Exhibit 99.11
EXECUTION COPY
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
among
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,
as Assignor
GS MORTGAGE SECURITIES CORP.,
as Assignee
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Servicer
Dated as of
February 24, 2006
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this "Assignment
Agreement") made this 24th day of February, 2006, among JPMorgan Chase Bank,
National Association (the "Servicer"), GS Mortgage Securities Corp., as
assignee (the "Assignee") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, as assignor (the
"Assignor").
WHEREAS, the Assignor and the Servicer have entered into the
Comprehensive Amended and Restated Servicing Agreement, dated as of September
1, 2005 (the "Servicing Agreement") and the Comprehensive Amended and Restated
Flow Mortgage Servicing Rights Purchase Agreement, dated as of July 1, 2004
(the "Rights Purchase Agreement");
WHEREAS, the Assignee has agreed on certain terms and conditions to
purchase from the Assignor certain of the mortgage loans (the "Mortgage
Loans"), which, in accordance with the Rights Purchase Agreement, will as of
March 1, 2006, be subject to the provisions of the Servicing Agreement and are
listed on the mortgage loan schedule attached as Exhibit 1 hereto (the
"Mortgage Loan Schedule"); and
WHEREAS, pursuant to a Master Servicing and Trust Agreement, dated as
of February 1, 2006 (the "Trust Agreement"), among GS Mortgage Securities
Corp., as depositor, Deutsche Bank National Trust Company, as a custodian,
U.S. Bank National Association, as a custodian and as trustee (the "Trustee")
and JPMorgan Chase Bank, National Association, as master servicer and
securities administrator (the "Master Servicer"), the Assignee will transfer
the Mortgage Loans to the Trustee, together with the Assignee's rights under
the Servicing Agreement, to the extent relating to the Mortgage Loans (other
than the rights of the Assignor (and if applicable its affiliates, officers,
directors and agents) to indemnification thereunder).
NOW THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Assignment and Assumption. (a) The Assignor hereby assigns to the
Assignee, as of the date hereof, all of its right, title and interest in and
to the Servicing Agreement, to the extent relating to the Mortgage Loans
(other than the rights of the Assignor (and if applicable its affiliates,
officers, directors and agents) to indemnification thereunder), and the
Assignee hereby assumes all of the Assignor's obligations under the Servicing
Agreement, to the extent relating to the Mortgage Loans, from and after the
date hereof, and the Servicer hereby acknowledges such assignment and
assumption and hereby agrees to the release of the Assignor from any
obligations under the Servicing Agreement from and after the date hereof, to
the extent relating to the Mortgage Loans.
(b) The Assignor represents and warrants to the Assignee that the
Assignor has not taken any action which would serve to impair or encumber the
Assignor's ownership interest in the Mortgage Loans since the date of the
Servicing Agreement.
2. Accuracy of the Servicing Agreement. (a) The Servicer and the
Assignor represent and warrant to the Assignee that (i) attached hereto as
Exhibit 2 is a true, accurate and complete copy of the Servicing Agreement,
(ii) the Servicing Agreement is in full force and
effect as of the date hereof, (iii) except as provided in this Agreement, the
Servicing Agreement has not been amended or modified in any respect and (iv)
no notice of termination has been given to the Servicer under the Servicing
Agreement. The Servicer, in its capacity as servicer under the Servicing
Agreement, further represents and warrants that the representations and
warranties contained in Article VI of the Servicing Agreement are true and
correct as of the Closing Date (as such term is defined in the Servicing
Agreement).
3. Modification of the Servicing Agreement. Only in so far as it
relates to the Mortgage Loans, the Servicer and the Assignor hereby amend the
Servicing Agreement as follows:
(a) a new defined term "Determination Date" will be added to Article
I after the term "Deboarding Fee" as follows:
"Determination Date: With respect to each Remittance Date, the close
of business of the last day of the month preceding the month in which such
Remittance Date occurs.
(b) a new defined term "FNBN" will be added to Article I after the
term "FDIC" as follows:
"FNBN: First National Bank of Nevada, a national banking association,
or its successors in interest."
(c) a new defined term "FNBN Agreement" will be added to Article I
after the term "FNBN" as follows:
"FNBN Agreement: The Master Mortgage Loan Purchase and Interim
Servicing Agreement, dated as of March 24, 2004, between ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company and First National Bank of Nevada."
(d) a new defined term "Monthly Advance" will be added to Article I
after the term "MERS(R) System" as follows:
"Monthly Advance: Commencing with each Monthly Payment due on or
after the related Cut-off Date, the portion of each Monthly Payment that is
delinquent with respect to each Mortgage Loan at the close of business on the
Determination Date required to be advanced by the Servicer pursuant to Section
4.04 on the Remittance Date of the related month."
(e) the definition of "Nonrecoverable Advance" in Article I shall be
deleted in its entirety and replaced as follows"
"Nonrecoverable Advance: Any Servicing Advance or Monthly Advance
previously made or proposed to be made in respect of a Mortgage Loan by the
Servicer which the Servicer believes, in accordance with the Servicing
Standard, will not or, in the case of a proposed Servicing Advance or Monthly
Advance, would not, ultimately be recoverable by the Servicer from the
proceeds of such Mortgage Loan."
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(f) the definition of "Remittance Date" in Article I shall be deleted
in its entirety and replaced as follows:
"Remittance Date: The 23rd day of any month, or if such 23rd day is
not a Business Day, the first Business Day immediately preceding such day."
(g) the definition of "Reporting Date" in Article I shall be deleted
in its entirety and replaced as follows:
"Reporting Date: The 15th day of any month, or if such 15th day is
not a Business Day, the first Business Day immediately preceding such 15th
day."
(h) the definition of "Servicing Advances" shall be amended by adding
the words "other than Monthly Advances" after the words "servicing
obligations" in the third line of the definition.
(i) Section 3.03 shall be amended as follows:
i. "and" shall be deleted from the end of subsection (viii);
ii. subsection (ix) shall be amended by deleting the "." at
the end of subsection (ix) and replacing it with "; and";
iii. a new subsection (x) shall be added to Section 3.03
immediately following subsection (ix) which shall be as
follows:
"(x) with respect to each voluntary Principal Prepayment an amount
(to be paid by the Servicer out of its own funds, but not in excess of its
aggregate Servicing Fee for the related Due Period) 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."
(j) Section 3.04 shall be amended as follows:
(i) subsection (vii) shall be amended by deleting ". 3.09(c) or
10.02" at the end of subsection (vii);
(ii) "and" shall be deleted from the end of subsection (viii);
(iii) subsection (ix) shall be amended by deleting the "." at the end
of subsection (ix) and replacing it with "; and";
(ix) a new subsection (x) shall be added to Section 3.04 immediately
following subsection (ix) which shall be as follows:
"(x) to reimburse itself for Monthly Advances of the Servicer's funds
made pursuant to Section 4.04, the Servicer's right to reimburse itself
pursuant to this subclause (x) being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and
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such other amounts as may be collected by the Servicer from the Mortgagor or
otherwise relating to the Mortgage Loan, including amounts received on the
related Mortgage Loan which represent late payments of principal and/or
interest respecting which any such advance was made, it being understood that,
in the case of any such reimbursement, the Servicer's right thereto shall be
prior to the rights of any purchaser."
(k) Section 3.15 shall be amended by adding the following paragraph
immediately after the 3rd paragraph thereof:
The Servicer shall use its best efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within three years after title has been taken to such REO Property, not later
than the end of the third taxable year after the year of its acquisition
unless (i) (A) a REMIC election has not been made with respect to the
arrangement under which the Mortgage Loans and the REO Property are held, (ii)
the Servicer obtains an extension from the Internal Revenue Service and (iii)
the Servicer determines, and gives an appropriate notice to the Owner to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than three years is permitted under the
foregoing sentence and is necessary to sell any REO Property, (i) the Servicer
shall report monthly to the Owner as to the progress being made in selling
such REO Property and (ii) if, with the written consent of the Owner, a
purchase money mortgage is taken in connection with such sale, such purchase
money mortgage shall name the Servicer as mortgagee, and such purchase money
mortgage shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Servicer and Owner shall be entered into
with respect to such purchase money mortgage.
(l) a new section, Section 4.04, will be added immediately following
Section 4.03 which shall read as follows:
"Section 4.04 Monthly Advances by Servicer.
(m) On the Remittance Date, the Servicer shall deposit in the
Custodial Account from its own funds or from amounts held for future
distribution an amount equal to all Monthly Payments to the extent not
allocable to the period prior to the Cut-off Date (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 or deferred as of the
close of business on the Business Day prior to the related Determination Date.
Any amounts held for future distribution and so used shall be replaced by the
Servicer by deposit in the Custodial Account on or before any future
Remittance Date if funds in the Custodial Account on such Remittance Date
shall be less than payments to the Owner required to be made on such
Remittance Date. The Servicer's obligation to make such Monthly Advances as to
any Mortgage Loan will continue through the last Monthly Payment due prior to
the payment in full of the Mortgage Loan, or of the last Remittance Date prior
to the Remittance Date for the distribution of all Liquidation Proceeds and
other payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan; provided, however, that such
obligation shall cease if the Servicer determines, in its sole reasonable
opinion, that advances with respect to such Mortgage Loan are non-recoverable
by the Servicer from Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds, or otherwise with respect to a particular
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Mortgage Loan. In the event that the Servicer determines that any such
advances are non-recoverable, the Servicer shall provide the Owner with a
certificate signed by an officer of the Servicer evidencing such
determination."
(n) Section 7.02 shall be deleted in its entirety and replaced with
the following:
"Section 7.02 Indemnification by the Owner.
"In the event that FNBN is required to make any payment to the
Servicer under the terms of Section 12.01 of the FNBN Agreement and FNBN fails
to do so in a timely manner, the Owner unconditionally agrees with the
Servicer that it will make such payment directly to the Servicer upon demand."
4. Recognition of Assignee. From and after the date hereof, the
Servicer shall note the transfer of the Mortgage Loans to the Assignee in its
books and records, shall recognize the Assignee as the owner of the Mortgage
Loans and, notwithstanding anything herein to the contrary, shall service all
of the Mortgage Loans for the benefit of the Assignee pursuant to the
Servicing Agreement the terms of which are incorporated herein by reference.
It is the intention of the Assignor, Assignee and Servicer that the Servicing
Agreement shall be binding upon and inure to the benefit of the Servicer and
the Assignee and their successors and assigns.
5. Representations and Warranties of the Assignee. The Assignee
hereby represents and warrants to the Assignor as follows:
(a) Decision to Purchase. The Assignee represents and warrants that
it is a sophisticated investor able to evaluate the risks and merits of the
transactions contemplated hereby, and that it has not relied in connection
therewith upon any statements or representations of the Assignor or the
Servicer other than those contained in the Servicing Agreement or this
Assignment Agreement.
(b) Authority. The Assignee hereto represents and warrants that it is
duly and legally authorized to enter into this Assignment Agreement and to
perform its obligations hereunder and under the Servicing Agreement.
(c) Enforceability. The Assignee hereto represents and warrants that
this Assignment Agreement has been duly authorized, executed and delivered by
it and (assuming due authorization, execution and delivery thereof by each of
the other parties hereto) constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforcement is considered in
a proceeding in equity or at law).
6. Representations and Warranties of the Assignor. The Assignor
hereby represents and warrants to the Assignee as follows:
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(a) Organization. The Assignor has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of New York with full power and authority (corporate and other) to enter into
and perform its obligations under the Servicing Agreement and this Assignment
Agreement.
(b) Enforceability. This Assignment Agreement has been duly executed
and delivered by the Assignor, and, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a legal, valid, and
binding agreement of the Assignor, enforceable against it in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium, or
other similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
(c) No Consent. The execution, delivery and performance by the
Assignor of this Assignment Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except such
as has been obtained, given, effected or taken prior to the date hereof.
(d) Authorization; No Breach. The execution and delivery of this
Assignment Agreement have been duly authorized by all necessary corporate
action on the part of the Assignor; neither the execution and delivery by the
Assignor of this Assignment Agreement, nor the consummation by the Assignor of
the transactions herein contemplated, nor compliance by the Assignor with the
provisions hereof, will conflict with or result in a breach of, or constitute
a default under, any of the provisions of the governing documents of the
Assignor or any law, governmental rule or regulation or any material judgment,
decree or order binding on the Assignor or any of its properties, or any of
the provisions of any material indenture, mortgage, deed of trust, contract or
other instrument to which the Assignor is a party or by which it is bound.
(e) Actions; Proceedings. There are no actions, suits or proceedings
pending or, to the knowledge of the Assignor, threatened, before or by any
court, administrative agency, arbitrator or governmental body (A) with respect
to any of the transactions contemplated by this Assignment Agreement or (B)
with respect to any other matter that in the judgment of the Assignor will be
determined adversely to the Assignor and will, if determined adversely to the
Assignor, materially adversely affect its ability to perform its obligations
under this Assignment Agreement.
It is understood and agreed that the representations and warranties
set forth in Section 6 shall survive delivery of the respective mortgage loan
documents to the Assignee or its designee and shall inure to the benefit of
the Assignee and its assigns notwithstanding any restrictive or qualified
endorsement or assignment. Upon the discovery by the Assignor or the Assignee
and its assigns of a breach of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the
other parties to this Assignment Agreement, and in no event later than two (2)
Business Days from the date of such discovery.
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It is understood and agreed that, with respect to the Mortgage Loans,
the Assignor has made no representations or warranties to the Assignee other
than those contained in Section 6, and no other affiliate of the Assignor has
made any representations or warranties of any kind to the Assignee.
7. Continuing Effect. Except as contemplated hereby, the Servicing
Agreement shall remain in full force and effect in accordance with their
respective terms.
8. Governing Law.
THIS ASSIGNMENT AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF).
EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
ASSIGNMENT AGREEMENT, OR ANY OTHER DOCUMENTS AND INSTRUMENTS EXECUTED IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN), OR ACTIONS OF SUCH PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS ASSIGNMENT AGREEMENT.
9. Notices. Any notices or other communications permitted or required
hereunder or under the Servicing Agreement shall be in writing and shall be
deemed conclusively to have been given if personally delivered at or mailed by
registered mail, postage prepaid, and return receipt requested or transmitted
by telex, telegraph or telecopier and confirmed by a similar mailed writing,
to:
(b) in the case of the Servicer,
JPMorgan Chase Bank, National Association
c/o Chase Home Finance LLC
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Dunks
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
JPMorgan Chase Bank, National Association
c/o Chase Home Finance LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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or such other address as may hereafter be furnished by the Servicer;
(b) in the case of the Assignee,
GS Mortgage Securities Corp.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished by the Assignee;
and
(c) in the case of the Assignor,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished by the Assignor.
10. Counterparts. This Assignment Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
instrument.
11. Definitions. Any capitalized term used but not defined in this
Assignment Agreement has the meaning assigned thereto in the Servicing
Agreement or Trust Agreement, as applicable.
