Exhibit 99.9
XXXXXXX XXXXX MORTGAGE LENDING, INC.
PURCHASER
AND
XXXXX FARGO BANK, N.A.
COMPANY
SELLER'S WARRANTIES AND SERVICING AGREEMENT
DATED AS OF AUGUST 1, 2005
ADJUSTABLE RATE MORTGAGE LOANS
WFHM MORTGAGE LOAN SERIES 2005-W58
TABLE OF CONTENTS
ARTICLE I.............................................................................. 1
DEFINITIONS............................................................................ 1
ARTICLE II............................................................................. 12
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS;
CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS............................................. 12
ARTICLE III............................................................................ 15
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH..................................... 15
ARTICLE IV............................................................................. 34
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS......................................... 34
ARTICLE V.............................................................................. 50
PAYMENTS TO PURCHASER.................................................................. 50
ARTICLE VI............................................................................. 51
GENERAL SERVICING PROCEDURES........................................................... 51
ARTICLE VII............................................................................ 54
COMPANY TO COOPERATE................................................................... 54
ARTICLE VIII........................................................................... 54
THE COMPANY............................................................................ 54
ARTICLE IX............................................................................. 56
REMOVAL OF MORTGAGE LOANS FROM AGREEMENT............................................... 56
ARTICLE X.............................................................................. 59
DEFAULT................................................................................ 59
ARTICLE XI............................................................................. 61
TERMINATION............................................................................ 61
ARTICLE XII............................................................................ 61
MISCELLANEOUS PROVISIONS............................................................... 61
EXHIBITS
Exhibit A Mortgage Loan Schedule
Exhibit A-1 Data File
Exhibit B Contents of Each Mortgage Loan File
Exhibit C Custodial Agreement
Exhibit D Form of Assignment, Assumption and
Recognition Agreement
Exhibit E Form of Custodial Account Certification
Exhibit F Form of Escrow Account Certification
Exhibit G Form of Annual Certification
Exhibit H Indemnification Agreement
This is a Seller's Warranties and Servicing Agreement for adjustable rate
residential first
mortgage loans, dated and effective as of August 1, 2005, and is executed
between Xxxxxxx Xxxxx Mortgage Lending, Inc., as purchaser (the "Purchaser"),
and Xxxxx Fargo Bank, N.A., as seller and servicer (the "Company").
WITNESSETH
WHEREAS, the Purchaser has agreed to purchase from the Company and the Company
has agreed to sell to the Purchaser certain Mortgage Loans which have an
aggregate outstanding principal balance as indicated on the Mortgage Loan
Schedule;
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of trust or
other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule, which is
annexed hereto as Exhibit A; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the conveyance, servicing and control of the
Mortgage Loans.
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 Company agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the content
otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as the Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located and in accordance
with applicable law.
Adjustment Date: As to each adjustable rate Mortgage Loan, the date on which
the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note and Mortgage.
Agency: Xxxxxx Xxx, Xxxxxxx Mac or GNMA, or any of them as applicable.
Agency Sale: Any sale or transfer of some or all of the Mortgage Loans by the
Purchaser to an Agency which sale or transfer is not a Pass-Through Transfer or
Whole Loan Transfer.
Agreement: This Seller's Warranties and Servicing Agreement and all exhibits
thereto, amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i) the
value set forth on the appraisal made in connection with the origination of the
related Mortgage Loan as the value of the related Mortgaged Property, or (ii)
the purchase price paid for the Mortgaged Property, provided, however, that in
the case of a refinanced Mortgage Loan, such value shall be based solely on the
appraisal made in connection with the origination of such Mortgage Loan.
Appropriate Federal Banking Agency: Appropriate Federal Banking Agency
shall have the meaning ascribed to it by Section 1813(q) of Title 12 of the
United States Code, as amended from time to time.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser or if the related Mortgage has been
recorded in the name of MERS or its designee, such actions as are necessary to
cause the Purchaser to be shown as the owner of the related Mortgage on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS, including assignment of the MIN
Number which will appear either on the Mortgage or the Assignment of Mortgage to
MERS.
Assignment of Mortgage Note and Pledge Agreement: With respect to a
Cooperative Loan, an assignment of the Mortgage Note and Pledge Agreement.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, an
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Apartment is located to effect the
assignment of such Proprietary Lease.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions in the states where the parties
are located, are authorized or obligated by law or executive order to be closed.
Buydown Agreement: An agreement between the Company and a Mortgagor, or an
agreement among the Company, a Mortgagor and a seller of a Mortgaged Property or
a third party with respect to a Mortgage Loan which provides for the application
of Buydown Funds.
Buydown Funds: In respect of any Buydown Mortgage Loan, any amount contributed
by the seller of a Mortgaged Property subject to a Buydown Mortgage Loan, the
buyer of such property, the Company or any other source, plus interest earned
thereon, in order to enable the Mortgagor to reduce the payments required to be
made from the mortgagor's
funds in the early years of a Mortgage Loan.
Buydown Mortgage Loan: Any Mortgage Loan in respect of which, pursuant to a
Buydown Agreement, (i) the Mortgagor pays less than the full monthly payments
specified in the Mortgage Note for a specified period, and (ii) the difference
between the payments required under such Buydown Agreement and the Mortgage Note
is provided from Buydown Funds.
Buydown Period: The period of time when a Buydown Agreement is in effect with
respect to a related Buydown Mortgage Loan.
Closing Date: August 9, 2005.
Code: The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
Company: Xxxxx Fargo Bank, N.A., or its successor in interest or assigns, or
any successor to the Company under this Agreement appointed as herein provided.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent 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: A Mortgage Loan that by its terms and subject
to certain conditions contained in the related Mortgage or Mortgage Note allows
the Mortgagor to convert the adjustable Mortgage Interest Rate on such Mortgage
Loan to a fixed Mortgage Interest Rate.
Cooperative: The entity that holds title (fee or an acceptable leasehold
estate) to all of the real property that the Project comprises, including the
land, separate dwelling units and all common areas.
Cooperative Apartment: The specific dwelling unit relating to a
Cooperative Loan.
Cooperative Lien Search: A search for (a) federal tax liens, mechanics'
liens, lis pendens, judgments of record or otherwise against (i) the
Cooperative, (ii) the seller of the Cooperative Apartment and (iii) the Company
if the Cooperative Loan is a refinanced Mortgage Loan, (b) filings of financing
statements and (c) the deed of the Project into the Cooperative.
Cooperative Loan: A Mortgage Loan that is secured by Cooperative Shares
and a Proprietary Lease granting exclusive rights to occupy the related
Cooperative Apartment.
Cooperative Shares: The shares of stock issued by a Cooperative, owned by
the
Mortgagor, and allocated to a Cooperative Apartment.
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to the
Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.6b, Appendix
E, revised February 7, 2005 (excluding New Jersey "Covered Home Loans" as that
term is defined in clause (1) of the definition of that term in the New Jersey
Home Ownership Security Act of 2002).
Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.04.
Custodial Agreement: The agreement governing the retention of the originals of
each Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage Loan
Documents, between the Purchaser and the Custodian, a copy of which is annexed
hereto as Exhibit C.
Custodian: The custodian under the Custodial Agreement, or its successor in
interest or assigns, or any successor to the Custodian under the Custodial
Agreement as provided therein.
Cut-off Date: August 1, 2005.
Data File: The electronic data file prepared by the Company and delivered to
the Purchaser including the data fields set forth on Exhibit A-2 with respect to
each Mortgage Loan.
Deleted Mortgage Loan: A Mortgage Loan which is repurchased by the Company in
accordance with the terms of this Agreement and which is, in the case of a
substitution pursuant to Section 3.03, replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Determination Date: The Business Day immediately preceding the related
Remittance Date.
Due Date: The first day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing on the
second day of the month preceding the month of the Remittance Date and ending on
the first day of the month of the Remittance Date.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts constituting
ground rents, taxes, assessments, water rates, sewer rents, municipal charges,
mortgage insurance premiums, fire and hazard insurance premiums, condominium
charges, and any other payments required to be escrowed by the Mortgagor with
the mortgagee pursuant to the Mortgage or any other related document.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 10.01.
Xxxxxx Xxx: The Federal National Mortgage Association or Xxxxxx Mae, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Company pursuant to
Section 4.12.
First Remittance Date: September 19, 2005.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation or Xxxxxxx Mac, or any
successor thereto.
Gross Margin: With respect to each adjustable rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note which is added to the
Index in order to determine the related Mortgage Interest Rate, as set forth in
the Mortgage Loan Schedule.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan under
the Home Ownership and Equity Protection Act of 1994, (b) a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002), "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law or (c) a Mortgage Loan
categorized as "High Cost" pursuant to the Standard & Poor's Glossary for File
Format for LEVELS(R) Version 5.6b, Appendix E, revised February 7, 2005.
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 interest thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of insurance
policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall have
the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Only Mortgage Loan: A Mortgage Loan for which an interest-only
payment feature is allowed during the interest-only period set forth in the
related Mortgage Note.
Letter of Credit: With respect to a Pledged Asset Mortgage Loan, a
guaranty issued to the Company by the Pledge Holder for the Pledged Value
Amount.
Liquidation Proceeds: Cash received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the related
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio of
the original loan amount of the Mortgage Loan at its origination (unless
otherwise indicated) to the Appraised Value of the Mortgaged Property.
LPMI Policy: A PMI Policy for which the Company pays all premiums from its
own funds, without reimbursement.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest 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: Mortgage Identification Number used to identify mortgage loans
registered under MERS.
Monthly Advance: The portion of each Monthly Payment that is delinquent with
respect to each Mortgage Loan at the close of business on the Determination Date
required to be advanced by the Company pursuant to Section 5.03 on the Business
Day immediately preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal and interest on a
Mortgage Loan or in the case of an Interest Only Mortgage Loan, payments of (i)
interest, or (ii) principal and interest, as applicable, on such Mortgage Loan
during the interest-only period.
Mortgage: The mortgage, deed of trust or other instrument securing a Mortgage
Note, which creates a first lien on an unsubordinated estate in fee simple in
real property securing the Mortgage Note, or the Pledge Agreement securing the
Mortgage Note for a Cooperative Loan.
Mortgage File: The items pertaining to a particular Mortgage Loan referred to
in Exhibit B annexed hereto, and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket hazard
insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage Note
in accordance with the provisions of the 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 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 and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: With respect to a Mortgage Loan, the original related
Mortgage Note with applicable addenda and riders, the original related Mortgage
and the originals of any required addenda and riders, the original related
Assignment of Mortgage and any original intervening related Assignments of
Mortgage, the original related title insurance policy and evidence of the
related PMI policy, if any.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the annual
rate of interest remitted to the Purchaser, which shall be equal to the related
Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto as Exhibit
A, such schedule setting forth the following information with respect to each
Mortgage Loan: (1) the Company's Mortgage Loan number; (2) the city state and
zip code of the Mortgaged Property; (3) a code indicating whether the Mortgaged
Property is a single family residence, two-family residence, three-family
residence, four-family residence, planned unit development or condominium; (4)
the current Mortgage Interest Rate; (5) the current net Mortgage Interest Rate;
(6) the current Monthly Payment; (7) the Gross Margin; (8) the original term to
maturity; (9) the scheduled maturity date; (10) the principal balance of the
Mortgage Loan as of the Cut-off Date after deduction of payments of principal
due on or before the Cut-off Date whether or not collected; (11) the
Loan-to-Value Ratio; (12) the next Adjustment Date; (13) the lifetime Mortgage
Interest Rate cap; (14) whether the Mortgage Loan is convertible or not; (15) a
code indicating the mortgage guaranty insurance company; (16) a code indicating
whether the Mortgage Loan is an Interest Only Mortgage Loan; (17) a code
indicating whether the loan is subject to LPMI and (18) the Servicing Fee Rate.
Mortgage Note: The note or other evidence of the indebtedness of a Mortgagor
secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt evidenced
by a Mortgage Note, or with respect to a Cooperative Loan, the Cooperative
Apartment.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President and certified by the Treasurer or the Secretary or one
of the Assistant Treasurers or Assistant Secretaries of the Company, and
delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of
the Company, reasonably acceptable to the Purchaser.
Pass-Through Transfer: The sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a trust to be formed as part of a publicly issued or
privately placed mortgage-backed securities transaction.
Periodic Interest Rate Cap: As to each adjustable rate Mortgage Loan, the
maximum increase or decrease in the Mortgage Interest Rate on any Adjustment
Date pursuant to the terms of the Mortgage Note.
Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Pledge Agreement: With respect to a Cooperative Loan, the specific
agreement creating a first lien on and pledge of the Cooperative Shares and the
appurtenant Proprietary Lease.
Pledge Account: With respect to a Pledged Asset Mortgage Loan, an account that
is managed by the Pledge Holder to secure a Letter of Credit.
Pledge Account Maintenance Value: With respect to a Pledged Asset Mortgage
Loan, a minimum percentage of the pledged amount specified in the Underwriting
Guidelines. If the balance on the Pledge Account falls below the maintenance
value of the pledge amount, the Pledge Holder will require that more funds be
added to the Pledge Account, or decide to make a margin call.
Pledge Account Set-Up Value: With respect to a Pledged Asset Mortgage
Loan, a minimum percentage of the pledged amount specified in the Underwriting
Guidelines placed in the Pledge Account to allow for market fluctuations. The
Pledge Holder determines the Pledge Account Set-Up Value.
Pledge Holder: With respect to a Pledged Asset Mortgage Loan, the entity
that
holds the Pledge Account, manages the Pledge Account and provides the Letter of
Credit.
Pledge Instruments: With respect to a Cooperative Loan, the Stock Power,
the Assignment of the Proprietary Lease and the Assignment of the Mortgage Note
and Pledge Agreement.
Pledged Asset Mortgage Loan: A Mortgage Loan for which the Mortgagor has
pledged financial assets to a Pledge Account to secure a Letter of Credit, as
partial collateral for the Mortgage Loan, in lieu of a cash down payment.
Pledged Value Amount: With respect to a Pledged Asset Mortgage Loan, a
minimum of 20% of the lower of the purchase price or appraised value of a
Mortgaged Property.
PMI Policy: A policy of primary mortgage guaranty insurance evidenced by
an electronic form and certificate number issued by a Qualified Insurer, as
required by this Agreement with respect to certain Mortgage Loans. The premiums
on a PMI Policy are paid (i) by the Mortgagor or (ii) by the Company from its
own funds, without reimbursement, in the case of an LPMI Policy.
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.
Principal Prepayment: Any payment or other recovery of principal on a Mortgage
Loan which is received in advance of its scheduled Due Date, including any
prepayment penalty or premium thereon and which is not accompanied by an amount
of interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment.
Principal Prepayment Period: The calendar month preceding the month in which
the related Remittance Date occurs.
Project: With respect to a Cooperative Loan, all real property owned by
the related Cooperative including the land, separate dwelling units and all
common areas.
Proprietary Lease: With respect to a Cooperative Loan, a lease on a
Cooperative Apartment evidencing the possessory interest of the Mortgagor in
such Cooperative Apartment.
Purchaser: Xxxxxxx Xxxxx Mortgage Lending, Inc., or its successor in interest
or any successor to the Purchaser under this Agreement as herein provided.
Qualified Depository: A deposit account or accounts maintained with a federal
or state chartered depository institution the deposits in which are insured by
the FDIC to the applicable limits and the short-term unsecured debt obligations
of which (or, in the case of a depository institution that is a subsidiary of a
holding company, the short-term unsecured debt obligations of such holding
company) are rated A-1 by Standard & Poor's
Ratings Services or Prime-1 by Xxxxx'x Investors Service, Inc. (or a comparable
rating if another rating agency is specified by the Purchaser by written notice
to the Company) at the time any deposits are held on deposit therein.
Qualified Insurer: A mortgage guaranty insurance company duly authorized and
licensed where required by law to transact mortgage guaranty insurance business
and approved as an insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be substituted
by the Company for a Deleted Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding principal balance, after deduction of all
scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) have a Mortgage Loan Remittance Rate not less
than, and not more than two percent (2%) greater, than the Mortgage Loan
Remittance Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; and (iv) comply with each representation and warranty set
forth in Sections 3.01 and 3.02.
Recognition Agreement: An agreement whereby a Cooperative and a lender with
respect to a Cooperative Loan (i) acknowledge that such lender may make, or
intends to make, such Cooperative Loan, and (ii) make certain agreements with
respect to such Cooperative Loan.
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement shall be reconstituted as part of a Pass-Through
Transfer, Agency Sale or Whole Loan Transfer pursuant to Section 9.01 hereof.
The Reconstitution Date shall be such date which the Purchaser shall designate.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day (or if such 18th day is not a Business Day, the
first Business Day immediately following) of any month, beginning with the First
Remittance Date.
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf of the
Purchaser through foreclosure or by deed in lieu of foreclosure, as described in
Section 4.16.
Repurchase Price: Unless agreed otherwise agreed by the Purchaser and the
Company, a price equal to (i) the Stated Principal Balance of the Mortgage Loan
as of the date on which such repurchase takes place, plus (ii) interest on such
Stated Principal Balance at the Mortgage Loan Remittance Rate from the date on
which interest has last been paid and distributed to the Purchaser through the
last day of the month in which such repurchase takes place, less amounts
received or advanced in respect of such repurchased Mortgage Loan which are
being held in the Custodial Account for distribution in the month of repurchase.
Securities Act of 1933 or the 1933 Act: The Securities Act of 1933, as
amended.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses other than Monthly Advances (including reasonable attorney's
fees and disbursements) incurred in the performance by the Company of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of any REO Property and (d) compliance with the obligations
under Section 4.08 (excluding the Company's obligation to pay the premiums on
LPMI Policies).
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual
fee the Purchaser shall pay to the Company, which shall, for a period of one
full month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate
and (b) the outstanding 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
received. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to the
extent permitted by Section 4.05) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.05.
Servicing Fee Rate: 0.250% per annum per Mortgage Loan.
Servicing File: With respect to each Mortgage Loan, the file retained by the
Company consisting of originals of all documents in the Mortgage File which are
not delivered to the Custodian and copies of the Mortgage Loan Documents listed
in the Custodial Agreement the originals of which are delivered to the Custodian
pursuant to Section 2.03.
Servicing Officer: Any officer of the Company 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 Company to the Purchaser upon
request, as such list
may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan and as of any date of
determination, (i) the principal balance of the Mortgage Loan at the 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 related Mortgage Loan representing payments or
recoveries of principal or advances in lieu thereof.
Stock Certificate: With respect to a Cooperative Loan, a certificate
evidencing ownership of the Cooperative Shares issued by the Cooperative.
Stock Power: With respect to a Cooperative Loan, an assignment of the
Stock Certificate or an assignment of the Cooperative Shares issued by the
Cooperative.
Subsidy Account: An account maintained by the Company specifically to hold
all Subsidy Funds to be applied to individual Subsidy Loans.
Subsidy Funds: With respect to any Subsidy Loans, funds contributed by the
employer of a Mortgagor in order to reduce the payments required from the
Mortgagor for a specified period in specified amounts.
