EXECUTION COPY
================================================================================
FLOW INTERIM SERVICING AGREEMENT
between
▇▇▇▇▇▇ Brothers Bank, FSB,
Purchaser
and
IndyMac Bank, F.S.B.,
Seller/Interim Servicer
Dated as of February 13, 2001
CONVENTIONAL FIXED RATE RESIDENTIAL MORTGAGE LOANS
================================================================================
EXECUTION COPY
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Definitions...................................................................................1
ARTICLE II
SERVICING
Section 2.01 Seller to Act as Servicer.....................................................................5
Section 2.02 Liquidation of Mortgage Loans.................................................................7
Section 2.03 Collection of Mortgage Loan Payments..........................................................8
Section 2.04 Establishment of and Deposits to Custodial Account............................................8
Section 2.05 Permitted Withdrawals From Custodial Account..................................................9
Section 2.06 Establishment of and Deposits to Escrow Account..............................................10
Section 2.07 Permitted Withdrawals From Escrow Account....................................................10
Section 2.08 Payment of Taxes, Insurance and Other Charges................................................11
Section 2.09 PMI Obligations..............................................................................11
Section 2.10 Protection of Accounts.......................................................................11
Section 2.11 Maintenance of Hazard Insurance..............................................................12
Section 2.12 Maintenance of Mortgage Impairment Insurance.................................................14
Section 2.13 Maintenance of Fidelity Bond and Errors and Omissions Insurance..............................14
Section 2.14 Inspections..................................................................................14
Section 2.15 Restoration of Mortgaged Property or Cooperative Unit........................................15
Section 2.16 Maintenance of PMI Policy; Claims............................................................15
Section 2.17 Title, Management and Disposition of REO Property............................................16
Section 2.18 Permitted Withdrawals with respect to REO Property...........................................17
Section 2.19 Liquidation Reports..........................................................................17
Section 2.20 Reports of Foreclosures and Abandonments of Mortgaged Property...............................17
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances..................................................................................17
Section 3.02 Statements to Purchaser......................................................................18
Section 3.03 Principal and Interest Advances by Seller....................................................18
-i-
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property..............................................................18
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files......................................19
Section 4.03 Servicing Compensation.......................................................................20
Section 4.04 Right to Examine Seller Records..............................................................20
ARTICLE V
SELLER TO COOPERATE
Section 5.01 Provision of Information.....................................................................20
Section 5.02 Financial Statements; Servicing Facilities...................................................21
ARTICLE VI
TERMINATION
Section 6.01 Agency Suspension............................................................................21
Section 6.02 Damages......................................................................................21
Section 6.03 Termination Upon Transfer of Servicing, Termination Procedures...............................21
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the Transfer Date.....................................22
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification..............................................................................23
Section 8.02 Limitation on Liability of Seller and Others.................................................24
Section 8.03 Limitation on Resignation and Assignment by Seller...........................................24
Section 8.04 Assignment by Purchaser......................................................................25
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
Section 9.01 Authority and Capacity.......................................................................25
Section 9.02 Assistance...................................................................................25
-ii-
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 10.01 Due Organization and Authority...............................................................25
Section 10.02 Ordinary Course of Business..................................................................26
Section 10.03 No Conflicts.................................................................................26
Section 10.04 Ability to Service...........................................................................26
Section 10.05 Ability to Perform...........................................................................26
Section 10.06 No Litigation Pending........................................................................26
Section 10.07 No Consent Required..........................................................................26
Section 10.08 No Untrue Information........................................................................27
ARTICLE XI
DEFAULT
Section 11.01 Events of Default............................................................................27
Section 11.02 Waiver of Defaults...........................................................................28
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices......................................................................................28
Section 12.02 Waivers......................................................................................29
Section 12.03 Entire Agreement; Amendment..................................................................29
Section 12.04 Execution; Binding Effect....................................................................29
Section 12.05 Headings.....................................................................................29
Section 12.06 Applicable Law...............................................................................29
Section 12.07 Relationship of Parties......................................................................29
Section 12.08 Severability of Provisions...................................................................30
Section 12.09 Recordation of Assignments of Mortgage.......................................................30
Section 12.10 Appointment and Designation of Master Servicer...............................................30
-iii-
EXHIBITS
--------
EXHIBIT 1 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ACKNOWLEDGMENT AGREEMENT
-iv-
Flow Interim Servicing Agreement
This Flow Interim Servicing Agreement (the "Agreement") is entered into
as of February 13, 2001, by and between IndyMac BANK, F.S.B. (the "Seller"), a
federal savings bank and ▇▇▇▇▇▇ BROTHERS BANK, FSB, a federal savings bank (the
"Purchaser").
WHEREAS, the Purchaser and Seller entered into a Flow Mortgage Loan
Purchase and Warranties Agreement dated as of the date hereof (the "Purchase
Agreement") pursuant to which from time the Purchaser shall purchase from the
Seller certain conventional, residential, fixed rate first mortgage loans and
cooperative loans (the "Mortgage Loans") delivered as whole loans servicing
released; and
WHEREAS, the Purchaser desires to have the Seller service the Mortgage
Loans in each Mortgage Loan Package during the period between the related
Closing Date and the related Transfer Date (the "Interim Period"), the Seller
desires to service and administer such Mortgage Loans on behalf of the Purchaser
during the Interim Period, and the parties desire to provide the terms and
conditions of such interim servicing by the Seller.
NOW, THEREFORE, in consideration of the mutual covenants made herein
and for other good and valuable consideration the sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms not otherwise defined
herein have the respective meanings set forth in the Purchase Agreement. The
following terms are defined as follows (except as otherwise agreed by the
parties).
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, or, with respect to a
Cooperative Loan, where the related Cooperative Project, is located.
Agreement: This agreement between the Purchaser and the Seller for the
interim servicing and administration of the Mortgage Loans.
Appropriate Federal Banking Agency: Appropriate Federal Banking Agency
shall have the meaning ascribed to it by Section 1813(q) of Title 12 of the
United States Code, as amended from time to time.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 2.04.
Eligible Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than the
Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America; and
(ii) federal funds, demand and time deposits in, certificates
of deposits of, or bankers' acceptances issued by, any depository
institution or trust company incorporated or organized under the laws
of the United States of America or any state thereof and subject to
supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or contractual
commitment providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company
which is the principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such holding company) are
rated "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc. and the long-term debt
obligations of such holding company) are rated "P-1" by ▇▇▇▇▇'▇
Investors Service, Inc. and the long-term debt obligations of such
depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal
subsidiary of a holding company, the long-term debt obligations of such
holding company) are rated at least "Aa" by ▇▇▇▇▇'▇ Investors Service,
Inc.
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 2.06.
Escrow Payment: 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, cooperative or condominium charges, and any other payments required to
be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any
other document.
-2-
Event of Default: Any one of the conditions or circumstances enumerated
in Section 11.01.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ Selling Guide and the ▇▇▇▇▇▇ Mae
Servicing Guide and all amendments or additions thereto.
Fidelity Bond: A fidelity bond to be maintained by the Seller pursuant
to Section 2.13.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interim Period: The period between the related Closing Date and the
related Transfer Date.
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.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 2.12.
Mortgage Loan Package: A pool of Mortgage Loans sold to the Purchaser
by the Seller on a Closing Date.
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.
PMI Policy: A policy of primary mortgage guaranty insurance 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.
Purchase Agreement: The Flow Mortgage Loan Purchase and Warranties
Agreement between the Purchaser and the Seller related to the purchase of the
Mortgage Loans dated as of the initial Cut-off Date.
-3-
Qualified Depository: A depository the accounts of which are insured by
the FDIC through the BIF or the SAIF and the debt obligations of which are rated
AA or better by Standard & Poor's Corporation..
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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Remittance Date: The 10th day (or if such 10th day is not a Business
Day, the first Business Day immediately following) of any month, beginning with
the first Remittance Date.
REO Disposition: The final sale by the Seller of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 2.17.
REO Property: A Mortgaged Property or the rights to occupy the
Cooperative Unit, as applicable, acquired by the Seller on behalf of the
Purchaser through foreclosure or by deed in lieu of foreclosure, as described in
Section 2.17.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Seller of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property or Cooperative Unit, as
applicable, (b) any enforcement or judicial proceedings, including foreclosures,
(c) the management and liquidation of the Mortgaged Property or Cooperative
Unit, as applicable, if the Mortgaged Property is acquired in satisfaction of
the Mortgage and (d) compliance with the obligations under Section 2.08.
Servicing Fee: With respect to each Mortgage Loan, an amount equal to
$7.00 per month. Such fee shall be payable monthly and shall be pro rated for
any portion of a month during which the Mortgage Loan is serviced pursuant to
this Agreement. 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 2.05) of such Monthly Payment collected by the
Seller, or as otherwise provided under Section 2.05.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Seller consisting of originals of all documents in the Mortgage File
which are not delivered to the Purchaser and copies of the Mortgage Loan
Documents listed on Exhibit B to the Purchase Agreement.
Servicing Officer: Any officer of the Seller involved in or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished by the Seller to the Purchaser upon
request, as such list may from time to time be amended.
-4-
Subservicer: Any subservicer which is subservicing the Mortgage Loans
pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 4.01.
Subservicing Agreement: An agreement between the Seller and a
Subservicer for the servicing of the Mortgage Loans.
Transfer Date: Shall have the meaning provided in Section 6.03 hereof.