12. Third Party Beneficiary. The parties agree that the Trustee is
intended to be, and shall have the rights of, a third party beneficiary of
this Assignment Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement the day and year first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE
COMPANY
By: ▇▇▇▇▇▇▇ Sachs Real Estate Funding
Corp., its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
GS MORTGAGE SECURITIES CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
JPM Step 1 AAR
EXHIBIT 1
Mortgage Loan Schedule
[On File with the Securities Administrator as provided by the Depositor]
1-1
EXHIBIT 2
Servicing Agreement
[See Attached]
2-1
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JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Servicer
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,
as Owner
---------------------------------
COMPREHENSIVE AMENDED AND RESTATED SERVICING AGREEMENT
Dated as of September 1, 2005
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS.............................................................................................1
Section 1.01. Definitions......................................................................................1
ARTICLE II. OWNER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING RESPONSIBILITIES...................................13
Section 2.01. Contract for Servicing; Possession of Servicing Files............................................13
Section 2.02. Books and Records................................................................................14
Section 2.03. Custodial Agreement; Delivery of Documents.......................................................15
ARTICLE III. SERVICING OF THE MORTGAGE LOANS.......................................................................15
Section 3.01. Servicer to Service..............................................................................15
Section 3.02. Collection and Liquidation of Mortgage Loans.....................................................16
Section 3.03. Establishment of and Deposits to Custodial Account...............................................18
Section 3.04. Permitted Withdrawals From Custodial Account.....................................................19
Section 3.05. Establishment of and Deposits to Escrow Account..................................................20
Section 3.06. Permitted Withdrawals From Escrow Account........................................................21
Section 3.07. Notification of Adjustments......................................................................22
Section 3.08. Completion and Recordation of Assignment of Mortgage.............................................22
Section 3.09. Payment of Taxes, Insurance and Other Charges....................................................22
Section 3.10. Protection of Accounts...........................................................................23
Section 3.11. Maintenance of Hazard Insurance..................................................................23
Section 3.12. Maintenance of Fidelity Bond and Errors and Omissions Insurance..................................25
Section 3.13. Inspections......................................................................................26
Section 3.14. Restoration of Mortgaged Property................................................................26
Section 3.15. Title, Management and Disposition of REO Property................................................26
Section 3.16. Real Estate Owned Reports........................................................................27
Section 3.17. Reports of Foreclosures and Abandonments of Mortgaged Property...................................28
Section 3.18. Prepayment Charges...............................................................................28
Section 3.19. Credit Reporting.................................................................................28
Section 3.20. Additional Servicing Requirements:...............................................................28
ARTICLE IV. PAYMENTS TO OWNER......................................................................................29
Section 4.01. Remittances......................................................................................29
Section 4.02. Statements to Owner..............................................................................29
Section 4.03. Advances by Servicer.............................................................................31
ARTICLE V. GENERAL SERVICING PROCEDURES............................................................................31
Section 5.01. Transfers of Mortgaged Property..................................................................31
Section 5.02. Satisfaction of Mortgages and Release of Mortgage Files..........................................32
Section 5.03. Servicing Compensation...........................................................................32
Section 5.04. Annual Audit Report..............................................................................32
Section 5.05. Annual Officer's Certificate.....................................................................33
Section 5.06. Right to Examine Servicer Records................................................................33
Section 5.07. Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999...................................................33
Section 5.08. Provision of Information.........................................................................34
Section 5.09. Financial Statements; Servicing Facilities.......................................................34
ARTICLE VI. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.............................................................36
Section 6.01. Representations, Warranties and Agreements of the Servicer.......................................36
Section 6.02. Remedies for Breach of Representations and Warranties of the Servicer............................37
Section 6.03. Representations and Warranties of the Owner......................................................38
Section 6.04. Remedies for Breach of Representations and Warranties of the Owner...............................39
ARTICLE VII. RECONSTITUTION........................................................................................40
Section 7.01. Removal of Mortgage Loans from Inclusion Under this Agreement Upon a Pass-Through Transfer,
a Whole Loan Transfer or Servicing Released Sale.................................................40
Section 7.02. RESERVED.........................................................................................44
Section 7.03. Additional Indemnification by the Servicer.......................................................44
Section 7.04. Transfer of Servicing............................................................................44
ARTICLE VIII. THE SERVICER.........................................................................................45
Section 8.01. Merger or Consolidation of the Servicer..........................................................45
Section 8.02. Limitation on Liability of the Servicer and Others...............................................45
Section 8.03. Limitation on Resignation and Assignment by the Servicer.........................................45
ARTICLE IX. TERMINATION............................................................................................46
Section 9.01. Termination for Cause............................................................................46
Section 9.02. Termination Without Cause........................................................................48
ARTICLE X. MISCELLANEOUS PROVISIONS................................................................................49
Section 10.01. Successor to the Servicer........................................................................49
Section 10.02. Costs............................................................................................50
Section 10.03. Protection of Confidential Information...........................................................50
Section 10.04. Notices..........................................................................................50
Section 10.05. Severability Clause..............................................................................51
Section 10.06. No Solicitation..................................................................................51
Section 10.07. Counterparts.....................................................................................52
Section 10.08. Place of Delivery and Governing Law..............................................................52
Section 10.09. Further Agreements...............................................................................52
Section 10.10. Intention of the Parties.........................................................................52
Section 10.11. Successors and Assigns; Assignment of Servicing Agreement........................................52
Section 10.12. Waivers..........................................................................................53
Section 10.13. Exhibits.........................................................................................53
Section 10.14. General Interpretive Principles..................................................................53
Section 10.15. Reproduction of Documents........................................................................54
EXHIBITS:
EXHIBIT A CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF POWER OF ATTORNEY
This is a Comprehensive Amended and Restated Servicing Agreement (the
"Agreement"), dated as of September 1, 2005 by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company (the "Owner"), having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, and JPMorgan Chase Bank, National Association having an
office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Servicer").
W I T N E S S E T H:
WHEREAS, the Owner owns certain mortgage loans secured by mortgages or
deeds of trust on residential real property (the "Mortgage Loans") and may
from time to time buy additional Mortgage Loans;
WHEREAS, the Owner and the Servicer desire to set forth the terms and
conditions on which the Servicer will service and provide management and
disposition services for the Mortgage Loans pending the Reconstitution (as
defined herein) or other disposition, including a Servicing Released Sale, of
any or all of such Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and reasonable consideration, the
receipt and adequacy of which is hereby acknowledged, the Owner and Servicer
hereby agree as follows:
13.
DEFINITIONS
(a) Definitions.
The following terms are defined as follows:
Affiliate: With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: This Comprehensive Amended and Restated Servicing Agreement
and all amendments hereof and supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans other than
payments of principal, interest and Escrow Payments (excluding Servicing Fees
and Prepayment Charges attributable to the Mortgage Loans), including but not
limited to interest received on funds deposited in the Custodial Account or
any Escrow Account, all late charges, assumption
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fees, escrow account benefits, reinstatement fees, fees received with respect
to checks on bank drafts returned by the related bank for insufficient funds,
and similar types of fees arising from or in connection with any Mortgage Loan
to the extent not otherwise payable to the Mortgagor under applicable law or
pursuant to the terms of the related Mortgage Note.
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 transfer of the Mortgage to the party indicated therein.
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 State of New York,
State of Arizona or State of California are authorized or obligated by law or
executive order to be closed.
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.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 3.03.
Custodial Agreement: Any custodial agreement designated by the Owner and
between the Owner and a Custodian.
Custodian: The custodian(s) appointed by the Owner from time to time to
hold certain Mortgage Loan Documents.
Cut-off Date: As to any Mortgage Loan, the date or dates set forth in
the related Mortgage Loan Schedule.
Data File: Shall have the meaning set forth in Section 4.02.
Deboarding Fee: $25.00 per Mortgage Loan.
Due Date: With respect to any Mortgage Loan, the day on which the
Monthly Payment is due on such Mortgage Loan in accordance with the
terms of the related Mortgage.
Due Period: With respect to each Remittance Date, and any Mortgage Loan,
the prior calendar month.
Eligible Accounts: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by
each Rating Agency in one of its two highest rating categories, or (ii)
maintained with the corporate trust department of a bank which has a rating of
at least Baa3 or P-3 by Moody's, or (iii) an account or accounts the deposit
in which are fully insured by the FDIC, or (iv) otherwise acceptable to each
Rating Agency, as evidenced by a letter from each Rating Agency.
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Eligible Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than
one day prior to the Remittance Date in each month (or such other date as
permitted under this Agreement):
(i) direct obligations of, and obligations fully
guaranteed as to timely payment of principal and interest by, the
United States of America or any agency or instrumentality of the
United States of America the obligations of which are backed by the
full faith and credit of the United States of America ("Direct
Obligations");
(ii) federal funds, demand and time deposits in,
certificates of deposits of, or bankers' acceptances issued by, any
depository institution or trust company (including U.S. subsidiaries
of foreign depositories) incorporated or organized under the laws of
the United States of America or any state thereof and subject to
supervision and examination by federal or state banking authorities,
so long as at the time of such investment or the contractual
commitment providing for such investment the commercial paper or
other short-term debt obligations of such depository institution or
trust company (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the
commercial paper or other short-term debt or deposit obligations of
such holding company or deposit institution, as the case may be) have
been rated by each Rating Agency in its highest short-term rating
category or one of its two highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct
Obligations or securities guaranteed by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
with any registered broker/dealer subject to Securities Investors'
Protection Corporation jurisdiction or any commercial bank insured by
the FDIC, if such broker/dealer or bank has an uninsured, unsecured
and unguaranteed obligation rated by each Rating Agency in its
highest short-term rating category;
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States of America or any state thereof which have a credit rating
from each Rating Agency, at the time of investment or the contractual
commitment providing for such investment, at least equal to one of
the two highest long-term credit rating categories of each Rating
Agency; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount
of securities issued by such corporation to exceed 20% of the
aggregate principal amount of all Eligible Investments in the
Custodial Accounts and the Escrow Accounts; provided, further, that
such securities will not be Eligible Investments if they are
published as being under review with negative implications from
either Rating Agency;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 180 days after the date
of issuance thereof) rated by each Rating Agency in its highest
short-term rating category;
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(vi) certificates or receipts representing direct
ownership interests in future interest or principal payments on
obligations of the United States of America or its agencies or
instrumentalities (which obligations are backed by the full faith and
credit of the United States of America) held by a custodian in
safekeeping on behalf of the holders of such receipts; and
(vii) any other demand, money market, common trust fund
or time deposit or obligation, or interest-bearing or other security
or investment rated in the highest rating category by each Rating
Agency;
provided, however, that (a) any such instrument shall be acceptable to
the Rating Agencies, and (b) no such instrument shall be an Eligible
Investment if such instrument evidences either (i) a right to receive only
interest payments with respect to the obligations underlying such instrument,
or (ii) both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with
respect to such instrument provide a yield to maturity of greater than 120% of
the yield to maturity at par of such underlying obligations.
Errors and Omissions Insurance: Errors and Omissions Insurance to be
maintained by the Servicer in accordance with Section 3.12 hereof.
Escrow Account: The account or accounts operated and maintained pursuant
to Section 3.05.
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, hazard, and flood
insurance premiums, and any other payments required to be escrowed by the
Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any event set forth in Section 9.01.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer in
accordance with Section 3.13.
Fitch: Fitch Ratings. or any successor in interest.
HOEPA Claim Loan: A Mortgage Loan that the Mortgagor claims is subject
to the Home Ownership and Equity Protection Act of 1994 ("HOEPA").
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property, including the proceeds of any hazard or flood insurance policy or
PMI Policy.
Investor: Any owner, purchaser or beneficiary of the Mortgage Loans.
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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 REO Property, if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or any successor in interest.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on an unsubordinated
estate in fee simple in real property securing the Mortgage Note.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note.
Mortgage Loan: An individual Mortgage Loan or REO Property which is the
subject of this Agreement, each Mortgage Loan subject to this Agreement being
identified on the related Mortgage Loan Schedule, which Mortgage Loan includes
the Mortgage Loan Documents, the Monthly Payments, Principal Prepayments,
Liquidation 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: Any documents pertaining to any Mortgage Loan,
including the Mortgage Note, the recorded Mortgage, the recorded Assignment of
Mortgage and all other recorded assignments and the title insurance policy.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Owner, which shall be equal to the
Mortgage Interest Rate minus the applicable Servicing Fee Rate.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
Servicer on or before a Transfer Date, setting forth the information as to
each Mortgage Loan delivered for servicing on such Transfer Date in form and
substance agreed to by the Servicer and the Owner. Where the context requires,
the term "Mortgage Loan Schedule" is the collective reference to all Mortgage
Loan Schedules delivered by the Owner to the Servicer pursuant to this
Agreement.
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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.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: Any Servicing Advance previously made or
proposed to be made in respect of a Mortgage Loan by the Servicer which the
Servicer believes, in accordance with the Servicing Standard, will not or, in
the case of a proposed Servicing Advance, would not, ultimately be recoverable
by the Servicer from the proceeds of such Mortgage Loan.
Officer's Certificate: A certificate signed by a Vice President or an
Assistant Vice President and by an Assistant Treasurer or Assistant Secretary
of the Servicer, and delivered to the Owner as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Servicer, reasonably acceptable to the Owner.
Owner: ▇▇▇▇▇▇▇ Sachs Mortgage Company.
Payment Plan: A payment plan agreed to by the Mortgagor and the
Servicer, in the Servicer's own discretion, which enables a Mortgagor to bring
the related Mortgage Loan current within an amount of time deemed reasonable
by the Servicer in the exercise of its prudent business judgment and in
accordance with the Servicing Standard.
Pass Through Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust to be formed as part of a publicly-issued and/or
privately placed, rated or unrated, mortgage pass-through transaction (with or
without a master servicer).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance with respect
to certain Mortgage Loans.
Prepayment Charge: With respect to any Mortgage Loan and Remittance
Date, the charges or premiums, if any, due in connection with a full or
partial prepayment of such Mortgage Loan during the immediately preceding
Principal Prepayment Period in accordance with the terms thereof.
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.
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Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan that is received in advance of its scheduled Due Date, including
any Prepayment Charge or premium thereon and that 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 month preceding the month in which the
related Remittance Date occurs.
Prior Servicer: Any prior servicer (other than the Servicer) of any or
all of the Mortgage Loans.
Property Charges: Ground rents, taxes, assessments, water rates, sewer
rents, and other charges that are or may become a lien upon the Mortgaged
Property and fire and hazard insurance premiums, including renewal premiums.
Qualified Depository: Any of (i) a federal or state chartered depository
institution or trust company, and with respect to deposits held for 30 days or
more in such account the (a) long-term deposit or unsecured debt obligations
of which are rated at least (A) "Aa3-" by Moody's (if then rated by Moody's)
and (B) "AA-" by S&P (or "A-" provided the short-term unsecured debt
obligations are rated at least "A-1" by S&P) at any time such funds are on
deposit therein, or with respect to deposits held for less than 30 days in
such account the (b) short-term deposits of which are rated at least "P-1" by
Moody's (if then rated by Moody's) and "A-1" by S&P as evidenced in writing by
the applicable Rating Agency at any time such funds are on deposit therein, or
(ii) a federal or state chartered depository institution or trust company
acting in its fiduciary capacity, which, in the case of a state chartered
depository institution or trust company, is subject to regulations regarding
fiduciary funds on deposit therein substantially similar to 12 CFR ss.
9.10(b), having in either case a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authority.
Rating Agency: Each of Fitch, Moody's and S&P or their successors. If
such agencies or their successors are no longer in existence, "Rating
Agencies" shall be such nationally recognized statistical rating agencies, or
other comparable person, agreed upon and designated by the Owner.
Reconstitution: The actions required by Article VII in connection with a
Pass-Through Transfer or Whole Loan Transfer.
