EMC MORTGAGE CORPORATION Purchaser and WELLS FARGO BANK, N.A. Company
EMC
MORTGAGE CORPORATION
Purchaser
and
▇▇▇▇▇
FARGO BANK, N.A.
Company
AMENDED
AND RESTATED MASTER
SELLER'S
WARRANTIES AND SERVICING AGREEMENT
Dated
as of November 1, 2005
Fixed
Rate and Adjustable Rate Mortgage Loans
TABLE
OF CONTENTS
ARTICLE
I
DEFINITIONS
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL
AGREEMENT; DELIVERY OF DOCUMENTS
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
ARTICLE
V
PAYMENTS
TO PURCHASER
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
ARTICLE
VII
COMPANY
TO COOPERATE
ARTICLE
VIII
THE
COMPANY
ARTICLE
IX
SECURITIZATION
TRANSACTIONS; WHOLE LOAN TRANSFERS AND AGENCY TRANSFERS
ARTICLE
X
DEFAULT
ARTICLE
XI
TERMINATION
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
EXHIBITS
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Exhibit
A
|
Form
of Assignment and Conveyance
|
|
|
Agreement
|
||
|
Exhibit
B
|
Custodial
Agreement
|
|
|
Exhibit
C
|
Contents
of Each Retained Mortgage File,
|
|
|
Servicing
File and Custodial Mortgage File
|
||
|
Exhibit
D
|
Servicing
Criteria
|
|
|
Exhibit
E
|
Form
of Sarbanes Certification
|
|
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Exhibit
F
|
Form
of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Back-Up
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|
|
Certification
|
||
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Exhibit
G
|
Form
of Assignment, Assumption and
|
|
|
Recognition
Agreement
|
||
|
Exhibit
H
|
Electronic
Data File
|
This
is
an Amended and Restated Master Seller's Warranties and Servicing Agreement
for
residential first mortgage loans, dated and effective as of November 1, 2005,
and is executed between EMC Mortgage Corporation, as purchaser (the
"Purchaser"), and ▇▇▇▇▇ Fargo Bank, N.A., as seller and servicer (the
"Company").
W I T N E S S E T H
WHEREAS,
the Purchaser has agreed to purchase from the Company and the Company has agreed
to sell to the Purchaser from time to time (each a “Transaction”) certain
residential Mortgage Loans which shall be delivered as whole loans (each a
“Loan
Package”) on various dates (each a “Closing Date”) as provided for in certain
Assignment and Conveyance Agreements by and between the Purchaser and the
Company as executed from time to time; and
WHEREAS,
each of the Mortgage Loans is secured by a mortgage, deed of trust or other
security instrument creating a first lien on a residential dwelling located
in
the jurisdiction indicated on the related Mortgage Loan Schedule; and
WHEREAS,
the Purchaser and the Company wish to prescribe the manner of purchase of the
Mortgage Loans and the conveyance, servicing and control of the Mortgage
Loans.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Purchaser and the Company agree as
follows:
ARTICLE
I
DEFINITIONS
Whenever
used herein, the following words and phrases, unless the content otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type
as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property
is
located.
Adjustment
Date:
As to
each adjustable rate Mortgage Loan, the date on which the Mortgage Interest
Rate
is adjusted in accordance with the terms of the related Mortgage Note and
Mortgage.
Agency/Agencies:
▇▇▇▇▇▇
Mae, ▇▇▇▇▇▇▇ Mac or GNMA, or any of them as applicable.
Agency
Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to an
Agency which sale or transfer is not a Securitization Transaction or Whole
Loan
Transfer.
Agreement:
This
Amended and Restated Master Seller's Warranties and Servicing Agreement and
all
amendments hereof and supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraised
Value:
With
respect to any Mortgage Loan, the lesser of (i) the value set forth on the
appraisal made in connection with the origination of the related Mortgage Loan
as the value of the related Mortgaged Property, or (ii) the purchase price
paid
for the Mortgaged Property, provided, however, in the case of a refinanced
Mortgage Loan, such value shall be based solely on the appraisal made in
connection with the origination of such Mortgage Loan.
Assignment
and Conveyance Agreement: With
respect to each Transaction, the agreement between the Purchaser and the Company
conveying to the Purchaser all the right, title and interest of the Company
in
and to the related Mortgage Loans listed on the related Mortgage Loan Schedule,
a form of which is attached hereto as Exhibit A.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the sale of the Mortgage to
the
Purchaser or if the related Mortgage has been recorded in the name of MERS
or
its designee, such actions as are necessary to cause the Purchaser to be shown
as the owner of the related Mortgage on the records of MERS for purposes of
the
system of recording transfers of beneficial ownership of mortgages maintained
by
MERS, including assignment of the MIN Number which will appear either on the
Mortgage or the Assignment of Mortgage to MERS.
Assignment
of Mortgage Note and Pledge Agreement:
With
respect to a Cooperative Loan, an assignment of the Mortgage Note and Pledge
Agreement.
Assignment
of Proprietary Lease:
With
respect to a Cooperative Loan, an assignment of the Proprietary Lease sufficient
under the laws of the jurisdiction wherein the related Cooperative Apartment
is
located to effect the assignment of such Proprietary Lease.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the states where the parties are located or are
authorized or obligated by law or executive order to be closed.
Buydown
Agreement:
An
agreement between the Company and a Mortgagor, or an agreement among the
Company, a Mortgagor and a seller of a Mortgaged Property or a third party
with
respect to a Mortgage Loan which provides for the application of Buydown
Funds.
Buydown
Funds:
In
respect of any Buydown Mortgage Loan, any amount contributed by the seller
of a
Mortgaged Property subject to a Buydown Mortgage Loan, the buyer of such
property, the Company or any other source, plus interest earned thereon, in
order to enable the Mortgagor to reduce the payments required to be made from
the Mortgagor’s funds in the early years of a Mortgage Loan.
Buydown
Mortgage Loan:
Any
Mortgage Loan in respect of which, pursuant to a Buydown Agreement, (i) the
Mortgagor pays less than the full Monthly Payments specified in the Mortgage
Note for a specified period, and (ii) the difference between the payments
required under such Buydown Agreement and the Mortgage Note is provided from
Buydown Funds.
Buydown
Period:
The
period of time when a Buydown Agreement is in effect with respect to a related
Buydown Mortgage Loan.
Closing
Date:
The
date or dates, set forth in the related Commitment Letter, on which from time
to
time the Purchaser shall purchase and the Company shall sell the Mortgage Loans
listed on the related Mortgage Loan Schedule for each Transaction.
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to time or any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Commission:
The
United States Securities and Exchange Commission.
Commitment
Letter:
The
commitment letter executed in relation to each Transaction that sets forth,
among other things, the Purchase Price for the related Mortgage
Loans.
Company:
▇▇▇▇▇
Fargo Bank, N.A., or its successor in interest or assigns, or any successor
to
the Company under this Agreement appointed as herein provided.
Company
Information:
As
defined in Section 9.01(f)(i)(A).
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.
Cooperative:
The
entity that holds title (fee or an acceptable leasehold estate) to all of the
real property that the Project comprises, including the land, separate dwelling
units and all common areas.
Cooperative
Apartment:
The
specific dwelling unit relating to a Cooperative Loan.
Cooperative
Lien Search:
A
search for (a) federal tax liens, mechanics’ liens, lis
pendens,
judgments of record or otherwise against (i) the Cooperative, (ii) the seller
of
the Cooperative Apartment and (iii) the Company if the Cooperative Loan is
a
refinanced Mortgage Loan, (b) filings of financing statements and (c) the deed
of the Project into the Cooperative.
Cooperative
Loan:
A
Mortgage Loan that is secured by Cooperative Shares and a Proprietary Lease
granting exclusive rights to occupy the related Cooperative
Apartment.
Cooperative
Shares:
The
shares of stock issued by a Cooperative, owned by the Mortgagor, and allocated
to a Cooperative Apartment.
Covered
Loan:
A
Mortgage Loan categorized as “Covered” pursuant to the Standard & Poor’s
Glossary for File Format for LEVELS® Version 5.6, Appendix E, as revised from
time to time and in effect on each related Closing Date.
Custodial
Account:
The
separate account or accounts created and maintained pursuant to Section
4.04.
Custodial
Agreement:
The
agreement governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other Mortgage Loan Documents, a form
of
which is annexed hereto as Exhibit B.
Custodial
Mortgage File:
The
items referred to as items (1), (2), (4), (5) and (10) in Exhibit C annexed
hereto to be delivered by the Company to the Custodian on the related Closing
Date with respect to a particular Mortgage Loan, and any additional documents
required to be added to the Custodial Mortgage File and delivered to the
custodian pursuant to this Agreement.
Custodian:
The
custodian under the Custodial Agreement, or its successor in interest or
assigns, or any successor to the Custodian under the Custodial Agreement as
provided therein.
Cut-off
Date:
With
respect to each Transaction, the first day of the month in which the related
Closing Date occurs.
Deleted
Mortgage Loan:
A
Mortgage Loan which is repurchased by the Company in accordance with the terms
of this Agreement and which is, in the case of a substitution pursuant to
Section 3.03, replaced or to be replaced with a Qualified Substitute Mortgage
Loan.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date:
The
Business Day immediately preceding the related Remittance Date.
Due
Date:
The
first day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace.
Due
Period:
With
respect to each Remittance Date, the period commencing on the second day of
the
month preceding the month of the Remittance Date and ending in the first day
of
the month of the Remittance Date.
Electronic
Data File:
The
final electronic file of the Mortgage Loans, in relation to each Transaction,
provided by Company to the Purchaser on or before the related Closing
Date.
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Company pursuant
to Section 4.12.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section 4.06.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other related document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in Section 10.01.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇
▇▇▇:
The
Federal National Mortgage Association or any successor thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity
Bond:
A
fidelity bond to be maintained by the Company pursuant to Section
4.12.
▇▇▇▇▇▇▇
Mac:
The
Federal Home Loan Mortgage Corporation or any successor thereto.
Gross
Margin:
With
respect to each adjustable rate Mortgage Loan, the fixed percentage amount
set
forth in the related Mortgage Note which is added to the Index in order to
determine the related Interest Rate, as set forth in the Mortgage Loan
Schedule.
High
Cost Loan:
A
Mortgage Loan classified as (a) a “high cost” loan under the Home Ownership and
Equity Protection Act of 1994, (b) a “high cost home,” “threshold,” “covered,”
“high risk home,” “predatory” or similar loan under any other applicable state,
federal or local law or (c) a Mortgage Loan categorized as “High Cost” pursuant
to the Standard & Poor’s Glossary for File Format for LEVELS® Version 5.6,
Appendix E, as revised from time to time and in effect on each related Closing
Date.
Home
Loan:
A
Mortgage Loan categorized as “Home Loan” pursuant to the Standard & Poor’s
Glossary for File Format for LEVELS® Version 5.6, Appendix E, as revised from
time to time and in effect on each related Closing Date.
Incremental
Interest:
As to
any Incremental Rate Mortgage Loan, the amount of interest accrued on such
Mortgage Loan attributable to the Incremental Rate; provided, however, that
with
respect to any payment of interest received in respect of such a Mortgage Loan
(whether paid by the Mortgagor or received as Liquidation Proceeds or otherwise)
which is less than the full amount of interest then due with respect to such
Mortgage Loan, only that portion of such payment of interest that bears the
same
relationship to the total amount of such payment of interest as the Incremental
Rate, if any, in respect of such Mortgage Loan bears to the Mortgage Interest
Rate shall be allocated to the Incremental Interest with respect
thereto.
Incremental
Rate:
For an
Incremental Rate Mortgage Loan, the per annum increase to the initial Mortgage
Interest Rate set forth in the addendum to the related Mortgage Note, which
increase takes effect upon the occurrence of certain specified conditions prior
to the first Adjustment Date and remains in effect until the first Adjustment
Date.
Incremental
Rate Mortgage Loan:
A
Mortgage Loan for which the related Mortgage Note includes an addendum that
allows for an increase to the initial Mortgage Interest Rate upon the occurrence
of certain specified conditions.
Index:
With
respect to any adjustable rate Mortgage Loan, the index identified on the
Mortgage Loan Schedule and set forth in the related Mortgage Note for the
purpose of calculating the interest thereon.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Interest
Only Mortgage Loan:
A
Mortgage Loan for which an interest-only payment feature is allowed during
the
interest-only period set forth in the related Mortgage Note.
Lender
Paid Mortgage Insurance Policy or LPMI Policy:
A PMI
Policy for which the Company pays all premiums from its own funds, without
reimbursement therefor.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, or the sale of the related Mortgaged Property
if
the Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
Loan-to-Value
Ratio or LTV:
With
respect to any Mortgage Loan, the ratio of the original loan amount of the
Mortgage Loan at its origination (unless otherwise indicated) to the Appraised
Value of the Mortgaged Property.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or
any
successor in interest thereto.
MERS
Mortgage Loan:
Any
Mortgage Loan registered with MERS on the MERS System
MERS
System:
The
system of recording transfers of mortgages electronically maintained by
MERS.
MIN:
Mortgage Identification Number used to identify mortgage loans registered under
MERS.
Monthly
Advance:
The
portion of each Monthly Payment that is delinquent with respect to each Mortgage
Loan at the close of business on the Determination Date, required to be advanced
by the Company pursuant to Section 5.03 on the Business Day immediately
preceding the Remittance Date of the related month.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage Loan or in
the
case of an Interest Only Mortgage Loan, payments of (i) interest, or (ii)
principal and interest, if applicable, on a Mortgage Loan.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first lien on an unsubordinated estate in fee simple in real property
securing the Mortgage Note or the Pledge Agreement securing the Mortgage Note
for a Cooperative Loan.
Mortgage
Impairment Insurance Policy:
A
mortgage impairment or blanket hazard insurance policy as described in Section
4.11.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note in accordance with the
provisions of the Mortgage Note.
Mortgage
Loan:
An
individual mortgage loan which is the subject of this Agreement, each Mortgage
Loan originally sold and subject to this Agreement being identified on the
Mortgage Loan Schedule, which Mortgage Loan includes without limitation the
Retained Mortgage File, the Custodial Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds
and
obligations arising from or in connection with such Mortgage Loan.
Mortgage
Loan Documents:
With
respect to a Mortgage Loan, the original related Mortgage Note with applicable
addenda and riders, the original related Security Instrument and the originals
of any required addenda and riders, the original related Assignment and any
original intervening related Assignments, the original related title insurance
policy and evidence of the related PMI Policy, if any.
Mortgage
Loan Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to the
Purchaser, which shall be equal to the Mortgage Interest Rate minus the
Servicing Fee Rate.
Mortgage
Loan Schedule:
With
respect to each Transaction, a schedule of Mortgage Loans, which shall be
attached to the related Assignment and Conveyance Agreement, setting forth
the
following information with respect to each Mortgage Loan: (1) the Company’s
Mortgage Loan number; (2) the city state and zip code of the Mortgaged Property;
(3) a code indicating whether the Mortgaged Property is a single family
residence, two-family residence, three-family residence, four-family residence,
a Cooperative Loan, planned unit development or condominium; (4) the current
Mortgage Interest Rate; (5) the current net Mortgage Interest Rate; (6) the
current Monthly Payment; (7) the Gross Margin; (8) the original term to
maturity; (9) the scheduled maturity date; (10) the principal balance of the
Mortgage Loan as of the related Cut-off Date after deduction of payments of
principal due on or before the related Cut-off Date whether or not collected;
(11) the Loan-to-Value; (12) the next Adjustment Date; (13) the lifetime
Mortgage Interest Rate cap; (14) whether the Mortgage Loan is convertible or
not; (15) a code indicating the mortgage guaranty insurance company; (16) a
code
indicating whether the Mortgage Loan contains pledged assets; (17) a code
indicating whether the Mortgage Loan has balloon payments; (18) a code
indicating whether the Mortgage Loan is an Interest Only Mortgage Loan;
(16)
a
field indicating whether the Mortgage Loan is a Home Loan; and
(17)
the Servicing Fee.
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
real property securing repayment of the debt evidenced by a Mortgage Note,
or
with respect to a Cooperative Loan, the Cooperative Apartment.
Mortgagor:
The
obligor on a Mortgage Note.
Officer's
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or the President or a Vice President or an Assistant Vice President and
certified by the Treasurer or the Secretary or one of the Assistant Treasurers
or Assistant Secretaries of the Company, and delivered to the Purchaser as
required by this Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Company, reasonably
acceptable to the Purchaser.
Periodic
Interest Rate Cap:
As to
each adjustable rate Mortgage Loan, the maximum increase or decrease in the
Mortgage Interest Rate on any Adjustment Date pursuant to the terms of the
Mortgage Note.
Person:
Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
Pledge
Agreement:
With
respect to a Cooperative Loan, the specific agreement creating a first lien
on
and pledge of the Cooperative Shares and the appurtenant Proprietary
Lease.
Pledge
Instruments:
With
respect to a Cooperative Loan, the Stock Power, the Assignment of the
Proprietary Lease and the Assignment of the Mortgage Note and Pledge
Agreement.
PMI
Policy:
A
policy of primary mortgage guaranty insurance evidenced by an electronic form
and certificate number issued by a Qualified Insurer, as required by this
Agreement with respect to certain Mortgage Loans.
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as the
average rate in The
Wall Street Journal.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, including any prepayment penalty or premium
thereon and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment.
Principal
Prepayment Period:
The
month preceding the month in which the related Remittance Date
occurs.
Project:
With
respect to a Cooperative Loan, all real property owned by the related
Cooperative including the land, separate dwelling units and all common
areas.
Proprietary
Lease:
With
respect to a Cooperative Loan, a lease on a Cooperative Apartment evidencing
the
possessory interest of the Mortgagor in such Cooperative Apartment.
Purchaser:
EMC
Mortgage Corporation, or its successor in interest or any successor to the
Purchaser under this Agreement as herein provided.
Purchase
Price:
The
purchase price for each Loan Package shall be as stated in the related
Commitment Letter.
Qualified
Correspondent:
Any
Person from which the Company purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Company and such Person that contemplated
that such person would underwrite mortgage loans from time to time, for sale
to
the Company, in accordance with underwriting guidelines designated by the
Company (“Designated Guidelines”) or guidelines that do not vary materially from
such Designated Guidelines; (ii) such Mortgage Loans were in fact underwritten
as described in clause (i) above and were acquired by the Company within 180
days after origination; (iii) either (x) the Designated Guidelines were, at
the
time such Mortgage Loans were originated, used by the Company in origination
of
mortgage loans of the same type as the Mortgage Loans for the Company’s own
account or (y) the Designated Guidelines were, at the time such Mortgage Loans
were underwritten, designated by the Company on a consistent basis for use
by
lenders in originating mortgage loans to be purchased by the Company; and (iv)
the Company employed, at the time such Mortgage Loans were acquired by the
Company, pre-purchased or post-purchased quality assurance procedures (which
may
involve, among other things, review of a sample or mortgage loans purchased
during a particular time period or through particular channels) designed to
ensure that Persons from which it purchased mortgage loans properly applied
the
underwriting criteria designated by the Company.
Qualified
Depository:
A
deposit account or accounts maintained with a federal or state chartered
depository institution the deposits in which are insured by the FDIC to the
applicable limits and the short-term unsecured debt obligations of which (or,
in
the case of a depository institution that is a subsidiary of a holding company,
the short-term unsecured debt obligations of such holding company) are rated
A-1
by Standard & Poor’s Ratings Group or Prime-1 by ▇▇▇▇▇’▇ Investors Service,
Inc. (or a comparable rating if another rating agency is specified by the
Purchaser by written notice to the Company) at the time any deposits are held
on
deposit therein.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business and approved as an
insurer by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by the Company for a Deleted Mortgage
Loan which must, on the date of such substitution, (i) have an outstanding
principal balance, after deduction of all scheduled payments due in the month
of
substitution (or in the case of a substitution of more than one mortgage loan
for a Deleted Mortgage Loan, an aggregate principal balance), not in excess
of
the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage
Loan Remittance Rate not less than and not more than two percent (2%) greater
than the Mortgage Loan Remittance Rate of the Deleted Mortgage Loan; (iii)
have
a remaining term to maturity not greater than and not more than one year less
than that of the Deleted Mortgage Loan; (iv) be of the same type as the Deleted
Mortgage Loan and (v) comply with each representation and warranty set forth
in
Sections 3.01 and 3.02.
Rating
Agency/Agencies:
Any
nationally recognized statistical Rating Agency, or its successors, including
Standard & Poor’s, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, ▇▇▇▇▇’▇
Investors Service, Inc. and Fitch Ratings.
Recognition
Agreement:
An
agreement whereby a Cooperative and a lender with respect to a Cooperative
Loan
(i) acknowledge that such lender may make, or intends to make, such Cooperative
Loan, and (ii) make certain agreements with respect to such Cooperative
Loan.
Reconstitution:
Any
Securitization Transaction or Whole Loan Transfer.
Reconstitution
Agreement:
The
agreement or agreements entered into by the Company and the Purchaser and/or
certain third parties on the Reconstitution Date or Dates with respect to any
or
all of the Mortgage Loans serviced hereunder, in connection with a Whole Loan
Transfer or Securitization Transaction.
Reconstitution
Date:
The
date on which any or all of the Mortgage Loans serviced under this Agreement
may
be removed from this Agreement and reconstituted as part of a Securitization
Transaction, Agency Transfer or Whole Loan Transfer pursuant to Section 9.01
hereof. The Reconstitution Date shall be such date as the Purchaser shall
designate.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
REMIC:
A "real
estate mortgage investment conduit" within the meaning of Section 860D of the
Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the Code,
and related provisions, regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
Remittance
Date:
The
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately following) of any month.
REO
Disposition:
The
final sale by the Company of any REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to Section
4.16.
REO
Property:
A
Mortgaged Property acquired by the Company on behalf of the Purchaser through
foreclosure or by deed in lieu of foreclosure, as described in Section
4.16.
Repurchase
Price:
Unless
agreed otherwise by the Purchaser and the Company, a price equal to (i) the
Stated Principal Balance of the Mortgage Loan plus (ii) interest on such Stated
Principal Balance at the Mortgage Loan Remittance Rate from the date on which
interest has last been paid and distributed to the Purchaser through the last
day of the month in which such repurchase takes place, less amounts received
or
advanced in respect of such repurchased Mortgage Loan which are being held
in
the Custodial Account for distribution in the month of repurchase.
Retained
Mortgage File:
The
items referred to as items (3), (6), (7), (8) and (9) in Exhibit C annexed
hereto with respect to a particular Mortgage Loan that are not required to
be
delivered to the Custodian pursuant to this Agreement, and any additional
documents required to be added to the Retained Mortgage File pursuant to this
Agreement.
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (a) a sale or other transfer of some or all of
the
Mortgage Loans directly or indirectly to an issuing entity in connection with
an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (b) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Servicer:
As
defined in Section 9.01(e)(iii).
Servicing
Advances:
All
customary, reasonable and necessary "out of pocket" costs and expenses other
than Monthly Advances (including reasonable attorney's fees and disbursements)
incurred in the performance by the Company of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration
and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of
any
REO Property and (d) compliance with the obligations under Section 4.08 and
4.10
(excluding the Company’s obligations to pay the premiums on LPMI
Policies).
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Purchaser shall
pay to the Company, which shall, for a period of one full month, be equal to
one-twelfth of the product of (a) the Servicing Fee Rate and (b) the outstanding
principal balance of such Mortgage Loan. Such fee shall be payable monthly,
computed on the basis of the same principal amount and period respecting which
any related interest payment on a Mortgage Loan is received. The obligation
of
the Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee
is
payable solely from, the interest portion (including recoveries with respect
to
interest from Liquidation Proceeds, to the extent permitted by Section 4.05)
of
such Monthly Payment collected by the Company, or as otherwise provided under
Section 4.05.
Servicing
Fee Rate:
The per
annum percentage for each Mortgage Loan, as stated in the Commitment
Letter.
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Company consisting
of
originals of all documents in the Retained Mortgage File which are not delivered
to the Custodian and copies of the Mortgage Loan Documents listed in the
Custodial Agreement the originals of which are delivered to the Custodian
pursuant to Section 2.03.
Servicing
Officer:
Any
officer of the Company involved in or responsible for the administration and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Company to the Purchaser upon request, as such list
may from time to time be amended.
Stated
Principal Balance:
As to
each Mortgage Loan, (i) the principal balance of the Mortgage Loan at the
related Cut-off Date after giving effect to payments of principal due on or
before such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal or advances in lieu thereof.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Stock
Certificate:
With
respect to a Cooperative Loan, a certificate evidencing ownership of the
Cooperative Shares issued by the Cooperative.
Stock
Power:
With
respect to a Cooperative Loan, an assignment of the Stock Certificate or an
assignment of the Cooperative Shares issued by the Cooperative.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Company or a
Subservicer.
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Company or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Company under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
Subsidy
Account:
An
account maintained by the Company specifically to hold all Subsidy Funds to
be
applied to individual Subsidy Loans.
Subsidy
Funds:
With
respect to any Subsidy Loans, funds contributed by the employer of a Mortgagor
in order to reduce the payments required from the Mortgagor for a specified
period in specified amounts.