Well Capitalized: Well Capitalized shall mean, with respect to any
Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for such
capital category under the regulations promulgated pursuant to Section 1831(o)
of the United States Code, as amended from time to time, by the Appropriate
Federal Banking Agency for such institution, as such regulation may be amended
from time to time.
ARTICLE II
SERVICING
Section 2.01 Seller to Act as Servicer. With respect to the Mortgage
Loans in each Mortgage Loan Package purchased by the Purchaser, from and after
the related Closing Date, the Seller, as an independent contractor, shall, from
time to time, service and administer the Mortgage Loans during the related
Interim Period, by execution and delivery of the related Acknowledgement
Agreement, which shall contain the related Closing and Transfer Dates therein,
in the form attached hereto as Exhibit 6, and shall have full power and
authority, acting alone, to do any and all things in connection with such
servicing and administration which the Seller may deem necessary or desirable,
consistent with the terms of this Agreement and with Accepted Servicing
Practices.
Consistent with the terms of this Agreement, the Seller may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Seller's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, that unless the Seller has obtained the prior
written consent of the Purchaser, the Seller shall not permit any modification
with respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer or forgive the payment of principal or interest, reduce or increase the
outstanding principal balance (except for actual payments of principal) or
change the final maturity date on such Mortgage Loan. In the event of any such
modification which permits the deferral of interest or principal payments on any
Mortgage Loan, the Seller shall, on the Business Day immediately preceding the
Remittance Date in any month in which any such principal or interest payment has
been deferred, deposit in the Custodial Account from its own funds, in
accordance with Section 2.04, 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 Seller shall be entitled to reimbursement for such advances to
the same extent as for all other advances made pursuant to Section 2.05. Without
limiting the generality of the foregoing, the Seller 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 Seller, the Purchaser shall furnish the Seller with any powers
of attorney and other documents necessary or appropriate to enable the Seller to
carry out its servicing and administrative duties under this Agreement.
-5-
In servicing and administering the Mortgage Loans, the Seller 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 Seller.
The Seller shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Seller
shall note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be
made unless such transfer is in compliance with the terms hereof. For the
purposes of this Agreement, Seller shall be under no obligation to deal with any
Person with respect to this Agreement or the Mortgage Loans unless the Seller
has been notified of such transfers as provided in this Section 2.01. The
Purchaser may sell and transfer, in whole or in part, the Mortgage Loans,
provided that no such sale and transfer shall be binding upon Seller unless such
transferee shall agree in writing in the form of the Assignment and Assumption
Agreement attached to the Purchase Agreement as Exhibit H, to be bound by the
terms of this Agreement and the Purchase Agreement, and an executed copy of the
same shall have been delivered to the Seller. Upon receipt thereof, Seller shall
▇▇▇▇ its books and records to reflect the ownership of the Mortgage Loans by
such assignee, and the previous Purchaser shall be released from its obligations
hereunder. This Agreement shall be binding upon and inure to the benefit of the
Purchaser and Seller and their permitted successors, assignees and designees.
The Mortgage Loans may be subserviced by the Subservicer on behalf of
the Seller provided that the Subservicer is a ▇▇▇▇▇▇ Mae-approved lender or a
▇▇▇▇▇▇▇ Mac seller/servicer in good standing, and no event has occurred,
including but not limited to a change in insurance coverage, which would make it
unable to comply with the eligibility requirements for lenders imposed by ▇▇▇▇▇▇
Mae or for seller/servicers imposed by ▇▇▇▇▇▇▇ Mac, or which would require
notification to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Seller may perform any of its
servicing responsibilities hereunder or may cause the Subservicer to perform any
such servicing responsibilities on its behalf, but the use by the Seller of the
Subservicer shall not release the Seller from any of its obligations hereunder
and the Seller shall remain responsible hereunder for all acts and omissions of
the Subservicer as fully as if such acts and omissions were those of the Seller.
The Seller shall pay all fees and expenses of the Subservicer from its own
funds, and the Subservicer's fee shall not exceed the Servicing Fee.
-6-
At the cost and expense of the Seller, without any right of
reimbursement from the Custodial Account, the Seller shall be entitled to
terminate the rights and responsibilities of the Subservicer and arrange for any
servicing responsibilities to be performed by a successor Subservicer meeting
the requirements in the preceding paragraph, provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Seller, at the
Seller's option, from electing to service the related Mortgage Loans itself. In
the event that the Seller's responsibilities and duties under this Agreement are
terminated pursuant to Section 9.04, 10.01 or 11.02, and if requested to do so
by the Purchaser, the Seller shall at its own cost and expense terminate the
rights and responsibilities of the Subservicer as soon as is reasonably
possible. The Seller shall pay all fees, expenses or penalties necessary in
order to terminate the rights and responsibilities of the Subservicer from the
Seller's own funds without reimbursement from the Purchaser.
Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Seller and the Subservicer or any
reference herein to actions taken through the Subservicer or otherwise, the
Seller shall not be relieved of its obligations to the Purchaser and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Seller shall be
entitled to enter into an agreement with the Subservicer for indemnification of
the Seller by the Subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
Any Subservicing Agreement and any other transactions or services
relating to the Mortgage Loans involving the Subservicer shall be deemed to be
between the Subservicer and Seller alone, and the Purchaser shall have no
obligations, duties or liabilities with respect to the Subservicer including no
obligation, duty or liability of Purchaser to pay the Subservicer's fees and
expenses. For purposes of distributions and advances by the Seller pursuant to
this Agreement, the Seller shall be deemed to have received a payment on a
Mortgage Loan when the Subservicer has received such payment.
Section 2.02 Liquidation of Mortgage Loans. In the event that any
payment due under any Mortgage Loan and not postponed pursuant to Section 2.01
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 Seller shall take
such action as (1) the Seller 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 Seller 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 2.01 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 Seller shall
commence foreclosure proceedings. In such connection, the Seller shall from its
own funds make all necessary and proper Servicing Advances, provided, however,
that the Seller shall not be required to expend its own funds in connection with
any foreclosure or towards the restoration or preservation of any Mortgaged
Property or Cooperative Unit, as applicable, 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 2.05) or
through Insurance Proceeds (respecting which it shall have similar priority).
-7-
Section 2.03 Collection of Mortgage Loan Payments. Continuously from
the related Closing Date until the related Transfer Date the Seller 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 Loans and each related
Mortgaged Property, to the end that the installments payable by the Mortgagors
will be sufficient to pay such charges as and when they become due and payable.
Section 2.04 Establishment of and Deposits to Custodial Account. The
Seller shall segregate and hold all funds collected and received pursuant to the
Mortgage Loans separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form of
time deposit or demand accounts, titled "IndyMac Bank, F.S.B. in trust for
▇▇▇▇▇▇ Brothers Bank, FSB, Residential Fixed Rate Mortgage Loans and various
Mortgagors". The Custodial Account shall be established with a Qualified
Depository acceptable to the Purchaser. Any funds deposited in the Custodial
Account shall at all times be fully insured to the full extent permitted under
applicable law. Funds deposited in the Custodial Account may be drawn on by the
Seller in accordance with Section 2.05. The creation of any Custodial Account
shall be evidenced by a certification in the form of Exhibit 2 hereto, in the
case of an account established with the Seller, or by a letter agreement in the
form of Exhibit 3 hereto, in the case of an account held by a depository other
than the Seller. A copy of such certification or letter agreement shall be
furnished to the Purchaser and, upon request, to any subsequent Purchaser.
The Seller shall deposit in the Custodial Account on a daily basis, and
retain therein, the following collections received by the Seller after the
related Cut-off Date:
(i) all payments on account of principal on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans adjusted
to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 2.11 (other than proceeds to be held in the Escrow
Account and applied to the restoration or repair of the Mortgaged Property
or Cooperative Unit, as applicable, or released to the Mortgagor in
accordance with Section 2.15), Section 2.12 and Section 2.16;
(v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or Cooperative Unit, as applicable, or
released to the Mortgagor in accordance with Section 2.15;
(vi) all prepayment penalties;
-8-
(vii) any amount required to be deposited in the Custodial Account
pursuant to Section 2.01, 2.10, 2.17, 4.01 or 4.02;
(viii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 8 of the Purchase Agreement; and
(ix) any amounts required to be deposited by the Seller pursuant to
Section 2.11 in connection with the deductible clause in any blanket hazard
insurance policy.
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 4.01, need not be deposited
by the Seller 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 Seller and the Seller shall be entitled to retain and withdraw
such interest from the Custodial Account pursuant to Section 2.05.
Section 2.05 Permitted Withdrawals From Custodial Account. The Seller
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 3.01;
(ii) to reimburse itself for unreimbursed Servicing Advances, any
unpaid Servicing Fees and for unreimbursed advances of Seller funds made
pursuant to Section 2.17, the Seller'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 Seller from the Mortgagor or
otherwise relating to the Mortgage Loan, it being understood that, in the
case of any such reimbursement, the Seller's right thereto shall be prior
to the rights of the Purchaser except that, where the Seller is required to
repurchase a Mortgage Loan pursuant to Section 8 of the Purchase Agreement
or Section 4.02 of this Agreement, the Seller'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 pay itself interest on funds deposited in the Custodial
Account;
(iv) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 4.03;
(v) to clear and terminate the Custodial Account upon the termination
of this Agreement; and
(vi) to withdraw funds deposited in error.