Reconstitution Agreements: The agreement or agreements entered into by
the Owner, the Servicer, or certain third parties on the Reconstitution
Date(s) with respect to any or all of the Mortgage Loans serviced hereunder,
in connection with a Whole Loan Transfer or a Pass-Through Transfer as set
forth in Section 7.01, including (i) any and all servicing agreements and
tri-party agreements reasonably required by an Investor, (ii) a Pooling and
Servicing Agreement and/or a servicing, subservicing/master servicing
agreement and related custodial/trust agreement, insurance agreements, loss
mitigation advisory or credit risk management agreements, and other related
documents with respect to a Pass-Through Transfer, and (iii) a sale and
servicing agreement and related custodial agreement and closing documents with
respect to a Whole Loan Transfer. Such agreement or agreements shall prescribe
the rights
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and obligations of the Servicer in servicing the related Mortgage Loans and
shall provide for servicing compensation to the Servicer (calculated on a
weighted average basis for all the related Mortgage Loans as of the
Reconstitution Date), at least equal to the Servicing Fee and Ancillary Income
due the Servicer in accordance with this Agreement and as specified in a
servicing purchase agreement to be entered into with the Owner. The form of
relevant Reconstitution Agreement to be entered into by the Owner and/or
master servicer or trustee and the Servicer with respect to Pass-Through
Transfers and/or Whole Loan Transfers shall be reasonably satisfactory in form
and substance to the Owner and the Servicer and the representations and
warranties and servicing provisions contained therein shall be substantially
similar to those contained in this Agreement, unless otherwise mutually agreed
by the parties.
Reconstitution Date: The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Pass-Through Transfer or a Whole Loan
Transfer pursuant to Section 7.01. On such date or dates, the Mortgage Loans
transferred shall cease to be covered by this Agreement and the Servicer's
servicing responsibilities shall cease under this Agreement with respect to
the related transferred Mortgage Loans.
Regulation AB: Regulation AB of the Securities Act of 1933, as amended
from time to time.
Remittance Date: The 10th Business Day of any month.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 3.15.
REO Property: A Mortgaged Property acquired by the Servicer on behalf of
the Owner through foreclosure or by deed in lieu of foreclosure, as described
in Section 3.17.
Reporting Date: The 10th Business Day of any month.
Securities Act: The federal Securities Act of 1933, as amended.
Securities Exchange Act: The federal Securities Exchange Act of 1934, as
amended.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Servicer: JPMorgan Chase Bank, National Association or its successor in
interest or assigns or any successor to the Servicer under this Agreement as
herein provided.
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Servicer Employees: All of the Servicer's officers, employees or other
Persons acting in any capacity requiring such Persons to handle funds, money,
documents or papers relating to the Mortgage Loans.
Servicing Advances: All customary "out of pocket" costs and expenses
(including reasonable attorneys' fees and disbursements) incurred in the
performance by the Servicer of its servicing obligations, including the cost
of (a) the preservation, restoration and protection of the Mortgaged Property,
(b) any enforcement or administrative or judicial proceedings, including
foreclosures, (c) the management and liquidation of the Mortgaged Property if
the Mortgaged Property is acquired in satisfaction of the Mortgage (including
any fees of an independent contractor engaged by the Servicer in connection
with such activities), (d) taxes, assessments, water rates, sewer rents and
other charges which are or may become a lien upon the Mortgaged Property, PMI
Policy premiums (to the extent paid on a monthly or other regular basis) fire
and hazard insurance coverage and repayment of senior liens, and (e) to the
extent not otherwise covered in (a) - (d) of this definition, any losses
sustained by the Servicer with respect to the liquidation of the Mortgaged
Property. The Servicer shall have no obligation to make any Servicing Advances
if the Servicer, in accordance with the Servicing Standard, determines that
such Servicing Advances are or would constitute a Nonrecoverable Advance.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, which as of the date hereof consists of the following:
(a) General servicing considerations.
(1) Policies and procedures are instituted to monitor any performance or
other triggers and events of default in accordance with the transaction
agreements.
(2) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the third party's
performance and compliance with such servicing activities.
(3) Any requirements in the transaction agreements to maintain a back-up
servicer for the mortgage loans are maintained.
(4) A fidelity bond and errors and omissions policy is in effect on the
party participating in the servicing function throughout the reporting period
in the amount of coverage required by and otherwise in accordance with the
terms of the transaction agreements.
(b) Cash collection and administration.
(1) Payments on mortgage loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no more than two
business days following receipt, or such other number of days specified in the
transaction agreements.
(2) Disbursements made via wire transfer on behalf of an obligor or to
an investor are made only by authorized personnel.
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(3) Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances, are
made, reviewed and approved as specified in the transaction agreements.
(4) The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of overcollateralization, are
separately maintained (e.g., with respect to commingling of cash) as set forth
in the transaction agreements.
(5) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements. For
purposes of this criterion, "federally insured depository institution" with
respect to a foreign financial institution means a foreign financial
institution that meets the requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.
(6) Unissued checks are safeguarded so as to prevent unauthorized
access.
(7) Reconciliations are prepared on a monthly basis for all asset-backed
securities related bank accounts, including custodial accounts and related
bank clearing accounts. These reconciliations are (A) mathematically accurate;
(B) prepared within 30 calendar days after the bank statement cutoff date, or
such other number of days specified in the transaction agreements; (C)
reviewed and approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
(c) Investor remittances and reporting.
(1) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction agreements and
applicable Commission requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms set forth in the
transaction agreements; (B) provide information calculated in accordance with
the terms specified in the transaction agreements; (C) are filed with the
Commission as required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid principal balance
and number of mortgage loans serviced by the Servicer.
(2) Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth in the
transaction agreements.
(3) Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of days
specified in the transaction agreements.
(4) Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank statements.
(d) Mortgage Loan administration.
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(1) Collateral or security on mortgage loans is maintained as required
by the transaction agreements or related mortgage loan documents.
(2) Mortgage loan and related documents are safeguarded as required by
the transaction agreements.
(3) Any additions, removals or substitutions to the asset pool are made,
reviewed and approved in accordance with any conditions or requirements in the
transaction agreements.
(4) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to the
Servicer's obligor records maintained no more than two business days after
receipt, or such other number of days specified in the transaction agreements,
and allocated to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
(5) The Servicer's records regarding the mortgage loans agree with the
Servicer's records with respect to an obligor's unpaid principal balance.
(6) Changes with respect to the terms or status of an obligor's mortgage
loans (e.g., loan modifications or re-agings) are made, reviewed and approved
by authorized personnel in accordance with the transaction agreements and
related mortgage loan documents.
(7) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements established by the
transaction agreements.
(8) Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the transaction
agreements. Such records are maintained on at least a monthly basis, or such
other period specified in the transaction agreements, and describe the
entity's activities in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
(9) Adjustments to interest rates or rates of return for mortgage loans
with variable rates are computed based on the related mortgage loan documents.
(10) Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the obligor's
mortgage loan documents, on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable mortgage loan documents
and state laws; and (C) such funds are returned to the obligor within 30
calendar days of full repayment of the related mortgage loans, or such other
number of days specified in the transaction agreements.
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(11) Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration dates, as
indicated on the appropriate bills or notices for such payments, provided that
such support has been received by the servicer at least 30 calendar days prior
to these dates, or such other number of days specified in the transaction
agreements.
(12) Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds and not
charged to the obligor, unless the late payment was due to the obligor's error
or omission.
(13) Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the servicer, or such
other number of days specified in the transaction agreements.
(14) Delinquencies, charge-offs and uncollectable accounts are
recognized and recorded in accordance with the transaction agreements.
(15) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set
forth in the transaction agreements.
Servicing Fee: With respect to each Mortgage Loan that is subject to
this Agreement, the monthly fee the Owner shall pay to the Servicer shall be
equal to one twelfth the product of (a) the Servicing Fee Rate and (b) the
outstanding principal balance of such Mortgage Loan. The obligation of the
Owner 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 3.02) of
such Monthly Payment collected by the Servicer, or as otherwise provided under
this Agreement. Such fee shall be payable monthly with respect to payments
received following the related Servicing Transfer Date and with respect to
prepayments in full shall be pro-rated for any portion of a month during which
such prepaid Mortgage Loan is serviced by the Servicer hereunder.
Servicing Fee Rate: 0.50% per annum, or such other amount as may be set
forth in the related Mortgage Loan Schedule.
Servicing File: The items pertaining to a particular Mortgage Loan
including the computer files, data disks, books, records, data tapes, notes,
and all additional documents generated as a result of or utilized in
originating and/or servicing each Mortgage Loan, which are held in trust for
the Owner by the Servicer.
Servicing Officer: Any officer of the Servicer involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Owner upon request, as such list may from time to time be amended.
Servicing Released Sale: A Whole Loan Transfer in which the Servicer
will no longer act as servicer of the Mortgage Loans included in such Whole
Loan Transfer.
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Servicing Rights Purchase Agreement: Collectively the Mortgage Servicing
Rights Purchase Agreement dated as of September 1, 2003 and the Comprehensive
Amended and Restated Flow Mortgage Servicing Rights Purchase Agreement dated
July 1, 2004, the Flow Mortgage Servicing Rights Purchase Agreement dated
September 1, 2005, and any other purchase agreements between the Owner and the
Servicer.
Servicing Rights Repurchase Price; as defined in the Servicing Rights
Purchase Agreement.
Servicing Standard: The servicing and administration of the Mortgage
Loans for which the Servicer is responsible hereunder (a) in the same manner
in which, and with the same care, skill, prudence and diligence with which,
the Servicer generally services and administers similar mortgage loans with
similar mortgagors (i) for other third-parties, giving due consideration to
customary and usual standards of practice of prudent institutional residential
mortgage lenders servicing their own loans or (ii) held in the Servicer's own
portfolio, whichever standard is higher, (b) with a view to the maximization
of the recovery on such Mortgage Loans on a net present value basis and the
best interests of the Owner, any Person to which the Mortgage Loans may be
transferred by the Owner, (c) without regard to (i) any relationship that the
Servicer or any Affiliate thereof may have with the related Mortgagor or any
other party to the transaction; (ii) the right of the Servicer to receive
compensation or other fees for its services rendered pursuant to this
Agreement; (iii) the obligation of the Servicer to make Servicing Advances;
(iv) the ownership, servicing or management by the Servicer or any Affiliate
thereof for others of any other mortgage loans or mortgaged properties; and
(v) any debt the Servicer or any Affiliate of the Servicer has extended to any
Mortgagor or any Affiliate of such Mortgagor and (d) in accordance with
applicable state, local and federal laws, rules and regulations.
S&P: Standard & Poor's Rating Services, A Division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or any successor in interest.
Transfer Date: The date or dates on which the servicing of a pool of
Mortgage Loans is transferred from a Prior Servicer or the
Owner to the Servicer.
Whole Loan Transfer: The sale or transfer of some or all of the Mortgage
Loans to a third party purchaser in a whole loan transaction pursuant to a
seller's warranties and servicing agreement or a participation and servicing
agreement.
14.
OWNER'S ENGAGEMENT OF SERVICER TO PERFORM
SERVICING RESPONSIBILITIES
(a) Contract for Servicing; Possession of Servicing Files.
The Servicer shall maintain a Servicing File with respect to each
Mortgage Loan in order to service such Mortgage Loan pursuant to this
Agreement and such Servicing File is and shall be held in trust by the
Servicer for the benefit of the Owner as the owner thereof. The
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possession of each Servicing File by the Servicer is at the will of the Owner
for the sole purpose of servicing the related Mortgage Loan, and such
retention and possession by the Servicer is in a custodial capacity only. The
ownership of each Mortgage Note, Mortgage, and the contents of the Servicing
File shall be vested in the Owner 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 Servicer shall immediately vest in the Owner and
shall be retained and maintained, in trust, by the Servicer at the will of the
Owner in such custodial capacity only. The Servicing File retained by the
Servicer pursuant to this Agreement shall be identified in accordance with the
Servicer's file tracking system to reflect the ownership of the related
Mortgage Loan by the Owner. The Servicer shall release from its custody the
contents of any Servicing File retained by it only in accordance with this
Agreement.
At least 15 days prior than the related Transfer Date, the Servicer
shall provide the Prior Servicer with transfer procedures outlining the
delivery requirements for the Servicing Files. The Owner shall use its efforts
to facilitate that (i) the Prior Servicer delivers the contents of the
Servicing Files to the Servicer for receipt at least five (5) Business Days
prior to the related Transfer Date; (ii) the delivery of each Servicing File
is accompanied by an electronic transmittal to include, at a minimum, the
Prior Servicer's loan number, the Mortgagor's last name, the original loan
amount and the box number for each Servicing File; (iii) each box of Servicing
Files contains a hard copy of the electronic transmittal for the Servicing
Files contained in such box; and (iv) the Servicing Files are in a consistent
stacking order, secured and clearly labeled with the Mortgagor's name and the
Prior Servicer's loan number.
(b) Books and Records.
Record title to each Mortgage and the related Mortgage Note shall remain
in the name of the Owner or in such name as the Owner shall designate. With
respect to each Assignment of Mortgage, if so requested by the initial Owner
in its sole discretion, the Servicer or its designee, at the initial Owner's
expense, shall prepare and record each Assignment of Mortgage, and track such
Assignments of Mortgage to ensure they have been recorded. In connection with
the assignment of any MERS Mortgage Loan, the Servicer agrees that it will
cause, at the Owner's expense, the MERS(R) System to indicate that such
Mortgage Loans have been assigned by including in such computer files the
information required by the MERS(R) System to identify the owner of such
Mortgage Loans. The Owner shall pay all fees associated with the preparation,
recording and tracking of the initial assignment of the Mortgage Loans from
the Owner to a third party. All rights arising out of the Mortgage Loans shall
be vested in the Owner. All funds received on or in connection with a Mortgage
Loan shall be received and held by the Servicer in trust for the benefit of
the Owner as the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
The Servicer is authorized and empowered by the Owner, in its own name,
when the Servicer believes it appropriate in its reasonable judgment to
register any Mortgage Loan on the MERS(R) System, or in connection with a
Mortgage Loan becoming an REO Property, cause the removal from the
registration of such Mortgage Loan on the MERS(R) System, to execute and
deliver, on behalf of the Owner, any and all instruments of assignment and
other comparable
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instruments with respect to such assignment or re-recording
of a Mortgage in the name of MERS, solely as nominee for the Owner and its
successors and assigns.
(c) Custodial Agreement; Delivery of Documents.
Pursuant to the Custodial Agreement, the Owner has or shall deliver and
release to the Custodian the Mortgage Loan Documents as required pursuant to
the Custodial Agreement. The Custodian shall concurrently certify its receipt
of all such Mortgage Loan Documents required to be delivered pursuant to the
Custodial Agreement, as evidenced by the certification of the Custodian. The
Owner shall be responsible for maintaining the Custodial Agreement and shall
pay all fees and expenses of the Custodian, including fees and expenses due to
the Servicer's requests of the Custodian in the normal course of Servicer's
collection and foreclosure activities (including follow up document deliveries
of the Servicer, photocopies of documents made at the request of the Servicer
and follow up document insertion fees).
The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with Section 3.01 within fourteen
(14) calendar days of their execution, provided, however, that the Servicer
shall provide the Custodian with a certified true copy of any such document
submitted for recordation within one week 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 120 days of its submission for
recordation.
15.
SERVICING OF THE MORTGAGE LOANS
(a) Servicer to Service.
The Servicer shall service and administer the related Mortgage Loans
from and after the related Transfer Date and shall have full power and
authority, acting alone, to do any and all things in connection with such
servicing and administration which the Servicer may deem necessary or
desirable, consistent with the terms of this Agreement and with the Servicing
Standard.
Consistent with the terms of this Agreement, prior to a Mortgage Loan
becoming subject to a Reconstitution Agreement, the Servicer may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any
Mortgagor if, in accordance with the Servicing Standard, such waiver,
modification, postponement or indulgence is not materially adverse to the
Owner; provided, however, that unless the Servicer has obtained the prior
written consent of the Owner, the Servicer 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 or interest, reduce or
increase the outstanding principal balance (except for actual payments of
principal) or change the final maturity date on such Mortgage Loan; and
provided further, in the course of collecting
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past due payments, the Servicer, without the consent of the Owner, may enter
into a Payment Plan with the Mortgagor.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in
default or, in the judgment of the Servicer, such default is reasonably
foreseeable, the Servicer, consistent with the Servicing Standards, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest, or waive, in whole or in part, a Prepayment Charge), accept payment
from the related Mortgagor of an amount less than the Stated Principal Balance
in final satisfaction of such Mortgage Loan, or consent to the postponement of
strict compliance with any such term or otherwise grant indulgence to any
Mortgagor (any and all such waivers, modifications, variances, forgiveness of
principal or interest, postponements, or indulgences collectively referred to
herein as "forbearance"), provided, however, that the terms of any Mortgage
Loan may only be waived, modified or varied once without the consent of the
Owner while the Mortgage Loan remains outstanding. The Servicer's analysis
supporting any forbearance and the conclusion that any forbearance meets the
standards of this section shall be reflected in writing in the Servicing File;
provided, that, notwithstanding the foregoing, the Servicer shall have the
ability to enter into Payment Plans in its sole discretion.
Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered, to execute and deliver on
behalf of itself and the Owner, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the Mortgaged Properties. The Owner shall furnish the Servicer with any powers
of attorney in the form attached hereto and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures (including collection procedures) and exercise the same care
that it would employ and exercise in servicing and administering similar
mortgage loans for its own account and other institutional investors, giving
due consideration to the Servicing Standard where such practices do not
conflict with the requirements of this Agreement or any applicable law.
(b) Collection and Liquidation of Mortgage Loans.
Continuously from the related Transfer Date until the date each Mortgage
Loan ceases to be subject to this Agreement, the Servicer shall proceed 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 Loans and each related Mortgaged
Property, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
The Servicer shall use its best efforts, consistent with the Servicing
Standard, to foreclose upon or otherwise comparably convert the ownership of
such Mortgaged Properties as come into and continue in default and as to which
no satisfactory arrangements can be made
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for collection of delinquent payments pursuant to Section 3.01. The Servicer
shall use its best efforts to realize upon defaulted Mortgage Loans in such a
manner as will maximize the receipt of principal and interest by the Owner,
taking into account, among other things, the timing of foreclosure
proceedings. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage, the Servicer shall not be
required to expend its own funds toward the restoration of such property
unless it shall determine in its discretion in accordance with the Servicing
Standard (i) that such restoration will increase the proceeds of liquidation
of the related Mortgage Loan to the Owner after reimbursement to itself for
such expenses, and (ii) that such expenses will be recoverable by the Servicer
through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged
Property. In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 3.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Servicer shall take such action as shall be
consistent with the Servicing Standard and in the best interest of the Owner.
In the event that any payment due under any Mortgage Loan is not postponed
pursuant to Section 3.01 and remains delinquent for a period of not to exceed
one hundred and five (105) days or any other default continues for not to
exceed one hundred and five (105) days beyond the expiration of any grace or
cure period, and the Mortgage Loan is not subject to a forbearance agreement
or other loss mitigation plan in accordance with this Agreement, the Servicer
shall commence foreclosure proceedings. In such connection, the Servicer shall
be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the related Mortgaged Property, as contemplated in Section 3.04.
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 Servicer has reasonable cause to believe that a Mortgaged Property
is contaminated by hazardous or toxic substances or wastes, the Servicer shall
notify the Owner. In such case, or if the Owner otherwise requests an
environmental inspection or review of such Mortgaged Property, such review
shall be conducted by a qualified inspector. Upon completion of the
inspection, the Servicer shall provide the Owner with a written report of the
environmental inspection.
After reviewing the environmental inspection report, the Owner shall
determine how the Servicer shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Owner directs the Servicer to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all costs associated with such foreclosure or acceptance of a deed in lieu
of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Servicer, the Servicer shall be entitled
to be reimbursed from amounts in the Custodial Account pursuant to Section
3.04. In the event the Owner directs the Servicer not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall
be reimbursed for all Servicing Advances made with respect to the related
Mortgaged Property from the Custodial Account pursuant to Section 3.04.
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The Servicer does not service Mortgage Loans subject to HOEPA. With
respect to a HOEPA Claim Loan, upon receipt of notice from the Owner or the
Mortgagor that the Mortgagor has instituted a claim that its Mortgage Loan was
originated in violation of HOEPA, the Servicer shall, unless otherwise
directed by the Owner, suspend all of its loss mitigation activities with
respect to such Mortgage Loan until such time as such claim has been resolved.
In the event that the Owner provides direction to the Servicer, Servicer shall
continue to service such HOEPA Claim Loan, provided that such direction is not
inconsistent with the Servicing Standard.
If the Servicer elects to proceed with a foreclosure in accordance with
the laws of the state where the Mortgaged Property is located, the Servicer
shall have the discretion, in accordance with the Servicing Standards, to
foreclose on the Mortgaged Property in such manner as to preserve the Owner's
rights to a deficiency judgment against the related Obligor or any other
liable party or to waive the Owner's right to such deficiency judgment. The
Owner may, in its discretion, instruct the Servicer to attempt to collect
deficiency payments after foreclosure or a deed in lieu of a Loan; provided,
that the Servicer will not be required to expend any funds to attempt to
collect deficiency payments if, in accordance with the Servicing Standards,
the Servicer reasonably determines that such funds will not be recoverable. In
the event that the Owner elects to have a third party vendor pursue deficiency
payments, the Servicer shall cooperate with such vendor, including but not
limited to accepting deficiency payments delivered by such vendor for deposit
in the Custodial Account and remitting such proceeds in accordance with the
terms of this Agreement
(c) Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to the Mortgage Loans separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, titled "Chase Home
Finance LLC as subservicer for JPMorgan Chase Bank, National Association in
trust for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company". The Custodial Account shall be
established with a Qualified Depository and shall at all times be an Eligible
Account. Funds deposited in the Custodial Account may be drawn on by the
Servicer in accordance with Section 3.04. The creation of any Custodial
Account shall be evidenced by a letter agreement in the form of Exhibit A. A
copy of such certification or letter agreement shall be furnished to the Owner
and, upon request, to any subsequent owner of the Mortgage Loans.
The Servicer shall deposit in the Custodial Account on a daily basis,
but not more than two (2) Business Days from receipt from the Mortgagor, and
retain therein, the following collections received by the Servicer and
payments made by the Servicer after the Cut-off Date:
all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments and all Prepayment Charges;
all payments on account of interest on the Mortgage Loans adjusted
to the Mortgage Loan Remittance Rate;
all Liquidation Proceeds;
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 3.14;
all Insurance Proceeds including amounts required to be deposited
pursuant to Section 3.11 (other than proceeds to be held in the Escrow Account
and applied to the restoration and repair of the Mortgaged Property or
released to the Mortgagor in accordance with the related Mortgage Loan
Documents and the Servicing Standard);
any amount required to be deposited in the Custodial Account
pursuant to this Agreement;
any amounts in connection with the repurchase of any Mortgage Loan;
any amounts required to be deposited by the Servicer pursuant to
Section 3.11 in connection with the deductible clause in any blanket hazard
insurance policy; and
any amounts received with respect to or related to any REO Property
or REO Disposition Proceeds.
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 Servicing Fees or
Ancillary Income need not be deposited by the Servicer 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 Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.04. Additionally, any other benefit
derived from the Custodial Account associated with the receipt, disbursement
and accumulation of principal, interest, taxes, hazard insurance and mortgage
insurance shall accrue to the Servicer (provided, that in no case may the
Servicer upcharge any person for the amount of any such benefits).
(d) Permitted Withdrawals From Custodial Account.
The Servicer shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
to make payments to the Owner in the amounts and in the manner
provided for in Section 4.01;
in the event the Servicer has elected not to retain the Servicing
Fee out of any Mortgagor payments on account of interest or other recovery of
interest with respect to a particular Mortgage Loan (including late
collections of interest on such Mortgage Loan, or interest portions of
Insurance Proceeds or Liquidation Proceeds) prior to the deposit of such
Mortgagor payment or recovery in the Custodial Account, to pay to itself the
related Servicing Fee from all such Mortgagor payments on account of interest
or other such recovery for interest with respect to that Mortgage Loan;
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to reimburse itself for unreimbursed Servicing Advances, the
Servicer's right to reimburse itself pursuant to this subclause (iii) with
respect to any Mortgage Loan being limited to related Liquidation Proceeds,
Insurance Proceeds, REO Disposition Proceeds and other amounts received in
respect of the related REO Property, and such other amounts as may be
collected by the Servicer from the Mortgagor or otherwise relating to the
Mortgage Loan (provided that in the event the Servicer is unable to reimburse
itself from the related Mortgage Loan it may, by written notice to the Owner,
reimburse itself from amounts on deposit in the Custodial Account), it being
understood that, in the case of any such reimbursement, the Servicer's right
thereto shall be prior to the rights of the Owner;
to pay itself interest on funds deposited in the Custodial Account;
to transfer funds to another Qualified Depository in accordance with
Section 3.10;
to invest funds in Eligible Investments in accordance with Section
3.10;
to reimburse itself for any Nonrecoverable Advances or out-of-pocket
expenses incurred by the Servicer pursuant to Section 2.03, 3.09(c) or 10.02;
to withdraw funds deposited in error; and
to clear and terminate the Custodial Account upon the termination of
this Agreement.
(e) Establishment of and Deposits to Escrow Account.
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") titled
"Chase Home Finance as subservicer for JPMorgan Chase Bank, National
Association in trust for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and various
mortgagors," and shall deposit and retain therein all collections from the
Mortgagors for the payment of taxes, assessments, hazard and flood insurance
premiums or comparable items for the account of the Mortgagors separate and
apart from any of its own funds and general assets. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law. The Escrow Account shall be established with a
Qualified Depository, in a manner which shall provide maximum available
insurance thereunder. Funds deposited in the Escrow Account may be drawn on by
the Servicer in accordance with Section 3.06. A copy of such certification or
letter agreement shall be furnished to the Owner and, upon request, to any
subsequent owner of the Mortgage Loans.
The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:
all Escrow Payments collected on account of the Mortgage Loans, for
the purpose of effecting timely payment of any such items as required under
the terms of this Agreement; and
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all amounts representing Insurance Proceeds or Condemnation Proceeds
that are to be applied to the restoration or repair of any Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 3.06. The Servicer 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 Servicer 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.
(f) Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
to effect timely payments of ground rents, taxes, assessments, water
rates, mortgage insurance premiums, fire hazard and flood insurance premiums
or other items constituting Escrow Payments for the related Mortgage;
to reimburse the Servicer for any Servicing Advance made by the
Servicer 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;
to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Mortgage Loan, or applicable
law;
to the extent permitted by applicable law and the Mortgage Loan
Documents, 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;
for application to restoration or repair of the Mortgaged Property
in accordance with Section 3.14;
to pay to the Servicer, or any Mortgagor to the extent required by
law and the Mortgage Loan Documents, any interest paid on the funds deposited
in the Escrow Account; and
to clear and terminate the Escrow Account on the termination of this
Agreement.
The Servicer will be responsible for the administration of the Escrow
Accounts and will be obligated to make Servicing Advances to the Escrow
Account in respect of its obligations under this Section 3.06, reimbursable
from the Escrow Accounts or Custodial Account to the extent not collected from
the related Mortgagor, anything to the contrary notwithstanding, when and as
necessary to avoid the lapse of insurance coverage on the Mortgaged Property,
or which the Servicer knows is necessary to avoid the loss of the
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Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien. If any such payment has not been made and the Servicer receives notice
of a tax lien with respect to the Mortgage being imposed, the Servicer will
advance or cause to be advanced Servicing Advances necessary to discharge such
lien on the Mortgaged Property in order to prevent loss of title to the
Mortgaged Property.
(g) Notification of Adjustments.
With respect to each adjustable rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related interest rate adjustment date
and shall adjust the Monthly Payment on the related mortgage payment
adjustment date, if applicable, in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. The Servicer shall
execute and deliver any and all necessary notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and Monthly Payment adjustments. The Servicer shall,
upon written request therefor, deliver to the Owner such notifications and any
additional applicable data regarding such adjustments and the methods used to
calculate and implement such adjustments. Upon the discovery by the Servicer
or the receipt of notice from the Owner that the Servicer has failed to adjust
a Mortgage Interest Rate or Monthly Payment in accordance with the terms of
the related Mortgage Note, the Servicer shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss or
deferral caused the Owner thereby.
(h) Completion and Recordation of Assignment 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, including the MERS(R)
System, if applicable.
(i) Payment of Taxes, Insurance and Other Charges.
(i) With respect to each Mortgage Loan which provides for Escrow
Payments, the Servicer shall maintain accurate records reflecting the status
of Property and the status of fire and hazard insurance coverage and shall
obtain, from time to time, all bills for the payment of such and shall effect
payment thereof prior to the applicable penalty or termination date, employing
for such purpose deposits from the Mortgagor in the Escrow Account which shall
have been estimated and accumulated by the Servicer in amounts sufficient for
such purposes, as allowed under the terms of the Mortgage. The Servicer shall
effect timely payment of such amounts irrespective of each Mortgagor's
faithful performance in the payment of same or the making of the Escrow
Payments. The Servicer shall pay any late fee, interest or penalty which is
payable due to any delay in payment of any Property Charge.
(ii) To the extent that a Mortgage does not provide for Escrow Payments,
the Servicer shall make Servicing Advances from its own funds to effect
payment of all Property Charges upon receipt of notice of any failure to pay
on the part of the Mortgagor, or at such other time as the Servicer determines
to be in the best interest of the Owner, provided, that, in any
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event, the Servicer shall pay such charges on or before any date by which
payment is necessary to preserve the lien status of the Mortgage. The Servicer
shall pay any late fee, interest, or penalty which is payable due to any delay
in payment of any Property Charge after the date on which the Servicer
receives notice of the failure of the Mortgagor to pay such charges.
o For each Mortgage Loan not covered by a life-of-loan transferable
tax contract or a life-of-loan transferable flood tracking contract, the
Servicer shall order and purchase at the Owner's expense, such tax or flood
contract. Notwithstanding anything to the contrary herein, the Servicer shall
be entitled to deduct the cost of such tax services from any amounts remitted
to the Owner pursuant to Section 4.01.
(j) Protection of Accounts.
The Servicer may transfer the Custodial Account or the Escrow Account to
a different Qualified Depository from time to time. Such transfer shall be
made only upon obtaining the consent of the Owner, which consent shall not be
unreasonably withheld.
The Servicer shall bear any expenses, losses or damages sustained by the
Owner if the Custodial Account and/or the Escrow Account are not demand
deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account, to
the extent permitted by law and the Mortgage Loan Documents, may at the option
of the Servicer be invested in Eligible Investments. Any such Eligible
Investment shall mature no later than one day prior to the Remittance Date in
each month; provided, however, that if such Eligible Investment is an
obligation of a Qualified Depository (other than the Servicer) that maintains
the Custodial Account, then such Eligible Investment may mature on the related
Remittance Date. Any such Eligible Investment shall be made in the name of the
Servicer in trust for the benefit of the Owner. All income on or gain realized
from any such Eligible Investment shall be for the benefit of the Servicer and
may be withdrawn at any time by the Servicer, to the extent permitted by law
and the Mortgage Loan Documents. Any losses incurred in respect of any such
investment shall be deposited in the Custodial Account, by the Servicer out of
its own funds immediately as realized. If, at any time, the amount on deposit
in the Custodial Account exceeds the amount of the applicable FDIC insurance,
such excess above the amount of the applicable FDIC insurance shall be
invested in Eligible Investments.
(k) Maintenance of Hazard Insurance.
(i) The Servicer 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 under the Servicing Standard 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.
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(ii) In the event the Mortgagor fails to maintain a hazard insurance
policy with respect to the related Mortgaged Property, the Servicer shall
cause to be maintained with respect to each Mortgage Loan a hazard insurance
policy with a generally acceptable carrier in accordance with the Servicing
Standard that provides for fire and extended coverage, and for a recovery of
any Insurance Proceeds relating to such Mortgage Loan by the Servicer on
behalf of the Owner.
(iii) If upon origination of the Mortgage Loan, the related Mortgaged
Property was located in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available), the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with an
insurer acceptable under the Servicing Standard 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 at any time during the term of the Mortgage Loan, the Servicer
determines in accordance with applicable law and pursuant to the Servicing
Standard that a Mortgaged Property is located in a special flood hazard area
and is not covered by flood insurance or is covered in an amount less than the
amount required by the Flood Disaster Protection Act of 1973, as amended, the
Servicer shall notify the related Mortgagor that the Mortgagor must obtain
such flood insurance coverage, and if said Mortgagor fails to obtain the
required flood insurance coverage within forty-five (45) days after such
notification, the Servicer shall immediately force place the required flood
insurance on the Mortgagor's behalf.
(iv) With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of property taxes, assessments and
other Property Charges that are or may become a lien upon the Mortgaged
Property, all as required hereunder.
(v) With respect to each Mortgage Loan that provides for the collection
of Escrow Payments for the payment of fire and hazard insurance and flood
insurance, if applicable, the Servicer shall effect the payment thereof
payable when due and prior to the applicable policy termination date,
employing for such purpose deposits in the Escrow Account which shall have
been estimated and accumulated by the Servicer in the amounts sufficient for
such purposes. In accordance with the terms of this Agreement, to the extent a
Mortgage Loan does not provide for Escrow Payments and the Mortgagor fails to
maintain any required insurance coverage, the Servicer shall by a Servicing
Advance make the payment required to effect the applicable in-force policy for
the related Mortgaged Property.
o All policies required hereunder shall name the Servicer as loss
payee and shall be endorsed with standard 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.
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o The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies are an insurer acceptable under the Servicing
Standard. The Servicer 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. The Servicer shall furnish to the
Mortgagor a formal notice of expiration of any such insurance in sufficient
time for the Mortgagor to arrange for renewal coverage by the expiration date;
provided, however, that in the event that no such notice is furnished by the
Servicer, the Servicer shall ensure that replacement insurance policies are in
place in the required coverages and the Servicer shall be solely liable for
any losses in the event coverage is not provided.
(vi) The Servicer at its option may obtain and maintain, with respect to
all or any portion of the Mortgage Loans, a blanket insurance policy with
extended coverage insuring against fire and hazard , as applicable. The
Servicer shall be deemed conclusively to have satisfied its obligations with
respect to hazard insurance and flood insurance coverage under this Section
3.11 if such blanket policy names the Servicer as "loss payee" and provides
coverage in an amount equal to the aggregate unpaid principal balance of the
Mortgage Loans without co-insurance. If such policy contains a deductible
clause, the Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with clause
(a) of this Section 3.11, and there shall have been a loss that would have
been covered by such policy, deposit in the Collection Account the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to deposited from the Servicer's funds, without reimbursement
therefor. Upon request of the Owner, the Servicer shall cause to be delivered
to the Owner a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without thirty (30) days' prior written notice to the
Owner. In connection with its activities as Servicer of the Mortgage Loans,
the Servicer agrees to present, on behalf of itself and the Owner, claims
under any such blanket policy.
(l) Maintenance of Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall maintain with a generally acceptable carrier in
accordance with the Servicing Standard, at its own expense, a blanket Fidelity
Bond and an Errors and Omissions Insurance Policy, with broad coverage on all
Servicer Employees. Any such Fidelity Bond and Errors and Omissions Insurance
Policy shall be in the form of the mortgage banker's blanket bond and shall
protect and insure the Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of all Servicer
Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy also
shall protect and insure the Servicer against losses in connection with the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. The minimum coverage under any such
Fidelity Bond and Errors and Omissions Insurance Policy shall be at least
equal to the corresponding amounts required under the Servicing Standard. Upon
the request of the Owner, the Servicer shall cause to be delivered to the
Owner a certified true copy of such Fidelity Bond and an Errors and Omissions
Insurance Policy and a statement from the surety and the insurance
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carrier described herein that such Fidelity Bond and an Errors and Omissions
Insurance Policy shall in no event be terminated or materially modified
without thirty (30) days' prior written notice to the Owner.
(m) Inspections.
The Servicer shall inspect the Mortgaged Property as often as deemed
necessary by the Servicer under the Servicing Standard to assure itself that
the value of the Mortgaged property is being preserved. In addition, the
Servicer shall inspect the Mortgaged Property and/or take such other actions
as may be necessary or appropriate in accordance with the Servicing Standard.
The Servicer shall keep a written report of each such inspection.
(n) Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Owner prior to
releasing any Insurance Proceeds to the Mortgagor to be applied to the
restoration or repair of the Mortgaged Property if such release is in
accordance with the Servicing Standard. At a minimum, the Servicer shall
comply with the following conditions in connection with any such release of
Insurance Proceeds:
the Servicer shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with respect
thereto;
the Servicer shall take all steps necessary to preserve the priority
of the lien of the Mortgage, including requiring waivers with respect to
mechanics' and materialmen's liens; and
pending repairs or restoration, the Servicer shall place the
Insurance Proceeds in the Escrow Account.
If the Owner is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim
in the name of the Owner.
(o) 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 Owner or its designee, or in the event the
Owner is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed
or certificate of sale shall be taken in the name of such Person or Persons,
which, consistent with an Opinion of Counsel obtained by the Owner from an
attorney duly licensed to practice law in the state where the REO Property is
located, is authorized or permitted to hold title to real property in the
state where the REO Property is located. The Person or Persons holding such
title other than the Owner shall acknowledge in writing that such title is
being held as nominee for the Owner.
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Subject to the succeeding paragraph, the Servicer shall manage,
conserve, protect and operate each REO Property for the Owner solely for the
purpose of its prompt disposition and sale. The Servicer, either itself or
through an agent selected by the Servicer, shall manage, conserve, protect and
operate the REO Property in accordance with the Servicing Standard and in the
same manner that similar property in the same locality as the REO Property is
managed. The Servicer shall attempt to sell the same on such terms and
conditions as the Servicer deems to be in the best interest of the Owner.
The disposition of REO Property shall be carried out by the Servicer in
accordance with the Servicing Standard at such price, and upon such terms and
conditions, as the Servicer deems to be in the best interests of the Owner.
The Servicer 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 Mortgaged
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 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 Servicer shall reimburse itself for any related
unreimbursed Servicing Advances and unpaid Servicing Fees made pursuant to
this Section and the fees of any managing agent or independent contractor
acting on behalf of the Servicer, and 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 Owner.
The Servicer shall make Servicing Advances for all funds necessary for
the proper operation, management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to Section
3.15 and any outsourcing fees, such Servicing Advances to be reimbursed from
the disposition or Liquidation Proceeds of the REO Property. The Servicer
shall make monthly distributions on each Remittance Date to the Owner of the
net cash flow from the REO Property (which shall equal the revenues from such
REO Property net of the expenses described in this Section 3.15 and of any
reserves from time to time to be maintained to satisfy anticipated liabilities
for such expenses).
(p) Real Estate Owned Reports.
The Servicer shall furnish to the Owner or its designee on or before the
fifth (5th) business day of each month a statement with respect to any REO
Property covering the operation of such REO Property for the previous month
and the Servicer's efforts in connection with the sale of such REO Property
and any rental of such REO Property incidental to the sale thereof for the
previous month. That statement shall be accompanied by such other information
as the Owner or its designee shall reasonably request.
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(q) Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property,
the Servicer shall report such foreclosure or abandonment as required pursuant
to Section 6050J of the Code.
(r) Prepayment Charges.
The Servicer or any designee of the Servicer shall not waive any
Prepayment Charge with respect to any Mortgage Loan that contains a Prepayment
Charge that prepays during the term of the penalty. If the Servicer or its
designee fails to collect the Prepayment Charge upon any prepayment of any
Mortgage Loan that contains a Prepayment Charge, the Servicer shall pay the
Owner an amount equal to the Prepayment Charge that was not collected;
provided, however, that the Servicer shall not have an obligation to pay the
Owner the amount of any uncollected Prepayment Charge if the failure to
collect such amount is the direct result of (i) inaccurate or incomplete
information on the related Mortgage Loan Schedule, (ii) failure by the related
Custodian or the Owner to deliver the related Mortgage Loan Documents to the
Servicer, (iii) natural disaster, or (iv) the death of the primary Mortgagor.
Notwithstanding the above, the Servicer or its designee may waive a Prepayment
Charge without paying the Owner the amount of the Prepayment Charge if (i) the
Mortgage Loan is in default sixty-one (61) days or more delinquent and such
waiver would maximize recovery of total proceeds taking into account the value
of such Prepayment Charge and the related Mortgage Loan or (ii) if the
prepayment is not a result of a refinance by the Servicer or any of its
Affiliates and (a) the Mortgage Loan is foreseen to be in default and such
waiver would maximize recovery of total proceeds taking into account the value
of such Prepayment Charge and the related Mortgage Loan or (b) the collection
of the Prepayment Charge would be in violation of applicable laws; provided,
however, that in the event the Mortgage Loan is subject to a Pass Through
Transfer, the Servicer hereby agrees to modify this sentence to the extent
such waiver provisions are not acceptable to the applicable Rating Agencies.
(s) Credit Reporting.
The Servicer shall report both favorable and unfavorable Mortgagor
activity to each of the three credit repositories on a monthly basis in a
timely manner.
o Additional Servicing Requirements:
The Servicer shall comply with the following additional requirements:
o Get updated FICO scores quarterly for the entire portfolio;
o Follow time frames in the Servicing Standard on loans in
foreclosure;
o Order BPO valuations as per time lines specified in the Servicing
Standard;
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o Provide access to the system, which will include viewing collection
comments;
o Apply all payments received from Mortgagors in accordance with the
Servicing Standard; and
o Make appropriate staff reasonably available to discuss loans in
default, including foreclosures, bankruptcy and REO Properties.
16.
PAYMENTS TO OWNER
(a) Remittances.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Owner all amounts collected on the Mortgage
Loans during the related Due Period, minus (i) Servicing Fees and (ii)
permitted charges against and withdrawals from the Custodial Account pursuant
to Section 3.04.
With respect to any remittance received by the Owner after the second
Business Day following the Business Day on which such payment was due, the
Servicer shall pay to the Owner 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 Servicer on the date such late payment is made and shall cover
the period commencing with the day following the Business Day such payment was
due and ending with the Business Day on which such payment is made, both
inclusive. Such interest shall be remitted along with the distribution payable
on the next succeeding Remittance Date. The payment by the Servicer of any
such interest shall not be deemed an extension of time for payment or a waiver
of any Event of Default by the Servicer.
(b) Statements to Owner.
(a) Not later than each Reporting Date, the Servicer shall furnish to
the Owner a remittance report (a "Monthly Remittance Advice"), in hard copy
and electronic format acceptable to the Owner, containing information
regarding funds collected during the prior Due Period. This report shall
contain the following information:
Mortgage Loan number;
Current Mortgage Interest Rate;
Servicing Fee;
Current monthly principal and interest amount due;
Current stated principal balance;
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Remittances allocable to principal and interest;
Next due date;
Mortgage Loan balance; and
Delinquency status.
(b) The Servicer will provide a monthly Data File containing available
data elements as requested by the Owner no later than the tenth (10th)
Business Day of each month.
(c) The Servicer shall prepare and file any and all usual and customary
tax reporting, information statements or other filings required to be
delivered in accordance with good industry practice to any governmental taxing
authority or the Owner pursuant to any applicable law with respect to the
Mortgage Loans. In addition, the Servicer shall provide the Owner with such
information concerning the Mortgage Loans as is necessary for the Owner to
prepare its federal income tax return as the Owner may reasonably request from
time to time and which is reasonably available to the Servicer.
Notwithstanding the foregoing the Servicer will not provide any REMIC tax
reporting with respect to the Mortgage Loans, this Agreement or any
reconstitution of this Agreement.
In addition, on each Reporting Date the Servicer shall furnish to the
Owner an individual loan accounting report ("Report"), as of the last Business
Day of each month, in mortgage loan number order to document Mortgage Loan
payment activity on an individual Mortgage Loan basis. Each Report shall
contain the following:
(i) with respect to each Monthly Payment, the amount of such remittance
allocable to principal (including a separate breakdown of any Principal
Prepayment, including the date of such prepayment, and any Prepayment
Charges);
(ii) with respect to each Monthly Payment, the amount of such remittance
allocable to interest;
(iii) the amount of servicing compensation received by the Servicer
during the prior Due Period;
(iv) the aggregate stated principal balance of the Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the Servicer during the
prior Due Period; and
(vi) the number and aggregate outstanding principal balances of Mortgage
Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 days or
more; (b) as to which foreclosure has commenced; and (c) as to which REO
Property has been acquired.
The Servicer shall also provide a trial balance, sorted in mortgage loan
number order, with each such Report.
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The Servicer shall promptly notify the Owner of (i) any litigation or
governmental proceedings pending against the Servicer of the type described in
the litigation representation and warranty or (ii) any affiliations or
relationships that may develop following a Securitization Transfer between the
Servicer and any of the Persons identified in Item 1119 of Regulation AB.
(c) Advances by Servicer.
Except as otherwise provided herein, the Servicer shall be entitled to
first priority reimbursement pursuant to Section 3.04 hereof for Servicing
Advances from recoveries from the related Mortgagor or from all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds and
Condemnation Proceeds) with respect to the related Mortgage Loan.
17.
GENERAL SERVICING PROCEDURES
(a) Transfers of Mortgaged Property.
The Servicer 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 Servicer shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Servicer shall not exercise
such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is not in the best interests of
the Owner or is unable under applicable law to enforce such "due-on-sale"
clause, the Servicer 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 Servicer is unable
under applicable law to require that the original Mortgagor remain liable
under the Mortgage Note and the Servicer has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the
Owner of the Mortgaged Property pursuant to which the original Mortgagor is
released from liability and the Owner of the Mortgaged Property is substituted
as Mortgagor and becomes liable under the Mortgage Note. In connection with
any such assumption, neither the Mortgage Interest Rate borne by the related
Mortgage Note, the term of the Mortgage Loan nor the outstanding principal
amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Servicer shall
inquire diligently into the creditworthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used by the Servicer or its affiliates with respect to
underwriting mortgage loans of the same type as the Mortgage Loans. If the
credit of the proposed transferee does not meet such underwriting criteria,
the Servicer
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diligently shall, to the extent permitted by the Mortgage or the Mortgage Note
and by applicable law, accelerate the maturity of the Mortgage Loan.
(b) Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer shall notify the Owner in the
monthly remittance advice as provided in Section 4.02, and may request the
release of any Mortgage Loan Documents from the Owner in accordance with this
Section 5.02.
If the Servicer satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Servicer otherwise prejudice any rights the Owner may have under the
mortgage instruments, the Servicer shall deposit into the Custodial Account
the entire outstanding principal balance, plus all accrued interest on such
Mortgage Loan, on the day preceding the Remittance Date in the month following
the date of such release. The Servicer shall maintain the Fidelity Bond and
Errors and Omissions Insurance Policy as provided for in Section 3.12 insuring
the Servicer against any loss it may sustain with respect to any Mortgage Loan
not satisfied in accordance with the procedures set forth herein.
(c) Servicing Compensation.
As consideration for servicing the Mortgage Loans subject to this
Agreement, the Servicer shall retain the relevant Servicing Fee for each
Mortgage Loan remaining subject to this Agreement during any month or part
thereof. Such Servicing Fee shall be payable monthly and only from the
interest amounts collected by the Servicer from such Mortgage Loan for such
related period. Additional servicing compensation in the form of Ancillary
Income shall be retained by the Servicer and is not required to be deposited
in the Custodial Account.
The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled
to reimbursement thereof except as specifically provided for herein.
(d) Annual Audit Report.
Not later than (a) March 15, 2006, the Servicer shall, at its own
expense, cause a firm of independent public accountants (who may also render
other services to the Servicer), which is a member of the American Institute
of Certified Public Accountants, to furnish to the Owner (i) year-end audited
(if available) financial statements of the Servicer and (ii) a statement to
the effect that such firm has examined certain documents and records for the
preceding fiscal year (or during the period from the date of commencement of
such Servicer's duties hereunder until the end of such preceding fiscal year
in the case of the first such certificate) and that, on the basis of such
examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, such firm is of the opinion that the
Servicer's overall servicing operations have been conducted in compliance with
the Uniform Single Attestation Program for Mortgage Bankers except for such
exceptions that, in the opinion of such firm,
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the Uniform Single Attestation Program for Mortgage Bankers requires it to
report, in which case such exceptions shall be set forth in such statement and
(b) on or before March 15th of each year beginning March 15, 2007, the
servicer compliance statement required by Item 1123 of Regulation AB, which as
of the date hereof requires a statement to the effect that (i) an authorized
officer of the Servicer has reviewed (or a review has been made under its
supervision) of the Servicer's activities under this Agreement during the
prior calendar year and (ii) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all of its obligations under this
Agreement in all respects throughout the period covered by the prior calendar
year or, if there has been a failure to fulfill any such obligation in any
respect, a statement of such failure known to such officer and the nature and
the status thereof.
(e) Annual Officer's Certificate.
Not later than (a) March 15, 2006, the Servicer, at its own expense,
will deliver to the Owner a Servicing Officer's certificate stating, as to
each signer thereof, that (i) a review of the activities of the Servicer
during such preceding fiscal year and of performance under this Agreement has
been made under such officers' supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement for such year, or, if there has been a
default in the fulfillment of all such obligations, specifying each such
default known to such officers and the nature and status thereof including the
steps being taken by the Servicer to remedy such default and (b) on or before
March 1st of each year beginning March 1, 2007, furnish to the Owner a report
by a registered public accounting firm that attests to, and reports on, the
assessment made by the Servicer as required by Rules 13a-18 and 15d-18 of the
Securities Exchange Act and Section 1122(b) of Regulation AB, which
attestation shall be in accordance with Rule 1-02(a)(3) and Rule 2-02(g) of
Regulation S-X under the Securities Act and the Securities Exchange Act.
(f) Right to Examine Servicer Records.
The Owner shall have the right to examine and audit any and all of the
books, records, or other information of the Servicer, whether held by the
Servicer or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times
as may be reasonable under applicable circumstances, upon fifteen (15)
calendar days notice (or, upon the occurrence of an Event of Default, two (2)
Business Days notice). In addition, to the extent possible, the Servicer shall
give the Owner on-line computer access to the Servicer's servicing system in a
manner consistent with access given to similar clients of the Servicer. The
Owner agrees to be subject to the Servicer's procedures and requirements
governing on-line computer access to the Servicer's servicing system. The
Owner further agrees to hold all such information in confidence and not to use
or disclose such information except pursuant to the purposes of this
Agreement.
(g) Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999.
With respect to each Mortgage Loan and the related Mortgagor, the
Servicer shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and
all applicable regulations and guidelines promulgated thereunder, and shall
provide all notices required thereunder.
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(h) Provision of Information.
During the term of this Agreement, the Servicer shall furnish to the
Owner all reports required hereunder, and such other periodic, special, or
other reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate with respect to the Owner or the
purposes of this Agreement to the extent such reports or information are
readily accessible to the Servicer without undue expense. All such reports or
information shall be provided by and in accordance with all reasonable
instructions and directions which the Owner may give.
The Servicer shall execute and deliver all such instruments and take all
such action as the Owner may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this Agreement.
(i) Financial Statements; Servicing Facilities.
In connection with marketing the Mortgage Loans or a proposed
Reconstitution, the Owner may make available to a prospective purchaser
audited financial statements of the consolidated group that includes the
Servicer for the most recently completed three fiscal years for which such
statements are available, as well as a Consolidated Statement of Condition at
the end of the last two fiscal years covered by any Consolidated Statement of
Operations. The Servicer also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on
behalf of the corporate group that includes the Servicer (and are available
upon request to members or stockholders of the corporate group that includes
the Servicer or to the public at large). The Servicer shall furnish promptly
to the Owner or a prospective purchaser copies of the statements specified
above.
Upon reasonable prior notice, the Servicer shall make available to the
Owner or any prospective purchaser a knowledgeable financial or accounting
officer for the purpose of answering questions respecting recent developments
affecting the Servicer or the financial statements of the corporate group that
includes the Servicer, and to permit any prospective purchaser to inspect the
Servicer's servicing facilities for the purpose of satisfying such prospective
purchaser that the Servicer has the ability to service the Mortgage Loans as
provided in this Agreement.
(j) Servicing Criteria.
The Servicer shall deliver to Owner or its designee on or before March
1st of each year beginning March 15, 2007 a report reasonably satisfactory to
the Owner regarding its assessment of compliance with Servicing Criteria as
required by Rules 13a-18 and 15d-18 of the Securities Exchange Act and Item
1122 of Regulation AB, which as of the date hereof require a report by an
authorized officer of the Servicer that contains the following:
(i) A statement by such officer of its responsibility of assessing the
Servicing Criteria applicable to the Servicer;
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(ii) A statement by such officer that it used the Servicing Criteria to
assess compliance with the Servicing Criteria applicable to the Servicer;
(iii) A statement by such officer of the Servicer's compliance with the
applicable Servicing Criteria as of the immediately preceding December 31 and
for the period covered by the preceding calendar year and disclosure of any
instance of noncompliance with respect thereto;
(iv) A statement that a registered public accounting firm has issued an
attestation report on the Servicer's compliance with the applicable Servicing
Criteria as of the immediately preceding December 31, and for the period
covered by the preceding calendar year; and
(v) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Servicer (which statement shall be based on the activities
it performs with respect to asset-backed securities transactions taken as a
whole involving the Servicer that are backed by the same asset type as the
Mortgage Loans).
(k) Subservicers
The Servicer shall not hire or otherwise utilize a subservicer or other
contractor hereunder, or permit any subservicer or subcontractor to itself
utilize the services of any subservicer or subcontractor, without the prior
written consent of the Owner and its designee. Any such subservicer must agree
in writing to comply with the provisions of Sections 5.05, 5.05 and 5.10
hereof to the same extent as if such subservicer were the Servicer, and with
this Section 5.11 and Sections 5.12 and Section 7.01 hereof and to provide
such information relating to such subservicer as the Owner or its designee may
request from time to time in order to permit the Owner or its designee to
comply with Regulation AB in connection with any Securitization Transfer. Any
subcontractor that performs any of the functions identified in Item 1122(d) of
Regulation AB must agree in writing that, if the Owner determines that such
subcontractor was "participating in the servicing function" within the meaning
of Item 1122, such subcontractor will comply with the provisions of Sections
5.05 and 5.10 herrof to the same extent as if such subcontractor were the
Servicer.
(l) Sarbanes Oxley
In the event that the Servicer is servicing in a Securitization
Transfer, the Servicer shall deliver to the Owner, on or before March 1st each
year beginning March 1, 2006, a certification using the language supplied by
the Owner in the form of Exhibit D hereto. The Servicer shall indemnify and
hold harmless the Person acting as depositor in the Securitization Transfer,
the Person acting as trustee in the Securitization transaction, the master
servicer and their respective officers, directors and Affiliates, from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any breach of the Servicer's obligations under
this paragraph or any material misstatement or omission, negligence, bad faith
or willful misconduct of the Servicer in connection therewith. If the
indemnification provided for in the preceding sentence is unavailable or
insufficient to hold harmless any indemnified party, then the
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Servicer agrees that it shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities of
such indemnified party in such proportion as is appropriate to reflect the
relative fault of such indemnified party, on the one hand, and the Servicer,
on the other, in connection with a breach of the Servicer's obligations under
this paragraph or any material misstatement or omission, negligence, bad faith
or willful misconduct of the Servicer in connection therewith.
18.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
(a) Representations, Warranties and Agreements of the Servicer.
The Servicer, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Owner as of each Transfer Date:
(i) Due Organization and Authority. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation 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 Servicer, and in any event the Servicer is in
compliance with the laws of any such state to the extent necessary to ensure
the enforceability of the terms of this Agreement; the Servicer 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 Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Servicer and
all requisite corporate action has been taken by the Servicer to make this
Agreement valid and binding upon the Servicer in accordance with its terms;
(ii) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Servicer;
(iii) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the servicing responsibilities by the Servicer
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, conditions or provisions of the Servicer's
charter or by-laws or any legal restriction or any agreement or instrument to
which the Servicer is now a party or by which it is bound, or to Servicer's
knowledge (i) constitute a default or result in an acceleration under any of
the foregoing, (ii) result in the violation of any law, rule, regulation,
order, judgment or decree to which the Servicer or its property is subject,
(iii) impair the ability of the Servicer to service the Mortgage Loans, or
(iv) impair the value of the Mortgage Loans;
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(iv) Ability to Perform. The Servicer does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(v) No Litigation Pending. There is no known action, suit, proceeding or
investigation pending or, to the best of its knowledge threatened against the
Servicer which, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of the
right or ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or which
would draw into question the validity of this Agreement or of any action taken
or to be taken in connection with the obligations of the Servicer contemplated
herein, or which would be likely to impair materially the ability of the
Servicer to perform under the terms of this Agreement;
(vi) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Servicer of or compliance by the Servicer with
this Agreement, or if required, such consent, approval, authorization or order
has been obtained prior to the Transfer Date;
(vii) Ability to Service. The Servicer is an approved seller/servicer of
residential mortgage loans of the same type as the Mortgage Loans, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The
Servicer is in good standing to service mortgage loans, and no event has
occurred, including a change in insurance coverage, which would make the
Servicer unable to service the Mortgage Loans;
(viii) No Commissions to Third Parties. The Servicer 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 Owner.
(ix) No Untrue Information. No statement, report or other document
furnished or to be furnished by the Servicer pursuant to this Agreement
contains any material untrue statement of fact or omits to state a material
fact necessary to make the statements contained therein not misleading.
(b) Remedies for Breach of Representations and Warranties of the
Servicer.
Upon discovery by either the Servicer or the Owner of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the ability of the Servicer to perform its duties and obligations
under this Agreement or otherwise materially and adversely affects the value
of the Mortgage Loans, the Mortgaged Property or the priority of the security
interest on such Mortgaged Property or the interest of the Owner, 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
Servicer of any breach of a representation or warranty set forth in Section
6.01 which materially and
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adversely affects the ability of the Servicer to perform its duties and
obligations under this Agreement or otherwise materially and adversely affects
the value of the Mortgage Loans, the Mortgaged Property or the priority of the
security interest on such Mortgaged Property, the Servicer shall use its best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Owner may, in the Owner's sole and absolute
discretion (i) terminate the Servicer for cause under Section 9.01 of this
Agreement, (ii) assign the Servicer's rights and obligations under this
Agreement (or respecting the affected Mortgage Loans) to a successor servicer
(such assignment to be made in accordance with Sections 9.01 and 10.01) and
(iii) exercise all rights and remedies which the Owner may have at law or in
equity against the Servicer except as such rights and remedies may be limited
by the terms of this Agreement.
Any cause of action against the Servicer relating to or arising out of
the material breach of any representations and warranties made in Section 6.01
shall accrue upon (i) discovery of such material breach by the Servicer or
notice thereof by the Owner to the Servicer, (ii) failure by the Servicer to
cure such material breach within the applicable cure period, and (iii) demand
upon the Servicer by the Owner for compliance with this Agreement.
(c) Representations and Warranties of the Owner.
The Owner, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Servicer as of each Transfer Date:
(i) Due Organization and Authority. The Owner is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation 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 Owner, and in any event the Owner is in compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of the terms of this Agreement; the Owner 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 Owner 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 Owner and all
requisite corporate action has been taken by the Owner to make this Agreement
valid and binding upon the Owner in accordance with its terms.
(ii) Effective Agreement/Ordinary Course of Business. The execution,
delivery and performance of this Agreement by Owner, its compliance with the
terms hereof and consummation of the transactions contemplated hereby
(assuming receipt of the approvals required pursuant to this Agreement) will
not violate, conflict with, result in a breach of, constitute a default under,
be prohibited by or require any additional approval under its charter, bylaws,
or any instrument or agreement to which it is a party or by which it is bound
or which affects the Servicing Rights or any state or federal law, rule, or
regulation or any judicial or administrative decree, order, ruling or
regulation applicable to it or to the Servicing Rights. The
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consummation of the transactions contemplated by this Agreement is in the
ordinary course of business of Owner.
o Compliance with Contracts and Regulations. The Owner has complied in
all material respects with (i) all contracts to which it is or was a party,
and (ii) all applicable federal, state and local laws and regulations, in each
case which affect any of the Servicing Rights (or the Mortgage Loans related
thereto) hereunder.
o Title to the Servicing Rights. Prior to the sale to the Servicer,
Owner is the lawful owner of the Servicing Rights.
o Litigation. There is no known action, suit, proceeding or
investigation pending or, to the best of its knowledge, threatened against the
Owner 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 Owner, or in any material impairment of the right
or ability of the Owner to carry on its business substantially as now
conducted, or in any material liability on the part of the Owner, or which
would draw into question the validity of this Agreement or of any action taken
or to be taken in connection with the obligations of the Owner contemplated
herein, or which would be likely to impair materially the ability of the Owner
to perform under the terms of this Agreement;
(iii) Ability to Perform. Owner 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.
o No Untrue Information. No statement, report or other document
furnished or to be furnished by the Owner pursuant to this Agreement contains
any material untrue statement of fact or omits to state a material fact
necessary to make the statements contained therein not misleading. For the
avoidance of doubt, information provided to Servicer by prior servicers shall
not be deemed to be material furnished or to be furnished by the Owner.
(d) Remedies for Breach of Representations and Warranties of the Owner.
It is understood and agreed that the representations and warranties set
forth in Section 6.03 shall survive the engagement of the Servicer to perform
the servicing responsibilities as of the Transfer Dates and the delivery of
the Servicing Files to the Servicer and shall inure to the benefit of the
Servicer. Upon discovery by either the Servicer or the Owner of a breach of
any of the foregoing representations and warranties which materially and
adversely affects the value of the servicing contract established herein or
the interest of the Servicer, 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
Owner of any breach of a representation or warranty set forth in Section 6.03
which materially and adversely affects the value of the servicing contract,
the Owner shall use its best efforts promptly to cure such breach in all
material respects.
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The Owner shall indemnify the Servicer 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, including any
reasonable legal fees and related expenses incurred by the Owner in connection
with enforcing this indemnity, 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 Sections 6.03 of this Agreement.
Upon a breach of any of the representations and warranties contained in
Section 6.03 which materially and adversely affects the value of the servicing
contract and which is not cured by the Owner as described herein, the Servicer
may transfer servicing of the affected Mortgage Loans to the Owner or a
successor servicer appointed by the Owner.
With respect to the representations and warranties described in Sections
6.03 that are made to the best of the Owner's knowledge, if it is discovered
by the Owner or the Servicer that the substance of such representation and
warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the servicing contract, notwithstanding the Owner's lack of
knowledge with respect to the substance of such representation and warranty,
such inaccuracy shall be deemed a breach of the applicable representation or
warranty and the remedies described in this Section 6.04 shall apply to such
breach.
Any cause of action against the Owner relating to or arising out of the
breach of any representations and warranties made in Section 6.03 shall accrue
upon (i) discovery of such breach by the Owner or notice thereof by the
Servicer to the Owner, (ii) failure by the Owner to cure such breach within
the applicable cure period, and (iii) demand upon the Owner by the Servicer
for compliance with this Agreement.
19.
RECONSTITUTION
(a) Removal of Mortgage Loans from Inclusion Under this Agreement Upon a
Pass-Through Transfer, a Whole Loan Transfer or Servicing Released Sale.
The Owner and the Servicer agree that with respect to some or all of the
Mortgage Loans, from time to time the Owner may:
(1) Effect a Whole Loan Transfer, and/or
(2) Effect a Pass-Through Transfer,
and in each such case, in its reasonable discretion, may retain the Servicer
as the servicer, or, as applicable, the "seller/servicer", thereof; provided,
however, that with respect to the Mortgage Loans which become subject to this
agreement on a Transfer Date, in no event shall there be more than a total of
four (4) persons under any single Pass-Through Transfer or Whole Loan Transfer
at any given time having the status of "Purchaser" or "Owner" in connection
with such transfers. The Owner and the Servicer agree that with respect to
some or all of the Mortgage
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Loans, from time to time, the Owner may effect a Servicing Released Sale upon
thirty (30) days prior written notice to the Servicer. With respect to each
Mortgage Loan included in any Servicing Released Sale, the Owner shall pay the
Servicer a Deboarding Fee on the date of such Servicing Released Sale. The
Owner agrees to cooperate with the Servicer to comply with the terms of the
Servicer's servicing transfer procedures that are attached hereto as Exhibit
D. On the related Reconstitution Date or date of the Servicing Released Sale,
the Mortgage Loans transferred shall cease to be covered by this Agreement.
(i) If the Owner, in its reasonable discretion, retains the Servicer in
connection with a Reconstitution, the Servicer shall cooperate with the Owner
in connection with any Pass-Through Transfer or Whole Loan Transfer
contemplated by the Owner pursuant to this Section 7.01. In that connection,
the Servicer shall:
execute any Reconstitution Agreement, reasonably acceptable to the
Servicer, within a reasonable period of time after receipt of any
Reconstitution Agreement which time shall be sufficient for the Servicer and
Servicer's counsel to review such Reconstitution Agreement, but such time
shall not exceed ten (10) days after such receipt;
cooperate with the Owner, the trustee or a third party purchaser
and any prospective purchaser, at the Owner's expense, with respect to all
reasonable requests and due diligence procedures including participating in
meetings with rating agencies, bond insurers, guarantors, loss mitigation or
credit risk management advisors and such other parties as the Owner shall
designate and participating in meetings with prospective purchasers of the
Mortgage Loans or interests therein and providing information contained in the
Mortgage Loan Schedule including any diskette or other related data tapes
provided as reasonably requested by such purchasers;
negotiate and execute one or more loss mitigation advisory or
credit risk management agreements, reasonably acceptable to the Servicer,
between the Servicer and any loss mitigation or credit risk management advisor
designated by the Owner in its sole discretion;
deliver to the Owner, any subsequent purchaser of the Mortgage
Loans from the Owner or to any Person designated by the Owner (a) for
inclusion in any prospectus or other offering material such publicly available
information regarding the Servicer, its financial condition and its mortgage
loan delinquency, foreclosure and loss experience and any additional
information requested by the Owner (or such other Person), (b) any similar
non-public, unaudited financial information (which the Owner (or such other
Person) may, at its option and at its cost, have audited by certified public
accountants) and such other information as is reasonably requested by the
Owner (or such other Person) and which the Servicer is capable of providing
without unreasonable effort or expense, and to indemnify the Owner (or such
other Person), each Affiliate of the Owner (or such other Person)
participating in any such Reconstitution and each Person who controls the
Owner (or such other person) or such Affiliate for material misstatements
contained in such information pursuant to an indemnification agreement, the
terms of which are reasonably acceptable to the Servicer and which shall
include an indemnification from the Owner (or such other Person) or its
Affiliates to the Servicer for all other information not provided by the
Servicer, and (c) such statements and audit letters of
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reputable, certified public accountants pertaining to information provided by
the Servicer pursuant to clause (a) above as shall be reasonably requested by
the Owner (or such other Person);
to cooperate with the Owner, or any subsequent purchaser of the
Mortgage Loans from the Owner, with respect to the preparation of Mortgage
Loan Documents and other related documents, with respect to servicing
requirements reasonably requested by the rating agencies and credit enhancers;
to restate the representations and warranties of the Servicer set
forth in this Agreement as of the settlement or closing date in connection
with such Reconstitution (each, a "Reconstitution Date") and to make the
following representations: (a) the Mortgage Loan Schedule delivered by the
Servicer in connection with such Reconstitution is true, correct and complete
and (b) the related Mortgage Loans have been serviced in accordance with the
terms of this Agreement and the Servicing Standards; and
provide, on an ongoing basis from information obtained through its
servicing of the Mortgage Loans, any information reasonably necessary to
enable the "tax matters person" for any REMIC in a Pass-Through Transfer,
including any master servicer or trustee acting in such capacity, to perform
its obligations in accordance with applicable law and customary secondary
mortgage market standards for securitized transactions.
(ii) The Servicer shall provide to the Owner or issuer, as the case may
be, and any other participants in such Whole Loan Transfer or Pass-Through
Transfer, (i) any and all information with respect to itself, its servicing
portfolio or the Mortgage Loans and appropriate verification of information
which may be reasonably available to the Servicer, whether through letters of
its auditors and counsel or otherwise, as the Owner or any such other
participant 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 Servicer as Servicer
reasonably agrees to provide and as are reasonably believed necessary by the
trustee, such third party purchaser, any master servicer, any Rating Agency or
the Owner, as the case may be, in connection with such transactions.
(iii) To the extent required by the applicable Reconstitution Agreements
or otherwise requested by the Owner in connection with a Reconstitution, the
Servicer shall prepare Assignments of Mortgage in form and substance
reasonably acceptable to the trustee or such third party, as the case may be,
for each Mortgage Loan that is part of a Reconstitution. The Servicer 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 or
such third party, as the case may be, upon the Servicer's receipt thereof. The
Owner shall pay all pre-approved fees associated with the preparation,
recording and tracking of such Assignments of Mortgage.
(iv) In connection with any Securitization Transfer, the Servicer shall,
if requested by the Owner or its designee, deliver to the Owner or its
designee within three (3) Business Days after such request information, in
form and substance satisfactory to the Owner or such designee, with respect to
such Servicer information reasonably requested by the Owner or
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its designee and the information set forth under Item 1108(b) and 1108(c) of
Regulation AB (collectively, the "Servicer Information"), which as of the date
hereof includes:
(i) a description of the Servicer's form of organization;
(ii) a description of how long the Servicer has been servicing residential
mortgage loans; a general discussion of the Servicer's experience in servicing
assets of any type as well as a more detailed discussion of the Servicer's
experience in, and procedures for the servicing function it will perform under
this Agreement and any Reconstitution Agreements; information regarding the
size, composition and growth of the Servicer's portfolio of mortgage loans of
the type similar to the Mortgage Loans and information on factors related to
the Servicer that may be material, in the good faith judgment of the Owner, to
any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable (including, without limitation, whether
any prior securitizations of mortgage loans of the type similar to the
Mortgage Loans involving the Servicer have defaulted or experienced an early
amortization or other performance triggering event because of servicing; the
extent of outsourcing the Servicer utilizes; whether there has been previous
disclosure of noncompliance with Servicing Criteria with respect to other
securitizations involving the Servicer whether there has been any termination
of the Servicer as servicer in a mortgage loan securitization; and whether in
a mortgage loan securitization a servicing performance test or trigger that
could have resulted in the termination of the Servicer as servicer was
reached, whether or not the Servicer was so terminated);
(iii) a description of any material changes to the Servicer's policies or
procedures in the servicing function it will perform under this Agreement and
any Reconstitution Agreements for mortgage loans of the type similar to the
Mortgage Loans during the past three years;
(iv) information regarding the Servicer's financial condition to the extent
that there is a risk that the effect on one or more aspects of servicing
resulting from such financial condition could have an impact on the
performance of the securities issued in the Securitization Transfer, or on
servicing of mortgage loans of the same asset type as the Mortgage Loans;
(v) statistical information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer's overall servicing portfolio for the past
three years;
(vi) the Servicer's process for handling delinquencies, losses, bankruptcies
and recoveries, such as through liquidation of REO Properties, sale of the
Mortgage Loans or workouts; and
(vii) the Servicer's processes and procedures designed to address any special
or unique factors involved in servicing loans of the same type as the Mortgage
Loans.
The Servicer shall indemnify the Owner, each affiliate of the Owner and
each underwriter as placement agent participating in the Reconstitution and
each Person who controls the Owner or such affiliate and their respective
present and former directors, officers, employees and agents, and hold each of
them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any
other costs, fees and expenses that each of them may sustain arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in the information provided by or on behalf
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of the Servicer regarding the Servicer, the Servicer's servicing practices or
the performance of the Mortgage Loans set forth in any offering document
prepared in connection with any Reconstitution. For purposes of the previous
sentence, "Owner" shall mean the Person then acting as the Owner under this
Agreement and any and all Persons who previously were "Owners" under this
Agreement.
(b) RESERVED
(c) Additional Indemnification by the Servicer.
The Servicer shall indemnify the Owner 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 Owner may sustain in any way related to the material
failure of the Servicer to perform its duties and service the Mortgage Loans
in compliance with the terms of this Agreement or any Reconstitution Agreement
entered into pursuant to Section 7.01 or any breach by the Servicer of its
representations, warranties or covenant under this Agreement. The Servicer
shall immediately notify the Owner if a claim is made by a third party with
respect to this Agreement or any Reconstitution Agreement or the Mortgage
Loans, shall promptly notify the trustee or other relevant third party with
respect to any claim made by a third party with respect to any Reconstitution
Agreement, assume (with the prior written consent of the Owner) the defense of
any such claim and pay all expenses in connection therewith, including counsel
fees, promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or the Owner in respect of such claim and follow any
written instructions received from the Owner in connection with such claim.
The Owner promptly shall reimburse the Servicer for all amounts advanced by it
pursuant to the preceding sentence except when the claim is in any way related
to the Servicer's indemnification pursuant to Section 6.02, or the material
failure of the Servicer to service and administer the Mortgage Loans in
compliance with the terms of this Agreement or any Reconstitution Agreement.
In the event a dispute arises between the Servicer and the Owner with respect
to any of the rights and obligations of the parties pursuant to this
Agreement, and such dispute is adjudicated in a court of law, by an
arbitration panel or any other judicial process, then the losing party shall
indemnify and reimburse the winning party for all attorney's fees and other
costs and expenses related to the adjudication of said dispute.
(d) Transfer of Servicing.
In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to the
provisions of this Agreement, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor. The resignation or removal of the Servicer pursuant to the
aforementioned sections shall not become effective until a successor shall be
appointed by the Owner. The Servicer shall deliver promptly to the successor
servicer the funds in the Custodial Account and Escrow Account and all
Servicing Files and related documents and statements held by it hereunder and
the Servicer shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably
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be required to more fully and definitively vest in the successor all such
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer.
20.
THE SERVICER
(a) Merger or Consolidation of the Servicer.
The Servicer shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided,
however, that the 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 servicer
in good standing of mortgage loans of the same type as the Mortgage Loans.
(b) Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Owner for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment, provided, however, that
this provision shall not protect the Servicer or any such person against any
breach of its warranties or representations made herein, or failure to perform
its obligations set forth in this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of
this Agreement. The Servicer and any director, officer, employee or agent of
the Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expense or liability, provided, however, that
the Servicer may, with the consent of the Owner, undertake any such action
which it may deem necessary or desirable in respect of this Agreement and the
rights and duties of the parties hereto. In such event, the Servicer shall be
entitled to reimbursement from the Owner for the legal expenses and costs of
such action.
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(c) Limitation on Resignation and Assignment by the Servicer.
The Servicer shall not assign this Agreement or the servicing
responsibilities hereunder or delegate its rights or duties hereunder or any
portion hereof (to other than a subservicer) or sell or otherwise dispose of
all or substantially all of its property or assets without the prior written
consent of the Owner, which consent shall be granted or withheld in the
reasonable discretion of the Owner; provided, however, that nothing contained
herein shall prohibit or limit the transfer, sale or assignment of any
interests of the Servicer, including any interest in this Agreement, to a
subsidiary or Affiliate of the Servicer.
Subject to Section 9.02, the Servicer shall not resign from the
obligations and duties hereby imposed on it except with the prior written
consent of the Owner, which consent shall be granted or withheld in the
reasonable discretion of the Owner or upon the determination that its duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Servicer. No such resignation shall become effective
until a successor shall have assumed the Servicer's responsibilities and
obligations hereunder in the manner provided in Section 10.01.
Without in any way limiting the generality of this Section 8.03, in the
event that the Servicer either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof (to other than a subservicer) or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written consent
of the Owner (such consent not to be unreasonably withheld), then the Owner
shall have the right to terminate this Agreement upon notice given as set
forth in Section 9.01, without any payment of any penalty or damages and
without any liability whatsoever to the Servicer or any third party.
21.
TERMINATION
(a) Termination for Cause.
(i) This Agreement shall be terminable at the sole option of the Owner,
if any of the following Events of Default exist on the part of the Servicer:
any failure by the Servicer to remit to the Owner any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of two (2) Business Days; or
The Owner and Servicer hereby agree that any failure to deliver (a)
the annual statement of compliance required under Section 5.04, (b) the annual
independent public accountants' servicing attestation required under Section
5.05, (c) the annual assessment of servicing compliance required under Section
5.10 or (d) the certification required under Section 5.06, in each case, more
than 5 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the Owner;
or
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any failure by the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement which 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 Servicer by
the Owner; or
any failure by the Servicer to maintain its license to do business
or service residential mortgage loans in any jurisdiction where the Mortgaged
Properties are located, where the failure to so maintain such license will
have a material adverse effect on the Servicer's ability to service the
Mortgage Loans; or
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,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of sixty (60) days; or
the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Servicer
or of or relating to all or substantially all of its property; or
the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations;
if (x) any Rating Agency reduces or withdraws the rating of any
security issued by Owner or one of its Affiliates in connection with a Pass
Through Transfer due to a reason attributable to the Servicer, or (y) the
Servicer's residential primary servicer rating for servicing subprime loans
issued by any Rating Agency is reduced by more than one level; or
the Servicer attempts, without the consent of the Owner, to assign
the servicing of the Mortgage Loans or its right to servicing compensation
hereunder or the Servicer attempts, without the consent of the Owner, to sell
or otherwise dispose of all or substantially all of its property or assets or
to assign this Agreement or the servicing responsibilities hereunder or to
delegate its duties hereunder or any portion thereof.
In each and every such case, so long as a Event of Default shall not
have been remedied, in addition to whatsoever rights the Owner may have at law
or equity to damages, including injunctive relief and specific performance,
the Owner, by notice in writing to the Servicer, may terminate all the rights
and obligations of the Servicer under this Agreement and in and to the
servicing contract established hereby and the proceeds thereof.
Upon receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall
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pass to and be vested in a successor servicer appointed by the Owner. Upon
written request from the Owner, the Servicer shall prepare, execute and
deliver to the successor entity designated by the Owner any and all documents
and other instruments, place in such successor's possession all Servicing
Files, and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, including
the transfer of the Mortgage Loans and related documents, at the Servicer's
sole expense. The Servicer shall cooperate with the Owner and such successor
in effecting the termination of the Servicer's responsibilities and rights
hereunder, including the transfer to such successor for administration by it
of all cash amounts which shall at the time be credited by the Servicer to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.
By a written notice, the Owner may waive any default by the Servicer in
the performance of its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
(b) Termination Without Cause.