Subsidy Loan: Any Mortgage Loan subject to a temporary interest subsidy
agreement pursuant to which the monthly interest payments made by the related
Mortgagor will be less than the scheduled monthly interest payments on such
Mortgage Loan, with the resulting difference in interest payments being provided
by the employer of the Mortgagor. Each Subsidy Loan will be identified as such
in the related Data File and on the Mortgage Loan Schedule.
Time$aver(R) Mortgage Loan: A Mortgage Loan which has been refinanced pursuant
to a Company program that allows a rate/term refinance of an existing Company
serviced loan with minimal documentation.
Underwriting Guidelines: The underwriting guidelines of the Company, as
provided to the Purchaser by the Company.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage Loans
by the Purchaser to a third party, which sale or transfer is not a Pass-Through
Transfer or Agency Sale.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE
FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF
DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files;
Maintenance of Servicing Files.
The Company, simultaneously with the execution and delivery of this Agreement,
does hereby sell, transfer, assign, set over and convey to the Purchaser,
without recourse, but subject to the terms of this Agreement, all the right,
title and interest of the Company in and to the Mortgage Loans. Pursuant to
Section 2.03, the Company has delivered the Mortgage Loan Documents to the
Custodian.
The contents of each Mortgage File not delivered to the Custodian are and
shall be held in trust by the Company for the benefit of the Purchaser as the
owner thereof. The Company shall maintain a Servicing File consisting of a copy
of the contents of each Mortgage File and the originals of the documents in each
Mortgage File not delivered to the Custodian. The possession of each Servicing
File by the Company is at the will of the Purchaser for the sole purpose of
servicing the related Mortgage Loan, and such retention and possession by the
Company is in a custodial capacity only. Upon the sale of the Mortgage Loans the
ownership of each Mortgage Note, the related Mortgage and the related Mortgage
File and Servicing File shall vest immediately in the Purchaser, and the
ownership of all records and documents with respect to the related Mortgage Loan
prepared by or which come into the possession of the Company shall vest
immediately in the Purchaser and shall be retained and maintained by the
Company, in trust, at the will of the Purchaser and only in such custodial
capacity. The Company shall release its custody of the contents of any Servicing
File only in accordance with written instructions from the Purchaser, unless
such release is required as incidental to the Company's servicing of the
Mortgage Loans or is in connection with a repurchase of any Mortgage Loan
pursuant to Section 3.03 or 6.02. All such costs associated with the release,
transfer and re-delivery of any Mortgage Files and Servicing Files between the
parties shall be the responsibility of the party in possession of such file or
files.
In addition, in connection with the assignment of any MERS Mortgage Loan,
the Company agrees that it will cause, the MERS(R) System to indicate that such
Mortgage Loans have been assigned by the Company 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 as
beneficial owner of such Mortgage Loans.
Section 2.02 Books and Records; Transfers of Mortgage Loans.
From and after the sale of the Mortgage Loans to 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, shall be received and held
by the Company in trust for the benefit of the Purchaser as owner of the
Mortgage Loans, and the Company shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and
the supervision of the servicing of the Mortgage Loans.
The sale of each Mortgage Loan shall be reflected on the Company's balance
sheet and other financial statements as a sale of assets by the Company. The
Company shall be responsible for maintaining, and shall maintain, a complete set
of books and records for each Mortgage Loan which shall be marked clearly to
reflect the ownership of each Mortgage Loan by the Purchaser. In particular, the
Company 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 Xxxxxx Xxx or Xxxxxxx Mac, 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 Xxxxxx Mae or Xxxxxxx Mac
and records of periodic inspections 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 Company
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 Company complies with the requirements of the Xxxxxx
Mae Selling and Servicing Guide, as amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any 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.
The Company shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Company shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms hereof. For the purposes of
this Agreement, the Company shall be under no obligation to deal with any Person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such Person as the owner of the Mortgage Loan. The Purchaser may,
subject to the terms of this Agreement, sell and transfer one or more of the
Mortgage Loans. The Purchaser also shall advise the Company of the transfer.
Upon receipt of notice of the transfer, the Company shall xxxx its books and
records to reflect the ownership of the Mortgage Loans of such assignee, and
shall release the previous Purchaser from its obligations hereunder with respect
to the Mortgage Loans sold or transferred. If the Company receives notification
of a transfer, including a loan schedule, with a final loan schedule by the
third Business Day before the last Business Day of the month, the Company's
duties to remit and report as required by Section 5 shall begin with the next
Due Period.
Section 2.03 Custodial Agreement; Delivery of Documents.
The Company has delivered to the Custodian those Mortgage Loan Documents as
required by Exhibit B to this Agreement with respect to each Mortgage Loan.
The Custodian has certified its receipt of all such Mortgage Loan Documents
required to be delivered pursuant to the Custodial Agreement, as evidenced by
the Initial Certification of the Custodian in the form annexed to the Custodial
Agreement. The Purchaser will be responsible for the fees and expenses of the
Custodian.
The Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one week of their
execution, provided, however, that the Company shall provide the Custodian with
a certified true copy of any such document submitted for recordation within ten
(10) days of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty days of its submission for recordation.
In the event the public recording office is delayed in returning any original
document, the Company shall deliver to the Custodian within 240 days of its
submission for recordation, a copy of such document and an Officer's
Certificate, which shall (i) identify the recorded document; (ii) state that the
recorded document has not been delivered to the Custodian due solely to a delay
by the public recording office, (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, and (iv) specify the date the applicable recorded
document will be delivered to the Custodian. The Company will be required to
deliver the document to the Custodian by the date specified in (iv) above. An
extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld. In the event that
any document described above has not been delivered to the Custodian by the date
set forth in (iv) above or by the extended date as may be agreed to by both
parties, then the Company shall, at Purchaser's request, repurchase the related
Mortgage Loan for which such documents have not been delivered.
In the event that new, replacement, substitute or additional Stock
Certificates are issued with respect to existing Cooperative Shares, the Company
immediately shall deliver to the Custodian the new Stock Certificates, together
with the related Stock Powers in blank. Such new Stock Certificates shall be
subject to the related Pledge Instruments and shall be subject to all of the
terms, covenants and conditions of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company hereby represents and warrants to the Purchaser that, as of the
Closing Date:
(a) Due Organization and Authority.
The Company is a national banking association duly organized, validly existing
and in good standing under the laws of the United States and has all
licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state where a Mortgaged
Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Company, and in any event the Company is in compliance with the laws of
any such state to the extent necessary to ensure the enforceability of the
related Mortgage Loan and the servicing of such Mortgage Loan in
accordance with the terms of this Agreement; the Company has the full
corporate power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by the Company and the consummation of the
transactions contemplated hereby have been duly and validly authorized;
this Agreement evidences the valid, binding and enforceable obligation of
the Company; and all requisite corporate action has been taken by the
Company to make this Agreement valid and binding upon the Company in
accordance with its terms;
(b) Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Company, who is in the business of
selling and servicing loans, and the transfer, assignment and conveyance
of the Mortgage Notes and the Mortgages by the Company pursuant to this
Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(c) No Conflicts.
Neither the execution and delivery of this Agreement, the acquisition of the
Mortgage Loans by the Company, the sale of the Mortgage Loans to the
Purchaser or the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement will
conflict with or result in a breach of any of the terms, articles of
incorporation or by-laws or any legal restriction or any agreement or
instrument to which the Company is now a party or by which it is bound, or
constitute a default or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Company or its property
is subject, or impair the ability of the Purchaser to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability to Service.
The Company is an approved seller/servicer of conventional residential
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac, with the facilities,
procedures, and experienced personnel necessary for the sound servicing of
mortgage loans of the same type as the Mortgage Loans. The Company is a
HUD approved mortgagee and is in good standing to sell mortgage loans to
and service mortgage loans for Xxxxxx Mae or Xxxxxxx Mac, and no event has
occurred, including but not limited to a change in insurance coverage,
which would make the Company unable to comply with Xxxxxx Mae or Xxxxxxx
Mac eligibility requirements or which would require notification to either
Xxxxxx Mae or Xxxxxxx Mac;
(e) Reasonable Servicing Fee.
The Company acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Company, for accounting and tax
purposes, as compensation for the servicing and administration of the
Mortgage Loans pursuant to this Agreement;
(f) Ability to Perform.
The Company does not believe, nor does it have any reason or cause to believe,
that it cannot perform each and every covenant contained in this
Agreement. The Company is solvent and the sale of the Mortgage Loans will
not cause the Company to become insolvent. The sale of the Mortgage Loans
is not undertaken to hinder, delay or defraud any of the Company's
creditors;
(g) No Litigation Pending.
There is no action, suit, proceeding or investigation pending or threatened
against the Company which, either in any one instance or in the aggregate,
may result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company, or in any
material impairment of the right or ability of the Company to carry on its
business substantially as now conducted, or in any material liability on
the part of the Company, or which would draw into question the validity of
this Agreement or the Mortgage Loans or of any action taken or to be
contemplated herein, or which would be likely to impair materially the
ability of the Company to perform under the terms of this Agreement;
(h) No Consent Required.
No consent, approval, authorization or order of any court or governmental
agency
or body is required for the execution, delivery and performance by
the Company of or compliance by the Company with this Agreement or
the sale of the Mortgage Loans as evidenced by the consummation of
the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the Closing Date;
(i) Selection Process.
The Mortgage Loans were selected from among the outstanding
adjustable rate one- to four-family mortgage loans in the Company's
mortgage banking portfolio at the Closing Date as to which the
representations and warranties set forth in Section 3.02 could be
made and such selection was not made in a manner so as to affect
adversely the interests of the Purchaser;
(j) No Untrue Information.
Neither this Agreement nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any
untrue statement of fact or omits to state a fact necessary to make
the statements contained therein not misleading;
(k) Sale Treatment.
The Company has determined that the disposition of the Mortgage Loans
pursuant to this Agreement will be afforded sale treatment for
accounting and tax purposes;
(l) No Material Change.
There has been no material adverse change in the business, operations,
financial condition or assets of the Company since the date of the
Company's most recent financial statements;
(m) No Brokers' Fees.
The Company has not dealt with any broker, investment banker, agent or
other Person that may be entitled to any commission or compensation
in the connection with the sale of the Mortgage Loans; and
(n) MERS Status
The Company is a member of MERS in good standing.
Section 3.02 Representations and Warranties Regarding Individual Mortgage Loans.
As to each Mortgage Loan, the Company hereby represents and warrants to the
Purchaser that as of the Closing Date:
(a) Mortgage Loans as Described.
The information set forth in the Mortgage Loan Schedule attached hereto
as Exhibit A and the information contained on the Data File attached
hereto as Exhibit A-1 delivered to the Purchaser is true and
correct;
(b) Payments Current.
All payments required to be made up to the Cut-off Date for the Mortgage
Loan under the terms of the Mortgage Note have been made and
credited. No payment under any Mortgage Loan has been 30 or more
days delinquent since the date of origination;
(c) No Outstanding Charges.
There are no defaults in complying with the terms of the Mortgages, and
all taxes, governmental assessments, insurance premiums, leasehold
payments, water, sewer and municipal charges, which previously
became due and owing have been paid, or an escrow of funds has been
established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and
payable. The Company has not advanced funds, or induced, or
solicited directly or indirectly, the payment of any amount required
under the Mortgage Loan, except for interest accruing from the date
of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is later, to the day which precedes by one month
the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the
interests of the Purchaser and which has been delivered to the
Custodian. The substance of any such waiver, alteration or
modification has been approved by the issuer of any related PMI
Policy and the title insurer, to the extent required by the policy,
and its terms are reflected on the Mortgage Loan Schedule. No
Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement approved by the issuer of
any related PMI Policy and the title insurer, to the extent required
by the policy, and which assumption agreement is part of the
Mortgage Loan File delivered to the Custodian and the terms of which
are reflected in the Mortgage Loan
Schedule;
(e) No Defenses.
The Mortgage Loan is 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 either the Mortgage Note or the Mortgage unenforceable, in
whole or in part, or subject to any right of rescission, set-off,
counterclaim or defense, including without limitation the defense of
usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(f) No Satisfaction of Mortgage.
The Mortgage has not been satisfied, canceled, subordinated or rescinded,
in whole or in part, 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
satisfaction, release, cancellation, subordination or rescission;.
The Company 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 Company waived
any default resulting from any action or inaction by the Mortgagor;
(g) Validity of Mortgage Documents.
The Mortgage Note and the Mortgage and related documents are genuine, and
each is the legal, valid and binding obligation of the maker thereof
enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note and the
Mortgage, and the Mortgage Note and the Mortgage have been duly and
properly executed by such parties;
With respect to each Cooperative Loan, the Mortgage Note, the
Mortgage, the Pledge Agreement, and related documents are genuine,
and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms. All parties to the
Mortgage Note, the Mortgage, the Pledge Agreement, the Proprietary
Lease, the Stock Power, Recognition Agreement and the Assignment of
Proprietary Lease had legal capacity to enter into the Mortgage Loan
and to execute and deliver such documents, and such documents have
been duly and properly executed by such parties;
(h) Regarding the Mortgagor.
The Mortgagor is one or more natural persons and/or trustees for an
Illinois land trust or a trustee under a "living trust" and such
"living trust" is in compliance with the Underwriting Guidelines for
such trusts;
(i) No Fraud.
No error, omission, misrepresentation, negligence, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the
part of the Company, or the Mortgagor, or to the best of the
Company's knowledge, any appraiser, any builder, or any developer,
or any other party involved in the origination of the Mortgage Loan
or in the application of any insurance in relation to such Mortgage
Loan;
(j) Compliance with Applicable Laws.
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 laws, predatory and abusive lending laws applicable to
the Mortgage Loan have been complied with. 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. Each
Mortgage File contains evidence of such compliance as required by
applicable law or regulation;
(k) Location and Type of Mortgaged Property.
The Mortgaged Property is located in the state identified in the Mortgage
Loan Schedule and consists of a contiguous parcel of real property
with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a
condominium project, or a Cooperative Apartment, or an individual
unit in a planned unit development or a townhouse, provided,
however, that any condominium project or planned unit development
shall conform with the applicable Xxxxxx Mae or Xxxxxxx Mac
requirements, or the Underwriting Guidelines, regarding such
dwellings, and no residence or dwelling is a mobile home. As of the
respective appraisal date for each Mortgaged Property, any Mortgaged
Property being used for commercial purposes conforms to the
Underwriting Guidelines and, to the best of the Company's knowledge,
since the date of such appraisal, no portion of the Mortgaged
Property has been used for commercial purposes outside of the
Underwriting Guidelines;
(l) Valid First Lien.
The Mortgage is a valid, subsisting and enforceable first lien on the
Mortgaged Property, including all buildings on the Mortgaged
Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at
any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(1) the lien of current real property taxes and assessments not yet
due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the
date of recording acceptable to mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage
Loan and (i) referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan and
(ii) which do not adversely affect the Appraised Value of the
Mortgaged Property set forth in such appraisal; and
(3) 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 a valid, subsisting and enforceable first lien and first
priority security interest on the property described therein and the
Company has full right to sell and assign the same to the Purchaser;
With respect to each Cooperative Loan, each Pledge Agreement creates
a valid, enforceable and subsisting first security interest in the
Cooperative Shares and Proprietary Lease, subject only to (i) the
lien of the related 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 (ii) 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
Pledge Agreement; provided, however, that the appurtenant
Proprietary Lease may be subordinated or otherwise subject to the
lien of any mortgage on the Project;
(m) Full Disbursement of Proceeds.
The proceeds of the Mortgage Loan have been fully disbursed, except for
escrows established or created due to seasonal weather conditions,
and there is no requirement for future advances thereunder. 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 Mortgage;
(n) Consolidation of Future Advances.
Any future advances made prior to the 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 reflected on the Mortgage
Loan Schedule. 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 Xxxxxx Mae or Xxxxxxx Mac; the consolidated principal
amount does not exceed the original principal amount of the Mortgage
Loan; the Company shall not make future advances after the Cut-off
Date;
(o) Ownership.
The Company is the sole owner of record and holder of the Mortgage Loan
and the related Mortgage Note and the Mortgage are not assigned or
pledged, and the Company has good and marketable title thereto and
has full right and authority to transfer and sell the Mortgage Loan
to the Purchaser. The Company is transferring the Mortgage Loan free
and clear of any and all encumbrances, liens, pledges, equities,
participation interests, claims, charges or security interests of
any nature encumbering such Mortgage Loan;
(p) Origination/Doing Business.
The Mortgage Loan was originated by a savings and loan association, a
savings bank, a commercial bank, a credit union, an insurance
company, or similar institution that is supervised and examined by a
federal or state authority or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203
and 211 of the National Housing Act. All parties which have had any
interest in the Mortgage Loan, whether as mortgagee, assignee,
pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) (1) in compliance with any and
all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located, and (2) organized
under the laws of such state, or (3) qualified to do business in
such state, or (4) federal savings and loan associations or national
banks having principal offices in such state, or (5) not doing
business in such state;
(q) LTV, PMI Policy.
Except as set forth on the Mortgage Loan Schedule, no Mortgage Loan has an
LTV greater than 95%. If the LTV of the Mortgage Loan was greater
than 80% at the time of origination, a portion of the unpaid
principal balance of the Mortgage Loan is and will be insured as to
payment defaults by a PMI Policy. If the Mortgage Loan is insured by
a PMI Policy for which the Mortgagor pays all premiums, the coverage
will remain in place until (i) the LTV decreases to 78% or (ii) the
PMI Policy is otherwise terminated pursuant to the Homeowners
Protection Act of 1998, 12 USC Section 4901, et seq. All provisions
of such PMI Policy or LPMI Policy have been and are being complied
with, such policy is in full force and effect, and all premiums due
thereunder have been paid, and to the best of Company's knowledge,
no state of facts exist that would result in the exclusion from,
denial of, or defense to coverage. The Qualified Insurer has a
claims paying ability acceptable to Xxxxxx Xxx or Xxxxxxx Mac. Any
Mortgage Loan subject to a PMI Policy or LPMI Policy obligates the
Mortgagor or the Company to maintain the PMI Policy or LPMI Policy
and to pay all premiums and charges in connection therewith;
(r) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title insurance policy
(or in the case of any Mortgage Loan secured by a Mortgaged Property
located in a jurisdiction where such policies are generally not
available, an opinion of counsel of the type customarily rendered in
such jurisdiction in lieu of title insurance) or other generally
acceptable form of policy of insurance acceptable to Xxxxxx Xxx or
Xxxxxxx Mac, issued by a title insurer acceptable to Xxxxxx Xxx or
Xxxxxxx Mac and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring the Company, its
successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan,
subject only to the exceptions contained in clauses (1), (2) and (3)
of Paragraph (l) of this Section 3.02, and against any loss by
reason of the invalidity or unenforceability of the lien resulting
from the provisions of the Mortgage providing for adjustment to the
Mortgage Interest Rate and Monthly Payment. Additionally, such
lender's title insurance policy includes no exceptions regarding
ingress, egress or encroachments that impact the value or the
marketability of the Mortgaged Property. The Company is the sole
insured of such lender's title insurance policy, and such lender's
title insurance policy is in full force and effect and will be in
force and effect upon the consummation of the transactions
contemplated by this
Agreement. No claims have been made under such lender's title
insurance policy, and no prior holder of the Mortgage, including the
Company, has done, by act or omission, anything which would impair
the coverage of such lender's title insurance policy;
(s) No Defaults.