-9-
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Seller shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 3.01, the Seller is not
obligated to remit on such Remittance Date. The Seller may use such withdrawn
funds only for the purposes described in this Section 2.05.
Section 2.06 Establishment of and Deposits to Escrow Account. The
Seller 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, "IndyMac Bank,
F.S.B., in trust for ▇▇▇▇▇▇ Brothers Bank, FSB Residential Fixed Rate Mortgage
Loans and various Mortgagors". The Escrow Accounts shall be established with a
Qualified Depository, in a manner which shall provide maximum available
insurance thereunder. Funds deposited in the Escrow Account may be drawn on by
the Seller in accordance with Section 2.07. The creation of any Escrow Account
shall be evidenced by a certification in the form of Exhibit 4 hereto, in the
case of an account established with the Seller, or by a letter agreement in the
form of Exhibit 5 hereto, in the case of an account held by a depository other
than the Seller. A copy of such certification shall be furnished to the
Purchaser and, upon request, to any subsequent Purchaser.
The Seller shall deposit in the Escrow Account or Accounts on a daily
basis, 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; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property or Cooperative Unit, as applicable.
The Seller shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 2.07. The Seller 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 Seller 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 2.07 Permitted Withdrawals From Escrow Account. Withdrawals
from the Escrow Account or Accounts may be made by the Seller only:
(i) to effect timely payments of ground rents, taxes, Cooperative
Corporation charges, 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 Seller for any Servicing Advance made by the
Seller pursuant to Section 2.08 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;
-10-
(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
or Cooperative Unit, as applicable, in accordance with the procedures
outlined in Section 2.15;
(vi) to pay to the Seller, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
(vii) to clear and terminate the Escrow Account on the termination of
this Agreement; and
(viii) to withdraw funds deposited in error.
Section 2.08 Payment of Taxes, Insurance and Other Charges. With
respect to each Mortgage Loan, the Seller 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 or Cooperative Unit, as applicable, and the status of PMI Policy
premiums, fire and hazard insurance coverage, and Cooperative Corporation
assessments and charges 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 Seller in amounts sufficient for such purposes,
as allowed under the terms of the Mortgage. To the extent that a Mortgage does
not provide for Escrow Payments, the Seller shall determine that any such
payments are made by the Mortgagor at the time they first become due. The Seller
assumes full responsibility for the timely payment of all 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 Seller shall make advances from its own funds to effect such
payments.
Section 2.09 PMI Obligations. The Servicer shall comply with all
provisions of applicable state and federal law relating to the cancellation of,
or collection of premiums with respect to, PMI Policies, including, but not
limited to, the provisions of the Homeowners Protection Act of 1998, and all
regulations promulgated thereunder, as amended from time to time.
Section 2.10 Protection of Accounts. The Seller may transfer the
Custodial Account or the Escrow Account to a different Qualified Depository from
time to time. Such transfer shall be made only upon obtaining the consent of the
Purchaser, which consent shall not be withheld unreasonably.
-11-
The Seller shall bear any expenses, losses or damages sustained by the
Purchaser because the Custodial Account and/or the Escrow Account are not demand
deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may
at the option of the Seller be invested in Eligible Investments; provided that
in the event that amounts on deposit in the Custodial Account or the Escrow
Account exceed the amount fully insured by the FDIC (the "Insured Amount") the
Seller shall be obligated to invest the excess amount over the Insured Amount in
Eligible Investments on the same Business Day as such excess amount becomes
present in the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Determination Date next following the
date of such Eligible Investment, provided, however, that if such Eligible
Investment is an obligation of a Qualified Depository (other than the Seller)
that maintains the Custodial Account or the Escrow Account, then such Eligible
Investment may mature on such Remittance Date. Any such Eligible Investment
shall be made in the name of the Seller in trust for the benefit of the
Purchaser. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Seller and may be withdrawn at any time by the
Seller. Any losses incurred in respect of any such investment shall be deposited
in the Custodial Account or the Escrow Account, by the Seller out of its own
funds immediately as realized.
Section 2.11 Maintenance of Hazard Insurance. The Seller shall cause to
be maintained for each Mortgage Loan, hazard insurance such that all buildings
upon the Mortgaged Property or Cooperative Unit, as applicable, are insured by a
generally acceptable insurer rated A:VI or better in the current Best's Key
Rating Guide ("Best's") against loss by fire, hazards of extended coverage and
such other hazards as are customary in the area where the Mortgaged Property or
Cooperative Unit, as applicable, is located, in an amount which is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
thereof shall be sufficient to prevent the Mortgagor or the loss payee from
becoming a co-insurer.
If upon origination of the Mortgage Loan, the related Mortgaged
Property or Cooperative Unit, as applicable, was located in an area identified
in the Federal Register 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 rated A:VI or better in Best's 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 Seller
determines in accordance with applicable law and pursuant to the ▇▇▇▇▇▇ ▇▇▇
Guides that a Mortgaged Property or Cooperative Unit, as applicable, is located
in a special flood hazard area and is not covered by flood insurance or is
covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, the Seller shall notify the related
Mortgagor that the Mortgagor must obtain such flood insurance coverage, and if
said Mortgagor fails to obtain the required flood insurance coverage within
forty-five (45) days after such notification, the Seller shall immediately force
place the required flood insurance on the Mortgagor's behalf.
-12-
If a Mortgage is secured by a unit in a condominium project or
Cooperative Unit, the Seller 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 Seller 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 or
Cooperative Unit, as applicable, as security.
The Seller shall cause to be maintained on each Mortgaged Property or
Cooperative Unit, as applicable, earthquake or such other or additional
insurance as may be required pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance, or
pursuant to the requirements of any private mortgage guaranty insurer, or as may
be required to conform with Accepted Servicing Practices.
In the event that the Purchaser or the Seller shall determine that the
Mortgaged Property or Cooperative Unit, as applicable, 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 Seller
shall communicate and consult with the Mortgagor with respect to the need for
such insurance and bring to the Mortgagor's attention the desirability of
protection of the Mortgaged Property or Cooperative Unit, as applicable.
All policies required hereunder shall name the Seller as loss payee and
shall be endorsed with standard or New York 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 Seller shall not interfere with the Mortgagor's freedom of choice
in selecting either his insurance carrier or agent, provided, however, that the
Seller shall not accept any such insurance policies from insurance companies
unless such companies are rated A:VI or better in Best's and are licensed to do
business in the jurisdiction in which the Mortgaged Property is located. The
Seller shall determine that such policies provide sufficient risk coverage and
amounts, that they insure the property owner, and that they properly describe
the property address. The Seller shall furnish to the Mortgagor a formal notice
of expiration of any such insurance in sufficient time for the Mortgagor to
arrange for renewal coverage by the expiration date.
Pursuant to Section 2.04, any amounts collected by the Seller under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property or
Cooperative Unit, as applicable, or property acquired in liquidation of the
Mortgage Loan, or to be released to the Mortgagor, in accordance with the
Seller's normal servicing procedures as specified in Section 2.15) shall be
deposited in the Custodial Account subject to withdrawal pursuant to Section
2.05.
-13-
Section 2.12 Maintenance of Mortgage Impairment Insurance. In the event
that the Seller 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 2.11 and otherwise
complies with all other requirements of Section 2.11, it shall conclusively be
deemed to have satisfied its obligations as set forth in Section 2.11. Any
amounts collected by the Seller under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section 2.05. 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 or Cooperative Unit, as applicable, a policy complying with Section
2.11, and there shall have been a loss which would have been covered by such
policy, the Seller 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 Seller's funds, without
reimbursement therefor. Upon request of the Purchaser, the Seller shall cause to
be delivered to the Purchaser a certified true copy of such policy and a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Purchaser.
Section 2.13 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Seller 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 ("Seller 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 Seller against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Seller Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Seller 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 2.13 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Seller from its duties
and obligations as set forth in this Agreement. The minimum coverage under any
such bond and insurance policy shall be at least equal to the corresponding
amounts required by ▇▇▇▇▇▇ ▇▇▇ in the ▇▇▇▇▇▇ Mae Guides or by ▇▇▇▇▇▇▇ Mac in the
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' & Servicers' Guide. Upon the request of the Purchaser, the
Seller shall cause to be delivered to the 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 2.14 Inspections. The Seller shall inspect the Mortgaged
Property or Cooperative Unit, as applicable, as often as deemed necessary by the
Seller to assure itself that the value of the Mortgaged Property or Cooperative
Unit, as applicable, is being preserved. In addition, if any Mortgage Loan is
more than 60 days delinquent, the Seller immediately shall inspect the Mortgaged
Property or Cooperative Unit, as applicable, and shall conduct subsequent
inspections in accordance with Accepted Servicing Practices or as may be
required by the primary mortgage guaranty insurer. The Seller shall keep a
written report of each such inspection.
-14-
Section 2.15 Restoration of Mortgaged Property or Cooperative Unit. The
Seller 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 or Cooperative Unit, as
applicable, if such release is in accordance with Accepted Servicing Practices.
At a minimum, the Seller shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation Proceeds:
(i) the Seller shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with respect
thereto; (ii) the Seller 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 Seller shall verify that the Mortgage Loan is not in default;
and
(iv) pending repairs or restoration, the Seller shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Seller is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
Section 2.16 Maintenance of PMI Policy; Claims. With respect to each
Mortgage Loan with a LTV in excess of 80% with a PMI Policy (a "PMI Loan"), the
Seller shall, without any cost to the Purchaser, maintain or cause the Mortgagor
to maintain in full force and effect a PMI Policy insuring that portion of the
PMI Loan in excess of 75% of value, and shall pay or shall cause the Mortgagor
to pay the premium thereon on a timely basis, until the LTV of such PMI Loan is
reduced to 80%. In the event that such PMI Policy shall be terminated, the
Seller 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 Seller
shall determine whether recoveries under the PMI Policy are jeopardized for
reasons related to the financial condition of such insurer, it being understood
that the Seller shall in no event have any responsibility or liability for any
failure to recover under the PMI Policy for such reason. If the Seller
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 Seller shall not take any action which would
result in noncoverage under any applicable PMI Policy of any loss which, but for
the actions of the Seller would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered into
pursuant to Section 4.01, the Seller shall promptly notify the insurer under the
related PMI Policy, if any, of such assumption or substitution of liability in
accordance with the terms of such PMI Policy and shall take all actions which
may be required by such insurer as a condition to the continuation of coverage
under such PMI Policy. If such PMI Policy is terminated as a result of such
assumption or substitution of liability, the Seller shall obtain a replacement
PMI Policy as provided above.
-15-
In connection with its activities as servicer, the seller agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any 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 PMI Loan.
Pursuant to Section 2.04, any amounts collected by the Seller under any PMI
Policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 2.05.
Section 2.17 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 Seller 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 Seller shall manage, conserve, protect and operate each REO
Property for the Purchaser solely for the purpose of its prompt disposition and
sale. The Seller, either itself or through an agent selected by the Seller,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account, and in the same manner that similar property in the same
locality as the REO Property is managed. The Seller 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 Seller
deems to be in the best interest of the Purchaser.
The Seller shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within one year
after title has been taken to such REO Property, unless the Seller determines,
and gives an appropriate notice to the Purchaser to such effect, that a longer
period is necessary for the orderly liquidation of such REO Property. If a
period longer than one year is permitted under the foregoing sentence and is
necessary to sell any REO Property, (i) the Seller 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
Seller as mortgagee, and such purchase money mortgage shall not be held pursuant
to this Agreement, but instead a separate participation agreement among the
Seller and Purchaser shall be entered into with respect to such purchase money
mortgage.
The Seller shall also maintain on each REO Property fire and hazard
insurance with extended coverage in an amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
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.
-16-
The disposition of REO Property shall be carried out by the Seller at
such price, and upon such terms and conditions, as the Seller deems to be in the
best interests of the Purchaser. The 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 Seller shall reimburse itself
for any related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to this Section, and on the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Purchaser.
With respect to each REO Property, the Seller shall hold all funds
collected and received in connection with the operation of the REO Property in
the Custodial Account. The Seller shall cause to be deposited on a daily basis
upon the receipt thereof in each Custodial Account all revenues received with
respect to the conservation and disposition of the related REO Property.
Notwithstanding the foregoing, at any time and from time to time, the
Purchaser may at its election terminate this Agreement with respect to one or
more REO Properties as provided by Section 6.03(d).
Section 2.18 Permitted Withdrawals with respect to REO Property. The
Seller shall withdraw REO funds on deposit in the Custodial Account with respect
to each related REO Property necessary for the proper operation, management and
maintenance of the REO Property, including the cost of maintaining any hazard
insurance pursuant to Section 2.11, the cost of any taxes or assessments and the
fees of any managing agent acting on behalf of the Seller. The Seller 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 Section 2.17 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section 2.19 Liquidation Reports. Upon the foreclosure sale of any
Mortgaged Property or the acquisition thereof by the Purchaser pursuant to a
deed in lieu of foreclosure, the Seller shall submit to the Purchaser a notice
of acquisition with respect to such Mortgaged Property.
Section 2.20 Reports of Foreclosures and Abandonments of Mortgaged
Property. Following the foreclosure sale or abandonment of any Mortgaged
Property or Cooperative Unit, the Seller shall report such foreclosure or
abandonment as required pursuant to Section 6050J of the Code.
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances. On each Remittance Date the Seller 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 2.05), plus (b) all amounts, if any, which the
Seller is obligated to distribute pursuant to Section 2.03.
-17-
With respect to any remittance received by the Purchaser after the
second Business Day following the Business Day on which such payment was due,
the Seller shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Seller on the date such late payment is made and shall cover the
period commencing with the day following such second Business Day and ending
with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Remittance Date. The payment by the Seller of any such interest shall
not be deemed an extension of time for payment or a waiver of any Event of
Default by the Seller.
Section 3.02 Statements to Purchaser. Not later than the Remittance
Date, the Seller shall furnish to the Purchaser a Monthly Remittance Advice,
with a trial balance report attached thereto, in the form of Exhibit 1 annexed
hereto in hard copy and electronic medium mutually acceptable to the parties as
to the preceding remittance and the period ending on the preceding Determination
Date.
In addition, not more than 60 days after the end of each calendar year,
the Seller shall furnish to each Person who was a Purchaser at any time during
such calendar year an annual statement in accordance with the requirements of
applicable federal income tax law as to the aggregate of remittances for the
applicable portion of such year.
Such obligation of the Seller shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by the
Seller pursuant to any requirements of the Internal Revenue Code as from time to
time are in force.
The Seller shall prepare and file any and all tax returns, information
statements or other filings required to be delivered to any governmental taxing
authority or to the Purchaser pursuant to any applicable law with respect to the
Mortgage Loans and the transactions contemplated hereby. In addition, the Seller
shall provide the Purchaser with such information concerning the Mortgage Loans
as is necessary for the Purchaser to prepare its federal income tax return as
the Purchaser may reasonably request from time to time.
Section 3.03 Principal and Interest Advances by Seller. The Seller
shall have no obligation to advance any amounts constituting delinquent
principal and interest payments.
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property. The Seller 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 Seller shall, to the extent it has knowledge of such
conveyance, exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause applicable thereto, provided, however, that the
Seller 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.
-18-
If the Seller reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Seller 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
Seller is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Seller 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 Seller for entering into an assumption
agreement, a portion of such fee, up to an amount equal to one-half of one
percent (0.5%) of the outstanding principal balance of the related Mortgage
Loan, will be retained by the Seller as additional servicing compensation, and
any portion thereof in excess of one-half of one percent (0.5%) shall be
deposited in the Custodial Account for the benefit of the Purchaser. In
connection with any such assumption, neither the Mortgage Interest Rate borne by
the related Mortgage Note, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Seller shall
inquire diligently into the creditworthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used by ▇▇▇▇▇▇ ▇▇▇ 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 Seller diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the Seller of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Seller shall notify the Purchaser in the Monthly Remittance
Advice as provided in Section 3.02, and may request the release of any Mortgage
Loan Documents from the Purchaser in accordance with this Section 4.02 hereof.
If the Seller satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Seller otherwise prejudice any rights the Purchaser may have under the
mortgage instruments, upon written demand of the Purchaser, the Seller 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 Seller shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 2.13 insuring the Seller against any
loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
-19-
Section 4.03 Servicing Compensation. As consideration for servicing
each Mortgage Loan during the period from the related Closing Date up to but not
including the related Transfer Date, the Seller shall retain a Servicing Fee
with respect to each Mortgage Loan in the amount of $7.00 per month, which
amount shall be prorated for any portion of a month during which the Mortgage
Loan is serviced by the Seller pursuant to this Agreement. 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 2.02), of
such Monthly Payment collected by the Seller, or as otherwise provided under
Section 2.03.
Additional servicing compensation in the form of assumption fees, to
the extent provided in Section 4.01, and late payment charges shall be retained
by the Seller to the extent not required to be deposited in the Custodial
Account. The Seller shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 4.04 Annual Statement as to Compliance. The Seller shall
deliver to the Purchaser, on or before March 31 each year beginning March 31,
2001, and on the Transfer Date an Officer's Certificate, stating that (i) a
review of the activities of the Seller during the preceding calendar year and of
performance under this Agreement has been made under such officer's supervision,
and (ii) the Seller has complied fully with the provisions of Article II and
Article IV, and (iii) to the best of such officer's knowledge, based on such
review, the Seller 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 Seller to cure such
default.
Section 4.05 Right to Examine Seller Records. The Purchaser shall have
the right to examine and audit any and all of the books, records, or other
information of the Seller, whether held by the Seller 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.
ARTICLE V
SELLER TO COOPERATE
Section 5.01 Provision of Information. During the term of this
Agreement, the Seller shall furnish to the Purchaser such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate with respect to the Purchaser or the
purposes of this Agreement. All such reports or information shall be provided by
and in accordance with all reasonable instructions and directions which the
Purchaser may give.
The Seller 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.
-20-
Section 5.02 Financial Statements; Servicing Facilities. In connection
with marketing the Mortgage Loans, the Purchaser may make available to a
prospective Purchaser a Consolidated Statement of Operations of the Seller for
the most recently completed five 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
Seller also shall make available any comparable interim statements to the extent
any such statements have been prepared by or on behalf of the Seller (and are
available upon request to members or stockholders of the Seller or to the public
at large). If it has not already done so, the Seller shall furnish promptly to
the Purchaser copies of the statement specified above.