(i) This Agreement and the Servicer's rights hereunder with respect to
some or all of the Mortgage Loans shall terminate upon: (i) the later of (a)
the distribution of the final payment or liquidation proceeds on the last
Mortgage Loan to the Owner (or Servicing Advances by the Servicer for the
same), and (b) the disposition of all REO Property acquired upon foreclosure
of the last Mortgage Loan and the remittance of all funds due hereunder, or
(ii) mutual consent of the Servicer and the Owner in writing or (iii) at the
sole option of the Owner, without cause, upon thirty (30) days written notice,
subject to the limitations set forth below (provided that in the event that
the transfer of servicing to the successor servicer cannot be accomplished
within 30 days, such longer period as the parties hereto and the successor
servicer shall agree. Any such notice of termination shall be in writing and
delivered to the Servicer by registered mail to the address set forth at the
beginning of this Agreement. The Owner and the Servicer shall comply with the
termination procedures set forth in Sections 9.01 and 10.01.
(ii) In the event that either (i) the Owner retains ownership of the
Mortgage Loans and the Servicer is terminated without cause with respect to
some or all of the Mortgage Loans or (ii) some or all of the Mortgage Loans
are included in a Pass-Through Transfer or Whole Loan Transfer in which the
Servicer is not retained as "servicer," the Owner shall pay the Servicer the
Deboarding Fee and the Servicing Rights Repurchase Price for each affected
Mortgage Loan.
(iii) Upon ninety (90) days written notice to the Owner, the Servicer,
at its sole option, may cease to service any additional Mortgage Loans under
this Agreement. At such time, any Mortgage Loans then being serviced hereunder
would remain subject to the terms of this Agreement and would continue to be
serviced in accordance with the terms of this Agreement.
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22.
MISCELLANEOUS PROVISIONS
(a) Successor to the Servicer.
Simultaneously with the termination of the Servicer's responsibilities
and duties under this Agreement pursuant to Sections 6.02, 8.03, 9.01 or 9.02,
the Owner or its designee shall (i) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor and which shall succeed to all rights
and assume all of the responsibilities, duties and liabilities of the Servicer
under this Agreement simultaneously with the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement. In connection
with such appointment and assumption, the Owner may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree, provided, however, that no such compensation shall
be in excess of that permitted the Servicer under this Agreement without the
consent of the Owner. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 10.01
and shall in no event relieve the Servicer of the representations and
warranties made pursuant to Sections 6.01 and the remedies available to the
Owner under Section 6.02 and 7.04, it being understood and agreed that the
provisions of such Sections 6.01, 6.02 and 7.04 shall be applicable to the
Servicer notwithstanding any such resignation or termination of the Servicer,
or the termination of this Agreement.
Within thirty (30) days of the appointment of a successor entity by the
Owner, the Servicer shall prepare, execute and deliver to the successor entity
any and all documents and other instruments, place in such successor's
possession all Servicing Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including the transfer of the Mortgage Notes and related
documents. The Servicer shall cooperate with the Owner and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder and the transfer of servicing responsibilities to the successor
servicer, including the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Servicer to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Owner an instrument accepting such
appointment, wherein the successor shall make the representations and
warranties set forth in Section 6.01, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer, with like effect as if originally
named as a party to this
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Agreement. Any termination or resignation of the Servicer or termination of
this Agreement pursuant to Sections 6.02, 8.03, 9.01 or 9.02 shall not affect
any claims that the Owner may have against the Servicer arising out of the
Servicer's actions or failure to act prior to any such termination or
resignation.
The Servicer shall deliver promptly to the successor servicer the funds
in the Custodial Account and Escrow Account and all Mortgage Loan Documents
and related documents and statements held by it hereunder and the Servicer
shall account for all funds and shall execute and deliver such instruments and
do such other things as may reasonably be required to more fully and
definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer shall
notify by mail the Owner of such appointment in accordance with the procedures
set forth in Section 10.04.
(b) Costs.
The Owner shall pay any commissions due its salesmen and the legal fees
and expenses of its attorneys. Costs and expenses incurred in connection with
the transfer of the servicing responsibilities (other than in connection with
a termination of the Servicer for cause), including fees for delivering
Servicing Files, shall be paid by the Owner. The Owner shall pay the costs
associated with the preparation, delivery, recording and tracking of
Assignments of Mortgages required on each Reconstitution Date or individual
assignments required in connection with loans that payoff or go into
foreclosure. The Owner shall reimburse the Servicer for the reasonable and
customary third party, out-of-pocket professional fees incurred by the
Servicer in connection with entering into any Reconstitution Agreements.
(c) Protection of Confidential Information.
The Servicer shall keep confidential and shall not divulge to any party,
without the Owner's prior written consent, the purchase price paid by the
Owner for the Mortgage Loans and any information pertaining to the Mortgage
Loans or any Mortgagor thereunder, except to the extent that it is appropriate
for the Servicer to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies.
(d) Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed by overnight courier,
addressed as follows (or such other address as may hereafter be furnished to
the other party by like notice):
(i) if to the Owner:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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(ii) if to the Servicer:
JPMorgan Chase Bank, National Association
c/o Chase Home Finance LLC ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Dunks Telecopy:
▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
JPMorgan Chase Bank, National Association
c/o Chase Home Finance LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee.
(e) Severability Clause.
Any part, provision, representation or warranty of this Agreement that
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 that 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.
(f) No Solicitation.
Servicer and Owner agree that each will not take any action or permit or
cause any action to be taken by any of their agents and affiliates, or by any
independent contractors or independent mortgage brokerage companies on their
behalf, to personally, by telephone, mail or electronic mail, specifically
target through direct solicitations, the Mortgagors under the Mortgage Loans
for the purpose of refinancing such Mortgage Loans; provided, however, that
Servicer may solicit any Mortgagor for whom the Servicer has become aware of
or received a request for payoff, or a written or verbal communication from
Mortgagor or his/her agent
-51-
indicating a desire to prepay the related Mortgage Loan provided further that,
it is understood and agreed that promotions undertaken by the Servicer or any
of its affiliates which (i) concern optional insurance products (excluding
single premium insurance) or other financial products or services (excluding
any mortgage related products such as HELOCs and second mortgage products), or
(ii) are directed to the general public at large or certain segments thereof
exclusive of the Mortgagors as a targeted group and, including mass mailings
based on commercially acquired mailing lists, newspaper, radio and television
advertisements shall not constitute solicitation under this Section, nor is
the Servicer prohibited from responding to unsolicited requests or inquiries
made by a Mortgagor or his/her agent.
(g) 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.
(h) Place of Delivery and Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Owner in the State of New York and
shall be deemed to have been made in the 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.
(i) Further Agreements.
The Owner and the Servicer each agree to execute and deliver to the
other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
(j) Intention of the Parties.
It is the intention of the parties that the Owner is conveying, and the
Servicer is receiving only a contract for servicing the Mortgage Loans.
Accordingly, the parties hereby acknowledge that the Owner remains the sole
and absolute owner of the Mortgage Loans and all rights related thereto.
(k) Successors and Assigns; Assignment of Comprehensive Amended and
Restated Servicing Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable
by the Servicer and the Owner and the respective successors and assigns of the
Servicer and the Owner. This Agreement shall not be assigned, pledged or
hypothecated by the Servicer to a third party without the prior written
consent of the Owner, which consent shall be given at the sole discretion of
the Owner. In connection with a servicing retained sale of the Mortgage Loans,
this
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Agreement may be assigned by the Owner only to an entity acceptable to
the Servicer, in the Servicer's sole discretion.
Notwithstanding anything set forth in this Section 10.11, the Owner may
with the consent of the Servicer (such consent not to be unreasonably
withheld), assign to a purchaser of some or all of the Mortgage Loans, the
Owner's rights and remedies set forth in this Agreement with respect to the
representations and warranties of the Servicer and the servicing of such
Mortgage Loans by the Servicer prior to such assignment.
(l) 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.
(m) Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
(n) General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(ii) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(iii) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(iv) a reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which
the reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(v) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and
(vi) the words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation".
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(o) Reproduction of Documents.
This Agreement and all documents relating thereto, including (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.
-54-
IN WITNESS WHEREOF, the Servicer and the Owner have caused their names
to be signed hereto by their respective officers thereunto duly authorized as
of the date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
(Owner)
By: ___________________________________
Name:______________________________
Title:_____________________________
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
(Servicer)
By: ___________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
CUSTODIAL ACCOUNT LETTER AGREEMENT
-------------- ---, ----
To: ________________________________
________________________________
________________________________
(the "Depository")
As servicer under the Comprehensive Amended and Restated Servicing
Agreement, dated as of September 1, 2005 (the "Agreement"), we hereby
authorize and request you to establish an account, as a Custodial Account
pursuant to Section 3.03 of the Agreement, to be designated as "Chase Home
Finance LLC as subservicer for JPMorgan Chase Bank, National Association in
trust for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company. All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Servicer. You may
refuse any deposit that would result in violation of the requirement that the
account be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to us.
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
By: ___________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
A-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The account at any time will be one insured by
the Federal Deposit Insurance Corporation through the Bank Insurance Fund
("BIF") or the Savings Association Insurance Fund ("SAIF").
_________________________________________
Depository
By: ___________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
A-2
C-2
NY1 5774919v.1
EXHIBIT C
FORM OF POWER OF ATTORNEY
Record and Return to:
Paid Accounts Dept. #410
JPMorgan Chase Bank, National Association
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
LIMITED POWER OF ATTORNEY
This Limited Power of Attorney is made as of _____________ by ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Company, having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇ (Owner"), in favor of JPMorgan Chase Bank, National Association, a New
Jersey corporation, having an office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ("Servicer").
WHEREAS, Owner and Servicer have executed and delivered a certain
Loan Comprehensive Amended and Restated Servicing Agreement dated as of
September 1, 2005 (the "Servicing Agreement"), pursuant to which Owner and
Servicer agreed to certain terms governing the servicing of single family
mortgage loans ("Mortgage Loans") by Servicer on behalf of Owner; and
WHEREAS, Owner and Servicer desire that Owner execute and deliver
this Limited Power of Attorney in order to facilitate the servicing of the
Mortgage Loans by Servicer; and
NOW THEREFORE, Owner does hereby appoint, subject to and in
accordance with the Servicing Agreement, Servicer, as its attorney-in-fact, in
its name, place and stead:
1) To execute all documents necessary to satisfy or discharge "Security
Instruments" and "Notes" (as defined in the Servicing Agreement) upon
receipt of all principal, interest and other payments called for in the
related lien documents;
2) To take such actions as are necessary and appropriate to pursue,
prosecute and defend foreclosures (or other comparable conversions to
ownership), ejectments, evictions, bankruptcies, suits and other
related matters with respect to "Mortgaged Properties" (as defined in
the Servicing Agreement), in accordance with Servicing Agreement;
3) To execute all deeds, deeds to secure debt, assignments, transfers,
tax declarations, certificates, pledges and any other documents or
instruments whatsoever which are necessary, appropriate, or required
in order to transfer and assign Mortgaged Properties acquired by
Owner either by foreclosure or by deed in lieu of foreclosure and any
such deed to be without recourse;
C-1
4) To endorse checks, notes, drafts and other evidences of payment made
payable to the Owner, representing payments on accounts in the name of
the Owner.
5) To execute subordination agreements affecting the lien priority of
the Security Instruments.
6) To take such further actions as are deemed necessary or desirable to
service, administer, and enforce the terms of said Mortgage Loans in
accordance with the Servicing Agreement; and
Until a properly executed revocation of this Limited Power of
Attorney is duly executed and delivered, all parties dealing with said
attorney-in-fact (individually or collectively) in connection with the above
described matters may fully rely upon the power and authority of said
attorney-in-fact to act for and on behalf of the undersigned, and in its name,
place and stead, and may accept and rely on all documents and agreements
entered into by said attorney-in-fact pursuant to the powers listed herein.
As between Owner and Servicer, this Limited Power of Attorney shall
be effective as ______________ and shall remain in full force and effect
thereafter until a written notice of revocation hereof shall have been
executed by Owner. The expiration or revocation of the period of agency
hereunder shall in no wise affect the validity of any actions of said
Attorney-In-Fact during said period. This Limited Power of Attorney is not
intended to modify or expand the rights and obligations of Servicer as set
forth in the Servicing Agreement.
Nothing in this Limited Power of Attorney shall be construed to
prevent Owner from acting on its behalf as the owner of the Mortgage Loans.
IN WITNESS WHEREOF, Owner has caused this Limited Power of Attorney
to be signed and executed as its seal hereto affixed in its name by its proper
officer thereunto duly authorized on the ______ day of _________________,
200__.
_________________________________
___________________________ By: ___________________________
Witness
Name: ___________________________
Title: __________________________
State of [________________________]:
County of [_______________________]:
On this, the _____ day of _____________, 200__, before me, a Notary Public in
and for said County and State, personally appeared, ______________________,
personally known to me (or proved on the basis of satisfactory evidence) to be
the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal
______________________________
Notary Signature
C-2
My Commission Expires on ______________________
C-3
EXHIBIT D
ANNUAL CERTIFICATION
A. [_______________] (the "Trust"), Mortgage Pass-Through Certificates,
Series [_____], issued pursuant to the [the Trust Agreement] [the
Pooling and Servicing Agreement] [the Servicing Agreement], dated as of
[_____], 200[__] (the [the Trust Agreement] [the Pooling and Servicing
Agreement][the Servicing Agreement], among [_____], as depositor (the
"Depositor"), [_____], as trustee (the "Trustee"), [_____], as master
servicer (the "Master Servicer") [_____], as a servicer (the
"Servicer"), and [_____], as responsible party
I, [identify the certifying individual], certify to the Depositor, the
Master Servicer and the Trustee, and their officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:
1. The servicing information required to be provided to the Trustee and
the Master Servicer by [_______] as a Servicer under [the Trust
Agreement] [the Pooling and Servicing Agreement] [the Servicing
Agreement] has been so provided;
2. I am responsible for reviewing the activities performed by [_______]
as a Servicer under [the Trust Agreement] [the Pooling and Servicing
Agreement] [the Servicing Agreement] and based upon my knowledge and the
annual compliance review required under [the Trust Agreement] [the
Pooling and Servicing Agreement] [the Servicing Agreement], and except
as disclosed in the annual compliance statement required to be delivered
to the Trustee and the Master Servicer in accordance with the terms of
[the Trust Agreement] [the Pooling and Servicing Agreement] [the
Servicing Agreement] (which has been so delivered to the Trustee and the
Master Servicer), [_________] as a Servicer has fulfilled its
obligations under [the Trust Agreement] [the Pooling and Servicing
Agreement] [the Servicing Agreement]; and
3. [If the Securitization Transfer occurs in 2005] All significant
deficiencies relating to the Servicer's compliance with the minimum
servicing standards for purposes of the report provided by an
independent public accountant, after conducting a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar procedure, as set forth in [the Trust Agreement] [the
Pooling and Servicing Agreement] [the Servicing Agreement], have been
disclosed to such accountant and the Master Servicer and are included in
such report; and
4. [If the Securitization Transfer occurs in 2006 or thereafter.] The
report on assessment of compliance with Servicing Criteria and its
related accountant's attestation report required to be delivered by us
under the [the Trust Agreement]
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[the Pooling and Servicing Agreement] [the Servicing Agreement] have
been delivered to the Trustee and the Master Servicer and complied with
the requirements thereunder and any material instance of non-compliance
with the Servicing Criteria has been disclosed on such reports.
Capitalized terms used but not defined herein shall have the
meanings assigned in [the Trust Agreement] [the Pooling and Servicing
Agreement] [the Servicing Agreement].
Date: _________________________
_______________________________
[Signature]
[Title]
D-2