There is no default, breach, violation or event of acceleration existing
under the Mortgage or the 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
of acceleration, and neither the Company nor its predecessors have
waived any default, breach, violation or event of acceleration;
(t) No Mechanics' Liens.
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 the law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage which are not
insured against by the title insurance policy referenced in
Paragraph (r) above;
(u) Location of Improvements; No Encroachments.
Except as insured against by the title insurance policy referenced in
Paragraph (r) above, all improvements which were considered in
determining the Appraised Value of the Mortgaged Property lay wholly
within the boundaries and building restriction lines of the
Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or
being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation;
(v) Payment Terms.
The Mortgage Loans have an original term to maturity of not more than 30
years, with interest payable in arrears on the first day of each
month. As to each adjustable rate Mortgage Loan on each applicable
Adjustment Date, the Mortgage Interest Rate will be adjusted to
equal the sum of the Index plus the applicable Gross Margin, rounded
up or down to the nearest multiple of 0.125% indicated by the
Mortgage Note; provided that the Mortgage Interest Rate will not
increase or decrease by more than the Periodic Interest Rate Cap on
any Adjustment Date, and will in no event exceed the maximum
Mortgage Interest Rate or be lower than the minimum Mortgage
Interest Rate listed on the Mortgage Loan Schedule for such Mortgage
Loan. As to each Mortgage Loan that is not an Interest Only
Mortgage Loan, each Mortgage Note requires a monthly payment which
is sufficient, during the period prior to the first adjustment to
the Mortgage Interest Rate, to fully amortize the outstanding
principal balance as of the first day of such period over the then
remaining term of such Mortgage Note and to pay interest at the
related Mortgage Interest Rate. As to each adjustable rate Mortgage
Loan, if the related Mortgage Interest Rate changes on an Adjustment
Date or, with respect to an Interest Only Mortgage Loan, on an
Adjustment Date following the related interest only period, the then
outstanding principal balance will be reamortized over the remaining
life of such Mortgage Loan. No Mortgage Loan contains terms or
provisions which would result in negative amortization;
(w) Convertible Mortgage Loans; Simple Interest.
No Mortgage Loan is a Convertible Mortgage Loan and no Mortgage Loan
is a simple interest Mortgage Loan;
(x) Customary Provisions.
The Mortgage and related Mortgage Note contain 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, including, (i) in
the case of a Mortgage designated as a deed of trust, by trustee's
sale, and (ii) otherwise by judicial foreclosure. There is no
homestead or other exemption available to a Mortgagor which would
interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;
(y) Occupancy of the Mortgaged Property.
As of the date of origination, the Mortgaged Property was lawfully
occupied under applicable law;
(z) No Additional Collateral.
Except in the case of a Pledged Asset Mortgage Loan and as indicated on
the related Data File, the Mortgage Note is not and has not been
secured by any collateral, pledged account or other security except
the lien of the corresponding Mortgage and the security interest of
any applicable security agreement or chattel mortgage referred to in
Paragraph (l) above;
(aa) Deeds of Trust.
In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and
no fees or expenses
are or will become payable by the Mortgagee to the trustee under the
deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(bb) Acceptable Investment.
The Company has no knowledge of any circumstances or conditions with
respect to the Mortgage Loan, the Mortgaged Property, the Mortgagor
or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability of the
Mortgage Loan;
(cc) Transfer of Mortgage Loans.
The Assignment of Mortgage, upon the insertion of the name of the assignee
and recording information, is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the
Mortgaged Property is located (except with respect to each MERS
Designated Mortgage Loan ). Each original Mortgage was recorded and,
except for those Mortgage Loans subject to the MERS identification
system, all subsequent assignments of the original Mortgage (other
than the assignment to the Purchaser) have been recorded in the
appropriate jurisdictions wherein such recordation is necessary to
perfect the lien thereof as against creditors of the Company, or is
in the process of being recorded;
(dd) Mortgaged Property Undamaged.
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;
(ee) Collection Practices; Escrow Deposits.
The origination, servicing and collection practices used with respect to
the Mortgage Loan have been in accordance with Accepted Servicing
Practices, and have been in all material respects legal and proper.
The Mortgage Loan has been serviced by the Company and any
predecessor servicer in accordance with the terms of the Mortgage
Note. With respect to escrow deposits and Escrow Payments, all such
payments are in the possession of the Company 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 in full compliance with state and
federal law. No escrow deposits or Escrow
Payments or other charges or payments due the Company have been
capitalized under the Mortgage Note;
(ff) No Condemnation.
There is no proceeding pending or to the best of the Company's knowledge
threatened for the total or partial condemnation of the related
Mortgaged Property;
(gg) The Appraisal.
The Mortgage Loan Documents for each Mortgage Loan include an appraisal of
the related Mortgaged Property which generally conform to the
requirements of Xxxxxx Xxx and Xxxxxxx Mac. As to each Time$aver(R)
Mortgage Loan, the appraisal may be from the original of the
existing Company-serviced loan, which was refinanced via such
Time$aver(R) Mortgage Loan. The appraisal was conducted by an
appraiser 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 the appraisal and the appraiser both satisfy the
applicable requirements of Title XI of the Financial Institution
Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated;
(hh) Insurance.
The Mortgaged Property securing each Mortgage Loan is insured by an
insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement and such other hazards as are customary in the area
where the Mortgaged Property is located pursuant to insurance
policies conforming to the requirements of Section 4.10, in an
amount which is not less than the lesser of 100% of the insurable
value of the Mortgaged Property and the outstanding principal
balance of the Mortgage Loan, but in no event less than the minimum
amount necessary to fully compensate for any damage or loss on a
replacement cost basis. If the Mortgaged Property is a condominium
unit, it is included under the coverage afforded by a blanket policy
for the project. If the improvements on the Mortgaged Property are
in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, a flood
insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration is in effect with a
generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (A) the outstanding principal
balance of the Mortgage Loan, (B) the full insurable value and (C)
the maximum amount of insurance which was
available under the Flood Disaster Protection Act of 1973, as
amended. All individual insurance policies contain a standard
mortgagee clause naming the Company and its successors and assigns
as mortgagee, and all premiums thereon have been paid. 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 the common facilities of a planned unit development.
The Mortgage obligates the Mortgagor thereunder to maintain a hazard
insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. 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
Company has not acted or failed to act, and has no knowledge of any
action or failure to act on the part of the Mortgagor, so as to
impair the coverage of any such insurance policy or the validity,
binding effect and enforceability thereof;
(ii) Servicemembers Civil Relief Act.
The Mortgagor has not notified the Company and the Company has no
knowledge of any relief requested or allowed to, the Mortgagor under
the Servicemembers Civil Relief Act.
(jj) No Balloon Payments, Graduated Payments or Contingent Interests.
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. No Mortgage Loan has a balloon payment
feature;
(kk) No Construction Loans.
No Mortgage Loan was made in connection with (i) the construction or
rehabilitation of a Mortgage Property or (ii) facilitating the
trade-in or exchange of a Mortgaged Property other than a
construction-to-permanent loan which has converted to a permanent
Mortgage Loan;
(ll) Underwriting.
Each Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines of the Company; and the Mortgage Note and Mortgage are on
forms acceptable to Xxxxxxx Mac or Xxxxxx Mae;
(mm) Buydown Mortgage Loans.
With respect to each Mortgage Loan that is a Buydown Mortgage Loan:
(i) On or before the date of origination of such Mortgage Loan, the
Company and the Mortgagor, or the Company, the Mortgagor and
the seller of the Mortgaged Property or a third party entered
into a Buydown Agreement. The Buydown Agreement provides that
the seller of the Mortgaged Property (or third party) shall
deliver to the Company temporary Buydown Funds in an amount
equal to the aggregate undiscounted amount of payments that,
when added to the amount the Mortgagor on such Mortgage Loan
is obligated to pay on each Due Date in accordance with the
terms of the Buydown Agreement, is equal to the full scheduled
Monthly Payment due on such Mortgage Loan. The temporary
Buydown Funds enable the Mortgagor to qualify for the Buydown
Mortgage Loan. The effective interest rate of a Buydown
Mortgage Loan if less than the interest rate set forth in the
related Mortgage Note will increase within the Buydown Period
as provided in the related Buydown Agreement so that the
effective interest rate will be equal to the interest rate as
set forth in the related Mortgage Note. The Buydown Mortgage
Loan satisfies the requirements of Xxxxxx Xxx or Xxxxxxx Mac
guidelines;
(ii) The Mortgage and Mortgage Note reflect the permanent payment
terms rather than the payment terms of the Buydown Agreement.
The Buydown Agreement provides for the payment by the
Mortgagor of the full amount of the Monthly Payment on any Due
Date that the Buydown Funds are available. The Buydown Funds
were not used to reduce the original principal balance of the
Mortgage Loan or to increase the Appraised Value of the
Mortgage Property when calculating the Loan-to-Value Ratios
for purposes of the Agreement and, if the Buydown Funds were
provided by the Company and if required under Xxxxxx Mae or
Xxxxxxx Mac guidelines, the terms of the Buydown Agreement
were disclosed to the appraiser of the Mortgaged Property;
(iii) The Buydown Funds may not be refunded to the Mortgagor unless
the Mortgagor makes a principal payment for the outstanding
balance of the Mortgage Loan;
(iv) As of the date of origination of the Mortgage Loan, the
provisions of the related Buydown Agreement complied with the
requirements of Xxxxxx Mae or Xxxxxxx Mac regarding buydown
agreements;
(nn) Mortgage File.
With respect to each Mortgage Loan, the Company is in possession of
a complete Mortgage File except for the documents which have been
delivered to the Purchaser or the Custodian or which have been
submitted for recording and not yet returned;
(oo) Calculation of Interest.
Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(pp) Environmental Matters.
To the best of the Company's knowledge, 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 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;
(qq) Ground Leases.
No Mortgaged Property is subject to a ground lease.
(rr) Home Ownership and Equity Protection Act.
No Mortgage Loan is a Covered Loan or a High Cost Loan;
(ss) Anti Money Laundering Laws.
The Company has complied with all applicable anti money laundering
laws and regulations, (collectively, the "Anti Money Laundering
Laws"); and the Company has established an anti money laundering
compliance program as required by the Anti Money Laundering Laws,
has conducted the requisite due diligence in connection with the
origination of each Mortgage Loan for purposes of the Anti Money
Laundering Laws;
(tt) Due on Sale.
The Mortgage contains an enforceable provision, to the extent
allowable under applicable laws governing the application of
due-on-sale provision, for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written
consent of the mortgagee thereunder;
(uu) Tax Service Contract; Flood Certification Contract.
Each Mortgage Loan shall have a tax service contract and, if
applicable, a flood insurance contract which shall have a term of
the life of the Mortgage Loan. Each such tax service and flood
insurance contract shall be fully transferable without penalty,
premium or cost to the Purchaser or its designee;
(vv) Credit Reporting.
The Company, in its capacity as servicer for each Mortgage Loan, has
fully furnished in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information on
its borrowers credit files to Equifax, Experian and Trans Union
Credit Information Company on a monthly basis;
(ww) Single Premium Credit Life Insurance.
No Mortgagor was required to purchase any credit life, disability,
accident or health insurance product as a condition of obtaining the
extension of credit. No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(xx) Fair Consideration.
The consideration received by the Company upon the sale of the
Mortgage Loans under this Agreement constitutes fair consideration
and reasonably equivalent value for the Mortgage Loans;
(yy) No Bankruptcy.
No Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding at the time the Mortgage Loan was originated
and as of the Closing Date, to the best of the Company's knowledge,
the Company has not received notice that any Mortgagor is a debtor
under any state or federal bankruptcy or insolvency proceeding; and
(zz) Prepayment Penalty.
No Mortgage Loan is subject to a prepayment penalty.
(aaa) Cooperative Loans.
With respect to each Cooperative Loan:
(i) The Cooperative Shares are held by a person as a tenant-stockholder in
a Cooperative. Each original UCC financing statement, continuation
statement or other governmental filing or recordation necessary to
create or preserve the perfection and priority of the first lien and
security interest in the Cooperative Loan and Proprietary Lease has
been timely and properly made. Any security agreement, chattel
mortgage or equivalent document related to the Cooperative Loan and
delivered to Purchaser or its designee establishes in Purchaser a
valid and subsisting perfected first lien on and security interest
in the Mortgaged Property described therein, and Purchaser has full
right to sell and assign the same;
(ii) A Cooperative Lien Search has been made by a company competent to
make the same which company is acceptable to Xxxxxx Mae and
qualified to do business in the jurisdiction where the Cooperative
is located;
(iii) (a) The term of the related Proprietary Lease is not less than the
terms of the Cooperative Loan; (b) there is no provision in any
Proprietary Lease which requires the Mortgagor to offer for sale the
Cooperative Shares owned by such Mortgagor first to the Cooperative;
(c) there is no prohibition in any Proprietary Lease against
pledging the Cooperative Shares or assigning the Proprietary Lease;
(d) the Cooperative has been created and exists in full compliance
with the requirements for residential cooperatives in the
jurisdiction in which the Project is located and qualifies as a
cooperative housing corporation under Section 210 of the Code; (e)
the Recognition Agreement is on a form published by Aztech Document
Services, Inc. or includes similar provisions; and (f) the
Cooperative has good and marketable title to the Project, and owns
the Project either in fee simple; such title is free and clear of
any adverse liens or encumbrances, except the lien of any blanket
mortgage;
(iv) The Company has the right under the terms of the Mortgage Note,
Pledge Agreement and Recognition Agreement to pay any maintenance
charges or assessments owed by the Mortgagor;
(v) Each Stock Power (i) has all signatures guaranteed or (ii) if all
signatures are not guaranteed, then such Cooperative Shares will be
transferred by the stock transfer agent of the Cooperative if the
Company undertakes to convert the ownership of the collateral
securing the related Cooperative Loan.
Section 3.03 Repurchase.
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 to the
Purchaser and the delivery of the Mortgage Loan Documents to the Custodian 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 failure to examine any Mortgage File. Upon discovery by either
the Company 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 (or which materially and adversely
affects the interests of Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to the Company
of any breach of a representation or warranty which materially and adversely
affects the value of the Mortgage Loans, the Company shall use its best efforts
promptly to cure such breach in all material respects and, if such breach cannot
be cured, the Company shall, at the Purchaser's option, repurchase such Mortgage
Loan at the Repurchase Price. In the event that a breach shall involve any
representation or warranty set forth in Section 3.01, and such breach cannot be
cured within 60 days of the earlier of either discovery by or notice to the
Company of such breach, all of the Mortgage Loans shall, at the Purchaser's
option, be repurchased by the Company at the Repurchase Price. However, if the
breach shall involve a representation or warranty set forth in Section 3.02 and
the Company discovers or receives notice of any such breach within 120 days of
the Closing Date, the Company shall, if the breach cannot be cured, at the
Purchaser's option and provided that the Company has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the Closing Date.
If the Company has no Qualified Substitute Mortgage Loan, it shall repurchase
the deficient Mortgage Loan within 60 days of the written notice of the breach
or the failure to cure, whichever is later. Any repurchase of a Mortgage Loan or
Loans pursuant to the foregoing provisions of this Section 3.03 shall be
accomplished by deposit in the Custodial Account of the amount of the Repurchase
Price for distribution to Purchaser on the next scheduled Remittance Date, after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future distribution.
At the time of repurchase or substitution, the Purchaser and the Company shall
arrange for the reassignment of the Deleted Mortgage Loan to the Company and the
delivery to the Company of any documents held by the Custodian relating to the
Deleted Mortgage Loan. If the Company repurchases a Mortgage Loan that is a MERS
Mortgage Loan, the Company shall cause MERS to designate on the MERS(R) System
to remove the Purchaser as the beneficial holder with respect to such Mortgage
Loan. In the event of a
repurchase or substitution, the Company shall, simultaneously with such
reassignment, give written notice to the Purchaser that such repurchase or
substitution has taken place, amend the Mortgage Loan Schedule to reflect the
withdrawal of the Deleted Mortgage Loan from this Agreement, and, in the case of
substitution, identify a Qualified Substitute Mortgage Loan and amend the
Mortgage Loan Schedule to reflect the addition of such Qualified Substitute
Mortgage Loan to this Agreement. In connection with any such substitution, the
Company shall be deemed to have made as to such Qualified Substitute Mortgage
Loan the representations and warranties set forth in this Agreement except that
all such representations and warranties set forth in this Agreement shall be
deemed made as of the date of such substitution. The Company shall effect such
substitution by delivering to the Custodian for such Qualified Substitute
Mortgage Loan the documents required by Section 2.03, with the Mortgage Note
endorsed as required by Section 2.03. No substitution will be made in any
calendar month after the Determination Date for such month. The Company shall
deposit in the Custodial Account the Monthly Payment less the Servicing Fee due
on such Qualified Substitute Mortgage Loan or Loans in the month following the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution shall be retained by the
Company. With respect to any Deleted Mortgage Loan, distributions to Purchaser
shall include the Monthly Payment due on any Deleted Mortgage Loan in the month
of substitution, and the Company shall thereafter be entitled to retain all
amounts subsequently received by the Company in respect of such Deleted Mortgage
Loan.
For any month in which the Company substitutes a Qualified Substitute Mortgage
Loan for a Deleted Mortgage Loan, the Company shall determine the amount (if
any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Company in the month of substitution
pursuant to Section 5.01. Accordingly, on the date of such substitution, the
Company shall deposit from its own funds into the Custodial Account an amount
equal to the amount of such shortfall.
In addition to such repurchase or substitution obligation, the Company shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the representations and warranties contained in this Agreement. It is understood
and agreed that the obligations of the Company set forth in this Section 3.03 to
cure, substitute for or repurchase a defective Mortgage Loan and to indemnify
the Purchaser as provided in this Section 3.03 constitute the sole remedies of
the Purchaser respecting a breach of the foregoing representations and
warranties.
Any cause of action against the Company 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) discovery of such breach by the
Purchaser or notice thereof by
the Company to the Purchaser, (ii) failures by the Company to cure such breach
or repurchase such Mortgage Loan as specified above, and (iii) demand upon the
Company by the Purchaser for compliance with this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as an independent contractor, shall service and administer the
Mortgage Loans and shall have full power and authority, acting alone or through
the utilization of a third party servicing provider, to do any and all things in
connection with such servicing and administration which the Company may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices. The Servicer shall be responsible for any and all
acts of a third party servicing provider, and the Servicer's utilization of a
third party servicing provider shall in no way relieve the liability of the
Servicer under this Agreement.
Consistent with the terms of this Agreement, the Company may waive, modify or
vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Company's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, the Company shall not make any future advances
with respect to a Mortgage Loan. The Company shall not permit any modification
with respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer or forgive the payment of principal (except for actual payments of
principal) or change the final maturity date on such Mortgage Loan. In the event
of any such modification which permits the deferral of interest or principal
payments on any Mortgage Loan, the Company 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 5.03, the difference
between (a) such month's principal and one month's interest at the Mortgage Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Company shall be entitled to reimbursement
for such advances to the same extent as for all other advances made pursuant to
Section 5.03. Without limiting the generality of the foregoing, the Company
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. If reasonably required by the Company, the Purchaser shall
furnish the Company with any powers of attorney and other documents necessary or
appropriate to enable the Company to carry out its servicing and administrative
duties under this Agreement.
In servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser's reliance on the Company.
The Company is authorized and empowered by the Purchaser, in its own name,
when the Company 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.
The Company 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.
The Company shall cause to be maintained for each Cooperative Loan a copy of
the financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Purchaser.
The Company shall apply any Principal Prepayment on an Interest Only
Mortgage Loan to the then-outstanding principal balance, which application shall
not reamortize the then-outstanding principal balance of such Interest Only
Mortgage Loan.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not postponed
pursuant to Section 4.01 is not paid when the same becomes due and payable, or
in the event the Mortgagor fails to perform any other covenant or obligation
under the Mortgage Loan and such failure continues beyond any applicable grace
period, the Company shall take such action as (1) the Company would take under
similar circumstances with respect to a similar mortgage loan held for its own
account for investment, (2) shall be consistent with Accepted Servicing
Practices, (3) the Company shall determine prudently to be in the best interest
of Purchaser, and (4) is consistent with any related PMI Policy. In the event
that any payment due under any Mortgage Loan is not postponed pursuant to
Section 4.01 and remains delinquent for a period of 90 days or any other default
continues for a period of 90 days beyond the expiration of any grace or cure
period, the Company shall commence foreclosure proceedings. In the event the
Purchaser objects to such foreclosure action, the Company shall not be required
to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section
5.03, and the Company's obligation to make such Monthly Advances shall terminate
on the 90th day referred to
above. In such connection, the Company shall from its own funds make all
necessary and proper Servicing Advances, provided, however, that the Company
shall not be required to expend its own funds in connection with any foreclosure
or towards the restoration or preservation of any Mortgaged Property, unless it
shall determine (a) that such preservation, restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan to Purchaser after
reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it shall
have priority for purposes of withdrawals from the Custodial Account pursuant to
Section 4.05) or through Insurance Proceeds (respecting which it shall have
similar priority).
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
Company 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. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Company shall
proceed, in the best interest of the Purchaser, with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Company shall proceed with foreclosure or acceptance of a
deed in lieu of foreclosure, the Company shall be reimbursed for all reasonable
costs associated with such foreclosure or acceptance of a deed in lieu of
foreclosure and any related environmental clean up costs, as applicable, from
the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Company, the Company shall be entitled to be
reimbursed from amounts in the Custodial Account pursuant to Section 4.05
hereof. In the event the Company does not proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Company shall be reimbursed for all
Servicing Advances made with respect to the related Mortgaged Property from the
Custodial Account pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Company shall proceed diligently to collect
all payments due under each of the Mortgage Loans when the same shall become due
and payable and shall take special care in ascertaining and estimating Escrow
Payments and all other charges that will become due and payable with respect to
the Mortgage Loan and the Mortgaged Property, to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received in
connection with a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "Xxxxx Fargo Bank, N.A.,
in trust for the Purchaser and/or subsequent purchasers of Mortgage Loans - P &
I." The Custodial Account shall be established with a Qualified Depository. On
the Closing Date, the Company shall provide the Purchaser with written
confirmation of the existence of such Custodial Account in the form of Exhibit
E. The Custodial Account shall at all times be insured to the fullest extent
allowed by applicable law. Funds deposited in the Custodial Account may be drawn
on by the Company in accordance with Section 4.05.
The Company shall deposit in the Custodial Account within one (1) Business Day
of Company's receipt, and retain therein, the following collections received by
the Company and payments made by the Company after the Cut-off Date, other than
payments of principal and interest due on or before the Cut-off Date, or
received by the Company prior to the Cut-off Date but allocable to a period
subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans, including
all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans adjusted to
the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 4.10 (other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with
Section 4.14), Section 4.11 and Section 4.15;
(v) all Condemnation Proceeds which are not applied to the restoration or
repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial Account pursuant
to Section 4.01, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 3.03 and all amounts required to
be deposited by the Company in connection with a shortfall in
principal amount of any Qualified Substitute Mortgage Loan pursuant
to Section 3.03;
(viii) with respect to each Principal Prepayment an amount (to be paid by
the Company out of its funds) which, when added to all amounts
allocable to
interest received in connection with the Principal Prepayment,
equals one month's interest on the amount of principal so prepaid at
the Mortgage Loan Remittance Rate;
(ix) any amounts required to be deposited by the Company pursuant to
Section 4.11 in connection with the deductible clause in any blanket
hazard insurance policy;
(x) any amounts received with respect to or related to any REO Property
and all REO Disposition Proceeds pursuant to Section 4.16; and
(xi) an amount from the Subsidy Account that when added to the Mortgagor's
payment will equal the full monthly amount due under the related
Mortgage Note.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05.
Section 4.05 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds 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;
(ii) to reimburse itself for Monthly Advances of the Company's funds made
pursuant to Section 5.03, the Company's right to reimburse itself
pursuant to this subclause (ii) being limited to amounts received on
the related Mortgage Loan which represent late Monthly Payments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and
such other amounts as may be collected by the Company respecting
which any such advance was made, it being understood that, in the
case of any such reimbursement, the Company's right thereto shall be
prior to the rights of Purchaser, except that, where the Company is
required to repurchase a Mortgage Loan pursuant to Section 3.03 or
6.02, the Company's right to such reimbursement shall be subsequent
to the payment to the Purchaser of the Repurchase Price pursuant to
such sections 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 for any
unpaid Servicing Fees, the Company's right to reimburse itself
pursuant to this subclause (iii) with respect to any Mortgage Loan
being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Company from the Mortgagor or otherwise relating to
the Mortgage Loan, it being understood that, in the case of any such
reimbursement, the Company's right thereto shall be prior to the
rights of Purchaser, except that where the Company is required to
repurchase a Mortgage Loan pursuant to Section 3.03 or 6.02, in
which case the Company's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price
pursuant to such sections and all other amounts required to be paid
to the Purchaser with respect to such Mortgage Loan;
(iv) to pay itself interest on funds deposited in the Custodial Account;
(v) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 8.01;
(vi) to pay any amount required to be paid pursuant to Section 4.16
related to any REO Property, it being understood that, in the case
of any such expenditure or withdrawal related to a particular REO
Property, the amount of such expenditure or withdrawal from the
Custodial Account shall be limited to amounts on deposit in the
Custodial Account with respect to the related REO Property;
(vii) to reimburse itself for any Servicing Advances or REO expenses after
liquidation of the Mortgaged Property not otherwise reimbursed
above;
(viii) to remove funds inadvertently placed in the Custodial Account by
the Company; and
(ix) to clear and terminate the Custodial Account upon the termination of
this Agreement.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 5.01, the Company is not
obligated to remit on such Remittance Date. The Company may use such withdrawn
funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts,
in the form of time deposit or demand accounts, titled, "Xxxxx Fargo Bank, N.A.,
in trust for the Purchaser and/or subsequent purchasers Residential Mortgage
Loans, and various Mortgagors - T & I." The Escrow Accounts shall be established
with a Qualified Depository, in a manner which shall provide maximum available
insurance thereunder. On the Closing Date, the Company shall provide the
Purchaser with written confirmation of the existence of such Escrow Account in
the form of Exhibit F hereto. Funds deposited in the Escrow Account may be drawn
on by the Company in accordance with Section 4.07.
The Company shall deposit in the Escrow Account or Accounts within one (1)
Business Day of Company's receipt, 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 amounts representing Insurance Proceeds or Condemnation Proceeds
which are to be applied to the restoration or repair of any
Mortgaged Property; and
(iii) all payments on account of Buydown Funds.
The Company shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
4.07. The Company shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Company
only:
(i) to effect timely payments of ground rents, taxes, assessments, water
rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow
Payments for the related Mortgage;
(ii) to reimburse the Company for any Servicing Advances made by the
Company pursuant to Section 4.08 with respect to a related Mortgage
Loan, but only from amounts received on the related Mortgage Loan
which represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to reduce the
principal balance of the Mortgage Loan in accordance with the terms
of the related Mortgage and Mortgage Note;
(v) for application to the restoration or repair of the Mortgaged Property
in accordance with the procedures outlined in Section 4.14;
(vi) to pay to the Company, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
(vii) to remove funds inadvertently placed in the Escrow Account by the
Company;
(viii) to remit to Purchaser payments on account of Buydown Funds as
applicable; and
(ix) to clear and terminate the Escrow Account on the termination of this
Agreement.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account (excluding the payment of LPMI Policy
premiums, which are to be paid from the Company's own funds without
reimbursement) which shall have been estimated and accumulated by the Company in
amounts sufficient for such purposes, as allowed under the terms of the
Mortgage. The Company assumes full responsibility for the timely payment of all
such bills and shall effect timely payment of all such charges irrespective of
each Mortgagor's faithful performance in the payment of same or the making of
the Escrow Payments, and the Company shall make advances from its own funds to
effect such payments.
Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account, Subsidy Account or the Escrow
Account to a different Qualified Depository from time to time, provided that the
Company shall give notice to the Purchaser within ten (10) Business Days of such
transfer.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by an
insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan and (ii) the greater of (a) the outstanding principal balance of
the Mortgage Loan and (b) an amount such that the proceeds thereof shall be
sufficient to prevent the Mortgagor or the loss payee from becoming a
co-insurer. In the event a hazard insurance policy shall be in danger of being
terminated, or in the event the insurer shall cease to be acceptable to Xxxxxx
Mae or Xxxxxxx Mac, the Company shall notify the Purchaser and the related
Mortgagor, and shall use its best efforts, as permitted by applicable law, to
obtain from another qualified insurer a replacement hazard insurance policy
substantially and materially similar in all respects to the original policy. In
no event, however, shall a Mortgage Loan be without a hazard insurance policy at
any time, subject only to Section 4.11 hereof.
If the related Mortgaged Property is located in an area identified by the
Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier acceptable to Xxxxxx
Mae or Xxxxxxx Mac in an amount representing coverage equal to the lesser of (i)
the minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended.
If a Mortgage is secured by a unit in a condominium project, the Company shall
verify that the coverage required of the owner's association, including hazard,
flood, liability, and fidelity coverage, is being maintained in accordance with
then current Xxxxxx Mae requirements, and secure from the owner's association
its agreement to notify the Company promptly of any change in the insurance
coverage or of any condemnation or casualty loss that may have a material effect
on the value of the Mortgaged Property as security.
In the event that any Purchaser or the Company shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the desirability of protection of the Mortgaged Property.
All policies required hereunder shall name the Company as loss payee and shall
be endorsed with standard or union mortgagee clauses, without contribution,
which shall provide for at least 30 days prior written notice of any
cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to Xxxxxx Xxx and Xxxxxxx Mac and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Company shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address.
Pursuant to Section 4.04, any amounts collected by the Company under any such
policies (other than amounts to be deposited in the Escrow Account and applied
to the restoration or repair of the related Mortgaged Property, or property
acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Company shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, 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. The Company shall prepare and make any claims on the blanket policy as
deemed necessary by the Company in accordance with Accepted Servicing Practices.
Any amounts collected by the Company under any such policy relating to a
Mortgage Loan shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05. Such policy may contain a deductible clause, in which
case, in the event that there shall not have been maintained on the related
Mortgaged Property a policy complying with Section 4.10, and there shall have
been a loss which would have been covered by such policy, the Company shall
deposit in the Custodial Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from the Company's funds, without reimbursement
therefor. Upon request of the Purchaser, the Company shall cause to be delivered
to such Purchaser a certificate of insurance and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without 30 days' prior written notice to such Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance.
The Company shall maintain with responsible companies, at its own expense, a
blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with broad
coverage on all officers, employees or other Persons acting in any capacity
requiring such persons to handle funds, money, documents or papers relating to
the Mortgage Loans ("Company Employees"). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker's Blanket
Bond and shall protect and insure the
Company against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such Company Employees. Such Fidelity Bond
and Errors and Omissions Insurance Policy also shall protect and insure the
Company against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.12 requiring such Fidelity Bond
and Errors and Omissions Insurance Policy shall diminish or relieve the Company
from its duties and obligations as set forth in this Agreement. The minimum
coverage under any such Fidelity Bond and Errors and Omissions Insurance Policy
shall be acceptable to Xxxxxx Xxx or Xxxxxxx Mac. Upon the request of any
Purchaser, the Company shall cause to be delivered to such Purchaser a
certificate of insurance for such Fidelity Bond and Errors and Omissions
Insurance Policy and a statement from the surety and the insurer that such
Fidelity Bond and Errors and Omissions Insurance Policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Purchaser.
Section 4.13 Inspections.
If any Mortgage Loan is more than 60 days delinquent, the Company immediately
shall inspect the Mortgaged Property and shall conduct subsequent inspections in
accordance with Accepted Servicing Practices or as may be required by the
primary mortgage guaranty insurer. The Company shall keep a written report of
each such inspection.
Section 4.14 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to releasing
any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. For claims greater than $15,000,
at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation Proceeds:
(i) the Company shall receive satisfactory independent
verification of completion of repairs and issuance of any
required approvals with respect thereto;
(ii) the Company shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not
limited to requiring waivers with respect to mechanics' and
materialmen's liens;
(iii) the Company shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Company shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow
Account.
If the Purchaser is named as an additional loss payee, the Company is hereby
empowered to endorse any loss draft issued in respect of such a claim in the
name of the Purchaser.
Section 4.15 Maintenance of PMI Policy; Claims.
Except in the case of a Pledged Asset Mortgage Loan, with respect to each
Mortgage Loan with an LTV in excess of 80%, the Company shall, without any cost
to the Purchaser maintain or cause the Mortgagor to maintain in full force and
effect a PMI Policy insuring the portion over 78% until terminated pursuant to
the Homeowners Protection Act of 1998, 12 USC Section 4901, et seq. In the event
that such PMI Policy shall be terminated other than as required by law, the
Company shall obtain from another Qualified Insurer a comparable replacement
policy, with a total coverage equal to the remaining coverage of such terminated
PMI Policy. If the insurer shall cease to be a Qualified Insurer, the Company
shall determine whether recoveries under the PMI Policy are jeopardized for
reasons related to the financial condition of such insurer, it being understood
that the Company shall in no event have any responsibility or liability for any
failure to recover under the PMI Policy for such reason. If the Company
determines that recoveries are so jeopardized, it shall notify the Purchaser and
the Mortgagor, if required, and obtain from another Qualified Insurer a
replacement insurance policy. The Company shall not take any action which would
result in noncoverage under any applicable PMI Policy of any loss which, but for
the actions of the Company 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 Company shall promptly notify the insurer under
the related PMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such PMI Policy and shall take all actions which
may be required by such insurer as a condition to the continuation of coverage
under such PMI Policy. If such PMI Policy is terminated as a result of such
assumption or substitution of liability, the Company shall obtain a replacement
PMI Policy as provided above.
In connection with its activities as servicer, the Company agrees to prepare
and present, on behalf of itself and the Purchaser, claims to the insurer under
any PMI Policy in a timely fashion in accordance with the terms of such PMI
Policy and, in this regard, to take such action as shall be necessary to permit
recovery under any PMI Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 4.04, any amounts collected by the Company under any PMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
In the event that the Company's rights hereunder are terminated pursuant
to Section 10.01 the Company shall pay any premiums on each LPMI Policy (which
may include a one-time lump sum to the related LPMI provider to continue the
related LPMI Policy) until the applicable Mortgage Loans have been paid in full
or otherwise liquidated or another entity acceptable to the insurers of such
LPMI Policy undertakes to pay such LPMI premiums.
Section 4.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in foreclosure
or by deed in lieu of foreclosure, the deed or certificate of sale shall be
taken in the name of the Company, or in the event the Company 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
Company from any attorney duly licensed to practice law in the state where the
REO Property is located. The Person or Persons holding such title other than the
Purchaser shall acknowledge in writing that such title is being held as nominee
for the Purchaser.
The Company shall manage, conserve, protect and operate each REO Property for
the Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Company deems to
be in the best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property as soon
as possible and shall sell such REO Property in any event prior to the close of
the third calendar year beginning after the year in which title has been taken
to such REO Property, unless (i) a REMIC election has not been made with respect
to the arrangement under which the Mortgage Loans and the REO Property are held,
and (ii) the Company determines that a longer period is necessary for the
orderly liquidation of such REO Property. If a period longer than three years is
permitted under the foregoing sentence, (i) the Company shall report monthly to
the Purchaser as to the progress being made in selling such REO Property and
(ii) if a purchase money mortgage is taken in connection with such sale, such
purchase money mortgage (a) shall name the Company as mortgagee, and (2) shall
not be held pursuant to this Agreement.
The Company shall also maintain on each REO Property fire and hazard insurance
with extended coverage in 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 the amount required above. The Company
shall indemnify the Purchaser and hold it harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
the Purchaser may sustain in any way related to premises liability claims made
with respect to an REO Property and based on losses occurring prior to the
related REO Disposition.
The disposition of REO Property shall be carried out by the Company at such
price, and upon such terms and conditions, as the Company deems to be in the
best interests of the Purchaser. The proceeds of sale of the REO Property shall
be promptly deposited in the Custodial Account. As soon as practical thereafter
the expenses of such sale shall be paid and the Company shall reimburse itself
for any related unreimbursed Servicing
Advances, unpaid Servicing Fees and unreimbursed advances made pursuant to
Section 5.03. On the Remittance Date immediately following the Principal
Prepayment Period in which such sale proceeds are received the net cash proceeds
of such sale remaining in the Custodial Account shall be distributed to the
Purchaser.
The Company shall withdraw from the Custodial Account funds necessary for the
proper operation management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 4.10 and the fees
of any managing agent of the Company, or the Company itself. The Company shall
make monthly distributions on each Remittance Date to the Purchaser of the net
cash flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in this Section 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the Company
shall furnish to the Purchaser on or before the Remittance Date each month a
statement with respect to any REO Property covering the operation of such REO
Property for the previous month and the Company's efforts in connection with the
sale of such REO Property and any rental of such REO Property incidental to the
sale thereof for the previous month. That statement shall be accompanied by such
other information as the Purchaser shall reasonably request.
Section 4.18 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 Company shall
submit to the Purchaser a liquidation report with respect to such Mortgaged
Property.
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property, the
Company shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code. The Company shall file information reports with
respect to the receipt of mortgage interest received in a trade or business and
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property as required by the Code. Such reports shall be in form
and substance sufficient to meet the reporting requirements imposed by the Code.
Section 4.20 Application of Buydown Funds.