The Seller shall make available to the Purchaser or any prospective
Purchaser a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Seller or the
financial statements of the Seller, and to permit any prospective Purchaser to
inspect the Seller's servicing facilities or those of any Subservicer for the
purpose of satisfying such prospective Purchaser that the Seller and any
Subservicer have the ability to service the Mortgage Loans as provided in this
Agreement.
ARTICLE VI
TERMINATION
Section 6.01 Agency Suspension. Should the Seller at any time during
the term of this Agreement have its right to service temporarily or permanently
suspended by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac or otherwise cease to be an approved
seller/servicer of conventional residential mortgage loans for ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac, then the Purchaser may immediately terminate this Agreement and
accelerate performance of the provisions of the Purchase Agreement to require
immediate transfer of the Servicing Rights.
Section 6.02 Damages. The Purchaser shall have the right at any time to
seek and recover from the Seller any damages or losses suffered by it as a
result of any failure by the Seller to observe or perform any duties,
obligations, covenants or agreements herein contained or contained in the
Purchase Agreement, or as a result of a party's failure to remain an approved
▇▇▇▇▇▇ Mae mortgage servicer.
Section 6.03 Termination Upon Transfer of Servicing, Termination
Procedures. This Agreement shall terminate with respect to the Mortgage Loans or
portion thereof transferred on the related Transfer Date which shall be the date
set forth in the related Acknowledgment Agreement.
The Purchaser may elect to terminate this Agreement and transfer the
servicing from the Seller prior to the related Transfer Date with respect to all
or any portion of the Mortgage Loans by providing written notice to the Seller
at least ___ Business Days prior to the date on which it intends to transfer the
servicing of its intent to transfer the servicing from the Seller. On or before
the date specified by the Purchaser in accordance with this paragraph (a) for
the transfer of servicing from the Seller, the Seller shall prepare, execute and
deliver to the successor entity designated by the Purchaser any and all
documents and other instruments, place in such successor's possession all
Mortgage Loan Documents 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 Seller's sole
expense. The Seller shall cooperate with the Purchaser and such successor in
effecting the termination of the Seller's responsibilities and rights hereunder.
-21-
On the related Transfer Date, the Seller shall comply with all of the
provisions of Section 5 of the Purchase Agreement to effect a complete transfer
of the Servicing Rights. On the related Transfer Date for each Mortgage Loan,
this Agreement, except for Articles VI, VIII, IX and X which shall survive each
Transfer Date, shall terminate.
(a) Mortgage Loans in Foreclosure. The servicing with respect to
Mortgage Loans in foreclosure on or before the related Transfer Date shall not
be transferred from the Seller to the Purchaser or the successor servicer, as
the case may be, and such Mortgage Loans shall continue to be serviced by the
Seller pursuant to the terms of this Agreement. However, if the Purchaser so
elects, the Purchaser may waive the provisions of this paragraph (b) and accept
transfer of servicing of such Mortgage Loans and all amounts received by the
Seller thereunder.
(b) Servicing Advances. Notwithstanding the fact that the related
Transfer Date has occurred, the Seller shall not be reimbursed for any Servicing
Advances with respect to any Mortgage Loan until the Seller or the successor
servicer receives a Monthly Payment or Liquidation Proceeds with respect to such
Mortgage Loan. At such time, the Seller shall be entitled to be reimbursed for
all unreimbursed Servicing Advances with respect to such Mortgage Loan on a
first priority basis (but subject to any successor servicer's rights to
reimbursement with respect to Servicing Advances) from the Monthly Payment or
Liquidation Proceeds received with respect to such Mortgage Loan. This Section
6.03(b) shall survive the related Transfer Date.
(c) Additional Termination Provisions. Notwithstanding and in addition
to the foregoing, in the event that (i) a Mortgage Loan becomes delinquent for a
period of 120 days or more (a "Delinquent Mortgage Loan") or (ii) a Mortgage
Loan becomes an REO Property, the Purchaser may at its election terminate this
Agreement with respect to such Delinquent Mortgage Loan or REO Property, upon 15
days' written notice to the Seller.
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the Related
Transfer Date. Prior to the related Transfer Date, the contents of each
Servicing File are and shall be held in trust by the Seller for the benefit of
the Purchaser as the owner thereof. The Seller shall maintain in the Servicing
File a copy of the contents of each Mortgage File and the originals of the
documents in each Mortgage File not delivered to the Purchaser. The possession
of the Servicing File by the Seller is at the will of the Purchaser for the sole
purpose of servicing the related Mortgage Loan, pursuant to this Agreement, and
such retention and possession by the Seller is in its capacity as Servicer only
and at the election of the Purchaser. The Seller 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
Seller's servicing of the Mortgage Loans pursuant to this Agreement, or is in
connection with a repurchase of any Mortgage Loan pursuant to Section 8 of the
Purchase Agreement.
-22-
The Seller 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 Seller shall maintain in its possession, available for
inspection by the Purchaser or its designee, and shall deliver to the Purchaser
or its designee 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 or Cooperative Unit, as
applicable, documentation evidencing insurance coverage and eligibility of any
condominium project for approval by ▇▇▇▇▇▇ Mae and periodic inspection reports
as required by Section 2.14.
The Seller shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Seller
shall note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be
made unless such transfer is in compliance with the terms hereof. For the
purposes of this Agreement, the Seller 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 or transfer one or more of the
Mortgage Loans. The Purchaser also shall advise the Seller of the transfer. Upon
receipt of notice of the transfer, the Seller 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.
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification. The Seller agrees to indemnify the
Purchaser and hold it harmless against any and all claims, losses, damages,
penalties, fines, and forfeitures, including, but not limited to 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
Seller to (a) perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement and/or (b) comply with applicable
law. The Seller promptly shall notify the Purchaser if a claim is made by a
third party with respect to this Agreement, 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 Seller shall follow any written instructions
received from the Purchaser in connection with such claim. The Purchaser
promptly shall reimburse the Seller for all amounts advanced by it pursuant to
the preceding sentence except when the claim is in any way related to the
Seller's indemnification pursuant to Section 8 of the Purchase Agreement, or the
failure of the Seller to (a) service and administer the Mortgage Loans in strict
compliance with the terms of this Agreement and/or (b) comply with applicable
law.
-23-
Section 8.02 Limitation on Liability of Seller and Others. Neither the
Seller nor any of the directors, officers, employees or agents of the Seller
shall be under any liability to the Purchaser for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Seller or any such person against any breach of warranties
or representations made herein, or failure to perform its obligations in strict
compliance with any standard of care set forth in this Agreement, or any
liability which would otherwise be imposed by reason of any breach of the terms
and conditions of this Agreement. The Seller and any director, officer, employee
or agent of the Seller may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expense or liability, provided, however, that the
Seller 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 Seller shall be entitled to
reimbursement from the Purchaser of the reasonable legal expenses and costs of
such action.
Section 8.03 Limitation on Resignation and Assignment by Seller. The
Purchaser has entered into this Agreement with the Seller and subsequent
Purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Seller, 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
Seller shall neither assign this Agreement or the servicing hereunder or
delegate its rights or duties hereunder or any portion hereof (to other than a
Subservicer) or sell or otherwise dispose of all or substantially all of its
property or assets without the prior written consent of the Purchaser, which
consent shall be granted or withheld in the sole discretion of the Purchaser.
The Seller shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Seller and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Seller. Any such
determination permitting the resignation of the Seller shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Seller's responsibilities and obligations hereunder in the manner provided in
Section 6.03.
Without in any way limiting the generality of this Section 8.03, in the
event that the Seller either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof (to other than a Subservicer) or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written consent
of the Purchaser, then the Purchaser shall have the right to terminate this
Agreement upon notice given as set forth in Section 6.03, without any payment of
any penalty or damages and without any liability whatsoever to the Seller or any
third party.
-24-
Section 8.04 Assignment by Purchaser. The Purchaser shall have the
right, without the consent of the Seller but subject to the limit set forth in
Section 2.01 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 and Assumption Agreement substantially in the form of Exhibit H to
the Purchase Agreement. Upon such assignment of rights and assumption of
obligations, the assignee or designee shall accede to the rights and obligations
hereunder of the Purchaser with respect to such Mortgage Loans and the Purchaser
as assignor shall be released from all obligations hereunder with respect to
such Mortgage Loans from and after the date of such assignment and assumption.
All references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
The Purchaser warrants and represents to, and covenants and agrees
with, the Seller as follows:
Section 9.01 Authority and Capacity. The execution, delivery and
performance by the Purchaser of this Agreement has been and will remain duly and
validly authorized by all necessary corporate action. This Agreement constitutes
and will continue to constitute a legal, valid and enforceable obligation of the
Purchaser.