Subsidy
Loan:
Any
Mortgage Loan subject to a temporary interest subsidy agreement pursuant to
which the monthly interest payments made by the related Mortgagor will be less
than the scheduled monthly interest payments on such Mortgage Loan, with the
resulting difference in interest payments being provided by the employer of
the
Mortgagor. Each Subsidy Loan will be identified as such in the related
Electronic Data File.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Company.
Time$aver®
Mortgage Loan:
A
Mortgage Loan which has been refinanced pursuant to a Company program that
allows a rate/term refinance of an existing Company serviced loan with minimal
documentation.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to a
third party, which sale or transfer is not a Securitization Transaction or
Agency Transfer.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL
AGREEMENT; DELIVERY OF DOCUMENTS
Section
2.01 Conveyance
of Mortgage Loans; Possession of Custodial Mortgage Files;
Maintenance
of Retained Mortgage Files and Servicing Files.
Pursuant
to an Assignment and Conveyance Agreement, on the related Closing Date, the
Company, simultaneously with the payment of the Purchase Price by the Purchaser,
shall thereby sell, transfer, assign, set over and convey to the Purchaser,
without recourse, but subject to the terms of this Agreement and the related
Assignment and Conveyance Agreement, all the right, title and interest of the
Company in and to the Mortgage Loans listed on the respective Mortgage Loan
Schedule annexed to such Assignment and Conveyance Agreement, together with
the
Retained Mortgage Files and Custodial Mortgage Files and all rights and
obligations arising under the documents contained therein. Pursuant to Section
2.03, the Company shall deliver the Custodial Mortgage File for each Mortgage
Loan comprising the related Loan Package to the Custodian.
The
contents of each Retained Mortgage File not delivered to the Custodian are
and
shall be held in trust by the Company for the benefit of the Purchaser as the
owner thereof. The Company shall maintain a Servicing File consisting of a
copy
of the contents of each Custodial Mortgage File and the originals of the
documents in each Retained Mortgage File not delivered to the Custodian. The
possession of each Retained Mortgage File and Servicing File by the Company
is
at the will of the Purchaser for the sole purpose of servicing the related
Mortgage Loan, and such retention and possession by the Company is in a
custodial capacity only. Upon the sale of the Mortgage Loans the ownership
of
each Mortgage Note, the related Mortgage and the related Custodial Mortgage
File
and Servicing File shall vest immediately in the Purchaser, and the ownership
of
all records and documents with respect to the related Mortgage Loan prepared
by
or which come into the possession of the Company shall vest immediately in
the
Purchaser and shall be retained and maintained by the Company, in trust, at
the
will of the Purchaser and only in such custodial capacity. The Company shall
release its custody of the contents of any Servicing File only in accordance
with written instructions from the Purchaser, unless such release is required
as
incidental to the Company's servicing of the Mortgage Loans or is in connection
with a repurchase of any Mortgage Loan pursuant to Section 3.03 or 6.02. All
such costs associated with the release, transfer and re-delivery to the Company
shall be the responsibility of the Purchaser other than any related recording
costs (especially in instances of breach).
In
addition, in connection with the assignment of any MERS Mortgage Loan, the
Company agrees that it will cause, the MERS® System to indicate that such
Mortgage Loans have been assigned by the Company to the Purchaser in accordance
with this Agreement by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
the information required by the MERS® System to identify the Purchaser as
beneficial owner of such Mortgage Loans.
Section
2.02 Books
and Records; Transfers of Mortgage Loans.
From
and
after the sale of the Mortgage Loans to the Purchaser in the related Loan
Package on each Closing Date, all rights arising out of such Mortgage Loans
including but not limited to all funds received on or in connection with such
Mortgage Loans, shall be received and held by the Company in trust for the
benefit of the Purchaser as owner of such Mortgage Loans, and the Company shall
retain record title to the related Mortgages for the sole purpose of
facilitating the servicing and the supervision of the servicing of such Mortgage
Loans.
The
sale
of each Mortgage Loan shall be reflected on the Company's balance sheet and
other financial statements as a sale of assets by the Company. The Company
shall
be responsible for maintaining, and shall maintain, a complete set of books
and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Company
shall maintain in its possession, available for inspection by the Purchaser,
or
its designee, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and eligibility
of any condominium project for approval by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and records
of periodic inspections as required by Section 4.13. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Company may be in the form
of
microfilm or microfiche or such other reliable means of recreating original
documents, including but not limited to, optical imagery techniques so long
as
the Company complies with the requirements of the ▇▇▇▇▇▇ Mae Selling and
Servicing Guide, as amended from time to time.
The
Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Purchaser or its designee the related Servicing
File during the time the Purchaser retains ownership of such Mortgage Loan
and
thereafter in accordance with applicable laws and regulations.
The
Company shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe, the Company shall note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made unless
such transfer is in compliance with the terms hereof. For the purposes of this
Agreement, the Company shall be under no obligation to deal with any Person
with
respect to this Agreement or the Mortgage Loans unless the books and records
show such Person as the owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans. The Purchaser also shall advise the Company of the transfer. Upon receipt
of notice of the transfer, the Company shall ▇▇▇▇ its books and records to
reflect the ownership of the Mortgage Loans of such assignee, and shall release
the previous Purchaser from its obligations hereunder with respect to the
Mortgage Loans sold or transferred. Such notification of a transfer shall
include a final loan schedule which shall be received by the Company no fewer
than five (5) Business Days before the last Business Day of the month. If such
notification is not received as specified above, the Company’s duties to remit
and report as required by Section 5 shall begin with the next Due
Period.
Section
2.03 Custodial
Agreement; Delivery of Documents.
On
each
Closing Date with respect to each Mortgage Loan comprising the related Loan
Package, the Company shall deliver and release to the Custodian the related
Custodial Mortgage File as set forth in Exhibit C attached hereto.
The
Custodian shall certify its receipt of any Mortgage Loan Documents actually
received on or prior to such Closing Date and as required to be delivered
pursuant to the Custodial Agreement, as evidenced by the Initial Certification
of the Custodian in the form annexed to the Custodial Agreement. The Purchaser
will be responsible for the fees and expenses of the Custodian.
Upon
the
Purchaser’s request, the Company shall deliver to Purchaser or its designee
within ten (10) days after such request such contents of the Retained Mortgage
file so requested. In the event that the company fails to deliver to the
Purchaser or its designee the requested contents of the Retained Mortgage File
within such ten-day period, and if the Company does not cure such failure within
five (5) days following receipt of written notification of such failure, the
Company shall repurchase each related Mortgage Loan at the price and in the
manner specified in Section 3.03.
The
Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one week of their
execution, provided, however, that the Company shall provide the Custodian
with
a certified true copy of any such document submitted for recordation within
ten
(10) days of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty days of its submission for recordation.
In
the
event the public recording office is delayed in returning any original document
which the Company is required to deliver at any time to the Custodian in
accordance with the terms of the Custodial Agreement or which the Company is
required to maintain in the related Retained Mortgage File, the Company shall
deliver to the Custodian or to the Retained Mortgage File, as applicable, within
240 days of its submission for recordation, a copy of such document and an
Officer's Certificate, which shall (i) identify the recorded document; (ii)
state that the recorded document has not been delivered to the Custodian due
solely to a delay by the public recording office, (iii) state the amount of
time
generally required by the applicable recording office to record and return
a
document submitted for recordation, and (iv) specify the date the applicable
recorded document will be delivered to the Custodian. The Company will be
required to deliver such document to the Custodian or to the Retained Mortgage
File, as applicable, by the date specified in (iv) above. An extension of the
date specified in (iv) above may be requested from the Purchaser, which consent
shall not be unreasonably withheld.
In
the
event that new, replacement, substitute or additional Stock Certificates are
issued with respect to existing Cooperative Shares, the Company immediately
shall deliver to the Custodian the new Stock Certificates, together with the
related Stock Powers in blank. Such new Stock Certificates shall be subject
to
the related Pledge Instruments and shall be subject to all of the terms,
covenants and conditions of this Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
Section
3.01 Company
Representations and Warranties.
The
Company hereby represents and warrants to the Purchaser that, as of the related
Closing Date:
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(a)
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Due
Organization and Authority.
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The
Company is a national banking association duly organized, validly
existing
and in good standing under the laws of the United States and has
all
licenses necessary to carry on its business as now being conducted
and is
licensed, qualified and in good standing in each state where a Mortgaged
Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted
by the
Company, and in any event the Company is in compliance with the laws
of
any such state to the extent necessary to ensure the enforceability
of the
related Mortgage Loan and the servicing of such Mortgage Loan in
accordance with the terms of this Agreement; the Company has the
full
power and authority to execute and deliver this Agreement and to
perform
in accordance herewith; the execution, delivery and performance of
this
Agreement (including all instruments of transfer to be delivered
pursuant
to this Agreement) by the Company and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Company;
and all requisite action has been taken by the Company to make this
Agreement valid and binding upon the Company in accordance with its
terms;
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(b)
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Ordinary
Course of Business.
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The
consummation of the transactions contemplated by this Agreement are
in the
ordinary course of business of the Company, who is in the business
of
selling and servicing loans, and the transfer, assignment and conveyance
of the Mortgage Notes and the Mortgages by the Company pursuant to
this
Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable
jurisdiction;
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(c)
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No
Conflicts.
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Neither
the execution and delivery of this Agreement, the acquisition of
the
Mortgage Loans by the Company, the sale of the Mortgage Loans to
the
Purchaser or the transactions contemplated hereby, nor the fulfillment
of
or compliance with the terms and conditions of this Agreement will
conflict with or result in a breach of any of the terms, articles
of
incorporation or by-laws or any legal restriction or any agreement
or
instrument to which the Company is now a party or by which it is
bound, or
constitute a default or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Company or its
property
is subject, or impair the ability of the Purchaser to realize on
the
Mortgage Loans, or impair the value of the Mortgage
Loans;
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(d)
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Ability
to Service.
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The
Company is an approved seller/servicer of conventional residential
mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with the facilities,
procedures, and experienced personnel necessary for the sound servicing
of
mortgage loans of the same type as the Mortgage Loans. The Company
is in
good standing to sell mortgage loans to and service mortgage loans
for
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and no event has occurred, including but
not
limited to a change in insurance coverage, which would make the Company
unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements
or which would require notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac;
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(e)
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Reasonable
Servicing Fee.
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The
Company acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the
entire
Servicing Fee shall be treated by the Company, for accounting and
tax
purposes, as compensation for the servicing and administration of
the
Mortgage Loans pursuant to this
Agreement;
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(f)
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Ability
to Perform.
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The
Company does not believe, nor does it have any reason or cause to
believe,
that it cannot perform each and every covenant contained in this
Agreement. The Company is solvent and the sale of the Mortgage Loans
will
not cause the Company to become insolvent. The sale of the Mortgage
Loans
is not undertaken to hinder, delay or defraud any of the Company's
creditors;
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(g)
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No
Litigation Pending.
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There
is no action, suit, proceeding or investigation pending or threatened
against the Company which, either in any one instance or in the aggregate,
may result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company, or in any
material impairment of the right or ability of the Company to carry
on its
business substantially as now conducted, or in any material liability
on
the part of the Company, or which would draw into question the validity
of
this Agreement or the Mortgage Loans or of any action taken or to
be
contemplated herein, or which would be likely to impair materially
the
ability of the Company to perform under the terms of this
Agreement;
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(h)
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No
Consent Required.
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No
consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance
by
the Company of or compliance by the Company with this Agreement or
the
sale of the Mortgage Loans as evidenced by the consummation of the
transactions contemplated by this Agreement, or if required, such
approval
has been obtained prior to the related Closing
Date;
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(i)
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Selection
Process.
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The
Mortgage Loans were selected from among either the outstanding fixed rate or
adjustable rate one- to four-family mortgage loans in the Company's mortgage
banking portfolio at the related Closing Date as to which the representations
and warranties set forth in Section 3.02 could be made and such selection was
not made in a manner so as to affect adversely the interests of the
Purchaser;
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(j)
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No
Untrue Information.
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Neither
this Agreement nor any statement, report or other document furnished
or to
be furnished pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of
fact or
omits to state a fact necessary to make the statements contained
therein
not misleading;
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(k)
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Sale
Treatment.
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The
Company has determined that the disposition of the Mortgage Loans
pursuant
to this Agreement will be afforded sale treatment for accounting
and tax
purposes;
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(l)
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No
Material Change.
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There
has been no material adverse change in the business, operations,
financial
condition or assets of the Company since the date of the Company’s most
recent financial statements;
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(m)
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No
Brokers’ Fees.
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The
Company has not dealt with any broker, investment banker, agent or
other
Person that may be entitled to any commission or compensation in
the
connection with the sale of the Mortgage Loans; and
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| (n) |
MERS.
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The
Company is a member of MERS in good standing.
Section
3.02 Representations
and Warranties Regarding Individual Mortgage Loans.
As
to
each Mortgage Loan, the Company hereby represents and warrants to the Purchaser
that as of the related Closing Date:
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(a)
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Mortgage
Loans as Described.
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The
information set forth in the respective Mortgage Loan Schedule and
the
information contained on the respective Electronic Data File delivered
to
the Purchaser is true and correct;
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(b)
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Payments
Current.
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All
payments required to be made up to the related Cut-off Date for the
Mortgage Loan under the terms of the Mortgage Note have been made
and
credited. No payment under any Mortgage Loan has been thirty (30)
days
delinquent more than one time within twelve (12) months prior to
the
related Closing Date;
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(c)
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No
Outstanding Charges.
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There
are no defaults in complying with the terms of the Mortgages, and
all
taxes, governmental assessments, insurance premiums, leasehold payments,
water, sewer and municipal charges, which previously became due and
owing
have been paid, or an escrow of funds has been established in an
amount
sufficient to pay for every such item which remains unpaid and which
has
been assessed but is not yet due and payable. The Seller has not
advanced
funds, or induced, solicited directly or indirectly, the payment
of any
amount required under the Mortgage Loan, except for interest accruing
from
the date of the Mortgage Note or date of disbursement of the Mortgage
Loan
proceeds, whichever is later, to the day which precedes by one month
the
Due Date of the first installment of principal and
interest;
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(d)
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Original
Terms Unmodified.
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The
terms of the Mortgage Note and Mortgage have not been impaired, waived,
altered or modified in any respect, except by a written instrument
which
has been recorded, if necessary to protect the interests of the Purchaser
and which has been delivered to the Custodian. The substance of any
such
waiver, alteration or modification has been approved by the issuer
of any
related PMI Policy and the title insurer, to the extent required
by the
policy, and its terms are reflected on the related Mortgage Loan
Schedule.
No Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement approved by the issuer of any related
PMI
Policy and the title insurer, to the extent required by the policy,
and
which assumption agreement was delivered to the Custodian pursuant
to the
terms of the Custodial Agreement;
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(e)
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No
Defenses.
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The
Mortgage Loan is not subject to any right of rescission, set-off,
counterclaim or defense, including without limitation the defense
of
usury, nor will the operation of any of the terms of the Mortgage
Note or
the Mortgage, or the exercise of any right thereunder, render either
the
Mortgage Note or the Mortgage unenforceable, in whole or in part,
or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such right
of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
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(f)
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No
Satisfaction of Mortgage.
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The
Mortgage has not been satisfied, canceled, subordinated or rescinded,
in
whole or in part, and the Mortgaged Property has not been released
from
the lien of the Mortgage, in whole or in part, nor has any instrument
been
executed that would effect any such release, cancellation, subordination
or rescission;
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(g)
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Validity
of Mortgage Documents.
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The
Mortgage Note and the Mortgage and related documents are genuine,
and each
is the legal, valid and binding obligation of the maker thereof
enforceable in accordance with its terms. All parties to the Mortgage
Note
and the Mortgage had legal capacity to enter into the Mortgage Loan
and to
execute and deliver the Mortgage Note and the Mortgage, and the Mortgage
Note and the Mortgage have been duly and properly executed by such
parties;
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With
respect to each Cooperative Loan, the Mortgage Note, the Mortgage, the Pledge
Agreement, and related documents are genuine, and each is the legal, valid
and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage, the Pledge Agreement,
the
Proprietary Lease, the Stock Power, Recognition Agreement and the Assignment
of
Proprietary Lease had legal capacity to enter into the Mortgage Loan and to
execute and deliver such documents, and such documents have been duly and
properly executed by such parties;
(h)
No
Fraud.
|
No
error, omission, misrepresentation, negligence, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the
part of
the Company, or the Mortgagor, or to the best of the Company’s knowledge,
any appraiser, any builder, or any developer, or any other party
involved
in the origination of the Mortgage Loan or in the application of
any
insurance in relation to such Mortgage
Loan;
|
|
(i)
|
Compliance
with Applicable Laws.
|
|
Any
and all requirements of any federal, state or local law including,
without
limitation, usury, truth-in-lending, real estate settlement procedures,
consumer credit and privacy protection, equal credit opportunity,
disclosure or predatory and abusive lending laws applicable to the
Mortgage Loan have been complied with, and the Company shall maintain
in
its possession, available for the Purchaser's inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance with
all such
requirements. All inspections, licenses and certificates required
to be
made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including
but not limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities;
|
|
(j)
|
Location
and Type of Mortgaged Property.
|
|
The
Mortgaged Property is located in the state identified in the related
Mortgage Loan Schedule and consists of a single, contiguous parcel
of real
property with a detached single family residence erected thereon,
or a
two- to four-family dwelling, or an individual condominium unit in
a
condominium project, or a Cooperative Apartment, or an individual
unit in
a planned unit development or a townhouse, provided, however, that
any
condominium project or planned unit development shall conform with
the
applicable ▇▇▇▇▇▇ Mae requirements, or the underwriting guidelines
of the
company, regarding such dwellings, and no residence or dwelling is
a
mobile home. As of the respective date of the appraisal for each
Mortgaged
Property, any Mortgaged Property being used for commercial purposes
conforms to the underwriting guidelines of the Company and, to the
best of
the Company’s knowledge, since the date of such appraisal, no portion of
the Mortgage Property has been used for commercial purposes outside
of the
underwriting guidelines of the
Company;
|
(k)
Valid
First Lien.
|
The
Mortgage is a valid, subsisting and enforceable first lien on the
Mortgaged Property, including all buildings on the Mortgaged Property
and
all installations and mechanical, electrical, plumbing, heating and
air
conditioning systems located in or annexed to such buildings, and
all
additions, alterations and replacements made at any time with respect
to
the foregoing. The lien of the Mortgage is subject only
to:
|
|
(1)
|
the
lien of current real property taxes and assessments not yet due and
payable;
|
|
(2)
|
covenants,
conditions and restrictions, rights of way, easements and other matters
of
the public record as of the date of recording acceptable to mortgage
lending institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of the
Mortgage Loan and (i) referred to or otherwise considered in the
appraisal
made for the originator of the Mortgage Loan and (ii) which do not
adversely affect the Appraised Value of the Mortgaged Property set
forth
in such appraisal; and
|
|
(3)
|
other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to
be
provided by the mortgage or the use, enjoyment, value or marketability
of
the related Mortgaged Property.
|
|
Any
security agreement, chattel mortgage or equivalent document related
to and
delivered in connection with the Mortgage Loan establishes and creates
a
valid, subsisting and enforceable first lien and first priority security
interest on the property described therein and the Company has full
right
to sell and assign the same to the Purchaser;
|
With
respect to each Cooperative Loan, each Pledge Agreement creates a valid,
enforceable and subsisting first security interest in the Cooperative Shares
and
Proprietary Lease, subject only to (i) the lien of the related Cooperative
for
unpaid assessments representing the Mortgagor’s pro rata share of the
Cooperative’s payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments
to
which like collateral is commonly subject and (ii) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Pledge Agreement;
provided, however, that the appurtenant Proprietary Lease may be subordinated
or
otherwise subject to the lien of any mortgage on the Project;
(l)
Full
Disbursement of Proceeds.
|
The
proceeds of the Mortgage Loan have been fully disbursed, except for
escrows established or created due to seasonal weather conditions,
and
there is no requirement for future advances thereunder. All costs,
fees
and expenses incurred in making or closing the Mortgage Loan and
the
recording of the Mortgage were paid, and the Mortgagor is not entitled
to
any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
|
|
(m)
|
Consolidation
of Future Advances.
|
|
Any
future advances made prior to the related Cut-off Date, have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears
a
single interest rate and single repayment term reflected on the related
Mortgage Loan Schedule. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien priority
by a
title insurance policy, an endorsement to the policy insuring the
mortgagee’s consolidated interest or by other title evidence acceptable to
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; the consolidated principal amount does
not
exceed the original principal amount of the Mortgage Loan; the Seller
shall not make future advances after the related Cut-Off
Date;
|
(n)
Ownership.
|
The
Company is the sole owner of record and holder of the Mortgage Loan
and
the related Mortgage Note and the Mortgage are not assigned or pledged,
and the Company has good and marketable title thereto and has full
right
and authority to transfer and sell the Mortgage Loan to the Purchaser.
The
Company is transferring the Mortgage Loan free and clear of any and
all
encumbrances, liens, pledges, equities, participation interests,
claims,
charges or security interests of any nature encumbering such Mortgage
Loan;
|
(o)
Origination/Doing
Business.
|
The
Mortgage Loan was originated by a savings and loan association, a
savings
bank, a commercial bank, a credit union, an insurance company, or
similar
institution which is supervised and examined by a federal or state
authority or by a mortgagee approved by the Secretary of Housing
and Urban
Development pursuant to Sections 203 and 211 of the National Housing
Act.
All parties which have had any interest in the Mortgage Loan, whether
as
mortgagee, assignee, pledgee or otherwise, are (or, during the period
in
which they held and disposed of such interest, were) (1) in compliance
with any and all applicable licensing requirements of the laws of
the
state wherein the Mortgaged Property is located, and (2) organized
under
the laws of such state, or (3) qualified to do business in such state,
or
(4) federal savings and loan associations or national banks having
principal offices in such state, or (5) not doing business in such
state;
|
(p)
LTV,
PMI Policy.
|
Each
Mortgage Loan has an LTV as set forth in the related Mortgage Loan
Schedule and related Electronic Data File. Except as indicated on
the
Electronic Data File, those Mortgage Loans with an LTV greater than
80% at
the time of origination, a portion of the unpaid principal balance
of the
Mortgage Loan is and will be insured as to payment defaults by a
PMI
Policy. If the Mortgage Loan is insured by a PMI Policy for which
the
Mortgage pays all premiums, the coverage will remain in place until
(i)
the LTV is decreased to 78% or (ii) the PMI Policy is otherwise terminated
pursuant to the Homeowners Protection Act of 1998, 12 USC 4901, et
seq.
All provisions of such PMI Policy and LPMI Policy have been and are
being
complied with, such PMI Policy and LPMI Policy is in full force and
effect, and all premiums due thereunder have been paid. The Qualified
Insurer has a claims paying ability acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac. Any Mortgage Loan subject to a PMI Policy obligates the Mortgagor
or
in the case of an LPMI Policy, obligates the Company, thereunder
to
maintain the PMI Policy or LPMI Policy and to pay all premiums and
charges
in connection therewith. The Mortgage Interest Rate for the Mortgage
Loan
as set forth on the related Mortgage Loan Schedule is net of any
such
insurance premium. No prior holder of the Mortgage, including the
Company,
has done, by act or omission, anything which would impair the coverage
of
such PMI Policy or LPMI Policy;
|
(q)
Title
Insurance.
|
The
Mortgage Loan is covered by an ALTA lender's title insurance policy
or
other generally acceptable form of policy of insurance acceptable
to
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a title insurer acceptable to
▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction
where
the Mortgaged Property is located, insuring the Company, its successors
and assigns, as to the first priority lien of the Mortgage in the
original
principal amount of the Mortgage Loan, subject only to the exceptions
contained in clauses (1), (2) and (3) of Paragraph (k) of this Section
3.02, and against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing
for
adjustment to the Mortgage Interest Rate and Monthly Payment. The
Company
is the sole insured of such lender's title insurance policy, and
such
lender's title insurance policy is in full force and effect and will
be in
force and effect upon the consummation of the transactions contemplated
by
this Agreement. No claims have been made under such lender's title
insurance policy, and no prior holder of the Mortgage, including
the
Company, has done, by act or omission, anything which would impair
the
coverage of such lender's title insurance
policy;
|
(r)
No
Defaults.
|
There
is no default, breach, violation or event of acceleration existing
under
the Mortgage or the Mortgage Note and no event which, with the passage
of
time or with notice and the expiration of any grace or cure period,
would
constitute a default, breach, violation or event of acceleration,
and
neither the Company nor its predecessors have waived any default,
breach,
violation or event of acceleration;
|
(s)
No
Mechanics' Liens.
|
There
are no mechanics' or similar liens or claims which have been filed
for
work, labor or material (and no rights are outstanding that under
the law
could give rise to such liens) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with,
the lien
of the related Mortgage which are not insured against by the title
insurance policy referenced in Paragraph (q)
above;
|
(t)
Location
of Improvements; No Encroachments.
|
Except
as insured against by the title insurance policy referenced in Paragraph
(q) above, all improvements which were considered in determining
the
Appraised Value of the Mortgaged Property lay wholly within the boundaries
and building restriction lines of the Mortgaged Property and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
No improvement located on or being part of the Mortgaged Property
is in
violation of any applicable zoning law or
regulation;
|
|
(u)
|
Payment
Terms.
|
|
Except
with respect to the Interest Only Mortgage Loans, principal payments
commenced no more than 60 days after the funds were disbursed to
the
Mortgagor in connection with the Mortgage Loan. The Mortgage Loans
have an
original term to maturity of not more than 30 years, with interest
payable
in arrears on the first day of each month. As to each adjustable
rate
Mortgage Loan on each applicable Adjustment Date, the Mortgage Interest
Rate will be adjusted to equal the sum of the Index plus the applicable
Gross Margin, rounded up or down to the nearest multiple of 0.125%
indicated by the Mortgage Note; provided that the Mortgage Interest
Rate
will not increase or decrease by more than 2.00% on any Adjustment
Date,
and will in no event exceed the maximum Mortgage Interest Rate or
be lower
than the minimum Mortgage Interest Rate listed on the Mortgage Loan
Schedule for such Mortgage Loan. Each adjustable rate Mortgage Note
requires a monthly payment which is sufficient, during the period
prior to
the first adjustment to the Mortgage Interest Rate, to fully amortize
the
outstanding principal balance as of the first day of such period
over the
then remaining term of such Mortgage Note and to pay interest at
the
related Mortgage Interest Rate; provided however, with respect to
any
Interest Only Mortgage Loans, the Mortgage Note allows a Monthly
Payment
of interest only during the period prior to the first Adjustment
Date and
upon the first adjustment to the Mortgage Interest Rate, the Mortgage
Note
requires a Monthly Payment of principal and interest, sufficient
to fully
amortize the outstanding principal balance over the then remaining
term of
such Mortgage Loan. As to each adjustable rate Mortgage Loan, if
the
related Mortgage Interest Rate changes on an adjustment date, the
then
outstanding principal balance will be reamortized over the remaining
life
of such Mortgage Loan. No Mortgage Loan contains terms or provisions
which
would result in negative amortization;
|
(v)
Customary
Provisions.
|
The
Mortgage contains customary and enforceable provisions such as to
render
the rights and remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the security provided
thereby, including, (i) in the case of a Mortgage designated as a
deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure.
There is no homestead or other exemption available to a Mortgagor
which
would interfere with the right to sell the Mortgaged Property at
a
trustee's sale or the right to foreclose the
Mortgage;
|
(w) Occupancy
of the Mortgaged Property.
|
As
of the date of origination, the Mortgaged Property was lawfully occupied
under applicable law;
|
(x)
No
Additional Collateral.
|
The
Mortgage Note is not and has not been secured by any collateral,
pledged
account, except as indicated on the Electronic Data File, or other
security except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage
referred
to in (k) above;
|
(y)
Deeds
of Trust.
|
In
the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage,
and no
fees or expenses are or will become payable by the Mortgagee to the
trustee under the deed of trust, except in connection with a trustee's
sale after default by the
Mortgagor;
|
(z)
Acceptable
Investment.
|
The
Company has no knowledge of any circumstances or conditions with
respect
to the Mortgage Loan, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause
private institutional investors to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent,
or
adversely affect the value or marketability of the Mortgage
Loan;
|
(aa)
Transfer
of Mortgage Loans.
|
If
the Mortgage Loan is not a MERS Mortgage Loan, the Assignment upon
the
insertion of the name of the assignee and recording information is
in
recordable form and is acceptable for recording under the laws of
the
jurisdiction in which the Mortgaged Property is
located;
|
(bb) Mortgaged
Property Undamaged.
|
The
Mortgaged Property is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the
Mortgage
Loan or the use for which the premises were
intended;
|
(cc)
Collection
Practices; Escrow Deposits.
|
The
origination and collection practices used with respect to the Mortgage
Loan have been in accordance with Accepted Servicing Practices, and
have
been in all material respects legal and proper. With respect to escrow
deposits and Escrow Payments, all such payments are in the possession
of
the Company and there exist no deficiencies in connection therewith
for
which customary arrangements for repayment thereof have not been
made. All
Escrow Payments have been collected in full compliance with state
and
federal law. No escrow deposits or Escrow Payments or other charges
or
payments due the Company have been capitalized under the Mortgage
Note;
|
(dd) No
Condemnation.
|
There
is no proceeding pending or to the best of the Company’s knowledge
threatened for the total or partial condemnation of the related Mortgaged
Property;
|
(ee)
The
Appraisal.
|
The
Servicing File contains an appraisal of the related Mortgaged Property.
As
to each Time$aver® Mortgage Loan, the appraisal may be from the original
of the existing Company-serviced loan, which was refinanced via such
Time$aver® Mortgage Loan. The appraisal was conducted by an appraiser who
had no interest, direct or indirect, in the Mortgaged Property or
in any
loan made on the security thereof; and whose compensation is not
affected
by the approval or disapproval of the Mortgage Loan, and the appraisal
and
the appraiser both satisfy the applicable requirements of Title XI
of the
Financial Institution Reform, Recovery, and Enforcement Act of 1989
and
the regulations promulgated thereunder, all as in effect on the date
the
Mortgage Loan was originated;
|
(ff)
Insurance.
|
The
Mortgaged Property securing each Mortgage Loan is insured by an insurer
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac against loss by fire and
such
hazards as are covered under a standard extended coverage endorsement
and
such other hazards as are customary in the area where the Mortgaged
Property is located pursuant to insurance policies conforming to
the
requirements of Section 4.10, in an amount which is at least equal
to the
lesser of (a) 100% of the insurable value, on a replacement cost
basis, of
the improvements on the related Mortgaged Property, and (b) the greater
of
(i) the outstanding principal balance of the Mortgage Loan and (ii)
an
amount such that the proceeds of such insurance shall be sufficient
to
prevent the application to the Mortgagor or the loss payee of any
coinsurance clause under the policy. If the Mortgaged Property is
a
condominium unit, it is included under the coverage afforded by a
blanket
policy for the project. If the improvements on the Mortgaged Property
are
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, a flood insurance
policy meeting the requirements of the current guidelines of the
Federal
Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than
the
least of (A) the outstanding principal balance of the Mortgage Loan,
(B) the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster Protection
Act of
1973, as amended. All individual insurance policies contain a standard
mortgagee clause naming the Company and its successors and assigns
as
mortgagee, and all premiums thereon have been paid. The Mortgage
obligates
the Mortgagor thereunder to maintain a hazard insurance policy at
the
Mortgagor's cost and expense, and on the Mortgagor's failure to do
so,
authorizes the holder of the Mortgage to obtain and maintain such
insurance at such Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. The hazard insurance policy is the valid
and
binding obligation of the insurer, is in full force and effect, and
will
be in full force and effect and inure to the benefit of the Purchaser
upon
the consummation of the transactions contemplated by this Agreement.
The
Company has not acted or failed to act so as to impair the coverage
of any
such insurance policy or the validity, binding effect and enforceability
thereof;
|
|
(gg)
|
Servicemembers’
Civil Relief Act.
|
|
The
Mortgagor has not notified the Company, and the Company has no knowledge
of any relief requested or allowed to the Mortgagor under the
Servicemembers’ Civil Relief Act, as
amended;
|
|
(hh)
|
No
Graduated Payments or Contingent Interests.
|
|
The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage
Loan does not have a shared appreciation or other contingent interest
feature;
|
|
(ii)
|
No
Construction Loans.
|
|
No
Mortgage Loan was made in connection with (i) the construction or
rehabilitation of a Mortgage Property or (ii) facilitating the trade-in
or
exchange of a Mortgaged Property other than a construction-to-permanent
loan which has converted to a permanent Mortgage
Loan;
|
|
(jj)
|
Underwriting.
|
|
Each
Mortgage Loan was underwritten in accordance with the underwriting
guidelines of the Company, which were in effect at the time the Mortgage
Loan was originated; and the Mortgage Note and Mortgage are on forms
acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇
Mae;
|
|
(kk)
|
Buydown
Mortgage Loans.
|
|
With
respect to each Mortgage Loan that is a Buydown Mortgage
Loan:
|
|
(i)
|
On
or before the date of origination of such Mortgage Loan, the Company
and
the Mortgagor, or the Company, the Mortgagor and the seller of the
Mortgaged Property or a third party entered into a Buydown Agreement.
The
Buydown Agreement provides that the seller of the Mortgaged Property
(or
third party) shall deliver to the Company temporary Buydown Funds
in an
amount equal to the aggregate undiscounted amount of payments that,
when
added to the amount the Mortgagor on such Mortgage Loan is obligated
to
pay on each Due Date in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payment due on
such
Mortgage Loan. The temporary Buydown Funds enable the Mortgagor to
qualify
for the Buydown Mortgage Loan. The effective interest rate of a Buydown
Mortgage Loan if less than the interest rate set forth in the related
Mortgage Note will increase within the Buydown Period as provided
in the
related Buydown Agreement so that the effective interest rate will
be
equal to the interest rate as set forth in the related Mortgage Note.
The
Buydown Mortgage Loan satisfies the requirements of ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇
Mac guidelines;
|
|
(ii)
|
The
Mortgage and Mortgage Note reflect the permanent payment terms rather
than
the payment terms of the Buydown Agreement. The Buydown Agreement
provides
for the payment by the Mortgagor of the full amount of the Monthly
Payment
on any Due Date that the Buydown Funds are available. The Buydown
Funds
were not used to reduce the original principal balance of the Mortgage
Loan or to increase the Appraised Value of the Mortgage Property
when
calculating the Loan-to-Value Ratios for purposes of the Agreement
and, if
the Buydown Funds were provided by the Company and if required under
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac guidelines, the terms of the Buydown Agreement
were disclosed to the appraiser of the Mortgaged
Property;
|
|
(iii)
|
The
Buydown Funds may not be refunded to the Mortgagor unless the Mortgagor
makes a principal payment for the outstanding balance of the Mortgage
Loan;
|
|
(iv)
|
As
of the date of origination of the Mortgage Loan, the provisions of
the
related Buydown Agreement complied with the requirements of ▇▇▇▇▇▇
Mae or
▇▇▇▇▇▇▇ Mac regarding buydown
agreements.
|
|
(ll)
|
Delivery
of Custodial Mortgage Files.
|
Any
documents required to be delivered by the Company under this Agreement have
been
delivered to the Custodian. The Company is in possession of a complete, true
and
accurate Retained Mortgage File and Custodial Mortgage File in compliance with
Exhibit C hereto;
|
(mm)
|
No
Violation of Environmental Laws.
|
There
is
no pending action or proceeding directly involving any Mortgaged Property of
which the Company is aware in which compliance with any environmental law,
rule
or regulation is an issue; and to the best of the Company’s knowledge, nothing
further remains to be done to satisfy in full all requirements of each such
law,
rule or regulation constituting a prerequisite to use and enjoyment of said
property;
|
(nn)
|
No
Bankruptcy.
|
No
Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated and to the best of
the
Company’s knowledge, as of the related Closing Date, the Company has not
received notice that any Mortgagor is a debtor under any state or federal
bankruptcy or insolvency proceeding;
(oo)
HOEPA.
No
Mortgage Loan is a High Cost Loan or Covered Loan;
(pp)
Cooperative
Loans.
With
respect to each Cooperative Loan:
|
(i)
|
The
Cooperative Shares are held by a person as a tenant-stockholder in
a
Cooperative. Each original UCC financing statement, continuation
statement
or other governmental filing or recordation necessary to create or
preserve the perfection and priority of the first lien and security
interest in the Cooperative Loan and Proprietary Lease has been timely
and
properly made. Any security agreement, chattel mortgage or equivalent
document related to the Cooperative Loan and delivered to Purchaser
or its
designee establishes in Purchaser a valid and subsisting perfected
first
lien on and security interest in the Mortgaged Property described
therein,
and Purchaser has full right to sell and assign the same. The Proprietary
Lease term expires no less than five years after the Mortgage Loan
term or
such other term acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac;
|
|
(ii)
|
A
Cooperative Lien Search has been made by a company competent to make
the
same which company is acceptable to ▇▇▇▇▇▇ Mae and qualified to do
business in the jurisdiction where the Cooperative is
located;
|
|
(iii)
|
(a)
The term of the related Proprietary Lease is not less than the terms
of
the Cooperative Loan; (b) there is no provision in any Proprietary
Lease
which requires the Mortgagor to offer for sale the Cooperative Shares
owned by such Mortgagor first to the Cooperative; (c) there is no
prohibition in any Proprietary Lease against pledging the Cooperative
Shares or assigning the Proprietary Lease; (d) the Cooperative has
been
created and exists in full compliance with the requirements for
residential cooperatives in the jurisdiction in which the Project
is
located and qualifies as a cooperative housing corporation under
Section
210 of the Code; (e) the Recognition Agreement is on a form published
by
Aztech Document Services, Inc. or includes similar provisions; and
(f) the
Cooperative has good and marketable title to the Project, and owns
the
Project either in fee simple or under a leasehold that complies with
the
requirements of the ▇▇▇▇▇▇ ▇▇▇ Guidelines; such title is free and
clear of
any adverse liens or encumbrances, except the lien of any blanket
mortgage;
|
| (iv) |
The
Company has the right under the terms of the Mortgage Note, Pledge
Agreement and Recognition Agreement to pay any maintenance charges
or
assessments owed by the Mortgagor;
|
| (v) |
Each
Stock Power (i) has all signatures guaranteed or (ii) if all signatures
are not guaranteed, then such Cooperative Shares will be transferred
by
the stock transfer agent of the Cooperative if the Company undertakes
to
convert the ownership of the collateral securing the related Cooperative
Loan;
|
(qq)
Georgia
Fair Lending Act.
There
is
no Mortgage Loan that was originated on or after October 1, 2002 and before
March 7, 2003, which is secured by property located in the State of
Georgia;
(rr)
Methodology.
The
methodology used in underwriting the extension of credit for each Mortgage
Loan
employs objective mathematical principles which relate the borrower’s income,
assets and liabilities to the proposed payment and such underwriting methodology
does not rely on the extent of the borrower’s equity in the collateral as the
principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the borrower had a reasonable ability to make timely
payments on the Mortgage Loan;
| (ss) |
Imposition
of a Premium.
|
With
respect to any Mortgage Loan that contains a provision permitting imposition
of
a premium upon a prepayment prior to maturity: (i) the prepayment premium is
disclosed to the borrower in the loan documents pursuant to applicable state
and
federal law, and (ii) notwithstanding any state or federal law to the contrary,
the Company shall recommend that such prepayment premium is not imposed in
any
instance when the mortgage debt is accelerated as the result of the borrower’s
default in making the loan payments;
| (tt) |
Single
Premium Credit Life.
|
No
Mortgagor was required to purchase any single premium credit insurance policy
(e.g. life, disability, accident, unemployment or health insurance products)
or
debt cancellation agreement as a condition of obtaining the extension of credit.
No Mortgagor obtained a prepaid single premium credit insurance policy (e.g.
life, disability, accident, unemployment or health insurance product) as part
of
the origination of the Mortgage Loan. No proceeds from any Mortgage Loan were
used to purchase single premium credit insurance policies or debt cancellation
agreements as part of the origination of, or as a condition to closing, such
Mortgage Loan;
(uu)
No
Arbitration Provision.
|
With
respect to each Mortgage Loan, neither the related Mortgage nor the
related Mortgage Note requires the Mortgagor to
submit to arbitration to resolve any dispute arising out of or relating
in
any way to the Mortgage Loan transaction;
|
|
(ww)
|
Credit
Reporting.
|
With
respect to each Mortgage Loan, the Company has fully furnished, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (i.e. favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company (three
of
the credit repositories), on a monthly basis; and
| (xx) |
Illinois
Interest Act.
|
Any
Mortgage Loan with a Mortgaged Property in the State of Illinois complies with
the Illinois Interest Act.
Section
3.03 Repurchase.
It
is
understood and agreed that the representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and the delivery of the Mortgage Loan Documents to the Custodian
and
shall inure to the benefit of the Purchaser, notwithstanding any restrictive
or
qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Custodial Mortgage Files or Retained
Mortgage File. Upon discovery by either the Company or the Purchaser of a breach
of any of the foregoing representations and warranties which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of Purchaser
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan), the party discovering such breach
shall
give prompt written notice to the other.
Within
ninety (90) days of the earlier of either discovery by or notice to the Company
of any breach of a representation or warranty which materially and adversely
affects the value of the Mortgage Loans, the Company shall use its best efforts
promptly to cure such breach in all material respects and, if such breach cannot
be cured, the Company shall, at the Purchaser's option, repurchase such Mortgage
Loan at the Repurchase Price. In the event that a breach shall involve any
representation or warranty set forth in Section 3.01, and such breach cannot
be
cured within 90 days of the earlier of either discovery by or notice to the
Company of such breach, all of the Mortgage Loans shall, at the Purchaser's
option, be repurchased by the Company at the Repurchase Price. However, if
the
breach shall involve a representation or warranty set forth in Section 3.02
and
the Company discovers or receives notice of any such breach within 120 days
of
the related Closing Date, the Company shall, if the breach cannot be cured,
at
the Purchaser's option and provided that the Company has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the related Closing
Date. If the Company has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan within ninety (90) days of the written
notice of the breach or the failure to cure, whichever is later. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this Section
3.03 shall be accomplished by deposit in the Custodial Account of the amount
of
the Repurchase Price for distribution to Purchaser on the next scheduled
Remittance Date, after deducting therefrom any amount received in respect of
such repurchased Mortgage Loan or Loans and being held in the Custodial Account
for future distribution.
At
the
time of repurchase or substitution, the Purchaser and the Company shall arrange
for the reassignment of the Deleted Mortgage Loan to the Company and the
delivery to the Company of any documents held by the Custodian relating to
the
Deleted Mortgage Loan. If
the
Company repurchases a Mortgage Loan that is a MERS Mortgage Loan, the Company
shall cause MERS to designate on the MERS® System to remove the Purchaser as the
beneficial holder with respect to such Mortgage Loan. In
the
event of a repurchase or substitution, the Company shall, simultaneously with
such reassignment, give written notice to the Purchaser that such repurchase
or
substitution has taken place, amend the related Mortgage Loan Schedule to
reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and,
in
the case of substitution, identify a Qualified Substitute Mortgage Loan and
amend the related Mortgage Loan Schedule to reflect the addition of such
Qualified Substitute Mortgage Loan to this Agreement. In connection with any
such substitution, the Company shall be deemed to have made as to such Qualified
Substitute Mortgage Loan the representations and warranties set forth in this
Agreement except that all such representations and warranties set forth in
this
Agreement shall be deemed made as of the date of such substitution. The Company
shall effect such substitution by delivering to the Custodian for such Qualified
Substitute Mortgage Loan the documents required by Section 2.03, with the
Mortgage Note endorsed as required by Section 2.03. No substitution will be
made
in any calendar month after the Determination Date for such month. The Company
shall deposit in the Custodial Account the Monthly Payment less the Servicing
Fee due on such Qualified Substitute Mortgage Loan or Loans in the month
following the date of such substitution. Monthly Payments due with respect
to
Qualified Substitute Mortgage Loans in the month of substitution shall be
retained by the Company. With respect to any Deleted Mortgage loan,
distributions to Purchaser shall include the Monthly Payment due on any Deleted
Mortgage Loan in the month of substitution, and the Company shall thereafter
be
entitled to retain all amounts subsequently received by the Company in respect
of such Deleted Mortgage Loan.
For
any
month in which the Company substitutes a Qualified Substitute Mortgage Loan
for
a Deleted Mortgage Loan, the Company shall determine the amount (if any) by
which the aggregate principal balance of all Qualified Substitute Mortgage
Loans
as of the date of substitution is less than the aggregate Stated Principal
Balance of all Deleted Mortgage Loans (after application of scheduled principal
payments due in the month of substitution). The amount of such shortfall shall
be distributed by the Company in the month of substitution pursuant to Section
5.01. Accordingly, on the date of such substitution, the Company shall deposit
from its own funds into the Custodial Account an amount equal to the amount
of
such shortfall.
In
addition to such repurchase or substitution obligation, the Company shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach
of
the Company representations and warranties contained in this Agreement. It
is
understood and agreed that the obligations of the Company set forth in this
Section 3.03 to cure, substitute for or repurchase a defective Mortgage Loan
and
to indemnify the Purchaser as provided in this Section 3.03 constitute the
sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties.
Any
cause
of action against the Company relating to or arising out of the breach of any
representations and warranties made in Sections 3.01 and 3.02 shall accrue
as to
any Mortgage Loan upon (i) discovery of such breach by the Purchaser or notice
thereof by the Company to the Purchaser, (ii) failures by the Company to cure
such breach or repurchase such Mortgage Loan as specified above, and (iii)
demand upon the Company by the Purchaser for compliance with this
Agreement.
In
the
event a Mortgage Loan pays off in full on or before the related Closing Date,
the Company must repay the Purchaser the difference between the Unpaid Principal
Balance of such Mortgage Loan as of the date of pay off and the Unpaid Principal
Balance multiplied by the purchase price percentage adjusted, if necessary
in
accordance with the Commitment Letter.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.01 Company
to Act as Servicer.
The
Company, as an independent contractor, shall service and administer the Mortgage
Loans and shall have full power and authority, acting alone or through the
utilization of a Subcontractor, to do any and all things in connection with
such
servicing and administration which the Company may deem necessary or desirable,
consistent with the terms of this Agreement and with Accepted Servicing
Practices. The
Company shall be responsible for any and all acts of a Subcontractor, and the
Company’s utilization of a Subcontractor shall in no way relieve the liability
of the Company under this Agreement.
Consistent
with the terms of this Agreement, the Company may waive, modify or vary any
term
of any Mortgage Loan or consent to the postponement of strict compliance with
any such term or in any manner grant indulgence to any Mortgagor if in the
Company's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser, provided,
however, that the Company shall not make any future advances with respect to
a
Mortgage Loan and (unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Company, imminent
and
the Company has obtained the prior written consent of the Purchaser) the Company
shall not permit any modification with respect to any Mortgage Loan that would
change the Mortgage Interest Rate, defer or forgive the payment of principal
(except for actual payments of principal) or change the final maturity date
on
such Mortgage Loan. In the event of any such modification which permits the
deferral of interest or principal payments on any Mortgage Loan, the Company
shall, on the Business Day immediately preceding the Remittance Date in any
month in which any such principal or interest payment has been deferred, deposit
in the Custodial Account from its own funds, in accordance with Section 5.03,
the difference between (a) such month's principal and one month's interest
at
the Mortgage Loan Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor. The Company shall be
entitled to reimbursement for such advances to the same extent as for all other
advances made pursuant to Section 5.03. Without limiting the generality of
the
foregoing, the Company shall continue, and is hereby authorized and empowered,
to execute and deliver on behalf of itself and the Purchaser, all instruments
of
satisfaction or cancellation, or of partial or full release, discharge and
all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. If reasonably required by the Company,
the
Purchaser shall furnish the Company with any powers of attorney and other
documents necessary or appropriate to enable the Company to carry out its
servicing and administrative duties under this Agreement.
In
servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser's reliance on the Company.
The
Company is authorized and empowered by the Purchaser, in its own name, when
the
Company believes it appropriate in its reasonable judgment to register any
Mortgage Loan on the MERS® System, or cause the removal from the registration of
any Mortgage Loan on the MERS® System, with written consent of the Purchaser, to
execute and deliver, on behalf of the Purchaser, any and all instruments of
assignment and other comparable instruments with respect to such assignment
or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Purchaser and its successors and assigns.
The
Company shall cause to be maintained for each Cooperative Loan a copy of the
financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Purchaser.
The
Company shall apply any Principal Prepayment on an Interest Only Mortgage Loan
to the then-outstanding principal balance, at which time the interest-only
payment feature shall be extinguished. The related Monthly Payment shall
thereafter consist of both principal and interest components, and the amount
of
such Monthly Payment shall not change prior to the next Adjustment
Date.
Section
4.02 Liquidation
of Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 4.01 is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period,
the
Company shall take such action as (1) the Company would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (2) shall be consistent with Accepted Servicing Practices,
(3)
the Company shall determine prudently to be in the best interest of Purchaser,
and (4) is consistent with any related PMI Policy. In the event that any payment
due under any Mortgage Loan is not postponed pursuant to Section 4.01 and
remains delinquent for a period of 90 days or any other default continues for
a
period of 90 days beyond the expiration of any grace or cure period, the Company
shall commence foreclosure proceedings, the Company shall notify the Purchaser
in writing of the Company's intention to do so, and the Company shall not
commence foreclosure proceedings if the Purchaser objects to such action within
three (3) Business Days of receiving such notice. In the event the Purchaser
objects to such foreclosure action, the Company shall not be required to make
Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03,
and the Company's obligation to make such Monthly Advances shall terminate
on
the 90th day referred to above. In such connection, the Company shall from
its
own funds make all necessary and proper Servicing Advances, provided, however,
that the Company shall not be required to expend its own funds in connection
with any foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to Purchaser after reimbursement to itself for such expenses and (b) that
such expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 4.05) or through Insurance Proceeds
(respecting which it shall have similar priority).
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Company has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Purchaser otherwise requests
an environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector. The cost
for
such inspection or review shall be borne by the Purchaser. Upon completion
of
the inspection or review, the Company shall promptly provide the Purchaser
with
a written report of the environmental inspection.
After
reviewing the environmental inspection report, the Purchaser shall determine
how
the Company 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 Purchaser
directs the Company to proceed with foreclosure or acceptance of a deed in
lieu
of foreclosure, the Company shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Company, the Company shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event
the Purchaser directs the Company not to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Company shall be reimbursed for all
Servicing Advances made with respect to the related Mortgaged Property from
the
Custodial Account pursuant to Section 4.05 hereof.
Section
4.03 Collection
of Mortgage Loan Payments.
Continuously
from the related Cut-off Date until the principal and interest on all Mortgage
Loans are paid in full, the Company shall proceed diligently to collect all
payments due under each of the Mortgage Loans when the same shall become due
and
payable and shall take special care in ascertaining and estimating Escrow
Payments and all other charges that will become due and payable with respect
to
the Mortgage Loan and the Mortgaged Property, to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
Section
4.04 Establishment
of and Deposits to Custodial Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form
of
time deposit or demand accounts, titled "▇▇▇▇▇ Fargo Bank, N.A. in trust for
the
Purchaser and/or subsequent purchasers of Mortgage Loans - P & I." The
Custodial Account shall be established with a Qualified Depository. Upon request
of the Purchaser and within ten (10) days thereof, the Company shall provide
the
Purchaser with written confirmation of the existence of such Custodial Account.
Any funds deposited into the Custodial Account shall at all times be insured
to
the fullest extent allowed by applicable law. Funds deposited in the Custodial
Account may be drawn on by the Company in accordance with Section
4.05.
The
Company shall deposit in the Custodial Account within one (1) Business Day
of
Company’s receipt, and retain therein, the following collections received by the
Company and payments made by the Company after the related Cut-off Date, other
than payments of principal and interest due on or before the related Cut-off
Date, or received by the Company prior to the related Cut-off Date but allocable
to a period subsequent thereto:
|
(i)
|
all
payments on account of principal on the Mortgage Loans, including
all
Principal Prepayments;
|
|
(ii)
|
all
payments on account of interest on the Mortgage Loans adjusted to
the
Mortgage Loan Remittance Rate;
|
|
(iii)
|
all
Liquidation Proceeds;
|
|
(iv)
|
all
Insurance Proceeds including amounts required to be deposited pursuant
to
Section 4.10 (other than proceeds to be held in the Escrow Account
and
applied to the restoration or repair of the Mortgaged Property or
released
to the Mortgagor in accordance with Section 4.14), Section 4.11 and
Section 4.15;
|
|
(v)
|
all
Condemnation Proceeds which are not applied to the restoration or
repair
of the Mortgaged Property or released to the Mortgagor in accordance
with
Section 4.14;
|
|
(vi)
|
any
amount required to be deposited in the Custodial Account pursuant
to
Section 4.01, 5.03, 6.01 or 6.02;
|
|
(vii)
|
any
amounts payable in connection with the repurchase of any Mortgage
Loan
pursuant to Section 3.03 and all amounts required to be deposited
by the
Company in connection with a shortfall in principal amount of any
Qualified Substitute Mortgage Loan pursuant to Section
3.03;
|
|
(viii)
|
with
respect to each Principal Prepayment an amount (to be paid by the
Company
out of its funds) which, when added to all amounts allocable to interest
received in connection with the Principal Prepayment, equals one
month's
interest on the amount of principal so prepaid at the Mortgage Loan
Remittance Rate;
|
|
(ix)
|
any
amounts required to be deposited by the Company pursuant to Section
4.11
in connection with the deductible clause in any blanket hazard insurance
policy;
|
|
(x)
|
any
amounts received with respect to or related to any REO Property and
all
REO Disposition Proceeds pursuant to Section 4.16; and
|
|
(xi)
|
an
amount from the Subsidy Account that when added to the Mortgagor’s payment
will equal the full monthly amount due under the related Mortgage
Note.
|
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in
the
Custodial Account by the depository institution shall accrue to the benefit
of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05.
Section
4.05 Permitted
Withdrawals From Custodial Account.
The
Company shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(i)
to
make
payments to the Purchaser in the amounts and in the manner provided for in
Section 5.01;
(ii)
to
reimburse itself for Monthly Advances of the Company's funds made pursuant
to
Section 5.03, the Company's right to reimburse itself pursuant to this subclause
(ii) being limited to amounts received on the related Mortgage Loan which
represent late 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 Company's right thereto shall be prior to the rights of
Purchaser, except that, where the Company is required to repurchase a Mortgage
Loan pursuant to Section 3.03 or 6.02, the Company's right to such reimbursement
shall be subsequent to the payment to the Purchaser of the Repurchase Price
pursuant to such sections and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loan;
(iii)
to
reimburse itself for unreimbursed Servicing Advances, and for any unpaid
Servicing Fees, the Company's right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other
amounts as may be collected by the Company from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of any
such
reimbursement, the Company's right thereto shall be prior to the rights of
Purchaser, except that where the Company is required to repurchase a Mortgage
Loan pursuant to Section 3.03 or 6.02, in which case the Company's right to
such
reimbursement shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to such sections and all other amounts required to
be
paid to the Purchaser with respect to such Mortgage Loan. Upon Purchaser's
request, the Company shall provide documentation supporting the Company's
Servicing Advances;
(iv)
to
pay
itself interest on funds deposited in the Custodial Account;
(v)
to
reimburse itself for expenses incurred and reimbursable to it pursuant to
Section 8.01;
(vi)
to
pay
any amount required to be paid pursuant to Section 4.16 related to any REO
Property, it being understood that, in the case of any such expenditure or
withdrawal related to a particular REO Property, the amount of such expenditure
or withdrawal from the Custodial Account shall be limited to amounts on deposit
in the Custodial Account with respect to the related REO Property;
(vii) to
reimburse itself for any Servicing Advances or REO expenses after liquidation
of
the Mortgaged Property not otherwise reimbursed above;
(viii)
to
remove
funds inadvertently placed in the Custodial Account by the Company;
and
(ix)
to
clear
and terminate the Custodial Account upon the termination of this
Agreement.
In
the
event that the Custodial Account is interest bearing, on each Remittance Date,
the Company shall withdraw all funds from the Custodial Account except for
those
amounts which, pursuant to Section 5.01, the Company is not obligated to remit
on such Remittance Date. The Company may use such withdrawn funds only for
the
purposes described in this Section 4.05.
Section
4.06 Establishment
of and Deposits to Escrow Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any of its
own funds and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled, "▇▇▇▇▇ Fargo
Bank, N.A., in trust for the Purchaser and/or subsequent purchasers of
Residential Mortgage Loans, and various Mortgagors - T & I." The Escrow
Accounts shall be established with a Qualified Depository, in a manner which
shall provide maximum available insurance thereunder. Upon request of the
Purchaser and within ten (10) days thereof, the Company shall provide the
Purchaser with written confirmation of the existence of such Escrow Account.
Funds deposited in the Escrow Account may be drawn on by the Company in
accordance with Section 4.07.
The
Company shall deposit in the Escrow Account or Accounts within one (1) Business
Days of Company’s receipt, and retain therein:
|
(i)
|
all
Escrow Payments collected on account of the Mortgage Loans, for the
purpose of effecting timely payment of any such items as required
under
the terms of this Agreement;
|
|
(ii)
|
all
amounts representing Insurance Proceeds or Condemnation Proceeds
which are
to be applied to the restoration or repair of any Mortgaged Property;
and
|
|
(iii)
|
all
payments on account of Buydown
Funds.
|
The
Company shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 4.07.
The
Company shall be entitled to retain any interest paid on funds deposited in
the
Escrow Account by the depository institution, other than interest on escrowed
funds required by law to be paid to the Mortgagor. To the extent required by
law, the Company shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section
4.07 Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Company
only:
|
(i)
|
to
effect timely payments of ground rents, taxes, assessments, water
rates,
mortgage insurance premiums, condominium charges, fire and hazard
insurance premiums or other items constituting Escrow Payments for
the
related Mortgage;
|
|
(ii)
|
to
reimburse the Company for any Servicing Advances made by the Company
pursuant to Section 4.08 with respect to a related Mortgage Loan,
but only
from amounts received on the related Mortgage Loan which represent
late
collections of Escrow Payments
thereunder;
|
|
(iii)
|
to
refund to any Mortgagor any funds found to be in excess of the amounts
required under the terms of the related Mortgage
Loan;
|
|
(iv)
|
for
transfer to the Custodial Account and application to reduce the principal
balance of the Mortgage Loan in accordance with the terms of the
related
Mortgage and Mortgage Note;
|
|
(v)
|
for
application to restoration or repair of the Mortgaged Property in
accordance with the procedures outlined in Section
4.14;
|
|
(vi)
|
to
pay to the Company, or any Mortgagor to the extent required by law,
any
interest paid on the funds deposited in the Escrow
Account;
|
|
(vii)
|
to
remove funds inadvertently placed in the Escrow Account by the
Company;
|
|
(viii)
|
to
remit to Purchaser payments on account of Buydown Funds as applicable;
and
|
|
(ix)
|
to
clear and terminate the Escrow Account on the termination of this
Agreement.
|
Section
4.08 Payment
of Taxes, Insurance and Other Charges.
With
respect to each Mortgage Loan, the Company shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of
such
charges (including renewal premiums) and shall effect payment thereof prior
to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Company in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage. The Company assumes full responsibility for
the
timely payment of all such bills and shall effect timely payment of all such
charges irrespective of each Mortgagor's faithful performance in the payment
of
same or the making of the Escrow Payments, and the Company shall make advances
from its own funds to effect such payments.
Section
4.09 Protection
of Accounts.
The
Company may transfer the Custodial Account, the Subsidy Account or the Escrow
Account to a different Qualified Depository from time to time with prior written
notice to Purchaser.
Section
4.10 Maintenance
of Hazard Insurance.
The
Company shall cause to be maintained for each Mortgage Loan hazard insurance
such that all buildings upon the Mortgaged Property are insured by an insurer
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where
the
Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) 100% of the insurable value, on a replacement cost basis, of
the
improvements on the related Mortgaged Property, and (ii) the greater of (a)
the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds of such insurance shall be sufficient to prevent the application
to
the Mortgagor or the loss payee of any coinsurance clause under the policy.
In
the event a hazard insurance policy shall be in danger of being terminated,
or
in the event the insurer shall cease to be acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, the Company shall notify the Purchaser and the related Mortgagor, and
shall
use its best efforts, as permitted by applicable law, to obtain from another
qualified insurer a replacement hazard insurance policy substantially and
materially similar in all respects to the original policy. In no event, however,
shall a Mortgage Loan be without a hazard insurance policy at any time, subject
only to Section 4.11 hereof.
If
upon
origination of the Mortgage Loan, the related Mortgaged Property was located
in
an area identified by the Flood Emergency Management Agency as having special
flood hazards (and such flood insurance has been made available) a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Company determines in accordance with applicable law 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 Company 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 Company shall
immediately force place the required flood insurance on the Mortgagor’s behalf,
as permitted by applicable law.
If
a
Mortgage is secured by a unit in a condominium project, the Company shall verify
that the coverage required of the owner's association, including hazard, flood,
liability, and fidelity coverage, is being maintained in accordance with then
current ▇▇▇▇▇▇ Mae requirements, and secure from the owner's association its
agreement to notify the Company promptly of any change in the insurance coverage
or of any condemnation or casualty loss that may have a material effect on
the
value of the Mortgaged Property as security.
In
the
event that any Purchaser or the Company shall determine that the Mortgaged
Property should be insured against loss or damage by hazards and risks not
covered by the insurance required to be maintained by the Mortgagor pursuant
to
the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the required amount of coverage for the Mortgaged Property
and if the Mortgagor does not obtain such coverage, the Company shall
immediately force place the required coverage on the Mortgagor’.
All
policies required hereunder shall name the Company as loss payee and shall
be
endorsed with standard or union mortgagee clauses, without contribution, which
shall provide for at least 30 days prior written notice of any cancellation,
reduction in amount or material change in coverage.
The
Company shall not interfere with the Mortgagor's freedom of choice in selecting
either his insurance carrier or agent, provided, however, that the Company
shall
not accept any such insurance policies from insurance companies unless such
companies are acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and are licensed to
do
business in the jurisdiction in which the Mortgaged Property is located. The
Company shall determine that such policies provide sufficient risk coverage
and
amounts, that they insure the property owner, and that they properly describe
the property address.
Pursuant
to Section 4.04, any amounts collected by the Company under any such policies
(other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the related Mortgaged Property, or property acquired
in
liquidation of the Mortgage Loan, or to be released to the Mortgagor, in
accordance with the Company's normal servicing procedures as specified in
Section 4.14) shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05.
Section
4.11 Maintenance
of Mortgage Impairment Insurance.
In
the
event that the Company shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage
on
all of the Mortgage Loans, then, to the extent such policy provides coverage
in
an amount equal to the amount required pursuant to Section 4.10 and otherwise
complies with all other requirements of Section 4.10, it shall conclusively
be
deemed to have satisfied its obligations as set forth in Section 4.10. The
Company shall prepare and make any claims on the blanket policy as deemed
necessary by the Company in accordance with Accepted Servicing Practices. Any
amounts collected by the Company under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section 4.05. Such policy may contain a deductible clause, in which case,
in
the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 4.10, and there shall have been a
loss
which would have been covered by such policy, the Company shall deposit in
the
Custodial Account at the time of such loss the amount not otherwise payable
under the blanket policy because of such deductible clause, such amount to
be
deposited from the Company's funds, without reimbursement therefor. Upon request
of the Purchaser, the Company shall cause to be delivered to such Purchaser
a
certificate of insurance and a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without 30 days'
prior written notice to such Purchaser.
Section
4.12 Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Company shall maintain with responsible companies, at its own expense, a blanket
Fidelity Bond and an Errors and Omissions Insurance Policy, with broad coverage
on all officers, employees or other Persons acting in any capacity requiring
such Persons to handle funds, money, documents or papers relating to the
Mortgage Loans ("Company Employees"). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker's Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Company against losses in connection with
the
release or satisfaction of a Mortgage Loan without having obtained payment
in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth
in
this Agreement. The minimum coverage under any such bond and insurance policy
shall be with a company acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and in amounts
at least equal to the amounts acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Upon
the
request of any Purchaser, the Company shall cause to be delivered to such
Purchaser a certified true copy of such fidelity bond and insurance policy
and a
statement from the surety and the insurer that such fidelity bond and insurance
policy shall in no event be terminated or materially modified without 30 days'
prior written notice to the Purchaser.
Section
4.13 Inspections.
If
any
Mortgage Loan is more than 60 days delinquent, the Company immediately shall
inspect the Mortgaged Property and shall conduct subsequent inspections in
accordance with Accepted Servicing Practices or as may be required by the
primary mortgage guaranty insurer. The Company shall keep a record of each
such
inspection and shall provide the Purchaser with copies of such upon
request.
Section
4.14 Restoration
of Mortgaged Property.
The
Company need not obtain the approval of the Purchaser prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. For claims greater than $15,000,
at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
(i) the
Company shall receive satisfactory independent verification of completion of
repairs and issuance of any required approvals with respect
thereto;
(ii) the
Company shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics' and materialmen's liens;
(iii) the
Company shall verify that the Mortgage Loan is not in default; and
(iv) pending
repairs or restoration, the Company shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
If
the
Purchaser is named as an additional loss payee, the Company is hereby empowered
to endorse any loss draft issued in respect of such a claim in the name of
the
Purchaser.
Section
4.15 Maintenance
of PMI Policy; Claims.
Each
Mortgage Loan has an LTV as indicated on the Mortgage Loan Schedule and
Electronic Data File. Except as indicated on the Electronic Data File, with
respect to each Mortgage Loan with an LTV in excess of 80% at the time of
origination, the Company shall, without any cost to the Purchaser maintain
or
cause the Mortgagor to maintain in full force and effect a PMI Policy or LPMI
Policy insuring a portion of the unpaid principal balance of the Mortgage Loan
as to payment defaults. If the Mortgage Loan is insured by a PMI Policy for
which the Mortgagor pays all premiums, the coverage will remain in place until
(i) the LTV decreases to 78% or (ii) the PMI Policy is otherwise terminated
pursuant to the Homeowners Protection Act of 1998, 12 USC 4901, et seq. In
the
event that such PMI Policy shall be terminated other than as required by law,
the Company shall obtain from another Qualified Insurer a comparable replacement
policy, with a total coverage equal to the remaining coverage of such terminated
PMI Policy. If the insurer shall cease to be a Qualified Insurer, the Company
shall determine whether recoveries under the PMI Policy and LPMI Policy are
jeopardized for reasons related to the financial condition of such insurer,
it
being understood that the Company shall in no event have any responsibility
or
liability for any failure to recover under the PMI Policy or LPMI Policy for
such reason. If the Company determines that recoveries are so jeopardized,
it
shall notify the Purchaser and the Mortgagor, if required, and obtain from
another Qualified Insurer a replacement insurance policy. The Company shall
not
take any action which would result in noncoverage under any applicable PMI
Policy or LPMI Policy of any loss which, but for the actions of the Company
would have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Section
6.01, the Company shall promptly notify the insurer under the related PMI Policy
or LPMI Policy, if any, of such assumption or substitution of liability in
accordance with the terms of such PMI Policy or LPMI Policy and shall take
all
actions which may be required by such insurer as a condition to the continuation
of coverage under such PMI Policy or LPMI Policy. If such PMI Policy is
terminated as a result of such assumption or substitution of liability, the
Company shall obtain a replacement PMI Policy or LPMI Policy as provided
above.
In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
PMI Policy in a timely fashion in accordance with the terms of such PMI Policy
and, in this regard, to take such action as shall be necessary to permit
recovery under any PMI Policy respecting a defaulted Mortgage Loan. Pursuant
to
Section 4.04, any amounts collected by the Company under any PMI Policy shall
be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
Section
4.16 Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the Purchaser, or in the event the Purchaser is not authorized or
permitted to hold title to real property in the state where the REO Property
is
located, or would be adversely affected under the "doing business" or tax laws
of such state by so holding title, the deed or certificate of sale shall be
taken in the name of such Person or Persons as shall be consistent with an
Opinion of Counsel obtained by the Company from any attorney duly licensed
to
practice law in the state where the REO Property is located. The Person or
Persons holding such title other than the Purchaser shall acknowledge in writing
that such title is being held as nominee for the Purchaser.
The
Purchaser shall have the option to manage and operate the REO Property provided
the Purchaser gives written notice of its intention to do so within thirty
(30)
days after such REO Property is acquired in foreclosure or by deed in lieu
of
foreclosure. The election by the Purchaser to manage the REO Property shall
not
constitute a termination of any rights of the Company pursuant to Section 11.02.
Upon the Company's receipt of such written notice, it shall be relived of any
obligation to manage, conserve, protect, operate, dispose or sell the Mortgaged
Property for the Purchaser, or its designee. All such duties will become the
obligation of the Purchaser, or its designee. In such connection, upon the
Mortgaged Property being acquired on behalf of the Purchaser, or its designee,
the Company shall fully cooperate with Purchaser to transfer management of
the
REO Property to Purchaser, or its designee, and shall immediately submit a
statement of expenses to the Purchaser for reimbursement within 30 days for
all
Monthly Advances and Servicing Advances. If Company does not receive
reimbursement of such expenses from the Purchaser within the 30-days of the
statement of expenses, Company shall be permitted to withdraw such amount from
the Custodial Account pursuant to Section 4.05.
In
the
event the Purchaser does not elect to manage an REO Property, the Company shall
manage, conserve and protect the related REO Property for the Purchaser. The
Company, either itself or through an agent selected by the Company, shall manage
the REO Property in the same manner that it manages, conserves, protects and
operates other foreclosed property for its own account, and in the same manner
that similar property in the same locality as the REO Property is managed.
The
Company shall attempt to sell the same (and may temporarily rent the same for
a
period not greater than one year, except as otherwise provided below) on such
terms and conditions as the Company deems to be in the best interest of the
Purchaser.
The
Company shall use its best efforts to dispose of the REO Property as soon as
possible and shall sell such REO Property in any event within one year after
title has been taken to such REO Property, unless (i) a REMIC election has
not
been made with respect to the arrangement under which the Mortgage Loans and
the
REO Property are held, and (ii) the Company determines, and gives an appropriate
notice to the Purchaser to such effect, that a longer period is necessary for
the orderly liquidation of such REO Property. If a period longer than one year
is permitted under the foregoing sentence and is necessary to sell any REO
Property, (i) the Company shall report monthly to the Purchaser as to the
progress being made in selling such REO Property and (ii) if, with the written
consent of the Purchaser, a purchase money mortgage is taken in connection
with
such sale, such purchase money mortgage shall name the Company as mortgagee,
and
such purchase money mortgage shall not be held pursuant to this Agreement,
but
instead a separate participation agreement among the Company and Purchaser
shall
be entered into with respect to such purchase money mortgage.
The
Company shall also maintain on each REO Property fire and hazard insurance
with
extended coverage in amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability insurance
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
disposition of REO Property shall be carried out by the Company at such price,
and upon such terms and conditions, as the Company deems to be in the best
interests of the Purchaser. The proceeds of sale of the REO Property shall
be
promptly deposited in the Custodial Account. As soon as practical thereafter
the
expenses of such sale shall be paid and the Company shall reimburse itself
for
any related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to Section 5.03. On the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Purchaser.
The
Company shall withdraw the Custodial Account funds necessary for the proper
operation management and maintenance of the REO Property, including the cost
of
maintaining any hazard insurance pursuant to Section 4.10 and the fees of any
managing agent of the Company, or the Company itself. The Company shall make
monthly distributions on each Remittance Date to the Purchaser of the net cash
flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in the Section 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section
4.17 Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 5.02, the Company shall furnish
to the Purchaser on or before the Remittance Date each month a statement with
respect to any REO Property covering the operation of such REO Property for
the
previous month and the Company's efforts in connection with the sale of such
REO
Property and any rental of such REO Property incidental to the sale thereof
for
the previous month. That statement shall be accompanied by such other
information as the Purchaser shall reasonably request.
Section
4.18 Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Purchaser pursuant to a deed in lieu of foreclosure, the Company shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged
Property.
Section
4.19 Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Company
shall
report such foreclosure or abandonment as required pursuant to Section 6050J
of
the Code. The Company shall file information reports with respect to the receipt
of mortgage interest received in a trade or business and information returns
relating to cancellation of indebtedness income with respect to any Mortgaged
Property as required by the Code. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by the Code.
Section
4.20 Application
of Buydown Funds.
With
respect to each Buydown Mortgage Loan, the Company shall have deposited into
the
Escrow Account, no later than the last day of the month, Buydown Funds in an
amount equal to the aggregate undiscounted amount of payments that, when added
to the amount the Mortgagor on such Mortgage Loan is obligated to pay on all
Due
Dates in accordance with the terms of the Buydown Agreement, is equal to the
full scheduled Monthly Payments which are required to be paid by the Mortgagor
under the terms of the related Mortgage Note (without regard to the related
Buydown Agreement as if the Mortgage Loan were not subject to the terms of
the
Buydown Agreement). With respect to each Buydown Mortgage Loan, the Company
will
distribute to the Purchaser on each Remittance Date an amount of Buydown Funds
equal to the amount that, when added to the amount required to be paid on such
date by the related Mortgagor, pursuant to and in accordance with the related
Buydown Agreement, equals the full Monthly Payment that would otherwise be
required to be paid on such Mortgage Loan by the related Mortgagor under the
terms of the related Mortgage Note (as if the Mortgage Loan were not a Buydown
Mortgage Loan and without regard to the related Buydown Agreement).
If
the
Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan during
the
Buydown Period and the Mortgaged Property securing such Buydown Mortgage Loan
is
sold in the liquidation thereof (either by the Company or the insurer under
any
related Primary Insurance Policy) the Company shall, on the Remittance Date
following the date upon which Liquidation Proceeds or REO Disposition proceeds
are received with respect to any such Buydown Mortgage Loan, distribute to
the
Purchaser all remaining Buydown Funds for such Mortgage Loan then remaining
in
the Escrow Account. Pursuant to the terms of each Buydown Agreement, any amounts
distributed to the Purchaser in accordance with the preceding sentence will
be
applied to reduce the outstanding principal balance of the related Buydown
Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan prepays such Mortgage
Loan in its entirety during the related Buydown Period, the Company shall be
required to withdraw from the Escrow Account any Buydown Funds remaining in
the
Escrow Account with respect to such Buydown Mortgage Loan in accordance with
the
related Buydown Agreement. If a principal prepayment by a Mortgagor on a Buydown
Mortgage Loan during the related Buydown Period, together with any Buydown
Funds
then remaining in the Escrow Account related to such Buydown Mortgage Loan,
would result in a principal prepayment of the entire unpaid principal balance
of
the Buydown Mortgage Loan, the Company shall distribute to the Purchaser on
the
Remittance Date occurring in the month immediately succeeding the month in
which
such Principal Prepayment is received, all Buydown Funds related to such
Mortgage Loan so remaining in the Escrow Account, together with any amounts
required to be deposited into the Custodial Account.
Section
4.21 Notification
of Adjustments.
With
respect to each adjustable rate Mortgage Loan, the Company shall adjust the
Mortgage Interest Rate on the related Interest Rate Adjustment Date in
compliance with the requirements of applicable law and the related Mortgage
and
Mortgage Note. The Company shall execute and deliver any and all necessary
notices required under applicable law and the terms of the related Mortgage
Note
and Mortgage regarding the Mortgage Interest Rate adjustments. Upon the
discovery by the Company or the receipt of notice from the Purchaser that the
Company has failed to adjust a Mortgage Interest Rate in accordance with the
terms of the related Mortgage Note, the Company shall immediately deposit in
the
Custodial Account from its own funds the amount of any interest loss or deferral
caused the Purchaser thereby.
Section
4.22 Confidentiality/Protection
of Customer Information.
The
Company shall keep confidential and shall not divulge to any party, without
the
Purchaser's prior written consent, the price paid by the Purchaser for the
Mortgage Loans, except to the extent that it is reasonable and necessary for
the
Company to do so in working with legal counsel, auditors, taxing authorities
or
other governmental agencies. Each party agrees that it shall comply with all
applicable laws and regulations regarding the privacy or security of Customer
Information and shall maintain appropriate administrative, technical and
physical safeguards to protect the security, confidentiality and integrity
of
Customer Information, including maintaining security measures designed to meet
the Interagency Guidelines Establishing Standards for Safeguarding Customer
Information, 66 Fed. Reg. 8616 (the “Interagency Guidelines”), if applicable.
For purposes of this Section 4.22, the term “Customer Information” shall have
the meaning assigned to it in the Interagency Guidelines.
Section
4.23 Fair
Credit Reporting Act
The
Company, in its capacity as servicer for each Mortgage Loan, agrees to fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly
basis.
Section
4.24 Establishment
of and Deposits to Subsidy Account.
The
Company shall segregate and hold all Subsidy Funds collected and received
pursuant to the Subsidy Loans separate and apart from any of its own funds
and
general assets and shall establish and maintain one or more Subsidy Accounts,
in
the form of time deposit or demand accounts, titled “▇▇▇▇▇ Fargo Bank, N.A., in
trust for the Purchaser, its successors or assigns, and/or subsequent purchasers
of residential Mortgage Loans, and various Mortgagors.” The Subsidy Account
shall be an eligible deposit account established with an eligible
institution.
The
Company shall, from time to time, withdraw funds from the Subsidy Account for
the following purposes:
|
(i)
|
to
deposit in the Custodial Account in the amounts and in the manner
provided
for in Section 4.04(xi);
|
|
(ii)
|
to
transfer funds to another eligible institution in accordance with
Section
4.09 hereof;
|
(iii) to
withdraw funds deposited in error; and
|
(iv)
|
to
clear and terminate the Subsidy Account upon the termination of this
Agreement.
|
Notwithstanding
anything to the contrary elsewhere in this Agreement, the Company may employ
the
Escrow Account as the Subsidy Account to the extent that the Company can
separately identify any Subsidy Funds deposited therein.
Section
4.25 Use
of
Subservicers and Subcontractors.
The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (a) of this Section 4.25. The Company shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Company under this Agreement or any Reconstitution
Agreement unless the Company complies with the provisions of paragraph (b)
of
this Section 4.25.
(a) It
shall
not be necessary for the Company to seek the consent of the Purchaser or any
Depositor to the utilization of any Subservicer. The Company shall cause any
Subservicer used by the Company (or by any Subservicer) for the benefit of
the
Purchaser and any Depositor to comply with the provisions of this Section 4.25
and with Sections 6.04, 6.06, 9.01(e)(iii), 9.01(e)(v) and 9.01(f) of this
Agreement to the same extent as if such Subservicer were the Company, and to
provide the information required with respect to such Subservicer under Section
9.01(e)(iv) of this Agreement. The Company shall be responsible for obtaining
from each Subservicer and delivering to the Purchaser and any Depositor any
servicer compliance statement required to be delivered by such Subservicer
under
Section 6.04 and any assessment of compliance and attestation required to be
delivered by such Subservicer under Section 6.06 and any certification required
to be delivered to the Person that will be responsible for signing the Sarbanes
Certification under Section 6.06 as and when required to be
delivered.
(b) It
shall
not be necessary for the Company to seek the consent of the Purchaser or any
Depositor to the utilization of any Subcontractor. The Company shall promptly
upon request provide to the Purchaser and any Depositor (or any designee of
the
Depositor, such as a master servicer or administrator) a written description
(in
form and substance satisfactory to the Purchaser and such Depositor) of the
role
and function of each Subcontractor utilized by the Company or any Subservicer,
specifying (i) the identity of each such Subcontractor, (ii) which (if any)
of
such Subcontractors are “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (ii) of this paragraph.
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.06 and 9.01(f) of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance
and
attestation required to be delivered by such Subcontractor under Section 6.06,
in each case as and when required to be delivered.
ARTICLE
V
PAYMENTS
TO PURCHASER
Section
5.01 Remittances.
On
each
Remittance Date the Company shall remit by wire transfer of immediately
available funds to the Purchaser (a) all amounts deposited in the Custodial
Account as of the close of business on the Determination Date (net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.05),
plus (b) all amounts, if any, which the Company is obligated to distribute
pursuant to Section 5.03, minus (c) any amounts attributable to Principal
Prepayments received after the applicable Principal Prepayment Period which
amounts shall be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii);
minus (d) any amounts attributable to Monthly Payments collected but due on
a
Due Date or Dates subsequent to the first day of the month of the Remittance
Date, and minus (e) any amounts attributable to Buydown Funds being held in
the
Custodial Account, which amounts shall be remitted on the Remittance Date next
succeeding the Due Period for such amounts.
With
respect to any remittance received by the Purchaser after the Business Day
on
which such payment was due, the Company shall pay to the Purchaser interest
on
any such late payment at an annual rate equal to the Prime Rate, adjusted as
of
the date of each change, plus three percentage points, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall 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 to the
Purchaser, both inclusive. Such interest shall be remitted by wire transfer
of
immediately available funds within one Business Day following agreement by
the
Purchaser and the Company of the penalty amount. The payment by the Company
of
any such interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Company.
Section
5.02 Statements
to Purchaser.
Not
later
than the Remittance Date, the Company shall furnish to the Purchaser a monthly
remittance advice in the standard form of electronic Alltel® file, as to the
period ending on the last day of the preceding month. If requested by the
Purchaser prior to the related Closing Date, the first monthly remittance advice
due to the Purchaser following such Closing Date shall be furnished by the
12th
calendar
day, or if such day is not a Business Day, then the preceding Business
Day.
Section
5.03 Monthly
Advances by Company.
On
the
Business Day immediately preceding each Remittance Date, the Company shall
deposit in the Custodial Account from its own funds or from amounts held for
future distribution an amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close
of
business on the immediately preceding Determination Date or which were deferred
pursuant to Section 4.01. Any amounts held for future distribution and so used
shall be replaced by the Company by deposit in the Custodial Account on or
before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Purchaser required to be
made
on such Remittance Date. The Company's obligation to make such Monthly Advances
as to any Mortgage Loan will continue through the last Monthly Payment due
prior
to the payment in full of the Mortgage Loan, or through the last Remittance
Date
prior to the Remittance Date for the distribution of all Liquidation Proceeds
and other payments or recoveries (including REO Disposition Proceeds, Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided,
however, that such obligation shall cease if the Company determines, in its
sole
reasonable opinion, that advances with respect to such Mortgage Loan are
non-recoverable by the Company from Liquidation Proceeds, Insurance Proceeds,
REO Disposition Proceeds, Condemnation Proceeds, or otherwise with respect
to a
particular Mortgage Loan. In the event that the Company determines that any
such
advances are non-recoverable, the Company shall provide the Purchaser with
a
certificate signed by two officers of the Company evidencing such
determination.
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.01 Transfers
of Mortgaged Property.
The
Company shall use its best efforts to enforce any "due-on-sale" provision
contained in any Mortgage or Mortgage Note and to deny assumption by the Person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Company shall, to the extent
it
has knowledge of such conveyance, immediately notify the Purchaser and exercise
its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause applicable thereto, provided, however, that the Company
shall not exercise such rights if prohibited by law from doing so or if the
exercise of such rights would impair or threaten to impair any recovery under
the related PMI Policy, if any.
If
the
Company reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause, the Company shall enter into (i) an assumption and
modification agreement with the Person to whom such property has been conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and the
original Mortgagor remains liable thereon or (ii) in the event the Company
is
unable under applicable law to require that the original Mortgagor remain liable
under the Mortgage Note and the Company has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is
released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage
Loan,
the outstanding principal amount of the Mortgage Loan nor any other materials
terms shall be changed without Purchaser’s consent.
To
the
extent that any Mortgage Loan is assumable, the Company shall inquire diligently
into the credit worthiness of the proposed transferee, and shall use the
underwriting criteria for approving the credit of the proposed transferee which
are used with respect to underwriting mortgage loans of the same type as the
Mortgage Loans. If the credit of the proposed transferee does not meet such
underwriting criteria, the Company diligently shall, to the extent permitted
by
the Mortgage or the Mortgage Note and by applicable law, accelerate the maturity
of the Mortgage Loan.
Section
6.02 Satisfaction
of Mortgages and Release of Mortgage Loan Documents.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Company of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Company shall notify the Purchaser in the Monthly Remittance
Advice as provided in Section 5.02, and may request the release of any Mortgage
Loan Documents.
If
the
Company satisfies or releases a Mortgage without first having obtained payment
in full of the indebtedness secured by the Mortgage or should the Company
otherwise prejudice any rights the Purchaser may have under the mortgage
instruments, upon written demand of the Purchaser, the Company shall repurchase
the related Mortgage Loan at the Repurchase Price by deposit thereof in the
Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Company shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 4.12 insuring the Company against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section
6.03 Servicing
Compensation.
As
compensation for its services hereunder, the Company shall be entitled to
withdraw from the Custodial Account or to retain from interest payments on
the
Mortgage Loans the amount of its Servicing Fee. The Servicing Fee shall be
payable monthly and shall be computed on the basis of the outstanding principal
balance and for the period respecting which any related interest payment on
a
Mortgage Loan is computed. The obligation of the Purchaser to pay the Servicing
Fee is limited to, and payable solely from, the interest portion of such Monthly
Payments.
Additional
servicing compensation in the form of assumption fees, to the extent provided
in
Section 6.01, and late payment charges shall be retained by the Company to
the
extent not required to be deposited in the Custodial Account. The Company shall
be required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement thereof except
as specifically provided for herein.
Section
6.04 Annual
Statements as to Compliance.
(i) The
Company shall deliver to the Purchaser, on or before February 28, 2006, an
Officer's Certificate, stating that (x) a review of the activities of the
Company during the preceding calendar year and of performance under this
Agreement or similar agreements has been made under such officer's supervision,
and (y) to the best of such officer's knowledge, based on such review, the
Company has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and the action being taken by the Company to cure such
default.
(ii) On
or
before March 1 of each calendar year, commencing in 2007, the Company shall
deliver to the Purchaser and any Depositor a statement of compliance addressed
to the Purchaser and such Depositor and signed by an authorized officer of
the
Company, to the effect that (a) a review of the Company’s activities during the
immediately preceding calendar year (or applicable portion thereof) and of
its
performance under this Agreement and any applicable Reconstitution Agreement
during such period has been made under such officer’s supervision, and (b) to
the best of such officers’ knowledge, based on such review, the Company has
fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar
year
(or applicable portion thereof) or, if there has been a failure to fulfill
any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status
thereof.
Section
6.05 Annual
Independent Public Accountants' Servicing Report.
Except
with respect to Securitization Transactions occurring on or after January 1,
2006, on or before February 28, 2006, the Company, at its expense, shall cause
a
firm of independent public accountants which is a member of the American
Institute of Certified Public Accountants to furnish a statement to each
Purchaser to the effect that such firm has examined certain documents and
records relating to the servicing of the mortgage loans similar in nature and
that such firm is of the opinion that the provisions of this or similar
agreements have been complied with, and that, on the basis of such examination
conducted substantially in compliance with the Single Attestation Program for
Mortgage Bankers, nothing has come to their attention which would indicate
that
such servicing has not been conducted in compliance therewith, except for (i)
such exceptions as such firm shall believe to be immaterial, and (ii) such
other
exceptions as shall be set forth in such statement. By providing Purchaser
a
copy of a Uniform Single Attestation Program Report from their independent
public accountant's on an annual basis, Company shall be considered to have
fulfilled its obligations under this Section 6.05.
Section
6.06 Report
on Assessment of Compliance and Attestation.
With
respect to any Mortgage Loans that are the subject of a Securitization
Transaction occurring on or before March 1 of each calendar year, commencing
in
2007, the Company shall:
| (i) |
deliver
to the Purchaser and any Depositor a report (in form and substance
reasonably satisfactory to the Purchaser and such Depositor) regarding
the
Company’s assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18
and
15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report
shall be addressed to the Purchaser and such Depositor and signed by
an
authorized officer of the Company and shall address each of the Servicing
Criteria specified on a certification substantially in the form of
Exhibit
D hereto;
|
| (ii) |
deliver
to the Purchaser and any Depositor a report of a registered public
accounting firm reasonably acceptable to the Purchaser and such Depositor
that attests to, and reports on, the assessment of compliance made
by the
Company and delivered pursuant to the preceding paragraph. Such
attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g)
of
Regulation S-X under the Securities Act and the Exchange Act;
|
| (iii) |
cause
each Subservicer and each Subcontractor, determined by the Company
pursuant to Section 425(b) to be “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, to deliver to the
Purchaser and such Depositor an assessment of compliance and accountants’
attestation as and when provided in paragraphs (a) and (b) of this
Section
6.06; and
|
| (iv) |
deliver
to the Purchaser, any Depositor and any other Person that will be
responsible for signing the certification (a “Sarbanes Certification”)
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant
to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) on behalf of an
asset-backed issuer with respect to a Securitization Transaction a
certification in the form attached hereto as Exhibit
E.
|
The
Company acknowledges that the parties identified in clause (iv) above may rely
on the certification provided by the Company pursuant to such clause in signing
a Sarbanes Certification and filing such with the Commission.
Section
6.07 Remedies.
(i) Any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under Article 9, Section 6.04,
Section 6.05 or Section 6.06, or any breach by the Company of a representation
or warranty set forth in Section 9.01(e)(iv)(A), or in a writing furnished
pursuant to Section 9.01(e)(iv)(B) and made as of a date prior to the closing
date of the related Securitization Transaction, to the extent that such breach
is not cured by such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(e)(iv)(B) to the extent made as of a date subsequent to such closing date,
shall, except as provided in sub-clause (ii) of this Section, immediately and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations
of
the Company as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement or any applicable Reconstitution Agreement to the contrary) of any
compensation to the Company; provided that to the extent than any provision
of
this Agreement and/or any applicable Reconstitution Agreement expressly provides
for the survival of certain rights or obligations following termination of
the
Company as servicer, such provision shall be given effect.
(ii) Any
failure by the Company, any Subservicer or any Subcontractor to deliver any
information, report, certification or accountants’ letter when and as required
under Section 6.04, Section 6.05 or Section 6.06, including any failure by
the
Company to identify any Subcontract “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, which continues unremedied
for
ten (10) calendar days after the date on which such information, report,
certification or accountants’ letter was required to be delivered shall
constitute an Event of Default with respect to the Company under this Agreement
and any applicable Reconstitution Agreement, and shall entitle the Purchaser
or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Company under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement to the contrary) of any compensation to the Company; provided that
to
the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
(iii) The
Company shall promptly reimburse the Purchaser (or any designee of the
Purchaser, such as a master servicer) and any Depositor, as applicable, for
all
reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the Mortgage Loans to
a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance or
injunctive relief.
Section
6.08 Right
to Examine Company Records.
The
Purchaser, or its designee, shall have the right to examine and audit any and
all of the books, records, or other information of the Company, whether held
by
the Company or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times
as
may be reasonable under applicable circumstances, upon reasonable advance
notice. The Purchaser shall pay its own expenses associated with such
examination.
Section
6.09 Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Company shall not take any action,
cause the REMIC to take any action or fail to take (or fail to cause to be
taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited
to
the tax on “prohibited transactions” as defined Section 860(a)(2) of the Code
and the tax on “contributions” to a REMIC set forth in Section 860(d) of the
Code) unless the Company has received an Opinion of Counsel (at the expense
of
the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
ARTICLE
VII
COMPANY
TO COOPERATE
Section
7.01 Provision
of Information.
During
the term of this Agreement, the Company shall furnish to the Purchaser such
periodic, special, or other reports or information, and copies or originals
of
any documents contained in the Servicing File for each Mortgage Loan provided
for herein. All other special reports or information not provided for herein
as
shall be necessary, reasonable, or appropriate with respect to the Purchaser
or
any regulatory agency will be provided at the Purchaser’s expense. All such
reports, documents or information shall be provided by and in accordance with
all reasonable instructions and directions which the Purchaser may
give.
The
Company shall execute and deliver all such instruments and take all such action
as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this
Agreement.
Section
7.02 Financial
Statements; Servicing Facility.
In
connection with marketing the Mortgage Loans, the Purchaser may make available
to a prospective Purchaser a Consolidated Statement of Operations of the Company
for the most recently completed two (2) fiscal years for which such a statement
is available, as well as a Consolidated Statement of Condition at the end of
the
last two fiscal years covered by such Consolidated Statement of Operations.
The
Company also shall make available any comparable interim statements to the
extent any such statements have been prepared by or on behalf of the Company
(and are available upon request to members or stockholders of the Company or
to
the public at large).
The
Company also shall make available to Purchaser or prospective Purchaser a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Company or the financial
statements of the Company, and to permit any prospective purchaser to inspect
the Company's servicing facilities for the purpose of satisfying such
prospective purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE
VIII
THE
COMPANY
Section
8.01 Indemnification;
Third Party Claims.
The
Company shall indemnify the Purchaser and hold it harmless against any and
all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Purchaser may sustain in any way related to the failure of the Company
to perform its duties and service the Mortgage Loans in strict compliance with
the terms of this Agreement. The Company immediately shall notify the Purchaser
if a claim is made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the Purchaser) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment
or
decree which may be entered against it or the Purchaser in respect of such
claim. The Company shall follow any written instructions received from the
Purchaser in connection with such claim. The Purchaser promptly shall reimburse
the Company for all amounts advanced by it pursuant to the preceding sentence
except when the claim is in any way related to the Company's indemnification
pursuant to Section 3.03, or the failure of the Company to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement.
Section
8.02 Merger
or Consolidation of the Company.
The
Company shall keep in full effect its existence, rights and franchises and
shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its
duties under this Agreement.
Any
Person into which the Company may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company,
shall
be the successor of the Company hereunder, without the execution or filing
of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however, that the successor
or
surviving Person shall be an institution which is a ▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇
Mac-approved company in good standing and has a net worth of no less than $25
million. Furthermore, in the event the Company transfers or otherwise disposes
of all or substantially all of its assets to an affiliate of the Company, such
affiliate shall satisfy the condition above, and shall also be fully liable
to
the Purchaser for all of the Company's obligations and liabilities
hereunder.
Section
8.03 Limitation
on Liability of Company and Others.
Neither
the Company nor any of the directors, officers, employees or agents of the
Company shall be under any liability to the Purchaser for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Company or any such Person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement
or
any other liability which would otherwise be imposed under this Agreement.
The
Company and any director, officer, employee or agent of the Company may rely
in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Company
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans
in
accordance with this Agreement and which in its opinion may involve it in any
expense or liability, provided, however, that the Company may, with the consent
of the Purchaser, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the Company shall be entitled to reimbursement from
the
Purchaser of the reasonable legal expenses and costs of such
action.
Section
8.04 Limitation
on Resignation and Assignment by Company.
The
Purchaser has entered into this Agreement with the Company and subsequent
Purchaser will purchase the Mortgage Loans in reliance upon the independent
status of the Company, and the representations as to the adequacy of its
servicing facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore,
the
Company shall neither assign this Agreement or the servicing rights hereunder
or
delegate its rights or duties hereunder (other than pursuant to Section 4.01)
or
any portion hereof or sell or otherwise dispose of all of its property or assets
without the prior written consent of the Purchaser, which consent shall not
be
unreasonably withheld.
The
Company shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced
by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided
in
Section 12.01.
Without
in any way limiting the generality of this Section 8.04, in the event that
the
Company either shall assign this Agreement or the servicing responsibilities
hereunder or delegate its duties hereunder (other than pursuant to Section
4.01)
or any portion thereof or sell or otherwise dispose of all or substantially
all
of its property or assets, without the prior written consent of the Purchaser,
then the Purchaser shall have the right to terminate this Agreement upon notice
given as set forth in Section 10.01, without any payment of any penalty or
damages and without any liability whatsoever to the Company or any third
party.
ARTICLE
IX
SECURITIZATION
TRANSACTIONS; WHOLE LOAN TRANSFERS AND AGENCY TRANSFERS
Section
9.01 Securitization
Transactions; Whole Loan Transfers and Agency Transfers
The
Purchaser and the Company agree that with respect to some or all of the Mortgage
Loans, the Purchaser, at its sole option, may effect Whole Loan Transfers,
Agency Transfer or Securitization Transactions, retaining the Company as the
servicer thereof or subservicer if a master servicer is employed, or as
applicable the "seller/servicer." On the Reconstitution Date, the Mortgage
Loans
transferred may cease to be covered by this Agreement; provided, however, that,
in the event that any Mortgage Loan transferred pursuant to this Section 9.01
is
rejected by the transferee, the Company shall continue to service such rejected
Mortgage Loan on behalf of the Purchaser in accordance with the terms and
provisions of this Agreement.
The
Company shall cooperate with the Purchaser in connection with each Whole Loan
Transfer, Agency Transfer or Securitization Transaction in accordance with
this
Section 9.01. In connection therewith:
|
(a)
|
the
Company shall make all representations and warranties with respect
to the
Mortgage Loans as of the related Closing Date and with respect to
the
Company itself as of the closing date of each Whole Loan Transfer,
Agency
Transfer or Securitization
Transaction;
|
|
(b)
|
the
Company shall negotiate in good faith and execute any seller/servicer
agreements required to effectuate the foregoing provided such agreements
create no greater obligation or cost on the part of the Company than
otherwise set forth in this
Agreement;
|
|
(c)
|
the
Company shall provide as
applicable:
|
|
(i)
|
any
and all information and appropriate verification of information which
may
be reasonably available to the Company, whether through letters of
its
auditors and counsel or otherwise, as the Purchaser shall
request;
|
| (ii) |
such
additional representations, warranties, covenants, opinions of counsel,
letters from auditors, and certificates of public officials or officers
of
the Company as are reasonably believed necessary by the trustee, any
Rating Agency or the Purchaser, as the case may be, in connection with
such Whole Loan Transfers, Agency Transfers or Securitization
Transactions. The Purchaser shall pay all third party costs associated
with the preparation of such information. The Company shall execute
any
seller/servicer agreements required within a reasonable period of time
after receipt of such seller/servicer agreements which time shall be
sufficient for the Seller and Seller's counsel to review such
seller/servicer agreements. Under this Agreement, the Company shall
retain
a Servicing Fee for each Mortgage Loan, at no less than the applicable
Servicing Fee Rate; and
|
| (iii) |
at
any time as required by any Rating Agency, such additional documents
from
the related Retained Mortgage File to the Custodian as may be required
by
such Rating Agency;
|
| (d) |
the
Company shall with respect to any Mortgage Loans that are subject to
a
Securitization Transaction occurring
on or before December 31, 2005,in
which the filing of a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification directly with the
Commission is required, by February 28, 2006, or in connection with
any
additional ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification required to be filed upon thirty
(30) days written request, an officer of the Company shall execute
and
deliver an Officer’s Certification substantially in the form attached
hereto as Exhibit F, to the entity filing the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification
directly with the Commission (such as the Purchaser, any master
servicer,
any trustee
or any depositor) for the benefit of such entity and such entity’s
affiliates and the officers, directors and agents of such entity and
such
entity’s affiliates, and shall indemnify such entity or persons arising
out of any breach of Company’s obligations
or representations
relating thereto as provided in such Officer’s Certification.
|
|
(e)
|
the
Company shall, in connection with any Securitization Transaction
occurring
on or after January 1, 2006, the Company shall (1) within five (5)
Business Days following request by the Purchaser or any Depositor,
provide
to the Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator and each Subservicer to provide), in writing
and in
form and substance reasonably satisfactory to the Purchaser and such
Depositor, the information and materials specified in paragraphs
(i),
(ii), (iii) and (vii) of this subsection (e), and (2) as promptly
as
practicable following notice to or discovery by the Company, provide
to
the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (iv) of this subsection
(e).
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|
(i)
|
if
so requested by the Purchaser or any Depositor, the Company shall
provide
such information regarding (1) the Company, as originator of the
Mortgage
Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (2) each Third-Party Originator, and (3) as applicable,
each Subservicer, as is requested for the purpose of compliance with
Items
1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such information
shall include, at a minimum:
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|
(A)
|
the
originator’s form of organization;
|
|
(B)
|
a
description of the originator’s origination program and how long the
originator has been engaged in originating residential mortgage loans,
which description shall include a discussion of the originator’s
experience in originating mortgage loans of a similar type as the
Mortgage
Loans; information regarding the size and composition of the originator’s
origination portfolio; and information that may be material, in the
good
faith judgment of the Purchaser, to an analysis of the performance
of the
Mortgage Loans, including the originators’ credit-granting or underwriting
criteria for mortgage loans of similar type(s) as the Mortgage Loans
and
such other information as the Purchaser or any Depositor may reasonably
request for the purpose of compliance with Item 1110(b)(2) of Regulation
AB;
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|
(C)
|
a
description of any material legal or governmental proceedings pending
(or
known to be contemplated) against the Company, each Third-Party Originator
and each Subservicer; and
|
|
(D)
|
a
description of any affiliation or relationship between the Company,
each
Third-Party Originator, each Subservicer and any of the following
parties
to a Securitization Transaction, as such parties are identified to
the
Company by the Purchaser or any Depositor in writing in advance of
a
Securitization Transaction:
|
(1) the
sponsor;
(2) the
depositor;
(3) the
issuing entity;
(4) any
servicer;
(5) any
trustee;
(6) any
originator;
(7) any
significant obligor;
(8) any
enhancement or support provider; and
(9) any
other
material transaction party.
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(ii)
|
If
so requested by the Purchaser or any Depositor, the Company shall
provide
(or, as applicable, cause each Third-Party Originator to provide)
Static
Pool Information with respect to the mortgage loans (of a similar type as
the Mortgage Loans, as reasonably identified by the Purchaser as
provided
below) originated by (1) the Company, if the Company is an originator
of
Mortgage Loans (including as an acquirer of Mortgage Loans from a
Qualified Correspondent), and/or (2) each Third-Party Originator.
Such
Static Pool Information shall be prepared by the Company (or Third-Party
Originator) on the basis of its reasonable, good faith interpretation
of
the requirements of Item 1105(a)(1)-(3) of Regulation AB. To the
extent
that there is reasonably available to the Company (or Third-Party
Originator) Static Pool Information with respect to more than one
mortgage
loan type, the Purchaser or any Depositor shall be entitled to specify
whether some or all of such information shall be provided pursuant
to this
paragraph. The content of such Static Pool Information may be in
the form
customarily provided by the Company, and need not be customized for
the
Purchaser or any Depositor. Such Static Pool Information for each
vintage
origination year or prior securitized pool, as applicable, shall
be
presented in increments no less frequently than quarterly over the
life of
the mortgage loans included in the vintage origination year or prior
securitized pool. The most recent periodic increment must be as of
a date
no later than 135 days prior to the date of the prospectus or other
offering document in which the Static Pool Information is to be included
or incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record
of the
information provided, such as a portable document format (pdf) file,
or
other such electronic format reasonably required by the Purchaser
or the
Depositor, as applicable.
|
If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense of
the
requesting party (to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such statements and agreed-upon
procedures letters of certified public accountants reasonably acceptable to
the
Purchaser or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to
the
Company’s or Third-Party Originator’s originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such statements and letters shall be addressed to and be
for
the benefit of such parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction. Any such statement or letter may take the
form
of a standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
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(iii)
|
If
so requested by the Purchaser or any Depositor, the Company shall
provide
such information regarding the Company, as servicer of the Mortgage
Loans,
and each Subservicer (each of the Company and each Subservicer, for
purposes of this paragraph, a “Servicer”), as is requested for the purpose
of compliance with Items 1108 of Regulation AB. Such information
shall
include, at a minimum:
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|
(A)
|
the
Servicer’s form of organization;
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|
(B)
|
a
description of how long the Servicer has been servicing residential
mortgage loans; a general discussion of the Servicer’s experience in
servicing assets of any type as well as a more detailed discussion
of the
Servicer’s experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution Agreements;
information regarding the size, composition and growth of the Servicer’s
portfolio of residential mortgage loans of a type similar to the
Mortgage
Loans and information on factors related to the Servicer that may
be
material, in the good faith judgment of the Purchaser or any Depositor,
to
any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without limitation:
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|
(1)
|
whether
any prior securitizations of mortgage loans of a type similar to
the
Mortgage Loans involving the Servicer have defaulted or experienced
an
early amortization or other performance triggering event because
of
servicing during the three-year period immediately preceding the
related
Securitization Transaction;
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|
(2)
|
the
extent of outsourcing the Servicer
utilizes;
|
|
(3)
|
whether
there has been previous disclosure of material noncompliance with
the
applicable servicing criteria with respect to other securitizations
of
residential mortgage loans involving the Servicer as a servicer during
the
three-year period immediately preceding the related Securitization
Transaction;
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|
(4)
|
whether
the Servicer has been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application
of a servicing performance test or trigger; and
|
|
(5)
|
such
other information as the Purchaser or any Depositor may reasonably
request
for the purpose of compliance with Item 1108(b)(2) of Regulation
AB;
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|
(C)
|
a
description of any material changes during the three-year period
immediately preceding the related Securitization Transaction to the
Servicer’s policies or procedures with respect to the servicing function
it will perform under this Agreement and any Reconstitution Agreements
for
mortgage loans of a type similar to the Mortgage
Loans;
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|
(D)
|
information
regarding the Servicer’s financial condition, to the extent that there is
a material risk that an adverse financial event or circumstance involving
the Servicer could have a material adverse effect on the performance
by
the Company of its servicing obligations under this Agreement or
any
Reconstitution Agreement;
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|
(E)
|
information
regarding advances made by the Servicer on the Mortgage Loans and
the
Servicer’s overall servicing portfolio of residential mortgage loans for
the three-year period immediately preceding the related Securitization
Transaction, which may be limited to a statement by an authorized
officer
of the Servicer to the effect that the Servicer has made all advances
required to be made on residential mortgage loans serviced by it
during
such period, or, if such statement would not be accurate, information
regarding the percentage and type of advances not made as required,
and
the reasons for such failure to
advance;
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|
(F)
|
a
description of the Servicer’s processes and procedures designed to address
any special or unique factors involved in servicing loans of a similar
type as the Mortgage Loans;
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|
(G)
|
a
description of the Servicer’s processes for handling delinquencies,
losses, bankruptcies and recoveries, such as through liquidation
of
mortgaged properties, sale of defaulted mortgage loans or workouts;
and
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|
(H)
|
information
as to how the Servicer defines or determines delinquencies and
charge-offs, including the effect of any grace period, re-aging,
restructuring, partial payments considered current or other practices
with
respect to delinquency and loss
experience.
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|
(iv)
|
If
so requested by the Purchaser or any Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act with respect
to
any class of asset-backed securities, the Company shall (or shall
cause
each Subservicer and Third-Party Originator to) (1) notify the Purchaser
and any Depositor in writing of (A) any material litigation or
governmental proceedings pending against the Company, any Subservicer
or
any Third-Party Originator and (B) any affiliations or relationships
that
develop following the closing date of a Securitization Transaction
between
the Company, any Subservicer or any Third-Party Originator and any
of the
parties specified in Section 9.01(e)(i)(D) (and any other parties
identified in writing by the requesting party) with respect to such
Securitization Transaction, and (2) provide to the Purchaser and
any
Depositor a description of such proceedings, affiliations or
relationships.
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|
(v)
|
As
a condition to the succession to the Company or any Subservicer as
servicer or Subservicer under this Agreement or any Reconstitution
Agreement by any Person (i) into which the Company or such Subservicer
may
be merged or consolidated, or (ii) which may be appointed as a successor
to the Company or any Subservicer, the Company shall provide to the
Purchaser and any Depositor, at least 15 calendar days prior to the
effective date of such succession or appointment, (x) written notice
to
the Purchaser and any Depositor of such succession or appointment
and (y)
in writing and in form and substance reasonably satisfactory to the
Purchaser and such Depositor, all information reasonably requested
by the
Purchaser or any Depositor in order to comply with is reporting obligation
under Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
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|
(vi)
|
(A)
|
The
Company shall represent to the Purchaser, as of the date on which
information is first provided to the Purchaser under this Section
9.01(e)
that, except as disclosed in writing to the Purchaser prior to such
date:
(1) the Company is not aware and has not received notice that any
default,
early amortization or other performance triggering event has occurred
as
to any other securitization due to any act or failure to act of the
Company; (2) the Company has not been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing
default or to application of a servicing performance test or trigger;
(3)
no material noncompliance with the applicable servicing criteria
with
respect to other securitizations of residential mortgage loans involving
the Company as servicer has been disclosed or reported by the Company;
(4)
no material changes to the Company’s policies or procedures with respect
to the servicing function it will perform under this Agreement and
any
Reconstitution Agreement for mortgage loans of a type similar to
the
Mortgage Loans have occurred during the three-year period immediately
preceding the related Securitization Transaction; (5) there are no
aspects
of the Company’s financial condition that could have a material adverse
effect on the performance by the Company of its servicing obligations
under this Agreement or any Reconstitution Agreement; (6) there are
no
material legal or governmental proceedings pending (or known to be
contemplated) against the Company, any Subservicer or any Third-Party
Originator; and (7) there are no affiliations, relationships or
transactions relating to the Company, any Subservicer or any Third-Party
Originator with respect to any Securitization Transaction and any
party
thereto identified by the related Depositor of a type described in
Item
1119 of Regulation AB.
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|
(B)
|
If
so requested by the Purchaser on any date following the date on which
information is first provided to the Purchaser under this Section
9.01(e),
the Company shall, within five (5) Business Days following such request,
confirm in writing the accuracy of the representations and warranties
set
forth in sub clause (A) above or, if any such representation and
warranty
is not accurate as of the date of such request, provide reasonably
adequate disclosure of the pertinent facts, in writing, to the requesting
party.
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|
(vii)
|
In
addition to such information as the Company, as servicer, is obligated
to
provide pursuant to other provisions of this Agreement, if so requested
by
the Purchaser or any Depositor, the Company shall provide such information
reasonably available to the Company regarding the performance of
the
Mortgage Loans as is reasonably required to facilitate preparation
of
distribution reports in accordance with Item 1121 of Regulation
AB.
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|
(f)
|
the
Company shall indemnify the Purchaser, each affiliate of the Purchaser,
and each of the following parties participating in a Securitization
Transaction; each sponsor and issuing entity; each Person responsible
for
the preparation, execution or filing of any report required to be
filed
with the Commission with respect to such Securitization Transaction,
or
for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to such Securitization
Transaction; each broker dealer acting as underwriter, placement
agent or
initial purchaser, each Person who controls any of such parties or
the
Depositor (within the meaning of Section 15 of the Securities Act
and
Section 20 of the Exchange Act); and the respective present and former
directors, officers, employees and agents of each of the foregoing
and of
the Depositor, and shall hold each of them harmless from and against
any
losses, damages, penalties, fines, forfeitures, legal fees and expenses
and related costs, judgments, and any other costs, fees and expenses
that
any of them may sustain arising out of or based
upon:
|
(i)
(A) any
untrue statement of a material fact contained or alleged to be contained in
any
information, report, certification, accountants’ letter or other material
provided under Sections 9.01(c) and (e) by or on behalf of the Company, or
provided under Sections 9.01(c) and (e) by or on behalf of any Subservicer,
Subcontractor or Third-Party Originator (collectively, the “Company
Information”), or (B) the omission or alleged omission to state in the Company
Information a material fact required to be stated in the Company Information
or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
by way of clarification, that
clause (B) of this paragraph shall be construed solely by reference to the
Company Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether the Company
Information or any portion thereof is presented together with or separately
from
such other information;
| (ii) |
any
failure by the Company, any Subservicer, any Subcontractor or any
Third-Party Originator to deliver any information, report, certification,
accountants’ letter or other material when and as required under Sections
9.01(c) and (e), including any failure by the Company to identify any
Subcontractor “participating in the servicing function” within the meaning
of Item 1122 of Regulation AB; or
|
| (iii) |
any
breach by the Company of a representation or warranty set forth in
Section
9.01(e)(iv)(A) or in a writing furnished pursuant to Section
9.01(e)(iv)(B) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach
is not
cured by such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(e)(iv)(B) to the extent made as of a date subsequent to such closing
date.
|
In
the
case of any failure of performance described in sub-clause (ii) of this Section
9.01(f), the Company shall promptly reimburse the Purchaser, any Depositor,
as
applicable, and each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Company, any Subservicer,
any
Subcontractor or any Third-Party Originator.
|
(g)
|
the
Purchaser and each Person who controls the Purchaser shall indemnify
the
Company, each affiliate of the Company, each Person who controls
any of
such parties or the Company (within the meaning of Section 15 of
the
Securities Act and Section 20 of the Exchange Act) and the respective
present and former directors, officers, employees and agents of each
of
the foregoing and of the Company, and shall hold each of them harmless
from and against any losses, damages, penalties, fines, forfeitures,
legal
fees and expenses and related costs, judgments, and any other costs,
fees
and expenses that any of them may sustain arising out of or based
upon:
|
(i)
(A) any
untrue statement of a material fact contained or alleged to be contained in
any
offering materials related to a Securitization Transaction, including without
limitation the registration statement, prospectus, prospectus supplement, any
private placement memorandum, any offering circular, any computational
materials, and any amendments or supplements to the foregoing (collectively,
the
“Securitization Materials”) or (B) the omission or alleged omission to state in
the Securitization Materials a material fact required to be stated in the
Securitization Materials or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
but only to the extent that such untrue statement or alleged untrue statement
or
omission or alleged omission is other than a statement or omission arising
out
of, resulting from, or based upon the Company Information.
The
Purchaser and the Company acknowledge and agree that the purpose of Section
9.01(e) is to facilitate compliance by the Purchaser and any Depositor with
the
provisions of Regulation AB and related rules and regulations of the Commission.
Neither the Purchaser nor any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder.
The
Company acknowledges that interpretations of the requirements of Regulation
AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Purchaser or any Depositor in good faith for delivery
of
information under these provisions on the basis of evolving interpretations
of
Regulation AB. In connection with any Securitization Transaction, the Company
shall cooperate fully with the Purchaser to deliver to the Purchaser (including
any of its assignees or designees) and any Depositor, any and all statements,
reports, certifications, records and any other information necessary in the
good
faith determination of the Purchaser or any Depositor to permit the Purchaser
or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Company, any Subservicer, any Third-Party
Originator and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Purchaser or any Depositor to be necessary in order
to effect such compliance.
In
the
event the Purchaser has elected to have the Company hold record title to the
Mortgages, prior to the Reconstitution Date the Company shall prepare an
Assignment of Mortgage in blank or to the trustee from the Company acceptable
to
the trustee for each Mortgage Loan that is part of the Whole Loan Transfers,
Agency Transfer or Securitization Transactions. The Company shall pay all
preparation and recording costs associated with the initial Assignment of
Mortgage. The Company shall execute each Assignment of Mortgage, track such
Assignments of Mortgage to ensure they have been recorded and deliver them
as
required by the trustee upon the Company's receipt thereof. Additionally, the
Company shall prepare and execute, at the direction of the Purchaser, any note
endorsements in connection with any and all seller/servicer agreements. If
required at any time by a Rating Agency, Purchaser or successor purchaser in
connection with any Whole Loan Transfer, Agency Sale or Securitization
Transaction, the Company shall deliver such additional documents from its
Retained Mortgage File within thirty (30) Business Days to the Custodian,
successor purchaser or other designee of the Purchaser as said Rating Agency,
Purchaser or successor purchaser may require.
All
Mortgage Loans (i) not sold or transferred pursuant to Whole Loan Transfers,
Agency Transfer or Securitization Transactions or (ii) that are subject to
a
Securitization for which the related trust is terminated for any reason, shall
remain subject to this Agreement and shall continue to be serviced in accordance
with the terms of this Agreement and with respect thereto this Agreement shall
remain in full force and effect.
ARTICLE
X
DEFAULT
Section
10.01 Events
of Default.
Each
of
the following shall constitute an Event of Default on the part of the
Company:
|
(i)
|
any
failure by the Company to remit to the Purchaser any payment required
to
be made under the terms of this Agreement which continues unremedied
for a
period of two Business Days after the date upon which written notice
of
such failure, requiring the same to be remedied, shall have been
given to
the Company by the Purchaser; or
|
|
(ii)
|
failure
by the Company duly to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Company set
forth
in this Agreement or in the Custodial Agreement which continues unremedied
for a period of 90 days after the date on which written notice of
such
failure, requiring the same to be remedied, shall have been given
to the
Company by the Purchaser or by the Custodian;
or
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|
(iii)
|
failure
by the Company to maintain its license to do business in any jurisdiction
where the Mortgaged Property is located if such license is required;
or
|
|
(iv)
|
a
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for
the
winding-up or liquidation of its affairs, shall have been entered
against
the Company and such degree or order shall have remained in force
undischarged or unstayed for a period of 60 days;
or
|
|
(v)
|
the
Company shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, readjustment of debt, marshaling of
assets
and liabilities or similar proceedings of or relating to the Company
or of
or relating to all or substantially all of its property;
or
|
|
(vi)
|
the
Company shall admit in writing its inability to pay its debts generally
as
they become due, file a petition to take advantage of any applicable
insolvency, bankruptcy or reorganization statute, make an assignment
for
the benefit of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations; or
|
|
(vii)
|
the
Company ceases to meet the qualifications of a ▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇
Mac
servicer; or
|
|
(viii)
|
the
Company attempts to assign its right to servicing compensation hereunder
or to assign this Agreement or the servicing responsibilities hereunder
or
to delegate its duties hereunder or any portion thereof in violation
of
Section 8.04.
|
In
each
and every such case, so long as an Event of Default shall not have been
remedied, in addition to whatever rights the Purchaser may have at law or equity
to damages, including injunctive relief and specific performance, the Purchaser,
by notice in writing to the Company, may terminate all the rights and
obligations of the Company under this Agreement and in and to the Mortgage
Loans
and the proceeds thereof.
Upon
receipt by the Company of such written notice, all authority and power of the
Company under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 12.01. Upon written request from any Purchaser, the Company shall
prepare, execute and deliver to the successor entity designated by the Purchaser
any and all documents and other instruments, place in such successor's
possession all 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 but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company's sole
expense. The Company shall cooperate with the Purchaser and such successor
in
effecting the termination of the Company's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Company to the Custodial Account, Subsidy Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
Section
10.02 Waiver
of Defaults.
By
a
written notice, the Purchaser may waive any default by the Company in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE
XI
TERMINATION
Section
11.01 Termination.
This
Agreement shall terminate upon either: (i) the later of the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder; or (ii) mutual consent
of
the Company and the Purchaser in writing.
Section
11.02 Termination
Without Cause.
The
Purchaser may terminate, at its sole option, any rights the Company may have
hereunder, without cause as provided in this Section 11.02. Any such notice
of
termination shall be in writing and delivered to the Company by registered
mail
as provided in Section 12.05.
The
Company shall be entitled to receive, as such liquidated damages, upon the
transfer of the servicing rights, an amount equal to: (i) 2.75% of the aggregate
outstanding principal amount of the Mortgage Loans as of the termination date
paid by the Purchaser to the Company with respect to all of the Mortgage Loans
for which a servicing fee rate of .25% is paid per annum, (ii) 3.25% of the
aggregate outstanding principal amount of the Mortgage Loans as of the
termination date paid by the Purchaser to the Company with respect to all of
the
Mortgage Loans for which a servicing fee rate of .375% is paid per annum, and
(iii) 3.75% of the aggregate outstanding principal amount of the Mortgage Loans
as of the termination date paid by the Purchaser to the Company with respect
to
all of the Mortgage Loans for which a servicing fee rate of .44% or greater
is
paid per annum.
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01 Successor
to Company.
Prior
to
termination of the Company's responsibilities and duties under this Agreement
pursuant to Sections 8.04, 10.01, 11.01 (ii) or 11.02 the Purchaser shall,
(i)
succeed to and assume all of the Company's responsibilities, rights, duties
and
obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in Section 8.02 and which shall succeed to all rights
and assume all of the responsibilities, duties and liabilities of the Company
under this Agreement prior to the termination of Company's responsibilities,
duties and liabilities under this Agreement. In connection with such appointment
and assumption, the Purchaser may make such arrangements for the compensation
of
such successor out of payments on Mortgage Loans as it and such successor shall
agree. In the event that the Company's duties, responsibilities and liabilities
under this Agreement should be terminated pursuant to the aforementioned
sections, the Company shall discharge such duties and responsibilities during
the period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which
it
is obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition
of
its successor. The resignation or removal of the Company pursuant to the
aforementioned sections shall not become effective until a successor shall
be
appointed pursuant to this Section 12.01 and shall in no event relieve the
Company of the representations and warranties made pursuant to Sections 3.01
and
3.02 and the remedies available to the Purchaser under Section 3.03, it being
understood and agreed that the provisions of such Sections 3.01, 3.02, 3.03
and
8.01 shall be applicable to the Company notwithstanding any such sale,
assignment, resignation or termination of the Company, or the termination of
this Agreement.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Company and to the Purchaser an instrument accepting such appointment,
wherein the successor shall make the representations and warranties set forth
in
Section 3.01, except for subsection (h) with respect to the sale of the Mortgage
Loans and subsections (i) and (k) thereof, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities, obligations
and liabilities of the Company, with like effect as if originally named as
a
party to this Agreement. Any termination or resignation of the Company or
termination of this Agreement pursuant to Section 8.04, 10.01, 11.01 or 11.02
shall not affect any claims that any Purchaser may have against the Company
arising out of the Company's actions or failure to act prior to any such
termination or resignation.
The
Company shall deliver promptly to the successor servicer the funds in the
Custodial Account, Subsidy Account and Escrow Account and all Servicing Files
and related documents and statements held by it hereunder and the Company shall
account for all funds and shall execute and deliver such instruments and do
such
other things as may reasonably be required to more fully and definitively vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Company.
Upon
a
successor's acceptance of appointment as such, the Company shall notify by
mail
the Purchaser of such appointment in accordance with the procedures set forth
in
Section 12.05.
Section
12.02 Amendment.
This
Agreement may be amended from time to time by written agreement signed by the
Company and the Purchaser.
Section
12.03 Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of New
York and the obligations, rights and remedies of the parties hereunder shall
be
determined in accordance with such laws.
Each
of
the Company and the Purchaser hereby knowingly, voluntarily and intentionally
waives any and all rights it may have to a trial by jury in respect or any
litigation based on, or arising out of, under, or in connection with, this
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 the Company or the Purchaser. This provision is
a
material inducement for the Purchaser to enter into this Agreement.
Section
12.04 Duration
of Agreement.
This
Agreement shall continue in existence and effect until terminated as herein
provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section
12.05 Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
(i)
if
to the
Company with respect to servicing and investor reporting issues:
▇▇▇▇▇
Fargo Bank, N.A.
1
Home
Campus
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇, MAC X2401-042
If
to the
Company with respect to all other issues:
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Structured Finance Manager, MAC X3906-012
In
each
instance with a copy to:
▇▇▇▇▇
Fargo Bank, N.A.
1
Home
Campus
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
General Counsel, MAC X2401-06T
or
such
other address as may hereafter be furnished to the Purchaser in writing
by
the
Company;
(ii)
if
to
Purchaser:
EMC
Mortgage Corporation
Mac
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇
With
a
copy to:
Bear
▇▇▇▇▇▇▇ Mortgage Capital Corp.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Section
12.06 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
Section
12.07 Relationship
of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or joint
venture between the parties hereto and the services of the Company shall be
rendered as an independent contractor and not as agent for the
Purchaser.
Section
12.08 Execution;
Successors and Assigns.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Section 8.04, this Agreement shall inure
to
the benefit of and be binding upon the Company and the Purchaser and their
respective successors and assigns.
Section
12.09 Recordation
of Assignments of Mortgage.
To
the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Company's expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option.
Section
12.10 Assignment
by Purchaser.
The
Purchaser shall have the right, without the consent of the Company but subject
to the limit set forth in Section 2.02 hereof, to assign, in whole or in part,
its interest under this Agreement with respect to some or all of the Mortgage
Loans, and designate any person to exercise any rights of the Purchaser
hereunder, by executing an Assignment, Assumption and Recognition Agreement
substantially in the form attached as Exhibit G and the assignee or designee
shall accede to the rights and obligations hereunder of the Purchaser with
respect to such Mortgage Loans. All references to the Purchaser in this
Agreement shall be deemed to include its assignee or designee.
Section
12.11 Solicitation
of Mortgagor.
Neither
party shall, after the related Closing Date, take any action to solicit the
refinancing of any Mortgage Loan. It is understood and agreed that neither
(i)
promotions undertaken by either party or any affiliate of either party which
are
directed to the general public at large, including, without limitation, mass
mailings based upon commercially acquired mailing lists, newspaper, radio,
television advertisements nor (ii) serving the refinancing needs of a Mortgagor
who, without solicitation, contacts either party in connection with the
refinance of such Mortgage or Mortgage Loan, shall constitute solicitation
under
this Section.
[Intentionally
Blank - Next Page Signature Page]
IN
WITNESS WHEREOF, the Company and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
day and year first above written.
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EMC MORTGAGE CORPORATION
Purchaser
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▇▇▇▇▇ FARGO BANK,
N.A.
Company
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| By: | By: | |||
| Name: |
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Name: |
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| Title: |
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Title: |
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STATE
OF
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)
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)
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ss:
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COUNTY
OF ___________
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)
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On
the
_____ day of _______________, 20___ before me, a Notary Public in and for said
State, personally appeared ,
known
to me to be
of ▇▇▇▇▇
Fargo Bank, N.A., the national banking association that executed the within
instrument and also known to me to be the person who executed it on behalf
of
said bank, and acknowledged to me that such bank executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
| Notary Public | |
| My Commission expires _______________________ |
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STATE
OF
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)
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)
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ss:
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COUNTY
OF
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)
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On
the
_____ day of _______________, 20___ before me, a Notary Public in and for said
State, personally appeared _____________________________________, known to
me to
be the ______________________________ of EMC Mortgage Corporation, the
corporation that executed the within instrument and also known to me to be
the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
| Notary Public | |
| My Commission expires _______________________ |
EXHIBIT
A
FORM
OF
ASSIGNMENT AND CONVEYANCE AGREEMENT
On
this
_____ day of __________, 20___, ▇▇▇▇▇ Fargo Bank, N.A. (the "Seller")
as the
Seller under that certain Amended and Restated Master Mortgage Loan Purchase
Agreement, ("Purchase Agreement") and as the Company under that certain Amended
and Restated Master Seller's Warranties and Servicing Agreement (the "Servicing
Agreement") each dated as of _______________, 20___, (collectively, the
"Agreements")
does
hereby sell, transfer, assign, set over and convey to EMC Mortgage Corporation
as the Purchaser (the "Purchaser")
under
the Purchase Agreement, and Purchaser hereby accepts from Seller, without
recourse, but subject to the terms of the Agreements, all right, title and
interest of, in and to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto as Exhibit
A,
together with the Custodial Mortgage Files and Retained Mortgage Files and
all
rights and obligations arising under the documents contained therein. Pursuant
to Section 2.03 of the Servicing Agreement, the Seller has delivered to the
Custodian the documents for each Mortgage Loan to be purchased. The Servicing
Files retained by the Seller pursuant to Section 2.01 of the Servicing Agreement
shall be appropriately marked to clearly reflect the sale of the related
Mortgage Loans to the Purchaser.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreements.
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EMC MORTGAGE CORPORATION
Purchaser
|
▇▇▇▇▇ FARGO BANK,
N.A.
Company
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| By: | By: | |||
| Name: |
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Name: |
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| Title: |
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Title: |
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EXHIBIT
B
CUSTODIAL
AGREEMENT
EXHIBIT
C
CONTENTS
OF EACH RETAINED MORTGAGE FILE,
SERVICING
FILE AND CUSTODIAL MORTGAGE FILE
With
respect to each Mortgage Loan, the Retained Mortgage File and Custodial Mortgage
File shall include each of the following items, which shall be available for
inspection by the Purchaser and any prospective Purchaser, and which shall
be
retained by the Company in the Retained Mortgage File or Servicing File or
delivered to the Custodian pursuant to Sections 2.01 and 2.03 of the Seller's
Warranties and the Servicing Agreement to which this Exhibit is attached (the
"Agreement"):
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1.
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The
original Mortgage Note bearing all intervening endorsements, endorsed
"Pay
to the order of
without recourse" and signed in the name of the Company by an authorized
officer (in the event that the Mortgage Loan was acquired by the
Company
in a merger, the signature must be in the following form: "[Company],
successor by merger to [name of predecessor]"; and in the event that
the
Mortgage Loan was acquired or originated by the Company while doing
business under another name, the signature must be in the following
form:
"[Company], formerly know as [previous
name]").
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2.
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The
original of any guarantee executed in connection with the Mortgage
Note
(if any).
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3.
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The
original Mortgage, with evidence of recording thereon or a certified
true
and correct copy of the Mortgage sent for recordation. If in connection
with any Mortgage Loan, the Company cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon
on or
prior to the related Closing Date because of a delay caused by the
public
recording office where such Mortgage has been delivered for recordation
or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Company shall
deliver
or cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Company stating that such
Mortgage
has been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of
such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly
delivered
to the Custodian upon receipt thereof by the Company; or (ii) in
the case
of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office or by the title insurance
company that issued the title policy to be a true and complete copy
of the
original recorded Mortgage.
|
Further,
with respect to MERS Mortgage Loans, (a) the Mortgage names MERS as the
Mortgagee and (b) the requirements set forth in the Electronic Tracking
Agreement have been satisfied, with a conformed recorded copy to follow as
soon
as the same is received by the Company.
|
4.
|
the
originals or certified true copies of any document sent for recordation
of
all assumption, modification, consolidation or extension agreements,
with
evidence of recording thereon.
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5.
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The
original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording (except for the insertion of the
name
of the assignee and recording information). The Assignment of Mortgage
must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located or
on
direction of the Purchaser as provided in the Custodial Agreement.
If the
Assignment of Mortgage is to be recorded, the Mortgage shall be assigned
to the Purchaser. If the Assignment of Mortgage is not to be recorded,
the
Assignment of Mortgage shall be delivered in blank. If the Mortgage
Loan
was acquired by the Company in a merger, the Assignment of Mortgage
must
be made by "[Company], successor by merger to [name of predecessor]."
If
the Mortgage Loan was acquired or originated by the Company while
doing
business under another name, the Assignment of Mortgage must be by
"[Company], formerly know as [previous name]."
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6.
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Originals
or certified true copies of documents sent for recordation of all
intervening assignments of the Mortgage with evidence of recording
thereon, or if any such intervening assignment has not been returned
from
the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of mortgage,
the Company shall deliver or cause to be delivered to the Custodian,
a
photocopy of such intervening assignment, together with (i) in the
case of
a delay caused by the public recording office, an Officer's Certificate
of
the Company stating that such intervening assignment of mortgage
has been
dispatched to the appropriate public recording office for recordation
and
that such original recorded intervening assignment of mortgage or
a copy
of such intervening assignment of mortgage certified by the appropriate
public recording office or by the title insurance company that issued
the
title policy to be a true and complete copy of the original recorded
intervening assignment of mortgage will be promptly delivered to
the
Custodian upon receipt thereof by the Company; or (ii) in the case
of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment.
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7.
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The
electronic form of PMI Policy as identified by certificate
number.
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8.
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The
original mortgagee policy of title insurance or other evidence of
title
such as a copy of the title commitment or copy of the preliminary
title
commitment.
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9.
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Any
security agreement, chattel mortgage or equivalent executed in connection
with the Mortgage.
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10.
Original
power of attorney, if applicable.
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11.
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For
each Cooperative Loan, the original or a seller certified true copy
of the
following:
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The
original Pledge Agreement entered into by the Mortgagor with respect to such
Cooperative Loan;
UCC-3
assignment in blank (or equivalent instrument), sufficient under the laws of
the
jurisdiction where the related Cooperative Apartment is located to reflect
of
record the sale and assignment of the Cooperative Loan to the
Purchaser;
Original
assignment of Pledge Agreement in blank showing a complete chain of assignment
from the originator of the related Cooperative Loan to the Company;
Original
Form UCC-1 and any continuation statements with evidence of filing thereon
with
respect to such Cooperative Loan;
Cooperative
Shares with a Stock Certificate in blank attached;
Original
Proprietary Lease;
Original
Assignment of Proprietary Lease, in blank, and all intervening assignments
thereof;
Original
recognition agreement of the interests of the mortgagee with respect to the
Cooperative Loan by the Cooperative, the stock of which was pledged by the
related Mortgagor to the originator of such Cooperative Loan; and
Originals
of any assumption, consolidation or modification agreements relating to any
of
the items specified above.
With
respect to each Mortgage Loan, the Servicing File shall include each of the
following items to the extent in the possession of the Company or in the
possession of the Company’s agent(s):
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12.
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The
original hazard insurance policy and, if required by law, flood insurance
policy, in accordance with Section 4.10 of the
Agreement.
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13.
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Residential
loan application.
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14.
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Mortgage
Loan closing statement.
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15.
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Verification
of employment and income, unless originated under the Company's Limited
Documentation program, ▇▇▇▇▇▇ ▇▇▇ Timesaver
Plus.
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16.
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Verification
of acceptable evidence of source and amount of down
payment.
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17.
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Credit
report on the Mortgagor.
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18.
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Residential
appraisal report.
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19.
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Photograph
of the Mortgaged Property.
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20.
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Survey
of the Mortgage property, if required by the title company or applicable
law.
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21.
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Copy
of each instrument necessary to complete identification of any exception
set forth in the exception schedule in the title policy, i.e. map
or plat,
restrictions, easements, sewer agreements, home association declarations,
etc.
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22.
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All
required disclosure statements.
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23.
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If
available, termite report, structural engineer's report, water potability
and septic certification.
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24.
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Sales
contract, if applicable.
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25.
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Evidence
of payment of taxes and insurance premiums, insurance claim files,
correspondence, current and historical computerized data files, and
all
other processing, underwriting and closing papers and records which
are
customarily contained in a mortgage loan file and which are required
to
document the Mortgage Loan or to service the Mortgage
Loan.
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26.
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Amortization
schedule, if available.
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27.
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Payment
history for any Mortgage Loan that has been closed for more than
90
days.
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In
the
event an Officer's Certificate of the Company is delivered to the Custodian
because of a delay caused by the public recording office in returning any
recorded document, the Company shall deliver to the Custodian, within 240 days
of the related Closing Date, an Officer's Certificate which shall (i) identify
the recorded document, (ii) state that the recorded document has not been
delivered to the Custodian due solely to a delay caused by the public recording
office, (iii) state the amount of time generally required by the applicable
recording office to record and return a document submitted for recordation,
and
(iv) specify the date the applicable recorded document will be delivered to
the
Custodian. The Company shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An extension
of the date specified in (iv) above may be requested from the Purchaser, which
consent shall not be unreasonably withheld.
EXHIBIT
D
SERVICING
CRITERIA TO BE ADDRESSED
IN
ASSESSMENT OF COMPLIANCE
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Reg
AB Reference
|
Servicing
Criteria
|
Applicable
Servicing Criteria
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Inapplicable
Servicing Criteria
|
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General
Servicing Considerations
|
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1122(d)(1)(i)
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Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
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1122(d)(1)(ii)
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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.
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1122(d)(1)(iii)
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Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
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1122(d)(1)(iv)
|
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.
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Cash
Collection and Administration
|
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1122(d)(2)(i)
|
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.
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1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
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1122(d)(2)(iii)
|
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.
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1122(d)(2)(iv)
|
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.
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1122(d)(2)(v)
|
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.
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1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
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1122(d)(2)(vii)
|
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.
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Investor
Remittances and Reporting
|
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1122(d)(3)(i)
|
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.
|
|
Reg
AB Reference
|
Servicing
Criteria
|
Applicable
Servicing Criteria
|
Inapplicable
Servicing Criteria
|
|
Pool
Asset Administration (cont’d)
|
|||
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
|
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
|
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
||
|
Pool
Asset Administration
|
|||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the transaction
agreements or related mortgage loan documents.
|
|
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
|
|
|
1122(d)(4)(iii)
|
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.
|
|
|
|
1122(d)(4)(iv)
|
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.
|
|
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
|
|
|
1122(d)(4)(vi)
|
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 pool asset documents.
|
|
|
|
1122(d)(4)(vii)
|
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.
|
|
|
|
1122(d)(4)(viii)
|
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).
|
|
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan documents.
|
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction agreements.
|
|
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
|
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
|
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are 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.
|
|
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
|
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
|
EXHIBIT
E
FORM
OF
SARBANES CERTIFICATION
|
Re:
|
The
[ ] agreement dated as of [ ], 200[ ] (the “Agreement”), among [IDENTIFY
PARTIES]
|
I,
________________________________, the _______________________ of [Name of
Servicer], certify to [the Owner], [the Depositor], and the [Master Servicer]
[Securities Administrator] [Trustee], and their officers, with the knowledge
and
intent that they will rely upon this certification, that:
(1) I
have
reviewed the servicer compliance statement of the Servicer provided in
accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the
report on assessment of the Servicer’s compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided
in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the
“Servicing Assessment”), the registered public accounting firm’s attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all
servicing reports, officer’s certificates and other information relating to the
servicing of the Mortgage Loans by the Servicer during 200[ ] that were
delivered by the Servicer to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the “Servicer
Servicing Information”);
(2) Based
on
my knowledge, the Servicer Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances under
which such statements were made, not misleading with respect to the period
of
time covered by the Servicer Servicing Information;
(3) Based
on
my knowledge, all of the Servicer Servicing Information required to be provided
by the Servicer under the Agreement has been provided to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee];
(4) I
am
responsible for reviewing the activities performed by the Servicer under the
Agreement, and based on my knowledge and the compliance review conducted in
preparing the Compliance Statement and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report, the Servicer
has
fulfilled its obligations under the Agreement; and
(5) The
Compliance Statement, the Servicing Assessment and the Attestation Report
required to be provided by the Servicer pursuant to the Agreement have been
provided to the [Depositor] [Master Servicer]. Any material instances of
noncompliance described in such reports have been disclosed to the [Depositor]
[Master Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports.
Date:
By:
Name:
Title:
EXHIBIT
F
FORM
OF
▇▇▇▇▇▇▇▇-▇▇▇▇▇ BACK-UP CERTIFICATION
I,
______________________, Vice President of ▇▇▇▇▇ Fargo Bank, N.A. (the
"Servicer"), certify to __________________, and its officers, directors, agents
and affiliates (the "Sarbanes Certifying Party"), and with the knowledge and
intent that they will rely upon this certification, that:
|
(i)
|
Based
on my knowledge, the information relating to the Mortgage Loans and
the
servicing thereof submitted by the Servicer to the Sarbanes Certifying
Party which is used in connection with preparation of the reports
on Form
8-K and the annual report on Form 10-K filed with the Securities
and
Exchange Commission with respect to the Securitization, taken as
a whole,
does not contain any untrue statement of a material fact or omit
to state
a material fact necessary to make the statements made, in light of
the
circumstances under which such statements were made, not misleading
as of
the date of this certification;
|
|
(ii)
|
The
servicing information required to be provided to the Sarbanes Certifying
Party by the Servicer under the relevant servicing agreement has
been
provided to the Sarbanes Certifying
Party;
|
|
(iii)
|
I
am responsible for reviewing the activities performed by the Servicer
under the relevant servicing agreement and based upon the review
required
by the relevant servicing agreement, and except as disclosed in the
Annual
Statement of Compliance, the Annual Independent Public Accountant's
Servicing Report and all servicing reports, officer's certificates
and
other information relating to the servicing of the Mortgage Loans
submitted to the Sarbanes Certifying Party, the Servicer has, as
of the
date of this certification fulfilled its obligations under the relevant
servicing agreement; and
|
| (iv) |
I
have disclosed to the Sarbanes Certifying Party all significant
deficiencies relating to the Servicer's compliance with the minimum
servicing standards in accordance with a review conducted in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the relevant servicing agreement.
|
|
(v)
|
The
Servicer shall indemnify and hold harmless the Sarbanes Certifying
Party
and its officers, directors, agents and affiliates from and against
any
losses, damages, penalties, fines, forfeitures, reasonable legal
fees and
related costs, judgments and other costs and expenses arising out
of or
based upon a breach by the Servicer or any of its officers, directors,
agents or affiliates of its obligations under this Certification
or the
negligence, bad faith or willful misconduct of the Servicer in connection
therewith. If the indemnification provided for herein is unavailable
or
insufficient to hold harmless the Sarbanes Certifying Party, then
the
Servicer agrees that it shall contribute to the amount paid or payable
by
the Sarbanes Certifying Party as a result of the losses, claims,
damages
or liabilities of the Sarbanes Certifying Party in such proportion
as is
appropriate to reflect the relative fault of the Sarbanes Certifying
Party
on the one hand and the Servicer on the other in connection with
a breach
of the Servicer's obligations under this Certification or the Servicer's
negligence, bad faith or willful misconduct in connection
therewith.
|
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Servicer.
Dated:
By:
Name:
Title:
EXHIBIT
G
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT
____________,
20__
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT, dated ___________________, 20____ between
_________________, a _________________ corporation having an office at
_________________ ("Assignor") and _________________, having an office at
_________________ ("Assignee"):
For
and
in consideration of the sum of one dollar ($1.00) and other valuable
consideration the receipt and sufficiency of which are hereby acknowledge,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
1.
The
Assignor hereby grants, transfers and assigns to Assignee all of the right,
title and interest of Assignor, as Purchaser, in, to and under that certain
Seller's Warranties and Servicing Agreement, (the "Seller's Warranties and
Servicing Agreement"), dated as of _________________, by and between
_________________ (the "Purchaser"), and _________________ (the "Company"),
and
the Mortgage Loans delivered thereunder by the Company to the Assignor, and
that
certain Custodial Agreement, (the "Custodial Agreement"), dated as of
_________________, by and among the Company, the Purchaser and _________________
(the "Custodian").
2.
The
Assignor warrants and represents to, and covenants with, the Assignee
that:
a.
The
Assignor is the lawful owner of the Mortgage Loans with the full right to
transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
b.
The
Assignor has not received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Company with respect to the
Seller's Warranties and Servicing Agreement or the Mortgage Loans;
c.
The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Seller's Warranties and Servicing
Agreement, the Custodial Agreement or the Mortgage Loans, including without
limitation the transfer of the servicing obligations under the Seller's
Warranties and Servicing Agreement. The Assignor has no knowledge of, and has
not received notice of, any waivers under or amendments or other modifications
of, or assignments of rights or obligations under, the Seller's Warranties
and
Servicing Agreement or the Mortgage Loans; and
d.
Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act or which would render the disposition of the
Mortgage Loans a violation of Section 5 of the 33 Act or require registration
pursuant thereto.
3.
That
Assignee warrants and represent to, and covenants with, the Assignor and the
Company pursuant to Section 12.10 of the Seller's Warranties and Servicing
Agreement that:
a.
The
Assignee agrees to be bound, as Purchaser, by all of the terms, covenants and
conditions of the Seller's Warranties and Servicing Agreement, the Mortgage
Loans and the Custodial Agreement, and from and after the date hereof, the
Assignee assumes for the benefit of each of the Company and the Assignor all
of
the Assignor's obligations as purchaser thereunder;
b.
The
Assignee understands that the Mortgage Loans have not been registered under
the
33 Act or the securities laws of any state;
c.
The
purchase price being paid by the Assignee for the Mortgage Loans are in excess
of $250,000.00 and will be paid by cash remittance of the full purchase price
within 60 days of the sale;
d.
The
Assignee is acquiring the Mortgage Loans for investment for its own account
only
and not for any other person. In this connection, neither the Assignee nor
any
person authorized to act therefor has offered to Mortgage Loans by means of
any
general advertising or general solicitation within the meaning of Rule 502(c)
of
US Securities and Exchange Commission Regulation D, promulgated under the
Securities Act;
e.
The
Assignee considers itself a substantial sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
f. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Company;
g. Neither
the Assignee nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner which would
constitute a distribution of the Mortgage Loans under the 33 Act or which would
render the disposition of the Mortgage Loans a violation of Section 5 of the
33
Act or require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner with respect
to the Mortgage Loans; and
h. Either
(1) the Assignee is not an employee benefit plan ("Plan") within the meaning
of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or a plan (also "Plan") within the meaning of section 4975(e)(1)
of
the Internal Revenue Code of 1986 ("Code"), and the Assignee is not directly
or
indirectly purchasing the Mortgage Loans on behalf of, investment manager of,
as
named fiduciary of, as Trustee of, or with assets of, a Plan; or (2) the
Assignee's purchase of the Mortgage Loans will not result in a prohibited
transaction under section 406 of ERISA or section 4975 of the Code.
i.
The
Assignee's address for purposes of all notices and correspondence related to
the
Mortgage Loans and the Seller's Warranties and Servicing Agreements
is:
| Attention: _________________ |
The
Assignee's wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Seller's Warranties and Servicing
Agreement is:
| Attention: _________________ |
4.
From
and
after the date hereof, the Company shall note the transfer of the Mortgage
Loans
to the Assignee in its books and records, the Company shall recognize the
Assignee as the owner of the Mortgage Loans and the Company shall service the
Mortgage Loans for the benefit of the Assignee pursuant to the Seller’s
Warranties and Servicing Agreement, the terms of which are incorporated herein
by reference. It is the intention of the Assignor, the Company and the Assignee
that the Seller’s Warranties and Servicing Agreement shall be binding upon and
inure to the benefit of the Company and the Assignee and their respective
successors and assigns.
[Signatures
Follow]
IN
WITNESS WHEREOF, the parties have caused this Assignment and Assumption to
be
executed by their duly authorized officers as of the date first above
written.
| Assignor | Assignee | |||
| By: | By: | |||
| Name: | Name: | |||
| Its: | Its: | |||
| Tax Payer Identification No.: | Tax Payer Identification No.: | |||
. .
EXHIBIT
H
ELECTRONIC
DATA FILE
|
(1)
|
the
street address of the Mortgaged Property including the city, state,
county
and zip code;
|
|
|
(2)
|
a
code indicating whether the Mortgaged Property is a single family
residence, a 2-4 family dwelling, a PUD, a cooperative, a townhouse,
manufactured housing or a unit in a condominium
project;
|
|
|
(3)
|
the
Mortgage Interest Rate as of the Cut-off Date;
|
|
|
(4)
|
the
current Monthly Payment;
|
|
|
(5)
|
loan
term, number of months;
|
|
|
(6)
|
the
stated maturity date;
|
|
|
(7)
|
the
Stated Principal Balance of the Mortgage Loan as of the close of
business
on the Cut-off Date, after deduction of payments of principal due
on or
before the Cut-off Date;
|
|
|
(8)
|
the
Loan-to-Value Ratio;
|
|
|
(9)
|
a
code indicating whether the Mortgage Loan is an Interest Only Mortgage
Loan;
|
|
|
(10)
|
a
code indicating whether the Mortgage Loan is a temporary buydown
(Y or
N);
|
|
|
(11)
|
the
Servicing Fee Rate;
|
|
|
(12)
|
a
code indicating whether the Mortgage Loan is covered by lender-paid
mortgage insurance (Y or N);
|
|
|
(13)
|
a
code indicating whether the Mortgage Loan is a Time$aver® Mortgage Loan (Y
or N);
|
|
|
(14)
|
the
Mortgagor's first and last name;
|
|
|
(15)
|
a
code indicating whether the Mortgaged Property is owner-occupied;
|
|
|
(16)
|
the
remaining months to maturity from the Cut-off Date, based on the
original
amortization schedule;
|
|
|
(17)
|
the
date on which the first Monthly Payment was due on the Mortgage
Loan;
|
|
|
(18)
|
the
last Due Date on which a Monthly Payment was actually applied to
the
actual principal balance;
|
|
|
(19)
|
the
original principal amount of the Mortgage Loan;
|
|
|
(20)
|
a
code indicating the purpose of the loan (i.e., purchase, financing,
rate/term refinancing, cash-out refinancing);
|
|
|
(21)
|
the
Mortgage Interest Rate at origination;
|
|
|
(22)
|
the
date on which the first Monthly Payment was due on the Mortgage
Loan;
|
|
|
(23)
|
a
code indicating the documentation style (i.e., full (providing
two years
employment verification - 2 years W-2’s and current pay stub or 2 years
1040’s for self employed borrowers), alternative or
reduced);
|
|
|
(24)
|
a
code indicating if the Mortgage Loan is subject to a PMI
Policy;
|
|
|
(25)
|
the
Appraised Value of the Mortgage Property;
|
|
|
(26)
|
the
sale price of the Mortgaged Property, if applicable;
|
|
|
(27)
|
the
Mortgagor’s Underwriting FICO Score;
|
|
|
(28)
|
term
of prepayment penalty in years;
|
|
|
(29)
|
a
code indicating the product type;
|
|
|
(30)
|
a
code indicating the credit grade of the Mortgage Loan;
|
|
|
(31)
|
the
unpaid balance of the Mortgage Loan as of the close of business
on the
Cut-off Date, after deduction of all payments of
principal;
|
|
|
(32)
|
the
Note date of the Mortgage Loan;
|
|
|
(33)
|
the
mortgage insurance certificate number and percentage of coverage,
if
applicable;
|
|
|
(34)
|
the
Mortgagor’s date of birth;
|
|
|
(35)
|
the
MIN Number for each Mortgage Loan, if applicable;
|
|
|
(36)
|
employer
name;
|
|
|
(37)
|
subsidy
program code;
|
|
|
(38)
|
servicer
name;
|
|
|
(39)
|
the
combined Loan-to-Value Ratio;
|
|
|
(40)
|
the
total Loan-to-Value Ratio;
|
|
|
(41)
|
whether
the Mortgage Loan is convertible (Y or N);
|
|
|
(42)
|
a
code indicating whether the Mortgage Loan is a relocation loan
(Y or
N);
|
|
|
(43)
|
a
code indicating whether the Mortgage Loan is a leasehold loan (Y
or
N);
|
|
|
(44)
|
a
code indicating whether the Mortgage Loan is an Alt A loan (Y or
N);
|
|
|
(45)
|
a
code indicating whether the Mortgage Loan is a no ratio loan (Y
or N);
|
|
|
(46)
|
a
code indicating whether the Mortgage Loan is a Pledged Asset Mortgage
Loan
(Y or N);
|
|
|
(47)
|
effective
LTV percentage for Pledged Asset Mortgage Loans;
|
|
|
(48)
|
citizenship
type code;
|
|
|
(49)
|
a
code indicating whether the Mortgage Loan is a conforming or
non-conforming loan, based on the original loan
balance;
|
|
|
(50)
|
the
name of the client for which the Mortgage Loan was
originated;
|
|
|
(51)
|
the
program code;
|
|
|
(52)
|
the
loan sub doc code;
|
|
|
(53)
|
the
remaining interest-only term for Interest Only Mortgage
Loans;
|
|
|
The
Company shall provide the following
|
||
|
For
the Home Mortgage Disclosure Act (HMDA):
|
||
|
(54)
|
the
Mortgagor’s and co-Mortgagor’s (if applicable)
ethnicity;
|
|
|
(55)
|
the
Mortgagor’s and co-Mortgagor’s (if applicable) race;
|
|
|
(56)
|
lien
status;
|
|
|
(57)
|
for
cash-out refinance loans, the cash purpose;
|
|
|
(58)
|
the
Mortgagor’s and co-Mortgagor’s (if applicable) gender;
|
|
|
(59)
|
the
Mortgagor’s and co-Mortgagor’s (if applicable) social security
numbers;
|
|
|
(60)
|
the
number of units for the property;
|
|
|
(61)
|
the
year in which the property was built;
|
|
|
(62)
|
the
qualifying monthly income of the Mortgagor;
|
|
|
(63)
|
the
number of bedrooms contained in the property;
|
|
|
(64)
|
a
code indicating first time buyer (Y or N);
|
|
|
(65)
|
the
total rental income, if any;
|
|
|
The
Seller shall provide the following
|
||
|
for
the adjustable rate Mortgage Loans (if applicable):
|
||
|
(66)
|
the
maximum Mortgage Interest Rate under the terms of the Mortgage
Note;
|
|
|
(67)
|
the
Periodic Interest Rate Cap;
|
|
|
(68)
|
the
Index;
|
|
|
(69)
|
the
next Adjustment Date;
|
|
|
(70)
|
the
Gross Margin; and
|
|
|
(71)
|
the
lifetime interest rate cap.
|
|
MASTER
MORTGAGE LOAN PURCHASE AGREEMENT
This
is
an Amended and Restated Master Mortgage Loan Purchase Agreement (the
"Agreement"), dated as of November 1, 2004 by and between EMC Mortgage
Corporation, having an office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ (the "Purchaser") and ▇▇▇▇▇ Fargo Bank, N.A., having an ▇▇▇▇▇▇
▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Seller").
W I T N E S S E T H
WHEREAS,
the Seller agrees to sell, and the Purchaser agrees to purchase, from time
to
time certain conventional residential mortgage loans (the "Mortgage Loans")
on a
servicing retained basis as described herein:
WHEREAS,
the Mortgage Loans shall be delivered as pools of whole loans (each a “Loan
Package”) on various dates as provided herein (each a “Closing Date”);
and
WHEREAS,
the parties intend hereby to set forth the terms and conditions upon which
the
proposed Transactions will be effected.
NOW
THEREFORE, in consideration of the promises and the mutual agreements set forth
herein, the parties hereto agree as follows:
SECTION
1.
All
capitalized terms not otherwise defined herein have the respective meanings
set
forth in the Amended and Restated Master Seller's Warranties and Servicing
Agreement, dated as of the date herewith (the“Master Seller's Warranties and
Servicing Agreement").
SECTION
2. Agreement
to Purchase.
The
Seller agrees to sell, and the Purchaser agrees to purchase from time to time,
Mortgage Loans having an aggregate principal balance on the applicable related
Cut-off Date in an amount as set forth in the related Commitment Letters or
in
such other amount as agreed by the Purchaser and the Seller as evidenced by
the
actual aggregate principal balance of the Mortgage Loans in the related Loan
Package accepted by the Purchaser on the related Closing Date. The Mortgage
Loans will be delivered pursuant to the Master Seller's Warranties and Servicing
Agreement.
SECTION
3. Mortgage
Schedules.
The
Seller will provide the Purchaser with certain information constituting a
listing of the Mortgage Loans to be purchased under this Agreement for each
Transaction (the "Mortgage Loan Schedule"). Each Mortgage Loan Schedule shall
conform to the definition of "Mortgage Loan Schedule" under the Master Seller's
Warranties and Servicing Agreement.
SECTION
4. Purchase
Price.
The
purchase price for each Loan Package (the "Purchase Price") shall be the
percentage of par as stated in the related Commitment Letter, multiplied by
the
aggregate principal balance, as of the related Cut-off Date, of the Mortgage
Loans listed in the related Loan Package, after application of scheduled
payments of principal for such related Loan Package due on or before the related
Cut-off Date whether or not collected. The purchase price for a Loan Package
may
be adjusted as stated in the related Commitment Letter.
In
addition to the Purchase Price, the Purchaser shall pay to the Seller, at
closing, accrued interest on the initial principal amount of the Mortgage Loans
at the weighted average Mortgage Loan Remittance Rate for each Loan Package
from
the related Cut-off Date through the day prior to the related Closing Date,
inclusive.
With
respect to each Loan Package, the Purchaser shall be entitled to (1) all
scheduled principal due after the related Cut-off Date, (2) all other recoveries
of principal collected after the related Cut-off Date (provided, however, that
all scheduled payments of principal due on or before the related Cut-off Date
and collected by the Seller after the related Cut-off Date shall belong to
the
Seller), and (3) all payments of interest on the Mortgage Loans at the Mortgage
Loan Remittance Rate (minus that portion of any such payment which is allocable
to the period prior to the related Cut-off Date). The principal balance of
each
Mortgage Loan as of the related Cut-off Date is determined after application
of
payments of principal due on or before the related Cut-off Date whether or
not
collected. Therefore, payments of scheduled principal and interest prepaid
for a
due date beyond the related Cut-off Date shall not be applied to the principal
balance as of the related Cut-off Date. Such prepaid amounts (minus interest
at
the Servicing Fee Rate) shall be the property of the Purchaser. The Seller
shall
deposit any such prepaid amounts into the Custodial Account, which account
is
established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION
5. Examination
of Mortgage Files.
Prior to
each Closing Date, the Seller shall (a) deliver to the Purchaser in escrow,
for
examination, the Mortgage File for each Mortgage Loan, including a copy of
the
Assignment of Mortgage, pertaining to each Mortgage Loan, or (b) make the
Mortgage Files available to the Purchaser for examination at the Seller's
offices or such other location as shall otherwise be agreed upon by the
Purchaser and the Seller. Such examination may be made by the Purchaser or
by
any prospective purchaser of the Mortgage Loans from the Purchaser, at any
time
before or after such related Closing Date, upon prior reasonable notice to
the
Seller. The fact that the Purchaser or any prospective purchaser of the Mortgage
Loans has conducted or has failed to conduct any partial or complete examination
of the Mortgage Files shall not affect the Purchaser's (or any of its
successor's) rights to demand repurchase, substitution or other relief as
provided under the Master Seller's Warranties and Servicing
Agreement.
Prior
to
Seller’s receipt of the Purchase Price, the Purchaser shall cause the Custodian
to act as bailee for the sole and exclusive benefit of the Seller pursuant
to
the Custodial Agreement and act only in accordance with Seller’s instructions.
Upon the Seller’s receipt of the Purchase Price, the Seller shall provide
notification to the Custodian to release ownership of the Mortgage Loan
Documents contained in the Custodial Mortgage File. Such notification shall
be
in a form of a written notice by facsimile or other electronic media, with
a
copy sent to the Purchaser. Subsequent to such release, such Mortgage Loan
Documents shall be retained by the Custodian for the benefit of the Purchaser.
All Mortgage Loan Documents related to Mortgage Loans not purchased by the
Purchaser on the Closing Date, shall be maintained by the Custodian for the
benefit of the Seller and shall be returned to the Seller within two (2)
Business Days after the Closing Date.
SECTION
6. Representations,
Warranties and Agreements of Seller.
The
Seller agrees and acknowledges that it shall, as a condition to the consummation
of the transactions contemplated hereby, make the representations and warranties
specified in Section 3.01 and 3.02 of the Master Seller's Warranties and
Servicing Agreement, as of each related Closing Date. The meaning of the term
"Agreement" as used in Sections 3.01 and 3.02 of the Master Seller's Warranties
and Servicing Agreement shall include this Agreement. The Seller, without
conceding that the Mortgage Loans are securities, hereby makes the following
additional representations, warranties and agreements which shall be deemed
to
have been made as of the related Closing Date:
a)
neither
the Seller nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of any Mortgage Loans, any interest
in
any Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act or which would render the disposition of any
Mortgage Loans a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will
it
authorize any person to act, in such manner with respect to the Mortgage Loans;
and
b)
the
Seller has not dealt with any broker or agent or anyone else who might be
entitled to a fee or commission in connection with this transaction other than
the Purchaser.
SECTION
7. Representation,
Warranties and Agreement of Purchaser.
The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall
have
been deemed to have been made as of the related Closing Date.
a)
the
Purchaser understands that the Mortgage Loans have not been registered under
the
Securities Act or the securities laws of any state;
b)
the
Purchaser is acquiring the Mortgage Loans for its own account only and not
for
any other person;
c)
the
Purchaser considers itself a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
d)
the
Purchaser has been furnished with all information regarding the Mortgage Loans
which it has requested from the Seller or the Company; and
e)
neither
the Purchaser nor anyone acting on its behalf offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loan, any interest in any Mortgage
Loan or any other similar security to, or solicited any offer to buy or accept
a
transfer, pledge or other disposition of any Mortgage Loan, any interest in
any
Mortgage Loan or any other similar security from, or otherwise approached or
negotiated with respect to any Mortgage Loan, any interest in any Mortgage
Loan
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act or which would render the disposition of any
Mortgage Loan a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will
it
authorize any person to act, in such manner with respect to the Mortgage
Loans.
SECTION
8. Closing.
The
closing for the purchase and sale of each Loan Package shall take place on
the
related Closing Date. At the Purchaser's option, the Closing shall be either:
by
telephone, confirmed by letter or wire as the parties shall agree; or conducted
in person, at such place as the parties shall agree.
The
closing shall be subject to each of the following conditions:
a)
all
of
the representations and warranties of the Seller under this Agreement and under
the Master Seller's Warranties and Servicing Agreement shall be true and correct
as of such related Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default under this Agreement
or an Event of Default under the Master Seller's Warranties and Servicing
Agreement;
b)
the
Purchaser shall have received, or the Purchaser's attorneys shall have received
in escrow, all Closing Documents as specified in Section 9 of this Agreement,
in
such forms as are agreed upon and acceptable to the Purchaser, duly executed
by
all signatories other than the Purchaser as required pursuant to the respective
terms thereof;
c)
the
Seller shall have delivered and released to the Custodian under the Master
Seller's Warranties and Servicing Agreement all documents required pursuant
to
the related Custodial Agreement, and
d)
all
other
terms and conditions of this Agreement shall have been complied
with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on such
related Closing Date the applicable Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION
9. Closing
Documents.
With
respect to the Mortgage Loans, the Closing Documents shall consist of the
following documents:
On
the
initial Closing Date:
|
1.
|
the
Master Seller's Warranties and Servicing Agreement, in three
counterparts;
|
|
2.
|
this
Agreement in two counterparts;
|
|
3.
|
the
Custodial Agreement, dated as November 30, 1999, by and between EMC
Mortgage Corporation as Owner, and ▇▇▇▇▇ Fargo Bank, N.A. (formerly
▇▇▇▇▇
Fargo Bank Minnesota, N.A.) attached as an exhibit to the Master
Seller's
Warranties and Servicing Agreement;
|
|
4.
|
the
Mortgage Loan Schedule for the related Loan Package, one copy to
be
attached to each counterpart of the Master Seller's Warranties and
Servicing Agreement, to each counterpart of this Agreement, and to
each
counterpart of the Custodial Agreement, as the Mortgage Loan Schedule
thereto;
|
|
5.
|
a
Receipt and Certification, as required under the Custodial
Agreement;
|
| 6. |
an
Opinion of Counsel of the Seller, in the form of Exhibit 1 hereto;
and
|
| 7. |
an
Assignment and Conveyance Agreement for the related Mortgage
Loans.
|
On
each
subsequent Closing Date, the following documents:
| 1. |
the
Mortgage Loan Schedule for the related Loan
Package;
|
| 2. |
an
Assignment and Conveyance Agreement for the related Mortgage Loans;
and
|
| 3. |
a
Receipt and Certification, as required under the Custodial
Agreement.
|
SECTION
10. Costs.
The
Purchaser shall pay any commissions due its salesmen, the legal fees and
expenses of its attorneys and the costs and expenses associated with the
Custodian. The Seller shall be responsible for reasonable costs and expenses
associated with any preparation of the initial assignments of mortgage. All
other costs and expenses incurred in connection with the transfer and delivery
of the Mortgage Loans, including fees for title policy endorsements and
continuations and the Seller's attorney fees, shall be paid by the
Seller.
SECTION
11. Servicing
The
Mortgage Loans shall be serviced by the Seller in accordance with the terms
of
the Master Seller's Warranties and Servicing Agreement. The Seller shall be
entitled to servicing fees calculated as provided therein, at the Servicing
Fee
Rate.
SECTION
12. Financial
Statements.
The
Seller understands that in connection with the Purchaser's marketing of the
Mortgage Loans, the Purchaser shall make available to prospective purchasers
a
Consolidated Statement of Operations of the Seller for the most recently
completed two fiscal years respecting which such a statement is available,
as
well as a Consolidated Statement of Condition at the end of the last two (2)
fiscal years covered by such Consolidated Statement of Operations. The Purchaser
shall also make available any comparable interim statements to the extent any
such statements have been prepared by the seller in a format intended or
otherwise suitable for the public at large. The Seller, if it has not already
done so, agrees to furnish promptly to the Purchaser copies of the statements
specified above. The Seller shall also make available information on its
servicing performance with respect to loans in its own portfolio and loans
serviced for others (if any), including foreclosure and delinquency
ratios.
The
Seller also agrees to allow access to a knowledgeable (as shall be determined
by
the Seller) financial or accounting officer for the purpose of answering
questions asked by any prospective purchaser regarding recent developments
affecting the Seller or the financial statements of the Seller.
SECTION
13. Mandatory
Delivery.
The sale
and delivery on each Closing Date of the related Mortgage Loans described on
the
respective Mortgage Loan Schedules is mandatory, it being specifically
understood and agreed that each Mortgage Loan must be unique and identifiable
on
such related Closing Date and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred
by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller's failure to deliver the Mortgage Loans on
or
before such related Closing Date. All rights and remedies of the Purchaser
under
this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or
successively.
SECTION
14. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address shown on the first page hereof, or such other address
as
may hereafter be furnished to the other party by like notice. Any such demand,
notice of communication hereunder shall be deemed to have been received on
the
date delivered to or received at the premises of the addressee (as evidenced,
in
the case of registered or certified mail, by the date noted on the return
receipt).
SECTION
15. Severability
Clause.
Any
part, provision, representation or warranty of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective
to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty
of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of
any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is as close as possible to the economic effect of this Agreement
without regard to such invalidity.
SECTION
16. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.
SECTION
17. Place
of Delivery and Governing Law.
This
Agreement shall be deemed in effect when a fully executed counterpart thereof
is
received by the Purchaser in the State of New York and shall be deemed to have
been made in State of New York. The Agreement shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with the laws of
the
State of New York, except to the extent preempted by Federal Law.
Each
of
the Seller and the Purchaser 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
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 the Seller or the Purchaser. This provision is a
material inducement for the Purchaser to enter into this Agreement.
SECTION
18. Further
Agreements.
The
Purchaser and the Seller each agree to execute and deliver to the other such
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
Without
limiting the generality of the foregoing, the Seller shall reasonably cooperate
with the Purchaser in connection with the initial resales of the Mortgage Loans
by the Purchaser. In that connection, the Seller shall provide to the Purchaser:
(i) any and all information and appropriate verification of information, whether
through letters of its auditors and counsel or otherwise, as the Purchaser
shall
reasonably request, and (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors and certificates of public
officials or officers of the Seller as are reasonably believed necessary by
the
Purchaser in connection with such resales. The requirement of the Seller
pursuant to (ii) above shall terminate on the related Closing Date, except
as
provided pursuant to Article IX of the Master Seller’s Warranties and Servicing
Agreement. Prior to incurring any out-of-pocket expenses pursuant to this
paragraph, the Seller shall notify the Purchaser in writing of the estimated
amount of such expense. The Purchaser shall reimburse the Seller for any such
expense following its receipt of appropriate details thereof.
SECTION
19. Intention
of the Parties.
It is
the intention of the parties that the Purchaser is purchasing, and the Seller
is
selling, an undivided 100% ownership interest in the Mortgage Loans and not
a
debt instrument of the Seller or another security. Accordingly, the parties
hereto each intend to treat the transaction for Federal income tax purposes
as a
sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans.
The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans
which
shall affect the Federal income tax consequences of owning the Mortgage Loans
and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
SECTION
20. Successors
and Assigns; Assignment of Purchase Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective successors and assigns of the Seller
and the Purchaser. This Agreement shall not be assigned, pledged or hypothecated
by the Seller to a third party without the consent of the
Purchaser.
SECTION
21. Waivers;
Other Agreements.
No term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
22. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
SECTION
23. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
a)
the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
b)
accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
c)
references
herein to "Articles", "Sections", "Subsections", "Paragraphs", and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
d)
a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
e)
the
words
"herein", "hereof", "hereunder" and other words of similar import refer to
this
Agreement as a whole and not to any particular provision; and
f)
the
term
"include" or "including" shall mean without limitation by reason of
enumeration.
SECTION
24. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
[Signatures
Follow]
IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
date first above written.
|
EMC
MORTGAGE CORPORATION
(Purchaser)
|
||
| |
|
|
| By: | ||
| Name: |
|
|
| Title: |
|
|
|
|
||
|
▇▇▇▇▇
FARGO BANK, N.A.
(Seller)
|
||
| |
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| By: | ||
| Name: |
|
|
| Title: |
|
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||
EXHIBIT
1
FORM
OF
OPINION OF COUNSEL
@
@
@
@
Re:
Mortgage
Loan Sale by ▇▇▇▇▇ Fargo Bank, N.A. (the “Company”) to EMC Mortgage Corporation
(the “Purchaser”) of first lien mortgage loans (the “Mortgage Loans”) pursuant
to that certain Amended and Restated Master Seller’s Warranties and Servicing
Agreement and Amended and Restated Master Mortgage Loan Purchase Agreement
by
and between the Company and the Purchaser, dated as of November 1,
2005.
Dear
Sir/Madam:
I
am @ of
▇▇▇▇▇ Fargo Bank, N.A. and have acted as counsel to ▇▇▇▇▇ Fargo Bank, N.A.
(the
“Company”), with respect to certain matters in connection with the sale by the
Company of Mortgage Loans pursuant to that certain Amended and Restated Master
Seller’s Warranties and Servicing Agreement and Amended and Restated Master
Mortgage Loan Purchase Agreement by and between the Company and EMC Mortgage
Corporation (the “Purchaser”), dated as of November 1, 2005, (the “Agreements”),
which sale is in the form of whole Mortgage Loans. Capitalized terms not
otherwise defined herein have the meanings set forth in the Amended and Restated
Master Seller’s Warranties and Servicing Agreement.
I
have
examined the following documents:
| 1. |
the
Amended and Restated Master Seller’s Warranties and Servicing
Agreement;
|
| 2. |
the
Amended and Restated Master Mortgage Loan Purchase
Agreement;
|
| 3. |
the
Custodial Agreement;
|
| 4. |
the
form of endorsement of the Mortgage Notes;
and
|
| 5. |
such
other documents, records and papers as I have deemed necessary and
relevant as a basis for this opinion.
|
To
the
extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreements.
I
have assumed the authenticity of all documents submitted to me as originals,
the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based
upon the foregoing, it is my opinion that;
|
1.
|
The
Company is a national banking association duly organized, validly
existing
and in good standing under the laws of the United States.
|
|
2.
|
The
Company has the power to engage in the transactions contemplated
by the
Agreements, the Custodial Agreement and all requisite power, authority
and
legal right to execute and deliver the Agreements, the Custodial
Agreement
and the Mortgage Loans, and to perform and observe the terms and
conditions of such instruments.
|
|
3.
|
Each
person who, as an officer or attorney-in-fact of the Company, signed
(a)
the Agreements, each dated as of November 1, 2005, by and between
the
Company and the Purchaser, and (b) any other document delivered prior
hereto or on the date hereof in connection with the sale and servicing
of
the Mortgage Loans in accordance with the Agreements was, at the
respective times of such signing and delivery, and is, as of the
date
hereof, duly elected or appointed, qualified and acting as such officer
or
attorney-in-fact, and the signatures of such persons appearing on
such
documents are their genuine
signatures.
|
|
4.
|
Each
of the Agreements, the Custodial Agreement, and the Mortgage Loans,
has
been duly authorized, executed and delivered by the Company and is
a
legal, valid and binding agreement enforceable in accordance with
its
terms, subject to the effect of insolvency, liquidation, convervatorship
and other similar laws administered by the Federal Deposit Insurance
Corporation affecting the enforcement of contract obligations of
insured
banks and subject to the application of the rules of equity, including
those respecting the availability of specific performance, none of
which
will materially interfere with the realization of the benefits provided
thereunder or with the Purchaser’s ownership of the Mortgage
Loans.
|
|
5.
|
The
Company has been duly authorized to allow any of its officers to
execute
any and all documents by original signature in order to complete
the
transactions contemplated by the Agreements and the Custodial Agreement,
and by original or facsimile signature in order to execute the
endorsements to the Mortgage Notes and the assignments of the Mortgages,
and the original or facsimile signature of the officer at the Company
executing the endorsements to the Mortgage Notes and the assignments
of
the Mortgages represents the legal and valid signature of said officer
of
the Company.
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6.
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Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Company of or compliance by the Company with the
Agreements, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated
by the
Agreements, and the Custodial Agreement; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
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7.
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Neither
the consummation of the transactions contemplated by, nor the fulfillment
of the terms of the Agreements and the Custodial Agreement, will
conflict
with or results in or will result in a breach of or constitutes or
will
constitute a default under the charter or by-laws of the Company,
the
terms of any indenture or other agreement or instrument to which
the
Company is a party or by which it is bound or to which it is subject,
or
violates any statute or order, rule, regulations, writ, injunction
or
decree of any court, governmental authority or regulatory body to
which
the Company is subject or by which it is
bound.
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8.
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There
is no action, suit, proceeding or investigation pending or, to the
best of
my knowledge, threatened against the Company which, in my opinion,
either
in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment
of the
right or ability of the Company to carry on its business substantially
as
now conducted or in any material liability on the part of the Company
or
which would draw into question the validity of the Agreements, and
the
Custodial Agreement, or of any action taken or to be taken in connection
with the transactions contemplated thereby, or which would be likely
to
impair materially the ability of the Company to perform under the
terms of
the Agreements and the Custodial
Agreement.
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9.
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For
purposes of the foregoing, I have not regarded any legal or governmental
actions, investigations or proceedings to be "threatened" unless
the
potential litigant or governmental authority has manifested to the
legal
department of the Company or an employee of the Company responsible
for
the receipt of process a present intention to initiate such proceedings;
nor have I regarded any legal or governmental actions, investigations
or
proceedings as including those that are conducted by state or federal
authorities in connection with their routine regulatory activities.
The
sale of each Mortgage Note and Mortgage as and in the manner contemplated
by the Agreements is sufficient fully to transfer all right, title
and
interest of the Company thereto as noteholder and mortgagee, apart
from
the rights to service the Mortgage Loans pursuant to the
Agreements.
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10.
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The
form of endorsement that is to be used with respect to the Mortgage
Loans
is legally valid and sufficient to duly endorse the Mortgage Notes
to the
Purchaser. Upon the completion of the endorsement of the Mortgage
Notes
and the completion of the assignments of the Mortgages, and the recording
thereof, the endorsement of the Mortgage Notes, the delivery to the
Custodian of the completed assignments of the Mortgages, and the
delivery
of the original endorsed Mortgage Notes to the Custodian would be
sufficient to permit the entity to which such Mortgage Note is initially
endorsed at the Purchaser’s direction, and to whom such assignment of
Mortgages is initially assigned at the Purchaser’s direction, to avail
itself of all protection available under applicable law against the
claims
of any present or future creditors of the Company, and would be sufficient
to prevent any other sale, transfer, assignment, pledge or hypothecation
of the Mortgages and the Mortgage Notes by the Company from being
enforceable.
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This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which you
initially and directly resell the Mortgage Loans may rely on this opinion as
if
it were addressed to them as of its date.
Sincerely,
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