheduled
Due Date, including any
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Prepayment Penalty 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.
Purchase Price: As defined in Section 2.02.
Purchase Price and Terms Letter: As defined in the Recitals to this
Agreement which may also be a form of trade execution notice.
Purchaser: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., its successors in
interest and assigns.
Qualified Appraiser: With respect to each Mortgage Loan, an
appraiser, duly appointed by the Seller, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the Mortgage Loan, and such appraiser and the appraisal made by such
appraiser both satisfy the requirements of ▇▇▇▇▇▇ Mae and Title XI of FIRREA
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided by the insurance policy issued by
it, approved as an insurer by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Rating Agencies: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇- ▇▇▇▇ Companies, Inc., ▇▇▇▇▇'▇ Investors Service, Inc. or, in the
event that some or all ownership of the Mortgage Loans is evidenced by
mortgage-backed securities, the nationally recognized rating agencies issuing
ratings with respect to such securities, if any.
Reconstitution: As defined in Section 10.01.
Reconstitution Agreement: As defined in Section 10.01.
Reconstitution Date: As defined in Section 10.01.
Refinanced Mortgage Loan: A Mortgage Loan which was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which were used in whole or part to satisfy
an existing mortgage.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
Remittance Date: The 18th day of each month, beginning with the
First Remittance Date, or if such day is not a Business Day, the first
Business Day thereafter.
REO Disposition: The final sale by the Seller of any REO Property.
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REO Disposition Proceeds: Amounts received by the Seller in
connection with an REO Disposition.
REO Property: A Mortgaged Property acquired by or on behalf of the
Purchaser in full or partial satisfaction of the related Mortgage as described
in Section 4.13.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty set forth in this Agreement is found, a
price equal to (i) the then outstanding principal balance of the Mortgage Loan
to be repurchased, plus (ii) accrued interest thereon at the Mortgage Interest
Rate from the date to which interest had last been paid through the date of
such repurchase, plus (iii) the amount of any outstanding advances owed to any
servicer, plus (iv) all costs and expenses incurred by the Purchaser or any
servicer arising out of or based upon such breach, including without
limitation reasonable costs and expenses incurred in the enforcement of the
Seller's repurchase obligation hereunder, less (v) in the event the Seller is
servicing such Mortgage Loan as of the date of repurchase, amounts received or
advanced in respect of such repurchased Mortgage Loan which are being held in
the Custodial Account for distribution in connection with such Mortgage Loan,
plus (vi) in the event a Mortgage Loan is repurchased during the period
following the related Closing Date and prior to a related Reconstitution Date
(but in no event shall such period extend for more than the first twelve
months following the related Closing Date), an amount equal to the Premium
Percentage multiplied by the outstanding principal balance of such Mortgage
Loan as of the date of such repurchase.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
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-offered or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Security Agreement: With respect to a Co-op Loan, the agreement or
mortgage creating a security interest in favor of the originator of the Co-op
Loan in the related Co-op Stock.
Scheduled Principal Balance: As to each Mortgage Loan and any date
of determination, (i) the principal balance of such Mortgage Loan as of the
related Cut-off Date after giving effect to payments of principal due on or
before such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the Mortgage Loan representing
payments or recoveries of principal (or advances in lieu thereof).
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Seller of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of a Mortgaged Property, (b) any enforcement,
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administrative or judicial proceedings, or any legal work or advice
specifically related to servicing the Mortgage Loans, including but not
limited to, foreclosures, bankruptcies, condemnations, drug seizures,
elections, foreclosures by subordinate or superior lienholders, and other
legal actions incidental to the servicing of the Mortgage Loans (provided that
such expenses are reasonable and that the Seller specifies the Mortgage
Loan(s) to which such expenses relate, and provided further that any such
enforcement, administrative or judicial proceeding does not arise out of a
breach of any representation, warranty or covenant of the Seller hereunder),
(c) the management and liquidation of any REO Property, (d) taxes,
assessments, water rates, sewer rates and other charges which are or may
become a lien upon the Mortgaged Property, and Primary Mortgage Insurance
Policy premiums and fire and hazard insurance coverage, (e) any expenses
reasonably sustained by the Seller with respect to the liquidation of the
Mortgaged Property in accordance with the terms of this Agreement and (f)
compliance with the obligations under Section 4.08.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Seller, which shall, for each month,
be equal to one-twelfth of the product of (i) the Servicing Fee Rate and (ii)
the Scheduled Principal Balance of such Mortgage Loan. Such fee shall be
payable monthly, computed on the basis of the same principal amount and period
respecting which any related interest payment on a Mortgage Loan is computed,
and for any month in which servicing of such Mortgage Loan is transferred from
the Seller, shall be pro rated (based upon the number of days of the related
month the Seller so acted as servicer relative to the number of days in that
month) for each part thereof. The obligation of the Purchaser to pay the
Servicing Fee is limited to, and payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds and
other proceeds, to the extent permitted by Section 4.05) of related Monthly
Payments collected by the Seller, or as otherwise provided under Section 4.05.
Servicing Fee Rate: The per annum rate at which the Servicing Fee
accrues, which rate with respect to each Mortgage Loan shall be as set forth
in the related Purchase Price and Terms Letter.
Servicing File: With respect to each Mortgage Loan, the documents
pertaining thereto specified in Exhibit A-2 and copies of all documents for
such Mortgage Loan specified in Exhibit A-1.
Servicing Officer: Any officer of the Seller 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 Seller to the
Purchaser upon request, as such list may from time to time be amended.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and its successors in interest.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
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Underwriting Standards: As to each Mortgage Loan, the Seller's
underwriting guidelines in effect as of the date of origination of such
Mortgage Loan.
Whole Loan Transfer: As defined in Section 11.01(a)(i).
ARTICLE II
SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION OF
MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01. Agreement to Purchase.
The Seller agrees to sell and the Purchaser agrees to purchase on
each Closing Date, pursuant to this Agreement and the related Purchase Price
and Terms Letter, the Mortgage Loans being sold by the Seller and listed on
the related Mortgage Loan Schedule, servicing rights retained, having an
aggregate Scheduled Principal Balance in an amount as set forth in the related
Purchase Price and Terms Letter, or in such other amount as agreed by the
Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on such Closing Date.
The Seller shall deliver in an electronic format the Mortgage Loan Schedule
for the Mortgage Loans to be purchased on such Closing Date to the Purchaser
at least two (2) Business Days prior to such Closing Date.
Section 2.02. Purchase Price.
The Purchase Price for the Mortgage Loans in a Mortgage Loan Package
shall be equal to the sum of (a) the percentage of par as stated in the
related Purchase Price and Terms Letter (subject to adjustment as provided
therein), multiplied by the aggregate Scheduled Principal Balance of Mortgage
Loans as of the related Cut-off Date listed on the related Mortgage Loan
Schedule plus (b) accrued interest on the aggregate Scheduled Principal
Balance of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Loan Remittance Rate of such Mortgage Loans from and
including the related Cut-off Date to but not including such Closing Date (the
"Purchase Price"). If so provided in the related Purchase Price and Terms
Letter, portions of each Mortgage Loan Package shall be priced separately.
The Purchase Price as set forth in the preceding paragraph for the
Mortgage Loans in a Mortgage Loan Package shall be paid on the related Closing
Date by wire transfer of immediately available funds.
With respect to each Mortgage Loan, the Purchaser shall be entitled
to (1) the principal portion of all Monthly Payments due after the related
Cut-off Date, (2) all other recoveries of principal collected on or after the
related Cut-off Date (provided, however, that the principal portion of all
Monthly Payments due on or before the related Cut-off Date and collected by
the Seller or any successor servicer after the related Cut-off Date shall
belong to the Seller), and (3) all payments of interest on the Mortgage Loans
at the related Mortgage Loan Remittance Rate (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date).
The Scheduled Principal Balance of each Mortgage Loan as of the related
Cut-off Date is determined after application of payments of principal due on
or before the
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related Cut-off Date whether or not collected, together with any unscheduled
Principal Prepayments collected prior to the related Cut-off Date; provided,
however, that Monthly Payments for a Due Date beyond the related Cut-off Date
shall not be applied to the principal balance as of the related Cut-off Date.
Such Monthly Payments shall be the property of the Purchaser. The Seller shall
deposit any such Monthly Payments into the Custodial Account.
Section 2.03. Servicing of Mortgage Loans.
On each Closing Date, the Mortgage Loans in the related Mortgage
Loan Package will be sold by the Seller to the Purchaser on a servicing
retained basis upon the execution and delivery of an Assignment and Conveyance
in the form attached hereto as Exhibit E (the "Assignment and Conveyance").
Simultaneously with the execution and delivery of the related
Assignment and Conveyance, for each Mortgage Loan Package, the Seller hereby
agrees to service the Mortgage Loans listed on the Mortgage Loan Schedule in
accordance with Accepted Servicing Practices and this Agreement. The rights of
the Purchaser to receive payments with respect to the related Mortgage Loans
shall be as set forth in this Agreement.
Section 2.04. Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files.
As of each Closing Date, the Seller will have sold, transferred,
assigned, set over and conveyed to the Purchaser, without recourse, and the
Seller hereby acknowledges that the Purchaser will have, all the right, title
and interest of the Seller in and to the Mortgage Loans. In accordance with
Section 2.07, the Seller shall deliver at its own expense, the Mortgage Files
for the related Mortgage Loans to Purchaser or its designee. The possession of
each Servicing File by the Seller is for the sole purpose of servicing the
related Mortgage Loan. From each Closing Date, the ownership of each related
Mortgage Loan, including the Mortgage Note, the Mortgage, the contents of the
related Mortgage File and all rights, benefits, proceeds and obligations
arising therefrom or in connection therewith, has been vested in the
Purchaser. All rights arising out of the Mortgage Loans including, but not
limited to, all funds received on or in connection with the Mortgage Loans and
all records or documents with respect to the Mortgage Loans prepared by or
which come into the possession of the Seller shall be received and held by the
Seller in trust for the benefit of the Purchaser as the owner of the Mortgage
Loans. Any portion of the Mortgage Files retained by the Seller shall be
appropriately identified in the Seller's computer system to clearly reflect
the ownership of the Mortgage Loans by the Purchaser.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at its own expense, the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the Seller
to the Purchaser in accordance with this Agreement by including (or deleting,
in the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files the information required by the MERS(R)
System to identify the Purchaser of such Mortgage Loans. The Seller further
agrees that it will not alter the information referenced in this paragraph
with respect to any Mortgage Loan during the term of this Agreement unless and
until such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
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Section 2.05. Books and Records.
The sale of each Mortgage Loan will be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller
and will be reflected on the Purchaser's balance sheet and other financial
statements as a purchase by the Purchaser. The Seller shall maintain, a
complete set of books and records for the Mortgage Loans sold by it which
shall be appropriately identified in the Seller's computer system to clearly
reflect the ownership of the Mortgage Loans by the Purchaser. In particular,
the Seller shall maintain in its possession, available for inspection by the
Purchaser, or its designee and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, as applicable,
including but not limited to documentation as to the method used in
determining the applicability of the provisions of the Flood Disaster
Protection Act of 1973, as amended, to the Mortgaged Property, documentation
evidencing insurance coverage and eligibility of any condominium project for
approval by Seller and periodic inspection reports as required by Section
4.13. To the extent that original documents are not required for purposes of
realization of Liquidation Proceeds or Insurance Proceeds, documents
maintained by the Seller may be in the form of microfilm or microfiche or such
other reliable means of recreating original documents, including but not
limited to, optical imagery techniques so long as the Seller complies with the
requirements of the ▇▇▇▇▇▇ Mae Guides.
Section 2.06. Transfer of Mortgage Loans.
The Seller shall keep at its office books and records in which,
subject to such reasonable regulations as it may prescribe, the Seller shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms of Section 11.12. For the
purposes of this Agreement, the Seller shall be under no obligation to deal
with any person with respect to this Agreement or any Mortgage Loan unless a
properly executed Assignment, Assumption and Recognition Agreement in the form
of Exhibit D with respect to such Mortgage Loan has been delivered to the
Seller; provided, that, unless otherwise provided in the related Purchase
Price and Terms Letter, in no event shall there be more than four (4)
"Purchasers" with respect to any Mortgage Loan Package. Upon receipt of notice
of the transfer, the Seller shall ▇▇▇▇ its books and records to reflect the
ownership of the Mortgage Loans by such assignee, and, except as otherwise
provided herein, the previous Purchaser shall be released from its obligations
hereunder with respect to the Mortgage Loans sold or transferred.
Section 2.07. Delivery of Mortgage Loan Documents.
The Seller shall, at least two (2) Business Days prior to the
related Closing Date (or such later date as the Purchaser may reasonably
request), deliver and release to the Purchaser, or its designee, the Mortgage
Loan Documents with respect to each Mortgage Loan pursuant to a bailee letter
agreement. If the Seller cannot deliver the original recorded Mortgage Loan
Documents on the related Closing Date, the Seller shall, promptly upon receipt
thereof and in any case not later than 180 days from the related Closing Date,
deliver such original recorded documents to the Purchaser or its designee
(unless the Seller is delayed in making such delivery by reason of the fact
that such documents shall not have been returned by the appropriate
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recording office). If delivery is not completed within 180 days of the related
Closing Date solely because such documents shall not have been returned by the
appropriate recording office, the Seller shall deliver a recording receipt of
such recording office or, if such recording receipt is not available, an
officer's certificate of a servicing officer of the Seller, confirming that
such document has been accepted for recording and shall use its best efforts
to deliver such document within twelve (12) months of the related Closing
Date.
To the extent received by it, the Seller shall forward to the
Purchaser, or its designee, original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan entered into in
accordance with this Agreement within two (2) weeks after their execution;
provided, however, that the Seller shall provide the Purchaser, or its
designee, with a copy, certified by the Seller as a true copy, of any such
document submitted for recordation within two (2) weeks after its execution,
and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within two (2)
weeks of its return from the appropriate public recording office.
The Seller shall pay all initial recording fees, if any, for the
Assignments of Mortgage and any other fees or costs in transferring all
original documents to the Custodian or, upon written request of the Purchaser,
to the Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's
designee shall be responsible for recording the Assignments of Mortgage and
shall be reimbursed by the Seller for the costs associated therewith pursuant
to the preceding sentence.
Section 2.08. Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal
documents, credit documents, property appraisals, and underwriting decisions.
The program must be capable of evaluating and monitoring the overall quality
of its loan production and servicing activities. The program is to ensure that
the Mortgage Loans are originated and serviced in accordance with prudent
mortgage banking practices and accounting principles; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
Section 2.09. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the related Closing Date. The closing shall be either: by
telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree. The closing for
the Mortgage Loans to be purchased on the related Closing Date shall be
subject to each of the following conditions:
(a) at least two (2) Business Days prior to the related Closing
Date, the Seller shall deliver to the Purchaser a magnetic
diskette, or transmit by modem or e-mail, a listing on a
loan-level basis of the information contained in the Mortgage
Loan Schedule;
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(b) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the related
Closing Date or, with respect to representations and warranties
made as of a date other than the related Closing Date, as of
such date, and no event shall have occurred which, with notice
or the passage of time, would constitute a default under this
Agreement;
(c) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all closing documents, in such
forms as are agreed upon and acceptable to the Purchaser, duly
executed by all signatories other than the Purchaser as
required pursuant to the terms hereof;
(d) the Seller shall have received, or the Seller's attorneys shall
have received in escrow, all closing documents, in such forms
as are agreed upon and acceptable to the Seller, duly executed
by all signatories other than the Seller as required pursuant
to the terms hereof;
(e) the Seller shall have delivered and released to the Purchaser
(or its designee) on or prior to the related Closing Date all
documents required to be delivered and released pursuant to the
terms of this Agreement; and
(f) all other terms and conditions of this Agreement, the related
Purchase Price and Terms Letter and the related Assignment and
Conveyance shall have been materially complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price pursuant to Section 2.02
of this Agreement, by wire transfer of immediately available funds to the
account designated by the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER; REPURCHASE;
REVIEW OF MORTGAGE LOANS
Section 3.01. Representations and Warranties of the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of each Closing Date or as of such date specifically provided herein:
(a) The Seller is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and
has all licenses necessary to carry out its business as now being conducted,
and is licensed and qualified to transact business in and is in good standing
under the laws of each state in which any Mortgaged Property is located or is
otherwise exempt under applicable law from such licensing or qualification or
is otherwise not required under applicable law to effect such licensing or
qualification and no demand for such licensing or qualification has been made
upon the Seller by any such state, and in any event the Seller is in
compliance with the laws of any such state to the extent necessary to ensure
the enforceability of each Mortgage Loan and the servicing of the Mortgage
Loans in accordance with the terms of this Agreement;
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(b) The Seller has the full power and authority and legal right to
hold, transfer and convey each Mortgage Loan, to sell each Mortgage Loan and
to execute, deliver and perform, and to enter into and consummate all
transactions contemplated by this Agreement, the related Purchase Price and
Terms Letter and the related Assignment and Conveyance and to conduct its
business as presently conducted; the Seller has duly authorized the execution,
delivery and performance of this Agreement and any agreements contemplated
hereby, has duly executed and delivered this Agreement, the related Purchase
Price and Terms Letter and the related Assignment and Conveyance, and any
agreements contemplated hereby, and this Agreement, the related Purchase Price
and Terms Letter, the related Assignment and Conveyance and each Assignment of
Mortgage to the Purchaser and any agreements contemplated hereby, constitute
the legal, valid and binding obligations of the Seller, enforceable against it
in accordance with their respective terms, except as such enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization and similar
laws, and by equitable principles affecting the enforceability of the rights
of creditors; and all requisite corporate action has been taken by the Seller
to make this Agreement, the related Purchase Price and Terms Letter, the
related Assignment and Conveyance and all agreements contemplated hereby valid
and binding upon the Seller in accordance with their respective terms;
(c) None of the execution and delivery of this Agreement, the
related Purchase Price and Terms Letter, the related Assignment and
Conveyance, the sale of the Mortgage Loans to the Purchaser, the consummation
of the transactions contemplated hereby, or the fulfillment of or compliance
with the terms and conditions of this Agreement, the related Purchase Price
and Terms Letter or the related Assignment and Conveyance will conflict with
any of the terms, conditions or provisions of the Seller's charter or by-laws
or materially conflict with or result in a material breach of any of the
terms, conditions or provisions of any legal restriction or any material
agreement or instrument to which the Seller 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 material violation of any law, rule, regulation,
order, judgment or decree to which the Seller or its property is subject;
(d) There is no litigation, suit, proceeding or investigation
pending or, to the Seller's knowledge, threatened, or any order or decree
outstanding, which is reasonably likely to have a material adverse effect on
the sale of the Mortgage Loans, the execution, delivery, performance or
enforceability of this Agreement, the related Purchase Price and Terms Letter
or the related Assignment and Conveyance, or which is reasonably likely to
have a material adverse effect on the financial condition of the Seller;
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this Agreement,
the related Purchase Price and Terms Letter and the related Assignment and
Conveyance, except for consents, approvals, authorizations and orders which
have been obtained;
(f) The consummation of the transactions contemplated by this
Agreement, the related Purchase Price and Terms Letter and the related
Assignment and Conveyance are in the ordinary course of business of the
Seller, and the transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller pursuant to this Agreement, the related
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Purchase Price and Terms Letter and the related Assignment and Conveyance are
not subject to bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction;
(g) The Seller has not used selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans in the Seller's portfolio at the Cut-off Date;
(h) The Seller will treat the sale of the Mortgage Loans to the
Purchaser as a sale for reporting and accounting purposes and, to the extent
appropriate, for federal income tax purposes;
(i) The Seller is an approved seller/servicer of residential
mortgage loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and HUD, with such facilities,
procedures and personnel necessary for the sound servicing of such mortgage
loans. The Seller is duly qualified, licensed, registered and otherwise
authorized under all applicable federal, state and local laws and regulations,
meets the minimum capital requirements, if applicable, set forth by the OCC,
and is in good standing to sell mortgage loans to and service mortgage loans
for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and no event has occurred which would make the
Seller unable to comply with eligibility requirements or which would require
notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(j) The Seller does not believe, nor does it have any cause or
reason to believe, that it cannot perform each and every covenant contained in
this Agreement and the related Purchase Price and Terms Letter. The Seller is
solvent and the sale of the Mortgage Loans will not cause the Seller to become
insolvent. The sale of the Mortgage Loans is not undertaken with the intent to
hinder, delay or defraud any of the Seller's creditors;
(k) Neither this Agreement nor any information, statement, tape,
diskette, form, report, or other document furnished or to be furnished
pursuant to this Agreement or any Reconstitution Agreement or in connection
with the transactions contemplated hereby (including any Securitization
Transfer or Whole Loan Transfer) contains or will contain any untrue statement
of fact or omits or will omit to state a fact necessary to make the statements
contained herein or therein not misleading;
(l) The Seller acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such services and that the
entire Servicing Fee shall be treated by the Seller, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement;
(m) The Seller has delivered to the Purchaser financial statements
as to its last two complete fiscal years for which financial statements are
available. All such financial statements fairly present the pertinent results
of operations and changes in financial position for each of such periods and
the financial position at the end of each such period of the Seller and its
subsidiaries and have been prepared in accordance with GAAP consistently
applied throughout the periods involved, except as set forth in the notes
thereto. There has been no change in the business, operations, financial
condition, properties or assets of the Seller since the date of the Seller's
financial statements that would have a material adverse effect on its ability
to perform its
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obligations under this Agreement, the related Purchase Price and Terms Letter
or the related Assignment and Conveyance;
(n) The Seller has not dealt with any broker, investment banker,
agent or other person that may be entitled to any commission or compensation
in connection with the sale of the Mortgage Loans; and
(o) The Seller is a member of MERS in good standing, and will comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the MERS Mortgage Loans for as long as such Mortgage
Loans are registered with MERS.