Section 9.02 Assistance. To the extent possible, the Purchaser shall
cooperate with and assist the Seller as requested by the Seller, in carrying out
Seller's covenants, agreements duties and responsibilities under the Purchase
Agreement and in connection therewith shall execute and deliver all such papers,
documents and instruments as may be necessary and appropriate in furtherance
thereof.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller warrants and represents to, and covenants and agrees with,
the Purchaser as follows:
Section 10.01 Due Organization and Authority. The Seller is a federal
savings bank 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 or Cooperative Unit, as applicable, is
located if the laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan in accordance with the
terms of this Agreement; the Seller has the full corporate power and authority
to execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments
or transfer to be delivered pursuant to this Agreement) by the Seller 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 Seller; and all requisite corporate action has been taken by
the Seller to make this Agreement valid and binding upon the Seller in
accordance with its terms;
-25-
Section 10.02 Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller;
Section 10.03 No Conflicts. Neither the execution and delivery of this
Agreement, nor the fulfillment of or compliance with the terms and conditions of
this Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Seller's charter or by-laws or any legal
restriction or any agreement or instrument to which the Seller is now a party or
by which it is bound, or constitute a default or result in an acceleration under
any of the foregoing, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Seller 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;
Section 10.04 Ability to Service. The Seller 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 Seller 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 Seller unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility
requirements or which would require notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac;
Section 10.05 Ability to Perform. The Seller does not believe, nor does
it have any reason or cause to believe, that it cannot comply in all material
respects with each and every covenant contained in this Agreement;
Section 10.06 No Litigation Pending. There is no action, suit,
proceeding or investigation pending or, to the best of Seller's knowledge,
threatened against the Seller 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 Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
Section 10.07 No Consent Required. No consent, approval, authorization
or order of any court or governmental agency or body is required for the
execution, delivery and performance by the Seller of or compliance by the Seller
with this Agreement or the Servicing of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the Closing Date;
-26-
Section 10.08 No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of fact or omits to state a fact necessary to make
the statements contained therein not misleading.
ARTICLE XI
DEFAULT
Section 11.01 Events of Default. The following shall constitute an
Event of Default under this Agreement on the part of the Seller:
(a) any failure by the Seller to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of five days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to the Seller
by the Purchaser; or
(b) the failure by the Seller duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Seller set forth in this Agreement which continues unremedied for a period of 30
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Seller by the Purchaser; or
(c) 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, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Seller and such decree or order
shall have remained in force undischarged or unstayed for a period of 60 days;
or
(d) the Seller 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 Seller or of
or relating to all or substantially all of its property; or
(e) the Seller shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) the Seller ceases to meet the qualifications of a ▇▇▇▇▇▇ Mae
servicer; or
(g) the Seller fails to maintain a minimum net worth of $25,000,000; or
-27-
(h) the Seller, if it is an Insured Depository Institution, shall
become the subject of a cease and desist order of the Appropriate Federal
Banking Agency or interest into a memorandum of understanding, consent agreement
or any similar agreement with the Appropriate Federal Banking Agency, any of
which, would have or is purportedly the result of, any condition which would
have a material adverse effect on the Mortgage Loans, the Seller, or the
Seller's ability to service the Mortgage Loans as provided hereunder; or
(i) the Seller shall fail to maintain its status as Well Capitalized;
or
(j) the Seller attempts to assign its right to servicing compensation
hereunder or the Seller attempts, without the consent of the Purchaser, to sell
or otherwise dispose of all or substantially all of its property or assets or to
assign this Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof.
In each and every such case, so long as 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 Seller, may terminate all the rights and
obligations of the Seller under this Agreement and in and to the Mortgage Loans
and the proceeds thereof.
Upon receipt by the Seller of such written notice, all authority and
power of the Seller under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the successor appointed
pursuant to Section 6.03.
Section 11.02 Waiver of Defaults. By a written notice, the Purchaser
may waive any default by the Seller 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 XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices. All notices, requests, demands and other
communications which are required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given upon the
delivery or mailing thereof, as the case may be, sent by registered or certified
mail, return receipt requested:
(a) If to Purchaser to:
▇▇▇▇▇▇ Brothers Bank, FSB
3 World Financial ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Contract Finance
-28-
(b) If to Seller to:
IndyMac Bank, F.S.B.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to
IndyMac Bank, F.S.B.
Kalamazoo, MI
Attn: Home Loan Servicing
Section 12.02 Waivers. Either the Seller or Purchaser may upon consent
of all parties, by written notice to the others:
(a) Waive compliance with any of the terms, conditions or covenants
required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations of the others
hereunder.
The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other subsequent
breach.
Section 12.03 Entire Agreement; Amendment. This Agreement and the
Purchase Agreement constitute the entire agreement between the parties with
respect to servicing of the Mortgages during the Interim Period. This Agreement
may be amended and any provision hereof waived, but, only in writing signed by
the party against whom such enforcement is sought.
Section 12.04 Execution; Binding Effect. 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 8.03, this Agreement shall inure to the benefit of
and be binding upon the Seller and the Purchaser and their respective successors
and assigns.
Section 12.05 Headings. Headings of the Articles and Sections in this
Agreement are for reference purposes only and shall not be deemed to have any
substantive effect.
Section 12.06 Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of New York.
Section 12.07 Relationship of Parties. Nothing herein contained shall
be deemed or construed to create a partnership or joint venture between the
parties. The duties and responsibilities of the Seller shall be rendered by them
as independent contractors and not as an agent of Purchaser. The Seller shall
have full control of all of its acts, doings, proceedings, relating to or
requisite in connection with the discharge of its duties and responsibilities
under this Agreement.
-29-
Section 12.08 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 12.09 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 or Cooperative Unit, as applicable, are situated, and in
any other appropriate public recording office or elsewhere, such recordation to
be effected at the Seller's expense pursuant to Section 12 of the Flow Mortgage
Purchase and Warranties Agreement in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
Section 12.10 Appointment and Designation of Master Servicer. The
Purchaser hereby appoints and designates Aurora Loan Services, Inc. as its
master servicer (the "Master Servicer") for the Mortgage Loans subject to this
Agreement. The Seller is hereby authorized and instructed to take any and all
instructions with respect to servicing the Mortgage Loans hereunder as if the
Master Servicer were the Purchaser hereunder. The authorization and instruction
set forth herein shall remain in effect until such time as the Seller shall
receive written instruction from the Purchaser that such authorization and
instruction is terminated.
-30-
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date and year first above written.
▇▇▇▇▇▇ BROTHERS BANK, FSB
(the Purchaser)
By: _________________________________
Name:
Title:
INDYMAC BANK, F.S.B.
(the Seller)
By: _________________________________
Name:
Title:
EXHIBIT 1
FORM OF MONTHLY REMITTANCE ADVICE
[INTENTIONALLY OMITTED]
1-1
EXHIBIT 2
FORM OF CUSTODIAL ACCOUNT CERTIFICATION
________ __, 2001
_____________________________________________ hereby certifies that it
has established the account described below as a Custodial Account pursuant to
Section 2.04 of the Flow Interim Servicing Agreement, dated as of February 13,
2001, Fixed Rate Mortgage Loans, Group 2001-1.
Title of Account: "IndyMac Bank, F.S.B. in trust for ▇▇▇▇▇▇ Brothers
Bank, FSB, Residential Fixed Rate Mortgage Loans and various Mortgagors."
Account Number:______________________________________
Address of office or branch
of the Seller at
which Account is maintained:_________________________
______________________________________
______________________________________
INDYMAC BANK, F.S.B.
______________________________________
Seller
By: __________________________________
Name:
Title:
2-1
EXHIBIT 3
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
_________ __, 20__
To: _______________________________
_______________________________
_______________________________
(the "Depository")
As Seller under the Flow Interim Servicing Agreement, dated as of
February 13, 2001, Fixed Rate Mortgage Loans (the "Agreement"), we hereby
authorize and request you to establish an account, as a Custodial Account
pursuant to Section 2.04 of the Agreement, to be designated as "IndyMac Bank,
F.S.B. in trust for ▇▇▇▇▇▇ Brothers Bank, FSB, Residential Fixed Rate Mortgage
Loans and various Mortgagors" All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Seller. You may refuse any deposit
which would result in violation of the requirement that the account be fully
insured as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
INDYMAC BANK, F.S.B.
Seller
By: _____________________________
Name:
Title:
Date:
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
_________________________________
Depository
By: _____________________________
Name:
Title:
Date:
3-1
EXHIBIT 4
FORM OF ESCROW ACCOUNT CERTIFICATION
_________ ___, 200_
__________________________________ hereby certifies that it has
established the account described below as an Escrow Account pursuant to Section
2.06 of the Flow Interim Servicing Agreement, dated as of February 13, 2001,
Fixed Rate Mortgage Loans.
Title of Account:_"IndyMac Bank, F.S.B. in trust for ▇▇▇▇▇▇ Brothers
Bank, FSB, Residential Fixed Rate Mortgage Loans and various Mortgagors."
Account Number:______________________________________
Address of office or branch
of the Seller at
which Account is maintained:_________________________
______________________________________
______________________________________
INDYMAC BANK, F.S.B.
Seller
By: __________________________________
Name:
Title:
Date:
4-1
EXHIBIT 5
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 200_
To: _______________________________
_______________________________
_______________________________
(the "Depository")
As Seller under the Flow Interim Servicing Agreement, dated as of
February 13, 2001, Fixed Rate Mortgage Loans, Group 2001-1 (the "Agreement"), we
hereby authorize and request you to establish an account, as an Escrow Account
pursuant to Section 2.06 of the Agreement, to be designated as "IndyMac Bank,
F.S.B. in trust for ▇▇▇▇▇▇ Brothers Bank, FSB, Residential Fixed Rate Mortgage
Loans and various Mortgagors." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Seller. You may refuse any deposit
which would result in violation of the requirement that the account be fully
insured as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
IndyMac Bank, F.S.B.