With respect to each Buydown Mortgage Loan, the Company shall have deposited
into the Escrow Account, no later than the last day of the month, Buydown Funds
in an amount equal to the aggregate undiscounted amount of payments that, when
added to the amount the Mortgagor on such Mortgage Loan is obligated to pay on
all Due Dates in
accordance with the terms of the Buydown Agreement, is equal to the full
scheduled Monthly Payments which are required to be paid by the Mortgagor under
the terms of the related Mortgage Note (without regard to the related Buydown
Agreement as if the Mortgage Loan were not subject to the terms of the Buydown
Agreement). With respect to each Buydown Mortgage Loan, the Company will
distribute to the Purchaser on each Remittance Date an amount of Buydown Funds
equal to the amount that, when added to the amount required to be paid on such
date by the related Mortgagor, pursuant to and in accordance with the related
Buydown Agreement, equals the full Monthly Payment that would otherwise be
required to be paid on such Mortgage Loan by the related Mortgagor under the
terms of the related Mortgage Note (as if the Mortgage Loan were not a Buydown
Mortgage Loan and without regard to the related Buydown Agreement).
If the Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan
during the Buydown Period and the Mortgaged Property securing such Buydown
Mortgage Loan is sold in the liquidation thereof (either by the Company or the
insurer under any related Primary Insurance Policy) the Company shall, on the
Remittance Date following the date upon which Liquidation Proceeds or REO
Disposition proceeds are received with respect to any such Buydown Mortgage
Loan, distribute to the Purchaser all remaining Buydown Funds for such Mortgage
Loan then remaining in the Escrow Account. Pursuant to the terms of each Buydown
Agreement, any amounts distributed to the Purchaser in accordance with the
preceding sentence will be applied to reduce the outstanding principal balance
of the related Buydown Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan
prepays such Mortgage Loan in its entirety during the related Buydown Period,
the Company shall be required to withdraw from the Escrow Account any Buydown
Funds remaining in the Escrow Account with respect to such Buydown Mortgage Loan
in accordance with the related Buydown Agreement. If a principal prepayment by a
Mortgagor on a Buydown Mortgage Loan during the related Buydown Period, together
with any Buydown Funds then remaining in the Escrow Account related to such
Buydown Mortgage Loan, would result in a principal prepayment of the entire
unpaid principal balance of the Buydown Mortgage Loan, the Company shall
distribute to the Purchaser on the Remittance Date occurring in the month
immediately succeeding the month in which such Principal Prepayment is received,
all Buydown Funds related to such Mortgage Loan so remaining in the Escrow
Account, together with any amounts required to be deposited into the Custodial
Account.
Section 4.21 Notification of Adjustments.
With respect to each adjustable rate Mortgage Loan, the Company shall adjust
the Mortgage Interest Rate on the related Adjustment Date in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note. The
Company shall execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate adjustments. Upon the discovery by the Company or the
receipt of notice from the Purchaser that the Company has failed to adjust a
Mortgage Interest Rate in accordance with the terms of the related Mortgage
Note, the Company shall immediately deposit in the Custodial Account from its
own funds the amount of any
interest loss or deferral caused the Purchaser thereby.
Section 4.22 Confidentiality/Protection of Customer Information.
The Company shall keep confidential and shall not divulge to any party,
without the Purchaser's prior written consent, the price paid by the Purchaser
for the Mortgage Loans, except to the extent that it is reasonable and necessary
for the Company to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies. Each party agrees that it shall
comply with all applicable laws and regulations regarding the privacy or
security of Customer Information and shall maintain appropriate administrative,
technical and physical safeguards to protect the security, confidentiality and
integrity of Customer Information, including maintaining security measures
designed to meet the objectives of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information, 66 Fed. Reg. 8616 (the
"Interagency Guidelines"). For purposes of this Section, the term "Customer
Information" shall have the meaning assigned to it in the Interagency
Guidelines.
Section 4.23 Credit Reporting.
For Each Mortgage Loan, the Servicer shall furnish on a monthly basis
complete information on the related borrower credit files to Equifax, Experian
and Trans Union Credit Information Company, in accordance with the Fair Credit
Reporting Act and its implementing regulations.
Section 4.24 Pledged Asset Mortgage Loans.
For each Pledged Asset Mortgage Loan, the Company has obtained a Letter of
Credit from the Pledge Holder for the Pledged Value Amount. The Pledge Holder is
responsible for managing the Pledge Account, which includes making a
determination as to the types of assets or accounts the Mortgagor may pledge, as
well as the Pledge Account Set-Up Value and Pledge Account Maintenance Value. In
the event that the value of the Pledge Account is reduced below the Pledge
Account Maintenance Value, the Pledge Holder will require the Mortgagor to add
funds to the Pledge Account. In the event the Mortgagor is unable to comply with
the Pledge Account Maintenance Value requirements, the Pledge Holder can perform
a margin call. The Company has no role in the management or maintenance of the
Pledge Account.
Section 4.25 Establishment of and Deposits to Subsidy Account.
The Company shall segregate and hold all Subsidy Funds collected and
received pursuant to the Subsidy Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Subsidy
Accounts, in the form of time deposit or demand accounts, titled "Xxxxx Fargo
Bank, N.A., in trust for the Purchaser, its successors or assigns, and/or
subsequent purchasers of residential Mortgage Loans, and various Mortgagors."
The Subsidy Account shall be established with a Qualified Depository.
The Company shall, from time to time, withdraw funds from the Subsidy
Account for the following purposes:
(i) to deposit in the Custodial Account in the amounts and in the
manner provided for in Section 4.04(xi);
(ii) to transfer funds to another eligible institution in
accordance with Section 4.09 hereof;
(iii) to withdraw funds deposited in error; and
(iv) to clear and terminate the Subsidy Account upon the
termination of this Agreement.
Notwithstanding anything to the contrary elsewhere in this Agreement, the
Company may employ the Escrow Account as the Subsidy Account to the extent that
the Company can separately identify any Subsidy Funds deposited therein.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment Period
which amounts shall be remitted on the following Remittance Date, together with
any additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii);
minus (d) any amounts attributable to Monthly Payments collected but due on a
Due Date or Dates subsequent to the first day of the month of the Remittance
Date, and minus (e) any amounts attributable to Buydown Funds being held in the
Custodial Account, which amounts shall be remitted on the Remittance Date next
succeeding the Due Period for such amounts.
With respect to any remittance received by the Purchaser after the second
Business Day following the Business Day on which such payment was due, the
Company shall pay to the 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 three 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 Company on the date such late payment
is made and shall cover the period commencing with the day following such second
Business Day and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with the distribution
payable on the next succeeding Remittance Date. The payment by the Company of
any such interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Company.
Section 5.02 Statements to Purchaser.
Not later than the 10th Business Day of each month the Company shall furnish
to the Purchaser a monthly remittance advice, with a trial balance report
attached thereto, as to the preceding remittance and the period ending on the
last day of the preceding month.
Section 5.03 Monthly Advances by Company.
On the Business Day immediately preceding each Remittance Date, the Company
shall deposit in the Custodial Account from its own funds or from amounts held
for future distribution an amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close of
business on the immediately preceding Determination Date or which were deferred
pursuant to Section 4.01. Any amounts held for future distribution and so used
shall be replaced by the Company by deposit in the Custodial Account on or
before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Purchaser required to be made
on such Remittance Date. The Company's obligation to make such Monthly Advances
as to any Mortgage Loan will continue through the last Monthly Payment due prior
to the payment in full of the Mortgage Loan, or through the last Remittance Date
prior to the Remittance Date for the distribution of all Liquidation Proceeds
and other payments or recoveries (including REO Disposition Proceeds, Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided,
however, that such obligation shall cease if the Company determines, in its sole
reasonable opinion, that advances with respect to such Mortgage Loan are
non-recoverable by the Company from Liquidation Proceeds, REO Disposition
Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise with respect
to a particular Mortgage Loan. In the event that the Company determines that any
such advances are non-recoverable, the Company shall provide the Purchaser with
a certificate signed by two officers of the Company evidencing such
determination.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any "due-on-sale" provision
contained
in any Mortgage or Mortgage Note and to deny assumption by the Person to whom
the Mortgaged Property has been or is about to be sold whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
liable on the Mortgage and the Mortgage Note. When the Mortgaged Property has
been conveyed by the Mortgagor, the Company shall, to the extent it has
knowledge of such conveyance, exercise its rights to accelerate the maturity of
such Mortgage Loan under the "due-on-sale" clause applicable thereto, provided,
however, that the Company shall not exercise such rights if prohibited by law
from doing so or if the exercise of such rights would impair or threaten to
impair any recovery under the related PMI Policy, if any.
If the Company reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the Person to whom such property has
been conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Company is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Company has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser's consent.
To the extent that any Mortgage Loan is assumable, the Company shall inquire
diligently into the credit worthiness of the proposed transferee, and shall use
the underwriting criteria for approving the credit of the proposed transferee
which are used with respect to underwriting mortgage loans of the same type as
the Mortgage Loan. If the credit worthiness of the proposed transferee does not
meet such underwriting criteria, the Company diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate
the maturity of the Mortgage Loan.
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 Company
of a notification that payment in full will be escrowed in a manner customary
for such purposes, the Company shall notify the Purchaser in the monthly
remittance advice as provided in Section 5.02, and may request the release of
any Mortgage Loan Documents.
If the Company satisfies or releases a Mortgage without first having obtained
payment in full of the indebtedness secured by the Mortgage or should the
Company otherwise prejudice any rights the Purchaser may have under the mortgage
instruments, upon written demand of the Purchaser, the Company shall repurchase
the related Mortgage Loan at the Repurchase Price by deposit thereof in the
Custodial Account within 2
Business Days of receipt of such demand by the Purchaser. The Company shall
maintain the Fidelity Bond and Errors and Omissions Insurance Policy as provided
for in Section 4.12 insuring the Company against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures set
forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be entitled to
withdraw from the Custodial Account the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis of the
same unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Purchaser
to pay the Servicing Fee is limited to, and payable solely from, the interest
portion of such Monthly Payments.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.01, and late payment charges shall be retained by
the Company to the extent not required to be deposited in the Custodial Account.
The Company shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 6.04 Annual Statements as to Compliance.
The Company shall deliver to the Purchaser, on or before February 28th, each
year beginning February 28, 2006, an Officer's Certificate, stating that (i) a
review of the activities of the Company during the preceding calendar year and
of performance under this Agreement or similar agreements has been made under
such officer's supervision, and (ii) to the best of such officer's knowledge,
based on such review, the Company has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and the action being taken by the
Company to cure such default.
Section 6.05 Annual Independent Public Accountants' Servicing Report.
On or before February 28th, of each year beginning February 28, 2006, the
Company, 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 each Purchaser to the effect that such firm has examined
certain documents and records relating to the servicing of the mortgage loans
similar in nature and that such firm is of the opinion that the provisions of
this or similar Agreements have been complied with, and that, on the basis of
such examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, nothing has come to their attention
which would indicate that such servicing has not been conducted in compliance
therewith, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement. By providing Purchaser a copy of a Uniform Single Attestation Program
Report from their independent public
accountant's on an annual basis, Company shall be considered to have fulfilled
its obligations under this Section 6.05.
Section 6.06 Right to Examine Company Records.
The Purchaser, or its designee, shall have the right to examine and audit any
and all of the books, records, or other information of the Company, whether held
by the Company or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times as
may be reasonable under applicable circumstances, upon reasonable advance
notice. The Purchaser shall pay its own expenses associated with such
examination.
Section 6.07 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under which
the Mortgage Loans and REO Property are held, the Company shall not take any
action, cause the REMIC to take any action, fail to take any action, or fail to
cause the REMIC to take any action, that, under the REMIC Provisions, if taken
or not taken, as the case may be, could (i) endanger the status of the REMIC as
a REMIC or (ii) result in the imposition of a tax upon the REMIC (including but
not limited to the tax on "prohibited transactions" as defined in Section
860F(a) (2) of the Code and the tax on "contributions" to a REMIC set forth in
Section 860G(d) of the Code) unless the Company has received an Opinion of
Counsel (at the expense of the party seeking to take such action) to the effect
that the contemplated action will not endanger such REMIC status or result in
the imposition of any such tax.
ARTICLE VII
COMPANY TO COOPERATE
Section 7.01 Provision of Information.
During the term of this Agreement, the Company shall furnish to the Purchaser
such periodic, special, or other reports or information, and copies or originals
of any documents contained in the Servicing File for each Mortgage Loan provided
for herein. All other special reports or information not provided for herein as
shall be necessary, reasonable, or appropriate with respect to the Purchaser or
any regulatory agency will be provided at the Purchaser's expense. All such
reports, documents or information shall be provided by and in accordance with
all reasonable instructions and directions which the Purchaser may give.
The Company shall execute and deliver all such instruments and take all such
action as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this Agreement.
Section 7.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective purchaser a Consolidated Statement of Operations of
the Company for the most recently completed two fiscal years for which such a
statement is available, as well as a Consolidated Statement of Condition at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Company, upon request, also shall make available any comparable
interim statements to the extent any such statements have been prepared by or on
behalf of the Company (and are available upon request to members or stockholders
of the Company or to the public at large).
The Company also shall make available to Purchaser or prospective purchasers a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Company or the financial
statements of the Company, and to permit any prospective purchaser to inspect
the Company's servicing facilities for the purpose of satisfying such
prospective purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE VIII
THE COMPANY
Section 8.01 Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser and hold it harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Company to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The Company immediately shall
notify the Purchaser if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written 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 Company shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Company for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Company's
indemnification pursuant to Section 3.03, or the failure of the Company to
service and administer the Mortgage Loans in strict compliance with the terms of
this Agreement.
Section 8.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and franchises and
shall obtain and preserve its qualification to do business 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 Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company 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 (i) having a net worth
of not less than $25,000,000 and (ii) which is a Xxxxxx Xxx/Xxxxxxx Mac-approved
seller/servicer in good standing. Furthermore, in the event the Company
transfers or otherwise disposes of all or substantially all of its assets to an
affiliate of the Company, such affiliate shall satisfy the condition above, and
shall also be fully liable to the Purchaser for all of the Company's obligations
and liabilities hereunder.
Section 8.03 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or agents of
the Company 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, provided, however, that this provision
shall not protect the Company or any such Person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement or
any other liability which would otherwise be imposed under this Agreement. The
Company and any director, officer, employee or agent of the Company may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Company
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it in any
expense or liability, provided, however, that the Company may, with the consent
of the Purchaser, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the Company shall be entitled to reimbursement from the
Purchaser of the reasonable legal expenses and costs of such action.
Section 8.04 Limitation on Resignation and Assignment by Company.
The Purchaser has entered into this Agreement with the Company and subsequent
purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Company, and the representations as to the adequacy of its
servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Company shall neither assign this Agreement or the servicing rights hereunder or
delegate its rights or duties hereunder (other than pursuant to Section 4.01) or
any portion hereof or sell or otherwise dispose of all of its property or assets
without the prior written consent of the Purchaser, which consent shall not be
unreasonably withheld..
The Company shall not resign from the obligations and duties hereby imposed on
it except by mutual consent of the Company 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 Company. Any such
determination permitting the resignation of the Company 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
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.01.
Without in any way limiting the generality of this Section 8.04, in the event
that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or sell or otherwise dispose of all or substantially
all of its property or assets, without the prior written consent of the
Purchaser, then the Purchaser shall have the right to terminate this Agreement
upon notice given as set forth in Section 10.01, without any payment of any
penalty or damages and without any liability whatsoever to the Purchaser or any
third party.
ARTICLE IX
REMOVAL OF MORTGAGE LOANS FROM AGREEMENT
Section 9.01 Removal of Mortgage Loans from Inclusion Under this Agreement
The Purchaser and the Company agree that with respect to some or all of the
Mortgage Loans, the Purchaser, at its sole option, may effect Whole Loan
Transfers, Agency Sales or Pass-Through Transfers, retaining the Company as the
servicer thereof or subservicer if a master servicer is employed, or as
applicable the "seller/servicer." In the event that any Mortgage Loan
transferred pursuant to this Section 9.01 is rejected by the transferee, the
Company shall continue to service such rejected Mortgage Loan on behalf of the
Purchaser in accordance with the terms and provisions of this Agreement.
The Company shall cooperate with the Purchaser in connection with each Whole
Loan Transfer, Agency Sale or Pass-Through Transfer in accordance with this
Section 9.01; provided that no such Whole Loan Transfer, Agency Sale or
Pass-Through Transfer shall create a greater obligation or cost on the part of
the Company than otherwise set forth in this Agreement. In connection therewith
the Company shall:
(a) make all representations and warranties with respect to the
Mortgage Loans as of the Closing Date and with respect to the
Company itself as of the closing date of each Agency Sale,
Whole Loan Transfer or Pass-Through Transfer;
(b) negotiate in good faith and execute any seller/servicer
agreements required to effectuate the foregoing;
(c) with respect to any Mortgage Loans that are subject to a
Pass-Through Transfer or other securitization (a
"Securitization") in which the filing of a Xxxxxxxx-Xxxxx
Certification directly with the Securities and Exchange
Commission is required, by February 28th of each year or in
connection with any additional Xxxxxxxx-Xxxxx Certification
required to be filed upon thirty (30) days written request, an
officer of the Company shall execute and deliver an Officer's
Certification substantially in the form attached hereto as
Exhibit G, to the entity filing the Xxxxxxxx-Xxxxx
Certification directly with the Securities and Exchange
Commission (the "Sarbanes Certifying Party") for the benefit
of such entity and such entity's affiliates and the officers,
directors and agents of such entity and such entity's
affiliates, and shall indemnify such entity or persons arising
out of any breach of Company's obligations or representations
relating thereto as provided in such Officer's Certification.
(d) to cooperate fully with the Purchaser and any prospective
purchaser with respect to all reasonable requests and due
diligence procedures and with respect to the preparation
(including, but not limited to, the endorsement, delivery,
assignment, and execution) of the Mortgage Loan Documents and
other related documents;
(e) provide as applicable:
(i) any and all information and appropriate verification of
information which may be reasonably available to the
Company, including the Company's foreclosure,
delinquency experience and the Company's underwriting
standards, whether through letters of its auditors and
counsel or otherwise, as the Purchaser shall request;
provided that the Purchaser executes an Indemnification
Agreement substantially in the form of Exhibit H
attached hereto;
(ii) such additional representations, warranties, covenants,
opinions of counsel, letters from auditors, and
certificates of public officials or officers of the
Company as are reasonably believed necessary by the
trustee, any rating agency or the Purchaser, as the case
may be, in connection with such Agency Sales, Whole Loan
Transfers or Pass-Through Transfers. The Purchaser shall
pay all third-party costs associated with the
preparation of such information. The Company shall
execute any seller/servicer agreements required within a
reasonable period of time after receipt of such
seller/servicer agreements which time shall be
sufficient for the Company and Company's counsel to
review such seller/servicer agreements. Under this
Agreement, the Company shall retain a Servicing Fee for
each Mortgage Loan at the Servicing Fee Rate;
(f) to negotiate and execute one or more subservicing agreements
between the Company and any master servicer which is generally
considered to be a prudent master servicer in the secondary
mortgage market, designated by the Purchaser in its sole
discretion after consultation with the Company and/or one or
more custodial and servicing agreements among the Purchaser,
the Company and a third party custodian/trustee which is
generally considered to be a prudent custodian/trustee in the
secondary mortgage market designated by the Purchaser in its
sole discretion after consultation with the Company, in either
case for the purpose of pooling the Mortgage Loans with other
Mortgage Loans for resale or securitization;
(g) in connection with any securitization of any Mortgage Loans,
to execute a pooling and servicing agreement, which pooling
and servicing agreement may, at the Purchaser's direction,
contain contractual provisions including, but not limited to,
a 24 day certificate payment delay (54 day total payment
delay), servicer advances of delinquent scheduled payments of
principal and interest through liquidation (unless deemed non
recoverable) and prepayment interest shortfalls (to the extent
of the monthly servicing fee payable thereto);
In the event the Purchaser has elected to have the Company hold record title to
the Mortgages, prior to the Reconstitution Date the Company shall prepare an
Assignment of Mortgage in blank or to the trustee from the Company acceptable to
the trustee for each Mortgage Loan that is part of the Agency Sales, Whole Loan
Transfers or Pass-Through Transfers. The Purchaser shall pay all preparation and
recording costs associated therewith, if the Assignments of Mortgage have been
previously prepared and recorded in the name of the Purchaser or its designee.