Section 3.02. Representations and Warranties as to Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser, as to
each Mortgage Loan, as of the related Closing Date as follows:
(a) The information set forth in the Mortgage Loan Schedule,
including any diskette or other related data tapes delivered to the Purchaser,
is complete, true and correct in all material respects as of the related
Cut-off Date;
(b) With respect to a first lien Mortgage Loan that is not a Co-op
Loan, the Mortgage creates a first lien or a first priority ownership interest
in an estate in fee simple in real property securing the related Mortgage
Note. With respect to a first lien Mortgage Loan that is a Co-op Loan, the
Mortgage creates a first lien or a first priority ownership interest in the
stock ownership and leasehold rights associated with the cooperative unit
securing the related Mortgage Note;
(c) With respect to a Second Lien Mortgage Loan that is not a Co-op
Loan, the Mortgage creates a second lien or a second priority ownership
interest in an estate in fee simple in real property securing the related
Mortgage Note. With respect to a Second Lien Mortgage Loan that is a Co-op
Loan, the Mortgage creates a second lien or a second priority ownership
interest in the stock ownership and leasehold rights associated with the
cooperative unit securing the related Mortgage Note;
(d) All payments due on or prior to the related Cut-off Date for
such Mortgage Loan have been made as of the related Closing Date, the Mortgage
Loan is not delinquent thirty (30) days or more in payment and has not been
dishonored; there are no material defaults under the terms of the Mortgage
Loan; the Seller has not advanced funds, or induced, solicited or knowingly
received any advance of funds from a party other than the owner of the
Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan; as to each Mortgage Loan,
there has been no more than one thirty (30) day delinquency during the
immediately preceding twelve-month period;
(e) All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;
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(f) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Purchaser. No
instrument of waiver, alteration or modification has been executed in
connection with such Mortgage Loan, and no Mortgagor has been released, in
whole or in part, from the terms thereof except in connection with an
assumption agreement and which assumption agreement is part of the Mortgage
File and the terms of which are reflected in the Mortgage Loan Schedule; the
substance of any such waiver, alteration or modification has been approved by
the issuer of any related Primary Mortgage Insurance Policy and title
insurance policy, to the extent required by the related policies;
(g) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the terms
of the Mortgage Note or the Mortgage, or the exercise of any right thereunder,
render the Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;
(h) All buildings or other customarily insured improvements upon the
Mortgaged Property are insured by an insurer acceptable under the ▇▇▇▇▇▇ Mae
Guides, against loss by fire, hazards of extended coverage and such other
hazards as are provided for in the ▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac, as
well as all additional requirements set forth in Section 4.10 of this
Agreement. All such standard hazard policies are in full force and effect and
on the date of origination contained a standard mortgagee clause naming the
Seller and its successors in interest and assigns as loss payee and such
clause is still in effect and all premiums due thereon have been paid. If
required by the Flood Disaster Protection Act of 1973, as amended, the
Mortgage Loan is covered by a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance Administration which policy
conforms to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac requirements, as well as all additional
requirements set forth in Section 4.10 of this Agreement. Such policy was
issued by an insurer acceptable under ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac guidelines.
The Mortgage obligates the Mortgagor thereunder to maintain all such insurance
at the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser
upon the consummation of the transactions contemplated by this Agreement. The
Seller has not engaged in, and has no knowledge of the Mortgagor's having
engaged in, any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the validity
and binding effect of either including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained or
realized by the Seller;
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(i) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, disclosure,
predatory, fair lending or abusive lending laws applicable to the Mortgage
Loan have been complied with, the consummation of the transactions
contemplated hereby will not involve the violation of any such laws or
regulations, and the Seller shall maintain in its possession, available for
the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(j) The Mortgage has not been satisfied, canceled or subordinated,
in whole or in part, or rescinded, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such action
would cause the Mortgage Loan to be in default, nor has the Seller waived any
default resulting from any action or inaction by the Mortgagor;
(k) With respect to any first lien Mortgage Loan, the related
Mortgage is a valid, subsisting, enforceable and perfected first lien on the
Mortgaged Property and, with respect to any Second Lien Mortgage Loan, the
related Mortgage is a valid, subsisting, enforceable and perfected second lien
on the Mortgaged Property, including for Mortgage Loans that are not Co-op
Loans, all buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems affixed
to such buildings, and all additions, alterations and replacements made at any
time with respect to the foregoing securing the Mortgage Note's original
principal balance. The Mortgage and the Mortgage Note do not contain any
evidence of any security interest or other interest or right thereto. Such
lien is free and clear of all adverse claims, liens and encumbrances having
priority over the first or second lien, as applicable, of the Mortgage subject
only to (1) with respect to any Second Lien Mortgage Loan, the related First
Lien, (2) the lien of non-delinquent current real property taxes and
assessments not yet due and payable, (3) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record
as of the date of recording which are acceptable to mortgage lending
institutions generally and either (A) which are referred to or otherwise
considered in the appraisal made for the originator of the Mortgage Loan, or
(B) which do not adversely affect the appraised value of the Mortgaged
Property as set forth in such appraisal, and (4) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates (1)
with respect to any first lien Mortgage Loan, a valid, subsisting, enforceable
and perfected first lien and first priority security interest and (2) with
respect to any Second Lien Mortgage Loan, a valid, subsisting, enforceable and
perfected second lien and second priority security interest, in each case, on
the property described therein, and the Seller has the full right to sell and
assign the same to the Purchaser;
(l) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights
USActive 7452067.1
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of creditors generally and the equitable remedy of specific performance and by
general equitable principles. All parties to the Mortgage Note and the related
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the related Mortgage. The Mortgage Note and
the related Mortgage have been duly and properly executed by such parties. No
fraud, error, omission, misrepresentation, negligence or similar occurrence
with respect to a Mortgage Loan has taken place on the part of Seller, the
Mortgagor or any other party involved in the origination of the Mortgage Loan.
The proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or related Mortgage;
(m) The Seller or its Affiliate (or with respect to MERS Mortgage
Loans, MERS on behalf of the Seller or its Affiliate) is the sole owner of
record and holder of the Mortgage Loan and the indebtedness evidenced by the
Mortgage Note, and upon recordation the Purchaser or its designee will be the
owner of record of the Mortgage and the indebtedness evidenced by the Mortgage
Note, and upon the sale of the Mortgage Loan to the Purchaser, the Seller will
retain the Servicing File in trust for the Purchaser only for the purpose of
servicing and supervising the servicing of the Mortgage Loan. Immediately
prior to the transfer and assignment to the Purchaser on the related Closing
Date, the Mortgage Loan, including the Mortgage Note and the Mortgage, were
not subject to an assignment or pledge, and the Seller had good and marketable
title to and was the sole owner thereof and had full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest and has the full
right and authority subject to no interest or participation of, or agreement
with, any other party, to sell and assign the Mortgage Loan pursuant to this
Agreement and following the sale of the Mortgage Loan, the Purchaser will own
such Mortgage Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest. The Seller intends
to relinquish all rights to possess, control and monitor the Mortgage Loan,
except for the purposes of servicing the Mortgage Loan as set forth in this
Agreement. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Each Mortgage Loan that is not a Co-op Loan is covered by an
ALTA lender's title insurance policy or other generally acceptable form of
policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a title
insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do business
in the jurisdiction where the Mortgaged Property is located, insuring (subject
to the exceptions contained in (k)(1), (2), (3) and (4) above) the Seller, its
successors and assigns, as to the first or second priority lien, as
applicable, of the Mortgage in the original principal amount of the Mortgage
Loan. Where required by applicable state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage
title insurance. The Seller, its successors and assigns, are the sole insureds
of such lender's title insurance policy, such title insurance policy has been
duly and validly endorsed to the Purchaser or the assignment to the Purchaser
of the Seller's interest therein does not require
USActive 7452067.1
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the consent of or notification to the insurer and such lender's title
insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this
Agreement and the related Purchase Price and Terms Letter. No claims have been
made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(o) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach, violation or event permitting
acceleration; and neither the Seller nor, to the Seller's knowledge, any prior
mortgagee has waived any default, breach, violation or event permitting
acceleration. With respect to each Second Lien Mortgage Loan, (i) the First
Lien is in full force and effect, (ii) there is no default, breach, violation
or event of acceleration existing under such prior mortgage or the related
mortgage note, (iii) no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration thereunder, and either (A) the
prior mortgage contains a provision which allows or (B) applicable law
requires, the mortgagee under the Second Lien Mortgage Loan to receive notice
of, and affords such mortgagee an opportunity to cure any default by payment
in full or otherwise under the prior mortgage;
(p) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to or equal to the lien of the
related Mortgage, which are not insured against by the title insurance policy
referenced in paragraph (n) above;
(q) All improvements subject to the Mortgage which were considered
in determining the Appraised Value of the Mortgaged Property lie wholly within
the boundaries and building restriction lines of the Mortgaged Property (and
wholly within the project with respect to a condominium unit) and no
improvements on adjoining properties encroach upon the Mortgaged Property
except those which are insured against by the title insurance policy referred
to in clause (n) above and all improvements on the property comply with all
applicable zoning and subdivision laws and ordinances;
(r) The Mortgage Loan was originated by or for the Seller. The
Mortgage Loan complies with the terms, conditions and requirements of the
Underwriting Standards in all material respects. The Mortgage Notes and
Mortgages (exclusive of any riders) are on forms generally acceptable to
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. The Mortgage Loan bears interest at the Mortgage
Interest Rate set forth in the related Mortgage Loan Schedule, and Monthly
Payments under the Mortgage Note are due and payable on the first day of each
month. The Mortgage contains the usual and enforceable provisions of the
originator at the time of origination for the acceleration of the payment of
the unpaid principal amount of the Mortgage Loan if the related
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Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder;
(s) The Mortgaged Property at origination of the related Mortgage
Loan was and, to the Seller's knowledge, currently is free of material damage
and waste. At origination of the Mortgage Loan there was, and there currently
is, no proceeding pending for the total or partial condemnation of the
Mortgaged Property;
(t) The related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby. Upon default by a Mortgagor on a Mortgage Loan
and foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to
the proper procedures, the holder of the Mortgage Loan will be able to deliver
good and merchantable title to the Mortgaged Property. There is no homestead
or other exemption available to the Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption;
(u) If the Mortgage constitutes a deed of trust, a trustee,
authorized and duly qualified if required under applicable law to act as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses, except as may be required by local law, are
or will become payable by the Purchaser to the trustee under the deed of
trust, except in connection with a trustee's sale or attempted sale after
default by the Mortgagor;
(v) The Mortgage File contains an appraisal (or other valuation
method as indicated on the related Mortgage Loan Schedule and otherwise
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac for mortgage loans that have "DU"
underwriter or loan prospector approval, respectively) of the related
Mortgaged Property signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser. The appraisal is in a form acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(w) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (A) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (B) (1) organized under the laws of
such state, or (2) qualified to do business in such state, or (3) federal
savings and loan associations or national banks or a Federal Home Loan Bank or
savings bank having principal offices in such state, or (4) not doing business
in such state;
(x) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
in clause (k) above and such collateral does not serve as security for any
other obligation;
(y) The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account
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established by the Seller or anyone on behalf of the Mortgagor, or paid by any
source other than the Mortgagor nor does it contain any other similar
provisions which may constitute a "buydown" provision. The Mortgage Loan is
not a graduated payment mortgage loan and the Mortgage Loan does not have a
shared appreciation or other contingent interest feature;
(z) The Mortgagor was not in bankruptcy or insolvent as of the date
of origination of the Mortgage Loan and, to the Seller's knowledge, is not in
bankruptcy or insolvent as of the related Closing Date;
(aa) Each Fixed Rate Mortgage Loan has an original term to maturity
of not more than thirty (30) years, with interest calculated and payable in
arrears on the first day of each month in equal monthly installments of
principal and interest. Except with respect to Interest Only Mortgage Loans,
each Mortgage Note requires a monthly payment which is sufficient to fully
amortize the original principal balance of the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty (30) years
and to pay interest at the related Mortgage Interest Rate; provided, however,
in the case of an Interest Only Mortgage Loan, after the interest-only period,
payments will be sufficient to amortize with respect to the life of the
Mortgage Loan. No Mortgage Loan contains terms or provisions which would
result in negative amortization. No Mortgage Loan is a Balloon Mortgage Loan;
(bb) If a Mortgage Loan has an LTV greater than 80%, the portion of
the principal balance of such Mortgage Loan in excess of the portion of the
Appraisal Value of the Mortgaged Property required by ▇▇▇▇▇▇ Mae, is and will
be insured as to payment defaults by a Primary Mortgage Insurance Policy
issued by a Qualified Insurer. All provisions of such Primary Mortgage
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. No action,
inaction, or event has occurred and no state of facts exists that has, or will
result in the exclusion from, denial of, or defense to coverage. Any Mortgage
Loan subject to a Primary Mortgage Insurance Policy obligates the Mortgagor
thereunder to maintain the Primary Mortgage Insurance Policy and to pay all
premiums and charges in connection therewith. The mortgage interest rate for
the Mortgage Loan as set forth on the related Mortgage Loan Schedule is net of
any such insurance premium;
(cc) The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(dd) As to Mortgage Loans that are not Co-op Loans and that are not
secured by an interest in a leasehold estate, the Mortgaged Property is
located in the state identified in the related Mortgage Loan Schedule and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a townhouse, or a two-to four-family dwelling,
or an individual condominium unit in a condominium project, or an individual
unit in a planned unit development or a de minimis planned unit development,
provided, however, that no residence or dwelling is a mobile home, log home,
geodesic dome or other unique property type. As of the date of origination, no
portion of the Mortgaged Property was used for commercial purposes, and, since
the date of origination no portion of the Mortgaged Property has been used for
commercial purposes, except as permitted under the Underwriting Standards. In
the case of any Mortgaged Properties that are manufactured homes (a
"Manufactured Home Mortgage Loan"),
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(i) such Manufactured Home Mortgage Loan conforms with the applicable ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac requirements regarding mortgage loans related to
manufactured dwellings, (ii) the related manufactured dwelling is permanently
affixed to the land, (iii) the related manufactured dwelling and the related
land are subject to a Mortgage properly filed in the appropriate public
recording office and naming Seller as mortgagee, (iv) the applicable laws of
the jurisdiction in which the related Mortgaged Property is located will deem
the manufactured dwelling located on such Mortgaged Property to be a part of
the real property on which such dwelling is located, and (v) such Manufactured
Home Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of the
Internal Revenue Code of 1986, as amended and (y) secured by manufactured
housing treated as a single family residence under Section 25(e)(10) of the
Code. As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes;
(ee) Except with respect to Interest Only Mortgage Loans, principal
payments on the Mortgage Loan commenced no more than sixty (60) days after the
funds were disbursed in connection with such Mortgage Loan;
(ff) No Mortgage Loan imposes a Prepayment Penalty;
(gg) As of the date of origination of the Mortgage Loan, the
Mortgaged Property was lawfully occupied under applicable law, and all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect
to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been made
or obtained from the appropriate authorities;
(hh) If the Mortgaged Property is a condominium unit or a planned
unit development (other than a de minimis planned unit development), or stock
in a cooperative housing corporation, such condominium, cooperative or planned
unit development project meets the Seller's eligibility requirements as set
forth in Underwriting Standards;
(ii) There is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule
or regulation with respect to the Mortgage Property; and, to the best of the
Seller's knowledge, nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite
to use and enjoyment of said property;
(jj) The related Mortgagor has not notified the Seller, and the
Seller has no knowledge of any relief requested or allowed to the Mortgagor
under the Servicemembers Civil Relief Act or other similar state statute;
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(kk) No action has been taken or failed to be taken by the Seller on
or prior to the related Closing Date which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any Primary Mortgage
Insurance Policy (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or
fraud of the Seller, or for any other reason under such coverage;
(ll) Each Mortgage Loan has been serviced in all material respects
in compliance with Accepted Servicing Practices;
(mm) With respect to each Co-op Loan, the related Mortgage is a
valid, enforceable and subsisting first security interest on the related
cooperative shares securing the related cooperative note, subject only to (a)
liens of the cooperative for unpaid assessments representing the Mortgagor's
pro rata share of the cooperative's payments for its blanket mortgage, current
and future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Security
Agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Seller's security interest in such cooperative shares;
(nn) With respect to each Co-op Loan, a search for filings of
financing statements has been made by a company competent to make the same,
which company is acceptable to ▇▇▇▇▇▇ ▇▇▇ and qualified to do business in the
jurisdiction where the cooperative unit is located, and such search has not
found anything which would materially and adversely affect the Co-op Loan;
(oo) With respect to each Co-op Loan, the related cooperative
corporation that owns title to the related cooperative apartment building is a
"cooperative housing corporation" within the meaning of Section 216 of the
Code, is held by a person as a tenant-stockholder (as defined in Section 216
of the Code) and is in material compliance with applicable federal, state and
local laws which, if not complied with, could have a material adverse effect
on the Mortgaged Property;
(pp) With respect to each Co-op Loan, there is no prohibition
against pledging the shares of the cooperative corporation or assigning the
Co-op Lease;
(qq) The Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or similar institution which
is supervised and examined by a federal or state authority;
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(rr) With respect to any ground lease to which a Mortgaged Property
may be subject: (i) a true, correct and complete copy of the ground lease and
all amendments, modifications and supplements thereto is included in the
Servicing File, and the Mortgagor is the owner of a valid and subsisting
leasehold interest under such ground lease; (ii) such ground lease is in full
force and effect, unmodified and not supplemented by any writing or otherwise
except as contained in the Mortgage File; (iii) all rent, additional rent and
other charges reserved therein have been fully paid to the extent payable as
of the related Closing Date; (iv) the Mortgagor enjoys the quiet and peaceful
possession of the leasehold estate, subject to any sublease; (v) the Mortgagor
is not in default under any of the terms of such ground lease, and there are
no circumstances which, with the passage of time or the giving of notice, or
both, would result in a default under such ground lease; (vi) the lessor under
such ground lease is not in default under any of the terms or provisions of
such ground lease on the part of the lessor to be observed or performed; (vii)
the lessor under such ground lease has satisfied any repair or construction
obligations due as of the related Closing Date pursuant to the terms of such
ground lease; (viii) the execution, delivery and performance of the Mortgage
do not require the consent (other than those consents which have been obtained
and are in full force and effect) under, and will not contravene any provision
of or cause a default under, such ground lease; (ix) the ground lease term
extends beyond the maturity date of the related Mortgage Loan; and (x) the
Purchaser has the right to cure defaults on the ground lease;
(ss) With respect to any broker fees collected and paid on any of
the Mortgage Loans, all broker fees have been properly assessed to the
borrower and no claims will arise as to broker fees that are double charged
and for which the borrower would be entitled to reimbursement;
(tt) Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1);
(uu) Except as provided in Section 2.07, the Mortgage Note, the
Mortgage, the Assignment of Mortgage and the other documents set forth in
Exhibit A-1 and required to be delivered on the related Closing Date have been
delivered to the Purchaser or its designee;
(vv) To the Seller's knowledge, all information supplied by, on
behalf of, or concerning the Mortgagor is true, accurate and complete and does
not contain any statement that is or will be inaccurate or misleading in any
material respect;
(ww) The Mortgagor has executed a statement to the effect that the
Mortgagor has received all disclosure materials required by applicable law
with respect to the making of adjustable rate mortgage loans. The Seller shall
maintain such statement in the Servicing File;
(xx) No Mortgage Loan had a Loan-to-Value Ratio at the time of
origination of more than 100%. No Second Lien Mortgage Loan has an CLTV in
excess of 100%;
(yy) Either (a) no consent for the Second Lien Mortgage Loan is
required by the holder of the related First Lien or (b) such consent has been
obtained and is contained in the Mortgage File;
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(zz) With respect to any Second Lien Mortgage Loan, the Seller has
not received notice of: (1) any proceeding for the total or partial
condemnation of any Mortgaged Property, (2) any subsequent, intervening
mortgage, lien, attachment, lis pendens or other encumbrance affecting any
Mortgaged Property or (3) any default under any mortgage, lien or other
encumbrance senior to each Mortgage;
(aaa) No Second Lien Mortgage Loan is a "home equity line of
credit";
(bbb) As of the Closing Date, the Seller has not received a notice
of default of a First Lien which has not been cured;
(ccc) No First Lien provides for negative amortization;
(ddd) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable and no Mortgage Loan is covered by HOEPA. No Mortgage Loan
originated or modified on or after October 1, 2002 through March 6, 2003 is
governed by the Georgia Fair Lending Act;
(eee) No Mortgagor was required to purchase any single premium
credit insurance policy (e.g. life, disability, property, accident,
unemployment, or health insurance product) or debt cancellation agreement as a
condition of obtaining the extension of credit. No Mortgagor obtained a
prepaid single-premium credit insurance policy (e.g. life, mortgage,
disability, property, accident, unemployment or health insurance product) in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies
or debt cancellation agreements as part of the origination of, or as a
condition to closing, such Mortgage Loan;
(fff) The origination and servicing practices with respect to each
Mortgage Note and Mortgage have been legal and in accordance with applicable
laws and regulations, and in all material respects proper and prudent in the
mortgage origination and servicing business. With respect to escrow deposits
and payments that the Seller is entitled to collect, all such payments are in
the possession of, or under the control of, the Seller, and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All escrow payments have been collected
and are being maintained in full compliance with applicable state and federal
law and the provisions of the related Mortgage Note and Mortgage. As to any
Mortgage Loan that is the subject of an escrow, escrow of funds is not
prohibited by applicable law and has been established in an amount sufficient
to pay for every escrowed item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or other charges or payments
due under the Mortgage Note have been capitalized under any Mortgage or the
related Mortgage Note. All Mortgage Interest Rate adjustments have been made
in strict compliance with state and federal law and the terms of the related
Mortgage Note. Any interest required to be paid pursuant to state and local
law has been properly paid and credited;
(ggg) No Mortgage Loan is a Convertible Mortgage Loan;
(hhh) With respect to each Adjustable Rate Mortgage Loan, the
Mortgage Loan Documents provide that after the related first Interest Rate
Adjustment Date, a related Mortgage
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Loan may only be assumed if the party assuming such Mortgage Loan meets
certain credit requirements stated in the Mortgage Loan Documents;
(iii) Any future advances made to the Mortgagor prior to the
applicable Cut-off Date have been consolidated with the outstanding principal
amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the Mortgagee's consolidated interest or by
other title evidence acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(jjj) There is no proceeding pending or threatened for the total or
partial condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in good repair. There have not
been any condemnation proceedings with respect to the Mortgaged Property and
the Seller has no knowledge of any such proceedings in the future;
(kkk) No Mortgage Loan was made in connection with the construction
(other than a "construct-to-perm" loan) or rehabilitation of a Mortgaged
Property or facilitating the trade-in or exchange of a Mortgaged Property
(other than a tax deferred exchange under Section 1031 of the Code);
(lll) If applicable, with respect to each Mortgage, the Seller has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage
and adjusted the amount of such payments so that, assuming all required
payments are timely made, any deficiency will be eliminated on or before the
first anniversary of such analysis, or any overage will be refunded to the
Mortgagor, in accordance with RESPA and any other applicable law;
(mmm) As to each consumer report (as defined in the Fair Credit
Reporting Act, Public Law 91-508) or other credit information furnished by the
Seller to the Purchaser, the Seller has full right and authority and is not
precluded by law or contract from furnishing such information to the Purchaser
and the Purchaser is not precluded from furnishing the same to any subsequent
or prospective purchaser of such Mortgage. The Seller has and shall in its
capacity as servicer, for each Mortgage Loan, fully furnished, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (e.g., favorable and unfavorable) on its borrower
credit files to Equifax, Experian and Trans Union Credit Information Company
(three of the credit repositories), on a monthly basis;
(nnn) If the Mortgage Loan is secured by a leasehold estate, (1) the
ground lease is assignable or transferable; (2) the ground lease will not
terminate earlier than five years after the maturity date of the Mortgage
Loan; (3) the ground lease does not provide for termination of the lease in
the event of lessee's default without the Mortgagee being entitled to receive
written notice of, and a reasonable opportunity to cure the default; (4) the
ground lease permits the
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mortgaging of the related Mortgaged Property; (5) the ground lease protects
the Mortgagee's interests in the event of a property condemnation; (6) all
ground lease rents, other payments, or assessments that have become due have
been paid; and (7) the use of leasehold estates for residential properties is
a widely accepted practice in the jurisdiction in which the Mortgaged Property
is located;
(ooo) Each Mortgage Loan is covered by a paid in full, life of loan,
tax service contract issued by First American Real Estate Tax Service, and
such contract is transferable;
(ppp) The Seller's decision to originate any mortgage loan or to
deny any mortgage loan application is an independent decision based upon
Seller's underwriting guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser
may offer to pay for, any such mortgage loan, if originated;
(qqq) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser and any Mortgage Loan for which the related Mortgage has been
recorded in the name of MERS) have been recorded in the appropriate
jurisdictions wherein such recordation is necessary to perfect the lien
thereof as against creditors of the Seller, or is in the process of being
recorded;
(rrr) On or prior to the related Closing Date, the Mortgagor has not
filed a bankruptcy petition or has not become the subject of involuntary
bankruptcy proceedings or has not consented to the filing of a bankruptcy
proceeding against it or to a receiver being appointed in respect of the
related Mortgaged Property;
(sss) No Mortgagor with respect to any Mortgage Loan originated on
or after August 1, 2004 is required under the Mortgage or Mortgage Note to
submit to arbitration to resolve any dispute arising out of or relating in any
way to the mortgage loan transaction;
(ttt) The Seller has complied with all applicable anti-money
laundering laws, executive orders and regulations, including without
limitation the USA Patriot Act of 2001;
(uuu) The Mortgage Note, the Mortgage, the Assignment of Mortgage
and any other documents required to be delivered with respect to each Mortgage
Loan pursuant to Section 2.07 of this Agreement shall be delivered to the
Purchaser or its designee all in compliance with the specific requirements of
Section 2.07. With respect to each Mortgage Loan, the Seller will be in
possession of a complete Mortgage File in compliance with Exhibit A-1 hereto,
except for such documents as will be delivered to the Purchaser or its
designee;
(vvv) With respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Interest Rate is the related Gross Margin;
(www) The Seller has no knowledge of any circumstances or conditions
with respect to the related Mortgage, Mortgaged Property, Mortgagor, Mortgage
File or the related Mortgagor's credit standing that can reasonably be
expected to cause private institutional investors that invest in prime
mortgage loans similar to the Mortgage Loan to regard the Mortgage Loan as an
unacceptable investment;
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(xxx) With respect to the Mortgage Loans, the Mortgagor was offered
mortgage loan products suitable for such Mortgagor and not designed for less
creditworthy borrowers;
(yyy) The methodology used in underwriting the extension of credit
for each Mortgage Loan employs objective criteria which relate the Mortgagor
's income, assets and liabilities (except in the case of loan programs which
do not require the Mortgagor to report the Mortgagor 's income or assets, such
as "no income, no assets" lending programs or which rely on the Mortgagor 's
representation of the Mortgagor 's income, such as "stated income" lending
programs) to the proposed payment and such underwriting methodology does not
rely on the extent of the Mortgagor 's equity in the collateral as the
principal determining factor in approving such credit extension. Such
underwriting methodology determined that at the time of origination
(application/approval) the Mortgagor had the reasonable ability to make timely
payments on the Mortgage Loan; and
(zzz) No Mortgagor was charged Points and Fees, whether or not
amortized or financed, greater than 5% of the principal amount of such
Mortgage Loan. For purposes of this representation, such 5% limitation is
calculated in accordance with ▇▇▇▇▇▇ Mae's anti-predatory lending requirements
as set forth in the ▇▇▇▇▇▇ Mae Guides and Points and Fees (x) include
origination, underwriting, broker and finder fees and charges that the
Mortgagee imposed as a condition of making the Mortgage Loan, whether they are
paid to the Mortgagee or a third party, and (y) exclude bona fide discount
points, fees paid for actual services rendered in connection with the
origination of the Mortgage Loan (such as attorneys' fees, notaries fees and
fees paid for property appraisals, credit reports, surveys, title examinations
and extracts, flood and tax certifications, and home inspections), the cost of
mortgage insurance or credit-risk price adjustments, the costs of title,
hazard, and flood insurance policies, state and local transfer taxes or fees,
escrow deposits for the future payment of taxes and insurance premiums, and
other miscellaneous fees and charges which miscellaneous fees and charges, in
total, do not exceed 0.25% of the principal amount of such Mortgage Loan
(collectively, "Points and Fees"). All fees and charges (including finance
charges) and whether or not financed, assessed, collected or to be collected
in connection with the origination and servicing of each Mortgage Loan has
been disclosed in writing to the Mortgagor in accordance with applicable state
and federal law and regulation.
Section 3.03. Repurchase; Substitution.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage
Loans and delivery of the Mortgage File to the Purchaser, or its designee, and
shall inure to the benefit of the Purchaser, notwithstanding any restrictive
or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination, or lack of examination, of any Mortgage Loan Document. Upon
discovery by the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties which materially and adversely affects the
value of the Mortgage Loans or the interest of the Purchaser in any Mortgage
Loan, the party discovering such breach shall give prompt written notice to
the others. The Seller shall have a period of ninety (90) days from the
earlier of its discovery or its receipt of notice of any such breach within
which to correct or cure such breach. The Seller hereby covenants and agrees
that (except as provided in the previous sentence with respect to certain
breaches for which no substitution is permitted) if any such
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breach is not corrected or cured within such ninety (90) day period, the
Seller shall, at the Purchaser's option, either repurchase such Mortgage Loan
at the Repurchase Price or substitute a mortgage loan for the Defective
Mortgage Loan as provided below. In the event that any such breach shall
involve any representation or warranty set forth in Section 3.01, and such
breach is not cured within ninety (90) of the earlier of either discovery by
or notice to the Seller of such breach, all affected Mortgage Loans shall, at
the option of the Purchaser, be repurchased by the Seller at the Repurchase
Price. Any such repurchase shall be accomplished by deposit in the Custodial
Account of the amount of the Repurchase Price.
Notwithstanding the foregoing paragraph, any breach of any
representation or warranty set forth in any of clause (i), (dd), (ff), (tt),
(ddd), (eee), (mmm), (sss), (xxx), (yyy) or (zzz) of Section 3.02 shall
automatically be deemed to have had a material and adverse effect on the
Purchaser. With respect to each such affected Mortgage Loan, the Seller shall,
within sixty (60) days after the earlier of either discovery by, or notice to,
the Seller of such breach, repurchase such Mortgage Loan at the Repurchase
Price.
If pursuant to the foregoing provisions the Seller repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the Seller shall either (i) cause
MERS to execute and deliver an assignment of the Mortgage in recordable form
to transfer the Mortgage from MERS to the Seller and shall cause such Mortgage
to be removed from registration on the MERS(R) System in accordance with MERS'
rules and regulations or (ii) cause MERS to designate on the MERS(R) System
the Seller as the beneficial holder of such Mortgage Loan.
If the Seller is required to repurchase any Mortgage Loan pursuant
to this Section 3.03 as a result of a breach of any of the representations and
warranties set forth in Section 3.02, the Seller may, with the Purchaser's
prior consent, which consent shall not be unreasonably withheld, within 180
days from the related Closing Date, remove such defective Mortgage Loan from
the terms of this Agreement and substitute another mortgage loan for such
defective Mortgage Loan, in lieu of repurchasing such defective Mortgage Loan.
Any substitute Mortgage Loan shall (a) have a principal balance at the time of
substitution not in excess of the principal balance of the defective Mortgage
Loan (the amount of any difference, plus one month's interest thereon at the
Mortgage Interest Rate borne by the defective Mortgage Loan, being paid by the
Seller and deemed to be a Principal Prepayment to be deposited by the Seller
in the Custodial Account), (b) have a Mortgage Interest Rate not less than,
and not more than one percentage point greater than, the Mortgage Interest
Rate of the removed Mortgage Loan, (c) have a remaining term to stated
maturity not later than, and not more than one year less than, the remaining
term to stated maturity of the removed Mortgage Loan, (d) have a Loan-to-Value
Ratio at origination no greater than that of the removed Mortgage Loan, (e)
with respect to any Second Lien Mortgage Loan, have an Combined Loan-to-Value
Ratio at origination no greater than that of the removed Mortgage Loan, (f)
have the same lien priority as that of the removed Mortgage Loan and (g) be,
in the reasonable determination of the Purchaser, in material compliance with
the representations and warranties contained in this Agreement and described
in Section 3.02 as of the date of substitution.
The Seller shall amend the related Mortgage Loan Schedule to reflect
the withdrawal of the removed Mortgage Loan from this Agreement and the
substitution of such substitute Mortgage Loan therefor. Upon such amendment,
the Purchaser shall review the
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Mortgage File delivered to it relating to the substitute Mortgage Loan. The
Monthly Payment on a substitute Mortgage Loan due on the Due Date in the month
of substitution shall be the property of the Seller and the Monthly Payment on
the Defective Mortgage Loan for which the substitution is made due on the such
date shall be the property of the Purchaser.
It is understood and agreed that the obligation of the Seller set
forth in this Section 3.03 to cure, repurchase or substitute for a defective
Mortgage Loan, and to indemnify Purchaser pursuant to Section 7.01,
constitutes the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties. If the Seller fails to repurchase or
substitute for a defective Mortgage Loan in accordance with this Section 3.03,
or fails to cure a defective Mortgage Loan to Purchaser's reasonable
satisfaction in accordance with this Section 3.03, or to indemnify Purchaser
pursuant to Section 7.01, that failure shall, upon compliance by the Purchaser
with the next to the last paragraph of this Section 3.03, be an Event of
Default and the Purchaser shall be entitled to pursue all available remedies.
No provision of this paragraph shall affect the rights of the Purchaser to
terminate this Agreement for cause, as set forth in Sections 8.01 and 9.01.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Sections 3.01 and
3.02 shall accrue as to any Mortgage Loan upon (i) the earlier of discovery of
such breach by the Seller or notice thereof by the Purchaser to the Seller,
(ii) failure by the Seller to cure such breach or repurchase such Mortgage
Loan as specified above, and (iii) demand upon the Seller by the Purchaser for
compliance with this Agreement.
In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, with respect to any
Mortgage Loan that is not in default or as to which no default is imminent,
Purchaser may, in connection with any repurchase or substitution of a
Defective Mortgage Loan pursuant to this Section 3.03, require that the Seller
deliver, at the Seller's expense, an Opinion of Counsel to the effect that
such repurchase or substitution will not (i) result in the imposition of taxes
on "prohibited transactions" of such REMIC (as defined in Section 860F of the
Code) or otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail
to qualify as a REMIC at any time.
Section 3.04. Repurchase of Mortgage Loans with First Payment
Defaults.
If a Mortgagor is thirty (30) days or more delinquent with respect
to the first Monthly Payment due to the Purchaser on the related Mortgage Loan
immediately following the related Closing Date, the Seller, at the Purchaser's
option, shall promptly repurchase such Mortgage Loan from the Purchaser within
thirty (30) calendar days' of receipt of written notice from the Purchaser.
Any repurchase pursuant to this Section 3.04 shall be effected in accordance
with the procedures set forth in Section 3.03 hereof, however, any such
repurchase shall be made at the Repurchase Price.
Section 3.05. Purchase Price Protection.
With respect to any Mortgage Loan that prepays in full during the
first sixty (60) days following the related Closing Date, the Seller shall
reimburse the Purchaser the amount (if
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any) by which the Purchase Price paid by the Purchaser to the Seller exceeded
100% of the outstanding scheduled principal balance of the Mortgage Loan as of
the related Cut-off Date, within thirty (30) days of such payoff. Upon any
assignment of a Mortgage Loan and/or this Agreement, the Purchaser may at its
option retain its rights under this Section 3.05 notwithstanding such
assignment.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 4.01. The Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and with
Accepted Servicing Practices, and shall have full power and authority, acting
alone or through subservicers or agents, to do or cause to be done any and all
things in connection with such servicing and administration which the Seller
may deem necessary or desirable and consistent with the terms of this
Agreement and with Accepted Servicing Practices. The Seller shall service and
administer the Mortgage Loans through the exercise of the same care that it
customarily employs for its own account. The Seller may perform its servicing
responsibilities through agents or independent contractors, but shall not
thereby be released from any of its responsibilities hereunder.
Notwithstanding anything to the contrary, the Seller may delegate any of its
duties under this Agreement to one or more of its Affiliates without regard to
any of the requirements of this Section; provided, however, that the Seller
shall not be released from any of its responsibilities hereunder by virtue of
such delegation.
Except as set forth in this Agreement, the Seller shall service the
Mortgage Loans in compliance with the servicing provisions of the ▇▇▇▇▇▇ ▇▇▇
Guides (special servicing option), which include, but are not limited to,
provisions regarding the liquidation of Mortgage Loans, the collection of
Mortgage Loan payments, the payment of taxes, insurance and other charges, the
maintenance of hazard insurance with a Qualified Insurer, the maintenance of
mortgage impairment insurance, the maintenance of fidelity bond and errors and
omissions insurance, inspections, the restoration of Mortgaged Property, the
maintenance of Primary Mortgage Insurance Policies, insurance claims, the
title, management of REO Property, permitted withdrawals with respect to REO
Property, liquidation reports, and reports of foreclosures and abandonments of
Mortgaged Property, the transfer of Mortgaged Property, the release of
Mortgage Files, annual statements, and examination of records and facilities.
In the event of any conflict, inconsistency or discrepancy between any of the
servicing provisions of this Agreement and any of the servicing provisions of
the ▇▇▇▇▇▇ Mae Guides, the provisions of this Agreement shall control and be
binding upon the Purchaser and the Seller.
Consistent with the terms of this Agreement, the Seller may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
any such term or in any manner grant indulgence to any Mortgagor if in the
Seller's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser,
provided, however, that unless the Mortgagor is in default with respect to the
Mortgage Loan, or such default is, in the judgment of the Seller, imminent,
and the Seller has obtained the prior written consent of the Purchaser, the
Seller shall not permit any modification
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with respect to any Mortgage Loan that would which change the Mortgage
Interest Rate, forgive the payment of any principal or interest, reduce or
increase the outstanding principal balance (except for actual payments of
principal), make any future advances or extend the final maturity date, as the
case may be, with respect to such Mortgage Loan. In the event of any such
modification that permits the deferral of interest or principal payments on
any Mortgage Loan, the Seller shall, on the Business Day immediately preceding
the Remittance Date in any month in which any such principal or interest
payment has been deferred, deposit in the Custodial Account from its own
funds, in accordance with Section 4.04, the difference between (a) the
otherwise scheduled Monthly Payment and (b) the amount paid by the Mortgagor.