By: ________________________________
Name:
Title:
Date:
5-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
_________________________________
Depository
By: _________________________________
Name:
Title:
Date:
5-2
EXHIBIT 6
ACKNOWLEDGMENT AGREEMENT
On this ____ day of ____________, 200_, ▇▇▇▇▇▇ Brothers Bank, F.S.B,
(the "Purchaser") as the Purchaser under that certain Flow Interim Servicing
Agreement dated as of February 13, 2001, (the "Agreement"), does hereby contract
with IndyMac Bank, F.S.B., (the "Seller") as Seller under the Agreement, for the
servicing responsibilities related to the Mortgage Loans listed on the Mortgage
Loan Schedule attached hereto. The Seller hereby accepts the servicing
responsibilities transferred hereby and on the date hereof assumes all servicing
responsibilities related to the Mortgage Loans identified on the attached
Mortgage Loan Schedule all in accordance with the Agreement. The contents of
each Servicing File required to be delivered to service the Mortgage Loans
pursuant to the Agreement have been or shall be delivered to the Seller by the
Purchaser in accordance with the terms of the Agreement.
With respect to the Mortgage Loans made subject to the Agreement
hereby, the Closing Date shall be ___________________ and the Transfer Date
shall be _______________.
All other terms and conditions of this transaction shall be governed by
the Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
6-1
This Acknowledgment 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.
IN WITNESS WHEREOF, the Purchaser and the Seller have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
PURCHASER:
▇▇▇▇▇▇ BROTHERS BANK. F.S.B.
By:______________________________
Name:____________________________
Title:___________________________
SELLER:
INDYMAC BANK, F.S.B.
By:______________________________
Name:____________________________
Title:___________________________
6-2
AMENDMENT NO. 1
TO THE FLOW INTERIM SERVICING AGREEMENT
This is Amendment No. 1 (the "Amendment No. 1"), dated as of June 27,
2001, by and between by and between IndyMac Bank, F.S.B. (the "Seller"), a
federal savings bank and ▇▇▇▇▇▇ Brothers Bank, FSB, a federal savings bank (the
"Purchaser") to that certain Flow Interim Servicing Agreement, dated as of
February 13, 2001 (the "Existing Servicing Agreement").
W I T N E S S E T H
WHEREAS, solely with respect to the Mortgage Loans sold by the Seller
and purchased by the Purchaser pursuant to the June 21, 2001 and June 27, 2001
closings, the Seller and the Purchaser have agreed, subject to the terms and
conditions of this Amendment, that the Existing Servicing Agreement be amended
to reflect certain agreed upon revisions to the terms of the Existing Servicing
Agreement.
Accordingly, the Seller and the Purchaser hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that the Existing Servicing Agreement is hereby amended as follows:
(a) (a) Section 1.01 of the Existing Servicing Agreement is hereby
amended by adding the following definitions:
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.
Monthly Advance: The portion of Monthly Payment delinquent with respect
to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Seller pursuant to Section 3.03 on
the Business Day immediately preceding the Remittance Date of the
related month.
Prepayment Interest Shortfall Amount: With respect to any Mortgage Loan
that was subject to a Principal Prepayment in full or in part during
any Due Period, which Principal Prepayment was applied to such Mortgage
Loan prior to such Mortgage Loan's Due Date in such Due Period, the
amount of interest (net the related Servicing Fee) that would have
accrued on the amount of such Principal Prepayment during the period
commencing on the date as of which such Principal Prepayment was
applied to such Mortgage Loan and ending on the day immediately
preceding such Due Date, inclusive.
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.
Remittance Date: The 18th day (or if such 18th day is not a Business
Day, the first Business Day immediately following) of any month.
Servicing Fee Rate: 0.25% per annum.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the Cut-off Date after giving effect to
payments of principal due on or before such date, whether or not
received, minus (ii) all amounts previously distributed to the
Purchaser with respect to the related Mortgage Loan representing
payments or recoveries of principal or advances in lieu thereof.
(b) (b) Section 1.01 of the Existing Servicing Agreement is hereby
amended by deleting the existing definitions of Servicing Advance and Servicing
Fee in their entirety and replacing them with the following language.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including
reasonable attorneys' fees and disbursements) incurred in the
performance by the Seller of its servicing obligations, including, but
not limited to, the cost of (a) the preservation, restoration and
protection of 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 2.08.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Seller, which shall, for 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 computed. 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 2.05) of such Monthly Payment collected by
the Seller, or as otherwise provided under Section 2.05.
(c) (c) The second paragraph of Section 2.04 of the Existing Servicing
Agreement is hereby amended by deleting the entire paragraph in its entirety and
replacing it with the following language:
The Seller shall deposit in the Custodial Account on a daily
basis, and retain therein, the following collections received by the
Seller and payments made by the Seller after the Cut-off Date, other
than payments of principal and interest due on or before the Cut-off
Date, or received by the Seller prior to the Cut-off Date but allocable
to a period subsequent thereto:
(i) all payments on account of principal on the Mortgage
Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 2.11 (other than proceeds to be held in
the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or Cooperative Unit, as applicable, or released to
the Mortgagor in accordance with Section 2.15), Section 2.12 and
Section 2.16;
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or Cooperative Unit, as
applicable, or released to the Mortgagor in accordance with Section
2.15;
(vi) all prepayment penalties;
(vii) any amount required to be deposited in the Custodial
Account pursuant to Section 2.01, 2.10, 2.17, 3.03, 4.01 or 4.02;
(viii) any amounts payable in connection with the repurchase
of any Mortgage Loan pursuant to Section 8 of the Purchase Agreement;
and
(ix) with respect to each Principal Prepayment in full or in
part, the Prepayment Interest Shortfall Amount, if any, for the month
of distribution. Such deposit shall be made from the Seller's own
funds, without reimbursement therefor;
(x) any amounts required to be deposited by the Seller
pursuant to Section 2.11 in connection with the deductible clause in
any blanket hazard insurance policy.
(d) (d) Section 2.05 of the Existing Servicing Agreement is hereby
amended by deleting the entire paragraph in its entirety and replacing it with
the following language:
The Seller 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 3.01;
(ii) to reimburse itself for Monthly Advances of the Seller's
funds made pursuant to Section 3.03, the Seller's right to reimburse
itself pursuant to this subclause (ii) being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and
such other amounts as may be collected by the Seller from the Mortgagor
or otherwise relating to the Mortgage Loan, it being understood that,
in the case of any such reimbursement, the Seller's right thereto shall
be prior to the rights of the Purchaser except that, where the Seller
is required to repurchase a Mortgage Loan pursuant to Section 8 of the
Purchase Agreement or Section 4.02 of this Agreement, the Seller'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,
any unpaid Servicing Fees and for unreimbursed advances of Seller funds
made pursuant to Section 2.17, the Seller'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
Seller from the Mortgagor or otherwise relating to the Mortgage Loan,
it being understood that, in the case of any such reimbursement, the
Seller's right thereto shall be prior to the rights of the Purchaser
except that, where the Seller is required to repurchase a Mortgage Loan
pursuant to Section 8 of the Purchase Agreement or Section 4.02 of this
Agreement, the Seller's right to such reimbursement shall be subsequent
to the payment to the Purchaser of the Repurchase Price pursuant to
such sections and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loan; (iv) to pay itself
interest on funds deposited in the Custodial Account;
(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 4.03;
(vi) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(vii) to withdraw funds deposited in error.
(e) (e) Section 3.01 of the Existing Servicing Agreement is hereby
amended by deleting the entire paragraph in its entirety and replacing it with
the following language:
Section 3.01 Remittances.
On each Remittance Date the Seller 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 2.05), plus (b) all amounts,
if any, which the Seller is obligated to distribute pursuant to Section
3.03 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
2.04(ix), and 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, which amounts shall be remitted on
the Remittance Date next succeeding the Due Period for such amounts.
With respect to any remittance received by the Purchaser after
the second Business Day following the Business Day on which such
payment was due, the Seller shall pay to the Purchaser interest on any
such late payment at an annual rate equal to the Prime Rate, adjusted
as of the date of each change, plus three percentage points, but in no
event greater than the maximum amount permitted by applicable law. Such
interest shall be deposited in the Custodial Account by the Seller on
the date such late payment is made and shall cover the period
commencing with the day following such second Business Day and ending
with the Business Day on which such payment is made, both inclusive.
Such interest shall be remitted along with the distribution payable on
the next succeeding Remittance Date. The payment by the Seller of any
such interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Seller.
(f) (f) Section 3.03 of the Existing Servicing Agreement is hereby
amended by deleting the entire paragraph in its entirety and replacing it with
the following language:
Section 3.03 Monthly Advances by Seller.
On or prior to the Business Day immediately preceding each
Remittance Date, the Seller shall deposit in the Custodial Account from
its own funds 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 2.01. The
Seller's obligation to make such Monthly Advances as to any Mortgage
Loan will continue through the earliest of (i) the last Monthly Payment
due prior to the payment in full of the Mortgage Loan, or through; (ii)
the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or
recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the Mortgage Loan; and (iii) the date on which the
Seller determines that further Monthly Advances would not be
recoverable (provided, that with respect to each Mortgage Loan for
which the Seller determines further Monthly Advances would not be
recoverable, the Seller shall deliver to the Purchaser an Officer's
Certificate).
(g) (g) Section 4.03 of the Existing Servicing Agreement is hereby
amended by deleting the entire paragraph in its entirety and replacing it with
the following language:
Section 4.03 Servicing Compensation.
As compensation for its services hereunder, the Seller 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 same unpaid principal balance and for the period
respecting which any related interest payment on a Mortgage Loan is
computed. The Servicing Fee shall be payable only at the time of and
with respect to those Mortgage Loans for which payment is in fact made
of the entire amount of the Monthly Payment. The obligation of the
Purchaser to pay the Servicing Fee is limited to, and payable solely
from, the interest portion of such Monthly Payments collected by the
Seller.
Additional servicing compensation in the form of assumption
fees, to the extent provided in Section 4.01, and late payment charges
shall be retained by the Seller to the extent not required to be
deposited in the Custodial Account. The Seller shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement thereof except as
specifically provided for herein.
(h) (h) Limited Effect; No Waiver The parties hereto acknowledge and
agree that this Amendment shall apply solely to the Mortgage Loans purchased by
the Purchaser from the Seller pursuant to the June 21, 2001 and June 27, 2001
closings, and subject to the provisions of this Amendment No. 1, the provisions
of the Existing Servicing Agreement shall remain in full force and effect and
that the execution of this Amendment No. 1 by the Purchaser shall not operate as
a waiver of any of its rights, powers or privileges under the Existing Servicing
Agreement except as expressly set forth herein.
(i) (i) Conditions Precedent. This Amendment shall become effective on
the date (the "Amendment Effective Date") on which the following conditions
precedent shall have been satisfied:
(i) (i) Delivered Documents. On the Amendment Effective Date,
the Buyer shall have received the following, each of which shall be
satisfactory to the Buyer in form and substance:
1) (A) this Amendment, executed and delivered by a duly authorized
officer of the Buyer and the Seller;
2) (B) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
(ii) (ii) No Default. On the Amendment Effective Date, (i) the
Seller shall be in compliance with all the terms and provisions set
forth in the Existing Servicing Agreement on its part to be observed or
performed, (ii) the representations and warranties made and restated by
the Seller pursuant to Section (j) of this Amendment shall be true and
complete on and as of such date with the same force and effect as if
made on and as of such date, and (iii) no Default shall have occurred
and be continuing on such date.
(j) (j) Representations and Warranties. The Seller hereby represents
and warrants to the Purchaser that it is in compliance with all the terms and
provisions set forth in the Existing Servicing Agreement on its part to be
observed or performed, and that no Default has occurred or is continuing, and
hereby confirms and reaffirms the representations and warranties contained in
Section 10 of the Existing Servicing Agreement.
(k) (k) Limited Effect. Except as expressly amended and modified by
this Amendment, the Existing Servicing Agreement shall continue to be, and shall
remain, in full force and effect in accordance with its terms. Each reference to
the Existing Servicing Agreement shall be deemed to be a reference to the
Existing Servicing Agreement as amended hereby.
(l) (l) All other terms, conditions, and provisions of the Existing
Servicing Agreement, are hereby affirmed and shall remain in full force and
effect as written.
(m) (m) This Amendment No. 1 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.
(n) (n) This Amendment No. 1 may be executed in one or more
counterparts and by different parties hereto on separate counterparts, each of
which, when so executed, shall constitute one and the same agreement.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
▇▇▇▇▇▇ BROTHERS BANK, FSB
Purchaser
By:___________________________
Name:_________________________
Title:________________________
INDYMAC BANK, F.S.B.
Seller
By:___________________________
Name:_________________________
Title:________________________
AMENDMENT NO. 2
TO THE FLOW INTERIM SERVICING AGREEMENT
This is Amendment No. 2 (the "Amendment No. 2"), dated as of December
1, 2003 (the "Amendment Date"), by and between ▇▇▇▇▇▇ Brothers Bank, FSB (the
"Purchaser"), and IndyMac Bank, F.S.B. (the "Seller") to that certain Flow
Interim Servicing Agreement dated as of February 13, 2001 by and between the
Seller and the Purchaser, as amended by Amendment 1 to the Flow Interim
Servicing Agreement, dated as of June 27, 2001 (the "Existing Servicing
Agreement", as amended by this Amendment 2, the "Servicing Agreement").
W I T N E S S E T H
WHEREAS, the Seller and the Purchaser have agreed, subject to the terms
and conditions of this Amendment No. 2 that the Existing Servicing Agreement be
amended to reflect certain agreed upon revisions to the terms of the Existing
Servicing Agreement.
Accordingly, the Seller and the Purchaser hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that the Existing Servicing Agreement is hereby amended as follows:
(1) Notwithstanding anything set forth in the Existing Purchase Agreement,
the Seller and the Purchaser hereby agreement that from time to the
time the Purchase may purchase certain Mortgage Loans secured by a
second lien on the related Mortgaged Property (the "Second Lien
Mortgage Loans") and adjustable rate mortgage loans (the "ARM Mortgage
Loans") pursuant to the Purchase Agreement and that such Mortgage Loan
shall be serviced by the Seller during the Interim Period pursuant to
the Servicing Agreement.
(2) The Existing Servicing Agreement is hereby amended by deleting the
second sentence of Section 2.02 and replacing it with the following
language:
In the event that any payment due under any
Mortgage Loan is not postponed pursuant to Section 2.01 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 Seller shall
commence foreclosure proceedings, provided that, prior to
commencing foreclosure proceedings, the Seller shall notify
the Purchaser in writing of the Seller's intention to do so,
and the Seller shall not commence foreclosure proceedings if
the Purchaser objects to such action within 10 Business Days
of receiving such notice.
(3) The Existing Servicing Agreement is hereby amended by adding the
following language as new Sections 2.21, 2.22 and 2.23:
Section 2.21 Credit Reporting For each Mortgage Loan, the
Servicer shall accurately and fully furnish, in accordance
with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on its borrower
credit files to each of the following credit repositories:
Equifax Credit Information Services, Inc., TransUnion, LLC and
Experian Information Solution, Inc. on a monthly basis.
Section 2.22 Real Estate Owned Reports. Together with the
statement furnished pursuant to Section 2.19, the Seller shall
furnish to the Purchaser on or before the 15th day of each
month a statement with respect to any REO Property covering
the operation of such REO Property for the previous month and
the Seller'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 2.21 Notification of Adjustments. With respect to each
Mortgage Loan, the Seller 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 Seller 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. The
Seller shall promptly, upon written request therefor, deliver
to the Purchaser such notifications and any additional
applicable data regarding such adjustments and the methods
used to calculate and implement such adjustments. Upon the
discovery by the Seller or the receipt of notice from the
Purchaser that the Seller has failed to adjust a Mortgage
Interest Rate in accordance with the terms of the related
Mortgage Note, the Seller shall immediately deposit in the
Custodial Account from its own funds the amount of any
interest loss or deferral caused the Purchaser thereby.
(4) The Existing Servicing Agreement is hereby amended by adding the
following language as a new Section 4.06:
Section 4.06 Annual Independent Public Accountants' Servicing
Report. On or before March 31st of each year beginning March
31, 2004, the Seller, at its expense, shall cause a firm of
independent public accountants which is a member of the
American Institute of Certified Public Accountants to furnish
a statement to each Purchaser to the effect that such firm has
examined certain documents and records relating to the
servicing of the Mortgage Loans and this Agreement and that
such firm is of the opinion that the provisions of Article II
and Article III have been complied with, and that, on the
basis of such examination conducted substantially in
compliance with the Single Audit 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.
(5) The Existing Servicing Agreement is hereby amended by adding the
following language as a new Section 5.03:
Section 5.03 Compliance with Safeguarding Customer Information
Requirements. The Seller has implemented and will maintain
security measures designed to meet the objectives of the
Interagency Guidelines Establishing Standards for Safeguarding
Customer Information published in final form on February 1,
2001, 66 Fed. Reg. 8616, and the rules promulgated thereunder,
as amended from time to time (the "Guidelines"). The Seller
shall promptly provide Purchaser with information regarding
such security measures upon the reasonable request of
Purchaser which information shall include, but not be limited
to, any SAS 70 report covering the Seller's operations, and
any other audit reports, summaries of test results or
equivalent measures taken by the Seller with respect to its
security measures.
(6) Effective Date. This Amendment shall become effective on the date (the
"Amendment Effective Date") on which the following conditions
precedent shall have been satisfied:
(a) On the Amendment Effective Date, the Purchaser shall have received the
following, each of which shall be satisfactory to the Purchaser:
(i) this Amendment, executed and delivered by a duly authorized
officer of the Seller and the Purchaser;
(ii) such other documents as the Purchaser or counsel to the
Purchaser may reasonably request.
(b) On the Amendment Effective Date, (i) the Seller shall be in compliance
with all the representations and warranties set forth in Article X of
the Servicing Agreement, as amended by this Amendment No. 2, on its
part to be observed or performed, (ii) no default shall have occurred
and be continuing on such date.
(7) Except as expressly amended and modified by this Amendment, the
Existing Servicing Agreement shall continue to be, and shall remain,
in full force and effect in accordance with its terms.
(8) This Amendment No. 2 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.
(9) This Amendment No. 2 may be executed in one or more counterparts and
by different parties hereto on separate counterparts, each of which,
when so executed, shall constitute one and the same agreement.
(10) This Amendment No. 2 shall inure to the benefit of and be binding upon
the Purchaser and the Seller under the Existing Servicing Agreement,
and their respective successors and permitted assigns.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
▇▇▇▇▇▇ BROTHERS BANK, FSB
Purchaser
By:___________________________
Name:_________________________
Title:________________________
INDYMAC BANK, F.S.B.
Seller
By:___________________________
Name:_________________________
Title:________________________