The Company shall execute each Assignment of Mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
trustee upon the Company's receipt thereof. Additionally, the Company shall
prepare and execute, at the direction of the Purchaser, any note endorsements in
connection with any and all seller/servicer agreements.
All Mortgage Loans (i) not sold or transferred pursuant to Agency Sales, Whole
Loan Transfers or Pass-Through Transfers or (ii) that are subject to a
Securitization for which the related trust is terminated for any reason, 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 X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part of the
Company:
(i) any failure by the Company 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 Company by the Purchaser; or
(ii) failure by the Company duly to observe or perform in any
material respect any other of the covenants or agreements on
the part of the Company set forth in this Agreement or in the
Custodial Agreement which continues unremedied for a period of
30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been
given to the Company by the Purchaser or by the Custodian; or
(iii) failure by the Company to maintain its license to do business
and to service residential mortgage loans in any jurisdiction
where the Mortgaged Property is located if such license is
required; or
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, including bankruptcy, marshaling of
assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been
entered against the Company and such decree or order shall
have remained in force undischarged or unstayed for a period
of 60 days; or
(v) the Company shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Company or of or relating to
all or substantially all of its property; or
(vi) the Company 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, bankruptcy or
reorganization statute, make an assignment for the benefit of
its creditors, voluntarily suspend payment of its obligations
or cease its normal business operations for three Business
Days; or
(vii) the Company ceases to meet the qualifications of a Xxxxxx
Mae/Xxxxxxx Mac servicer; or
(viii) the Company, if it is an Insured Depository Institution,
shall become the subject of a cease and desist order of the
Appropriate Federal Banking Agency or enter into a memorandum
of understanding, consent agreement or any similar agreement
with the Appropriate Federal Banking Agency,
any of which would have, or is purportedly the result of, any
condition which would have a material adverse effect on the
Company's ability to service the Mortgage Loans as provided in
this Agreement;
(ix) the Company attempts to assign its right to servicing
compensation hereunder or to assign this Agreement or the
servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof in violation of Section 8.04;
or
(ix) failure by the Company to duly perform, within the required
time period, its obligations under Section 9.01(c) of this
Agreement, 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 Company by the Purchaser.
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatever rights the Purchaser may have at law or
equity to damages, including injunctive relief and specific performance, the
Purchaser, by notice in writing to the Company, may terminate all the rights and
obligations of the Company under this Agreement and in and to the Mortgage Loans
and the proceeds thereof.
Upon receipt by the Company of such written notice, all authority and power of
the Company 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 any Purchaser, the Company shall
prepare, execute and deliver to the successor entity designated by the Purchaser
any and all documents and other instruments, place in such successor's
possession all Mortgage Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company's sole
expense. The Company shall cooperate with the Purchaser and such successor in
effecting the termination of the Company'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 Company to the Custodial Account, Subsidy Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the Company in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder; or (ii) mutual consent of
the Company and the Purchaser in writing.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the Company may
have hereunder, without cause as provided in this Section 11.02. Any such notice
of termination shall be in writing and delivered to the Company by registered
mail as provided in Section 12.05.
The Company shall be entitled to receive, as such liquidated damages, upon the
transfer of the servicing rights, an amount equal to: (i) 2.25% of the aggregate
outstanding principal amount of the Mortgage Loans as of the termination date
paid by the Purchaser to the Company with respect to all of the Mortgage Loans
for which a servicing fee rate of .25% is paid per annum, (ii) 3.25% of the
aggregate outstanding principal amount of the Mortgage Loans as of the
termination date paid by the Purchaser to the Company with respect to all of the
Mortgage Loans for which a servicing fee rate of .375% is paid per annum, and
(iii) 3.75% of the aggregate outstanding principal amount of the Mortgage Loans
as of the termination date paid by the Purchaser to the Company with respect to
all of the Mortgage Loans for which a servicing fee rate of .44% or greater is
paid per annum.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company.
Prior to termination of the Company's responsibilities and duties under this
Agreement pursuant to Sections 8.04, 10.01, 11.01 (ii) or pursuant to Section
11.02 the Purchaser shall, (i) succeed to and assume all of the Company's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor having the characteristics set forth in Section 8.02 and
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Company under this Agreement prior to the
termination of Company's responsibilities, duties and liabilities under this
Agreement arising from and after such termination. In connection with such
appointment and assumption, the Purchaser may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree. In the event that the Company's duties, responsibilities
and liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, the Company 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 Company pursuant
to the aforementioned sections shall not become effective until a successor
shall be appointed pursuant to this Section 12.01 and shall in no event relieve
the Company of the representations and warranties made pursuant to Sections 3.01
and 3.02 and the remedies available to the Purchaser under Section 3.03 and
8.01, it being understood and agreed that the provisions of such Sections 3.01,
3.02, 3.03 and 8.01 shall be applicable to the Company notwithstanding any such
sale, assignment, resignation or termination of the Company, or the termination
of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 3.01, except for subsections (h) with respect to the sale
of the Mortgage Loans and subsections (i) and (k) thereof, whereupon such
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Company, with like effect
as if originally named as a party to this Agreement. Any termination or
resignation of the Company or termination of this Agreement pursuant to Section
8.04, 10.01, 11.01 or 11.02 shall not affect any claims that any Purchaser may
have against the Company arising out of the Company's actions or failure to act
prior to any such termination or resignation.
The Company shall deliver promptly to the successor servicer the funds in the
Custodial Account, Subsidy Account and Escrow Account and all Mortgage Files and
related documents and statements held by it hereunder and the Company shall
account for all funds and shall execute and deliver such instruments and do such
other things as may reasonably be required to more fully and definitively vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Company.
Upon a successor's acceptance of appointment as such, the Company shall notify
by mail the Purchaser of such appointment in accordance with the procedures set
forth in Section 12.05.
Section 12.02 Amendment.
This Agreement may be amended from time to time by written agreement signed by
the Company and the Purchaser.
Section 12.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the State of
New York and the obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws.
Section 12.04 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated as
herein provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
(i) if to the Company with respect to servicing issues:
Xxxxx Fargo Bank, N.A.
1 Home Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, MAC X2401-042
Fax: 515/000-0000
(ii) if to the Company with respect to all other issues:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Structured Finance Manager, MAC X3906-012
Fax: 301/000-0000
In each instance, with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel MAC X2401-06T
or such other address as may hereafter be furnished to the Purchaser
in writing by the Company;
(ii) if to Purchaser:
Xxxxxxx Xxxxx Mortgage Lending, Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxx
or such other address as may hereafter be furnished to the Company in
writing by the Purchaser.
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this
Agreement shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Agreement.
Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a partnership
or joint venture between the parties hereto and the services of the Company
shall be rendered as an independent contractor and not as agent for the
Purchaser.
Section 12.08 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 Section 8.04, this Agreement
shall inure to the benefit of and be binding upon the Company and the Purchaser
and their respective successors and assigns.
Section 12.09 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of Mortgage
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Company's expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company but
subject to the limit set forth in Section 2.02 hereof, 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 attached as
Exhibit D, and the assignee or designee shall accede to the rights and
obligations hereunder of the Purchaser with respect to such Mortgage Loans. All
references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee.
Section 12.11 Solicitation of Mortgagor.
Neither party shall, after the Closing Date, take any action to solicit
the refinancing of any Mortgage Loan. It is understood and agreed that neither
(i) promotions undertaken by either party or any affiliate which are directed to
the general public at large, including, without limitation, mass mailings based
upon commercially acquired mailing lists, newspaper, radio, television
advertisements nor (ii) serving the refinancing needs of a Mortgagor who,
without solicitation, contacts either party in connection with the refinance of
such Mortgage or Mortgage Loan, shall constitute solicitation under this
Section.
Section 12.12 Further Agreements.
The Purchaser and the Company each agree to execute and deliver to the other
such additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
Section 12.13 Waivers.
No term or provision of this Agreement may be waived or modified unless such
waiver or modification is in writing and signed by the party against whom such
waiver or modification is sought to be enforced.
Section 12.14. Acknowledgement of Anti-Predatory Lending Policies.
On the Purchase Date, Purchaser has in place internal policies and procedures
that expressly prohibit its purchase of any high cost Mortgage Loan as specified
in Section 3.02 (rr).
[Intentionally Blank - Next Page Signature Page]
IN WITNESS WHEREOF, the Company 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.
XXXXXXX XXXXX MORTGAGE XXXXX FARGO BANK, N.A.
LENDING, INC.
PURCHASER COMPANY
By: By:
Name: Name:
Title: Title:
STATE OF )
) ss:
COUNTY OF ___________ )
On the _____ day of _______________, 20___ before me, a Notary Public in and
for said State, personally appeared ______, known to me to be _________ of Xxxxx
Fargo Bank, N.A., the national banking association that executed the within
instrument and also known to me to be the person who executed it on behalf of
said bank, and acknowledged to me that such bank executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and year in this certificate first above written.
Notary Public
My Commission expires
STATE OF )
) ss:
COUNTY OF )
On the _____ day of _______________, 20___ before me, a Notary Public in and
for said State, personally appeared _____________________________________, known
to me to be the ______________________________ of
______________________________, the corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and year in this certificate first above written.
Notary Public
My Commission expires
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT A-1
DATA FILE
(1) the street address of the Mortgaged Property including the
city, state, county and zip code;
(2) a code indicating whether the Mortgaged Property is a single
family residence, a 2-4 family dwelling, a PUD, a Cooperative
Loan, a townhouse, manufactured housing or a unit in a
condominium project;
(3) the Mortgage Interest Rate as of the Cut-off Date;
(4) the current Monthly Payment;
(5) loan term, number of months;
(6) the stated maturity date;
(7) the Stated Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date, after deduction of
payments of principal due on or before the Cut-off Date;
(8) the Loan-to-Value Ratio;
(9) a code indicating whether the Mortgage Loan is an Interest
Only Mortgage Loan;
(10) a code indicating whether the Mortgage Loan is a temporary
buydown (Y or N);
(11) the Servicing Fee Rate;
(12) a code indicating whether the Mortgage Loan is covered by
lender-paid mortgage insurance (Y or N);
(13) a code indicating whether the Mortgage Loan is a Time$aver(R)
Mortgage Loan (Y or N);
(14) the Mortgagor's first and last name;
(15) a code indicating whether the Mortgaged Property is
owner-occupied;
(16) the remaining months to maturity from the Cut-off Date, based
on the original amortization schedule;
(17) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(18) the last Due Date on which a Monthly Payment was actually
applied to the actual principal balance;
(19) the original principal amount of the Mortgage Loan;
(20) a code indicating the purpose of the loan (i.e., purchase,
financing, rate/term refinancing, cash-out refinancing);
(21) the Mortgage Interest Rate at origination;
(22) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(23) a code indicating the documentation style (i.e., full
(providing two years employment verification - 2 years W-2's
and current pay stub or 2 years 1040's for self employed
borrowers), alternative or reduced);
(24) a code indicating if the Mortgage Loan is subject to a PMI
Policy;
(25) the Appraised Value of the Mortgage Property;
(26) the sale price of the Mortgaged Property, if applicable;
(27) the Mortgagor's Underwriting FICO Score;
(28) term of prepayment penalty in years;
(29) a code indicating the product type;
(30) a code indicating the credit grade of the Mortgage Loan;
(31) the unpaid balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of all payments
of principal;
(32) the Note date of the Mortgage Loan;
(33) the mortgage insurance certificate number and percentage of
coverage, if applicable;
(34) the Mortgagor's date of birth;
(35) the MIN Number;
(36) employer name;
(37) subsidy program code;
(38) servicer name;
(39) the combined Loan-to-Value Ratio;
(40) the total Loan-to-Value Ratio;
(41) whether the Mortgage Loan is convertible (Y or N);
(42) a code indicating whether the Mortgage Loan is a relocation
loan (Y or N);
(43) a code indicating whether the Mortgage Loan is a leasehold
loan (Y or N);
(44) a code indicating whether the Mortgage Loan is an Alt A loan
(Y or N);
(45) a code indicating whether the Mortgage Loan is a no ratio loan
(Y or N);
(46) a code indicating whether the Mortgage Loan is a Pledged Asset
Mortgage Loan (Y or N);
(47) effective LTV percentage for Pledged Asset Mortgage Loans;
(48) citizenship type code;
(49) a code indicating whether the Mortgage Loan is a conforming or
non-conforming loan, based on the original loan balance;
(50) the name of the client for which the Mortgage Loan was
originated;
(51) the program code;
(52) the loan sub doc code;
The Company shall provide the following
For the Home Mortgage Disclosure Act (HMDA):
(53) the Mortgagor's and co-Mortgagor's (if applicable) ethnicity;
(54) the Mortgagor's and co-Mortgagor's (if applicable) race;
(55) lien status;
(56) for cash-out refinance loans, the cash purpose;
(57) the Mortgagor's and co-Mortgagor's (if applicable) gender;
(58) the Mortgagor's and co-Mortgagor's (if applicable) social
security numbers;
(59) the number of units for the property;
(60) the year in which the property was built;
(61) the qualifying monthly income of the Mortgagor;
(62) the number of bedrooms contained in the property;
(63) a code indicating first time buyer (Y or N);
(64) the total rental income, if any;
The Seller shall provide the following
for the adjustable rate Mortgage Loans (if applicable):
(65) the maximum Mortgage Interest Rate under the terms of the
Mortgage Note;
(66) the Periodic Interest Rate Cap;
(67) the Index;
(68) the next Adjustment Date;
(69) the Gross Margin; and
(70) the lifetime interest rate cap.
EXHIBIT B
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each of
the following items, which shall be available for inspection by the Purchaser
and any prospective Purchaser, and which shall be retained by the Company in the
Servicing File or delivered to the Custodian pursuant to Sections 2.01 and 2.03
of the Seller's Warranties and Servicing Agreement to which this Exhibit is
attached (the "Agreement"):
1. The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of without recourse"
and signed in the name of the Company by an authorized officer
(in the event that the Mortgage Loan was acquired by the
Company in a merger, the signature must be in the following
form: "[Company], successor by merger to [name of
predecessor]"; and in the event that the Mortgage Loan was
acquired or originated by the Company while doing business
under another name, the signature must be in the following
form: "[Company], formerly known as [previous name]").
2. The original of any guarantee executed in connection with the
Mortgage Note (if any).
3. The original Mortgage, with evidence of recording thereon or a
certified true and correct copy of the Mortgage sent for
recordation. If in connection with any Mortgage Loan, the
Company cannot deliver or cause to be delivered the original
Mortgage with evidence of recording thereon on or prior to the
Closing Date because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation
or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, the
Company shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in
the case of a delay caused by the public recording office, an
Officer's Certificate of the Company stating that such
Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original
recorded Mortgage or a copy of such Mortgage certified by such
public recording office to be a true and complete copy of the
original recorded Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Company; or (ii) in the
case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is
lost after recordation in a public recording office, a copy of
such Mortgage certified by such public recording office or by
the title insurance company that issued the title policy to be
a true and complete copy of the original recorded Mortgage.
Further, with respect to MERS Mortgage Loans, (a) the Mortgage
names MERS as the Mortgagee and (b) the requirements set forth
in the Electronic Tracking Agreement have been satisfied, with
a conformed recorded copy to follow as soon as the same is
received by the Company.
4. The originals or certified true copies of any document sent
for recordation of all assumption, modification, consolidation
or extension agreements, with evidence of recording thereon.
5. The original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except for the
insertion of the name of the assignee and recording
information). The Assignment of Mortgage must be duly recorded
only if recordation is either necessary under applicable law
or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located
or on direction of the Purchaser. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned to
the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in
blank. If the Mortgage Loan was acquired by the Company in a
merger, the Assignment of Mortgage must be made by "[Company],
successor by merger to [name of predecessor]." If the Mortgage
Loan was acquired or originated by the Company while doing
business under another name, the Assignment of Mortgage must
be by "[Company], formerly know as [previous name]."
6. Originals or certified true copies of documents sent for
recordation of all intervening assignments of the Mortgage
with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording
office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the
Company shall deliver or cause to be delivered to the
Custodian, a photocopy of such intervening assignment,
together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Company
stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for
recordation and that such original recorded intervening
assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public
recording office or by the title insurance company that issued
the title policy to be a true and complete copy of the
original recorded intervening assignment of mortgage will be
promptly delivered to the Custodian upon receipt thereof by
the Company; or (ii) in the case of an intervening assignment
where a public recording office retains the original recorded
intervening assignment or in the case where an intervening
assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by
such public recording office to be a true and complete copy of
the original recorded intervening assignment.
7. The original mortgagee policy of title insurance or other
evidence of title such as a copy of the title commitment or
copy of the preliminary title commitment.
8. Any security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
9. The original Letter of Credit for each Pledged Asset Mortgage
Loan and an assignment, in blank, from the Company to the
Purchaser, of such Letter of Credit.
10. For each Cooperative Loan, the original or a seller certified
true copy of the following:
The original Pledge Agreement entered into by the Mortgagor
with respect to such Cooperative Loan;
UCC-3 assignment in blank (or equivalent instrument),
sufficient under the laws of the jurisdiction where the
related Cooperative Apartment is located to reflect of record
the sale and assignment of the Cooperative Loan to the
Purchaser;
Original Assignment of Mortgage Note and Pledge Agreement in
blank showing a complete chain of assignment from the
originator of the related Cooperative Loan to the Company;
Original Form UCC-1 and any continuation statements with
evidence of filing thereon with respect to such Cooperative
Loan;
Cooperative Shares with a Stock Certificate in blank attached;
Original Proprietary Lease;
Original Assignment of Proprietary Lease, in blank, and all
intervening assignments thereof;
Original recognition agreement of the interests of the
mortgagee with respect to the Cooperative Loan by the
Cooperative, the stock of which was pledged by the related
Mortgagor to the originator of such Cooperative Loan; and
Originals of any assumption, consolidation or modification
agreements relating to any of the items specified above.
With respect to each Mortgage Loan, the Servicing File shall include each of
the following items to the extent in the possession of the Company or in the
possession of the Company's agent(s):
11. The original hazard insurance policy and, if required by law,
flood insurance policy, in accordance with Section 4.10 of the
Agreement.
12. Residential loan application.
13. Mortgage Loan closing statement.
14. Verification of employment and income, unless originated under
the Company's Limited Documentation program, Xxxxxx Xxx
Timesaver Plus.