The Seller shall be entitled to reimbursement for such advances to the same
extent as for all other advances pursuant to Section 4.05. Without limiting
the generality of the foregoing, the Seller shall continue, and is hereby
authorized and empowered by the Purchaser when the Seller believes it
appropriate and reasonable in its best judgment, to prepare, execute and
deliver, 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 and to
institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure so
as to convert the ownership of such properties, and to hold or cause to be
held title to such properties, on behalf of the Purchaser pursuant to the
provisions of Section 4.13. Notwithstanding anything herein to the contrary,
the Seller may not enter into a forbearance agreement or similar arrangement
with respect to any Mortgage Loan which runs more than 180 days after the
first delinquent Due Date without the prior consent of the Purchaser. Any such
agreement shall be approved by any applicable holder of a Primary Mortgage
Insurance Policy, if required.
The Seller is authorized and empowered by the Purchaser, in its own
name, when the Seller believes it appropriate in its reasonable judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from
the registration of any Mortgage Loan on the MERS(R) System, to execute and
deliver, on behalf of the Purchaser, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording
of a Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns.
With respect to requests by the Seller to modify the terms of any
Mortgage Loan or to enter into any forbearance agreement, the Purchaser shall
be deemed to have given consent in connection with a particular matter if the
Purchaser does not affirmatively grant or deny consent within twenty-one (21)
calendar days from the date the Purchaser receives a written request for
consent for such matter from the Seller.
The Seller shall accurately and fully report its borrower credit
files related to the Mortgage Loans to Equifax, Transunion and Experian in a
timely manner.
Section 4.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the date each Mortgage Loan
ceases to be serviced subject to this Agreement, the Seller will proceed
diligently to collect all payments due under each Mortgage Loan when the same
shall become due and payable and shall, to the extent such procedures shall be
consistent with this Agreement, Accepted Servicing Practices, and the terms
and provisions of related Primary Mortgage Insurance Policy, follow such
collection
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procedures as it follows with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Further, the Seller will take
special care in ascertaining and estimating annual escrow payments, and all
other charges that, as provided in the Mortgage, will become due and payable,
so that the installments payable by the Mortgagors will be sufficient to pay
such charges as and when they become due and payable.
Section 4.03. Realization Upon Defaulted Mortgage Loans.
The Seller shall use commercially reasonable efforts, consistent
with the procedures that the Seller would use in servicing loans for its own
account, Accepted Servicing Practices, any Primary Mortgage Insurance and the
best interest of Purchaser, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into
and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 4.01.
Foreclosure or comparable proceedings shall be initiated pursuant to ▇▇▇▇▇▇
▇▇▇ guidelines and applicable state law with respect to Mortgaged Properties
for which no satisfactory arrangements can be made for collection of
delinquent payments. The Seller shall use its best efforts to realize upon
defaulted Mortgage Loans in such manner as will maximize the receipt of
principal and interest by the Purchaser, taking into account, among other
things, the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which the Mortgaged Property shall have
suffered damage, the Seller shall not be required to expend its own funds
toward the restoration of such property unless it shall determine in its
discretion (i) that such restoration will increase the proceeds of liquidation
of the related Mortgage Loan to the Purchaser after reimbursement to itself
for such expenses, and (ii) that such expenses will be recoverable by the
Seller through Insurance Proceeds or Liquidation Proceeds from the related
Mortgaged Property, as contemplated in Section 4.05. The Seller shall notify
the Purchaser in writing (which may be by electronic mail) of the commencement
of foreclosure proceedings. The Seller shall be responsible for all costs and
expenses incurred by it in any such proceedings or functions; provided,
however, that it shall be entitled to reimbursement thereof from the related
property, as contemplated in Section 4.05. Notwithstanding anything to the
contrary contained herein, in connection with a foreclosure or acceptance of a
deed in lieu of foreclosure, in the event the Seller has reasonable cause to
believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Purchaser otherwise requests an environmental
inspection or review of such Mortgaged Property, such an inspection or review
is to be conducted by a qualified inspector at the Purchaser's expense. Upon
completion of the inspection, the Seller shall promptly provide the Purchaser
with a written report of the environmental inspection. After reviewing the
environmental inspection report, the Purchaser shall determine how the Seller
shall proceed with respect to the Mortgaged Property.
In the event that a Mortgage Loan becomes part of a REMIC, and
becomes REO Property, such property shall be disposed of by the Seller, with
the consent of the Purchaser as required pursuant to this Agreement, within
three (3) years after becoming an REO Property, unless the Seller provides to
the trustee under such REMIC an opinion of counsel to the effect that the
holding of such REO Property subsequent to three years after its becoming REO
Property, will not result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code, or cause the transaction
to fail to qualify as a REMIC at any time that certificates are outstanding.
The Seller shall manage, conserve, protect and operate each such
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REO Property for the certificateholders solely for the purpose of its prompt
disposition and sale in a manner which does not cause such property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code, or any "net income from foreclosure property" which is subject to
taxation under the REMIC provisions of the Code. Pursuant to its efforts to
sell such property, the Seller shall either itself or through an agent
selected by the Seller, protect and conserve such property in the same manner
and to such an extent as is customary in the locality where such property is
located. Additionally, the Seller shall provide the Purchaser or any master
servicer with information sufficient to perform the tax withholding and
reporting related to Sections 1445 and 6050J of the Code.
Section 4.04. Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial
Accounts with a commercial bank, a savings bank or a savings and loan
association (which may be a depository Affiliate of the Seller) which meets
the guidelines set forth by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac as an eligible
depository institution for custodial accounts. Each Custodial Account shall be
an Eligible Account. Funds deposited in a Custodial Account may be drawn on in
accordance with Section 4.05. The creation of any Custodial Account shall be
evidenced by a letter agreement in the form shown in Exhibit B hereto. The
original of such letter agreement shall be furnished to the Purchaser on the
initial Closing Date, and upon the request of any subsequent purchaser.
The Seller shall deposit in the Custodial Account on a daily basis,
within one (1) Business Day of receipt thereof, and retain therein the
following payments and collections received or made by it subsequent to the
Cut-off Date, or received by it prior to the Cut-off Date but allocable to a
period subsequent thereto, other than in respect of principal and interest on
the Mortgage Loans due on or before the Cut-off Date:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) any amounts required to be deposited by the Seller in
connection with any REO Property pursuant to Section 4.13;
(v) all Insurance Proceeds including amounts required to be
deposited pursuant to Sections 4.08, 4.10 and 4.11, other than
proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Accepted Servicing Practices, the loan
documents or applicable law;
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(vi) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with the
Seller's normal servicing procedures, the loan documents or
applicable law;
(vii) any Monthly Advances;
(viii) Compensating Interest, if any, for the month of
distribution. Such deposit shall be made from the Seller's own
funds, without reimbursement therefor;
(ix) all proceeds of any Mortgage Loan repurchased in
accordance with Sections 3.03;
(x) any amounts required to be deposited by the Seller pursuant
to Section 4.11 in connection with the deductible clause in any
blanket hazard insurance policy, such deposit shall be made from the
Seller's own funds, without reimbursement therefor; and
(xi) any amounts required to be deposited in the Custodial
Account pursuant to Section 4.01 or Section 6.02.
The foregoing requirements for deposit in the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
assumption fees and other ancillary fees, to the extent permitted by Section
6.01, need not be deposited by the Seller in the Custodial Account.
The Seller may invest the funds in the Custodial Account in Eligible
Investments designated in the name of the Seller for the benefit of the
Seller, which shall mature not later than the Business Day next preceding the
Remittance Date next following the date of such investment (except that (A)
any investment in the Eligible Institution with which the Custodial Account is
maintained may mature on such Remittance Date and (B) any other investment may
mature on such Remittance Date if the Seller shall advance funds on such
Remittance Date, pending receipt thereof to the extent necessary to make
distributions to the Purchaser) and shall not be sold or disposed of prior to
maturity. Notwithstanding anything to the contrary herein and above, all
income and gain realized from any such investment shall be for the benefit of
the Seller and shall be subject to withdrawal by the Seller from the Custodial
Account pursuant to Section 4.05(iv). The amount of any losses incurred in
respect of any such investments shall be deposited in the Custodial Account by
the Seller out of its own funds immediately as realized.
Section 4.05. Permitted Withdrawals from the Custodial Account.
The Seller may, from time to time, withdraw from the Custodial
Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the
manner provided for in Section 5.01;
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(ii) to reimburse itself for Monthly Advances, the Seller's
right to reimburse itself pursuant to this subclause (ii) being
limited to amounts received on the related Mortgage Loan which
represent late collections (net of the related Servicing Fee) of
principal and/or interest respecting which any such advance was
made, it being understood that, in the case of such reimbursement,
the Seller's right thereto shall be prior to the rights of the
Purchaser, except that, where the Seller is required to repurchase a
Mortgage Loan, pursuant to Section 3.03, the Seller's right to such
reimbursement shall be subsequent to the payment to the Purchaser of
the Repurchase Price pursuant to such Section and all other amounts
required to be paid to the Purchaser with respect to such Mortgage
Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances
and any unpaid Servicing Fees, the Seller's right to reimburse
itself pursuant to this subclause (iii) with respect to any Mortgage
Loan being limited to related proceeds from Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and REO Disposition
Proceeds;
(iv) to pay to itself as part of its servicing compensation:
(a) any interest earned on funds or any investment earnings in the
Custodial Account net of any losses on such investments (all such
amounts to be withdrawn monthly not later than each Remittance
Date), and (b) to the extent not otherwise retained, the Servicing
Fee from that portion of any payment or recovery as to interest with
respect to a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that
has been repurchased pursuant to Section 3.03 all amounts received
thereon and not distributed as of the date on which the related
Repurchase Price is determined;
(vi) to reimburse itself for unreimbursed Monthly Advances and
Servicing Advances to the extent not fully reimbursed pursuant to
Section 4.05(ii) or (iii) above;
(vii) to transfer funds to another Eligible Account in
accordance with Section 4.09 hereof;
(viii) to remove funds inadvertently placed in the Custodial
Account by the Seller or for which amounts previously deposited are
returned unpaid by the related Mortgagor's banking institution; and
(ix) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 4.06. Establishment of Escrow Accounts; Deposits in
Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts. Each Escrow Account shall be an Eligible
Account. Funds deposited in the Escrow Account may be
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drawn on by the Seller in accordance with Section 4.07. The creation of any
Escrow Account shall be evidenced by a letter agreement in the form shown in
Exhibit C. The original of such letter agreement shall be furnished to the
Purchaser on the initial Closing Date, and upon request to any subsequent
purchaser.
The Seller shall deposit in the Escrow Account or Accounts on a
daily basis, within two (2) Business Days of 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;
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow
Payments are insufficient to cover escrow disbursements.
The Seller shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be as set forth or in accordance with Section 4.07. The
Seller shall be entitled to retain any interest paid on funds deposited in an
Escrow Account by the depository institution other than interest on escrowed
funds required by law to be paid to the Mortgagor and, to the extent required
by law, the Seller shall pay interest on escrowed funds to the Mortgagor
notwithstanding that such Escrow Account is non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section 4.07. Permitted Withdrawals from the Escrow Account.
Withdrawals from the Escrow Account may be made by the Seller only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, Primary Mortgage Insurance Policy
premiums, if applicable, fire and hazard insurance premiums,
condominium assessments and comparable items for the related
Mortgage;
(ii) to reimburse the Seller for any Servicing Advance made by
the Seller with respect to a related Mortgage Loan but only from
amounts received on the related Mortgage Loan which represent late
payments or collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined
to be overages;
(iv) for transfer to the Custodial Account in accordance with
the terms of this Agreement;
(v) for application to restoration or repair of the Mortgaged
Property;
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(vi) to pay to the Seller, or to the Mortgagor to the extent
required by law, any interest paid on the funds deposited in the
Escrow Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement;
(viii) to pay to the Mortgagors or other parties Insurance
Proceeds deposited in accordance with Section 4.06;
(ix) to remove funds inadvertently placed in the Escrow Account
by the Seller or for which amounts previously deposited are returned
unpaid by the related Mortgagor's banking institution; and
(x) to clear and terminate the Escrow Account upon the
termination of this Agreement.
Section 4.08. Payment of Taxes, Insurance and Charges; Maintenance
of Primary Mortgage Insurance; Collections Thereunder.
With respect to each Mortgage Loan, the Seller shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the
Mortgaged Property and the status of primary mortgage insurance premiums (if
any) 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 Seller in
amounts sufficient for such purposes, as allowed under the terms of the
Mortgage or applicable law. To the extent that the Mortgage does not provide
for Escrow Payments, the Seller shall determine that any such payments are
made by the Mortgagor at the time they first become due. The Seller assumes
full responsibility for the timely payment of all ground rents, taxes,
assessments, water rates and other charges and shall effect timely payments of
all such bills irrespective of the Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments and shall make advances
from its own funds to effect such payments subject to its ability to recover
such Servicing Advances pursuant to Sections 4.05(ii), (iii) and (vi).
Notwithstanding the foregoing, if the Seller reasonably determines that any
such Servicing Advance would not be recoverable from amounts collected on the
related Mortgage Loan, the Seller shall have no obligation to make such
Servicing Advance. Any such determination shall be evidenced by an Officer's
Certificate delivered to the Purchaser indicating the reasons therefor.
The Seller will maintain in full force and effect Primary Mortgage
Insurance Policies issued by a Qualified Insurer with respect to each first
lien Mortgage Loan for which such coverage is herein required. Such coverage
will be maintained until the Loan-to-Value ratio of the related Mortgage Loan
is reduced to the amount for which ▇▇▇▇▇▇ ▇▇▇ no longer requires such
insurance to be maintained. The Seller will not cancel or refuse to renew any
Primary Mortgage Insurance Policy in effect on the related Closing Date that
is required to be kept in force under this Agreement unless a replacement
Primary Mortgage Insurance Policy for
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such canceled or non-renewed policy is obtained from and maintained with a
Qualified Insurer. The Seller shall not take any action which would result in
non-coverage under any applicable Primary Mortgage Insurance Policy of any
loss which, but for the actions of the Seller would have been covered
thereunder. In connection with any assumption or substitution agreement
entered into or to be entered into pursuant to Section 6.01, the Seller shall
promptly notify the insurer under the related Primary Mortgage Insurance
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such policy and shall take all actions which may be required
by such insurer as a condition to the continuation of coverage under the
Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance Policy
is terminated as a result of such assumption or substitution of liability, the
Seller shall obtain a replacement Primary Mortgage Insurance Policy as
provided above.
In connection with its activities as servicer, the Seller agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any Primary Mortgage Insurance Policy in a timely fashion in
accordance with the terms of such Primary Mortgage Insurance Policy and, in
this regard, to take such action as shall be necessary to permit recovery
under any Primary Mortgage Insurance Policy respecting a defaulted first lien
Mortgage Loan. Pursuant to Section 4.04, any amounts collected by the Seller
under any Primary Mortgage Insurance Policy shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 4.05.
Section 4.09. Transfer of Accounts.
The Seller may transfer a Custodial Account or an Escrow Account to
a different Eligible Account from time to time. Such transfer shall be made
only upon providing notice of the transfer to the Purchaser.
Section 4.10. Maintenance of Hazard Insurance.
The Seller shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac and customary in the area where the Mortgaged Property is located
in an amount which is equal to the lesser of (i) the maximum insurable value
of the improvements securing such Mortgage Loan and (ii) the greater of (a)
the outstanding principal balance of the Mortgage Loan, and (b) an amount such
that the proceeds thereof shall be sufficient to prevent the Mortgagor and/or
the mortgagee from becoming a co-insurer. If required by the Flood Disaster
Protection Act of 1973, as amended, each Mortgage Loan shall be covered by a
flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration in effect with an insurance carrier
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, in an amount representing coverage
not less than the least of (i) the outstanding principal balance of the
Mortgage Loan, (ii) the maximum insurable value of the improvements securing
such Mortgage Loan and (iii) the maximum amount of insurance which is
available under the Flood Disaster Protection Act of 1973, as amended. If at
any time during the term of the Mortgage Loan, the Seller determines in
accordance with applicable law and pursuant to the ▇▇▇▇▇▇ Mae Guides that a
Mortgaged Property is located in a special flood hazard area and is not
covered by flood insurance or is covered in an amount less than the amount
required by the Flood Disaster Protection Act of 1973, as amended, the Seller
shall notify the related Mortgagor that the Mortgagor must obtain such flood
insurance coverage,
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and if the related Mortgagor fails to obtain the required flood insurance
coverage within forty-five (45) days after such notification, the Seller shall
immediately force place the required flood insurance on the Mortgagor's
behalf. To the extent the payment of the related premiums will not, in the
Seller's reasonable determination, constitute non-recoverable Servicing
Advances, the Seller shall also maintain on each REO Property, fire and hazard
insurance with extended coverage in an amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in an amount as provided above. Any
amounts collected by the Seller under any such policies other than amounts to
be deposited in the Escrow Account and applied to the restoration or repair of
the Mortgaged Property or REO Property, or released to the Mortgagor in
accordance with Accepted Servicing Practices, shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 4.05. It is
understood and agreed that no other additional insurance need be required by
the Seller or maintained on property acquired in respect of the Mortgage Loan,
other than pursuant to this Agreement, the ▇▇▇▇▇▇ ▇▇▇ Guides or such
applicable state or federal laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall
be endorsed with standard mortgagee clauses with loss payable to the Seller
and its successors and/or assigns and shall provide for at least thirty (30)
days prior written notice of any cancellation, reduction in the amount or
material change in coverage to the Seller. The Seller shall not interfere with
the Mortgagor's freedom of choice in selecting either his insurance carrier or
agent, provided, however, that the Seller shall not accept any such insurance
policies from insurance companies unless such companies are Qualified
Insurers.
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Seller (or an Affiliate of the Seller) shall
obtain and maintain a blanket policy issued by an issuer acceptable to ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac insuring against hazard losses on all of the Mortgage
Loans, then, to the extent such policy provides coverage in an amount equal to
the amount required pursuant to Section 4.10 and otherwise complies with all
other requirements of Section 4.10, it shall conclusively be deemed to have
satisfied its obligations as set forth in Section 4.10, it being understood
and agreed that such policy may contain a deductible clause, in which case the
Seller shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Section
4.10, and there shall have been a loss which would have been covered by such
policy, deposit in the Custodial Account the amount not otherwise payable
under the blanket policy because of such deductible clause. In connection with
its activities as servicer of the Mortgage Loans, the Seller agrees to prepare
and present, on behalf of the Purchaser, claims under any such blanket policy
in a timely fashion in accordance with the terms of such policy. Upon request
of the Purchaser, the Seller shall cause to be delivered to the Purchaser a
certified true copy of such policy and shall use commercially reasonable
efforts to obtain a statement from the insurer thereunder that such policy
shall in no event be terminated or materially modified without thirty (30)
days' prior written notice to the Purchaser.
Section 4.12. Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
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The Seller shall maintain, at its own expense, a blanket Fidelity
Bond and an errors and omissions insurance policy, with broad coverage with
responsible companies on all officers, employees or other persons acting in
any capacity with regard to the Mortgage Loans to handle funds, money,
documents and papers relating to the Mortgage Loans. The Fidelity Bond shall
be in the form of a mortgage banker's blanket bond and shall protect and
insure the Seller against losses, including forgery, theft, embezzlement and
fraud of such persons. The errors and omissions insurance shall protect and
insure the Seller against losses arising out of errors and omissions and
negligent acts of such persons. Such errors and omissions insurance shall also
protect and insure the Seller against losses in connection with the failure to
maintain any insurance policies required pursuant to this Agreement and the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring the Fidelity Bond or errors and omissions insurance shall diminish
or relieve the Seller from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the corresponding amounts required by ▇▇▇▇▇▇ Mae in the
▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac Guides. The Seller
shall deliver to the Purchaser a certificate from the surety and the insurer
as to the existence of the Fidelity Bond and errors and omissions insurance
policy and shall obtain a statement from the surety and the insurer that such
Fidelity Bond or insurance policy shall in no event be terminated or
materially modified without thirty (30) days' prior written notice to the
Purchaser. Upon request by the Purchaser, the Seller shall provide the
Purchaser with an insurance certificate certifying coverage under this Section
4.12, and will provide an update to such certificate upon request, or upon
renewal or material modification of coverage.
Section 4.13. Title, Management and Disposition of REO Property.
In the event that title to the Mortgaged Property is acquired in
foreclosure, by deed in lieu of foreclosure or other method resulting in full
or partial satisfaction of the related Mortgage, the deed or certificate of
sale shall be taken in the name of the Purchaser or its designee, or in the
event the Purchaser or its designee is not authorized or permitted to hold
title to real property in the state where the REO Property is located, or
would be adversely affected under the "doing business" or tax laws of such
state by so holding title, the deed or certificate of sale shall be taken in
the name of such Person or Persons as shall be consistent with an Opinion of
Counsel obtained by the Seller, at the expense of the Purchaser, from an
attorney duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the Purchaser
shall acknowledge in writing that such title is being held as nominee for the
benefit of the Purchaser.
The Seller shall notify the Purchaser in accordance with the ▇▇▇▇▇▇
Mae Guides of each acquisition of REO Property upon such acquisition, and
thereafter assume the responsibility for marketing such REO Property in
accordance with Accepted Servicing Practices. Thereafter, the Seller shall
continue to provide certain administrative services to the Purchaser relating
to such REO Property as set forth in this Section 4.13.
The Seller shall, either itself or through an agent selected by the
Seller, and in accordance with the ▇▇▇▇▇▇ ▇▇▇ Guides manage, conserve, protect
and operate each REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed
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property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Seller shall cause each
REO Property to be inspected promptly upon the acquisition of title thereto
and shall cause each REO Property to be inspected at least annually thereafter
or more frequently as required by the circumstances. The Seller shall make or
cause to be made a written report of each such inspection. Such reports shall
be retained in the Servicing File.
The Seller shall use its best efforts to dispose of the REO Property
as soon as possible and shall sell such REO Property in any event within three
(3) years after title has been taken to such REO Property, unless the Seller
determines, and gives an appropriate notice to the Purchaser to such effect,
that a longer period is necessary for the orderly liquidation of such REO
Property. If a longer period than three (3) years is permitted under the
foregoing sentence and is necessary to sell any REO Property, the Seller shall
report monthly to the Purchaser as to the progress being made in selling such
REO Property. If as of the date title to any REO Property was acquired by the
Seller there were outstanding unreimbursed Servicing Advances with respect to
the REO Property, the Seller shall be entitled to immediate reimbursement from
the Purchaser for any related unreimbursed Servicing Advances. The disposition
of REO Property shall be carried out by the Seller at such price, and upon
such terms and conditions, as the Seller deems to be in the best interests of
the Purchaser. The Seller shall update the Purchaser from time-to-time as to
the status of each REO Property.
Section 4.14. Notification of Maturity Date.
With respect to each Mortgage Loan, the Seller shall execute and
deliver to the Mortgagor any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage
regarding the maturity date if required under applicable law.
ARTICLE V
PAYMENTS TO THE PURCHASER
Section 5.01. Distributions.
On each Remittance Date, the Seller shall distribute by wire
transfer to the Purchaser (i) all amounts credited to the Custodial Account as
of the close of business on the preceding Determination Date, net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.05,
plus (ii) all Monthly Advances, if any, which the Seller is obligated to
distribute pursuant to Section 5.03, plus (iii) all payments in respect of
Compensating Interest for such Remittance Date required to be deposited in the
Custodial Account pursuant to Section 4.04(viii), minus (iv) any amounts
attributable to Monthly Payments collected but due on a Due Date or Dates
subsequent to the preceding Determination Date, which amounts shall be
remitted on the Remittance Date next succeeding the Due Period for such
amounts, and any Principal Prepayments received during the month of such
Remittance Date, which amounts shall be remitted on the next succeeding
Remittance Date.
With respect to any remittance received by the Purchaser after the
Business Day following the Business Day on which such payment was due, the
Seller shall pay to the
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Purchaser interest on any such late payment at an annual rate equal to the
Prime Rate, adjusted as of the date of each change, plus two percentage
points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in the Custodial Account by
the Seller on the date such late payment is made and shall cover the period
commencing with the day following the second Business Day on which such
payment was due and ending with the Business Day on which such payment is
made, both inclusive. Such interest shall be remitted along with the
distribution payable on the next succeeding Remittance Date. The payment by
the Seller of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Seller.
Section 5.02. Statements to the Purchaser.
The Seller shall furnish to the Purchaser an individual loan
accounting report, as of the last Business Day of each month, in the Seller's
assigned loan number order to document Mortgage Loan payment activity on an
individual Mortgage Loan basis. With respect to each month, the corresponding
individual loan accounting report shall be received by the Purchaser no later
than the fifth (5th) Business Day of the following month in a format mutually
agreed upon by both the Purchaser and the Seller and in hard copy, which
report shall contain the following:
(i) with respect to each Monthly Payment, the amount of such
remittance allocable to principal (including a separate breakdown of
any Principal Prepayment, including the date of such prepayment, and
any Prepayment Penalties or premiums, along with a detailed report
of interest on principal prepayment amounts remitted in accordance
with Section 4.04);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by the
Seller during the prior collection period;
(iv) the aggregate Scheduled Principal Balance of the Mortgage
Loans; (v) the aggregate of any expenses reimbursed to the Seller
during the prior distribution period pursuant to Section 4.05;
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days,
and (3) 90 days or more; (b) as to which foreclosure has commenced;
and (c) as to which REO Property has been acquired; and
(vii) the amount of any Monthly Advances.
The Seller shall also provide a monthly servicing report, sorted in
the Purchaser's assigned loan number order, in the form of reports S-50Y and
P-4DL, attached hereto as Exhibit G and Exhibit H, respectively (or in such
other forms as the Purchaser and the Seller may agree), with each such report.
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The Seller shall prepare and file any and all information statements
or other filings required to be delivered to any governmental taxing authority
or to the Purchaser pursuant to any applicable law with respect to the
Mortgage Loans and the transactions contemplated hereby. In addition, the
Seller shall provide the Purchaser with such information concerning the
Mortgage Loans as is necessary for the Purchaser to prepare its federal income
tax return as the Purchaser may reasonably request from time to time.
In addition, not more than sixty (60) days after the end of each
calendar year, the Seller shall furnish to each Person who was a Purchaser 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.
Section 5.03. Monthly Advances by the Seller.
Not later than the close of business on the Business Day preceding
each Remittance Date, the Seller shall deposit in the Custodial Account an
amount equal to all Monthly Payments, whether or not deferred pursuant to
Section 4.01, which were due on a Mortgage Loan on the immediately preceding
Due Date and delinquent at the close of business on the related Determination
Date.
The Seller's obligation to make such Monthly Advances as to any
Mortgage Loan will continue through the earlier of: (i) the date of the
termination or resignation, as applicable, of the Seller pursuant to Section
7.04, 8.01 or 9.01 or (ii) the date of final disposition and liquidation of
the related Mortgage Loan or any Mortgaged Property acquired through
foreclosure or a conveyance in lieu of foreclosure, unless the Seller
reasonably believes such advance to be non-recoverable from proceeds of the
related Mortgage Loan. In such event, the Seller shall deliver to the
Purchaser an Officer's Certificate of the Seller to the effect that an officer
of the Seller has reviewed the related Servicing File and has made the
reasonable determination that any additional advances are non-recoverable from
proceeds of the related Mortgage Loan.
Section 5.04. Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of
foreclosure, the Seller shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property. The Seller shall also provide reports
on the status of REO Property containing such information as the Purchaser may
reasonably require.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01. Assumption Agreements.
The Seller shall, to the extent it has knowledge of any conveyance
or prospective conveyance by any Mortgagor of the Mortgaged Property (whether
by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such
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Mortgage Loan under any "due-on-sale" clause to the extent permitted by law;
provided, however, that the Seller shall not exercise any such rights if
prohibited by law or the terms of the Mortgage Note from doing so or if the
exercise of such rights would impair or threaten to impair any recovery under
the related Primary Mortgage Insurance Policy, if any. If the Seller
reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause, the Seller will enter into an assumption agreement with
the person to whom the Mortgaged Property has been conveyed or is proposed to
be conveyed, pursuant to which such person becomes liable under the Mortgage
Note and, to the extent permitted by applicable state law, the Mortgagor
remains liable thereon. If the Seller is prohibited under applicable law from
(a) entering into an assumption agreement with the Person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed or (b)
requiring the original Mortgagor to remain liable under the Mortgage Note, the
Seller, with the prior consent of the primary mortgage insurer, if any, is
authorized to enter into a substitution of liability agreement with the person
to whom the Mortgaged Property has been conveyed or is proposed to be conveyed
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as mortgagor and becomes liable under the related
Mortgage Note. Any such substitution of liability agreement shall be in lieu
of an assumption agreement.
In connection with any such assumption or substitution of liability,
the Seller shall follow the underwriting practices and procedures of the
▇▇▇▇▇▇ Mae Guides. With respect to an assumption or substitution of liability,
the Mortgage Interest Rate borne by the related Mortgage Note and the amount
of the Monthly Payment may not be changed. If the credit of the proposed
transferee does not meet such underwriting criteria, the Seller diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan. The Seller shall
notify the Purchaser that any such substitution of liability or assumption
agreement has been completed by forwarding to the Purchaser the original of
any such substitution of liability or assumption agreement, which document
shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. All fees collected by
the Seller for entering into an assumption or substitution of liability
agreement shall belong to the Seller as additional servicing compensation.
Notwithstanding the foregoing paragraphs of this Section or any
other provision of this Agreement, the Seller shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason
of any assumption of a Mortgage Loan by operation of law or any assumption
which the Seller may be restricted by law from preventing, for any reason
whatsoever. For purposes of this Section 6.01, the term "assumption" is deemed
to also include a sale of the Mortgaged Property subject to the Mortgage that
is not accompanied by an assumption or substitution of liability agreement.
Section 6.02. Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Seller of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Seller will immediately notify the Purchaser
by a certification, which certification shall include a statement to the
effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Custodial Account pursuant
to Section 4.04
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have been or will be so deposited, of a Servicing Officer and shall request
delivery to it of the portion of the Mortgage File held by the Purchaser. The
Purchaser shall no later than five (5) Business Days after receipt of such
certification and request, release or cause to be released to the Seller, the
related Mortgage Loan Documents and, upon its receipt of such documents, the
Seller shall promptly prepare and deliver to the Purchaser the requisite
satisfaction or release. No later than three (3) Business Days following its
receipt of such satisfaction or release, the Purchaser shall deliver, or cause
to be delivered, to the Seller the release or satisfaction properly executed
by the owner of record of the applicable Mortgage or its duly appointed
attorney in fact. If such Mortgage Loan is a MERS Mortgage Loan, the Seller is
authorized to cause the removal from the registration on the MERS System of
such Mortgage and to execute and deliver, on behalf of the Purchaser, any and
all instruments of satisfaction or cancellation or of partial or full release.
In the event the Seller satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Purchaser may have under the
Mortgage Loan Documents, the Seller, upon written demand, shall remit within
two (2) Business Days to the Purchaser the then outstanding principal balance
of the related Mortgage Loan by deposit thereof in the Custodial Account.
From time to time and as appropriate for the servicing or
foreclosure of the Mortgage Loans, including for the purpose of collection
under any Primary Mortgage Insurance Policy, the Purchaser shall, upon request
of the Seller and delivery to the Purchaser of a servicing receipt signed by a
Servicing Officer, release the portion of the Mortgage File held by the
Purchaser to the Seller. Such servicing receipt shall obligate the Seller to
return such Mortgage Loan Documents to the Purchaser when the need therefor by
the Seller no longer exists, unless the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Custodial Account or the Mortgage File has been delivered to an attorney,
or to a public trustee or other public official as required by law, for
purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Seller has delivered to the Purchaser a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage
File was delivered and the purpose or purposes of such delivery. Upon receipt
of a certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated, the servicing receipt shall be released by the Purchaser to the
Seller.
Section 6.03. Servicing Compensation.
As compensation for its services hereunder, the Seller shall be
entitled to the Servicing Fee. Additional servicing compensation in the form
of assumption fees, as provided in Section 6.01, late payment charges,
interest and investment earning on funds on deposit in the Custodial Account
and Escrow Account (to the extent provided for herein) and other ancillary
income shall be retained by the Seller to the extent not required to be
deposited in the Custodial Account. The Seller shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement therefor except as specifically
provided for herein.
Section 6.04. Annual Statement as to Compliance.
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On or prior to March 15th of each year for each year in which the
Purchaser or an Affiliate of the Purchaser is required to file an annual
report on Form 10-K in connection with any Securitization Transfer with the
United States Securities and Exchange Commission (the "SEC"), and upon request
of the Purchaser for any other year, the Seller will deliver to the Purchaser
an Officers' Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Seller during the preceding calendar year and
of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Seller has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officers and
the nature and status thereof. The first Officer's Certificate delivered by
the Seller to the Purchaser pursuant to this Section shall be delivered on or
before March 15, 2005, or such other date as may be required pursuant to the
first sentence of this Section 6.04. Copies of such statement shall be
provided by the Seller to the Purchaser upon request. The obligations of the
Seller under this Section 6.04 apply to the Seller for any year in which the
Seller during the prior calendar year (or any portion thereof) serviced a
Mortgage Loan pursuant to this Agreement, whether or not the Seller is acting
as the servicer at the time such statement is required to be delivered.
Section 6.05. Annual Independent Certified Public Accountants'
Servicing Report.
On or prior to March 15th of each year for each year in which the
Purchaser or an Affiliate of the Purchaser is required to file an annual
report on Form 10-K in connection with any Securitization Transfer with the
SEC, and upon request of the Purchaser for any other year, the Seller at its
expense shall cause a firm of independent public accountants which is a member
of the American Institute of Certified Public Accountants to furnish a
statement to the Purchaser to the effect that such firm has examined certain
documents and records relating to the Seller's servicing of residential
mortgage loans, and that, on the basis of such an examination, conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Seller's servicing has
been conducted in compliance with such programs, except for (i) such
exceptions as such firm shall believe to be immaterial, and (ii) such other
exceptions as shall be set forth in such statement. The first statement
delivered by the Seller to the Purchaser pursuant to this Section shall be
delivered on or before March 15, 2005, or such other date as may be required
pursuant to the first sentence of this Section 6.05. Copies of such statement
shall be provided by the Seller to the Purchaser. The obligations of the
Seller under this Section 6.05 apply to the Seller for any year in which the
Seller during the prior calendar year (or any portion thereof) serviced a
Mortgage Loan pursuant to this Agreement, whether or not the Seller is acting
as the servicer at the time such statement is required to be delivered
Section 6.06. Purchaser's Right to Examine Seller Records.
At its expense, the Purchaser shall have the right to examine and
audit upon reasonable notice to the Seller, during business hours or at such
other times as might be reasonable under applicable circumstances, any and all
of the books, records, documentation or other information of the Seller, or
held by another for the Seller or on its behalf or otherwise,
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which relates to the performance or observance by the Seller of the terms,
covenants or conditions of this Agreement.
The Seller shall provide to the Purchaser and any supervisory agents
or examiners representing a state or federal governmental agency having
jurisdiction over the Purchaser, including but not limited to, OCC, OTS, FDIC
and other similar entities, access to any documentation regarding the Mortgage
Loans in the possession of the Seller which may be required by any applicable
regulations. Such access shall be afforded without charge, upon reasonable
request, during normal business hours and at the offices of the Seller, and in
accordance with the federal government, OCC, FDIC, OTS, or any other similar
regulations; provided, however, that in connection with providing such access,
the Seller shall not be required to incur any out-of-pocket costs unless
provisions have been made for the reimbursement thereof.
Section 6.07. Seller Shall Provide Information as Reasonably
Required.
The Seller shall furnish to the Purchaser during the term of this
Agreement such periodic, special or other reports, information or
documentation as the Purchaser may reasonably request, as shall be necessary,
reasonable or appropriate in respect to the Mortgage Loans and the performance
of the Seller under this Agreement, including any reports, information or
documentation reasonably required to comply with any regulations regarding any
supervisory agents or examiners of the Purchaser; provided, that, the Seller
shall not be liable for any out-of-pocket costs with respect to the provision
of such reports, information or documentation. All such reports or information
shall be provided by and in accordance with such applicable instructions and
directions as the Purchaser may reasonably request in relation to this
Agreement or the performance of the Seller under this Agreement. The Seller
agrees to execute and deliver all such instruments and take all such action as
the Purchaser, from time to time, may reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.
The Seller, upon reasonable advance notice, shall make reasonably
available to the Purchaser or any prospective purchaser a knowledgeable
financial or accounting officer for the purpose of answering questions and to
permit any prospective purchaser to inspect the Seller's servicing facilities
for the purpose of satisfying such prospective purchaser that the Seller has
the ability to service the Mortgage Loans as provided in this Agreement.
The Seller shall maintain with respect to each Mortgage Loan and
shall make available for inspection by the Purchaser or its designee the
related Servicing File during the time the Purchaser retains ownership of a
Mortgage Loan and thereafter in accordance with applicable laws and
regulations.
ARTICLE VII
THE SELLER
Section 7.01. Indemnification; Third Party Claims.
The Seller agrees to indemnify and hold the Purchaser and its
present and former directors, officers, employees and agents harmless from any
and all claims, losses, damages, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and
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expenses that any of such parties may sustain in any way related to the
failure of the Seller to observe and perform its duties, obligations,
covenants, and agreements and to service the Mortgage Loans in compliance with
the terms of this Agreement or as a result of the breach of a representation
or warranty set forth in Sections 3.01 or 3.02 of this Agreement. The Seller
hereunder shall immediately notify the Purchaser if a claim is made by a third
party with respect to this Agreement or a Mortgage Loan, assume (with the
consent of the Purchaser) the defense of any such claim and pay all expenses
in connection therewith, including counsel fees, and promptly pay, discharge
and satisfy any judgment or decree which may be entered against it or the
Purchaser in respect of such claim. The Seller shall follow any written
instructions received from the Purchaser in connection with such claim. The
Purchaser shall promptly reimburse the Seller for all amounts advanced by it
pursuant to the two preceding sentences except when the claim relates to the
failure of the Seller to service and administer the Mortgage Loans in
compliance with the terms of this Agreement, the failure of the Seller to
perform its duties and obligations pursuant to this Agreement, the breach of
representation or warranty set forth in Sections 3.01 or 3.02, or the gross
negligence, bad faith or willful misconduct of the Seller. The provisions of
this Section 7.01 shall survive termination of this Agreement and transfer of
the related servicing rights.
Section 7.02. Merger or Consolidation of the Seller.
The Seller shall keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated
(including by means of sale or disposal of all or substantially all of the
Seller's assets), or any corporation resulting from any merger, conversion or
consolidation to which the Seller shall be a party, or any Person succeeding
to the business of the Seller, shall be the successor of the Seller hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person shall be an
institution whose deposits are insured by FDIC or a company whose business is
the origination and servicing of mortgage loans, unless otherwise consented to
by the Purchaser, which consent shall not be unreasonably withheld, and shall
be qualified and in good standing to service mortgage loans on behalf of
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Section 7.03. Limitation on Liability of the Seller and Others.
The duties and obligations of the Seller shall be determined solely
by the express provisions of this Agreement, the Seller shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Agreement and no implied covenants or obligations shall be
read into this Agreement against the Seller. Neither the Seller nor any of the
officers, employees or agents of the Seller shall be under any liability to
the Purchaser for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment
made in good faith; provided, however, that this provision
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shall not protect the Seller or any such person against any breach of
warranties or representations made herein, or failure to perform its
obligations in compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of
negligence, bad faith or willful misconduct, or any breach of the terms and
conditions of this Agreement. The Seller and any officer, employee or agent of
the Seller may rely in good faith on any document of any kind prima facie
properly executed and submitted by the Purchaser respecting any matters
arising hereunder. The Seller 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
reasonable opinion may involve it in any expenses or liability.
Section 7.04. Seller Not to Resign.
The Seller shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Seller and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Seller. Any such
determination permitting the resignation of the Seller shall be evidenced by
an Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Seller's responsibilities and obligations hereunder in the manner provided in
Section 11.01.
Section 7.05. No Transfer of Servicing.
With respect to the retention of the Seller to service the Mortgage
Loans hereunder, the Seller acknowledges that the Purchaser has acted in
reliance upon the Seller's independent status, the adequacy of its servicing
facilities, plan, personnel, records and procedures, its integrity, reputation
and financial standing and the continuance thereof. Without in any way
limiting the generality of this Section 7.05, the Seller shall not either
assign this Agreement or the servicing hereunder or delegate its rights or
duties hereunder or any portion thereof without the prior written approval of
the Purchaser, which consent may be withheld in the Purchaser's discretion
exercised in good faith. Notwithstanding the foregoing, the Seller may,
without the consent of the Purchaser, retain reasonable and necessary third
party contractors to perform certain servicing and loan administration
functions, including and limited to, hazard insurance administration, tax
payment and administration, flood certification and administration and
foreclosure activities; provided, that such contractors shall perform such
servicing and loan administrative functions in a manner consistent with this
Agreement; provided, further, that the retention of such contractors by Seller
shall not limit the obligation of the Seller to service the Mortgage Loans
pursuant to the terms and conditions of this Agreement or release it from any
of its obligations hereunder.
ARTICLE VIII
DEFAULT
Section 8.01. Events of Default.
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In case one or more of the following Events of Default by the Seller
shall occur and be continuing, that is to say:
(i) any failure by the Seller to remit to the Purchaser any
payment required to be made under the terms of this Agreement which
continues unremedied for a period of two (2) Business Days after the
date upon which written notice of such failure, requiring the same
to be remedied, shall have been given to the Seller by the
Purchaser; or
(ii) failure on the part of the Seller duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Seller set forth in this Agreement, or
which failure continues unremedied for a period of thirty (30) days
after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Seller by the
Purchaser; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Seller and such decree
or order shall have remained in force undischarged or unstayed for a
period of sixty (60) days; or
(iv) the Seller shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Seller or of or relating
to all or substantially all of its property; or
(v) the Seller shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or
(vi) the Seller ceases to be approved by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac as a mortgage loan seller and servicer for more than thirty (30)
days; or
(vii) the Seller attempts to assign its right to servicing
compensation hereunder or the Seller attempts, without the consent
of the Purchaser, 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
(viii) the Seller ceases to be (a) licensed to service first
lien residential mortgage loans in each jurisdiction in which a
Mortgaged Property is located and such licensing is required, and
(b) qualified to transact business in any jurisdiction where it is
currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Seller's
ability to perform its obligations hereunder;
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then, and in each and every such case, so long as an Event of
Default shall not have been remedied, the Purchaser, by notice in writing to
the Seller may, in addition to whatever rights the Purchaser may have under
Sections 3.03 and 7.01 and at law or equity or to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Seller under this Agreement and in and to the Mortgage
Loans and the proceeds thereof without compensating the Seller for the same.
On or after the receipt by the Seller of such written notice of termination,
all authority and power of the Seller under this Agreement, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
successor appointed pursuant to Section 12.01. Upon written request from the
Purchaser, the Seller shall prepare, execute and deliver, any and all
documents and other instruments, place in such successor's possession all
Servicing Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Seller's sole expense. The Seller
agrees to cooperate with the Purchaser and such successor in effecting the
termination of the Seller's responsibilities and rights hereunder, including,
without limitation, the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Seller to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans or any REO Property.
If any of the Mortgage Loans are MERS Mortgage Loans, in connection
with the termination or resignation (as described in Section 8.04) of the
Seller hereunder, either (i) the successor servicer shall represent and
warrant that it is a member of MERS in good standing and shall agree to comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the Mortgage Loans that are registered with MERS, or
(ii) the Seller shall cooperate with the successor servicer either (x) in
causing MERS to execute and deliver an assignment of Mortgage in recordable
form to transfer the Mortgage from MERS to the Purchaser and to execute and
deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor servicer or (y)
in causing MERS to designate on the MERS(R) System the successor servicer as
the servicer of such Mortgage Loan.
Section 8.02. Waiver of Defaults.
The Purchaser may waive only by written notice any default by the
Seller in the performance of its obligations hereunder and its consequences.
Upon any such waiver of a past default, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been 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 in writing.
ARTICLE IX
TERMINATION
Section 9.01. Termination.
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The respective obligations and responsibilities of the Seller, as
servicer, shall terminate upon (a) the distribution to the Purchaser of the
final payment or liquidation with respect to the last Mortgage Loan (or
advances of same by the Seller); (b) the disposition of all property acquired
upon foreclosure or deed in lieu of foreclosure with respect to the last
Mortgage Loan and the remittance of all funds due hereunder or (c) by mutual
consent of the Seller and the Purchaser in writing. Upon written request from
the Purchaser in connection with any such termination, the Seller shall
prepare, execute and deliver, any and all documents and other instruments,
place in the Purchaser's possession all Mortgage Files, and do or accomplish
all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, whether to complete the transfer and endorsement
or assignment of the Mortgage Loans and related documents, or otherwise, at
the Purchaser's sole expense. The Seller agrees to cooperate with the
Purchaser and such successor in effecting the termination of the Seller's
responsibilities and rights hereunder as servicer, including, without
limitation, the transfer to such successor for administration by it of all
cash amounts which shall at the time be credited by the Seller to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.
Notwithstanding and in addition to the foregoing, in the event that
a Mortgage Loan (i) becomes delinquent for a period of ninety (90) days or
more (a "Delinquent Mortgage Loan") or (ii) becomes an REO Property, the
Purchaser may, at its option, terminate this Agreement with respect to such
Delinquent Mortgage Loan or REO Property upon twenty (20) days' written notice
to the Seller; provided that upon termination of this Agreement with respect
to such Delinquent Mortgage Loan or REO Property the Purchaser shall reimburse
the Seller for all outstanding Servicing Advances or Servicing Fees related to
such Delinquent Mortgage Loan.
ARTICLE X
RECONSTITUTION OF MORTGAGE LOANS
Section 10.01. Reconstitution of Mortgage Loans.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) ▇▇▇▇▇▇ Mae under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "▇▇▇▇▇▇ ▇▇▇ Transfer"); or
(ii) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ 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.
The Purchaser shall use its best efforts to provide notice to the
Seller of each such Reconstitution no later than fifteen (15) calendar days
prior to the related Reconstitution Date,
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but, in any event, shall provide such notice to the Seller no later than ten
(10) calendar days prior to the related Reconstitution Date.
The Seller agrees to execute in connection with any Agency Transfer,
any and all reasonably acceptable pool purchase contracts, and/or agreements
among the Purchaser, the Seller, ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac (as the case may
be) and any servicer in connection with a Whole Loan Transfer, a seller's
warranties and servicing agreement or a participation and servicing agreement
in form and substance reasonably acceptable to the parties, and in connection
with a Securitization Transfer, a pooling and servicing agreement in form and
substance reasonably acceptable to the parties or an Assignment and
Recognition Agreement substantially in the form attached hereto as Exhibit D
(collectively, the agreements referred to herein are designated, the
"Reconstitution Agreements"), together with an opinion of counsel with respect
to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; and (3) to
restate the representations and warranties set forth in Section 3.01 of this
Agreement as of the related Reconstitution Date, to restate the
representations and warranties set forth in Section 3.02 of this Agreement as
of the related Closing Date and to represent and warrant that the Seller has
serviced the Mortgage Loans in accordance with this Agreement, in each case,
as of the settlement or closing date in connection with such Reconstitution.
The Seller shall provide to such servicer or issuer, as the case may be, and
any other participants or purchasers in such Reconstitution: (i) any and all
information and appropriate verification of information which may be
reasonably available to the Seller or its Affiliates, whether through letters
of its auditors and counsel or otherwise, as the Purchaser or any such other
participant shall reasonably request; (ii) such additional opinions of
counsel, letters from auditors, and certificates of public officials or
officers of the Seller as are reasonably believed necessary by the Purchaser
or any such other participant; and (iii) to execute, deliver and satisfy all
conditions set forth in any indemnity agreement required by the Purchaser or
any such participant, including, without limitation, an Indemnification and
Contribution Agreement in substantially the form attached hereto as Exhibit I.
Moreover, the Seller agrees to cooperate with all reasonable requests made by
the Purchaser to effect such Reconstitution. The Seller shall indemnify the
Purchaser, each Affiliate of the Purchaser participating in the Reconstitution
and each Person who controls the Purchaser or such Affiliate and their
respective present and former directors, officers, employees and agents, and
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 each of them may sustain in any way
related to any information provided by or on behalf of the Seller regarding
the Seller or any affiliated servicer, the Seller's or any affiliated
servicer's servicing practices or performance or the Underwriting Standards
set forth in any offering document prepared in connection with any
Reconstitution (the "Seller Information"). For purposes of the previous
sentence, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement. In connection with any Reconstitution, the Purchaser shall
execute an Indemnification and Contribution Agreement substantially in the
form of Exhibit I attached hereto, which in any case, shall provide that the
Purchaser shall indemnify the Seller and each
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Person who controls the Seller and its directors, officers, employees and
agents, and 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 each of them may
sustain in any way related to any information, other than (i) the Seller
Information or (ii) any information regarding the Mortgage Loans set forth in
any offering document prepared in connection with any Reconstitution that is
derived from loan-level information provided by the Seller to the Purchaser,
the related depositor or any of their Affiliates, set forth in any offering
document prepared in connection with any Reconstitution.
With respect to any Mortgage Loans sold in a Securitization Transfer
where the Seller is the servicer, the Seller agrees that on or before March
15th of each year beginning March 15, 2005, the Seller shall deliver to the
depositor, the master servicer (if any) and the trustee for the securitization
trust in the Securitization Transfer, and their officers and directors, a
certification in the form attached as Exhibit J hereto, executed by the senior
officer in charge of servicing at the Seller for use in connection with any
Form 10-K to be filed with the SEC with respect to the securitization trust.
The Seller shall indemnify and hold harmless the depositor, the master
servicer (if any) and the trustee, and their respective officers and
directors, from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments and other
costs and expenses arising out of or based upon any breach of the Seller's
obligations under this paragraph or any material misstatement or omission,
negligence, bad faith or willful misconduct of the Seller in connection
therewith. If the indemnification provided for in the preceding sentence is
unavailable or insufficient to hold harmless any indemnified party, then the
Seller agrees that it shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities of
such indemnified party in such proportion as is appropriate to reflect the
relative fault of such indemnified party, on the one hand, and the Seller, on
the other, in connection with a breach of the Seller's obligations under this
paragraph or any material misstatement or omission, negligence, bad faith or
willful misconduct of the Seller in connection therewith.
The Purchaser shall reimburse the Seller for any and all
out-of-pocket expenses, costs and fees, including reasonable attorney's fees,
incurred by the Seller in response to requests for information or assistance
under this Section, other than such out-of-pocket expenses, costs and fees,
including reasonable attorney's fees, incurred by the Seller in connection
with fulfilling its obligations hereunder with respect to servicing and
administering the related Mortgage Loans. All Mortgage Loans not sold or
transferred pursuant to a Reconstitution shall remain subject to this
Agreement and shall continue to be serviced in accordance with the terms of
this Agreement, and with respect thereto this Agreement shall remain in full
force and effect.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Successor to the Seller.
Prior to termination of Seller's responsibilities and duties under
this Agreement pursuant to Section 7.04, 8.01 or 9.01, the Purchaser shall (i)
succeed to and assume all of the Seller's responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in Section 7.02 hereof and which shall succeed to
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all rights and assume all of the responsibilities, duties and liabilities of
the Seller under this Agreement. In connection with such appointment and
assumption, the Purchaser may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as the Purchaser and such
successor shall agree. In the event that the Seller's duties, responsibilities
and liabilities under this Agreement should be terminated pursuant to the
aforementioned Sections, the Seller shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or
financial condition of its successor. The resignation or removal of the Seller
pursuant to the aforementioned Sections shall not become effective until a
successor shall be appointed pursuant to this Section and shall in no event
relieve the Seller of the representations and warranties made pursuant to
Sections 3.01 and 3.02, the remedies available under Section 3.03 or the
indemnification obligations of the Seller pursuant to Section 7.01.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Seller and to the Purchaser an instrument
accepting such appointment, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Seller, with like effect as if originally named as a party
to this Agreement. Any termination or resignation of the Seller or this
Agreement pursuant to Section 7.04, 7.05, 8.01 or 9.01 shall not affect any
claims that the Purchaser may have against the Seller arising prior to any
such termination or resignation.
The Seller shall promptly deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Mortgage Files and related
documents and statements held by it hereunder and the Seller shall account for
all funds. The Seller shall execute and deliver such instruments and do such
other things all as may reasonably be required to more fully and definitely
vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Seller. Upon appointment
of successor servicer to the Seller, the Seller shall be reimbursed for
unrecovered Servicing Advances, Monthly Advances and unpaid Servicing Fees
which would otherwise have been recovered by the Seller pursuant to this
Agreement but for the appointment such successor servicer.
Upon a successor's acceptance of appointment as such, the Seller
shall notify by mail the Purchaser of such appointment.
Section 11.02. Amendment.
This Agreement may be amended or supplemented from time to time by
written agreement executed by the Purchaser and the Seller.
Section 11.03. Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any of all the
Mortgaged Properties subject to the Mortgages
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are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Seller at the Seller's
expense on direction of the Purchaser.
Section 11.04. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to its conflict of law
provisions, except to the extent preempted by Federal law. The obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws.
Section 11.05. Notices.
Any demands, notices or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been
given if personally delivered at or mailed by registered mail, postage
prepaid, and return receipt requested or certified mail, return receipt
requested, or transmitted by telex, telegraph or telecopier and confirmed by a
similar mailed writing, as follows:
1. if to the Seller:
Wachovia Mortgage Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Wachovia Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
2. if to the Purchaser:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loan Operations Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with copies to:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Servicing Oversight
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▇▇▇▇ ▇-▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - RFPG
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
Section 11.06. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement
which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable
any provision hereof. If the invalidity of any part, provision, representation
or warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
Section 11.07. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
Section 11.08. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
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(i) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as
the singular, and the use of any gender herein shall be deemed to
include the other gender;
(ii) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(iii) references herein to "Articles," "Sections,"
Subsections," "Paragraphs," and other subdivisions without reference
to a document are to designated Articles, Sections, Subsections,
Paragraphs and other subdivisions of this Agreement;
(iv) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same
Section in which the reference appears, and this rule shall also
apply to Paragraphs and other subdivisions;
(v) the words "herein," "hereof," "hereunder," and other words
of similar import refer to this Agreement as a whole and not to any
particular provision;
(vi) the term "include" or "including" shall mean without
limitation by reason of enumeration; and
(vii) 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 11.09. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (i) consents, waivers and modifications which may
hereafter be executed, (ii) documents received by any party at the closing,
and (iii) financial statements, certificates and other information previously
or hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
Section 11.10. Confidentiality of Information.
Each party recognizes that, in connection with this Agreement, it
may become privy to non-public information regarding the financial condition,
operations and prospects of the other party. Each of the Purchaser and the
Seller shall employ proper procedures and standards designed to maintain the
confidential nature of such information and the terms of this Agreement,
except to the extent: (a) disclosure of such information and terms is
reasonably believed by such party to be required in connection with regulatory
requirements or other legal
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requirements relating to its affairs; (b) disclosed to any one or more of such
party's employees, officers, directors, agents, attorneys or accountants who
would have access to the contents of this Agreement and such data and
information in the normal course of the performance of such Person's duties
for such party, to the extent such party has procedures in effect to inform
such Person of the confidential nature thereof; (c) disclosed in a prospectus,
prospectus supplement or private placement memorandum relating to a
securitization of the Mortgage Loans by the Purchaser (or an Affiliate
assignee thereof) or to any Person in connection with the resale or proposed
resale of all or a portion of the Mortgage Loans by such party in accordance
with the terms of this Agreement; and (d) that is reasonably believed by such
party to be necessary for the enforcement of such party's rights under this
Agreement.
Section 11.11. 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, such recordation to be
effected (i) with respect to MERS Mortgage Loans, at the Purchaser's expense
and (ii) with respect to Mortgage Loans that are not MERS Mortgage Loans, at
the Seller's expense, in each case, in the event recordation is either
necessary under applicable law or requested by the Purchaser at its sole
option.
Section 11.12. Assignment by Purchaser.
The Purchaser shall have the right, upon notice to the Seller, to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Purchaser hereunder, by executing an Assignment, Assumption and
Recognition Agreement substantially in the form of Exhibit D hereto, and the
assignee or designee shall accede to the rights and obligations hereunder of
the Purchaser with respect to such Mortgage Loans; provided, however, that, in
no event shall there be any more than three (3) "Purchasers" with respect to
any Mortgage Loan Package. In no event shall the Purchaser sell a partial
interest in any Mortgage Loan without the prior written consent of the Seller,
which consent may be granted or withheld in the Seller's sole discretion. All
references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee.
Section 11.13. No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Seller shall be rendered as an independent contractor and not as agent for
Purchaser.
Section 11.14. Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same agreement. Subject to
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Section 7.02, this Agreement shall inure to the benefit of and be binding upon
the Seller and the Purchaser and their respective successors and assigns.
Section 11.15. Entire Agreement.
Each of the parties to this Agreement acknowledges that no
representations, agreements or promises were made to any of the other parties
to this Agreement or any of its employees other than those representations,
agreements or promises specifically contained herein. This Agreement and the
related Purchase Price and Terms Letter set forth the entire understanding
between the parties hereto and shall be binding upon all successors of all of
the parties. In the event of any inconsistency between a Purchase Price and
Terms Letter and this Agreement, this Agreement shall control.
Section 11.16. No Solicitation.
From and after the related Closing Date, except as provided below,
the Seller agrees that it will not take any action or permit or cause any
action to be taken by any of its agents or Affiliates, or by any independent
contractors on the Seller's behalf, in any manner to solicit the borrower or
obligor under any Mortgage Loan to refinance the Mortgage Loan, in whole or in
part, without the prior written consent of the Purchaser. It is understood and
agreed that all rights and benefits relating to the solicitation of any
Mortgagors to refinance any Mortgage Loans and the attendant rights, title and
interest in and to the list of such Mortgagors and data relating to their
Mortgages (including insurance renewal dates) shall be transferred to the
Purchaser pursuant hereto on the related Closing Date and the Seller shall
take no action to undermine these rights and benefits. Notwithstanding the
foregoing, it is understood and agreed that the following promotions or
solicitations undertaken by the Seller or any Affiliate of the Seller shall
not be prohibited under this Section 11.16: (i) promotions or solicitations
that are directed to the general public at large or segments thereof, provided
that no segment shall consist primarily of the borrowers or obligors under the
Mortgage Loans, including, without limitation, mass mailing based on
commercially acquired mailing lists, newspaper, radio and television
advertisements; (ii) responding to Mortgagor requests for pay-off information
and regarding other bank or financial products or services; and (iii)
promotions or solicitations to any Mortgagor for any other bank or financial
products or services, unless such promotions or solicitations are for a
prepayment of a Mortgage Loan.
Section 11.17. Costs.
The Purchaser shall pay any commissions due its salesmen, the
expenses of its accountants and attorneys and the expenses and fees of any
broker retained by the Purchaser with respect to the transactions covered by
this Agreement. To the extent not otherwise provided herein, all other costs
and expenses incurred in connection with the transfer and delivery of the
Mortgage Loans, including, without limitation, fees for recording intervening
assignments of mortgage and Assignments of Mortgage, the cost of obtaining tax
service contracts and the legal fees and expenses of its attorneys shall be
paid by the Seller. The Seller shall be responsible for causing the
recordation of all Assignments of Mortgage and all intervening assignments of
mortgage, as applicable.
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Section 11.18. Protection of Mortgagor Personal Information.
Each of the Purchaser and the Seller agree that it (i) shall comply
with any applicable laws and regulations regarding the privacy and security of
Mortgagor Personal Information, (ii) shall not use Mortgagor Personal
Information in any manner inconsistent with any applicable laws and
regulations regarding the privacy and security of Mortgagor Personal
Information, (iii) shall not disclose Mortgagor Personal Information to third
parties except at the specific written direction of the other; provided,
however, that the Purchaser and the Seller may disclose Mortgagor Personal
Information to third parties in connection with secondary market transactions
to the extent not prohibited by applicable law or to the extent required by a
valid and effective subpoena issued by a court of competent jurisdiction or
other governmental body, (iv) shall maintain adequate physical, technical and
administrative safeguards to protect Mortgagor Personal Information from
unauthorized access and (v) shall immediately notify the other of any actual
or suspected breach of the confidentiality of Mortgagor Personal Information.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL
INC.,
as Purchaser
By:______________________________
Name:____________________________
Title:___________________________
WACHOVIA MORTGAGE CORPORATION,
as Seller
By:______________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
[Signature Page to First Amended and Restated Seller's Purchase,
Warranties and Servicing Agreement, dated as of June 1, 2006]
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Exhibit A-1
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Contents of Mortgage File
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser, and which shall be retained by the Seller in the Servicing File or
delivered to the Purchaser or its designee pursuant to Sections 2.04 and 2.05
of the First Amended and Restated Seller's Purchase, Warranties and Servicing
Agreement.
1. The original Mortgage Note endorsed "Pay to the order of
___________________ without recourse," and signed in the name of the Seller by
an authorized officer, with all intervening endorsements showing a complete
chain of title from the originator to the Seller. If the Mortgage Loan was
acquired by the Seller in a merger, the endorsement must be by "[Seller],
successor by merger to the [name of predecessor]". If the Mortgage Loan was
acquired or originated by the Seller while doing business under another name,
the endorsement must be by "[Seller] formerly known as [previous name]". If
the original note is unavailable, seller will provide an affidavit of lost
note (in form acceptable to the Purchaser) stating that the original Mortgage
Note was lost or destroyed, together with a copy of such Mortgage Note and
indemnifying the Purchaser against any and all claims arising as a result of
any person or entity claiming they are the holder of the note or that the note
has been paid off and returned.
2. A true certified copy, certified by the [title insurer], of the
applicable First Lien.
3. Except as provided below and for each Mortgage Loan that is not a
MERS Mortgage Loan, the original Mortgage with evidence of recording thereon,
or a copy thereof certified by the public recording office in which such
mortgage has been recorded or, if the original Mortgage has not been returned
from the applicable public recording office, a true certified copy, certified
by the [title insurer], of the original Mortgage together with a certificate
of the Seller certifying that the original Mortgage has been delivered for
recording in the appropriate public 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 Mortgage
Loans 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.
4. The original or certified to be a true copy or if in electronic
form identified on the Mortgage Loan Schedule, the certificate number,
certified by the Seller, of the related Primary Mortgage Insurance Policy, if
required.
5. In the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original Assignment, from the Seller in accordance with Purchaser's
instructions, which assignment shall, but for any blanks requested by the
Purchaser, be in form and substance acceptable for recording, or a copy
certified by the Seller as a true and correct copy of the
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original Assignment which has been sent for recordation. If the Mortgage Loan
was acquired or originated by the Seller while doing business under another
name, the Assignment must be by "[Seller] formerly known as [previous name]".
6. With respect to Mortgage Loans that are not Co-op Loans, the
original policy of title insurance, including riders and endorsements thereto,
or if the policy has not yet been issued, a written commitment or interim
binder or preliminary report of title issued by the title insurance or escrow
company.
7. Originals of all recorded intervening Assignments, or copies
thereof, certified by the public recording office in which such Assignments
have been recorded showing a complete chain of title from the originator to
the Seller, with evidence of recording thereon, or a copy thereof certified by
the public recording office in which such Assignment has been recorded or, if
the original Assignment has not been returned from the applicable public
recording office, a true certified copy, certified by the [title insurer] of
the original Assignment together with a certificate of the [title insurer]
certifying that the original Assignment has been delivered for recording in
the appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located.
8. Originals, or copies thereof certified by the public recording
office in which such documents have been recorded, of each assumption,
extension, modification, written assurance or substitution agreements, if
applicable, or if the original of such document has not been returned from the
applicable public recording office, a true certified copy, certified by the
[title insurer], of such original document together with certificate of Seller
certifying the original of such document has been delivered for recording in
the appropriate recording office of the jurisdiction in which the Mortgaged
Property is located.
9. If the Mortgage Note or Mortgage or any other material document
or instrument relating to the Mortgage Loan has been signed by a person on
behalf of the Mortgagor, the original power of attorney or other instrument
that authorized and empowered such person to sign bearing evidence that such
instrument has been recorded, if so required in the appropriate jurisdiction
where the Mortgaged Property is located (or, in lieu thereof, a duplicate or
conformed copy of such instrument, together with a certificate of receipt from
the recording office, certifying that such copy represents a true and complete
copy of the original and that such original has been or is currently submitted
to be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the original
power of attorney or other such instrument has been delivered for recording in
the appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located.
10. With respect to a Co-op Loan: (i) a copy of the Co-op Lease and
the assignment of such Co-op Lease to the originator of the Mortgage Loan,
with all intervening assignments showing a complete chain of title and an
assignment thereof by Seller; (ii) the stock certificate together with an
undated stock power relating to such stock certificate executed in blank;
(iii) the recognition agreement in substantially the same form as standard a
"AZTECH" form; (iv) copies of the financial statement filed by the originator
as secured party and, if applicable, a filed UCC-3 Assignment of the subject
security interest showing a complete chain
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of title, together with an executed UCC-3 Assignment of such security interest
by the Seller in a form sufficient for filing.
11. The original of any guarantee executed in connection with the
Mortgage Note.
Notwithstanding anything to the contrary herein, the Seller may
provide one certificate for all of the Mortgage Loans indicating that the
documents were delivered for recording.
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▇▇▇▇▇▇▇ ▇-▇
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Contents of Servicing File
With respect to each Mortgage Loan, the Servicing File shall include
each of the following items, which shall be available for inspection by the
Purchaser:
1. Mortgage Loan closing statement (Form HUD-1) and any other
truth-in-lending or real estate settlement procedure forms required by law.
2. Residential loan application.
3. Uniform underwriter and transmittal summary (▇▇▇▇▇▇ ▇▇▇ Form
1008) or reasonable equivalent.
4. Credit report on the mortgagor.
5. Business credit report, if applicable.
6. Residential appraisal report and attachments thereto.
7. Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program, all in accordance with
Seller's Underwriting Standards.
8. Verification of acceptable evidence of source and amount of down
payment, in accordance with the Underwriting Standards.
9. Photograph of the Mortgaged Property (may be part of appraisal).
10. Survey of the Mortgaged Property, if any.
11. Sales contract, if applicable.
12. If available, termite report, structural engineer's report,
water portability and septic certification.
13. Any original security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
14. Any ground lease, including all amendments, modifications and
supplements thereto.
15. Any other document required to service the Mortgage Loans.
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Exhibit B
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Form of Custodial Account Letter Agreement
__________________, 200_
To:
As "Seller" under the First Amended and Restated Seller's Purchase,
Warranties and Servicing Agreement, dated as of June 1, 2006 (the
"Agreement"), we hereby authorize and request you to establish an account, as
a Custodial Account pursuant to Section 4.04 of the Agreement, to be
designated as "Wachovia Mortgage Corporation, in trust for the Purchaser,
owner of various whole loan series - principal and interest". All deposits in
the account shall be subject to withdrawal therefrom by order signed by the
Seller. This letter is submitted to you in duplicate. Please execute and
return one original to us.
WACHOVIA MORTGAGE CORPORATION,
as SELLER
By:__________________________________
Name:________________________________
Title:_______________________________
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.
_____________________________________
By:__________________________________
Name:________________________________
Title:_______________________________
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Exhibit C
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Form of Escrow Account Letter Agreement
_____________________, 200_
To:
As "Seller" under the First Amended and Restated Seller's Purchase,
Warranties and Servicing Agreement, dated as of June 1, 2006 (the
"Agreement"), we hereby authorize and request you to establish an account, as
an Escrow Account pursuant to Section 4.06 of the Agreement, to be designated
as "Wachovia Mortgage Corporation, in trust for the Purchaser, owner of
various whole loan series, and various Mortgagors." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Seller. This letter is submitted to you in duplicate. Please execute and
return one original to us.
WACHOVIA MORTGAGE CORPORATION,
as SELLER
By:__________________________________
Name:________________________________
Title:_______________________________
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.
_____________________________________
By:__________________________________
Name:________________________________
Title:_______________________________
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Exhibit D
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Form of Assignment, Assumption and Recognition Agreement
This Assignment, Assumption and Recognition Agreement (this
"Assignment Agreement"), dated as of _________, between [Purchaser], a
[_____________] corporation (the "Assignor"), ______________________, a
________ corporation (the "Assignee"), and Wachovia Mortgage Corporation, a
North Carolina corporation (the "Seller"):
For good and valuable consideration the receipt and sufficiency of
which hereby are acknowledged, and of the premises and mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all
of the right, title and interest of Assignor, as Purchaser, in, to and under
(a) those certain mortgage loans listed on Exhibit A attached hereto (the
"Mortgage Loans"); and (b) the First Amended and Restated Seller's Purchase,
Warranties and Servicing Agreement dated as of June 1, 2006, but only to the
extent of the Mortgage Loans (the "Purchase Agreement"). For purposes of this
Assignment Agreement, the term "Purchase Agreement" includes any separate
Assignment and Conveyance pursuant to which Seller and Assignor effectuated
the purchase and sale of any Mortgage Loan following the execution and
delivery of the First Amended and Restated Seller's Purchase, Warranties and
Servicing Agreement dated as of June 1, 2006.
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under any
all obligations of the Assignor with respect to any mortgage loans subject to
the Purchase Agreement which are not the Mortgage Loans set forth on Exhibit A
attached hereto and are not the subject of this Assignment Agreement.
2. Each of the Seller and the Assignor represent and warrant to the
Assignee that (a) the copy of the Purchase Agreement, attached hereto as
Exhibit B, provided to the Assignee, is a true, complete and accurate copy of
the Purchase Agreement, (b) the Purchase Agreement is in full force and effect
as of the date hereof, (c) the provisions thereof have not been waived,
amended or modified in any respect, nor have any notices of termination been
given thereunder, (d) the Purchase Agreement contains all of the terms and
conditions governing the sale of the Mortgage Loans by Seller to Assignor and
the purchase of the Mortgage Loans by Assignor from Seller; provided, however,
that the date of purchase and sale and the amount of payment for the Mortgage
Loans may be set out in a Purchase Price and Terms Letter, as defined in the
Purchase Agreement, and (e) Seller sold, conveyed and transferred each
Mortgage Loan to Assignor pursuant to the Purchase Agreement.
3. The Assignor warrants and represents to, and covenants with, the
Assignee and the Seller that:
(a) As of the date hereof, the Assignor is not in default under the
Purchase Agreement;
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(b) The Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans and any and all of its interests,
rights and obligations under the Purchase Agreement, free from any and all
claims and encumbrances arising out of the Assignor's ownership thereof, and
the Mortgage Loans, as well as the Purchase Agreement, upon the transfer
thereof to the Assignee as contemplated herein, shall be free and clear of all
such liens, claims and encumbrances or any lien claim or encumbrance arising
out of the ownership of the Mortgage Loans by any person at any time after
Assignor first acquired any Mortgage Loan from the Seller;
(c) The Assignor has not received notice of, and has no knowledge
of, any offsets, counterclaims or other defenses available to the Seller with
respect to the Purchase Agreement or the Mortgage Loans;
(d) The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Purchase Agreement or
the Mortgage Loans. The Assignor has no knowledge of, and has not received
notice of, any waivers under or amendments or other modifications of, or
assignments of rights or obligations under or defaults under, the Purchase
Agreement, or the Mortgage Loans;
(e) The Assignor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
and has all requisite corporate power and authority to sell, transfer and
assign the Mortgage Loans;
(f) The Assignor has full corporate power and authority to execute,
deliver and perform under this Assignment Agreement, and to consummate the
transactions set forth herein. The consummation of the transactions
contemplated by this Assignment Agreement is in the ordinary course of the
Assignor's business and will not conflict with, or result in a breach of, any
of the terms, conditions or provisions of the Assignor's charter or by-laws,
or any legal restriction, or any material agreement or instrument to which the
Assignor is now a party or by which it is bound, or result in the violation of
any law, rule, regulation, order, judgment or decree to which the Assignor or
its property is subject. The execution, delivery and performance by the
Assignor of this Assignment Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action of the Assignor. This Assignment Agreement has been duly
executed and delivered by the Assignor and constitutes the valid and legally
binding obligation of the Assignor enforceable against the Assignor in
accordance with its respective terms except as enforceability thereof may be
limited by bankruptcy, insolvency, or reorganization or other similar laws now
or hereinafter in effect relating to creditor's rights generally and by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or in law;
(g) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required
to be obtained or made by the Assignor in connection with the execution,
delivery or performance by the Assignor of this Assignment Agreement, or the
consummation by it of the transactions contemplated hereby; and
(h) The Assignor has paid the purchase price for the Mortgage Loans
and has satisfied any conditions to closing required of it under the terms of
the Purchase Agreement.
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4. The Assignee warrants and represents to, and covenants with, the
Assignor and the Seller that:
(a) The Assignee is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
and has all requisite corporate power and authority to acquire, own and
purchase the Mortgage Loans;
(b) The Assignee has full corporate power and authority to execute,
deliver and perform under this Assignment Agreement, and to consummate the
transactions set forth herein. The consummation of the transactions
contemplated by this Assignment Agreement is in the ordinary course of the
Assignee's business and will not conflict with, or result in a breach of, any
of the terms, conditions or provisions of the Assignee's charter or by-laws,
or any legal restriction, or any material agreement or instrument to which the
Assignee is now a party or by which it is bound, or result in the violation of
any law, rule, regulation, order, judgment or decree to which the Assignee or
its property is subject. The execution, delivery and performance by the
Assignee of this Assignment Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action of the Assignee. This Assignment Agreement has been duly
executed and delivered by the Assignee and constitutes the valid and legally
binding obligation of the Assignee enforceable against the Assignee in
accordance with its respective terms except as enforceability thereof may be
limited by bankruptcy, insolvency, or reorganization or other similar laws now
or hereinafter in effect relating to creditor's rights generally and by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or in law;
(c) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required
to be obtained or made by the Assignee in connection with the execution,
delivery or performance by the Assignee of this Assignment Agreement, or the
consummation by it of the transactions contemplated hereby; and
(d) The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Purchase Agreement and the Mortgage
Loans, and from and after the date hereof, the Assignee assumes for the
benefit of each of the Seller and the Assignor all of the Assignor's
obligations as Purchaser thereunder, with respect to the Mortgage Loans.
5. The Seller warrants and represents to, and covenants with, the
Assignor and the Assignee that:
(a) The Seller is not a natural person or a general partnership and
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, and has all requisite power and authority to
service the Mortgage Loans;
(b) The Seller has full power and authority to execute, deliver and
perform under this Assignment Agreement, and to consummate the transactions
set forth herein. The consummation of the transactions contemplated by this
Assignment Agreement is in the ordinary course of the Seller's business and
will not conflict with, or result in a breach of, any of the terms, conditions
or provisions of the Seller's charter or by-laws, or any legal restriction, or
any material agreement or instrument to which the Seller is now a party or by
which it is bound, or
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result in the violation of any law, rule, regulation, order, judgment or
decree to which the Seller or its property is subject. The execution, delivery
and performance by the Seller of this Assignment Agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action of the Seller. This Assignment
Agreement has been duly executed and delivered by the Seller and constitutes
the valid and legally binding obligation of the Seller enforceable against the
Seller in accordance with its respective terms except as enforceability
thereof may be limited by bankruptcy, insolvency, or reorganization or other
similar laws now or hereinafter in effect relating to creditors' rights
generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or in law;
(d) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required
to be obtained or made by the Seller in connection with the execution,
delivery or performance by the Seller of this Assignment Agreement, or the
consummation by it of the transactions contemplated hereby;
(e) As of the date hereof, the Seller is not in default under the
Purchase Agreement; and
(f) No event has occurred or has failed to occur, during the period
commencing on date on which Assignor acquired the Mortgage Loans and ending on
the date hereof, inclusive, which would make the representations and
warranties set forth in Section 3.01 of the Purchase Agreement untrue if such
representations and warranties were made with respect to the Mortgage Loans
effective as of the date hereof.
6. From and after the date hereof, the Seller shall recognize the
Assignee as the owner of the Mortgage Loans, and shall look solely to the
Assignee for performance from and after the date hereof of the Assignor's
obligations with respect to the Mortgage Loans.
7. Notice Addresses.
(a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement is:
________________
________________
Attention:________________
(b) The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement is:
[_____________________________]
[_____________________________]
[_____________________________]
[_____________________________]
Attention:_______________
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(c) The Seller's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment Agreement is:
Wachovia Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
8. This Assignment Agreement shall be construed in accordance with
the substantive laws of the State of New York (without regard to conflict of
laws principles) and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, except to the
extent preempted by federal law.
9. This Assignment Agreement shall inure to the benefit of the
successors and assigns of the parties hereto. Any entity into which the
Seller, the Assignor or the Assignee may be merged or consolidated shall,
without the requirement for any further writing, be deemed the Seller, the
Assignor or the Assignee, respectively, hereunder.
10. No term or provision of this Assignment Agreement may be waived
or modified unless such waiver or modification is in writing and signed by the
party against whom such waiver or modification is sought to be enforced.
11. This Assignment Agreement shall survive the conveyance of the
Mortgage Loans and the assignment of the Purchase Agreement by the Assignor.
12. Notwithstanding the assignment of the Purchase Agreement by
either the Assignor or Assignee, this Assignment Agreement shall not be deemed
assigned by the Seller or the Assignor unless assigned by separate written
instrument.
13. For the purpose for facilitating the execution of this
Assignment Agreement as herein provided and for other purposes, this
Assignment Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute and be one and the same instrument.
[signatures on following page]
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IN WITNESS WHEREOF, the parties have caused this Assignment
Agreement to be executed by their duly authorized officers as of the date
first above written.
[_____________________________]
Assignor
By:
Name:
Title:
_______________________
Assignee
By:
Name:
Title:
Wachovia Mortgage Corporation
Seller
By:
Name:
Title:
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Exhibit E
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Form of Assignment and Conveyance
On this ____ day of ________, 200_, Wachovia Mortgage Corporation ("Wachovia")
as the Seller under that certain First Amended and Restated Seller's Purchase,
Warranties and Servicing Agreement, dated as of June 1, 2006 (the
"Agreement"), by and between Wachovia and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
(the "Purchaser") does hereby sell, transfer, assign, set over and convey to
the Purchaser under the Agreement, without recourse, but subject to the terms
of the Agreement, all rights, title and interest of Wachovia (excluding the
right to service the Mortgage Loans) in and to the Mortgage Loans listed on
the Mortgage Loan Schedule attached hereto as Exhibit A, together with the
Mortgage Files and all rights and obligations arising under the documents
contained therein. Pursuant to Section 2.07 of the Agreement, Wachovia has
delivered to the Purchaser the documents for each Mortgage Loan to be
purchased as set forth therein. The contents of each Servicing File required
to be retained by Wachovia to service the Mortgage Loans pursuant to the
Agreement and thus not delivered to the Purchaser are and shall be held in
trust by Wachovia, for the benefit of the Purchaser as the owner thereof.
Wachovia's possession of any portion of the Servicing File is at the will of
the Purchaser for the sole purpose of facilitating servicing of the related
Mortgage Loan pursuant to the Agreement, and such retention and possession by
Wachovia shall be in a custodial capacity only. The ownership of each Mortgage
Note, Mortgage, and the contents of the Mortgage File and Servicing File is
vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or which come into the
possession of Wachovia shall immediately vest in the Purchaser and shall be
retained and maintained, in trust, by Wachovia at the will of the Purchaser in
such custodial capacity only.
With respect to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto as Exhibit A, the term Standard & Poor's Glossary, as used in
the Agreement, shall refer to Version __ of the Standard & Poor's LEVELS(R)
Glossary.
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Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
WACHOVIA MORTGAGE CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
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Exhibit F
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Request for Release of Documents and Receipt
RE: Mortgage Loan#___________________________________
BORROWER:__________________________________________________
PROPERTY:__________________________________________________
Pursuant to a First Amended and Restated Seller's Purchase, Warranties and
Servicing Agreement (the "Agreement") between the Seller and the Purchaser,
the undersigned hereby certifies that he or she is an officer of the Seller
requesting release of the documents for the reason specified below. The
undersigned further certifies that:
(Check one of the items below)
_____ On _________________, the above captioned mortgage loan was paid in
full or the Seller has been notified that payment in full has been
or will be escrowed. The Seller hereby certifies that all amounts
with respect to this loan which are required under the Agreement
have been or will be deposited in the Custodial Account as required.
_____ The above captioned loan is being repurchased pursuant to the terms
of the Agreement. The Seller hereby certifies that the repurchase
price has been credited to the Custodial Account as required under
the Agreement.
_____ The above captioned loan is being placed in foreclosure and the
original documents are required to proceed with the foreclosure
action. The Seller hereby certifies that the documents will be
returned to the Purchaser in the event of reinstatement.
_____ Other (explain)
_______________________________________________________
_______________________________________________________
All capitalized terms used herein and not defined shall have the meanings
assigned to them in the Agreement.
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Based on this certification and the indemnities provided for in the Agreement,
please release to the Seller all original mortgage documents in your
possession relating to this loan.
Dated:_________________ By:________________________________
Signature
_____________________________________
Title
Send documents to: _____________________________________________
_____________________________________________
_____________________________________________
Acknowledgment:
Purchaser hereby acknowledges that all original documents previously released
on the above captioned mortgage loan have been returned and received by the
Purchaser.
Dated:________________ By:________________________________
Signature
Title:____________________________
USActive 7452067.1
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Exhibit G
---------
Form of S-50Y Report
S5261-50Y W A C H O V I A M O R T G A G
E C O R P 01/30/04
PRIVATE POOL DETAIL
REPORT PAGE 1
------------------------------------------------------------------------------
INVESTOR
:
CATEGORY :
POOL NO : INV PERCT :
100.00
LAST C/OFF: 12/31/03 ODD CLT/INV:( : ) ALPHA CODE:
BANK
PIF DAY PIF PIF CRT RMT PASS TRK ADD PL IND POOL USE S50Y T62C LOAN
DEF INT REM LLOB EXTOUT
RMT YR INT RATE ADJ CAL THRU BAL NEW TP LN ID RES SORT RECP ADV
INT DAY DAY TOL NUM
▇/▇ ▇/▇ ▇▇▇ ▇▇.▇▇▇▇▇ ▇ ▇▇ ▇▇.▇▇▇▇▇ ▇ ▇ CD Y PVT N L Y DET
NO 0000 0649
------------------------------------------------------------------------------
LOAN NO INT RATE S-FEE YIELD P&I CON BEG SCHED PRIN
BAL SCHED PRIN SCH NET INT BUYDOWN REMITTANCE
------------------------------------------------------------------------------
INV LOAN NO DUE DT BEGIN PRIN BAL END PRIN BAL
PRIN COLL INT COLL SER-FEE COLL
------------------------------------------------------------------------------
0009411054 07.00000 01.000 06.00000 309.23
27,512.33 148.74 137.56 0.00 286.30
ARM 0011467613 02/01/04 27,512.41
27,512.41 0.00 0.00 0.00
ENDING SCH
BALANCE 27,363.59
------------------------------------------------------------------------------
0009411062 06.75000 00.438 06.31200 385.84
35,138.54 188.19 184.83 0.00 373.02
ARM ▇▇▇▇▇▇▇▇▇▇ 03/01/04 35,138.54 34,950.35
188.19 197.65 12.83
ENDING SCH
BALANCE 34,950.35
------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇ 06.75000 00.438 06.31200 289.69
25,956.05 143.69 136.53 0.00 280.22
ARM 0011472637 03/01/04 26,098.93 25,812.36
286.57 292.81 19.00
ENDING SCH
BALANCE 25,812.36
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0009411074 04.25000 01.000 03.25000 198.87
22,282.94 119.95 60.35 0.00 180.30
ARM 0011488168 03/01/04 22,282.92 22,162.97
119.95 78.92 18.57
ENDING SCH
BALANCE 22,162.99
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0009411086 03.87500 00.750 03.12500 338.64
42,885.55 200.16 111.68 0.00 311.84
ARM 0012600673 02/01/04 43,085.10 42,837.71
247.39 139.13 26.93
01/01/04 CURTAILMENT 47.88 ADJ .15
INT-RATE .0387500 48.03
ENDING SCH
BALANCE 42,637.36
------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇ 04.00000 00.705 03.29501 299.47
37,919.73 173.07 104.12 0.00 277.19
ARM 0012600990 03/01/04 37,919.74 37,746.67
173.07 126.40 22.28
ENDING SCH
BALANCE 37,746.66
------------------------------------------------------------------------------
0009411090 04.00000 00.705 03.29501 791.38
100,312.27 457.01 275.44 0.00 732.45
ARM 0012601067 04/01/04 99,855.24 99,396.71
458.53 332.85 58.66
ENDING SCH
BALANCE 99,855.26
------------------------------------------------------------------------------
0009411103 06.75000 00.438 06.31200 260.77
22,710.32 133.02 119.46 0.00 252.48
ARM 0013159440 02/01/04 22,842.67 22,710.33
132.34 128.49 8.34
ENDING SCH
BALANCE 22,577.30
------------------------------------------------------------------------------
0009411108 06.00000 00.750 05.25000 183.38
10,418.30 131.29 45.58 0.00 176.87
ARM 0013175371 02/01/04 10,548.94 10,418.30
130.64 52.74 6.59
ENDING SCH
BALANCE 10,287.01
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USActive 7452067.1
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Exhibit H
---------
Form of P-4DL Report
P5261-4DL W A C H O V I A M O R T G A G
E C O R P 08/31/04
INVESTOR LIST OF DELINQUENT ACCOUNTS BY
INVESTOR LOAN NUMBER PAGE 3
------------------------------------------------------------------------------
INVESTOR NAME VARIOUS___ INTEREST RATE .0000000
SERVICE FEE .00000 STATE
INVESTOR
ADDRESS
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ INVESTOR N92 CATEGORY
001
------------------------------------------------------------------------------
LOAN NUMBER INV-CAT TP INV. LN # MORTG.-NAME DESC PRIN
BALANCE DUE-DATE PMT P&I CONST. DELQ PRIN & INTEREST
* COMMENTS PROD CONTACT RESPONSE REASON
DATE *
------------------------------------------------------------------------------
0009911861 N92-001 13 4001683965 XXXXXXX
34,779.99 07-01-03 43 269.63 30.52 239.11
FC- 7: CLAIM CHECK
REC
VACANT SECURED CONDITION ON 060704 LFCPI
▇▇-▇▇ ▇▇-▇▇-▇▇ 44 30.73 238.90
VACANT SECURED CONDITION ON 051804 LFCPI
▇▇-▇▇ ▇▇-▇▇-▇▇ 45 30.94 238.69
Y PAYOFF QUOTE GOOD TO 06/07/2004
▇▇-▇▇ ▇▇-▇▇-▇▇ 46 31.15 238.48
SCORE 792 042704 AGT RPRO DAYS DEL 301
▇▇-▇▇ ▇▇-▇▇-▇▇ 47 31.37 238.26
VACANT SECURED CONDITION ON 032004 LFCPI
▇▇-▇▇ ▇▇-▇▇-▇▇ 48 31.58 238.05
01-01-04 49 31.80 237.83
02-01-04 50 32.02 237.61
03-01-04 51 32.24 237.39
04-01-04 52
32.46 237.17
05-01-04 53 32.68 236.95
06-01-04
54 32.91 236.72
07-01-04 55 33.13 236.50
08-01-04
56 33.36 236.27
LOAN NO
TOTAL
3,774.82 446.89 3,327.93
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0009911863 N92-001 13 4001683967 XXXX
64,816.84 11-01-01 26 495.54 49.92 445.62
SCORE 272 122303 AGT RPRO DAYS DEL 782
▇▇-▇▇ ▇▇-▇▇-▇▇ 27 50.27 445.27
SCORE 287 082603 AGT RPRO DAYS DEL 663
▇▇-▇▇ ▇▇-▇▇-▇▇ 28 50.61 444.93
Y BLTR03 - TRUST RECEIPT FNMA (2009)
▇▇-▇▇ ▇▇-▇▇-▇▇ 29 50.96 444.58
SCORE 208 082802 AGT RPRO DAYS DEL 300
▇▇-▇▇ ▇▇-▇▇-▇▇ 30 51.31 444.23
Y ADV MTRG TO DISREGARD BREACH LETTER SINCE DE
▇▇-▇▇ ▇▇-▇▇-▇▇ 31 51.66 443.88
05-01-02 32 52.02 443.52
06-01-02 33 52.38 443.16
07-01-02 34 52.74 442.80
08-01-02 35 53.10 442.44
09-01-02 36 53.46 442.08
10-01-02 37 53.83 441.71
11-01-02 38 54.20 441.34
12-01-02 39 54.57 440.97
01-01-03 40 54.95 440.59
02-01-03 41 55.33 440.21
03-01-03 42 55.71 439.83
04-01-03 43 56.09 439.45
05-01-03 44 56.48 439.06
06-01-03 45
56.87 438.67
07-01-03 46 57.26 438.28
08-01-03 47
57.65 437.89
09-01-03 48 58.05 437.49
10-01-03
49 58.45 437.09
11-01-03 50 58.85 436.69
12-01-03
51 59.25 436.29
01-01-04 52 59.66 435.88
02-01-04 53 60.07 435.47
USActive 7452067.1
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Exhibit I
---------
Form of Indemnification and Contribution Agreement
This INDEMNIFICATION AND CONTRIBUTION AGREEMENT ("Agreement"), dated
as of [DATE], among [DEPOSITOR] (the "Depositor"), a _______ corporation (the
"Depositor"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York corporation
("▇▇▇▇▇▇") and Wachovia Mortgage Corporation, a North Carolina corporation, as
seller and as servicer (the "Seller").
W I T N E S S E T H:
WHEREAS, the Depositor is acting as depositor and registrant with
respect to the Prospectus, dated [DATE], and the Prospectus Supplement to the
Prospectus, dated [_____] (the "Prospectus Supplement") and the Term Sheet,
dated [______], (the "Term Sheet") relating to [________] (the "Certificates")
to be issued pursuant to a Pooling and Servicing Agreement, dated as of [DATE]
(the "P&S"), among the Depositor, as depositor, [_________], as master
servicer and securities administrator (the "Servicer"), and [_______], as
trustee (the "Trustee");
WHEREAS, as an inducement to the Depositor to enter into the P&S,
and [__________] (the "Underwriter") to enter into the Underwriting Agreement,
dated [________] (the "Underwriting Agreement"), between the Depositor and the
Underwriter, and [_____________] (the "Initial Purchaser") to enter into the
Certificate Purchase Agreement, dated [DATE] (the "Certificate Purchase
Agreement"), between the Depositor and the Initial Purchaser, Seller has
agreed to provide for indemnification and contribution on the terms and
conditions hereinafter set forth;
WHEREAS, ▇▇▇▇▇▇ purchased from Seller certain of the Mortgage Loans
underlying the Certificates (the "Mortgage Loans") pursuant to a First Amended
and Restated Seller's Purchase, Warranties and Servicing Agreement, dated as
of June 1, 2006 (the "Sale and Servicing Agreement"); and
WHEREAS, pursuant to Section 2.07 of the Reg AB Addendum, the Seller
has agreed to indemnify the Depositor, ▇▇▇▇▇▇, the Underwriter, the Initial
Purchaser and their respective present and former directors, officers,
employees and agents.
NOW THEREFORE, in consideration of the agreements contained herein,
and other valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Depositor, ▇▇▇▇▇▇ and the Seller agree as follows:
1. Indemnification and Contribution.
(a) The Seller agrees to indemnify and hold harmless the Depositor,
▇▇▇▇▇▇, the Underwriter, the Initial Purchaser and their respective Affiliates
and their respective present and former directors, officers, employees and
agents and each person, if any, who controls the Depositor, ▇▇▇▇▇▇, the
Underwriter, the Initial Purchaser or such Affiliates within the meaning of
either Section 15 of the Securities Act of 1933, as amended (the "1933 Act"),
or Section 20 of the Securities Exchange Act of 1934, as amended (the "1934
Act"), against any and all losses,
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claims, damages or liabilities, to which they or any of them may become
subject under the 1933 Act, the 1934 Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based in whole or in part upon any material non-compliance with the
requirements of Regulation AB Items 1108, 1110, 1111 (it being understood that
no representation is made by Seller with respect to information regarding the
mortgage loans as aggregated by the Depositor), 1117 or 1119, or arise out of
or are based in whole or in part upon any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus Supplement or the
Term Sheet or any omission or alleged omission to state in the Prospectus
Supplement or the Term Sheet a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any such untrue statement or omission
or alleged untrue statement or alleged omission made in any amendment of or
supplement to the Prospectus Supplement or the Term Sheet (provided that
▇▇▇▇▇▇ has provided the Seller with reasonable advanced notice of such
amendment or supplement and Seller if afforded no fewer than five (5) Business
Days to review and, if required, update, the Seller Information stated
therein) and agrees to reimburse the Depositor, ▇▇▇▇▇▇, the Underwriter, the
Initial Purchaser or such Affiliates and each such officer, director,
employee, agent and controlling person promptly upon demand for any legal or
other expenses reasonably incurred by any of them in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that Seller shall be liable in any such case only to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission set forth in or omitted from the Seller Information. The foregoing
indemnity agreement is in addition to any liability which Seller may otherwise
have to the Depositor, ▇▇▇▇▇▇, the Underwriter, the Initial Purchaser their
Affiliates or any such director, officer, employee, agent or controlling
person of the Depositor, ▇▇▇▇▇▇, the Underwriter, the Initial Purchaser or
their respective Affiliates.
(b) ▇▇▇▇▇▇ agrees to indemnify and hold harmless the Seller and its
present and former directors, officers, employees and agents and each person,
if any, who controls the Seller within the meaning of either Section 15 of the
1933 Act, or Section 20 of the 1934 Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the 1933 Act, the 1934 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based in whole or in part upon any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus Supplement or
the Term Sheet or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or any
such untrue statement or omission or alleged untrue statement or alleged
omission made in any amendment of or supplement to the Prospectus Supplement
or the Term Sheet, or arise out of or are based in whole or in part upon any
material non-compliance with the requirements of Regulation AB (17 CFR
229.1100 et seq.), and ▇▇▇▇▇▇ shall in each case reimburse the Seller and each
such officer, director, employee, agent and controlling person promptly upon
demand for any legal or other expenses reasonably incurred by any of them in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however,
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that ▇▇▇▇▇▇ shall be liable in any such case only to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
set forth in or omitted from the information set forth in the Prospectus
Supplement or the Term Sheet or any amendment of or supplement to either the
Prospectus Supplement or the Term Sheet other than (i) the Seller Information
or (ii) any information regarding the Mortgage Loans set forth in the
Prospectus Supplement or the Term Sheet or any amendment of or supplement to
either that is derived from loan-level information provided by the Seller to
the Purchaser, the Depositor or any of their Affiliates. The foregoing
indemnity agreement is in addition to any liability which ▇▇▇▇▇▇ may otherwise
have to the Seller or any such director, officer, employee, agent or
controlling person of the Seller.
As used herein:
"Seller Information" means any information relating to Seller, the
Mortgage Loans and/or the underwriting guidelines relating to the Mortgage
Loans provided by the Seller for inclusion in the Prospectus Supplement or the
Term Sheet.
(c) Promptly after receipt by any indemnified party under this
Section 1 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 1 except to the extent it has
been materially prejudiced by such failure; and provided, further, however,
that the failure to notify any indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 1.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, except as
provided in the following paragraph, the indemnifying party shall not be
liable to the indemnified party under this Section 1 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by
the indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
necessary or appropriate for such indemnified party to employ separate
counsel; or (iii) the indemnifying party has failed to assume the defense of
such action and employ counsel reasonably satisfactory to the indemnified
party, in which case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate
USActive 7452067.1
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counsel at the expense of the indemnifying party, the indemnifying party shall
not have the right to assume the defense of such action on behalf of such
indemnified party, it being understood, however, the indemnifying party shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to local
counsel) at any time for all such indemnified parties.
Each indemnified party, as a condition of the indemnity agreements
contained in this Section 1, shall cooperate with the indemnifying party in
the defense of any such action or claim. No indemnifying party shall be liable
for any settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment for the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of
such settlement.
(d) If the indemnification provided for in this Section 1 is
unavailable to an indemnified party, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party, respectively, in
connection with the statements or omissions that result in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified party and indemnifying
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
such parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission and any other
equitable considerations.
(e) The indemnity and contribution agreements contained in this
Section 1 shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by the
Depositor, ▇▇▇▇▇▇, the Underwriter, the Initial Purchaser, their respective
Affiliates, directors, officers, employees or agents or any person controlling
the Depositor, ▇▇▇▇▇▇, the Underwriter, the Initial Purchaser or any such
Affiliate, and (iii) acceptance of and payment for any of the Offered
Certificates or Private Certificates.
2. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to Seller, will be mailed, delivered
or faxed or emailed and confirmed by mail to Wachovia Mortgage Corporation,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Fax: (704)
▇▇▇-▇▇▇▇, with a copy to Wachovia Mortgage Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇▇, Fax: (919)
▇▇▇-▇▇▇▇; if sent to ▇▇▇▇▇▇, ▇▇▇▇ be mailed, delivered or faxed or emailed and
confirmed by mail to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Email:
▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, with copies to (i) ▇▇▇▇▇ ▇. ▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ - Legal Counsel, Securities, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Email: ▇▇▇▇▇.▇.▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - SPG Finance, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; if to the
Depositor, will be mailed, delivered or telegraphed and confirmed to
[___________]; Attention: [________]; or if to the Underwriter, will be
mailed, delivered or telegraphed and confirmed to [_________]; or if to the
Initial Purchaser, will be mailed, delivered or telegraphed and confirmed to
[_________]; Attention: [__________].
3. Miscellaneous. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without giving effect to
the conflict of laws provisions thereof. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their successors and
assigns and the controlling persons referred to herein, and no other person
shall have any right or obligation hereunder. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. This Agreement may be
executed in counterparts, each of which when so executed and delivered shall
be considered an original, and all such counterparts shall constitute one and
the same instrument. Capitalized terms used but not defined herein shall have
the meanings provided in the P&S.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers hereunto duly authorized, this
____ day of _____, 200__.
[DEPOSITOR]
By: ________________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By: ________________________________
Name:
Title:
WACHOVIA MORTGAGE CORPORATION
By: ________________________________
Name:
Title:
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Exhibit J
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Form of Annual Certification
Re: [_______________] (the "Trust"), Mortgage Pass-Through
Certificates, Series [_____], issued pursuant to the Pooling
and Servicing Agreement, dated as of [_____], 200[_] (the
"Pooling and Servicing Agreement"), among [_____], as depositor
(the "Depositor"), [_____], as trustee (the "Trustee"),
[_____], as servicer (the "Servicer"), and [_____], as
responsible party
I, [identify the certifying individual], certify to the Depositor
and the Trustee, and their officers, directors and Affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. The servicing information required to be provided to
the Trustee by the Servicer under the Pooling and Servicing
Agreement has been so provided;
2. I am responsible for reviewing the activities performed
by the Servicer under the Pooling and Servicing Agreement and based
upon my knowledge and the annual compliance review required under
the Pooling and Servicing Agreement, and except as disclosed in the
annual compliance statement required to be delivered to the Trustee
in accordance with the terms of the Pooling and Servicing Agreement
(which has been so delivered to the Trustee), the Servicer has
fulfilled its obligations under the Pooling and Servicing Agreement;
and
3. All significant deficiencies relating to the Servicer's
compliance with the minimum servicing standards for purposes of the
report provided by an independent public accountant, after
conducting a review conducted in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or similar procedure, as
set forth in the Pooling and Servicing Agreement, have been
disclosed to such accountant and are included in such report.
Date: _________________________
_______________________________
[Signature]
[Title]
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