Common use of Loan Modifications Clause in Contracts

Loan Modifications. a. The Servicer may, only with prior consent from Angel Oak, waive, modify or vary any term of any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Mortgagor if in the Servicer’s determination such waiver, modification, postponement or indulgence is not materially adverse to Angel Oak or the related Investor (a “Modification”). The Servicer shall provide to Angel Oak, with regard to such waivers, modifications, postponements or indulgences, monthly reporting in a form to be agreed upon by Angel Oak and the Servicer. b. Notwithstanding the foregoing, the Servicer shall not waive any Prepayment Penalty or portion thereof unless (i) the enforceability thereof shall have been limited by bankruptcy, insolvency, moratorium, receivership or other similar laws relating to creditors’ rights generally or is otherwise prohibited by law, or (ii) the enforceability thereof shall have been permanently limited due to acceleration in connection with a foreclosure or other involuntary payment or (iii) in the Servicer’s reasonable judgment, (x) such waiver relates to a default or a reasonably foreseeable default, (y) such waiver would maximize recovery of total proceeds taking into account the value of such Prepayment Penalty and related Mortgage Loan and (z) doing so is standard and customary in servicing Mortgage Loans (including any waiver of a Prepayment Penalty in connection with a refinancing of a Mortgage Loan that is related to a default or reasonably foreseeable default) or (iv) in the reasonable judgment of the Servicer, such Prepayment Penalty is not in full compliance with applicable state or federal laws and regulations or (v) the Servicer is unable to locate documentation sufficient to allow it to confirm the existence and amount of such Prepayment Penalty after using commercially reasonable efforts to locate such documentation. Except as provided in the preceding sentence, in no event will the Servicer waive a Prepayment Penalty in connection with a refinancing of a Mortgage Loan that is not related to a default or a reasonably foreseeable default. The Servicer will review the Mortgage Note and any rider or addendum thereto, if available, prior to enforcing any Prepayment Penalty to verify the terms thereof.