15. Verification of acceptable evidence of source and amount of
down payment.
16. Credit report on the Mortgagor.
17. Residential appraisal report.
18. Photograph of the Mortgaged Property.
19. Survey of the Mortgage property, if required by the title
company or applicable law.
20. Copy of each instrument necessary to complete identification
of any exception set forth in the exception schedule in the
title policy, i.e. map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
21. All required disclosure statements.
22. If available, termite report, structural engineer's report,
water potability and septic certification.
23. Sales contract, if applicable.
24. Evidence of payment of taxes and insurance premiums, insurance
claim files, correspondence, current and historical
computerized data files, and all other processing,
underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are
required to document the Mortgage Loan or to service the
Mortgage Loan.
25. Amortization schedule, if available.
26. Payment history for any Mortgage Loan that has been closed for
more than 90 days.
27. Original power of attorney, if applicable.
In the event an Officer's Certificate of the Company is delivered to the
Custodian because of a delay caused by the public recording office in returning
any recorded document, the Company shall deliver to the Custodian, within 240
days of the Closing Date, an Officer's Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, and (iv)
specify the date the applicable recorded document will be delivered to the
Custodian. The Company shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above or by the
extended date as may be agreed to by both parties. An extension of the date
specified in (iv) above may be requested from the Purchaser, which consent shall
not be unreasonably withheld.
EXHIBIT C
CUSTODIAL AGREEMENT
EXHIBIT D
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
____________, 20__
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated ___________________,
20__ between _________________, a _________________ corporation having an office
at _________________ ("Assignor") and _________________, having an office at
_________________ ("Assignee"):
For and in consideration of the sum of one dollar ($1.00) and other valuable
consideration the receipt and sufficiency of which are hereby acknowledge, and
of the 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 that
certain Seller's Warranties and Servicing Agreement, (the "Seller's Warranties
and Servicing Agreement"), dated as of _________________, by and between
_________________ (the "Purchaser"), and _________________ (the "Company"), and
the Mortgage Loans delivered thereunder by the Company to the Assignor, and that
certain Custodial Agreement, (the "Custodial Agreement"), dated as of
_________________, by and among the Company, the Purchaser and _________________
(the "Custodian").
2. From and after the date hereof (the "Closing Date"), the Company shall
and does hereby recognize that the Assignor will transfer the Mortgage Loans and
assign its rights under the Sellers Warranties and Servicing Agreement (solely
to the extent set forth herein) to the Assignee. The Company hereby acknowledges
and agrees that from and after the date hereof (i) the Assignee will be the
owner of the Mortgage Loans, (ii) the Company shall look solely to the Assignee
for performance of any obligations of the
Assignor [insofar as they relate to the enforcement of the representations,
warranties and covenants with respect to the Mortgage Loans], (iii) the
[Assignee] shall have all the rights and remedies available to the Assignor,
insofar as they relate to the Mortgage Loans, under the Seller's Warranties and
Servicing Agreement, and shall be entitled to enforce all of the obligations of
the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser [(insofar as they relate to the rights, title
and interest and, with respect to obligations of the Purchaser, only insofar as
they relate to the enforcement of the representations, warranties and covenants
of the Company)] under the Seller's Warranties and Servicing Agreement insofar
as they relate to the Mortgage Loans, shall be deemed to refer to the Assignee.
3. The Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The Assignor is the lawful owner of the Mortgage Loans with the full right
to transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
b. The Assignor has not received notice of, and has no knowledge of, any
offsets, counterclaims or other defenses available to the Company with respect
to the Seller's Warranties and Servicing Agreement or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Seller's Warranties and Servicing
Agreement, the Custodial Agreement or the Mortgage Loans, including without
limitation the transfer of the servicing obligations under the Seller's
Warranties and Servicing Agreement. 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, the Seller's Warranties and
Servicing Agreement or the Mortgage Loans; and
d. Neither the Assignor nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Mortgage Loans under the Securities Act of 1933
(the "33 Act") or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the 33 Act or require registration pursuant thereto.
4. That Assignee warrants and represent to, and covenants with, the Assignor
and the Company pursuant to Section 12.10 of the Seller's Warranties and
Servicing Agreement that:
a. The Assignee agrees to be bound, as Purchaser, by all of the terms,
covenants and conditions of the Seller's Warranties and Servicing Agreement, the
Mortgage Loans and the Custodial Agreement, and from and after the date hereof,
the Assignee assumes for the benefit of each of the Company and the Assignor all
of the Assignor's obligations as purchaser thereunder;
b. The Assignee understands that the Mortgage Loans have not been registered
under the 33 Act or the securities laws of any state;
c. The purchase price being paid by the Assignee for the Mortgage Loans are in
excess of $250,000.00 and will be paid by cash remittance of the full purchase
price within 60 days of the sale;
d. The Assignee is acquiring the Mortgage Loans for investment for its own
account only and not for any other person. In this connection, neither the
Assignee nor any person authorized to act therefor has offered to sell the
Mortgage Loans by means of any general advertising or general solicitation
within the meaning of Rule 502(c) of US Securities and Exchange Commission
Regulation D, promulgated under the 1933 Act;
e. The Assignee considers itself a substantial sophisticated institutional
investor having such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of investment in the
Mortgage Loans;
f. The Assignee has been furnished with all information regarding the Mortgage
Loans that it has requested from the Assignor or the Company;
g. Neither the Assignee nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accepted a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner which would constitute a distribution of the Mortgage Loans
under the 33 Act or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the 33 Act or require registration pursuant thereto,
nor will it act, nor has it authorized or will it authorize any person to act,
in such manner with respect to the Mortgage Loans; and
h. Either (1) the Assignee is not an employee benefit plan ("Plan") within the
meaning of section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") or a plan (also "Plan") within the meaning of section
4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and the Assignee is
not directly or indirectly purchasing the Mortgage Loans on behalf of,
investment manager of, as named fiduciary of, as Trustee of, or with assets of,
a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not result in
a prohibited transaction under section 406 of ERISA or section 4975 of the Code.
i. The Assignee's address for purposes of all notices and correspondence
related to the Mortgage Loans and the Seller's Warranties and Servicing
Agreements is:
Attention: _________________
The Assignee's wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Seller's Warranties and Servicing
Agreement is:
Attention: _________________
5. From and after the date hereof, the Company shall note the transfer of the
Mortgage Loans to the Assignee in its books and records, the Company shall
recognize the Assignee as the owner of the Mortgage Loans and the Company shall
service the Mortgage Loans for the benefit of the Assignee pursuant to the
Seller's Warranties and Servicing Agreement, the terms of which are incorporated
herein by reference. It is the intention of the Assignor, the Company and the
Assignee that the Seller's Warranties and Servicing Agreement shall be binding
upon and inure to the benefit of the Company and the Assignee and their
respective successors and assigns
[Signatures Follow]
IN WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition to be executed by their duly authorized officers as of the date
first above written.
Assignor Assignee
By: By:
Name: Name:
Its: Its:
Tax Payer Identification No.: Tax Payer Identification No.:
________________________________ _________________________________
EXHIBIT E
FORMS OF CUSTODIAL ACCOUNT CERTIFICATIONS
CUSTODIAL ACCOUNT CERTIFICATION
, 20
Xxxxx Fargo Bank, N.A. hereby certifies that it has established the account
described below as a
Custodial Account pursuant to Section 4.04 of the Seller's Warranties and
Servicing Agreement, dated as of , 20 ,.
Title of Account: Xxxxx Fargo Bank, N.A. in trust for the Purchaser and/or
subsequent purchasers of Mortgage Loans - P & I
Address of office or branch of the Company at which Account is maintained:
XXXXX FARGO BANK, N.A.
Company
By:
Name:
Title:
EXHIBIT F
FORMS OF ESCROW ACCOUNT CERTIFICATIONS
ESCROW ACCOUNT CERTIFICATION
, 20
Xxxxx Fargo Bank, N.A. hereby certifies that it has established the account
described below as an Escrow Account pursuant to Section 4.06 of the Seller's
Warranties and Servicing Agreement, dated as of , 20 ,.
Title of Account: Xxxxx Fargo Bank, N.A. in trust for the Purchaser and/or
subsequent purchasers of Mortgage Loans, and various Mortgagors - T & I
Address of office or branch
of the Company at which
Account is maintained:
XXXXX FARGO BANK, N.A.
Company
By:
Name:
Title:
EXHIBIT G
FORM OF ANNUAL CERTIFICATION
I, ______________________, Vice President of Xxxxx Fargo Bank, N.A. (the
"Servicer"), certify to __________________, and its officers, directors, agents
and affiliates (the "Sarbanes Certifying Party"), and with the knowledge and
intent that they will rely upon this certification, that:
(i) Based on my knowledge, the information relating to the Mortgage Loans
and the servicing thereof submitted by the Servicer to the
Sarbanes Certifying Party which is used in connection with
preparation of the reports on Form 8-K and the annual report
on Form 10-K filed with the Securities and Exchange Commission
with respect to the Securitization, taken as a whole, does not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were
made, not misleading as of the date of this certification;
(ii) The servicing information required to be provided to the Sarbanes
Certifying Party by the Servicer under the relevant servicing
agreement has been provided to the Sarbanes Certifying Party;
(iii) I am responsible for reviewing the activities performed by the
Servicer under the relevant servicing agreement and based upon
the review required by the relevant servicing agreement, and
except as disclosed in the Annual Statement of Compliance, the
Annual Independent Public Accountant's Servicing Report and
all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans
submitted to the Sarbanes Certifying Party, the Servicer has,
as of the date of this certification fulfilled its obligations
under the relevant servicing agreement; and
(iv) I have disclosed to the Sarbanes Certifying Party all significant
deficiencies relating to the Servicer's compliance with the
minimum servicing standards in accordance with a review
conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar standard as set forth
in the relevant servicing agreement.
(v) The Servicer shall indemnify and hold harmless the Sarbanes Certifying
Party and its officers, directors, agents and affiliates from
and against any losses, damages, penalties, fines,
forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers,
directors, agents or affiliates of its obligations under this
Certification or the negligence, bad faith or willful
misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or
insufficient to hold harmless the Sarbanes Certifying Party,
then the Servicer agrees that it shall contribute to the
amount paid or payable by the Sarbanes Certifying Party as a
result of the losses, claims, damages or liabilities of the
Sarbanes Certifying Party in such proportion as is appropriate
to reflect the relative fault of the Sarbanes Certifying Party
on the one hand and the Servicer on the other in connection
with a breach of the Servicer's obligations under this
Certification or the Servicer's negligence, bad faith or
willful misconduct in connection therewith.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Servicer.
Dated: By:
Name:
Title:
EXHIBIT H
INDEMNIFICATION AGREEMENT
Indemnification Agreement dated as of ___________, 200__ (the "Agreement")
between Xxxxx Fargo Bank, N.A. ("Company") and _____________________ (the
"Depositor").
Reference is made to the issuance of ____________________, Series ________,
Asset-Backed Certificates (the "Certificates"), pursuant to a Pooling and
Servicing Agreement,
dated as of _______________ (the "Pooling and Servicing Agreement"), among the
Depositor as depositor, _________________ as master servicer and
_____________________ as trustee. The Depositor will sell certain of the
Certificates to _______________ (the "Underwriter") for offer and sale pursuant
to the terms of an Underwriting Agreement, dated ______________, ____, between
the Depositor and the Underwriter. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Pooling and Servicing Agreement.
Reference is also made to the information provided by the Company contained in
the Prospectus Supplement, under the caption, "The Originators --
______________" and "The Servicer -- "__________" (collectively, the "Company
Information").
1. (a) Company agrees to indemnify and hold harmless the Depositor and each of
its directors and officers and affiliates and each person, if any, who controls
the Depositor within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act (each, a "Depositor Indemnified Party"), against any and
all actual losses, claims, expenses, damages or liabilities to which the
Depositor Indemnified Party may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement of any
material fact contained in the Company Information or omission to state therein,
a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which such
statements were made, not misleading (in each case, regardless of whether a
final judgment has been entered by a finder of fact); and will reimburse any
such reasonable legal or other expenses reasonably incurred by the Depositor
Indemnified Party in connection with investigating or defending any such loss,
claim, damage, liability or action. This indemnity agreement will be in addition
to any liability which Company may otherwise have.
(b) The Depositor agrees to indemnify and hold harmless the Company and each
of its directors and officers and affiliates and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, a "Company Indemnified Party" and
collectively with any Depositor Indemnified Party, "Indemnified Parties"),
against any and all actual losses, claims, expenses, damages or liabilities to
which the Company Indemnified Party may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Prospectus
Supplement other than with respect to the Company Information, or omission to
state therein a material fact required to be stated therein or necessary to make
the statements made therein not misleading (in each case, regardless of whether
a final judgment has been entered by a finder of fact); and will reimburse such
reasonable legal or other expenses actually incurred by the Company Indemnified
Party in connection with investigating or defending any such loss, claim,
damage, liability or action. This indemnity agreement will be in addition to any
liability which the Depositor may otherwise have.
(c) Promptly after receipt by an Indemnified Party under this Section 1 of
notice of the commencement of any action described therein, such Indemnified
Party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 1, notify the indemnifying party of the commencement
thereof, but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability that it may have to the Indemnified
Party (a) under this Agreement except to the extent that the omission to notify
the indemnifying party with respect to this Agreement materially adversely
affects the indemnifying party's ability to perform under this Agreement or (b)
other than under this Agreement. In case any such action is brought against the
Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the Indemnifying Party will be entitled to participate therein, and, to
the extent that it may wish to do so, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to the Indemnified Party (who shall not, except with the consent of
the Indemnified Party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to the Indemnified Party under this Section 1, the
indemnifying party shall not be liable for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation.
The 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 the Indemnified Party unless: (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing; (ii) a conflict or potential conflict exists (based on advice of
counsel to the Indemnified Party) between the Indemnified Party and the
indemnifying party (in which case the indemnifying party will not have the right
to direct the defense of such action on behalf of the Indemnified Party) 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 the Indemnified Party notifies the indemnifying party in writing that it
elects to employ separate 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 the 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 at any
time for the Indemnified Party, which firm shall be designated in writing by the
Company, in the case of Company Indemnified Parties, or by the Depositor, in the
case of Depositor Indemnified Parties.
The Indemnified Party, as a condition of the indemnity agreements contained in
Section 1(a), Section 1(b) and Section 1(c), shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. The indemnifying party shall not 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 the Indemnified Party from
and against any loss or liability (to the extent set forth in Section 1(a),
Section 1(b) or Section 1(c) as applicable) by reason of such settlement or
judgment.
2. All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered to
or mailed by registered mail, postage prepaid, or transmitted by facsimile and
confirmed by similar mailed writing as follows:
(i) if to the Company:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxx Xxx, Xxxxxxxx 0
Xxxxxxxxx, XX 00000
Attention: Structured Finance Manager, MAC X3901-016
Fax: 301/000-0000
(ii) with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel MAC X2401-06T
or such other address as may hereafter be furnished to the Depositor in
writing by the Company;
(iii) if to the Depositor:
@
@
@
@
or such other address as may hereafter be furnished to the Company in
writing by the Depositor.
3. This Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original, but all of such counterparts
shall together constitute one instrument.
4. This Agreement shall be construed in accordance with the laws of the State
of New York.
IN WITNESS WHEREOF, the Depositor and Company have caused their names to be
signed by their respective officers thereunto duly authorized as of the date
first above written.
XXXXX FARGO BANK, N.A.
Company
By:____________________________
Name:
Title:
___________________________
Depositor
By:______________________________
Name:
Title:
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (the "Agreement"), dated as of
August 1, 2005 by and between Xxxxxxx Xxxxx Mortgage Lending, Inc., having an
office at 4 World Financial Center, 9th Floor, New York, NY 10080 (the
"Purchaser") and Xxxxx Fargo Bank, N.A., having an xxxxxx xx 0 Xxxx Xxxxxx, Xxx
Xxxxxx, Xxxx 00000-0000 (the "Seller").
WITNESSETH
WHEREAS, the Seller agrees to sell, and the Purchaser agrees to purchase,
certain conventional residential adjustable rate mortgage loans (the "Mortgage
Loans") on a servicing retained basis as described herein:
WHEREAS, the Mortgage Loans shall be delivered as whole loans; and
WHEREAS, the parties intend hereby to set forth the terms and conditions upon
which the proposed transactions will be effected.
NOW THEREFORE, in consideration of the promises and the mutual agreements set
forth herein, the parties hereto agree as follows:
SECTION 1. All capitalized terms not otherwise defined herein have the
respective meanings set forth in the Seller's Warranties and Servicing
Agreement, dated as of the date herewith (the "Seller's Warranties and Servicing
Agreement"). The following terms are defined as follows (except as otherwise
agreed by the parties):
Cut-off Date: August 1, 2005
Closing Date: August 9, 2005
First Remittance Date: September 19, 2005
Servicing Fee Rate: .250%
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and the Purchaser
agrees to purchase, Mortgage Loans having an aggregate principal balance on the
Cut-off Date in an amount as set forth in the Commitment Letter, dated as of
July 7, 2005 (the "Commitment 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 the Closing Date. The
Mortgage Loans will be delivered pursuant to a Seller's Warranties and Servicing
Agreement, between the Purchaser and the Seller.
SECTION 3. Mortgage Schedules. The Seller has provided the Purchaser with
certain information constituting a listing of the Mortgage Loans to be purchased
under this Agreement (the "Mortgage Loan Schedule") substantially in the form
attached hereto as Exhibit 1. The Mortgage Loan Schedule shall conform to the
definition of "Mortgage Loan Schedule" under the Seller's Warranties and
Servicing Agreement.
SECTION 4. Purchase Price. The purchase price for the Mortgage Loans (the
"Purchase Price") shall be the percentage of par as stated in the Commitment
Letter, multiplied by the aggregate principal balance, as of the Cut-off Date,
of the Mortgage Loans listed on the related Mortgage Loan Schedule, after
application of scheduled payments of principal due on or before the Cut-off Date
whether or not collected. The Purchase Price may be adjusted as stated in the
Commitment Letter.
In addition to the Purchase Price as described above, the Purchaser shall pay
to the Seller, at closing, accrued interest on the aggregate principal amount of
the Mortgage Loans at the weighted average Mortgage Loan Remittance Rate from
the Cut-off Date through the day prior to the Closing Date, inclusive.
The Purchaser shall be entitled to (1) all scheduled principal due after the
Cut-off Date, (2) all other recoveries of principal collected after the Cut-off
Date (provided, however, that all scheduled payments of principal due on or
before the Cut-off Date and collected by the Seller after the Cut-off Date shall
belong to the Seller), and (3) all payments of interest on the Mortgage Loans at
the Mortgage Loan Remittance Rate (minus that portion of any such payment which
is allocable to the period prior to the Cut-off Date). The principal balance of
each Mortgage Loan as of the Cut-off Date is determined after application of
payments of principal due on or before the Cut-off Date whether or not
collected. Therefore, payments of scheduled principal and interest prepaid for a
Due Date beyond the Cut-off Date shall not be applied to the principal balance
as of the Cut-off Date. Such prepaid amounts (minus interest at the Servicing
Fee Rate) shall be the property of the Purchaser. The Seller shall deposit any
such prepaid amounts into the Custodial Account, which account is established
for the benefit of the Purchaser for subsequent remittance by the Seller to the
Purchaser.
SECTION 5. Examination of Mortgage Files. Prior to the Closing Date, the
Seller shall (a) deliver to the Purchaser in escrow, for examination, the
Mortgage File for each Mortgage Loan, including a copy of the Assignment of
Mortgage, pertaining to each Mortgage Loan, or (b) make the Mortgage Files
available to the Purchaser for examination at the Seller's offices or such other
location as shall otherwise be agreed upon by the Purchaser and the Seller. Such
examination may be made by the Purchaser or by any prospective purchaser of the
Mortgage Loans from the Purchaser, at any time before or after the Closing Date
upon prior reasonable notice to the Seller. The fact that the Purchaser or any
prospective purchaser of the Mortgage Loans has conducted or has failed to
conduct any partial or complete examination of the Mortgage Files shall not
affect the Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief or remedy as provided under the related Seller's
Warranties and Servicing Agreement.
SECTION 6. Representations, Warranties and Agreements of Seller. The Seller
agrees and acknowledges that it shall, as a condition to the consummation of the
transactions contemplated hereby, make the representations and warranties
specified in Section 3.01 and 3.02 of the Seller's Warranties and Servicing
Agreement, as of the Closing Date. The meaning of the term "Agreement" as used
in Sections 3.01 and 3.02 of the Seller's Warranties and Servicing Agreement
shall include this Agreement. The Seller, without conceding that the Mortgage
Loans are securities, hereby makes the following additional representations,
warranties and agreements which shall be deemed to have been made as of the
Closing Date:
a) neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Mortgage
Loans, any interest in any Mortgage Loans or any other similar
security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of any Mortgage Loans, any interest in
any Mortgage Loans or any other similar security from, or otherwise
approached or negotiated with respect to any Mortgage Loans, any
interest in any Mortgage Loans or any other similar security with,
any Person in any manner, or made any general solicitation by means
of general advertising or in any other manner, or taken any other
action which would constitute a distribution of the Mortgage Loans
under the Securities Act of 1933 (the "1933 Act") or which would
render the disposition of any Mortgage Loans a violation of Section
5 of the 1933 Act or require registration pursuant thereto, nor will
it act, nor has it authorized or will it authorize any Person to
act, in such manner with respect to the Mortgage Loans; and
b) the Seller has not dealt with any broker or agent or anyone else who might
be entitled to a fee or commission in connection with this
transaction other than the Purchaser.
SECTION 7. Representation, Warranties and Agreement of Purchaser. The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall have
been deemed to have been
made as of the Closing Date.
a) the Purchaser understands that the Mortgage Loans have not been registered
under the 1933 Act or the securities laws of any state;
b) the Purchaser is acquiring the Mortgage Loans for its own account only and
not for any other Person;
c) the Purchaser considers itself a substantial, sophisticated institutional
investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and
risks of investment in the Mortgage Loans;
d) the Purchaser has been furnished with all information regarding the
Mortgage Loans which it has requested from the Seller; and
e) neither the Purchaser nor anyone acting on its behalf offered, transferred,
pledged, sold or otherwise disposed of any Mortgage Loan, any
interest in any Mortgage Loan or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Mortgage Loan, any interest in any Mortgage Loan
or any other similar security from, or otherwise approached or
negotiated with respect to any Mortgage Loan, any interest in any
Mortgage Loan or any other similar security with, any Person in any
manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which
would constitute a distribution of the Mortgage Loans under the 1933
Act or which would render the disposition of any Mortgage Loan a
violation of Section 5 of the 1933 Act or require registration
pursuant thereto, nor will it act, nor has it authorized or will it
authorize any Person to act, in such manner with respect to the
Mortgage Loans.
SECTION 8. Closing. The closing for the purchase and sale of the Mortgage
Loans, shall take place on the Closing Date. At the Purchaser's option, 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 shall be subject to each of the following conditions:
a) all of the representations and warranties of the Seller under
this Agreement and under the Seller's Warranties and Servicing
Agreement shall be true and correct as of the Closing Date and no
event shall have occurred which, with notice or the passage of time,
would constitute a default under this Agreement or an Event of
Default under the related Seller's Warranties and Servicing
Agreement;
b) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all Closing Documents as specified in
Section 9 of this Agreement, 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 respective terms thereof;
c) the Seller shall have delivered and released to the Custodian
under the Seller's Warranties and Servicing Agreement all documents
required pursuant to the related Custodial Agreement; and
d) all other terms and conditions of this Agreement and the Seller's
Warranties and Servicing Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the Seller on
the Closing Date the Purchase Price, plus accrued interest pursuant to Section 4
of this Agreement, by wire transfer of immediately available funds to the
account designated by the Seller.
SECTION 9. Closing Documents. With respect to the Mortgage Loans, the Closing
Documents shall consist of fully executed originals of the following documents:
1. the Seller's Warranties and Servicing Agreement, dated as of the
Cut-off Date, in two counterparts;
2. this Agreement in two counterparts;
3. the Custodial Agreement, dated as of the Cut-off Date, in three
counterparts, in the form attached as an exhibit to the Seller's
Warranties and Servicing Agreement;
4. the Mortgage Loan Schedule, one copy to be attached to each
counterpart of the Seller's Warranties and Servicing Agreement,
to each counterpart of this Agreement, and to each counterpart
of the Custodial Agreement, as the Mortgage Loan Schedule
thereto;
5. a Receipt and Certification, as required under the Custodial
Agreement;
6. an Opinion of Counsel of the Seller, in the form of Exhibit 2
hereto;
7. a Custodial Account Certification in the form attached as Exhibit
G to the Seller's Warranties and Servicing Agreement;
8. as Escrow Account Certification in the form attached as Exhibit E
to the Seller's Warranties and Servicing Agreement; and
9. an Officer's Certificate, in the form of Exhibit 3 hereto,
including all attachments thereto.
SECTION 10. Costs. The Purchaser shall pay any commissions due its salesmen,
the legal fees and expenses of its attorneys and the costs and expenses
associated with the Custodian. The Seller shall be responsible for reasonable
costs and expenses associated with any preparation and recording of the initial
Assignments of Mortgage. All other costs and expenses incurred in connection
with the transfer and delivery of the Mortgage Loans, including fees for title
policy endorsements and continuations and the Seller's attorney fees, shall be
paid by the Seller.
SECTION 11. Servicing. The Mortgage Loans shall be serviced by the Seller in
accordance with the terms of the applicable Seller's Warranties and Servicing
Agreement. The Seller shall be entitled to servicing fees calculated as provided
therein, at the Servicing Fee Rate shown on the first page of this Agreement
unless otherwise agreed by the parties.
SECTION 12. Financial Statements. The Seller understands that in connection
with the Purchaser's marketing of the Mortgage Loans, the Purchaser may request
from the Seller and make available to prospective purchasers a Consolidated
Statement of Operations of the Seller for the most recently completed two fiscal
years respecting which such a statement is available, as well as a Consolidated
Statement of Condition at the end of the last two fiscal years covered by such
Consolidated Statement of Operations. The Purchaser, upon request, shall also
make available any comparable interim statements to the extent any such
statements have been prepared by the Seller in a format intended or otherwise
suitable for the public at large. The Seller, upon request, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans in its own portfolio and loans serviced for others (if any), including
foreclosure and delinquency ratios.
The Seller also agrees to allow access to a knowledgeable (as shall be
determined by the Seller) financial or accounting officer for the purpose of
answering questions asked by any prospective purchaser regarding recent
developments affecting the Seller or the financial statements of the Seller.
SECTION 13. Mandatory Delivery. The sale and delivery on the Closing Date of
the Mortgage Loans described on the Mortgage Loan Schedule is mandatory, it
being specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller's failure to deliver the Mortgage Loans on or
before the Closing Date. All rights and remedies of the Purchaser under this
Agreement are distinct from, and cumulative with, any other rights or remedies
under this Agreement or afforded by law or equity and all such rights and
remedies may be exercised concurrently, independently or successively.
SECTION 14. Notices. All demands, notices and communications hereunder shall
be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address shown on the first page hereof, or such other
address as may hereafter be furnished to the other party by like notice. Any
such demand, notice of 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 15. Severability Clause. Any part, provision, representation or
warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is as close as
possible to the economic effect of this Agreement without regard to such
invalidity.
SECTION 16. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts. Each counterpart shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.
SECTION 17. Place of Delivery and Governing Law. This Agreement shall be
deemed in effect when a fully executed counterpart thereof is received by the
Purchaser in the State of New York and shall be deemed to have been made in
State of New York. The Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with the laws of the State of New
York, except to the extent preempted by Federal Law.
SECTION 18. Further Agreements. The Purchaser and the Seller each agree to
execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Without limiting the generality of the foregoing, the Seller shall reasonably
cooperate with the Purchaser in connection with the initial resales of the
Mortgage Loans by the Purchaser. In that connection, the Seller shall provide to
the Purchaser: (i) any and all information and appropriate verification of
information, whether through letters of its auditors and counsel or otherwise,
as the Purchaser shall reasonably request, and (ii) such
additional representations, warranties, covenants, opinions of counsel, letters
from auditors and certificates of public officials or officers of the Seller as
are reasonably believed necessary by the Purchaser in connection with such
resales. Prior to incurring any out-of-pocket expenses pursuant to this
paragraph, the Seller shall notify the Purchaser in writing of the estimated
amount of such expense. The Purchaser shall reimburse the Seller for any such
expense following its receipt of appropriate details thereof.
SECTION 19. Intention of the Parties. It is the intention of the parties that
the Purchaser is purchasing, and the Seller is selling, an undivided 100%
ownership interest in the Mortgage Loans and not a debt instrument of the Seller
or another security. Accordingly, the parties hereto each intend to treat the
transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Purchaser shall have the
right to review the Mortgage Loans and the related Mortgage Loan Files to
determine the characteristics of the Mortgage Loans which shall affect the
Federal income tax consequences of owning the Mortgage Loans and the Seller
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
SECTION 20. Successors and Assigns; Assignment of Purchase Agreement. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective successors and assigns of the Seller
and the Purchaser. This Agreement shall not be assigned, pledged or hypothecated
by the Seller to a third party without the consent of the Purchaser.
SECTION 21. Waivers; Other Agreements. No term or provision of this Agreement
may be waived or modified unless such waiver or modification is in writing and
signed by the party against whom such waiver or modification is sought to be
enforced.
SECTION 22. Exhibits. The exhibits to this Agreement are hereby incorporated
and made a part hereof and are an integral part of this Agreement.
SECTION 23. General Interpretive Principles. For purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
a) the terms defined in this Agreement have the meanings assigned to them in
this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other
gender;
b) accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles;
c) references herein to "Articles", "Sections", "Subsections", "Paragraphs",
and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
d) 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;
e) the words "herein", "hereof", "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular
provision; and
f) the term "include" or "including" shall mean without limitation by reason
of enumeration.
SECTION 24. Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in 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.
[Signatures Follow]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
date first above written.
XXXXXXX XXXXX MORTGAGE
LENDING, INC.
(Purchaser)
By:
Name:
Title:
XXXXX FARGO BANK, N.A.
(Seller)
By:
Name:
Title:
EXHIBIT 1
MORTGAGE LOAN SCHEDULE
EXHIBIT 2
FORM OF OPINION OF COUNSEL
@
@
@
@
Re: Xxxxx Fargo Bank, N.A.
Mortgage Loan Series @
Dear Sir/Madam:
I am @ of Xxxxx Fargo Bank, N.A. and have acted as counsel to Xxxxx Fargo Bank,
N.A. (the "Company"), with respect to certain matters in connection with the
sale by the Company of the mortgage loans designated as Mortgage Loan Series @
(the "Mortgage Loans") pursuant to that certain Seller's Warranties and
Servicing Agreement and Mortgage Loan Purchase Agreement by and between the
Company and @ (the "Purchaser"), dated as of @, 20__, (the "Agreements"), which
sale is in the form of whole Mortgage Loans. Capitalized terms not otherwise
defined herein have the meanings set forth in the Seller's Warranties and
Servicing Agreement.
I have examined the following documents:
1. the Seller's Warranties and Servicing Agreement;
2. the Mortgage Loan Purchase Agreement;
3. the Custodial Agreement;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as I have deemed necessary and
relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreements. I
have assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based upon the foregoing, it is my opinion that;
1. The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
2. The Company has the power to engage in the transactions contemplated by the
Agreements, the Custodial Agreement and all requisite power, authority and
legal right to execute and deliver the Agreements, the Custodial Agreement
and the Mortgage Loans, and to perform and observe the terms and
conditions of such instruments.
3. Each person who, as an officer or attorney-in-fact of the Company, signed (a)
the Agreements, each dated as of @, 20__, by and between the Company and
the Purchaser, and (b) any other document delivered prior hereto or on the
date hereof in connection with the sale and servicing of the Mortgage
Loans in accordance with the Agreements was, at the respective times of
such signing and delivery, and is, as of the date hereof, duly elected or
appointed, qualified and acting as such officer or attorney-in-fact, and
the signatures of such persons appearing on such documents are their
genuine signatures.
4. Each of the Agreements, the Custodial Agreement, and the Mortgage Loans, has
been duly authorized, executed and delivered by the Company and is a
legal, valid and binding agreement enforceable in accordance with its
terms, subject to the effect of insolvency, liquidation, conservatorship
and other similar laws administered by the Federal Deposit Insurance
Corporation affecting the enforcement of contract obligations of insured
banks and subject to the application of the rules of equity, including
those respecting the availability of specific performance, none of which
will materially interfere with the realization of the benefits provided
thereunder or with the Purchaser's ownership of the Mortgage Loans.
5. The Company has been duly authorized to allow any of its officers to execute
any an d all documents by original or facsimile signature in order to
complete the transactions contemplated by the Agreements and the Custodial
Agreement and in order to execute the endorsements to the Mortgage Notes
and the assignments of
the Mortgages, and the original or facsimile signature of the officer at
the Company executing the Agreements, the Custodial Agreement, the
endorsements to the Mortgage Notes and the assignments of the Mortgages
represents the legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Agreements, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated by the
Agreements and the Custodial Agreement; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreements and the Custodial Agreement,
will conflict with or results in or will result in a breach of or
constitutes or will constitute a default under the charter or by-laws of
the Company, the terms of any indenture or other agreement or instrument
to which the Company is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to the best
of my knowledge, threatened against the Company which, in my opinion,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment of the
right or ability of the Company to carry on its business substantially as
now conducted or in any material liability on the part of the Company or
which would draw into question the validity of the Agreements, and the
Custodial Agreement, or of any action taken or to be taken in connection
with the transactions contemplated thereby, or which would be likely to
impair materially the ability of the Company to perform under the terms of
the Agreements and the Custodial Agreement.
9. For purposes of the foregoing, I have not regarded any legal or governmental
actions, investigations or proceedings to be "threatened" unless the
potential litigant or governmental authority has manifested to the legal
department of the Company or an employee of the Company responsible for
the receipt of process a present intention to initiate such proceedings;
nor have I regarded any legal or governmental actions, investigations or
proceedings as including those that are conducted by state or federal
authorities in connection with their routine regulatory activities. The
sale of each Mortgage Note and Mortgage as and in the manner contemplated
by the Agreements is sufficient fully to transfer all right, title and
interest of the Company thereto as noteholder and mortgagee, apart from
the rights to service the Mortgage Loans pursuant to the Agreements.
10. The form of endorsement that is to be used with respect to the Mortgage
Loans is legally valid and sufficient to duly endorse the Mortgage Notes
to the Purchaser. Upon the completion of the endorsement of the Mortgage
Notes and the completion of the assignments of the Mortgages, and the
recording thereof, the endorsement of the Mortgage Notes, the delivery to
the Custodian of the completed assignments of the Mortgages, and the
delivery of the original endorsed Mortgage Notes to the Custodian would be
sufficient to permit the entity to which such Mortgage Note is initially
endorsed at the Purchaser's direction, and to whom such assignment of
Mortgages is initially assigned at the Purchaser's direction, to avail
itself of all protection available under applicable law against the claims
of any present or future creditors of the Company, and would be sufficient
to prevent any other sale, transfer, assignment, pledge or hypothecation
of the Mortgages and the Mortgage Notes by the Company from being
enforceable.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Sincerely,
@
@
@/@
EXHIBIT 3 COMPANY'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly
elected ______________ of [Company], a ______________ (the "Company"), and
further certify, on behalf of the Company as follows:
1. Attached hereto as Exhibit A is a true, correct and complete copy of
the Articles of Association of the Company which are in full force
and effect on the date hereof.
2. Attached hereto as Exhibit B is a true, correct and complete copy of
the bylaws of the Company which are in effect on the date hereof.
3. The execution and delivery by the Company of the Seller's Warranties
and Servicing Agreement, dated as of _____________, 20__, (the "Sale
and
Servicing Agreement") and the Mortgage Loan Purchase Agreement dated
as of _____, 20__, (the "Custodial Agreement" and together with the
Sale and Servicing Agreement, the "Agreements") are in the ordinary
course of business of the Company.
4. A true and correct copy of the resolution of the Mortgage Banking
Committee of the Board of Directors of the Company authorizing the
Company to enter into the Agreements is attached hereto as Exhibit
C.
5. Each person who, as an officer or representative of the Company, signed
(a) the Agreements, or (b) any other document delivered prior hereto
or on the date hereof in connection with any transaction described
in the Agreements was, at the respective times of such signing and
delivery a duly elected or appointed, qualified and acting officer
or representative of the Company, and the signatures of such persons
appearing on such documents are their genuine signatures.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Company of or compliance by the Company with
the Agreements or the sale of the Mortgage Loans or the consummation
of the transactions contemplated by the Agreements; or (ii) any
required consent, approval, authorization or order has been obtained
by the Company.
7. To the best of my knowledge, neither the consummation of the
transactions contemplated by, nor the fulfillment of the terms of
the Agreements, conflicts or will conflict with or results or will
result in a breach of, or constitutes or will constitute a default
under, the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the Company is a
party or by which it is bound or to which it is subject, or any
statute or order, rule, regulation, writ, injunction or decree of
any court, governmental authority or regulatory body to which the
Company is subject or by which it is bound.
8. There are no actions, suits or proceedings pending or, to the best of
my knowledge, threatened against or affecting the Company that would
materially and adversely affect the Company's ability to perform its
obligations under the Agreements. No proceedings for merger,
consolidation, liquidation, dissolution, conservatorship or
receivership of the Company are pending, or to my knowledge
threatened, and no such proceeding is contemplated by the Company.
9. The Company is duly authorized to engage in the transactions described
and contemplated by the Agreements.
10. Capitalized terms used but not defined herein shall have the meanings
assigned in the Seller's Warranties and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed by name and affixed the seal of the
Company.
Dated: By:
Name:
[Seal] Title:
I, __________, __________ of Xxxxx Fargo Bank, N.A., hereby certify that
___________ is the duly elected, qualified and acting ___________ of the
Company and that the signature appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
Name:
Title: