LEHMAN BROTHERS BANK, FSB Purchaser and WELLS FARGO BANK, N.A. Company
Execution
Copy
▇▇▇▇▇▇
BROTHERS BANK, FSB
Purchaser
and
▇▇▇▇▇
FARGO BANK, N.A.
Company
SELLER'S
WARRANTIES AND SERVICING AGREEMENT
Dated
as of April 1, 2006
Adjustable
Rate Mortgage Loans
WFHM
Mortgage Loan Series 2006-W24
TABLE
OF CONTENTS
|
ARTICLE
I
|
1
|
|
DEFINITIONS
|
1
|
|
ARTICLE
II
|
13
|
|
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF CUSTODIAL MORTGAGE FILES; BOOKS
AND
RECORDS;CUSTODIAL AGREEMENT; DELIVERY OF
DOCUMENTS
|
13
|
|
ARTICLE
III
|
17
|
|
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
|
17
|
|
ARTICLE
IV
|
37
|
|
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
|
37
|
|
ARTICLE
V
|
55
|
|
PAYMENTS
TO PURCHASER
|
55
|
|
ARTICLE
VI
|
56
|
|
GENERAL
SERVICING PROCEDURES
|
56
|
|
ARTICLE
VII
|
61
|
|
COMPANY
TO COOPERATE
|
61
|
|
ARTICLE
VIII
|
62
|
|
THE
COMPANY
|
62
|
|
ARTICLE
IX
|
64
|
i
|
SECURITIZATION
TRANSACTIONS
|
64
|
|
ARTICLE
X
|
74
|
|
DEFAULT
|
74
|
|
ARTICLE
XI
|
76
|
|
TERMINATION
|
76
|
|
ARTICLE
XII
|
77
|
|
MISCELLANEOUS
PROVISIONS
|
77
|
EXHIBITS
|
Exhibit
A
|
Mortgage
Loan Schedule (WFHM
2006-W24)
|
|
Exhibit
B
|
Custodial
Agreement
|
|
Exhibit
C
|
Contents
of Custodial Mortgage File, Retained Mortgage File and Servicing
File
|
|
Exhibit
D
|
Contents
of the Data File
|
|
Exhibit
E
|
Underwriting
Guidelines
|
|
Exhibit
F
|
Custodial
Account Certifications
|
|
Exhibit
G
|
Escrow
Account Certifications
|
|
Exhibit
H
|
Servicing
Criteria
|
|
Exhibit
I
|
Sarbanes
Certification
|
|
Exhibit
J
|
Form
of Assignment, Assumption and Recognition
Agreement
|
ii
This
is a
Seller's Warranties and Servicing Agreement for adjustable rate residential
first lien mortgage loans, dated and effective as of April 1, 2006 and is
executed between ▇▇▇▇▇▇ Brothers Bank, FSB, as purchaser (the "Purchaser"),
and
▇▇▇▇▇ Fargo Bank, N.A., as seller and servicer (the "Company").
W I T N E S S E T H
WHEREAS,
the Purchaser has agreed to purchase from the Company and the Company has agreed
to sell to the Purchaser certain first lien adjustable rate mortgage loans
(the
“Mortgage Loans”) which have an aggregate unpaid scheduled principal balance as
of the close of business on the Cut-off Date, after deduction of payments due
on
or before such date, as indicated on the Mortgage Loan Schedule, which is
annexed hereto as Exhibit A;
WHEREAS,
each of the Mortgage Loans is secured by a mortgage, deed of trust or other
security instrument creating a first lien on a residential dwelling located
in
the jurisdiction indicated on the Mortgage Loan Schedule; and
WHEREAS,
the Purchaser and the Company wish to prescribe the manner of purchase of the
Mortgage Loans and the conveyance, servicing and control of the Mortgage
Loans.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Purchaser and the Company agree as
follows:
ARTICLE
I
DEFINITIONS
Whenever
used herein, the following words and phrases, unless the content otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type
as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property
is
located.
Adjustment
Date:
As to
each adjustable rate Mortgage Loan, the date on which the Mortgage Interest
Rate
is adjusted in accordance with the terms of the related Mortgage
Note.
Agency/Agencies:
▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ Mac or GNMA, or any of them as applicable.
Agency
Sale:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to an
Agency which sale or transfer is not a Securitization Transaction or Whole
Loan
Transfer.
1
Agreement:
This
Seller's Warranties and Servicing Agreement and all exhibits hereto, amendments
hereof and supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraised
Value:
With
respect to any Mortgage Loan, the lesser of (i) the value set forth on the
appraisal made in connection with the origination of the related Mortgage Loan
as the value of the related Mortgaged Property, or (ii) the purchase price
paid
for the Mortgaged Property; provided,
however,
that in
the case of a refinanced Mortgage Loan, such value shall be based solely on
the
appraisal made in connection with the origination of such Mortgage
Loan.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the sale of the Mortgage to
the
Purchaser or if the related Mortgage has been recorded in the name of MERS
or
its designee, such actions as are necessary to cause the Purchaser to be shown
as the owner of the related Mortgage on the records of MERS for purposes of
the
system of recording transfers of beneficial ownership of mortgages maintained
by
MERS, including assignment of the MIN Number which will appear either on the
Mortgage or the Assignment of Mortgage to MERS.
Assignment
of Mortgage Note and Pledge Agreement:
With
respect to a Cooperative Loan, an assignment of the Mortgage Note and Pledge
Agreement.
Assignment
of Proprietary Lease:
With
respect to a Cooperative Loan, an assignment of the Proprietary Lease sufficient
under the laws of the jurisdiction wherein the related Cooperative Apartment
is
located to effect the assignment of such Proprietary Lease.
Balloon
Loan:
A
Mortgage Loan for which the Monthly Payments will not fully amortize the loan
by
the end of the term, at which time the balance of the principal is due in a
lump
sum.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the states where the parties are located are authorized
or obligated by law or executive order to be closed.
Buydown
Agreement:
An
agreement between the Company and a Mortgagor, or an agreement among the
Company, a Mortgagor and a seller of a Mortgaged Property or a third party
with
respect to a Mortgage Loan which provides for the application of Buydown
Funds.
Buydown
Funds:
In
respect of any Buydown Mortgage Loan, any amount contributed by the seller
of a
Mortgaged Property subject to a Buydown Mortgage Loan, the buyer of such
property, the Company or any other source, plus interest earned thereon, in
order to enable the Mortgagor to reduce the payments required to be made from
the Mortgagor’s funds in the early years of a Mortgage Loan.
2
Buydown
Mortgage Loan:
Any
Mortgage Loan in respect of which, pursuant to a Buydown Agreement, (i) the
Mortgagor pays less than the full monthly payments specified in the Mortgage
Note for a specified period, and (ii) the difference between the payments
required under such Buydown Agreement and the Mortgage Note is provided from
Buydown Funds.
Buydown
Period:
The
period of time when a Buydown Agreement is in effect with respect to a related
Buydown Mortgage Loan.
Closing
Date:
April
27, 2006.
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to time or any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Commission:
The
United States Securities and Exchange Commission.
Commitment
Letter:
That
certain letter agreement, dated March 29, 2006, between the Company and the
Purchaser.
Company:
▇▇▇▇▇
Fargo Bank, N.A., or its successor in interest or assigns, or any successor
to
the Company under this Agreement appointed as herein provided.
Company
Information:
As
defined in Section 9.01(e)(i)(A).
Condemnation
Proceeds:
All
awards or settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
Cooperative:
The
entity that holds title (fee or an acceptable leasehold estate) to all of the
real property that the related Project comprises, including the land, separate
dwelling units and all common areas.
Cooperative
Apartment:
The
specific dwelling unit relating to a Cooperative Loan.
Cooperative
Lien Search:
A
search for (a) federal tax liens, mechanics’ liens, lis pendens, judgments of
record or otherwise against (i) the Cooperative, (ii) the seller of the
Cooperative Apartment and (iii) the Company, if the Cooperative Loan is a
refinanced Mortgage Loan, (b) filings of financing statements and (c) the deed
of the Project into the Cooperative.
Cooperative
Loan:
A
Mortgage Loan that is secured by Cooperative Shares and a Proprietary Lease
granting exclusive rights to occupy the related Cooperative
Apartment.
Cooperative
Shares:
The
shares of stock issued by a Cooperative, owned by the Mortgagor, and allocated
to a Cooperative Apartment.
3
Covered
Loan:
A
Mortgage Loan categorized as “Covered” pursuant to the Standard & Poor’s
Glossary for File Format for LEVELS® Version 5.6c, Appendix E, revised January
1, 2006.
Custodial
Account:
The
separate account or accounts created and maintained pursuant to Section
4.04.
Custodial
Agreement:
The
agreement governing the retention of the originals of each Mortgage Note,
Assignment of Mortgage and other Mortgage Loan Documents, if applicable, a
form
of which is annexed hereto as Exhibit B.
Custodial
Mortgage File:
With
respect to each Mortgage Loan, the file consisting of the Mortgage Loan
Documents listed as items 1 through 5 of Exhibit C attached hereto, which have
been delivered to the Custodian as of the Closing Date.
Custodian:
The
custodian under the Custodial Agreement, or its successor in interest or
assigns, or any successor to the Custodian under the Custodial Agreement as
provided therein.
Cut-off
Date:
April
1, 2006.
Data
File:
The
electronic data file prepared by the Company and delivered to the Purchaser
including the data fields set forth on Exhibit D with respect to each Mortgage
Loan.
Deleted
Mortgage Loan:
A
Mortgage Loan which is repurchased by the Company in accordance with the terms
of this Agreement and which is, in the case of a substitution pursuant to
Section 3.03, replaced or to be replaced with a Qualified Substitute Mortgage
Loan.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date:
The
Business Day immediately preceding the related Remittance Date.
Due
Date:
The
first (1st)
day of
the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of
any days of grace.
Due
Period:
With
respect to each Remittance Date, the period commencing on the second
(2nd)
day of
the month preceding the month of such Remittance Date and ending on the first
(1st)
day of
the month of such Remittance Date.
Eligible
Deposit Account:
An
account that is maintained with a federal or state-chartered depository
institution or trust company that complies with the definition of Eligible
Institution.
Eligible
Institution:
Any of
the following:
(i) an
institution whose:
4
(A) commercial
paper, short-term debt obligations, or other short-term deposits are rated
at
least “A-1+” or long-term unsecured debt obligations are rated at least “AA-“ by
S&P, if the amounts on deposit are to be held in the account for no more
than 365 days; or
(B) commercial
paper, short-term debt obligations, demand deposits, or other short-term
deposits are rated at least “A-2” by S&P, if the amounts on deposit are to
be held in the account for no more than thirty (30) days and are not intended
to
be used as credit enhancement. Upon the loss of the required rating set forth
in
this clause (ii), the accounts shall be transferred immediately to accounts
which have the required rating. Furthermore, commingling by the Servicer is
acceptable at the A-2 rating level if the Company is a bank, thrift, or
depository and provided the Company has the capability to immediately segregate
funds and commence remittance to an Eligible Deposit Account upon a downgrade;
or
(ii) the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity.
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Company pursuant
to Section 4.12.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section 4.06.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other related document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in Section 10.01.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇
▇▇▇:
The
Federal National Mortgage Association, or any successor thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity
Bond:
A
fidelity bond to be maintained by the Company pursuant to Section
4.12.
First
Remittance Date:
May 18,
2006.
▇▇▇▇▇▇▇
Mac:
The
Federal Home Loan Mortgage Corporation, or any successor thereto.
5
Gross
Margin:
With
respect to each adjustable rate Mortgage Loan, the fixed percentage amount
set
forth in the related Mortgage Note which is added to the Index in order to
determine the related Mortgage Interest Rate, as set forth in the Mortgage
Loan
Schedule.
High
Cost Loan:
A
Mortgage Loan classified as (a) a “high cost” loan under the Home Ownership and
Equity Protection Act of 1994, (b) a “high cost home,” “threshold,” “covered,”
“high risk home,” “predatory” or similar loan under any other applicable state,
federal or local law or (c) a Mortgage Loan categorized as “High Cost” pursuant
to the Standard & Poor’s Glossary for File Format for LEVELS® Version 5.6c,
Appendix E, revised January 1, 2006.
Index:
With
respect to any adjustable rate Mortgage Loan, the index identified on the
Mortgage Loan Schedule and set forth in the related Mortgage Note for the
purpose of calculating the interest thereon.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Interest
Only Mortgage Loan:
A
Mortgage Loan for which an interest-only payment feature is allowed during
the
interest-only period set forth in the related Mortgage Note.
Letter
of Credit:
With
respect to a Pledged Asset Mortgage Loan, a guaranty issued to the Company
by
the Pledge Holder for the Pledged Value Amount.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, or the sale of the related Mortgaged Property
if
the Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
Loan-to-Value
Ratio or LTV:
With
respect to any Mortgage Loan, the ratio of the original loan amount of the
Mortgage Loan at its origination (unless otherwise indicated) to the Appraised
Value of the Mortgaged Property.
LPMI
Policy: A
policy
of primary mortgage guaranty insurance evidenced by an electronic form and
certificate number issued by a Qualified Insurer, as required by this Agreement
with respect to certain Mortgage Loans. The premium on an LPMI Policy is paid
by
the Company from its own funds, without reimbursement.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or
any
successor in interest thereto.
MERS
Mortgage Loan:
Any
Mortgage Loan that has been originated in the name of or assigned to MERS and
registered with MERS on the MERS System.
MERS
System:
The
system of recording transfers of mortgages electronically maintained by
MERS.
6
MIN:
Mortgage Identification Number used to identify mortgage loans registered under
MERS.
Monthly
Advance:
The
portion of each Monthly Payment that is delinquent with respect to each Mortgage
Loan at the close of business on the Determination Date required to be advanced
by the Company pursuant to Section 5.03 on the Business Day immediately
preceding the Remittance Date of the related month.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage Loan, or
in
the case of an Interest Only Mortgage Loan, payment of (i) interest or (ii)
principal and interest, as applicable, on such Mortgage Loan during the
interest-only period.
Mortgage:
The
mortgage, deed of trust or other instrument and riders thereto securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note, or the Pledge Agreement
securing the Mortgage Note for a Cooperative Loan.
Mortgage
Impairment Insurance Policy:
A
mortgage impairment or blanket hazard insurance policy as described in Section
4.11.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note in accordance with the
provisions of the Mortgage Note.
Mortgage
Loan:
An
individual mortgage loan which is the subject of this Agreement, each Mortgage
Loan originally sold and subject to this Agreement being identified on the
Mortgage Loan Schedule, which Mortgage Loan includes without limitation the
Retained Mortgage File, the Custodial Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds
and
obligations arising from or in connection with such Mortgage Loan.
Mortgage
Loan Documents:
With
respect to a Mortgage Loan, the documents listed on Exhibit C attached hereto.
Mortgage
Loan Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to the
Purchaser, which shall be equal to the related Mortgage Interest Rate minus
the
Servicing Fee Rate.
Mortgage
Loan Schedule:
A
schedule of Mortgage Loans annexed hereto as Exhibit A, such schedule setting
forth the following information with respect to each Mortgage Loan: (1) the
Company’s Mortgage Loan number; (2) the city state and zip code of the Mortgaged
Property; (3) a code indicating whether the Mortgaged Property is a single
family residence, two-family residence, three-family residence, four-family
residence, planned unit development, Cooperative Apartment or condominium;
(4)
the current Mortgage Interest Rate; (5) the current net Mortgage Interest Rate;
(6) the current Monthly Payment; (7) the Gross Margin; (8) the original term
to
maturity; (9) the scheduled maturity date; (10) the principal balance of the
Mortgage Loan as of the Cut-off Date after deduction of payments of principal
due on or before the Cut-off Date whether or not collected; (11) the
Loan-to-Value Ratio; (12) the next Adjustment Date; (13) the lifetime Mortgage
Interest Rate cap; (14) whether the Mortgage Loan is convertible or not; (15)
a
code indicating the mortgage guaranty insurance company; (16) a code indicating
whether the Mortgage Loan is a Cooperative Loan; (17) code indicating whether
the loan is subject to LPMI; and (18) the Servicing Fee Rate.
7
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage
and riders thereto.
Mortgaged
Property:
The
real property securing repayment of the debt evidenced by a Mortgage Note,
or
with respect to a Cooperative Loan, the related Cooperative
Apartment.
Mortgagor:
The
obligor on a Mortgage Note.
Non-Assigned
Letter of Credit:
A
Letter of Credit in which the named beneficiary is the Company.
Officer's
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or the President or a Vice President or an Assistant Vice President and
certified by the Treasurer or the Secretary or one of the Assistant Treasurers
or Assistant Secretaries of the Company, and delivered to the Purchaser as
required by this Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Company, reasonably
acceptable to the Purchaser.
Periodic
Interest Rate Cap:
As to
each adjustable rate Mortgage Loan, the maximum increase or decrease in the
Mortgage Interest Rate on any Adjustment Date pursuant to the terms of the
Mortgage Note.
Person:
Any
individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
Pledge
Account:
With
respect to a Pledged Asset Mortgage Loan, an account that is managed by the
Pledge Holder to secure a Letter of Credit.
Pledge
Agreement:
With
respect to a Cooperative Loan, the specific agreement creating a first lien
on
and pledge of the Cooperative Shares and the appurtenant Proprietary
Lease.
Pledge
Holder:
With
respect to a Pledged Asset Mortgage Loan, the entity which issued a Letter
of
Credit.
Pledge
Instruments:
With
respect to a Cooperative Loan, the Stock Power, the Assignment of the
Proprietary Lease and the Assignment of the Mortgage Note and Pledge
Agreement.
8
Pledged
Asset Mortgage Loan:
A
Mortgage Loan for which the Mortgagor has pledged financial assets as partial
collateral for the Mortgage Loan, in lieu of a cash down payment.
Pledged
Value Amount:
With
respect to a Pledged Asset Mortgage Loan,
a
minimum LTV of 20% of the lower of the purchase price or Appraised Value of
a
Mortgaged Property.
PMI
Policy:
A
policy of primary mortgage guaranty insurance evidenced by an electronic form
and certificate number issued by a Qualified Insurer, as required by this
Agreement with respect to certain Mortgage Loans. The premiums on a PMI Policy
may be paid by the Mortgagor or by the Company from its own funds, without
reimbursement. If the premiums are paid by the Company, the PMI Policy is an
LPMI Policy.
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as the
average rate in The
Wall Street Journal.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date , including any prepayment penalty or premium
thereon and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment.
Principal
Prepayment Period:
The
calendar month preceding the month in which the related Remittance Date
occurs.
Project:
With
respect to a Cooperative Loan, all real property owned by the related
Cooperative including the land, separate dwelling units and all common
areas.
Proprietary
Lease:
With
respect to a Cooperative Loan, a lease on a Cooperative Apartment evidencing
the
possessory interest of the Mortgagor in such Cooperative Apartment.
Purchaser:
▇▇▇▇▇▇
Brothers Bank, FSB, or its successor in interest or any successor to the
Purchaser under this Agreement as herein provided.
Qualified
Correspondent:
Any
Person from which the Company purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Company and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Company, in accordance with underwriting guidelines designated by the
Company (“Designated Guidelines”) or guidelines that do not vary materially from
such Designated Guidelines; (ii) such Mortgage Loans were in fact underwritten
as described in clause (i) above and were acquired by the Company within 180
days after origination; (iii) either (x) the Designated Guidelines were, at
the
time such Mortgage Loans were originated, used by the Company in origination
of
mortgage loans of the same type as the Mortgage Loans for the Company’s own
account or (y) the Designated Guidelines were, at the time such Mortgage Loans
were underwritten, designated by the Company on a consistent basis for use
by
lenders in originating mortgage loans to be purchased by the Company; and (iv)
the Company employed, at the time such Mortgage Loans were acquired by the
Company, pre-purchased or post-purchased quality assurance procedures (which
may
involve, among other things, review of a sample of mortgage loans purchased
during a particular time period or through particular channels) designed to
ensure that Persons from which it purchased mortgage loans properly applied
the
underwriting criteria designated by the Company.
9
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business and approved as an
insurer by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by the Company for a Deleted Mortgage
Loan which must, on the date of such substitution, (i) have an outstanding
principal balance, after deduction of all scheduled payments due in the month
of
substitution (or in the case of a substitution of more than one mortgage loan
for a Deleted Mortgage Loan, an aggregate principal balance), not in excess
of
the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage
Loan Remittance Rate not less than, and not more than two percent (2%) greater,
than the Mortgage Loan Remittance Rate of the Deleted Mortgage Loan; (iii)
have
a remaining term to maturity not greater than and not more than one year less
than that of the Deleted Mortgage Loan; (iv) comply with each representation
and
warranty set forth in Sections 3.01 and 3.02; and (v) be of the same type as
the
Deleted Mortgage Loan.
Rating
Agencies:
Any
nationally recognized statistical rating agency, or its successor, including
Standard & Poor's Ratings Services, ▇▇▇▇▇'▇ Investors Service, Inc. and
Fitch Ratings.
Recognition
Agreement:
An
agreement whereby a Cooperative and a lender with respect to a Cooperative
Loan
(i) acknowledge that such lender may make, or intends to make, such Cooperative
Loan, and (ii) make certain agreements with respect to such Cooperative
Loan.
Reconstitution:
Any
Securitization Transaction, Agency Sale or Whole Loan Transfer.
Reconstitution
Agreement:
The
agreement or agreements entered into by the Company and the Purchaser and/or
certain third parties on the Reconstitution Date or Dates with respect to any
or
all of the Mortgage Loans serviced hereunder, in connection with a Whole Loan
Transfer, Agency Sale or Securitization Transaction.
Reconstitution
Date:
The
date on which any or all of the Mortgage Loans serviced under this Agreement
may
be removed from this Agreement and reconstituted as part of an Agency Sale,
Securitization Transaction or Whole Loan Transfer pursuant to Section 9.01
hereof. The Reconstitution Date shall be such date which the Purchaser shall
designate.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
10
REMIC:
A "real
estate mortgage investment conduit" within the meaning of Section 860D of the
Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the Code,
and related provisions, regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
Remittance
Date:
The
eighteenth (18th)
day (or
if such 18th
day is
not a Business Day, the first (1st)
Business Day immediately following) of any month, beginning with the First
Remittance Date.
REO
Disposition:
The
final sale by the Company of any REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to Section
4.16.
REO
Property:
A
Mortgaged Property acquired by the Company on behalf of the Purchaser through
foreclosure or by deed in lieu of foreclosure, as described in Section
4.16.
Repurchase
Price:
Unless
agreed otherwise by the Purchaser and the Company, a price equal to (i) the
Stated Principal Balance of the Mortgage Loan plus (ii) interest on such Stated
Principal Balance at the Mortgage Loan Remittance Rate from the date on which
interest has last been paid and distributed to the Purchaser through the last
day of the month in which such repurchase takes place, less amounts received
or
advanced in respect of such repurchased Mortgage Loan which are being held
in
the Custodial Account for distribution in the month of repurchase.
Retained
Mortgage File:
With
respect to each Mortgage Loan, the file consisting of the Mortgage Loan
Documents listed as items 6 through 12 of Exhibit C attached hereto, which
is
retained by the Company for the benefit of the Purchaser in a custodial capacity
only.
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (a) a sale or other transfer of some or all of
the
Mortgage Loans directly or indirectly to an issuing entity in connection with
an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (b) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Servicer:
As
defined in Section 9.01(d)(iii).
Servicing
Advances:
All
customary, reasonable and necessary "out of pocket" costs and expenses other
than Monthly Advances (including reasonable attorney's fees and disbursements)
incurred in the performance by the Company of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration
and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of
any
REO Property and (d) compliance with the obligations under Sections 4.08 and
(e)
force placing flood insurance in accordance with Section 4.10.
11
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Purchaser shall
pay to the Company, which shall, for a period of one full month, be equal to
one-twelfth of the product of (a) the Servicing Fee Rate and (b) the outstanding
principal balance of such Mortgage Loan. Such fee shall be payable monthly,
computed on the basis of the same principal amount and period respecting which
any related interest payment on a Mortgage Loan is received. The obligation
of
the Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee
is
payable solely from, the interest portion (including recoveries with respect
to
interest from Liquidation Proceeds, to the extent permitted by Section 4.05)
of
such Monthly Payment collected by the Company, or as otherwise provided under
Section 4.05.
Servicing
Fee Rate:
0.250%
per annum per Mortgage Loan.
Servicing
File:
With
respect to each Mortgage Loan, the file consisting of the Mortgage Loan
Documents listed as items 13 through 28 of Exhibit C attached hereto plus copies
of all Mortgage Loan Documents contained in the Custodial Mortgage File and
the
Retained Mortgage File, which are retained by the Company.
Servicing
Officer:
Any
officer of the Company involved in or responsible for the administration and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Company to the Purchaser upon request, as such list
may from time to time be amended.
Stated
Principal Balance:
As to
each Mortgage Loan and as of any date of determination, (i) the principal
balance of the Mortgage Loan at the Cut-off Date after giving effect to payments
of principal due on or before such date, whether or not received, minus (ii)
all
amounts previously distributed to the Purchaser with respect to the related
Mortgage Loan representing payments or recoveries of principal or advances
in
lieu thereof.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Stock
Certificate:
With
respect to a Cooperative Loan, a certificate evidencing ownership of the
Cooperative Shares issued by the Cooperative.
Stock
Power:
With
respect to a Cooperative Loan, an assignment of the Stock Certificate or an
assignment of the Cooperative Shares issued by the Cooperative.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Company or a
Subservicer.
12
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Company or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Company under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
Subsidy
Account:
An
account maintained by the Company specifically to hold all Subsidy Funds to
be
applied to individual Subsidy Loans.
Subsidy
Funds:
With
respect to any Subsidy Loans, funds contributed by the employer of a Mortgagor
in order to reduce the payments required from the Mortgagor for a specified
period in specified amounts.
Subsidy
Loan:
Any
Mortgage Loan subject to a temporary interest subsidy agreement pursuant to
which the monthly interest payments made by the related Mortgagor will be less
than the scheduled monthly interest payments on such Mortgage Loan, with the
resulting difference in interest payments being provided by the employer of
the
Mortgagor. Each Subsidy Loan will be identified as such in the related Data
File.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Company.
Time$aver®
Mortgage Loan:
A
Mortgage Loan which has been refinanced pursuant to a Company program that
allows a rate/term refinance of an existing Company serviced loan with minimal
documentation.
Underwriting
Guidelines:
The
Company's underwriting guidelines attached hereto as Exhibit E.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to a
third party, which sale or transfer is not a Securitization Transaction or
Agency Sale.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF CUSTODIAL MORTGAGE FILES; BOOKS AND RECORDS;
CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS
Section
2.01 Conveyance
of Mortgage Loans; Possession of Custodial Mortgage Files; Maintenance
of Retained Mortgage File and Servicing Files.
13
The
Company, simultaneously with the execution and delivery of this Agreement,
does
hereby sell, transfer, assign, set over and convey to the Purchaser, without
recourse, but subject to the terms of this Agreement, all the right, title
and
interest of the Company in and to the Mortgage Loans. Pursuant to Section 2.03,
the Company has delivered the Custodial Mortgage File to the
Custodian.
The
contents of each Retained Mortgage File not delivered to the Custodian are
and
shall be held in trust by the Company for the benefit of the Purchaser as the
owner thereof. Additionally and separate to the Retained Mortgage File, the
Company shall maintain a Servicing File, for the sole purpose of servicing
the
related Mortgage Loans, consisting of a copy of the contents of the Custodial
Mortgage File and the Retained Mortgage File. The possession of each Servicing
File and Retained Mortgage File held by the Company is at the will of the
Purchaser, and such retention and possession by the Company is in a custodial
capacity only. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the related Custodial Mortgage File,
Retained Mortgage File and Servicing File shall vest immediately in the
Purchaser, and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only
in
such custodial capacity. The Company shall release its custody of the contents
of any Retained Mortgage File and Servicing File only in accordance with written
instructions from the Purchaser, unless such release is required as incidental
to the Company's servicing of the Mortgage Loans, in the case of the Servicing
File, or is in connection with a repurchase of any Mortgage Loan pursuant to
Section 3.03 or 6.02. All such costs associated with the release, transfer
and
re-delivery to the Company shall be the responsibility of the
Purchaser.
In
addition, in connection with the assignment of any MERS Mortgage Loan, the
Company agrees that it will cause, the MERS® System to indicate that such
Mortgage Loans have been assigned by the Company to the Purchaser in accordance
with this Agreement by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
the information required by the MERS® System to identify the Purchaser as
beneficial owner of such Mortgage Loans.
Section
2.02 Books
and Records; Transfers of Mortgage Loans.
From
and
after the sale of the Mortgage Loans to the Purchaser all rights arising out
of
the Mortgage Loans, including, but not limited to, all funds received on or
in
connection with the Mortgage Loans, shall be received and held by the Company
in
trust for the benefit of the Purchaser as owner of the Mortgage Loans, and
the
Company shall retain record title to the related Mortgages for the sole purpose
of facilitating the servicing and the supervision of the servicing of the
Mortgage Loans.
The
sale
of each Mortgage Loan shall be reflected on the Company's balance sheet and
other financial statements as a sale of assets by the Company. The Company
shall
be responsible for maintaining, and shall maintain, a complete set of books
and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Company
shall maintain in its possession, available for inspection by the Purchaser,
or
its designee, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and eligibility
of any condominium project for approval by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and records
of periodic inspections as required by Section 4.13. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Company may be in the form
of
microfilm or microfiche or such other reliable means of recreating original
documents, including but not limited to, optical imagery techniques so long
as
the Company complies with the requirements of the ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
Selling and Servicing Guide, as amended from time to time.
14
The
Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Purchaser or its designee the related Retained
Mortgage File and Servicing File during the time the Purchaser retains ownership
of a Mortgage Loan and thereafter in accordance with applicable laws and
regulations.
The
Company shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe, the Company shall note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made unless
such transfer is in compliance with the terms hereof. For the purposes of this
Agreement, the Company shall be under no obligation to deal with any Person
with
respect to this Agreement or the Mortgage Loans unless the books and records
show such Person as the owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans. The Purchaser also shall advise the Company of the transfer. Upon receipt
of notice of the transfer, the Company shall ▇▇▇▇ its books and records to
reflect the ownership of the Mortgage Loans of such assignee, and shall release
the previous Purchaser from its obligations hereunder with respect to the
Mortgage Loans sold or transferred. If the Company receives notification of
a
transfer less than five (5) Business Days before the end of the related Due
Period, the Company’s duties to remit and report to the new purchaser(s) as
required by Section 5 shall begin with the next Due Period. Such notification
must include a final schedule of Mortgage Loans transferred.
Section
2.03 Custodial
Agreement; Delivery of Documents.
The
Company has delivered to the Custodian those Mortgage Loan Documents contained
in the Custodial Mortgage File as required by Exhibit C to this Agreement with
respect to each Mortgage Loan.
The
Custodian has certified its receipt of all such Mortgage Loan Documents in
each
Custodial Mortgage File pursuant to the Custodial Agreement, as evidenced by
the
trust receipt and initial certification of the Custodian in the form annexed
to
the Custodial Agreement. The Company shall be responsible for recording the
initial Assignments of Mortgage. The Purchaser will be responsible for the
fees
and expenses of the Custodian.
15
Upon
the
occurrence of the events described in Section 9.01 and Section 11.02 of this
Agreement or in the event the Company fails to allow the Purchaser access to
the
Retained Mortgage File as required pursuant to Section 2.04 (each such
occurrence, a "Delivery Event"), the Company shall deliver to the Custodian
or
any other party per written instructions from the Purchaser, the additional
documents from its Retained Mortgage File required to be delivered pursuant
to
Section 9.01 herein within ten (10) Business Days. All of the provisions of
this
Section 2.03 relating to a failure to deliver required documentation, delays
in
such delivery and the delivery of defective documentation shall apply equally
to
any obligation on the part of the Company to deliver documents which arises
after the Closing Date upon the occurrence of a Delivery Event.
The
Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one week of their
execution, provided, however, that the Company shall provide the Custodian
with
a certified true copy of any such document submitted for recordation within
ten
(10) days of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty (60) days of its submission for recordation.
In
the
event the public recording office is delayed in returning any original document,
which the Company is required to deliver at any time to the Custodian in
accordance with the terms of the Custodial Agreement or which the Company is
required to maintain in the Retained Mortgage File, the Company shall deliver
to
the Custodian within 180 days of its submission for recordation, a copy of
such
document and an Officer's Certificate, which shall (i) identify the recorded
document; (ii) state that the recorded document has not been delivered to the
Custodian due solely to a delay by the public recording office, (iii) state
the
amount of time generally required by the applicable recording office to record
and return a document submitted for recordation, and (iv) specify the date
the
applicable recorded document will be delivered to the Custodian. The Company
will be required to deliver the document to the Custodian by the date specified
in (iv) above. An extension of the date specified in (iv) above may be requested
from the Purchaser, which consent shall not be unreasonably
withheld.
In
the
event that new, replacement, substitute or additional Stock Certificates are
issued with respect to existing Cooperative Shares, the Company immediately
shall deliver to the Custodian the new Stock Certificates, together with the
related Stock Powers in blank. Such new Stock Certificates shall be subject
to
the related Pledge Instruments and shall be subject to all of the terms,
covenants and conditions of this Agreement.
Section
2.04 Examination
of Mortgage Loan Documents.
Prior
to
the Closing Date, the Company shall deliver the Mortgage Loan Documents included
in the Custodial Mortgage File to the Custodian. The Purchaser or a designee
may
review such Mortgage Loan Documents to verify that the documents required to
be
included in each Custodial Mortgage File are available. If a Custodial Mortgage
File is incomplete or defective or a Mortgage Loan does not conform to the
requirements of this Agreement and such omissions or defects cannot be cured
prior to the Closing Date, the Mortgage Loan shall be deleted from the Mortgage
Loan Schedule. If deleted, the Mortgage Loan may be replaced, up to one (1)
Business Day prior to the Closing Date, by one or more substitute Mortgage
Loans
which satisfy the criteria set forth in this Agreement.
16
The
Company shall make the Retained Mortgage File available to the Purchaser for
examination at the Company's offices or such other location as shall otherwise
be agreed upon by the Purchaser and the Company. Such examination may be made
by
the Purchaser or by any prospective purchaser of the Mortgage Loans from the
Purchaser, at any time after the Closing Date upon prior written notice to
the
Company. The fact that the Purchaser or any prospective purchaser of the
Mortgage Loans has conducted or has failed to conduct any partial or complete
examination of the Retained Mortgage File shall not affect the Purchaser's
(or
any of its successor's) rights to demand repurchase, substitution or other
relief as provided under this Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
Section
3.01 Company
Representations and Warranties.
The
Company hereby represents and warrants to the Purchaser that, as of the Closing
Date:
|
(a)
|
Due
Organization and Authority.
|
|
The
Company is a national banking association duly organized, validly
existing
and in good standing under the laws of the United States and has
all
licenses necessary to carry on its business as now being conducted
and is
licensed, qualified and in good standing in each state where a Mortgaged
Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted
by the
Company, and in any event the Company is in compliance with the laws
of
any such state to the extent necessary to ensure the enforceability
of the
related Mortgage Loan and the servicing of such Mortgage Loan in
accordance with the terms of this Agreement; the Company has the
full
power and authority to execute and deliver this Agreement and to
perform
in accordance herewith; the execution, delivery and performance of
this
Agreement (including all instruments of transfer to be delivered
pursuant
to this Agreement) by the Company and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Company;
and all requisite action has been taken by the Company to make this
Agreement valid and binding upon the Company in accordance with its
terms;
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17
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(b)
|
Ordinary
Course of Business.
|
|
The
consummation of the transactions contemplated by this Agreement are
in the
ordinary course of business of the Company, who is in the business
of
selling and servicing loans, and the transfer, assignment and conveyance
of the Mortgage Notes and the Mortgages by the Company pursuant to
this
Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable
jurisdiction;
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(c)
|
No
Conflicts.
|
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Neither
the execution and delivery of this Agreement, the acquisition of
the
Mortgage Loans by the Company, the sale of the Mortgage Loans to
the
Purchaser or the transactions contemplated hereby, nor the fulfillment
of
or compliance with the terms and conditions of this Agreement will
conflict with or result in a breach of any of the terms, articles
of
incorporation or by-laws or any legal restriction or any agreement
or
instrument to which the Company is now a party or by which it is
bound, or
constitute a default or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Company or its
property
is subject, or impair the ability of the Purchaser to realize on
the
Mortgage Loans, or impair the value of the Mortgage
Loans;
|
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(d)
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Ability
to Service.
|
|
The
Company is an approved seller/servicer of conventional residential
mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with the facilities,
procedures, and experienced personnel necessary for the sound servicing
of
mortgage loans of the same type as the Mortgage Loans. The Company
is in
good standing to sell mortgage loans to and service mortgage loans
for
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and no event has occurred, including but
not
limited to a change in insurance coverage, which would make the Company
unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements
or which would require notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac;
|
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(e)
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Reasonable
Servicing Fee.
|
|
The
Company acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the
entire
Servicing Fee shall be treated by the Company, for accounting and
tax
purposes, as compensation for the servicing and administration of
the
Mortgage Loans pursuant to this
Agreement;
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(f)
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Ability
to Perform.
|
|
The
Company does not believe, nor does it have any reason or cause to
believe,
that it cannot perform each and every covenant contained in this
Agreement. The Company is solvent and the sale of the Mortgage Loans
will
not cause the Company to become insolvent. The sale of the Mortgage
Loans
is not undertaken to hinder, delay or defraud any of the Company's
creditors;
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18
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(g)
|
No
Litigation Pending.
|
|
There
is no action, suit, proceeding or investigation pending or threatened
against the Company which, either in any one instance or in the aggregate,
may result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company, or in any
material impairment of the right or ability of the Company to carry
on its
business substantially as now conducted, or in any material liability
on
the part of the Company, or which would draw into question the validity
of
this Agreement or the Mortgage Loans or of any action taken or to
be
contemplated herein, or which would be likely to impair materially
the
ability of the Company to perform under the terms of this
Agreement;
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(h)
|
No
Consent Required.
|
|
No
consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance
by
the Company of or compliance by the Company with this Agreement or
the
sale of the Mortgage Loans as evidenced by the consummation of the
transactions contemplated by this Agreement, or if required, such
approval
has been obtained prior to the Closing
Date;
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(i)
|
Selection
Process.
|
The
Mortgage Loans were selected from among the outstanding adjustable rate one-
to
four-family mortgage loans in the Company's mortgage banking portfolio at the
Closing Date as to which the representations and warranties set forth in Section
3.02 could be made and such selection was not made in a manner so as to affect
adversely the interests of the Purchaser;
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(j)
|
No
Untrue Information.
|
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Neither
this Agreement nor any statement, report or other document furnished
or to
be furnished pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of
fact or
omits to state a fact necessary to make the statements contained
therein
not misleading;
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(k)
|
Sale
Treatment.
|
|
The
Company has determined that the disposition of the Mortgage Loans
pursuant
to this Agreement will be afforded sale treatment for accounting
and tax
purposes;
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19
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(l)
|
No
Material Change.
|
|
There
has been no material adverse change in the business, operations,
financial
condition or assets of the Company since the date of the Company’s most
recent financial statements;
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(m)
|
No
Brokers’ Fees.
|
|
The
Company has not dealt with any broker, investment banker, agent or
other
Person that may be entitled to any commission or compensation in
the
connection with the sale of the Mortgage Loans;
and
|
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(n)
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Fair
Consideration.
|
The
consideration received by the Company upon the sale of the Mortgage Loans under
this Agreement constitutes fair consideration and reasonably equivalent value
of
the Mortgage Loans.
Section
3.02 Representations
and Warranties Regarding Individual Mortgage Loans.
As
to
each Mortgage Loan, the Company hereby represents and warrants to the Purchaser
that as of the Closing Date:
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(a)
|
Mortgage
Loans as Described.
|
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The
information set forth in the Mortgage Loan Schedule attached hereto
as
Exhibit A and the information contained on the respective electronic
Data
File delivered to the Purchaser is true and
correct;
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(b)
|
Payments
Current.
|
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No
payment required under any Mortgage Loan will be thirty (30) days
or more
delinquent on the Closing Date. No Mortgage Loan will have been thirty
(30) days delinquent more than one time within the twelve (12) months
prior to the Closing Date;
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(c)
|
No
Outstanding Charges.
|
|
There
are no defaults in complying with the terms of the Mortgages, and
all
taxes, governmental assessments, insurance premiums, leasehold payments,
water, sewer and municipal charges, which previously became due and
owing
have been paid, or an escrow of funds has been established in an
amount
sufficient to pay for every such item which remains unpaid and which
has
been assessed but is not yet due and payable. The Company has not
advanced
funds, or induced, or solicited directly or indirectly, the payment
of any
amount required under the Mortgage Loan, except for interest accruing
from
the date of the Mortgage Note or date of disbursement of the Mortgage
Loan
proceeds, whichever is later, to the day which precedes by one (1)
month
the Due Date of the first installment of principal and
interest;
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20
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(d)
|
Original
Terms Unmodified.
|
|
The
terms of the Mortgage Note and Mortgage have not been impaired, waived,
altered or modified in any respect, except by a written instrument
which
has been recorded, if necessary, to protect the interests of the
Purchaser
and which the Mortgage Note has been delivered to the Custodian.
The
substance of any such waiver, alteration or modification has been
approved
by the issuer of any related PMI Policy and the title insurer, to
the
extent required by the policy, and its terms are reflected on the
Mortgage
Loan Schedule. No Mortgagor has been released, in whole or in part,
except
in connection with an assumption agreement approved by the issuer
of any
related PMI Policy and the title insurer, to the extent required
by the
policy, and which assumption agreement is part of the Custodial Mortgage
File delivered to the Custodian and the terms of which are reflected
in
the Mortgage Loan Schedule;
|
|
(e)
|
No
Defenses.
|
|
The
Mortgage Loan is not subject to any right of rescission, set-off,
counterclaim or defense, including without limitation the defense
of
usury, nor will the operation of any of the terms of the Mortgage
Note or
the Mortgage, or the exercise of any right thereunder, render either
the
Mortgage Note or the Mortgage unenforceable, in whole or in part,
or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such right
of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
|
|
(f)
|
No
Satisfaction of Mortgage.
|
|
Neither
the Mortgage nor the Mortgage Note has been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged
Property
has not been released from the lien of the Mortgage, in whole or
in part,
nor has any instrument been executed that would effect any such release,
cancellation, subordination or
rescission;
|
|
(g)
|
Validity
of Mortgage Documents.
|
|
The
Mortgage Note and the Mortgage and related documents are genuine,
and each
is the legal, valid and binding obligation of the maker thereof
enforceable in accordance with its terms. All parties to the Mortgage
Note, the Mortgage and any other related document had legal capacity
to
enter into the Mortgage Loan and to execute and deliver the Mortgage
Note,
the Mortgage and any other related document, and the Mortgage Note,
the
Mortgage and any other related document have been duly and properly
executed by such parties. The Company has reviewed all of the documents
constituting the Retained Mortgage File and Custodial Mortgage File
and
has made such inquiries as it deems necessary to make and confirm
the
accuracy of the representations set forth
herein;
|
21
With
respect to each Cooperative Loan, the Mortgage Note, the Mortgage, the Pledge
Agreement, and related documents are genuine, and each is the legal, valid
and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage, the Pledge Agreement,
the
Proprietary Lease, the Stock Power, Recognition Agreement and the Assignment
of
Proprietary Lease had legal capacity to enter into the Mortgage Loan and to
execute and deliver such documents, and such documents have been duly and
properly executed by such parties;
|
(h)
|
No
Fraud.
|
|
All
the documents executed in connection with the Mortgage Loan including,
but
not limited to, the Mortgage Note and the Mortgage are free of fraud
and
any misrepresentation, are signed by the persons they purport to
be signed
by, and witnessed or, as appropriate, notarized by the persons whose
signatures appear as witnesses or notaries, and each such document
constitutes the valid and binding legal obligation of the signatories
and
is enforceable in accordance with its
terms;
|
|
(i)
|
Compliance
with Applicable Laws.
|
|
Any
and all requirements of any federal, state or local law including,
without
limitation, usury, truth-in-lending, real estate settlement procedures,
consumer credit protection and privacy, equal credit opportunity,
disclosure, or predatory and abusive lending laws applicable to the
Mortgage Loan have been complied with, and the Company shall maintain
in
its possession, available for the Purchaser's inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance with
all such
requirements.
The
consummation of the transactions contemplated hereby will not violate
any
such laws or regulations. All inspections, licenses and certificates
required to be made or issued with respect to all occupied portions
of the
Mortgaged Property and, with respect to the use and occupancy of
the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities;
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|
(j)
|
Location
and Type of Mortgaged Property.
|
|
The
Mortgaged Property is located in the state identified in the Mortgage
Loan
Schedule and consists of a contiguous parcel of real property with
a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a condominium project,
or
an individual unit in a planned unit development, or a Cooperative
Apartment or a townhouse, provided, however, that any condominium
project
or planned unit development shall conform with the applicable Underwriting
Guidelines regarding such dwellings, and no residence or dwelling
is a
mobile home. As of the respective appraisal date for each Mortgaged
Property, no portion of the Mortgaged Property was being used for
commercial purposes, except as allowed under the Underwriting Guidelines.
If the Mortgaged Property is a condominium unit or a planned unit
development (other than a de minimus planned unit development) such
condominium or planned unit development meets the requirements under
the
Underwriting Guidelines;
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22
(k)
Valid
First Lien.
|
The
Mortgage is a valid, subsisting and enforceable first lien on the
Mortgaged Property, including all buildings on the Mortgaged Property
and
all installations and mechanical, electrical, plumbing, heating and
air
conditioning systems located in or annexed to such buildings, and
all
additions, alterations and replacements made at any time with respect
to
the foregoing. The lien of the Mortgage is subject only
to:
|
|
(1)
|
the
lien of current real property taxes and assessments not yet due and
payable;
|
|
(2)
|
covenants,
conditions and restrictions, rights of way, easements and other matters
of
the public record as of the date of recording acceptable to mortgage
lending institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of the
Mortgage Loan and (i) referred to or otherwise considered in the
appraisal
made for the originator of the Mortgage Loan and (ii) which do not
adversely affect the Appraised Value of the Mortgaged Property set
forth
in such appraisal; and
|
|
(3)
|
other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to
be
provided by the mortgage or the use, enjoyment, value or marketability
of
the related Mortgaged Property.
|
|
Any
security agreement, chattel mortgage or equivalent document related
to and
delivered in connection with the Mortgage Loan establishes and creates
a
valid, subsisting and enforceable first lien and first priority security
interest on the property described therein and the Company has full
right
to sell and assign the same to the Purchaser;
|
With
respect to each Cooperative Loan, each Pledge Agreement creates a valid,
enforceable and subsisting first security interest in the Cooperative Shares
and
Proprietary Lease, subject only to (i) the lien of the related Cooperative
for
unpaid assessments representing the Mortgagor’s pro rata share of the
Cooperative’s payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments
to
which like collateral is commonly subject and (ii) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Pledge Agreement;
provided, however, that the appurtenant Proprietary Lease may be subordinated
or
otherwise subject to the lien of any mortgage on the Project;
23
(l) Full
Disbursement of Proceeds.
|
The
Mortgage Loan has been closed and the proceeds of the Mortgage Loan
have
been fully disbursed, except for escrows established or improvements
to
the Mortgaged Property not completed prior to the closing of the
related
Mortgage Loan, or created due to seasonal weather conditions, as
allowed
under the Underwriting Guidelines, and there is no requirement for
future
advances thereunder. All costs, fees and expenses incurred in making
or
closing the Mortgage Loan and the recording of the Mortgage were
paid, and
the Mortgagor is not entitled to any refund of any amounts paid or
due
under the Mortgage Note or
Mortgage;
|
|
(m)
|
Consolidation
of Future Advances.
|
|
Any
future advances made prior to the Cut-off Date, have been consolidated
with the outstanding principal amount secured by the Mortgage, and
the
secured principal amount, as consolidated, bears a single interest
rate
and single repayment term reflected on the Mortgage Loan Schedule.
The
lien of the Mortgage securing the consolidated principal amount is
expressly insured as having first lien priority by a title insurance
policy, an endorsement to the policy insuring the mortgagee’s consolidated
interest or by other title evidence acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac; the consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan; the Company shall not make
future
advances after the Cut-off Date;
|
(n)
Ownership.
|
The
Company is the sole owner of record and holder of the Mortgage Loan
and
the related Mortgage Note and the Mortgage are not assigned or pledged,
and the Company has good and marketable title thereto and has full
right
and authority to transfer and sell the Mortgage Loan to the Purchaser.
The
Company is transferring the Mortgage Loan free and clear of any and
all
encumbrances, liens, pledges, equities, participation interests,
claims,
charges or security interests of any nature encumbering such Mortgage
Loan;
|
24
(o) Origination/Doing
Business.
|
The
Mortgage Loan was originated by a savings and loan association, a
savings
bank, a commercial bank, a credit union, an insurance company, or
similar
institution which is supervised and examined by a federal or state
authority or by a mortgagee approved by the Secretary of Housing
and Urban
Development pursuant to Sections 203 and 211 of the National Housing
Act.
All parties which have had any interest in the Mortgage Loan, whether
as
mortgagee, assignee, pledgee or otherwise, are (or, during the period
in
which they held and disposed of such interest, were) (1) in compliance
with any and all applicable licensing requirements of the laws of
the
state wherein the Mortgaged Property is located, and (2) organized
under
the laws of such state, or (3) qualified to do business in such state,
or
(4) federal savings and loan associations or national banks having
principal offices in such state, or (5) not doing business in such
state;
|
(p) LTV,
PMI Policy.
No
Mortgage Loan has an LTV greater than 90%. Except of Pledged Asset Mortgage
Loans, each Mortgage Loan with an LTV of greater than 80% at the time of
origination, a portion of the unpaid principal balance of each Mortgage Loan
is
and will be insured as to payment defaults by either a lender-paid or
borrower-paid PMI Policy. If the Mortgage Loan is insured by a PMI Policy for
which the Mortgagor pays all premiums, the coverage will remain in place until
(i) the LTV decreases to 78% or (ii) the PMI Policy is otherwise terminated
pursuant to the Homeowners Protection Act of 1998, 12 USC §4901, et seq. All
provisions of such PMI Policy have been and are being complied with, such policy
is in full force and effect, and all premiums due thereunder have been paid.
The
Qualified Insurer has a claims paying ability acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac. Any Mortgage Loan subject to a PMI Policy obligates the Mortgagor
or the Company, as applicable, to maintain the PMI Policy and to pay all
premiums and charges in connection therewith;
(q) Title
Insurance.
|
The
Mortgage Loan is covered by an ALTA lender's title insurance policy
(or in
the case of any Mortgage Loan secured by a Mortgaged Property located
in a
jurisdiction where such policies are not available, an opinion of
counsel
of the type customarily rendered in such jurisdiction in lieu of
title
insurance) or other generally acceptable form of policy of insurance
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a title insurer
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do business
in
the jurisdiction where the Mortgaged Property is located, insuring
the
Company, its successors and assigns, as to the first priority lien
of the
Mortgage in the original principal amount of the Mortgage Loan, subject
only to the exceptions contained in clauses (1), (2) and (3) of Paragraph
(k) of this Section 3.02, and against any loss by reason of the invalidity
or unenforceability of the lien resulting from the provisions of
the
Mortgage providing for adjustment to the Mortgage Interest Rate and
Monthly Payment. The Company is the sole insured of such lender's
title
insurance policy, and such lender's title insurance policy is in
full
force and effect and will be in force and effect upon the consummation
of
the transactions contemplated by this Agreement. No claims have been
made
under such lender's title insurance policy, and no prior holder of
the
Mortgage, including the Company, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance
policy;
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25
(r) No
Defaults.
|
There
is no default, breach, violation or event of acceleration existing
under
the Mortgage or the Mortgage Note and no event which, with the passage
of
time or with notice and the expiration of any grace or cure period,
would
constitute a default, breach, violation or event of acceleration,
and
neither the Company nor its predecessors have waived any default,
breach,
violation or event of acceleration;
|
(s) No
Mechanics' Liens.
|
There
are no mechanics' or similar liens or claims which have been filed
for
work, labor or material (and no rights are outstanding that under
the law
could give rise to such liens) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with,
the lien
of the related Mortgage which are not insured against by the title
insurance policy referenced in Paragraph (q)
above;
|
(t) Location
of Improvements; No Encroachments.
|
Except
as insured against by the title insurance policy referenced in Paragraph
(q) above, all improvements which were considered in determining
the
Appraised Value of the Mortgaged Property lay wholly within the boundaries
and building restriction lines of the Mortgaged Property and no
improvements on adjoining properties encroach upon the Mortgaged
Property.
No improvement located on or being part of the Mortgaged Property
is in
violation of any applicable zoning law or
regulation;
|
|
(u)
|
Payment
Terms.
|
|
Except
with respect to the Interest Only Mortgage Loans, principal payments
commenced no more than sixty (60) days after the funds were disbursed
to
the Mortgagor in connection with the Mortgage Loan. The Mortgage
Loans
have an original term to maturity of not more than 30 years, with
interest
payable in arrears on the first (1st)
day of each month. With respect to each Balloon Loan, the Mortgage
Loan is
payable in equal monthly installments of principal and interest based
on a
fifteen (15) or thirty (30) year amortization schedule, as set forth
in
the related Mortgage Note, and a final lump sum payment substantially
greater than the preceding Monthly Payment is required which is sufficient
to amortize the remaining principal balance of the Balloon Loan.
No
Balloon Loan has an original stated maturity of less than seven (7)
years.
As to each Mortgage Loan on each applicable Adjustment Date, the
Mortgage
Interest Rate will be adjusted to equal the sum of the Index plus
the
applicable Gross Margin, rounded up or down to the nearest multiple
of
0.125% indicated by the Mortgage Note; provided that the Mortgage
Interest
Rate will not increase or decrease by more than the Periodic Interest
Rate
Cap on any Adjustment Date, and will in no event exceed the maximum
Mortgage Interest Rate or be lower than the minimum Mortgage Interest
Rate
listed on the Mortgage Note for such Mortgage Loan. As
to each Mortgage Loan that is not an Interest Only Mortgage Loan,
each
Mortgage Note requires a monthly payment which is sufficient, during
the
period prior to the first adjustment to the Mortgage Interest Rate,
to
fully amortize the outstanding principal balance as of the first
(1st)
day of such period over the then remaining term of such Mortgage
Note and
to pay interest at the related Mortgage Interest Rate. As to each
Mortgage
Loan, if the related Mortgage Interest Rate changes on an Adjustment
Date
or, with
respect to an Interest Only Mortgage Loan, on an Adjustment Date
following
the related interest only period, the
then outstanding principal balance will be reamortized over the remaining
life of such Mortgage Loan. No Mortgage Loan contains terms or provisions
which would result in negative amortization;
|
26
(v) Customary
Provisions.
|
The
Mortgage and related Mortgage Note contain customary and enforceable
provisions such as to render the rights and remedies of the holder
thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the
case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial foreclosure and upon the exercise of such rights
and
remedies under the law, the holder of the Mortgage and Mortgage Note
will
be able to deliver good and merchantable title to the Mortgaged Property.
There is no homestead or other exemption available to a Mortgagor
which
would interfere with the right to sell the Mortgaged Property at
a
trustee's sale or the right to foreclose the
Mortgage;
|
(w) Occupancy
of the Mortgaged Property.
|
As
of the date of origination, the Mortgaged Property was lawfully occupied
under all applicable laws.
|
(x) No
Additional Collateral.
|
Except
in the case of a Pledged Asset Mortgage Loan and as indicated on
the
related Data File, the Mortgage Note is not and has not been secured
by
any collateral, pledged account or other security except the lien
of the
corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in sub clause
(k)
above;
|
27
(y) Deeds
of Trust.
|
In
the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage,
and no
fees or expenses are or will become payable by the Mortgagee to the
trustee under the deed of trust, except in connection with a trustee's
sale after default by the
Mortgagor;
|
(z) Acceptable
Investment.
|
The
Company has no knowledge of any circumstances or conditions with
respect
to the Mortgage Loan, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause
private institutional investors to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent,
or
adversely affect the value or marketability of the Mortgage
Loan;
|
(aa) Transfer
of Mortgage Loans.
|
If
the Mortgage Loan is not a MERS Mortgage Loan, the Assignment of
Mortgage
upon the insertion of the name of the assignee and recording information
is in recordable form and is acceptable for recording under the laws
of
the jurisdiction in which the Mortgaged Property is
located;
|
(bb) Mortgaged
Property Undamaged.
|
The
Mortgaged Property is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the
Mortgage
Loan or the use for which the premises were
intended;
|
(cc) Collection
Practices; Escrow Deposits.
|
The
origination and collection practices used with respect to the Mortgage
Loan have been in accordance with Accepted Servicing Practices, and
have
been in all material respects legal and proper. With respect to escrow
deposits and Escrow Payments, all such payments are in the possession
of
the Company and there exist no deficiencies in connection therewith
for
which customary arrangements for repayment thereof have not been
made. All
Escrow Payments have been collected in full compliance with state
and
federal law. No escrow deposits or Escrow Payments or other charges
or
payments due the Company have been capitalized under the Mortgage
Note;
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28
(dd) No
Condemnation.
|
There
is no proceeding pending or to the best of the Company’s knowledge
threatened for the total or partial condemnation of the related Mortgaged
Property;
|
(ee) The
Appraisal.
|
The
Mortgage Loan Documents contain an appraisal of the related Mortgaged
Property.
As
to each Time$aver® Mortgage Loan, the appraisal may be from the original
of the existing Company-serviced loan, which was refinanced via such
Time$aver® Mortgage Loan. The appraisal was conducted by an appraiser who
is licensed in the state where the Mortgaged Property is located,
and who
had no interest, direct or indirect, in the Mortgaged Property or
in any
loan made on the security thereof; and whose compensation is not
affected
by the approval or disapproval of the Mortgage Loan, and the appraisal
and
the appraiser both satisfy the applicable requirements of Title XI
of the
Financial Institution Reform, Recovery, and Enforcement Act of 1989
and
the regulations promulgated thereunder, all as in effect on the date
the
Mortgage Loan was originated;
|
(ff) Insurance.
|
The
Mortgaged Property securing each Mortgage Loan is insured by an insurer
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac against loss by fire and
such
hazards as are covered under a standard extended coverage endorsement
and
such other hazards as are customary in the area where the Mortgaged
Property is located pursuant to insurance policies conforming to
the
requirements of Section 4.10, in an amount which is at least equal
to the
lesser of (a) 100% of the insurable value, on a replacement cost
basis, of
the improvements on the related Mortgaged Property, and (b) the greater
of
(i) the outstanding principal balance of the Mortgage Loan and (ii)
an
amount such that the proceeds of such insurance shall be sufficient
to
prevent the application to the Mortgagor or the loss payee of any
coinsurance clause under the policy. If the Mortgaged Property is
a
condominium unit, it is included under the coverage afforded by a
blanket
policy for the project. If the improvements on the Mortgaged Property
are
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, a flood insurance
policy meeting the requirements of the current guidelines of the
Federal
Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than
the
least of (A) the outstanding principal balance of the Mortgage Loan,
(B) the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster Protection
Act of
1973, as amended. All individual insurance policies contain a standard
mortgagee clause naming the Company and its successors and assigns
as
mortgagee, and all premiums thereon have been paid. The Mortgage
obligates
the Mortgagor thereunder to maintain a hazard insurance policy at
the
Mortgagor's cost and expense, and on the Mortgagor's failure to do
so,
authorizes the holder of the Mortgage to obtain and maintain such
insurance at such Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. The hazard insurance policy is the valid
and
binding obligation of the insurer, is in full force and effect, and
will
be in full force and effect and inure to the benefit of the Purchaser
upon
the consummation of the transactions contemplated by this Agreement.
The
Company has not acted or failed to act so as to impair the coverage
of any
such insurance policy or the validity, binding effect and enforceability
thereof;
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29
|
(gg)
|
Servicemembers
Civil Relief Act.
|
|
The
Mortgagor has not notified the Company, and the Company has no knowledge
of any relief requested or allowed to the Mortgagor under the
Servicemembers Civil Relief Act, as
amended;
|
|
(hh)
|
Graduated
Payments or Contingent Interests.
|
|
The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage
Loan does not have a shared appreciation or other contingent interest
feature.
|
|
(ii)
|
No
Construction Loans.
|
|
No
Mortgage Loan was made in connection with (i) the construction or
rehabilitation of a Mortgage Property or (ii) facilitating the trade-in
or
exchange of a Mortgaged Property other than a construction-to-permanent
loan which has converted to a permanent Mortgage
Loan;
|
|
(jj)
|
Underwriting.
|
|
Each
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines; and the Mortgage Note and Mortgage are on forms acceptable
to
▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae;
|
|
(kk)
|
Bankruptcy.
|
No
Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding as of the date the Mortgage loan was closed;
(ll)
Leasehold
Estates.
With
respect to Mortgage Loans that are secured by a leasehold estate, the lease
is
valid, in full force and effect and conforms to the Underwriting Guidelines;
provided,
the
term of the leasehold exceeds the maturity date of the related Mortgage Loan
by
at least five (5) years;
30
(mm)
The
Mortgagor.
The
Mortgagor is one or more natural persons and/or an Illinois land trust or a
"living trust" and such "living trust" is in compliance with ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac guidelines;
(nn) Delivery
of Custodial Mortgage Files.
The
Mortgage Note and any other documents required to be delivered by the Company
under this Agreement for the Mortgage Loans have been delivered to the
Custodian. The Company is in possession of a complete, true and accurate
Retained Mortgage File in compliance with Exhibit C, except for such documents
the originals of which have been sent for recordation;
(oo) Servicing.
From
and
after the date of origination, each Mortgage Loan has been serviced in
accordance with the terms of all federal, state and local laws and regulations,
the terms of the Mortgage Note and Accepted Servicing Practices in all
respects;
|
(pp)
|
Due
on Sale.
|
The
Mortgage or Mortgage Note contains an enforceable provision for the acceleration
of the payment of the unpaid principal balance of the Mortgage Loan in the
event
that the Mortgaged Property is sold or transferred without the prior written
consent of the Mortgagee thereunder;
|
(qq)
|
No
Violation of Environmental Laws.
|
There
is
no pending action or proceeding directly involving any Mortgaged Property of
which the Company is aware in which compliance with any environmental law,
rule
or regulation is an issue; and to the best of the Company’s knowledge, nothing
further remains to be done to satisfy in full all requirements of each such
law,
rule or regulation constituting a prerequisite to use, value and enjoyment
of
said property;
(rr)
Single
Premium Credit Life Insurance.
No
Mortgagor was required to purchase any single premium credit insurance policy
(e.g. life, disability, accident, unemployment or health insurance product)
or
debt cancellation agreement as a condition of obtaining the extension of credit.
No Mortgagor obtained a prepaid single premium credit insurance policy (e.g.
life, disability, accident, unemployment or health insurance product) as part
of
the origination of the Mortgage Loan. No proceeds from any Mortgage Loan were
used to purchase single premium credit insurance policies or debt cancellation
agreements as part of the origination of, or as a condition to closing, such
Mortgage Loan;
31
(ss) Anti-Money
Laundering Laws.
The
Company has complied with all applicable anti-money laundering laws and
regulations, (the “Anti-Money Laundering Laws”), and has established an
anti-money laundering compliance program as required by the Anti-Money
Laundering Laws;
|
(tt)
|
No
High Cost Loans.
|
No
Mortgage Loan is a High Cost Loan or Covered Loan;
|
(uu)
|
Contents
of the Retained Mortgage File
|
The
Retained Mortgage File contains the documents listed as items 6 through 12
of
Exhibit C attached hereto;
(vv)
Fair
Credit Reporting Act.
The
Company, in its capacity as servicer for each Mortgage Loan, has fully
furnished, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian
and
Trans Union Credit Information Company (three of the credit repositories),
on a
monthly basis;
|
(ww)
|
Cooperative
Loans.
|
With
respect to each Cooperative Loan:
|
(i)
|
The
Cooperative Shares are held by a person as a tenant-stockholder in
a
Cooperative. Each original UCC financing statement, continuation
statement
or other governmental filing or recordation necessary to create or
preserve the perfection and priority of the first lien and security
interest in the Cooperative Loan and Proprietary Lease has been timely
and
properly made. Any security agreement, chattel mortgage or equivalent
document related to the Cooperative Loan and delivered to Purchaser
or its
designee establishes in Purchaser a valid and subsisting perfected
first
lien on and security interest in the Mortgaged Property described
therein,
and Purchaser has full right to sell and assign the same. The Proprietary
Lease term expires no less than five years after the Mortgage Loan
term or
such other term acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac;
|
32
|
(ii)
|
A
Cooperative Lien Search has been made by a company competent to make
the
same which company is acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and
qualified to do business in the jurisdiction where the Cooperative
is
located;
|
|
(iii)
|
(a)
The term of the related Proprietary Lease is not less than the terms
of
the Cooperative Loan; (b) there is no provision in any Proprietary
Lease
which requires the Mortgagor to offer for sale the Cooperative Shares
owned by such Mortgagor first to the Cooperative; (c) there is no
prohibition in any Proprietary Lease against pledging the Cooperative
Shares or assigning the Proprietary Lease; (d) the Cooperative has
been
created and exists in full compliance with the requirements for
residential cooperatives in the jurisdiction in which the Project
is
located and qualifies as a cooperative housing corporation under
Section
210 of the Code; (e) the Recognition Agreement is on a form published
by
Aztech Document Services, Inc. or includes similar provisions; and
(f) the
Cooperative has good and marketable title to the Project, and owns
the
Project either in fee simple or under a leasehold that complies with
the
requirements of the ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac guidelines; such title
is
free and clear of any adverse liens or encumbrances, except the lien
of
any blanket mortgage;
|
| (iv) |
The
Company has the right under the terms of the Mortgage Note, Pledge
Agreement and Recognition Agreement to pay any maintenance charges
or
assessments owed by the Mortgagor;
and
|
| (v) |
Each
Stock Power (i) has all signatures guaranteed or (ii) if all signatures
are not guaranteed, then such Cooperative Shares will be transferred
by
the stock transfer agent of the Cooperative if the Company undertakes
to
convert the ownership of the collateral securing the related Cooperative
Loan;
|
(xx)
No
Arbitration Provision.
With
respect to any Mortgage Loan, neither the related Mortgage nor the related
Mortgage Note requires the Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the mortgage loan transaction;
|
(yy)
|
Buydown
Mortgage Loans.
|
|
With
respect to each Mortgage Loan that is a Buydown Mortgage
Loan:
|
|
(i)
|
On
or before the date of origination of such Mortgage Loan, the Company
and
the Mortgagor, or the Company, the Mortgagor and the seller of the
Mortgaged Property or a third party entered into a Buydown Agreement.
The
Buydown Agreement provides that the seller of the Mortgaged Property
(or
third party) shall deliver to the Company temporary Buydown Funds
in an
amount equal to the aggregate undiscounted amount of payments that,
when
added to the amount the Mortgagor on such Mortgage Loan is obligated
to
pay on each Due Date in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payment due on
such
Mortgage Loan. The temporary Buydown Funds enable the Mortgagor to
qualify
for the Buydown Mortgage Loan. The effective interest rate of a Buydown
Mortgage Loan if less than the interest rate set forth in the related
Mortgage Note will increase within the Buydown Period as provided
in the
related Buydown Agreement so that the effective interest rate will
be
equal to the interest rate as set forth in the related Mortgage Note.
The
Buydown Mortgage Loan satisfies the requirements of ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇
Mac guidelines or the Underwriting
Guidelines;
|
33
|
(ii)
|
The
Mortgage and Mortgage Note reflect the permanent payment terms rather
than
the payment terms of the Buydown Agreement. The Buydown Agreement
provides
for the payment by the Mortgagor of the full amount of the Monthly
Payment
on any Due Date that the Buydown Funds are available. The Buydown
Funds
were not used to reduce the original principal balance of the Mortgage
Loan or to increase the Appraised Value of the Mortgage Property
when
calculating the Loan-to-Value Ratios for purposes of the Agreement
and, if
the Buydown Funds were provided by the Company and if required under
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac guidelines or the Underwriting Guidelines,
as
applicable, the terms of the Buydown Agreement were disclosed to
the
appraiser of the Mortgaged
Property;
|
|
(iii)
|
The
Buydown Funds may not be refunded to the Mortgagor unless the Mortgagor
makes a principal payment for the outstanding balance of the Mortgage
Loan;
|
| (iv) |
As
of the date of origination of the Mortgage Loan, the provisions of
the
related Buydown Agreement complied with the requirements of ▇▇▇▇▇▇
Mae or
▇▇▇▇▇▇▇ Mac or Underwriting Guidelines, as applicable, regarding
buydown
agreements; and
|
(zz) Pledged
Asset Mortgage Loan.
|
With
respect to a Pledged Asset Mortgage
Loan:
|
|
(i)
|
The
Pledge Holder has a rating of at least “AA” (or the equivalent) or better
from at least two Rating Agencies and the Pledge Holder is obligated
to
give the beneficiary of each Letter of Credit at least sixty (60)
days notice of any non-renewal of any Letter of
Credit;
|
34
|
(ii)
|
With
respect to each Pledged Asset Mortgage Loan, the Company is the named
beneficiary and no Person has drawn any funds against such Letter
of
Credit;
|
|
(iii)
|
Each
Letter of Credit is for an amount at least equal to an LTV of 20%
of the
lower of the purchase price or the Appraised Value of the related
Mortgaged Property;
|
|
(iv)
|
As
of the Closing Date, the Company has complied with all the requirements
of
any Letter of Credit, and each Letter of Credit is a valid and enforceable
obligation of the Pledge Holder;
|
|
(v)
|
The
Company has the right to draw on each Letter of Credit if the related
Pledged Asset Mortgage Loan becomes ninetieth (90) days or more delinquent
and to apply such proceeds as a partial prepayment
thereon;
|
|
(vi)
|
The
Company has not received notice of any non-renewal of any Letter
of
Credit;
|
|
(vii)
|
Upon
a default by the Pledge Holder, the Company will have a perfected
first
priority security interest in the assets pledged to secure the Letter
of
Credit and has the right to obtain possession thereof and the right
to
liquidate such assets and apply the proceeds thereof to prepay the
related
Pledged Asset Mortgage Loan; and
|
|
(viii)
|
The
Letter of Credit is required to be in effect (either for its original
term
or through renewal) until such time as all amounts owed under the
related
Pledged Asset Mortgage Loan by the related Mortgagor are less than 80% of
the lesser of the purchase price or the Appraised Value of the related
Mortgaged Property.
|
Section
3.03 Repurchase.
It
is
understood and agreed that the representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and the delivery of the applicable Mortgage Loan Documents to the
Custodian and shall inure to the benefit of the Purchaser, notwithstanding
any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Custodial Mortgage File
or
Retained Mortgage File. Upon discovery by either the Company or the Purchaser
of
a breach of any of the foregoing representations and warranties which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of Purchaser
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan) (in the case of any of the foregoing,
a
“Breach”), the party discovering such Breach shall give prompt written notice to
the other.
35
Within
ninetieth (90) days of the earlier of either discovery by or notice to the
Company of any Breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans, the Company shall use its
best efforts promptly to cure such Breach in all material respects (although,
in
connection with such a Breach of Section 3.02 (vv), the cure period shall be
fifteen (15) days) and, if such Breach cannot be cured, the Company shall,
at
the Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
In the event that a Breach shall involve any representation or warranty set
forth in Section 3.01, and such Breach cannot be cured within ninetieth (90)
days of the earlier of either discovery by or notice to the Company of such
Breach, all of the Mortgage Loans shall, at the Purchaser's option, be
repurchased by the Company at the Repurchase Price. However, if the Breach
shall
involve a representation or warranty set forth in Section 3.02 and the Company
discovers or receives notice of any such Breach within 120 days of the Closing
Date, the Company shall, if the Breach cannot be cured, at the Purchaser's
option and provided that the Company has a Qualified Substitute Mortgage Loan,
rather than repurchase the Mortgage Loan as provided above, remove such Mortgage
Loan (a "Deleted Mortgage Loan") and substitute in its place a Qualified
Substitute Mortgage Loan or Loans, provided that any such substitution shall
be
effected not later than 120 days after the Closing Date. If the Company has
no
Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage
Loan within ninetieth (90) days of the written notice of the Breach or the
failure to cure, whichever is later. Any repurchase of a Mortgage Loan or Loans
pursuant to the foregoing provisions of this Section 3.03 shall be accomplished
by deposit in the Custodial Account of the amount of the Repurchase Price for
distribution to Purchaser on the Remittance Date immediately following the
Principal Prepayment Period in which such repurchase takes place, after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future
distribution.
At
the
time of repurchase or substitution, the Purchaser and the Company shall arrange
for the reassignment of the Deleted Mortgage Loan to the Company and the
delivery to the Company of any documents held by the Custodian relating to
the
Deleted Mortgage Loan. If
the
Company repurchases a Mortgage Loan that is a MERS Mortgage Loan, the Company
shall cause MERS to designate on the MERS® System to remove the Purchaser as the
beneficial holder with respect to such Mortgage Loan.
In the
event of a repurchase or substitution, the Company shall, simultaneously with
such reassignment, give written notice to the Purchaser that such repurchase
or
substitution has taken place, amend the Mortgage Loan Schedule to reflect the
withdrawal of the Deleted Mortgage Loan from this Agreement, and, in the case
of
substitution, identify a Qualified Substitute Mortgage Loan and amend the
Mortgage Loan Schedule to reflect the addition of such Qualified Substitute
Mortgage Loan to this Agreement. In connection with any such substitution,
the
Company shall be deemed to have made as to such Qualified Substitute Mortgage
Loan the representations and warranties set forth in this Agreement except
that
all such representations and warranties set forth in this Agreement shall be
deemed made as of the date of such substitution. The Company shall effect such
substitution by delivering to the Custodian for such Qualified Substitute
Mortgage Loan the documents required by Section 2.03, with the Mortgage Note
endorsed as required by Section 2.03. No substitution will be made in any
calendar month after the Determination Date for such month. The Company shall
deposit in the Custodial Account the Monthly Payment less the Servicing Fee
due
on such Qualified Substitute Mortgage Loan or Loans in the month following
the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution shall be retained by
the
Company. With respect to any Deleted Mortgage loan, distributions to Purchaser
shall include the Monthly Payment due on any Deleted Mortgage Loan in the month
of substitution, and the Company shall thereafter be entitled to retain all
amounts subsequently received by the Company in respect of such Deleted Mortgage
Loan.
36
For
any
month in which the Company substitutes a Qualified Substitute Mortgage Loan
for
a Deleted Mortgage Loan, the Company shall determine the amount (if any) by
which the aggregate principal balance of all Qualified Substitute Mortgage
Loans
as of the date of substitution is less than the aggregate Stated Principal
Balance of all Deleted Mortgage Loans (after application of scheduled principal
payments due in the month of substitution). The amount of such shortfall shall
be distributed by the Company in the month of substitution pursuant to Section
5.01. Accordingly, on the date of such substitution, the Company shall deposit
from its own funds into the Custodial Account an amount equal to the amount
of
such shortfall.
In
addition to such repurchase or substitution obligation, the Company shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a Breach
of
the Company representations and warranties contained in this Agreement. It
is
understood and agreed that the obligations of the Company set forth in this
Section 3.03 to cure, substitute for or repurchase a defective Mortgage Loan
and
to indemnify the Purchaser as provided in this Section 3.03 constitute the
sole
remedies of the Purchaser respecting a Breach of the foregoing representations
and warranties.
Any
cause
of action against the Company relating to or arising out of the Breach of any
representations and warranties made in Sections 3.01 and 3.02 shall accrue
as to
any Mortgage Loan upon (i) discovery of such Breach by the Purchaser or notice
thereof by the Company to the Purchaser, (ii) failures by the Company to cure
such Breach or repurchase such Mortgage Loan as specified above, and (iii)
demand upon the Company by the Purchaser for compliance with this
Agreement.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.01 Company
to Act as Servicer.
The
Company, as an independent contractor, shall service and administer the Mortgage
Loans and shall have full power and authority, acting alone or through the
utilization of a Subservicer or a Subcontractor, to do any and all things in
connection with such servicing and administration which the Company may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices. The Company shall be responsible for any and
all
acts of a Subservicer and a Subcontractor, and the Company’s utilization of a
Subservicer or a Subcontractor shall in no way relieve the liability of the
Company under this Agreement.
37
Consistent
with the terms of this Agreement, the Company may waive, modify or vary any
term
of any Mortgage Loan or consent to the postponement of strict compliance with
any such term or in any manner grant indulgence to any Mortgagor if in the
Company's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser, provided,
however, the Company shall not make any future advances, other than Servicing
Advances, with respect to a Mortgage Loan. The Company shall not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, defer or forgive the payment of principal (except for actual
payments of principal) or change the final maturity date on such Mortgage Loan,
unless the Mortgagor is in default with respect to the Mortgage Loan or such
default is, in the judgment of the Company, imminent. In the event that no
default exists or is imminent, the Company shall request written consent from
the Purchaser to permit such a modification and the Purchaser shall provide
written consent or notify the Company of its objection to such modification
within five (5) Business Days of its receipt of the Company's request. In the
event of any such modification which permits the deferral of interest or
principal payments on any Mortgage Loan, the Company shall, on the Business
Day
immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 5.03, the difference
between (a) such month's principal and one month's interest at the Mortgage
Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Company shall be entitled to reimbursement
for such advances to the same extent as for all other advances made pursuant
to
Section 5.03. Without limiting the generality of the foregoing, the Company
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. If reasonably required by the Company, the Purchaser
shall
furnish the Company with any powers of attorney and other documents necessary
or
appropriate to enable the Company to carry out its servicing and administrative
duties under this Agreement.
In
servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser's reliance on the Company.
The
Company shall cause to be maintained for each Cooperative Loan a copy of the
financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Purchaser.
The
Company is authorized and empowered by the Purchaser, in its own name, when
the
Company believes it appropriate in its reasonable judgment to register any
Mortgage Loan on the MERS® System, or cause the removal from MERS registration
of any Mortgage Loan on the MERS® System, to execute and deliver, on behalf of
the Purchaser, any and all instruments of assignment and other comparable
instruments with respect to such assignment or re-recording of a Mortgage in
the
name of MERS, solely as nominee for the Purchaser and its successors and
assigns.
38
Section
4.02 Liquidation
of Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 4.01 is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period,
the
Company shall take such action as (1) the Company would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (2) shall be consistent with Accepted Servicing Practices,
(3)
the Company shall determine prudently to be in the best interest of Purchaser,
and (4) is consistent with any related PMI Policy. In the event that any payment
due under any Mortgage Loan is not postponed pursuant to Section 4.01 and
remains delinquent for a period of ninetieth (90) days or any other default
continues for a period of ninetieth (90) days beyond the expiration of any
grace
or cure period, the Company shall commence foreclosure proceedings. In the
event
the Purchaser objects to such foreclosure action, the Company shall not be
required to make Monthly Advances with respect to such Mortgage Loan, pursuant
to Section 5.03, and the Company's obligation to make such Monthly Advances
shall terminate on the ninetieth (90th)
day
referred to above. In such connection, the Company shall from its own funds
make
all necessary and proper Servicing Advances, provided, however, that the Company
shall not be required to expend its own funds in connection with any foreclosure
or towards the restoration or preservation of any Mortgaged Property, unless
it
shall determine (a) that such preservation, restoration and/or foreclosure
will
increase the proceeds of liquidation of the Mortgage Loan to Purchaser after
reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it
shall
have priority for purposes of withdrawals from the Custodial Account pursuant
to
Section 4.05) or through Insurance Proceeds (respecting which it shall have
similar priority).
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Company has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Purchaser otherwise requests
an environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector. The cost
for
such inspection or review shall be borne by the Purchaser. Upon completion
of
the inspection or review, the Company shall promptly provide the Purchaser
with
a written report of the environmental inspection.
After
reviewing the environmental inspection report, the Purchaser shall determine
how
the Company shall proceed with respect to the Mortgaged Property. In the event
(a) the environmental inspection report indicates that the Mortgaged Property
is
contaminated by hazardous or toxic substances or wastes and (b) the Purchaser
directs the Company to proceed with foreclosure or acceptance of a deed in
lieu
of foreclosure, the Company shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Company, the Company shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event
the Purchaser directs the Company not to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Company shall be reimbursed for all
Servicing Advances made with respect to the related Mortgaged Property from
the
Custodial Account pursuant to Section 4.05 hereof.
39
Section
4.03 Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, the Company shall proceed diligently to collect all payments
due
under each of the Mortgage Loans when the same shall become due and payable
and
shall take special care in ascertaining and estimating Escrow Payments and
all
other charges that will become due and payable with respect to the Mortgage
Loan
and the Mortgaged Property, to the end that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become due
and payable.
Section
4.04 Establishment
of and Deposits to Custodial Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form
of
time deposit or demand accounts, titled "▇▇▇▇▇ Fargo Bank, N.A. in trust for
the
Purchaser and/or subsequent purchasers of Mortgage Loans - P & I." The
Custodial Account shall be established with an Eligible Institution. The
Custodial Account shall at all times be insured to the fullest extent allowed
by
applicable law. Funds deposited in the Custodial Account may be drawn on by
the
Company in accordance with Section 4.05. The creation of any Custodial Account
shall be evidenced by a certification in the case of an account established
with
the Company, or by a letter agreement in the case of an account held by a
depository other than the Company each in the forms attached hereto as Exhibit
F. A copy of such certification or letter agreement shall be furnished to the
Purchaser or any subsequent purchaser upon request.
The
Company shall deposit in the Custodial Account within two (2) Business Days
of
the Company’s receipt, and retain therein, the following collections received by
the Company and payments made by the Company after the Cut-off Date, other
than
payments of principal and interest due on or before the Cut-off Date, or
received by the Company prior to the Cut-off Date but allocable to a period
subsequent thereto:
|
(i)
|
all
payments on account of principal on the Mortgage Loans, including
all
Principal Prepayments;
|
|
(ii)
|
all
payments on account of interest on the Mortgage Loans adjusted to
the
Mortgage Loan Remittance Rate;
|
|
(iii)
|
all
Liquidation Proceeds;
|
40
|
(iv)
|
all
Insurance Proceeds including amounts required to be deposited pursuant
to
Section 4.10 (other than proceeds to be held in the Escrow Account
and
applied to the restoration or repair of the Mortgaged Property or
released
to the Mortgagor in accordance with Section 4.14), Section 4.11 and
Section 4.15;
|
|
(v)
|
all
Condemnation Proceeds which are not applied to the restoration or
repair
of the Mortgaged Property or released to the Mortgagor in accordance
with
Section 4.14;
|
|
(vi)
|
any
amount required to be deposited in the Custodial Account pursuant
to
Section 4.01, 5.03, 6.01 or 6.02;
|
|
(vii)
|
any
amounts payable in connection with the repurchase of any Mortgage
Loan
pursuant to Section 3.03 and all amounts required to be deposited
by the
Company in connection with a shortfall in principal amount of any
Qualified Substitute Mortgage Loan pursuant to Section
3.03;
|
|
(viii)
|
with
respect to each Principal Prepayment an amount (to be paid by the
Company
out of its funds) which, when added to all amounts allocable to interest
received in connection with the Principal Prepayment, equals one
month's
interest on the amount of principal so prepaid at the Mortgage Loan
Remittance Rate;
|
|
(ix)
|
any
amounts required to be deposited by the Company pursuant to Section
4.11
in connection with the deductible clause in any blanket hazard insurance
policy;
|
| (x) |
any
amounts received with respect to or related to any REO Property and
all
REO Disposition Proceeds pursuant to Section 4.16;
|
| (xi) |
with
respect to a Subsidy Loan, an amount from the Subsidy Account that
when
added to the Mortgagor’s payment will equal the full monthly amount due
under the related Mortgage Note;
|
| (xii) |
with
respect to a Pledged Asset Mortgage Loan, any amounts required to
be
deposited by the Company pursuant to Section 4.26 of this Agreement
in
connection with a Letter of Credit;
and
|
| (xiii) |
with
respect to each Buydown Mortgage Loan, an amount from the Escrow
Account
that when added to the Mortgagor’s payment will equal the full monthly
amount due under the related Mortgage Note.
|
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in
the
Custodial Account by the depository institution shall accrue to the benefit
of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05.
41
Section
4.05 Permitted
Withdrawals From Custodial Account.
The
Company shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
| (i) |
to
make payments to the Purchaser in the amounts and in the manner provided
for in Section 5.01;
|
| (ii) |
to
reimburse itself for Monthly Advances of the Company's funds made
pursuant
to Section 5.03, the Company's right to reimburse itself pursuant
to this
subclause (ii) being limited to amounts received on the related Mortgage
Loan which represent late payments of principal and/or interest respecting
which any such advance was made, it being understood that, in the
case of
any such reimbursement, the Company's right thereto shall be prior
to the
rights of Purchaser, except that, where the Company is required to
repurchase a Mortgage Loan pursuant to Section 3.03 or 6.02, the
Company's
right to such reimbursement shall be subsequent to the payment to
the
Purchaser of the Repurchase Price pursuant to such sections and all
other
amounts required to be paid to the Purchaser with respect to such
Mortgage
Loan;
|
| (iii) |
to
reimburse itself for unreimbursed Servicing Advances, and for any
unpaid
Servicing Fees, the Company's right to reimburse itself pursuant
to this
subclause (iii) with respect to any Mortgage Loan being limited to
related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and
such
other amounts as may be collected by the Company from the Mortgagor
or
otherwise relating to the Mortgage Loan, it being understood that,
in the
case of any such reimbursement, the Company's right thereto shall
be prior
to the rights of Purchaser, except that where the Company is required
to
repurchase a Mortgage Loan pursuant to Section 3.03 or 6.02, in which
case
the Company's right to such reimbursement shall be subsequent to
the
payment to the Purchaser of the Repurchase Price pursuant to such
sections
and all other amounts required to be paid to the Purchaser with respect
to
such Mortgage Loan;
|
| (iv) |
to
pay itself interest on funds deposited in the Custodial
Account;
|
| (v) |
to
reimburse itself for expenses incurred and reimbursable to it pursuant
to
Section 8.01;
|
| (vi) |
to
pay any amount required to be paid pursuant to Section 4.16 related
to any
REO Property, it being understood that, in the case of any such
expenditure or withdrawal related to a particular REO Property, the
amount
of such expenditure or withdrawal from the Custodial Account shall
be
limited to amounts on deposit in the Custodial Account with respect
to the
related REO Property;
|
42
| (vii) |
to
reimburse itself for any Servicing Advances or REO expenses after
liquidation of the Mortgaged Property not otherwise reimbursed
above;
|
(viii) to
remove
funds inadvertently placed in the Custodial Account by the Company;
and
| (ix) |
to
clear and terminate the Custodial Account upon the termination of
this
Agreement.
|
In
the
event that the Custodial Account is interest bearing, on each Remittance Date,
the Company shall withdraw all funds from the Custodial Account except for
those
amounts which, pursuant to Section 5.01, the Company is not obligated to remit
on such Remittance Date. The Company may use such withdrawn funds only for
the
purposes described in this Section 4.05.
Section
4.06 Establishment
of and Deposits to Escrow Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any of its
own funds and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled, "▇▇▇▇▇ Fargo
Bank, N.A., in trust for the Purchaser and/or subsequent purchasers of
Residential Mortgage Loans, and various Mortgagors - T & I." The Escrow
Accounts shall be established with an Eligible Institution, in a manner which
shall provide maximum available insurance thereunder. Funds deposited in the
Escrow Account may be drawn on by the Company in accordance with Section 4.07.
The creation of any Escrow Account shall be evidenced by a certification in
the
case of an account established with the Company, or by a letter agreement in
the
case of an account held by a depository other than the Company each in the
forms
attached hereto as Exhibit G. A copy of such certification or letter agreement
shall be furnished to the Purchaser or any subsequent purchaser, upon
request.
The
Company shall deposit in the Escrow Account or Accounts within two (2) Business
Days of Company’s receipt, and retain therein:
|
(i)
|
all
Escrow Payments collected on account of the Mortgage Loans, for the
purpose of effecting timely payment of any such items as required
under
the terms of this Agreement;
|
| (ii) |
all
amounts representing Insurance Proceeds or Condemnation Proceeds
which are
to be applied to the restoration or repair of any Mortgaged Property;
|
| (iii) |
all
payments on account of Buydown Funds or Subsidy Funds;
and
|
| (iv) |
all
Servicing Advances for Mortgagors whose Escrow Payments are insufficient
to cover escrow disbursements.
|
43
The
Company shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 4.07.
The
Company shall be entitled to retain any interest paid on funds deposited in
the
Escrow Account by the depository institution, other than interest on escrowed
funds required by law to be paid to the Mortgagor. To the extent required by
law, the Company shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section
4.07 Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Company
only:
|
(i)
|
to
effect timely payments of ground rents, taxes, assessments, water
rates,
mortgage insurance premiums, condominium charges, fire and hazard
insurance premiums or other items constituting Escrow Payments for
the
related Mortgage;
|
|
(ii)
|
to
reimburse the Company for any Servicing Advances made by the Company
pursuant to Section 4.08 or Section 4.10 with respect to a related
Mortgage Loan, but only from amounts received on the related Mortgage
Loan
which represent late collections of Escrow Payments
thereunder;
|
|
(iii)
|
to
refund to any Mortgagor any funds found to be in excess of the amounts
required under the terms of the related Mortgage
Loan;
|
|
(iv)
|
for
transfer to the Custodial Account and application to reduce the principal
balance of the Mortgage Loan in accordance with the terms of the
related
Mortgage and Mortgage Note;
|
|
(v)
|
for
application to the restoration or repair of the Mortgaged Property
in
accordance with the procedures outlined in Section
4.14;
|
|
(vi)
|
to
pay to the Company, or any Mortgagor to the extent required by law,
any
interest paid on the funds deposited in the Escrow
Account;
|
|
(vii)
|
to
remove funds inadvertently placed in the Escrow Account by the Company;
|
| (viii) |
to
transfer payment on account of Buydown Funds or Subsidy Fund to the
Custodial Account, as applicable;
and
|
| (ix) |
to
clear and terminate the Escrow Account on the termination of this
Agreement.
|
Section
4.08 Payment
of Taxes, Insurance and Other Charges.
With
respect to each Mortgage Loan, the Company shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of
such
charges (including renewal premiums) and shall effect payment thereof prior
to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account, which shall have been estimated and
accumulated by the Company in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage. The Company assumes full responsibility for
the
timely payment of all such bills and shall effect timely payment of all such
charges irrespective of each Mortgagor's faithful performance in the payment
of
same or the making of the Escrow Payments, and the Company shall make advances
from its own funds to effect such payments.
44
Section
4.09 Protection
of Accounts.
The
Company may transfer the Custodial Account or the Subsidy Account or the Escrow
Account to a different Eligible Institution from time to time and shall provide
the Purchaser with notice of such transfer. The Company 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.
Section
4.10 Maintenance
of Hazard Insurance.
The
Company shall cause to be maintained for each Mortgage Loan hazard insurance
such that all buildings upon the Mortgaged Property are insured by an insurer
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where
the
Mortgaged Property is located, in an amount which is at least equal to the
lesser of (a) 100% of the insurable value, on a replacement cost basis, of
the
improvements on the related Mortgaged Property and (b) the greater of (i) the
outstanding principal balance of the Mortgage Loan and (ii) an amount such
that
the proceeds of such insurance shall be sufficient to prevent the application
to
the Mortgagor or the loss payee of any coinsurance clause under the policy.
In
the event a hazard insurance policy shall be in danger of being terminated,
or
in the event the insurer shall cease to be acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, the Company shall notify the Purchaser and the related Mortgagor, and
shall
use its best efforts, as permitted by applicable law, to obtain from another
qualified insurer a replacement hazard insurance policy substantially and
materially similar in all respects to the original policy. In no event, however,
shall a Mortgage Loan be without a hazard insurance policy at any time, subject
only to Section 4.11 hereof.
If
upon
origination of the Mortgage Loan, the related Mortgaged Property was located
in
an area identified by the Flood Emergency Management Agency as having special
flood hazards (and such flood insurance has been made available) the Company
shall cause to be maintained a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance Administration is in effect
with a generally acceptable insurance carrier acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac in an amount representing coverage equal to the lesser of (i) the
minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under
the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the Company determines in accordance with the
applicable law and pursuant to the ▇▇▇▇▇▇ Mae Seller/Servicer Guide, that the
Mortgaged Property is located in a special flood hazard area and is not covered
by flood insurance meeting the requirements of the Flood Disaster Protection
Act
of 1973, as amended, the Company shall notify the related Mortgagor that they
must obtain such flood insurance coverage and if the Mortgagor fails to provide
proof of such coverage within forty-five (45) days of such notice, the Company
shall force place the required flood insurance on the Mortgagor's
behalf.
45
If
a
Mortgage is secured by a unit in a condominium project, the Company shall verify
that the coverage required of the owner's association, including hazard, flood,
liability, and fidelity coverage, is being maintained in accordance with then
current ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac requirements, and secure from the owner's
association its agreement to notify the Company promptly of any change in the
insurance coverage or of any condemnation or casualty loss that may have a
material effect on the value of the Mortgaged Property as security.
In
the
event that any Purchaser or the Company shall determine that the Mortgaged
Property should be insured against loss or damage by hazards and risks not
covered by the insurance required to be maintained by the Mortgagor pursuant
to
the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the required amount of coverage for the Mortgaged Property
and if the Mortgagor does not obtain such coverage, the Company shall
immediately force place the required coverage on the Mortgagor’s
behalf.
All
policies required hereunder shall name the Company as loss payee and shall
be
endorsed with standard or union mortgagee clauses, without contribution, which
shall provide for at least thirty (30) days prior written notice of any
cancellation, reduction in amount or material change in coverage.
The
Company shall not interfere with the Mortgagor's freedom of choice in selecting
either his insurance carrier or agent, provided, however, that the Company
shall
not accept any such insurance policies from insurance companies unless such
companies are acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and are licensed to
do
business in the jurisdiction in which the Mortgaged Property is located. The
Company shall determine that such policies provide sufficient risk coverage
and
amounts, that they insure the property owner, and that they properly describe
the property address.
Pursuant
to Section 4.04, any amounts collected by the Company under any such policies
(other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the related Mortgaged Property, or property acquired
in
liquidation of the Mortgage Loan, or to be released to the Mortgagor, in
accordance with the Company's normal servicing procedures as specified in
Section 4.14) shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05.
Section
4.11 Maintenance
of Mortgage Impairment Insurance.
46
In
the
event that the Company shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage
on
all of the Mortgage Loans, then, to the extent such policy provides coverage
in
an amount equal to the amount required pursuant to Section 4.10 and otherwise
complies with all other requirements of Section 4.10, it shall conclusively
be
deemed to have satisfied its obligations as set forth in Section 4.10. The
Company shall prepare and make any claims on the blanket policy as deemed
necessary by the Company in accordance with Accepted Servicing Practices. Any
amounts collected by the Company under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section 4.05. Such policy may contain a deductible clause, in which case,
in
the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 4.10, and there shall have been a
loss
which would have been covered by such policy, the Company shall deposit in
the
Custodial Account at the time of such loss the amount not otherwise payable
under the blanket policy because of such deductible clause, such amount to
be
deposited from the Company's funds, without reimbursement therefor. Upon request
of the Purchaser, the Company shall cause to be delivered to such Purchaser
a
certificate of insurance and a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to such Purchaser.
Section
4.12 Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Company shall maintain with responsible companies, at its own expense, a blanket
Fidelity Bond and an Errors and Omissions Insurance Policy, with broad coverage
on all officers, employees or other Persons acting in any capacity requiring
such Persons to handle funds, money, documents or papers relating to the
Mortgage Loans ("Company Employees"). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker's Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Company against losses in connection with
the
release or satisfaction of a Mortgage Loan without having obtained payment
in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth
in
this Agreement. The minimum coverage under any such Fidelity Bond and Errors
and
Omissions Insurance Policy shall be acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Upon the request of any Purchaser, the Company shall cause to be delivered
to
such Purchaser a certificate of insurance for such Fidelity Bond and Errors
and
Omissions Insurance Policy and a statement from the surety and the insurer
that
such Fidelity Bond and Errors and Omissions Insurance Policy shall in no event
be terminated or materially modified without thirty (30) days' prior written
notice to the Purchaser.
Section
4.13 Inspections.
If
any
Mortgage Loan is more than sixty (60) days delinquent, the Company shall inspect
the Mortgaged Property and shall conduct subsequent inspections in accordance
with ▇▇▇▇▇▇ Mae or Accepted Servicing Practices or as may be required by the
primary mortgage guaranty insurer. The Company shall produce a report of each
such inspection upon written request by the Purchaser.
47
Section
4.14 Restoration
of Mortgaged Property.
The
Company need not obtain the approval of the Purchaser prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. For claims greater than $15,000,
at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
(i)
the
Company shall receive satisfactory independent verification of completion of
repairs and issuance of any required approvals with respect
thereto;
(ii)
the
Company shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics' and materialmen's liens;
(iii)
the
Company shall verify that the Mortgage Loan is not in default; and
(iv)
pending repairs or restoration, the Company shall place the Insurance Proceeds
or Condemnation Proceeds in the Escrow Account.
If
the
Purchaser is named as an additional loss payee, the Company is hereby empowered
to endorse any loss draft issued in respect of such a claim in the name of
the
Purchaser.
Section
4.15 Maintenance
of PMI Policy; Claims.
Except
for the Pledged Asset Mortgage Loans, with respect to each Mortgage Loan with
an
LTV greater than 80% at the time of origination, the Company shall, without
any
cost to the Purchaser, maintain or cause the Mortgagor to maintain in full
force
and effect a PMI Policy insuring that portion of the Mortgage Loan over 78%
of
value until terminated pursuant to the Homeowners Protection Act of 1998, 12
USC
§4901, et seq. In the event that such PMI Policy shall be terminated other than
as required by law, the Company shall obtain from another Qualified Insurer
a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated PMI Policy. If the insurer shall cease to be a
Qualified Insurer, the Company shall determine whether recoveries under the
PMI
Policy are jeopardized for reasons related to the financial condition of such
insurer, it being understood that the Company shall in no event have any
responsibility or liability for any failure to recover under the PMI Policy
for
such reason. If the Company determines that recoveries are so jeopardized,
it
shall notify the Purchaser and the Mortgagor, if required, and obtain from
another Qualified Insurer a replacement insurance policy. The Company shall
not
take any action which would result in noncoverage under any applicable PMI
Policy of any loss which, but for the actions of the Company would have been
covered thereunder. In connection with any assumption or substitution agreement
entered into or to be entered into pursuant to Section 6.01, the Company shall
promptly notify the insurer under the related PMI Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
PMI
Policy and shall take all actions which may be required by such insurer as
a
condition to the continuation of coverage under such PMI Policy. If such PMI
Policy is terminated as a result of such assumption or substitution of
liability, the Company shall obtain a replacement PMI Policy as provided
above.
48
In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
PMI Policy in a timely fashion in accordance with the terms of such PMI Policy
and, in this regard, to take such action as shall be necessary to permit
recovery under any PMI Policy respecting a defaulted Mortgage Loan. Pursuant
to
Section 4.04, any amounts collected by the Company under any PMI Policy shall
be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
Any
premiums payable on LPMI Policies will be paid from the Company’s own funds
without reimbursement.
Section
4.16 Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the Purchaser or the Purchaser's designee, or in the event the Purchaser
is not authorized or permitted to hold title to real property in the state
where
the REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Company from any attorney
duly licensed to practice law in the state where the REO Property is located.
The Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the
Purchaser.
The
Company shall manage, conserve, protect and operate each REO Property for the
Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for
its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same
(and
may temporarily rent the same for a period not greater than one year, except
as
otherwise provided below) on such terms and conditions as the Company deems
to
be in the best interest of the Purchaser.
The
Company shall use its best efforts to dispose of the REO Property as soon as
possible and shall sell such REO Property in any event prior to the close of
the
third calendar year beginning after the year in which title has been taken
to
such REO Property, unless(i) a REMIC election has not been made with respect
to
the arrangement under which the Mortgage Loans and the REO Property are held,
and (ii) the Company determines that a longer period is necessary for the
orderly liquidation of such REO Property. If a period longer than three years
is
permitted under the foregoing sentence and is necessary to sell any REO
Property, (i) the Company shall report monthly to the Purchaser as to the
progress being made in selling such REO Property and (ii) if a purchase money
mortgage is taken in connection with such sale, such purchase money mortgage
shall name the Company as mortgagee, and such purchase money mortgage shall
not
be held pursuant to this Agreement, but instead a separate participation
agreement among the Company and Purchaser shall be entered into with respect
to
such purchase money mortgage.
49
The
Company shall also maintain on each REO Property fire and hazard insurance
with
extended coverage in amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability insurance
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required
above.
The
disposition of REO Property shall be carried out by the Company at such price,
and upon such terms and conditions, as the Company deems to be in the best
interests of the Purchaser. The proceeds of sale of the REO Property shall
be
promptly deposited in the Custodial Account. As soon as practical thereafter
the
expenses of such sale shall be paid and the Company shall reimburse itself
for
any related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to Section 5.03. On the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Purchaser.
The
Company shall withdraw from the Custodial Account in accordance with Section
4.05, the funds necessary for the proper operation management and maintenance
of
the REO Property, including the cost of maintaining any hazard insurance
pursuant to Section 4.10 and the fees of any managing agent of the Company,
or
the Company itself. The Company shall make monthly distributions on each
Remittance Date to the Purchaser of the net cash flow from the REO Property
(which shall equal the revenues from such REO Property net of the expenses
described in this Section 4.16 and of any reserves reasonably required from
time
to time to be maintained to satisfy anticipated liabilities for such
expenses).
Section
4.17 Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 5.02, the Company shall furnish
to the Purchaser on or before the Remittance Date each month a statement with
respect to any REO Property covering the operation of such REO Property for
the
previous month and the Company's efforts in connection with the sale of such
REO
Property and any rental of such REO Property incidental to the sale thereof
for
the previous month. That statement shall be accompanied by such other
information as the Purchaser shall reasonably request.
Section
4.18 Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Purchaser pursuant to a deed in lieu of foreclosure, the Company shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged
Property.
Section
4.19 Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Company
shall
report such foreclosure or abandonment as required pursuant to Section 6050J
of
the Code. The Company shall file information reports with respect to the receipt
of mortgage interest received in a trade or business and information returns
relating to cancellation of indebtedness income with respect to any Mortgaged
Property as required by the Code. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by the
Code.
50
Section
4.20 Notification
of Adjustments.
With
respect to each Mortgage Loan, the Company shall adjust the Mortgage Interest
Rate on the related Interest Rate Adjustment Date in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note.
The
Company shall execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate adjustments. Upon the discovery by the Company or
the
receipt of notice from the Purchaser that the Company has failed to adjust
a
Mortgage Interest Rate in accordance with the terms of the related Mortgage
Note, the Company shall immediately deposit in the Custodial Account from its
own funds the amount of any interest loss or deferral caused the Purchaser
thereby.
Section
4.21 Confidentiality/Protection
of Customer Information.
The
Company shall keep confidential and shall not divulge to any party, without
the
Purchaser's prior written consent, the price paid by the Purchaser for the
Mortgage Loans, except to the extent that it is reasonable and necessary for
the
Company to do so in working with legal counsel, auditors, taxing authorities
or
other governmental agencies. Each party agrees that it shall comply with all
applicable laws and regulations regarding the privacy or security of Customer
Information and shall maintain appropriate administrative, technical and
physical safeguards to protect the security, confidentiality and integrity
of
Customer Information, including maintaining security measures designed to meet
the objectives of the Interagency Guidelines Establishing Standards for
Safeguarding Customer Information, 66 Fed. Reg. 8616 (the “Interagency
Guidelines”). For purposes of this Section, the term “Customer Information”
shall have the meaning assigned to it in the Interagency
Guidelines.
Section
4.22 Fair
Credit Reporting Act
The
Company, in its capacity as servicer for each Mortgage Loan, shall furnish,
on a
monthly basis, complete information on the related borrower credit files to
Equifax, Experian and Trans Union Credit Information Company, in accordance
with
the Fair Credit Reporting Act and its implementing regulations.
Section
4.23 Establishment
of and Deposits to Subsidy Account.
(a) The
Company shall segregate and hold all Subsidy Funds collected and received
pursuant to the Subsidy Loans separate and apart from any of its own funds
and
general assets and shall establish and maintain one or more Subsidy Accounts,
in
the form of time deposit or demand accounts, titled “▇▇▇▇▇ Fargo Bank, N.A., in
trust for the Purchaser, its successors or assigns, and/or subsequent purchasers
of Residential Mortgage Loans, and various Mortgagors.” The Subsidy Account
shall be an eligible deposit account established with an eligible institution.
51
(b) The
Company shall, from time to time, withdraw funds from the Subsidy Account for
the following purposes:
|
(i)
|
to
deposit in the Custodial Account in the amounts and in the manner
provided
for in Section 4.04(xi);
|
|
(ii)
|
to
transfer funds to another eligible institution in accordance with
Section
4.09 hereof;
|
(iii) to
withdraw funds deposited in error; and
|
(iv)
|
to
clear and terminate the Subsidy Account upon the termination of this
Agreement.
|
(c) Notwithstanding
anything to the contrary elsewhere in this Agreement, the Company may employ
the
Escrow Account as the Subsidy Account to the extent that the Company can
separately identify any Subsidy Funds deposited therein.
Section
4.24 Application
of Buydown Funds.
With
respect to each Buydown Mortgage Loan, the Company shall have deposited into
the
Escrow Account, no later than the last day of the month, Buydown Funds in an
amount equal to the aggregate undiscounted amount of payments that, when added
to the amount the Mortgagor on such Mortgage Loan is obligated to pay on all
Due
Dates in accordance with the terms of the Buydown Agreement, is equal to the
full scheduled Monthly Payments which are required to be paid by the Mortgagor
under the terms of the related Mortgage Note (without regard to the related
Buydown Agreement as if the Mortgage Loan were not subject to the terms of
the
Buydown Agreement). With respect to each Buydown Mortgage Loan, the Company
will
distribute to the Purchaser on each Remittance Date an amount of Buydown Funds
equal to the amount that, when added to the amount required to be paid on such
date by the related Mortgagor, pursuant to and in accordance with the related
Buydown Agreement, equals the full Monthly Payment that would otherwise be
required to be paid on such Mortgage Loan by the related Mortgagor under the
terms of the related Mortgage Note (as if the Mortgage Loan were not a Buydown
Mortgage Loan and without regard to the related Buydown Agreement).
If
the
Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan during
the
Buydown Period and the Mortgaged Property securing such Buydown Mortgage Loan
is
sold in the liquidation thereof (either by the Company or the insurer under
any
related Primary Insurance Policy) the Company shall, on the Remittance Date
following the date upon which Liquidation Proceeds or REO Disposition proceeds
are received with respect to any such Buydown Mortgage Loan, distribute to
the
Purchaser all remaining Buydown Funds for such Mortgage Loan then remaining
in
the Escrow Account. Pursuant to the terms of each Buydown Agreement, any amounts
distributed to the Purchaser in accordance with the preceding sentence will
be
applied to reduce the outstanding principal balance of the related Buydown
Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan prepays such Mortgage
Loan in its entirety during the related Buydown Period, the Company shall be
required to withdraw from the Escrow Account any Buydown Funds remaining in
the
Escrow Account with respect to such Buydown Mortgage Loan in accordance with
the
related Buydown Agreement. If a principal prepayment by a Mortgagor on a Buydown
Mortgage Loan during the related Buydown Period, together with any Buydown
Funds
then remaining in the Escrow Account related to such Buydown Mortgage Loan,
would result in a principal prepayment of the entire unpaid principal balance
of
the Buydown Mortgage Loan, the Company shall distribute to the Purchaser on
the
Remittance Date occurring in the month immediately succeeding the month in
which
such Principal Prepayment is received, all Buydown Funds related to such
Mortgage Loan so remaining in the Escrow Account, together with any amounts
required to be deposited into the Custodial Account.
52
Section
4.25 Letter
of Credit Compliance.
Notwithstanding
any other provision of this Agreement, the Company shall comply with all the
requirements of any Letter of Credit so as to assure the full benefit of such
Letter of Credit to the Purchaser.
Section
4.26 Letter
of Credit Draws.
The
Company shall take all steps necessary to make draws under any Letter of Credit
in accordance with the provisions thereof and shall draw on each Letter of
Credit all amounts payable thereunder within the time frame required by the
Letter of Credit or such shorter time within which the Company can effect such
draw (not to exceed thirty (30) calendar days) of (i) the date the related
Pledged Asset Mortgage Loan becomes ninetieth (90) days or more delinquent
and (ii) the receipt of notice of non-renewal from the Pledge Holder at any
time
prior to the date that all amounts owed under the related Pledged Asset Mortgage
Loan are less than or equal to 80% of the Appraised Value of the related
Mortgaged Property. The Company shall notify the Purchaser promptly in writing
upon receipt of notice from the Pledge Holder of non-renewal of any Letter
of
Credit. Upon receipt of any amounts as a result of a draw on a Letter of Credit
because of the non-renewal of such Letter of Credit or as a result of the
Pledged Asset Mortgage Loan continuing in default for ninetieth (90) or more
days, the Company shall deposit such amounts in the Custodial Account and such
amount shall be treated as a payment of principal.
Section
4.27 Assignment
of the Letter of Credit.
Notwithstanding
anything to the contrary in this Agreement (including, without limitation,
the
termination or transfer of the servicing rights and/or obligations of the
Company pursuant to Articles X and XI hereof), the Company, as
beneficiary under any Non-Assigned Letters of Credit, shall transfer and assign,
at no cost to the Purchaser, each Non-Assigned Letter of Credit to the Purchaser
in accordance with the provisions thereof within ten (10) days of such
termination or transfer. In addition, the Company shall forward within
one (1) Business Day of receipt any notice received of non-renewal of any
Letter of Credit. Any funds received by the Company from draws on the
Non-Assigned Letters of Credit after the Company is no longer the servicer
hereunder shall be remitted by the Company to the successor servicer for deposit
into the Custodial Account.
53
Section
4.28 Pledge
Holder Defaults.
Upon
a
default under the Letter of Credit by the Pledge Holder, the Company shall
take
possession of the assets securing the Letter of Credit and shall deposit such
assets or the proceeds thereof in the Custodial Account and apply them as a
prepayment of the related Pledged Asset Mortgage Loan. If such default described
in the prior sentence occurs at any time that the Company is no longer the
servicer of the related Pledged Asset Mortgage Loan, the Company shall, upon
knowledge of such default or notice from the successor servicer of such default
with respect to any Non-Assigned Letter of Credit forward such proceeds to
the
successor servicer for deposit into the Custodial Account.
Section
4.29 Use
of
Subservicers and Subcontractors.
The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (a) of this Section 4.29. The Company shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Company under this Agreement or any Reconstitution
Agreement unless the Company complies with the provisions of paragraph (b)
of
this Section 4.29.
(a) It
shall
not be necessary for the Company to seek the consent of the Purchaser or any
Depositor to the utilization of any Subservicer. The Company shall cause any
Subservicer used by the Company (or by any Subservicer) for the benefit of
the
Purchaser and any Depositor to comply with the provisions of this Section 4.29
and with Sections 6.04, 6.06, 9.01(d)(iii), 9.01(d)(v), 9.01(d)(vi) and 9.01(e)
of this Agreement to the same extent as if such Subservicer were the Company,
and to provide the information required with respect to such Subservicer under
Section 9.01(d)(iv) of this Agreement. The Company shall be responsible for
obtaining from each Subservicer and delivering to the Purchaser and any
Depositor any servicer compliance statement required to be delivered by such
Subservicer under Section 6.04 and any assessment of compliance and attestation
required to be delivered by such Subservicer under Section 6.06 and any
certification required to be delivered to the Person that will be responsible
for signing the Sarbanes Certification under Section 6.06 as and when required
to be delivered.
(b) It
shall
not be necessary for the Company to seek the consent of the Purchaser or any
Depositor to the utilization of any Subcontractor. The Company shall promptly
upon request provide to the Purchaser and any Depositor (or any designee of
the
Depositor, such as a master servicer or administrator) a written description
(in
form and substance satisfactory to the Purchaser and such Depositor) of the
role
and function of each Subcontractor utilized by the Company or any Subservicer,
specifying (i) the identity of each such Subcontractor, (ii) which (if any)
of
such Subcontractors are “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (ii) of this paragraph.
54
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.06 and 9.01(e) of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance
and
attestation required to be delivered by such Subcontractor under Section 6.06,
in each case as and when required to be delivered.
ARTICLE
V
PAYMENTS
TO PURCHASER
Section
5.01 Remittances.
On
each
Remittance Date the Company shall remit by wire transfer of immediately
available funds to the Purchaser (a) all amounts deposited in the Custodial
Account as of the close of business on the Determination Date (net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.05),
plus (b) all amounts, if any, which the Company is obligated to distribute
pursuant to Section 5.03, minus (c) any amounts attributable to Principal
Prepayments received after the applicable Principal Prepayment Period which
amounts shall be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii);
minus (d) any amounts attributable to Monthly Payments collected but due on
a
Due Date or Dates subsequent to the first day of the month of the Remittance
Date, and minus (e) any amounts attributable to Buydown Funds being held in
the
Custodial Account, which amounts shall be remitted on the Remittance Date next
succeeding the Due Period for such amounts.
With
respect to any remittance received by the Purchaser after the second
(2nd)
Business Day following the Business Day on which such payment was due, the
Company shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Company on the date such late payment is made and shall cover
the
period commencing with the day following such second (2nd)
Business Day and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with the distribution
payable on the next succeeding Remittance Date. The payment by the Company
of
any such interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Company.
55
Section
5.02 Statements
to Purchaser.
Not
later
than the tenth (10th)
calendar day of the month, the Company shall furnish in an agreed upon
electronic format to the Purchaser or its designee, a monthly loan level
scheduled remittance advice, trial balance report and payment and payoff
activity detail, as to the period ending on the last day of the preceding
month.
Section
5.03 Monthly
Advances by Company.
On
the
Business Day immediately preceding each Remittance Date, the Company shall
deposit in the Custodial Account from its own funds or from amounts held for
future distribution an amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close
of
business on the immediately preceding Determination Date or which were deferred
pursuant to Section 4.01. Any amounts held for future distribution and so used
shall be replaced by the Company by deposit in the Custodial Account on or
before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Purchaser required to be
made
on such Remittance Date. The Company's obligation to make such Monthly Advances
as to any Mortgage Loan will continue through the last Monthly Payment due
prior
to the payment in full of the Mortgage Loan, or through the last Remittance
Date
prior to the Remittance Date for the distribution of all Liquidation Proceeds
and other payments or recoveries (including REO Disposition Proceeds, Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided,
however, that such obligation shall cease if the Company determines, in its
sole
reasonable opinion, that advances with respect to such Mortgage Loan are
non-recoverable by the Company from Liquidation Proceeds, REO Disposition
Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise with respect
to a particular Mortgage Loan. In the event that the Company determines that
any
such advances are non-recoverable, the Company shall provide the Purchaser
with
a certificate signed by two officers of the Company evidencing such
determination. The Company shall not have an obligation to make such Monthly
Advances as to any Mortgage Loan with respect to shortfalls relating to the
Servicemembers Civil Relief Act or similar state and local laws.
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.01 Transfers
of Mortgaged Property.
The
Company shall use its best efforts to enforce any "due-on-sale" provision
contained in any Mortgage or Mortgage Note and to deny assumption by the Person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Company shall, to the extent
it
has knowledge of such conveyance, exercise its rights to accelerate the maturity
of such Mortgage Loan under the "due-on-sale" clause applicable thereto,
provided, however, that the Company shall not exercise such rights if prohibited
by law from doing so or if the exercise of such rights would impair or threaten
to impair any recovery under the related PMI Policy, if any.
56
If
the
Company reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause, the Company shall enter into (i) an assumption and
modification agreement with the Person to whom such property has been conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and the
original Mortgagor remains liable thereon or (ii) in the event the Company
is
unable under applicable law to require that the original Mortgagor remain liable
under the Mortgage Note and the Company has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is
released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage
Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser’s consent.
To
the
extent that any Mortgage Loan is assumable, the Company shall inquire diligently
into the credit worthiness of the proposed transferee, and shall use the
underwriting criteria for approving the credit of the proposed transferee which
are used with respect to underwriting mortgage loans of the same type as the
Mortgage Loan. If the creditworthiness of the proposed transferee does not
meet
such underwriting criteria, the Company diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate
the maturity of the Mortgage Loan.
Section
6.02 Satisfaction
of Mortgages and Release of Retained Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Company of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Company shall notify the Purchaser in the Monthly Remittance
Advice as provided in Section 5.02, and may request the release of any
applicable Mortgage Loan Documents.
If
the
Company satisfies or releases a Mortgage without first having obtained payment
in full of the indebtedness secured by the Mortgage (other than a modification
or liquidation of the Mortgaged Property pursuant to the terms of this
Agreement) or should the Company otherwise prejudice any rights the Purchaser
may have under the mortgage instruments, upon written demand of the Purchaser,
the Company shall repurchase the related Mortgage Loan at the Repurchase Price
by deposit thereof in the Custodial Account within two (2) Business Days of
receipt of such demand by the Purchaser. The Company shall maintain the Fidelity
Bond and Errors and Omissions Insurance Policy as provided for in Section 4.12
insuring the Company against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth
herein.
Section
6.03 Servicing
Compensation.
57
As
compensation for its services hereunder, the Company shall be entitled to retain
from the interest payment the amount of its Servicing Fee. The Servicing Fee
shall be payable monthly and shall be computed on the basis of the same unpaid
principal balance and for the period respecting which any related interest
payment on a Mortgage Loan is received. The obligation of the Purchaser to
pay
the Servicing Fee is limited to, and payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to
the
extent permitted by Section 4.05) of such Monthly Payments.
Additional
servicing compensation in the form of assumption fees, to the extent provided
in
Section 6.01, and late payment charges shall be retained by the Company to
the
extent not required to be deposited in the Custodial Account. The Company shall
be required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement thereof except
as specifically provided for herein.
Section
6.04 Annual
Statements as to Compliance.
On
or
before March 1st
of each
calendar year, commencing in 2007, the Company shall deliver to the Purchaser
and any Depositor a statement of compliance addressed to the Purchaser and
such
Depositor and signed by an authorized officer of the Company, to the effect
that
(a) a review of the Company’s activities during the immediately preceding
calendar year (or applicable portion thereof) and of its performance under
this
Agreement and any applicable Reconstitution Agreement during such period has
been made under such officer’s supervision, and (b) to the best of such
officers’ knowledge, based on such review, the Company has fulfilled all of its
obligations under this Agreement and any applicable Reconstitution Agreement
in
all material respects throughout such calendar year (or applicable portion
thereof) or, if there has been a failure to fulfill any such obligation in
any
material respect, specifically identifying each such failure known to such
officer and the nature and the status thereof.
Section
6.05 Annual
Independent Public Accountants' Servicing Report.
Except
with respect to any Mortgage Loans that are the subject of a Securitization
Transaction, on or before March 1st
of each
calendar year, commencing in 2007, the Company, at its expense, shall cause
a
firm of independent public accountants which is a member of the American
Institute of Certified Public Accountants to furnish a statement to each
Purchaser to the effect that such firm has examined certain documents and
records relating to the servicing of the mortgage loans similar in nature and
that such firm is of the opinion that the provisions of this or similar
agreements have been complied with, and that, on the basis of such examination
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance therewith,
except for (i) such exceptions as such firm shall believe to be immaterial,
and
(ii) such other exceptions as shall be set forth in such statement. By providing
Purchaser a copy of a Uniform Single Attestation Program Report from their
independent public accountant's on an annual basis, Company shall be considered
to have fulfilled its obligations under this Section 6.05.
58
Section
6.06 Report
on Assessment of Compliance and Attestation.
With
respect to any Mortgage Loans that are the subject of a Securitization
Transaction, on or before March 1st
of each
calendar year, commencing in 2007, the Company shall:
| (i) |
deliver
to the Purchaser and any Depositor a report (in form and substance
reasonably satisfactory to the Purchaser and such Depositor) regarding
the
Company’s assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18
and
15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report
shall be addressed to the Purchaser and such Depositor and signed
by an
authorized officer of the Company, and shall address each of the
Servicing
Criteria specified substantially in the form of Exhibit H hereto
delivered
to the Purchaser at the time of any Securitization
Transaction;
|
| (ii) |
deliver
to the Purchaser and any Depositor a report of a registered public
accounting firm reasonably acceptable to the Purchaser and such Depositor
that attests to, and reports on, the assessment of compliance made
by the
Company and delivered pursuant to the preceding paragraph. Such
attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g)
of
Regulation S-X under the Securities Act and the Exchange Act;
|
| (iii) |
cause
each Subservicer and each Subcontractor, determined by the Company
pursuant to Section 4.29(b) to be “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB, to deliver to
the Purchaser and any Depositor an assessment of compliance and
accountants’ attestation as and when provided in this Section 6.06; and
|
| (iv) |
if
requested by the Purchaser or any Depositor not later than February
1 of
the calendar year in which such certification is to be delivered,
deliver
to the Purchaser, any Depositor and any other Person that will be
responsible for signing the certification (a “Sarbanes Certification”)
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act
(pursuant
to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) on behalf of an
asset-backed issuer with respect to a Securitization Transaction
a
certification in the form attached hereto as Exhibit
I.
|
The
Company acknowledges that the parties identified in clause (iv) above may rely
on the certification provided by the Company pursuant to such clause in signing
a Sarbanes Certification and filing such with the Commission. Neither the
Purchaser nor any Depositor will request delivery of a certification under
clause (iv) above unless a Depositor is required under the Exchange Act to
file
an annual report on Form 10-K with respect to an issuing entity whose asset
pool
includes Mortgage Loans.
Each
assessment of compliance provided by a Subservicer pursuant to Section 6.06(i)
shall address each of the Servicing Criteria specified substantially in the
form
of Exhibit H hereto delivered to the Purchaser at the time of any Securitization
Transaction or, in the case of a Subservicer subsequently appointed as such,
on
or prior to the date of such appointment. An assessment of compliance provided
by a Subcontractor pursuant to Section 6.06(iii) need not address any elements
of the Servicing Criteria other than those specified by the Company pursuant
to
Section 4.29.
59
Section
6.07 Remedies.
(i) Any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under Article IX, Sections 4.29,
6.04 or 6.06, or any breach by the Company of a representation or warranty
set
forth in Section 9.01(d)(vi)(A), or in a writing furnished pursuant to Section
9.01(d)(vi)(B) and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured by
such
closing date, or any breach by the Company of a representation or warranty
in a
writing furnished pursuant to Section 9.01(d)(vi)(B) to the extent made as
of a
date subsequent to such closing date, shall, except as provided in sub-clause
(ii) of this Section, immediately and automatically, without notice or grace
period, constitute an Event of Default with respect to the Company under this
Agreement and any applicable Reconstitution Agreement, and shall entitle the
Purchaser or Depositor, as applicable, in its sole discretion to terminate
the
rights and obligations of the Company as servicer under this Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement or any applicable Reconstitution Agreement to the
contrary) of any compensation to the Company; provided that to the extent that
any provision of this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or obligations following
termination of the Company as servicer, such provision shall be given
effect.
(ii) Any
failure by the Company, any Subservicer or any Subcontractor to deliver any
information, report, certification or accountants’ letter when and as required
under Sections 6.04 or 6.06, including (except as provided below) any failure
by
the Company to identify any Subcontractor “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB, which continues
unremedied for ten (10) calendar days after the date on which such information,
report, certification or accountants’ letter was required to be delivered shall
constitute an Event of Default with respect to the Company under this Agreement
and any applicable Reconstitution Agreement, and shall entitle the Purchaser
or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Company under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement to the contrary) of any compensation to the Company; provided that
to
the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
Neither
the Purchaser nor any Depositor shall be entitled to terminate the rights and
obligations of the Company pursuant to this Section 6.07(ii) if a failure of
the
Company to identify a Subcontractor “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB was attributable solely to
the
role or functions of such Subcontractor with respect to mortgage loans other
than the Mortgage Loans.
60
(iii) The
Company shall promptly reimburse the Purchaser (or any designee of the
Purchaser, such as a master servicer) and any Depositor, as applicable, for
all
reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the Mortgage Loans to
a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance or
injunctive relief.
Section
6.08 Right
to Examine Company Records.
The
Purchaser, or its designee, shall have the right to examine and audit any and
all of the books, records, or other information of the Company, whether held
by
the Company or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times
as
may be reasonable under applicable circumstances, upon reasonable advance
notice. The Purchaser shall pay its own expenses associated with such
examination.
Section
6.09 Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Company shall not take any action,
cause the REMIC to take any action or fail to take any action that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of the REMIC as a REMIC or (ii) result in the imposition of a tax
upon the REMIC (including but not limited to the tax on “prohibited
transactions” as defined in Section 860F(a)(2) of the Code and the tax on
“contributions” to a REMIC set forth in Section 860G(d) of the Code) unless the
Company has received an Opinion of Counsel (at the expense of the party seeking
to take such action) to the effect that the contemplated action will not
endanger such REMIC status or result in the imposition of any such
tax.
ARTICLE
VII
COMPANY
TO COOPERATE
Section
7.01 Provision
of Information.
During
the term of this Agreement, the Company shall furnish to the Purchaser such
periodic, special, or other reports or information, and copies or originals
of
any documents contained in the Servicing File for each Mortgage Loan provided
for herein. All other special reports or information not provided for herein
as
shall be necessary, reasonable, or appropriate with respect to the Purchaser
or
any regulatory agency will be provided at the Purchaser’s expense. All such
reports, documents or information shall be provided by and in accordance with
all reasonable instructions and directions which the Purchaser may
give.
61
The
Company shall execute and deliver all such instruments and take all such action
as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this
Agreement.
Section
7.02 Financial
Statements; Servicing Facility.
In
connection with marketing the Mortgage Loans, the Purchaser may make available
to a prospective Purchaser a Consolidated Statement of Operations of the Company
for the most recently completed two (2) fiscal years for which such a statement
is available, as well as a Consolidated Statement of Condition at the end of
the
last two (2) fiscal years covered by such Consolidated Statement of Operations.
The Company, upon request, also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on behalf
of the Company (and are available upon request to members or stockholders of
the
Company or to the public at large).
The
Company also shall make available to Purchaser or prospective Purchaser a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Company or the financial
statements of the Company, and to permit any prospective purchaser to inspect
the Company's servicing facilities for the purpose of satisfying such
prospective purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE
VIII
THE
COMPANY
Section
8.01 Indemnification;
Third Party Claims.
The
Company shall indemnify the Purchaser and hold it harmless against any and
all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Purchaser may sustain in any way related to the failure of the Company
to perform its duties, comply with its obligations and covenants under the
terms
of this Agreement and service the Mortgage Loans all in strict compliance with
the terms of this Agreement. The Company immediately shall notify the Purchaser
if a claim is made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the Purchaser) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment
or
decree which may be entered against it or the Purchaser in respect of such
claim. The Company shall follow any written instructions received from the
Purchaser in connection with such claim. The Purchaser promptly shall reimburse
the Company for all amounts advanced by it pursuant to the preceding sentence
except when the claim is in any way related to the Company's indemnification
pursuant to Section 3.03, or the failure of the Company to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement.
Section
8.02 Merger
or Consolidation of the Company.
62
The
Company shall keep in full effect its existence, rights and franchises and
shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its
duties under this Agreement.
Any
Person into which the Company may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company,
shall
be the successor of the Company hereunder, without the execution or filing
of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however, that the successor
or
surviving Person shall be an institution (i) having a net worth of not less
than
$15,000,000 and (ii) which is a ▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇ Mac-approved seller/servicer
in good standing. Furthermore, in the event the Company transfers or otherwise
disposes of all or substantially all of its assets to an affiliate of the
Company, such affiliate shall satisfy the condition above, and shall also be
fully liable to the Purchaser for all of the Company's obligations and
liabilities hereunder.
Section
8.03 Limitation
on Liability of Company and Others.
Neither
the Company nor any of the directors, officers, employees or agents of the
Company shall be under any liability to the Purchaser for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Company or any such Person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement
or
any other liability which would otherwise be imposed under this Agreement.
The
Company and any director, officer, employee or agent of the Company may rely
in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Company
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans
in
accordance with this Agreement and which in its opinion may involve it in any
expense or liability, provided, however, that the Company may, with the consent
of the Purchaser, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the Company shall be entitled to reimbursement from
the
Purchaser of the reasonable legal expenses and costs of such
action.
Section
8.04 Limitation
on Resignation and Assignment by Company.
The
Purchaser has entered into this Agreement with the Company and subsequent
purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Company, and the representations as to the adequacy of its
servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore,
the
Company shall neither assign this Agreement or the servicing rights hereunder
or
sell or otherwise dispose of all of its property or assets without the prior
written consent of the Purchaser, which consent shall not be unreasonably
withheld by the Purchaser, with the understanding that any successor servicer
meet the requirements of this Agreement and be acceptable to the Rating Agencies
and trustee upon reconstitution.
63
The
Company shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced
by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided
in
Section 12.01.
Without
in any way limiting the generality of this Section 8.04, in the event that
the
Company either shall assign this Agreement or the servicing responsibilities
hereunder or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written consent of the Purchaser, then
the
Purchaser shall have the right to terminate this Agreement upon notice given
as
set forth in Section 10.01, without any payment of any penalty or damages and
without any liability whatsoever to the Purchaser or any third
party.
ARTICLE
IX
SECURITIZATION
TRANSACTIONS
Section
9.01 Removal
of Mortgage Loans from Inclusion Under this Agreement Upon an Agency Sale,
Whole
Loan Transfer or Securitization Transaction
The
Purchaser and the Company agree that with respect to some or all of the Mortgage
Loans, the Purchaser, at its sole option, may effect Whole Loan Transfers,
Agency Sales or Securitization Transactions, retaining the Company as the
servicer thereof or subservicer if a master servicer is employed, or as
applicable the "seller/servicer." On the Reconstitution Date, the Mortgage
Loans
transferred may cease to be covered by this Agreement; provided, however, that,
in the event that any Mortgage Loan transferred pursuant to this Section 9.01
is
rejected by the transferee, the Company shall continue to service such rejected
Mortgage Loan on behalf of the Purchaser in accordance with the terms and
provisions of this Agreement.
The
Company shall cooperate with the Purchaser in connection with each Whole Loan
Transfer, Agency Sale or Securitization Transaction in accordance with this
Section 9.01. In connection therewith:
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(a)
|
The
Company shall make all representations and warranties made herein
with
respect to the Mortgage Loans as of the Closing Date and with respect
to
the Company itself as of the closing date of each Whole Loan Transfer,
Agency Sale or Securitization
Transaction;
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64
| (b) |
The
Company shall negotiate in good faith and execute any seller/servicer
agreements required to effectuate the foregoing provided such agreements
create no greater obligation or cost on the part of the Company than
otherwise set forth in this
Agreement
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|
(c)
|
The
Company shall provide such additional representations, warranties,
covenants, opinions of counsel or certificates of officers of the
Company
as are reasonably believed necessary by the trustee, any rating agency
or
the Purchaser, as the case may be, in connection with such Whole
Loan
Transfers, Agency Sales or Securitization Transactions. The Purchaser
shall pay all third party costs associated with the preparation of
such
information. The Company shall execute any seller/servicer agreements
required within a reasonable period of time after receipt of such
seller/servicer agreements which time shall be sufficient for the
Company
and Company's counsel to review such seller/servicer agreements.
Under
this Agreement, the Company shall retain a Servicing Fee for each
Mortgage
Loan at the Servicing Fee Rate.
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|
(d)
|
In
connection with any Securitization Transaction, the Company shall
(1)
within five (5) Business Days following request by the Purchaser
or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable,
cause each Third-Party Originator and each Subservicer to provide),
in
writing and in form and substance reasonably satisfactory to the
Purchaser
and such Depositor, the information and materials specified in paragraphs
(i), (ii), (iii) and (vii) of this subsection (d), and (2) as promptly
as
practicable following notice to or discovery by the Company, provide
to
the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (iv) of this subsection
(d).
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|
(i)
|
If
so requested by the Purchaser or any Depositor, the Company shall
provide
such information regarding (1) the Company, as originator of the
Mortgage
Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (2) each Third-Party Originator, and (3) as applicable,
each Subservicer, as is requested for the purpose of compliance with
Items
1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such information
shall include, at a minimum:
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|
(A)
|
the
originator’s form of organization;
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|
(B)
|
a
description of the originator’s origination program and how long the
originator has been engaged in originating residential mortgage loans,
which description shall include a discussion of the originator’s
experience in originating mortgage loans of a similar type as the
Mortgage
Loans; information regarding the size and composition of the originator’s
origination portfolio; and information that may be material, in the
good
faith judgment of the Purchaser or any Depositor, to an analysis
of the
performance of the Mortgage Loans, including the originators’
credit-granting or underwriting criteria for mortgage loans of similar
type(s) as the Mortgage Loans and such other information as the Purchaser
or any Depositor may reasonably request for the purpose of compliance
with
Item 1110(b)(2) of Regulation
AB;
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65
|
(C)
|
a
description of any material legal or governmental proceedings pending
(or
known to be contemplated) against the Company, each Third-Party Originator
and each Subservicer; and
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|
(D)
|
a
description of any affiliation or relationship (of a type described
in
Item 1119 of Regulation AB) between the Company, each Third-Party
Originator, each Subservicer and any of the following parties to
a
Securitization Transaction, as such parties are identified to the
Company
by the Purchaser or any Depositor in writing in advance of a
Securitization Transaction:
|
(1)
the
sponsor;
(2) the
depositor;
(3) the
issuing entity;
(4) any
servicer;
(5) any
trustee;
(6) any
originator;
(7) any
significant obligor;
(8) any
enhancement or support provider; and
(9) any
other
material transaction party.
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(ii)
|
If
so requested by the Purchaser or any Depositor, the Company shall
provide
(or, as applicable, cause each Third-Party Originator to provide)
Static
Pool Information with respect to the mortgage loans (of a similar
type as
the Mortgage Loans, as reasonably identified by the Purchaser as
provided
below) originated by (1) the Company, if the Company is an originator
of
Mortgage Loans (including as an acquirer of Mortgage Loans from a
Qualified Correspondent), and/or (2) each Third-Party Originator.
Such
Static Pool Information shall be prepared by the Company (or Third-Party
Originator) on the basis of its reasonable, good faith interpretation
of
the requirements of Item 1105(a)(1)-(3) of Regulation AB. To the
extent
that there is reasonably available to the Company (or Third-Party
Originator) Static Pool Information with respect to more than one
mortgage
loan type, the Purchaser or any Depositor shall be entitled to specify
whether some or all of such information shall be provided pursuant
to this
paragraph. The content of such Static Pool Information may be in
the form
customarily provided by the Company, and need not be customized for
the
Purchaser or any Depositor. Such Static Pool Information for each
vintage
origination year or prior securitized pool, as applicable, shall
be
presented in increments no less frequently than quarterly over the
life of
the mortgage loans included in the vintage origination year or prior
securitized pool. The most recent periodic increment must be as of
a date
no later than 135 days prior to the date of the prospectus or other
offering document in which the Static Pool Information is to be included
or incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record
of the
information provided, such as a portable document format (pdf) file,
or
other such electronic format reasonably required by the Purchaser
or the
Depositor, as applicable.
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66
Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an omission
to include therein information required to be provided pursuant to such
paragraph), the Company shall provide corrected Static Pool Information to
the
Purchaser or any Depositor, as applicable, in the same format in which Static
Pool Information was previously provided to such party by the
Company.
If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense of
the
requesting party (to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon procedures letters
of certified public accountants reasonably acceptable to the Purchaser or
Depositor, as applicable, pertaining to Static Pool Information relating to
prior securitized pools for securitizations closed on or after January 1, 2006
or, in the case of Static Pool Information with respect to the Company’s or
Third-Party Originator’s originations or purchases, to calendar months
commencing January 1, 2006, as the Purchaser or such Depositor shall reasonably
request. Such letters shall be addressed to and be for the benefit of such
parties as the Purchaser or such Depositor shall designate, which may include,
by way of example, any sponsor, any Depositor and any broker dealer acting
as
underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction. Any such statement or letter may take the form
of a
standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
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(iii)
|
If
so requested by the Purchaser or any Depositor, the Company shall
provide
such information regarding the Company, as servicer of the Mortgage
Loans,
and each Subservicer (each of the Company and each Subservicer, for
purposes of this paragraph, a “Servicer”), as is requested for the purpose
of compliance with Items 1108 of Regulation AB. Such information
shall
include, at a minimum:
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|
(A)
|
the
Servicer’s form of
organization;
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67
|
(B)
|
a
description of how long the Servicer has been servicing residential
mortgage loans; a general discussion of the Servicer’s experience in
servicing assets of any type as well as a more detailed discussion
of the
Servicer’s experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution Agreements;
information regarding the size, composition and growth of the Servicer’s
portfolio of residential mortgage loans of a type similar to the
Mortgage
Loans and information on factors related to the Servicer that may
be
material, in the good faith judgment of the Purchaser or any Depositor,
to
any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without limitation:
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|
(1)
|
whether
any prior securitizations of mortgage loans of a type similar to
the
Mortgage Loans involving the Servicer have defaulted or experienced
an
early amortization or other performance triggering event because
of
servicing during the three-year period immediately preceding the
related
Securitization Transaction;
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|
(2)
|
the
extent of outsourcing the Servicer
utilizes;
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|
(3)
|
whether
there has been previous disclosure of material noncompliance with
the
applicable Servicing Criteria with respect to other securitizations
of
residential mortgage loans involving the Servicer as a servicer during
the
three-year period immediately preceding the related Securitization
Transaction;
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|
(4)
|
whether
the Servicer has been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application
of a servicing performance test or trigger; and
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|
(5)
|
such
other information as the Purchaser or any Depositor may reasonably
request
for the purpose of compliance with Item 1108(b)(2) of Regulation
AB;
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|
(C)
|
a
description of any material changes during the three-year period
immediately preceding the related Securitization Transaction to the
Servicer’s policies or procedures with respect to the servicing function
it will perform under this Agreement and any Reconstitution Agreements
for
mortgage loans of a type similar to the Mortgage
Loans;
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68
|
(D)
|
information
regarding the Servicer’s financial condition, to the extent that there is
a material risk that an adverse financial event or circumstance involving
the Servicer could have a material adverse effect on the performance
by
the Company of its servicing obligations under this Agreement or
any
Reconstitution Agreement;
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|
(E)
|
information
regarding advances made by the Servicer on the Mortgage Loans and
the
Servicer’s overall servicing portfolio of residential mortgage loans for
the three-year period immediately preceding the related Securitization
Transaction, which may be limited to a statement by an authorized
officer
of the Servicer to the effect that the Servicer has made all advances
required to be made on residential mortgage loans serviced by it
during
such period, or, if such statement would not be accurate, information
regarding the percentage and type of advances not made as required,
and
the reasons for such failure to
advance;
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|
(F)
|
a
description of the Servicer’s processes and procedures designed to address
any special or unique factors involved in servicing loans of a similar
type as the Mortgage Loans;
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|
(G)
|
a
description of the Servicer’s processes for handling delinquencies,
losses, bankruptcies and recoveries, such as through liquidation
of
mortgaged properties, sale of defaulted mortgage loans or workouts;
and
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|
(H)
|
information
as to how the Servicer defines or determines delinquencies and
charge-offs, including the effect of any grace period, re-aging,
restructuring, partial payments considered current or other practices
with
respect to delinquency and loss
experience.
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|
(iv)
|
If
so requested by the Purchaser or any Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act with respect
to
any class of asset-backed securities, the Company shall (or shall
cause
each Subservicer and Third-Party Originator to) (1) notify the Purchaser
and any Depositor in writing of (A) any material litigation or
governmental proceedings pending against the Company, any Subservicer
or
any Third-Party Originator and (B) any affiliations or relationships
that
develop following the closing date of a Securitization Transaction
between
the Company, any Subservicer or any Third-Party Originator and any
of the
parties specified in Section 9.01(d)(i)(D) (and any other parties
identified in writing by the requesting party) with respect to such
Securitization Transaction, and (2) provide to the Purchaser and
any
Depositor a description of such proceedings, affiliations or
relationships.
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69
|
(v)
|
As
a condition to the succession to the Company or any Subservicer as
servicer or Subservicer under this Agreement or any Reconstitution
Agreement by any Person (i) into which the Company or such Subservicer
may
be merged or consolidated, or (ii) which may be appointed as a successor
to the Company or any Subservicer, the Company shall provide to the
Purchaser and any Depositor, at least fifteen (15) calendar days
prior to
the effective date of such succession or appointment, (x) written
notice
to the Purchaser and any Depositor of such succession or appointment
and
(y) in writing and in form and substance reasonably satisfactory
to the
Purchaser and such Depositor, all information reasonably requested
by the
Purchaser or any Depositor in order to comply with is reporting obligation
under Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
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(vi) (A) The
Company shall be deemed to represent to the Purchaser and to any Depositor,
as
of the date on which information is first provided to the Purchaser under this
Section 9.01(d) that, except as disclosed in writing to the Purchaser or such
Depositor prior to such date: (1) the Company is not aware and has not received
notice that any default, early amortization or other performance triggering
event has occurred as to any other securitization due to any act or failure
to
act of the Company; (2) the Company has not been terminated as servicer in
a
residential mortgage loan securitization, either due to a servicing default
or
to application of a servicing performance test or trigger; (3) no material
noncompliance with the applicable Servicing Criteria with respect to other
securitizations of residential mortgage loans involving the Company as servicer
has been disclosed or reported by the Company; (4) no material changes to the
Company’s policies or procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreement for mortgage
loans
of a type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction; (5) there
are no aspects of the Company’s financial condition that could have a material
adverse effect on the performance by the Company of its servicing obligations
under this Agreement or any Reconstitution Agreement; (6) there are no material
legal or governmental proceedings pending (or known to be contemplated) against
the Company, any Subservicer or any Third-Party Originator; and (7) there are
no
affiliations, relationships or transactions relating to the Company, any
Subservicer or any Third-Party Originator with respect to any Securitization
Transaction and any party thereto identified by the related Depositor of a
type
described in Item 1119 of Regulation AB.
(B) If
so
requested by the Purchaser or any Depositor on any date following the date
on
which information is first provided to the Purchaser or any Depositor under
this
Section 9.01(d), the Company shall, within five (5) Business Days following
such
request, confirm in writing the accuracy of the representations and warranties
set forth in sub clause (A) above or, if any such representation and warranty
is
not accurate as of the date of such request, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting
party.
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|
(vii)
|
In
addition to such information as the Company, as servicer, is obligated
to
provide pursuant to other provisions of this Agreement, if so requested
by
the Purchaser or any Depositor, the Company shall provide such information
reasonably available to the Company regarding the performance or
servicing of the Mortgage Loans as is reasonably required to facilitate
preparation of distribution reports in accordance with Item 1121
of
Regulation AB. Such information shall be provided concurrently with
the
monthly reports otherwise required to be delivered by the servicer
under
this Agreement, commencing with the first such report due not less
than
ten (10) Business Days following such
request.
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|
(e)
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The
Company shall indemnify the Purchaser, each affiliate of the Purchaser,
and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible
for
the preparation, execution or filing of any report required to be
filed
with the Commission with respect to such Securitization Transaction,
or
for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to such Securitization
Transaction; each broker dealer acting as underwriter, placement
agent or
initial purchaser, each Person who controls any of such parties or
the
Depositor (within the meaning of Section 15 of the Securities Act
and
Section 20 of the Exchange Act); and the respective present and former
directors, officers, employees and agents of each of the foregoing
and of
the Depositor, and shall hold each of them harmless from and against
any
losses, damages, penalties, fines, forfeitures, legal fees and expenses
and related costs, judgments, and any other costs, fees and expenses
that
any of them may sustain arising out of or based
upon:
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| (i) |
(A) any
untrue statement of a material fact contained or alleged to be contained
in any information, report, certification, accountants’ letter or other
material provided in written or electronic form under Sections 4.29,
6.04,
6.06, 9.01(c) and (d) by or on behalf of the Company, or provided
under
Sections 4.29, 6.04, 6.06, 9.01(c) and (d) by or on behalf of any
Subservicer, Subcontractor or Third-Party Originator (collectively,
the
“Company Information”), or (B) the omission or alleged omission to state
in the Company Information a material fact required to be stated
in the
Company Information or necessary in order to make the statements
therein,
in the light of the circumstances under which they were made, not
misleading; provided,
by way of clarification, that
clause (B) of this paragraph shall be construed solely by reference
to the
Company Information and not to any other information communicated
in
connection with a sale or purchase of securities, without regard
to
whether the Company Information or any portion thereof is presented
together with or separately from such other
information;
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71
| (ii) |
any
failure by the Company, any Subservicer, any Subcontractor or any
Third-Party Originator to deliver any information, report, certification,
accountants’ letter or other material when and as required under Sections
4.29, 6.04, 6.06, 9.01(c) and (d), including any failure by the
Company to
identify any Subcontractor “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB;
or
|
| (iii) |
any
breach by the Company of a representation or warranty set forth in
Section
9.01(d)(vi)(A) or in a writing furnished pursuant to Section
9.01(d)(vi)(B) and made as of a date prior to the closing date of
the
related Securitization Transaction, to the extent that such breach
is not
cured by such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(d)(vi)(B) to the extent made as of a date subsequent to such
closing
date.
|
In
the
case of any failure of performance described in sub-clause (ii) of this Section
9.01(e), the Company shall promptly reimburse the Purchaser, any Depositor,
as
applicable, and each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Company, any Subservicer,
any
Subcontractor or any Third-Party Originator.
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(f)
|
The
Purchaser and each Person who controls the Purchaser (within the
meaning
of Section 15 of the Securities Act and Section 20 of the Exchange
Act)
shall indemnify the Company, each affiliate of the Company, each
Person
who controls any of such parties or the Company (within the meaning
of
Section 15 of the Securities Act and Section 20 of the Exchange Act)
and
the respective present and former directors, officers, employees
and
agents of each of the foregoing and of the Company, and shall hold
each of
them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments,
and any
other costs, fees and expenses that any of them may sustain arising
out of
or based upon:
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|
(i)
|
any
untrue statement of a material fact contained or alleged to be contained
in any offering materials related to a Securitization Transaction,
including without limitation the registration statement, prospectus,
prospectus supplement, any private placement memorandum, any freewriting
prospectuses, any ABS informational and computational material, any
offering circular, any computational material, and any amendments
or
supplements to the foregoing (collectively, the “Securitization
Materials”) or
|
72
| (ii) |
the
omission or alleged omission to state in the Securitization Materials
a
material fact required to be stated in the Securitization Materials
or
necessary in order to make the statements therein, in the light of
the
circumstances under which they were made, not misleading,
|
but
only
to the extent that such untrue statement or alleged untrue statement or omission
or alleged omission is other than a statement or omission arising out of,
resulting from, or based upon the Company Information.
|
(g)
|
in
the event the Mortgage Loans become subject to a ▇▇▇▇▇▇▇ Mac
securitization, negotiate in good faith the terms of such reconstitution
agreements as may be required.
|
The
Purchaser and the Company acknowledge and agree that the purpose of Section
9.01(d) is to facilitate compliance by the Purchaser and any Depositor with
the
provisions of Regulation AB and related rules and regulations of the Commission.
Although Regulation AB is applicable by its terms only to offerings of
asset-backed securities that are registered under the Securities Act, the
Company acknowledges that investors in privately offered securities may require
that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private
offerings.
Neither
the Purchaser nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder (or
provision in a private offering of disclosure comparable to that required under
the Securities Act). The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agrees to comply with requests made by the Purchaser or any Depositor in good
faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any Securitization
Transaction, the Company shall cooperate fully with the Purchaser to deliver
to
the Purchaser (including any of its assignees or designees) and any Depositor,
any and all statements, reports, certifications, records and any other
information necessary in the good faith determination of the Purchaser or any
Depositor to permit the Purchaser or such Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Company, any Subservicer, any Third-Party Originator and the Mortgage Loans,
or
the servicing of the Mortgage Loans, reasonably believed by the Purchaser or
any
Depositor to be necessary in order to effect such compliance.
73
The
Purchaser (including any of its assignees or designees) shall cooperate with
the
Company by providing timely notice of requests for information under these
provisions and by reasonably limiting such requests to information required,
in
the Purchaser’s reasonable judgment, to comply with Regulation AB.
In
the
event the Purchaser has elected to have the Company hold record title to the
Mortgages, prior to the Reconstitution Date the Company shall prepare an
Assignment of Mortgage in blank or to the trustee from the Company acceptable
to
the trustee for each Mortgage Loan that is part of the Whole Loan Transfers,
Agency Sales or Securitization Transactions. The Purchaser shall pay all
preparation and recording costs associated therewith, unless the Assignment
of
Mortgage is the initial Assignment of Mortgage delivered pursuant to Section
2.03. The Company shall execute each Assignment of Mortgage, track such
Assignments of Mortgage to ensure they have been recorded and deliver them
as
required by the trustee upon the Company's receipt thereof. Additionally, the
Company shall prepare and execute, at the direction of the Purchaser, any note
endorsements in connection with any and all seller/servicer agreements. If
required at any time by the Rating Agencies, Purchaser or successor purchaser
in
connection with any Whole Loan Transfer, Agency Sale or Securitization
Transaction, the Company shall deliver such additional documents from its
Retained Mortgage File within ten (10) Business Days to the Custodian, successor
purchaser or other designee of the Purchaser as the Rating Agencies, Purchaser
or successor purchaser may require.
Notwithstanding
any provisions of this Agreement to the contrary, all Mortgage Loans sold or
transferred to an Agency, shall be serviced in accordance with the guidelines
of
the respective Agency. All Mortgage Loans (i) not sold or transferred pursuant
to Whole Loan Transfers, Agency Sales or Securitization Transactions or (ii)
that are subject to a Securitization Transaction for which the related trust
is
terminated for any reason, shall remain subject to this Agreement and shall
continue to be serviced in accordance with the terms of this Agreement and
with
respect thereto this Agreement shall remain in full force and
effect.
ARTICLE
X
DEFAULT
Section
10.01 Events
of Default.
Each
of
the following shall constitute an Event of Default on the part of the
Company:
|
(i)
|
any
failure by the Company to remit to the Purchaser any payment required
to
be made under the terms of this Agreement which continues unremedied
for a
period of five (5) days after the date upon which written notice
of such
failure, requiring the same to be remedied, shall have been given
to the
Company by the Purchaser; or
|
|
(ii)
|
failure
by the Company duly to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Company set
forth
in this Agreement or
in the Custodial Agreement which continues unremedied for a period
of
thirty (30) days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company
by
the Purchaser or by the Custodian;
or
|
74
|
(iii)
|
failure
by the Company to maintain its license to do business in any jurisdiction
where the Mortgaged Property is located if such license is required;
or
|
|
(iv)
|
a
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for
the
winding-up or liquidation of its affairs, shall have been entered
against
the Company and such decree or order shall have remained in force
undischarged or unstayed for a period of sixty (60) days;
or
|
|
(v)
|
the
Company shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, readjustment of debt, marshaling of
assets
and liabilities or similar proceedings of or relating to the Company
or of
or relating to all or substantially all of its property;
or
|
|
(vi)
|
the
Company shall admit in writing its inability to pay its debts generally
as
they become due, file a petition to take advantage of any applicable
insolvency, bankruptcy or reorganization statute, make an assignment
for
the benefit of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations for three (3)
Business
Days; or
|
|
(vii)
|
the
Company ceases to meet the qualifications of a ▇▇▇▇▇▇ Mae/▇▇▇▇▇▇▇
Mac
servicer; or
|
| (viii) |
the
Company attempts to assign its right to servicing compensation hereunder
or to assign this Agreement or the servicing responsibilities hereunder
in
violation of Section 8.04; or
|
| (ix) |
an
Event of Default as set forth in Section
6.07.
|
In
each
and every such case, so long as an Event of Default shall not have been
remedied, in addition to whatever rights the Purchaser may have at law or equity
to damages, including injunctive relief and specific performance, the Purchaser,
by notice in writing to the Company, may terminate all the rights and
obligations of the Company under this Agreement and in and to the Mortgage
Loans
and the proceeds thereof.
Upon
receipt by the Company of such written notice, all authority and power of the
Company under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 12.01. Upon written request from any Purchaser, the Company shall
prepare, execute and deliver to the successor entity designated by the Purchaser
any and all documents and other instruments, place in such successor's
possession all Retained Mortgage Files, and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice
of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company's sole
expense. The Company shall cooperate with the Purchaser and such successor
in
effecting the termination of the Company's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Company to the Custodial Account or Subsidy Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
75
Section
10.02 Waiver
of Defaults.
By
a
written notice, the Purchaser may waive any default by the Company in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE
XI
TERMINATION
Section
11.01 Termination.
This
Agreement shall terminate upon either: (i) the later of the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder; or (ii) mutual consent
of
the Company and the Purchaser in writing.
Section
11.02 Termination
Without Cause.
The
Purchaser may terminate, at its sole option, any rights the Company may have
hereunder, without cause as provided in this Section 11.02. Any such notice
of
termination shall be in writing and delivered to the Company by registered
mail
as provided in Section 12.05.
The
Company shall be entitled to receive, as such liquidated damages, upon the
transfer of the servicing rights, an amount equal to 2.75% of the aggregate
outstanding principal amount of the Mortgage Loans as of the termination date
paid by the Purchaser to the Company with respect to all of the Mortgage Loans.
In the event that it is terminated pursuant to this Section 11.02, the Company
shall be required, at the expense of the Purchaser, to deliver to the Custodian
the entire contents of the Retained Mortgage File, to the extent such contents
were not previously delivered to the Custodian pursuant to this Agreement or
the
Custodial Agreement.
76
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01 Successor
to Company.
Prior
to
termination of the Company's responsibilities and duties under this Agreement
pursuant to Sections 8.04, 10.01, 11.01 (ii) or pursuant to Section 11.02,
the
Purchaser shall, (i) succeed to and assume all of the Company's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor having the characteristics set forth in Section 8.02 and
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Company under this Agreement prior to the termination
of
Company's responsibilities, duties and liabilities under this Agreement. In
connection with such appointment and assumption, the Purchaser may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree. In the event that the Company's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned sections, the Company shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Section 3.03, it being understood and agreed that the provisions
of such Sections 3.01, 3.02, 3.03 and 8.01 shall be applicable to the Company
notwithstanding any such sale, assignment, resignation or termination of the
Company, or the termination of this Agreement.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Company and to the Purchaser an instrument accepting such appointment,
wherein the successor shall make the representations and warranties set forth
in
Section 3.01, except for subsection (h) with respect to the sale of the Mortgage
Loans and subsections (i) and (k) thereof, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities, obligations
and liabilities of the Company, with like effect as if originally named as
a
party to this Agreement. Any termination or resignation of the Company or
termination of this Agreement pursuant to Section 8.04, 10.01, 11.01 or 11.02
shall not affect any claims that any Purchaser may have against the Company
arising out of the Company's actions or failure to act prior to any such
termination or resignation.
The
Company shall deliver promptly to the successor servicer the funds in the
Custodial Account, Subsidy Account and Escrow Account and all Retained Mortgage
Files and related documents and statements held by it hereunder and the Company
shall account for all funds and shall execute and deliver such instruments
and
do such other things as may reasonably be required to more fully and
definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Company.
Upon
a
successor's acceptance of appointment as such, the Company shall notify by
mail
the Purchaser of such appointment in accordance with the procedures set forth
in
Section 12.05.
77
Section
12.02 Amendment.
This
Agreement may be amended from time to time by written agreement signed by the
Company and the Purchaser.
Section
12.03 Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of New
York and the obligations, rights and remedies of the parties hereunder shall
be
determined in accordance with such laws.
Each
of
the Company and the Purchaser hereby knowingly, voluntarily and intentionally
waives any and all rights it may have to a trial by jury in respect of any
litigation based on, or arising out of, under, or in connection with, this
Agreement, or any other documents and instruments executed in connection
herewith, or any course of conduct, course of dealing, statements (whether
oral
or written), or actions of the Company or the Purchaser. This provision is
a
material inducement for the Purchaser to enter into this Agreement
Section
12.04 Duration
of Agreement.
This
Agreement shall continue in existence and effect until terminated as herein
provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section
12.05 Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
(i) if
to the
Company with respect to servicing or investor reporting issues:
▇▇▇▇▇
Fargo Bank, N.A.
1
Home
Campus
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇, MAC X2401-042
if
to the
Company with respect to all other issues:
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Structured Finance Manager, MAC X3906-012
in
each
instance, with a copy to:
78
▇▇▇▇▇
Fargo Bank, N.A.
1
Home
Campus
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
General Counsel - MAC X2401-06T
or
such
other address as may hereafter be furnished to the Purchaser in writing
by
the
Company;
(ii) if
to
Purchaser:
▇▇▇▇▇▇
Brothers Bank, FSB
▇▇▇
▇▇▇
▇▇▇▇▇▇,
▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇
Section
12.06 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
Section
12.07 Relationship
of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or joint
venture between the parties hereto and the services of the Company shall be
rendered as an independent contractor and not as agent for the
Purchaser.
Section
12.08 Execution;
Successors and Assigns.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Section 8.04, this Agreement shall inure
to
the benefit of and be binding upon the Company and the Purchaser and their
respective successors and assigns. The parties agree that this Agreement and
signature pages thereof may be transmitted between them by facsimile and that
faxed signatures may constitute original signatures and that a faxed signature
page containing the signature (faxed or original) is binding on the
parties.
Section
12.09 Recordation
of Assignments of Mortgage.
To
the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Company’s expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option. The Company shall only
be
responsible for the costs of recording the initial Assignments of Mortgage.
In
no event shall the Company be responsible for the cost of recording Assignments
of Mortgage in connection with a subsequent sale or transfer of the Mortgage
Loans by the Purchaser.
79
Section
12.10 Assignment
by Purchaser.
The
Purchaser shall have the right, without the consent of the Company to assign,
in
whole or in part, its interest under this Agreement with respect to some or
all
of the Mortgage Loans, and designate any Person to exercise any rights of the
Purchaser hereunder, by executing an Assignment, Assumption and Recognition
Agreement substantially in the form attached as Exhibit I, and the assignee
or
designee shall accede to the rights and obligations hereunder of the Purchaser
with respect to such Mortgage Loans. All references to the Purchaser in this
Agreement shall be deemed to include its assignee or designee.
Section
12.11 Solicitation
of Mortgagor.
Neither
party shall, after the Closing Date, take any action to solicit the refinancing
of any Mortgage Loan. It is understood and agreed that neither (i) promotions
undertaken by the either party or any affiliate of such party which are directed
to the general public at large, including, without limitation, mass mailings
based upon commercially acquired mailing lists, newspaper, radio, television
advertisements nor (ii) serving the refinancing needs of a Mortgagor who,
without solicitation, contacts either party in connection with the refinance
of
such Mortgage or Mortgage Loan, shall constitute solicitation under this
Section.
[Intentionally
Blank - Next Page Signature Page]
80
IN
WITNESS WHEREOF, the Company and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
day and year first above written.
| ▇▇▇▇▇▇ BROTHERS BANK, FSB | ▇▇▇▇▇ FARGO BANK, N.A. | ||||
| By: | By: | ||||
| Name: |
|
Name: | |||
| Title: |
|
Title: | |||
81
| STATE OF | ) |
| ) ss: | |
| COUNTY OF ___________ | ) |
On
the
_____ day of _______________, 20___ before me, a Notary Public in and for said
State, personally appeared ________________________________, known to me to
be
__________________________of ▇▇▇▇▇ Fargo Bank, N.A., the national banking
association that executed the within instrument and also known to me to be
the
person who executed it on behalf of said bank, and acknowledged to me that
such
bank executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
|
Notary Public
|
|
| My Commission expires |
|
82
| STATE OF | ) |
| ) ss: | |
| COUNTY OF ___________ | ) |
On
the
_____ day of _______________, 20___ before me, a Notary Public in and for said
State, personally appeared _____________________________________, known to
me to
be the ______________________________ of ______________________________, the
corporation that executed the within instrument and also known to me to be
the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
|
Notary Public
|
|
| My Commission expires |
|
83
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
(WFHM
2006-W24)
84
EXHIBIT
B
CUSTODIAL
AGREEMENT
85
EXHIBIT
C
CONTENTS
OF CUSTODIAL MORTGAGE FILE,
RETAINED
MORTGAGE FILE AND SERVICING FILE
With
respect to each Mortgage Loan, the Retained and Custodial Mortgage Files shall
include each of the following items, which shall be available for inspection
by
the Purchaser and any prospective Purchaser, and which shall be retained by
the
Company in the Retained Mortgage File or Servicing File or delivered to the
Custodian pursuant to Sections 2.01 and 2.03 of the Seller's Warranties and
the
Servicing Agreement to which this Exhibit is attached (the
"Agreement"):
With
respect to each Custodial Mortgage File:
|
1.
|
The
original Mortgage Note bearing all intervening endorsements, endorsed
"Pay
to the order of
without recourse" and signed in the name of the Company by an authorized
officer (in the event that the Mortgage Loan was acquired by the
Company
in a merger, the signature must be in the following form: "[Company],
successor by merger to [name of predecessor]"; and in the event that
the
Mortgage Loan was acquired or originated by the Company while doing
business under another name, the signature must be in the following
form:
"[Company], formerly known as [previous
name]").
|
|
2.
|
The
originals or certified true copies of any document sent for recordation
of
all assumption, modification, consolidation or extension agreements,
with
evidence of recording thereon.
|
|
3.
|
The
original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording (except for the insertion of the
name
of the assignee and recording information) except in the case of
such
Mortgage Loan that has been originated in the name of or assigned
to MERS
and registered on the MERS System. The Assignment of Mortgage must
be duly
recorded only if recordation is either necessary under applicable
law or
commonly required by private institutional mortgage investors in
the area
where the Mortgaged Property is located or on direction of the Purchaser
as provided in the Custodial Agreement. If the Assignment of Mortgage
is
to be recorded, the Mortgage shall be assigned to the Purchaser.
If the
Assignment of Mortgage is not to be recorded, the Assignment of Mortgage
shall be delivered in blank. If the Mortgage Loan was acquired by
the
Company in a merger, the Assignment of Mortgage must be made by
"[Company], successor by merger to [name of predecessor]." If the
Mortgage
Loan was acquired or originated by the Company while doing business
under
another name, the Assignment of Mortgage must be by "[Company], formerly
know as [previous name]."
|
|
4.
|
The
original of any guarantee executed in connection with the Mortgage
Note.
|
86
|
5.
|
Original
or copy of Power of Attorney, if
applicable.
|
With
respect to each Retained Mortgage File:
|
6.
|
The
original Mortgage, with evidence of recording thereon or a certified
true
and correct copy of the Mortgage sent for recordation. If in connection
with any Mortgage Loan, the Company cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon
on or
prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation
or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Company shall
deliver
or cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Company stating that such
Mortgage
has been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of
such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly
delivered
to the Custodian upon receipt thereof by the Company; or (ii) in
the case
of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office or by the title insurance
company that issued the title policy to be a true and complete copy
of the
original recorded Mortgage.
|
Further,
with respect to MERS Mortgage Loans, (a) the Mortgage names MERS as the
Mortgagee and (b) the requirements set forth in the Electronic Tracking
Agreement have been satisfied, with a conformed recorded copy to follow as
soon
as the same is received by the Company.
|
7.
|
For
any Mortgage Loan not recorded in the name of MERS, originals or
certified
true copies of documents sent for recordation of all intervening
assignments of the Mortgage with evidence of recording thereon, or
if any
such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the Company
shall
deliver or cause to be delivered to the Custodian, a photocopy of
such
intervening assignment, together with (i) in the case of a delay
caused by
the public recording office, an Officer's Certificate of the Company
stating that such intervening assignment of mortgage has been dispatched
to the appropriate public recording office for recordation and that
such
original recorded intervening assignment of mortgage or a copy of
such
intervening assignment of mortgage certified by the appropriate public
recording office or by the title insurance company that issued the
title
policy to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian
upon
receipt thereof by the Company; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment
is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office
to be a
true and complete copy of the original recorded intervening
assignment.
|
87
|
8.
|
The
original mortgagee policy of title insurance or other evidence of
title
such as a copy of the title commitment or copy of the preliminary
title
commitment.
|
|
9.
|
Any
security agreement, chattel mortgage or equivalent executed in connection
with the Mortgage.
|
|
10.
|
For
each Cooperative Loan, the original or a seller certified true copy
of the
following:
|
The
original Pledge Agreement entered into by the Mortgagor with respect to such
Cooperative Loan;
UCC-3
assignment in blank (or equivalent instrument), sufficient under the laws of
the
jurisdiction where the related Cooperative Apartment is located to reflect
of
record the sale and assignment of the Cooperative Loan to the
Purchaser;
Original
assignment of Pledge Agreement in blank showing a complete chain of assignment
from the originator of the related Cooperative Loan to the Company;
Original
Form UCC-1 and any continuation statements with evidence of filing thereon
with
respect to such Cooperative Loan;
Cooperative
Shares with a Stock Certificate in blank attached;
Original
Proprietary Lease;
Original
Assignment of Proprietary Lease, in blank, and all intervening assignments
thereof;
Original
recognition agreement of the interests of the mortgagee with respect to the
Cooperative Loan by the Cooperative, the stock of which was pledged by the
related Mortgagor to the originator of such Cooperative Loan; and
Originals
of any assumption, consolidation or modification agreements relating to any
of
the items specified above.
|
11.
|
The
electronic form of PMI Policy as identified by certificate
number.
|
|
12.
|
For
each Pledged Asset Mortgage Loan, an Assigned Letter of
Credit.
|
With
respect to each Mortgage Loan, the Servicing File shall include each of the
following items to the extent required by the Underwriting
Guidelines:
|
13.
|
The
original hazard insurance policy and, if required by law, flood insurance
policy, in accordance with Section 4.10 of the
Agreement.
|
88
|
14.
|
Residential
loan application.
|
|
15.
|
Mortgage
Loan closing statement.
|
|
16.
|
Verification
of employment and income, unless originated under the Company's Limited
Documentation program.
|
|
17.
|
Verification
of acceptable evidence of source and amount of down
payment.
|
|
18.
|
Credit
report on the Mortgagor.
|
|
19.
|
Residential
appraisal report.
|
|
20.
|
Photograph
of the Mortgaged Property.
|
|
21.
|
Survey
of the Mortgage property, if required by the title company or applicable
law.
|
|
22.
|
Copy
of each instrument necessary to complete identification of any exception
set forth in the exception schedule in the title policy, i.e. map
or plat,
restrictions, easements, sewer agreements, home association declarations,
etc.
|
|
23.
|
All
required disclosure statements.
|
|
24.
|
If
available, termite report, structural engineer's report, water potability
and septic certification.
|
|
25.
|
Sales
contract, if applicable.
|
|
26.
|
Evidence
of payment of taxes and insurance premiums, insurance claim files,
correspondence, current and historical computerized data files, and
all
other processing, underwriting and closing papers and records which
are
customarily contained in a mortgage loan file and which are required
to
document the Mortgage Loan or to service the Mortgage
Loan.
|
|
27.
|
Amortization
schedule, if available.
|
|
28.
|
Payment
history for any Mortgage Loan that has been closed for more than
ninetieth
(90) days.
|
89
In
the
event an Officer's Certificate of the Company is delivered to the Custodian
because of a delay caused by the public recording office in returning any
recorded document, the Company shall deliver to the Custodian, within 240 days
of the Closing Date, an Officer's Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, and (iv)
specify the date the applicable recorded document will be delivered to the
Custodian. The Company shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An extension
of the date specified in (iv) above may be requested from the Purchaser, which
consent shall not be unreasonably withheld.
90
EXHIBIT
D
DATA
FILE
ELEMENTS
|
(1)
|
the
Company’s Mortgage Loan identifying
number;
|
|
(2)
|
the
street address of the Mortgaged Property including the city, state,
county
and zip code;
|
|
(3)
|
a
code indicating whether the Mortgaged Property is a single family
residence, a 2-4 family dwelling, a PUD, a cooperative, a townhouse,
manufactured housing or a unit in a condominium
project;
|
| (4) |
the
Mortgage Interest Rate as of the Cut-off
Date;
|
| (5) |
the
current Monthly Payment;
|
| (6) |
loan
term, number of months;
|
| (7) |
the
stated maturity date;
|
|
(8)
|
the
Stated Principal Balance of the Mortgage Loan as of the close of
business
on the Cut-off Date, after deduction of payments of principal due
on or
before the Cut-off Date;
|
|
(9)
|
the
Loan-to-Value Ratio;
|
|
(10)
|
a
code indicating whether the Mortgage Loan is an Interest Only Mortgage
Loan;
|
|
(11)
|
a
code indicating whether the Mortgage Loan is a temporary buydown
(Y or
N);
|
|
(12)
|
the
Servicing Fee Rate;
|
|
(13)
|
a
code indicating the mortgage insurance provider and percent of coverage,
if applicable;
|
|
(14)
|
a
code indicating whether the Mortgage Loan is covered by lender-paid
mortgage insurance (Y or N);
|
| (15) |
a
code indicating whether the Mortgage Loan is a Time$aver® Mortgage Loan (Y
or N);
|
|
(16)
|
the
Mortgagor's first and last name;
|
|
(17)
|
a
code indicating whether the Mortgaged Property is owner-occupied;
|
|
(18)
|
the
remaining months to maturity from the Cut-off Date, based on the
original
amortization schedule;
|
|
(19)
|
the
date on which the first Monthly Payment was due on the Mortgage Loan;
|
|
(20)
|
the
actual next Due Date of the Mortgage
Loan;
|
|
(21)
|
the
last Due Date on which a Monthly Payment was actually applied to
the
actual principal balance;
|
|
(22)
|
the
original principal amount of the Mortgage Loan;
|
91
|
(23)
|
a
code indicating the purpose of the loan (i.e., purchase, financing,
rate/term refinancing, cash-out refinancing);
|
|
(24)
|
the
Mortgage Interest Rate at origination;
|
|
(25)
|
the
amount on which the first Monthly Payment was due on the Mortgage
Loan;
|
|
(26)
|
a
code indicating the documentation style (i.e., full (providing two
years
employment verification - 2 years W-2’s and current pay stub or 2 years
1040’s for self employed borrowers), alternative or
reduced);
|
|
(27)
|
a
code indicating if the Mortgage Loan is subject to a PMI
Policy;
|
|
(28)
|
the
Appraised Value of the Mortgage
Property;
|
|
(29)
|
the
sale price of the Mortgaged Property, if
applicable;
|
| (30) |
the
Mortgagor’s Underwriting FICO
Score;
|
| (31) |
term
of prepayment penalty in years;
|
| (32) |
a
code indicating the product type;
|
| (33) |
a
code indicating the credit grade of the Mortgage
Loan;
|
|
(34)
|
the
unpaid balance of the Mortgage Loan as of the close of business on
the
Cut-off Date, after deduction of all payments of
principal;
|
| (35) |
the
Note date of the Mortgage Loan;
|
|
(36)
|
the
mortgage insurance certificate number and percentage of coverage,
if
applicable;
|
| (37) |
the
Mortgagor’s and Co-Mortgagor’s (if any) date of
birth;
|
|
(38)
|
if
the Mortgage Loan is a MERS Mortgage Loan, the MIN Number for each
MERS
Mortgage Loan;
|
| (39) |
employer
name;
|
| (40) |
subsidy
program code;
|
| (41) |
servicer
name;
|
| (42) |
the
combined Loan-to-Value Ratio;
|
| (43) |
the
total Loan-to-Value Ratio;
|
| (44) |
whether
the Mortgage Loan is convertible (Y or
N);
|
| (45) |
a
code indicating whether the Mortgage Loan is a relocation loan (Y
or
N);
|
| (46) |
a
code indicating whether the Mortgage Loan is a leasehold loan (Y
or
N);
|
| (47) |
a
code indicating whether the Mortgage Loan is an Alt A loan (Y or
N);
|
| (48) |
a
code indicating whether the Mortgage Loan is a no ratio loan (Y or
N);
|
92
|
(49)
|
a
code indicating whether the Mortgage Loan is a Pledged Asset Mortgage
Loan
(Y or N);
|
| (50) |
effective
LTV percentage for Pledged Asset Mortgage
Loans;
|
| (51) |
citizenship
type code;
|
|
(52)
|
a
code indicating whether the Mortgage Loan is a conforming or
non-conforming loan, based on the original loan
balance;
|
| (53) |
the
name of the client for which the Mortgage Loan was
originated;
|
| (54) |
the
program code;
|
| (55) |
the
loan sub doc code;
|
|
(56)
|
a
code indicating amortization type (1 or
2);
|
|
(57)
|
interest
only note payment;
|
|
(58)
|
first
full amortization payment date;
|
|
(59)
|
interest
only term, number of months;
|
|
(60)
|
remaining
interest only term, number of
months;
|
|
(61)
|
a
code indicating whether the Mortgage Loan is a 2nd
lien (Y or N);
|
|
(62)
|
a
code indicating borrower VOA or lender VOA (L or
B);
|
|
(63)
|
combined
current loan balance;
|
The
Company shall provide the following
For
the Home Mortgage Disclosure Act (HMDA):
| (64) |
the
Mortgagor’s and co-Mortgagor’s (if applicable)
ethnicity;
|
| (65) |
the
Mortgagor’s and co-Mortgagor’s (if applicable)
race;
|
| (66) |
lien
status;
|
| (67) |
for
cash-out refinance loans, the cash
purpose;
|
| (68) |
the
Mortgagor’s and co-Mortgagor’s (if applicable)
gender;
|
| (69) |
the
Mortgagor’s and co-Mortgagor’s (if applicable) social security
numbers;
|
| (70) |
the
number of units for the property;
|
| (71) |
the
year in which the property was
built;
|
| (72) |
the
qualifying monthly income of the
Mortgagor;
|
| (73) |
the
number of bedrooms contained in the
property;
|
| (74) |
a
code indicating first time buyer (Y or
N);
|
93
| (75) |
the
total rental income, if any;
|
The
Company shall provide the following
for
the adjustable rate Mortgage Loans (if applicable):
| (76) |
the
maximum Mortgage Interest Rate under the terms of the Mortgage
Note;
|
| (77) |
the
Periodic Interest Rate Cap;
|
| (78) |
the
Index;
|
| (79) |
the
next interest rate and payment Adjustment
Date;
|
|
(80)
|
the
Mortgage Interest Rate adjustment cap and all subsequent interest
rate
Adjustment Dates;
|
| (81) |
the
Gross Margin; and
|
| (82) |
the
lifetime interest rate cap.
|
94
EXHIBIT
E
UNDERWRITING
GUIDELINES
EXHIBIT
F
FORMS
OF
CUSTODIAL ACCOUNT CERTIFICATIONS
CUSTODIAL
ACCOUNT CERTIFICATION
_________________,
20___
▇▇▇▇▇
Fargo Bank, N.A. hereby certifies that it has established the account described
below as a Custodial Account pursuant to Section 4.04 of the Seller's Warranties
and Servicing Agreement, dated as of _____________,
20
__,.
Title
of
Account: ▇▇▇▇▇
Fargo Bank, N.A. in trust for the Purchaser and/or subsequent purchasers of
Mortgage Loans - P & I
|
Address
of office or branch
of
the Company at which
Account
is maintained:
|
||
|
▇▇▇▇▇
FARGO BANK, N.A.
Company
|
||
| |
|
|
| By: | ||
| Name: | ||
|
Title:
|
||
CUSTODIAL
ACCOUNT LETTER AGREEMENT
|
__________________,
20__
|
||
|
To:
|
||
|
(the
"Depository")
|
As
Company under the Seller's Warranties and Servicing Agreement, dated as of
________,
20
__,
(the
"Agreement"), we hereby authorize and request you to establish an account,
as a
Custodial Account pursuant to Section 4.04 of the Agreement, to be designated
as
"▇▇▇▇▇ Fargo Bank, N.A., in trust for the Purchaser and/or subsequent purchasers
of Mortgage Loans, - P & I". All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Company.. This letter is submitted
to you in duplicate. Please execute and return one original to us.
|
▇▇▇▇▇
FARGO BANK, N.A.
Company
|
|||
|
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..
|
Depository
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
Date:
|
|||
EXHIBIT
G
FORMS
OF
ESCROW ACCOUNT CERTIFICATIONS
ESCROW
ACCOUNT CERTIFICATION
|
__________________,
20__
|
▇▇▇▇▇
Fargo Bank, N.A. hereby certifies that it has established the account described
below as an Escrow Account pursuant to Section 4.06 of the Seller's Warranties
and Servicing Agreement, dated as of ___________,
20
____,.
Title
of
Account: ▇▇▇▇▇
Fargo Bank, N.A. in trust for the Purchaser and/or subsequent purchasers of
Mortgage Loans, and various Mortgagors - T & I
|
Address
of office or branch
of
the Company at which
Account
is maintained:
|
||
|
▇▇▇▇▇
FARGO BANK, N.A.
Company
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
ESCROW
ACCOUNT LETTER AGREEMENT
|
__________________,
20__
|
|
To:
|
||
|
(the
"Depository")
|
As
Company under the Seller's Warranties and Servicing Agreement, dated as of
__________,
20
___,
(the
"Agreement"), we hereby authorize and request you to establish an account,
as an
Escrow Account pursuant to Section 4.06 of the Agreement, to be designated
as
"▇▇▇▇▇ Fargo Bank, N.A., in trust for the Purchaser and/or subsequent purchasers
of Mortgage Loans, and various Mortgagors - T & I". All deposits in the
account shall be subject to withdrawal therefrom by order signed by the Company.
This letter is submitted to you in duplicate. Please execute and return one
original to us.
|
▇▇▇▇▇
FARGO BANK, N.A.
Company
|
|||
|
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..
|
Depository
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
Date:
|
|||
EXHIBIT
H
SERVICING
CRITERIA TO BE ADDRESSED
IN
ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by [the Company][Name of Subservicer]
shall address, as a minimum, the criteria identified below as “Applicable
Servicing Criteria”
|
Reg
AB Reference
|
Servicing
Criteria
|
Applicable
Servicing Criteria
|
Inapplicable
Servicing Criteria
|
|||
|
General
Servicing Considerations
|
||||||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
||||
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
||||
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
X
|
||||
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
|
X
|
||||
|
Cash
Collection and Administration
|
||||||
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
||||
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
||||
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction agreements.
|
X
|
||||
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
X
|
||||
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
X
|
||||
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
|
||||
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
||||
|
Investor
Remittances and Reporting
|
||||||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the Servicer.
|
X
|
||||
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
||||
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
||||
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
|
Reg
AB Reference
|
Servicing
Criteria
|
Applicable
Servicing Criteria
|
Inapplicable
Servicing Criteria
|
|||
|
Pool
Asset Administration
|
||||||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the transaction
agreements or related mortgage loan documents.
|
X
|
||||
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
X
|
||||
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
|
X
|
||||
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
|
X
|
||||
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
||||
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's mortgage loans
(e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
||||
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
||||
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period a
mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
||||
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan documents.
|
X
|
||||
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction agreements.
|
X
|
||||
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
||||
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
||||
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
X
|
||||
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
||||
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
|
X
|
EXHIBIT
I
SARBANES
CERTIFICATION
|
Re:
|
The
[ ] agreement dated as of [ ], 200[ ] (the “Agreement”), among [IDENTIFY
PARTIES]
|
I,
________________________________, the _______________________ of [Name of
Servicer] (the “Servicer”), certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers,
with
the knowledge and intent that they will rely upon this certification,
that:
(1) I
have
reviewed the servicer compliance statement of the Servicer provided in
accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the
report on assessment of the Servicer’s compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided
in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the
“Servicing Assessment”), the registered public accounting firm’s attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all
servicing reports, officer’s certificates and other information relating to the
servicing of the Mortgage Loans by the Servicer during 200[ ] that were
delivered by the Servicer to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the “Servicer
Servicing Information”);
(2) Based
on
my knowledge, the Servicer Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances under
which such statements were made, not misleading with respect to the period
of
time covered by the Servicer Servicing Information;
(3) Based
on
my knowledge, all of the Servicer Servicing Information required to be provided
by the Servicer under the Agreement has been provided to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee];
(4) I
am
responsible for reviewing the activities performed by the Servicer under the
Agreement, and based on my knowledge and the compliance review conducted in
preparing the Compliance Statement and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report, the Servicer
has
fulfilled its obligations under the Agreement; and
(5) The
Compliance Statement required to be delivered by the Servicer pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Servicer and by each Subservicer ad Subcontractor pursuant
to
the Agreement have been provided to the [Depositor] [Master Servicer]. Any
material instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
|
Date:
|
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
EXHIBIT
J
FORM
OF
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT
AND ASSUMPTION
|
__________________,
20__
|
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT, dated ___________________, 20__ between
_________________, a _________________ corporation having an office at
_________________ ("Assignor") and _________________, having an office at
_________________ ("Assignee"):
For
and
in consideration of the sum of one dollar ($1.00) and other valuable
consideration the receipt and sufficiency of which are hereby acknowledge,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
1. The
Assignor hereby grants, transfers and assigns to Assignee all of the right,
title and interest of Assignor, as Purchaser, in, to and under that certain
Seller's Warranties and Servicing Agreement, (the "Seller's Warranties and
Servicing Agreement"), dated as of _________________, by and between
_________________ (the "Purchaser"), and _________________ (the "Company"),
and
the Mortgage Loans delivered thereunder by the Company to the Assignor, and
that
certain Custodial Agreement, (the "Custodial Agreement"), dated as of
_________________, by and among the Company, the Purchaser and _________________
(the "Custodian").
2. The
Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The
Assignor is the lawful owner of the Mortgage Loans with the full right to
transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
b. The
Assignor has not received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Company with respect to the
Seller's Warranties and Servicing Agreement or the Mortgage Loans;
c. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Seller's Warranties and Servicing
Agreement, the Custodial Agreement or the Mortgage Loans, including without
limitation the transfer of the servicing obligations under the Seller's
Warranties and Servicing Agreement. The Assignor has no knowledge of, and has
not received notice of, any waivers under or amendments or other modifications
of, or assignments of rights or obligations under, the Seller's Warranties
and
Servicing Agreement or the Mortgage Loans; and
d. Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the "33 Act") or which would render
the
disposition of the Mortgage Loans a violation of Section 5 of the 33 Act or
require registration pursuant thereto.
3. That
Assignee warrants and represent to, and covenants with, the Assignor and the
Company pursuant to Section 12.10 of the Seller's Warranties and Servicing
Agreement that:
a. The
Assignee agrees to be bound, as Purchaser, by all of the terms, covenants and
conditions of the Seller's Warranties and Servicing Agreement, the Mortgage
Loans and the Custodial Agreement, and from and after the date hereof, the
Assignee assumes for the benefit of each of the Company and the Assignor all
of
the Assignor's obligations as purchaser thereunder;
b. The
Assignee understands that the Mortgage Loans have not been registered under
the
33 Act or the securities laws of any state;
c. The
purchase price being paid by the Assignee for the Mortgage Loans are in excess
of $250,000.00 and will be paid by cash remittance of the full purchase price
within 60 days of the sale;
d. The
Assignee is acquiring the Mortgage Loans for investment for its own account
only
and not for any other person. In this connection, neither the Assignee nor
any
person authorized to act therefor has offered to Mortgage Loans by means of
any
general advertising or general solicitation within the meaning of Rule 502(c)
of
US Securities and Exchange Commission Regulation D, promulgated under the 1933
Act;
e. The
Assignee considers itself a substantial sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
f. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Company;
g. Neither
the Assignee nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner which would
constitute a distribution of the Mortgage Loans under the 33 Act or which would
render the disposition of the Mortgage Loans a violation of Section 5 of the
33
Act or require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner with respect
to the Mortgage Loans; and
h. Either
(1) the Assignee is not an employee benefit plan ("Plan") within the meaning
of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or a plan (also "Plan") within the meaning of section 4975(e)(1)
of
the Internal Revenue Code of 1986 ("Code"), and the Assignee is not directly
or
indirectly purchasing the Mortgage Loans on behalf of, investment manager of,
as
named fiduciary of, as Trustee of, or with assets of, a Plan; or (2) the
Assignee's purchase of the Mortgage Loans will not result in a prohibited
transaction under section 406 of ERISA or section 4975 of the Code.
i. The
Assignee's address for purposes of all notices and correspondence related to
the
Mortgage Loans and the Seller's Warranties and Servicing Agreements
is:
|
Attention:
|
||
The
Assignee's wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Seller's Warranties and Servicing
Agreement is:
|
Attention:
|
||
4. From
and
after the date hereof, the Company shall note the transfer of the Mortgage
Loans
to the Assignee in its books and records, the Company shall recognize the
Assignee as the owner of the Mortgage Loans and the Company shall service the
Mortgage Loans for the benefit of the Assignee pursuant to the Seller’s
Warranties and Servicing Agreement, the terms of which are incorporated herein
by reference. It is the intention of the Assignor, the Company and the Assignee
that the Seller’s Warranties and Servicing Agreement shall be binding upon and
inure to the benefit of the Company and the Assignee and their respective
successors and assigns.
[Signatures
Follow]
IN
WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement to be executed by their duly authorized officers as of
the
date first above written.
|
Assignor
|
Assignee
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Its:
|
Its:
|
|||
|
Tax
Payer Identification No.:
|
Tax
Payer Identification No.:
|
|||
MORTGAGE
LOAN PURCHASE AGREEMENT
This
is a
Purchase Agreement (the "Agreement"), dated as of April 1, 2006 by and between
▇▇▇▇▇▇ Brothers Bank, FSB, having an office at ▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Purchaser") and ▇▇▇▇▇ Fargo Bank, N.A., having an
▇▇▇▇▇▇ ▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the
"Seller").
W I T N E S S E T H
WHEREAS,
the Seller agrees to sell, and the Purchaser agrees to purchase, certain
conventional, residential, adjustable rate mortgage loans (the "Mortgage Loans")
on a servicing retained basis as described herein:
WHEREAS,
the Mortgage Loans shall be delivered as whole loans; and
WHEREAS,
the parties intend hereby to set forth the terms and conditions upon which
the
proposed transactions will be effected.
NOW
THEREFORE, in consideration of the promises and the mutual agreements set forth
herein, the parties hereto agree as follows:
SECTION
1.
All
capitalized terms not otherwise defined herein have the respective meanings
set
forth in the Seller's Warranties and Servicing Agreement, dated as of the date
herewith (the "Seller's Warranties and Servicing Agreement"). The following
terms are defined as follows (except as otherwise agreed by the
parties):
Cut-off
Date:
April
1,
2006
Closing
Date: April
27,
2006
First
Remittance
Date:
May
18,
2006
Servicing
Fee
Rate: 0.250%
SECTION
2. Agreement
to Purchase.
The
Seller agrees to sell, and the Purchaser agrees to purchase Mortgage Loans
having an aggregate principal balance on the Cut-off Date in an amount as set
forth in the Commitment Letter, dated as of March 29, 2006 (the "Commitment
Letter"), or in such other amount as agreed to by the Purchaser and the Seller
as evidenced by the aggregate scheduled principal balance of the Mortgage Loans
accepted by the Purchaser on the Closing Date. The Mortgage Loans will be
delivered pursuant to a Seller's Warranties and Servicing Agreement, between
the
Purchaser and the Seller.
SECTION
3. Mortgage
Schedule.
The
Seller has provided the Purchaser with certain information constituting a
listing of the Mortgage Loans to be purchased under this Agreement (the
"Mortgage Loan Schedule") substantially in the form attached hereto as Exhibit
1. The Mortgage Loan Schedule shall conform to the definition of "Mortgage
Loan
Schedule" under the Seller's Warranties and Servicing
Agreement.
SECTION
4. Purchase
Price.
The
purchase price for the Mortgage Loans (the "Purchase Price") shall be the
percentage of par as stated in the Commitment Letter, multiplied by the
aggregate scheduled principal balance, as of the Cut-off Date, of the Mortgage
Loans listed on the related Mortgage Loan Schedule, after application of
scheduled payments of principal due on or before the Cut-off Date whether or
not
collected. The Purchase Price may be adjusted as stated in the Commitment
Letter.
In
addition to the Purchase Price as described above, the Purchaser shall pay
to
the Seller, at closing, accrued interest on the aggregate scheduled principal
amount of the Mortgage Loans at the weighted average Mortgage Loan Remittance
Rate from the Cut-off Date through the day prior to the Closing Date,
inclusive.
The
Purchaser shall be entitled to (1) all scheduled principal due after the Cut-off
Date, (2) all other recoveries of principal collected after the Cut-off Date
(provided, however, that all scheduled payments of principal due on or before
the Cut-off Date and collected by the Seller after the Cut-off Date shall belong
to the Seller), and (3) all payments of interest on the Mortgage Loans at the
Mortgage Loan Remittance Rate (minus that portion of any such payment which
is
allocable to the period prior to the Cut-off Date). The principal balance of
each Mortgage Loan as of the Cut-off Date is determined after application of
payments of principal due on or before the Cut-off Date whether or not
collected. Therefore, payments of scheduled principal and interest prepaid
for a
Due Date beyond the Cut-off Date shall not be applied to the principal balance
as of the Cut-off Date. Such prepaid amounts (minus interest at the Servicing
Fee Rate) shall be the property of the Purchaser. The Seller shall deposit
any
such prepaid amounts into the Custodial Account, which account is established
for the benefit of the Purchaser for subsequent remittance by the Seller to
the
Purchaser.
SECTION
5. Examination
of Custodial Mortgage Files.
Prior to
the Closing Date, the Seller shall (a) deliver to the Purchaser in escrow,
for
examination, the Custodial Mortgage File for each Mortgage Loan,
including a
copy of
the Assignment of Mortgage, pertaining to each Mortgage Loan, or (b) make the
Custodial Mortgage Files and the Retained Mortgage Files available to the
Purchaser for examination at the Seller's offices or such other location as
shall otherwise be agreed upon by the Purchaser and the Seller. Such examination
may be made by the Purchaser or by any prospective purchaser of the Mortgage
Loans from the Purchaser, at any time before or after the Closing Date upon
prior reasonable notice to the Seller. The fact that the Purchaser or any
prospective purchaser of the Mortgage Loans has conducted or has failed to
conduct any partial or complete examination of the Custodial Mortgage Files
and
the Retained Mortgage Files shall not affect the Purchaser's (or any of its
successor's) rights to demand repurchase, substitution or other relief or remedy
as provided under the related Seller's Warranties and Servicing
Agreement.
Prior
to
Seller’s receipt of the Purchase Price, the Purchaser shall cause the Custodian
to act as bailee for the sole and exclusive benefit of the Seller pursuant
to
the Custodial Agreement and act only in accordance with Seller’s instructions.
Upon the Seller’s receipt of the Purchase Price, the Seller shall provide
notification to the Custodian to release ownership of the Mortgage Loan
Documents specified above to the Purchaser. Such notification shall be in a
form
of a written notice by facsimile or other electronic media, with a copy sent
to
the Purchaser. Subsequent to such release, such Mortgage Loan Documents shall
be
retained by the Custodian for the benefit of the Purchaser. All Mortgage Loan
Documents related to Mortgage Loans not purchased by the Purchaser on the
Closing Date, shall be maintained by the Custodian for the benefit of the Seller
and shall be returned to the Seller within two (2) Business Days after the
Closing Date.
2
SECTION
6. Representations,
Warranties and Agreements of Seller.
The
Seller agrees and acknowledges that it shall, as a condition to the consummation
of the transactions contemplated hereby, make the representations and warranties
specified in Section 3.01 and 3.02 of the Seller's Warranties and Servicing
Agreement, as of the Closing Date. The meaning of the term "Agreement" as used
in Sections 3.01 and 3.02 of the Seller's Warranties and Servicing Agreement
shall include this Agreement. The Seller, without conceding that the Mortgage
Loans are securities, hereby makes the following additional representations,
warranties and agreements which shall be deemed to have been made as of the
Closing Date:
a) neither
the Seller nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of any Mortgage Loans, any interest
in
any Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security with, any Person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act or which would render the disposition of any
Mortgage Loans a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will
it
authorize any Person to act, in such manner with respect to the Mortgage Loans;
and
b) the
Seller has not dealt with any broker or agent or anyone else who might be
entitled to a fee or commission in connection with this transaction other than
the Purchaser.
SECTION
7. Representation,
Warranties and Agreement of Purchaser.
The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall
have
been deemed to have been made as of the Closing Date.
a) the
Purchaser understands that the Mortgage Loans have not been registered under
the
Securities Act or the securities laws of any state;
b) the
Purchaser is acquiring the Mortgage Loans for its own account only and not
for
any other Person;
3
c) the
Purchaser considers itself a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
d) the
Purchaser has been furnished with all information regarding the Mortgage Loans
which it has requested from the Seller or the Company; and
e) neither
the Purchaser nor anyone acting on its behalf offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loan, any interest in any Mortgage
Loan or any other similar security to, or solicited any offer to buy or accept
a
transfer, pledge or other disposition of any Mortgage Loan, any interest in
any
Mortgage Loan or any other similar security from, or otherwise approached or
negotiated with respect to any Mortgage Loan, any interest in any Mortgage
Loan
or any other similar security with, any Person in any manner, or made any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act or which would render the disposition of any
Mortgage Loan a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will
it
authorize any Person to act, in such manner with respect to the Mortgage
Loans.
SECTION
8. Closing.
The
closing for the purchase and sale of the Mortgage Loans, shall take place on
the
Closing Date. At the Purchaser's option, the Closing shall be either: by
telephone, confirmed by letter or wire as the parties shall agree; or conducted
in Person, at such place as the parties shall agree.
The
closing shall be subject to each of the following conditions:
a) all
of
the representations and warranties of the Seller under this Agreement and under
the Seller's Warranties and Servicing Agreement shall be true and correct as
of
the Closing Date and no event shall have occurred which, with notice or the
passage of time, would constitute a default under this Agreement or an Event
of
Default under the related Seller's Warranties and Servicing
Agreement;
b) the
Purchaser shall have received, or the Purchaser's attorneys shall have received
in escrow, all Closing Documents as specified in Section 9 of this Agreement,
in
such forms as are agreed upon and acceptable to the Purchaser, duly executed
by
all signatories other than the Purchaser as required pursuant to the respective
terms thereof;
c) the
Seller shall have delivered to the Custodian all documents required under the
Seller's Warranties and Servicing Agreement; and
d) all
other
terms and conditions of this Agreement and the Seller's Warranties and Servicing
Agreement shall have been complied with.
4
Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on the
Closing Date the Purchase Price, plus accrued interest pursuant to Section
4 of
this Agreement, by wire transfer of immediately available funds to the account
designated by the Seller.
SECTION
9. Closing
Documents.
With
respect to the Mortgage Loans, the Closing Documents shall consist of the
following documents:
|
1.
|
the
Seller's Warranties and Servicing Agreement in three
counterparts;
|
|
2.
|
this
Agreement in three counterparts;
|
|
3.
|
an
originally executed Side Letter (the “Side Letter”) regarding repurchase
price, by and between the Seller and the Purchaser, dated as of April
27,
2006.
|
|
4.
|
the
originally executed Custodial Assignment and Assumption Agreement
by and
between the Purchaser and Seller dated as of April 27, 2006 in three
counter-parts assigning the Purchaser's rights as Initial Servicer
under
the Custodial Agreement, dated as of April 1, 2000, by and between
the
Purchaser, as owner and the Initial Servicer and ▇▇▇▇▇ Fargo Bank,
N.A.,
successor by merger to ▇▇▇▇▇ Fargo Bank Minnesota, N.A. (the
"Custodian");
|
|
5.
|
the
Mortgage Loan Schedule, one copy to be attached to each counterpart
of the
Seller's Warranties and Servicing Agreement, to each counterpart
of this
Agreement, and to each counterpart of the Custodial Agreement, as
the
Mortgage Loan Schedule thereto;
|
|
6.
|
an
Officer's Certificate of the
Seller;
|
|
7.
|
a
trust receipt and certification, as required under the Custodial
Agreement; and
|
|
8.
|
an
Opinion of Counsel of the Seller, in the form of Exhibit 2 hereto.
|
SECTION
10. Costs.
The
Purchaser shall pay any commissions due its salesmen, the legal fees and
expenses of its attorneys and the costs and expenses associated with the
Custodian. The Seller shall be responsible for reasonable costs and expenses
associated with any preparation and recording of the initial Assignments of
Mortgage. All other costs and expenses incurred in connection with the transfer
and delivery of the Mortgage Loans, including fees for title policy endorsements
and continuations and the Seller's attorney fees, shall be paid by the
Seller.
SECTION
11. Servicing.
The
Mortgage Loans shall be serviced by the Seller in accordance with the terms
of
the applicable Seller's Warranties and Servicing Agreement. The Seller shall
be
entitled to servicing fees calculated as provided therein, at the Servicing
Fee
Rate shown on the first page of this Agreement unless otherwise agreed by the
parties.
SECTION
12. Financial
Statements.
The
Seller understands that in connection with the Purchaser's marketing of the
Mortgage Loans, the Purchaser may request from the Seller and make available
to
prospective purchasers a Consolidated Statement of Operations of the Seller
for
the most recently completed two (2) fiscal years respecting which such a
statement is available, as well as a Consolidated Statement of Condition at
the
end of the last two (2) fiscal years covered by such Consolidated Statement
of
Operations. The Purchaser, upon request, shall also make available any
comparable interim statements to the extent any such statements have been
prepared by the Seller in a format intended or otherwise suitable for the public
at large. The Seller, upon request, agrees to furnish promptly to the Purchaser
copies of the statements specified above. The Seller shall also make available
information on its servicing performance with respect to loans in its own
portfolio and loans serviced for others (if any), including foreclosure and
delinquency ratios.
5
The
Seller also agrees to allow access to a knowledgeable (as shall be determined
by
the Seller) financial or accounting officer for the purpose of answering
questions asked by any prospective purchaser regarding recent developments
affecting the Seller or the financial statements of the Seller.
SECTION
13. Mandatory
Delivery.
The sale
and delivery on the Closing Date of the Mortgage Loans described on the Mortgage
Loan Schedule is mandatory, it being specifically understood and agreed that
each Mortgage Loan is unique and identifiable on the date hereof and that an
award of money damages would be insufficient to compensate the Purchaser for
the
losses and damages incurred by the Purchaser (including damages to prospective
purchasers of the Mortgage Loans) in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law
or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION
14. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address shown on the first page hereof, or such other address
as
may hereafter be furnished to the other party by like notice. Any such demand,
notice of communication hereunder shall be deemed to have been received on
the
date delivered to or received at the premises of the addressee (as evidenced,
in
the case of registered or certified mail, by the date noted on the return
receipt).
SECTION
15. Severability
Clause.
Any
part, provision, representation or warranty of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective
to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty
of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of
any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is as close as possible to the economic effect of this Agreement
without regard to such invalidity.
6
SECTION
16. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument The parties agree that this Agreement
and
signature pages thereof may be transmitted between them by facsimile and that
faxed signatures may constitute original signatures and that a faxed signature
page containing the signature of an authorized individual (faxed or original)
is
binding on the respective parties.
▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇
of Delivery and Governing Law.
This
Agreement shall be construed in accordance with the laws of the State of New
York and the obligations, rights and remedies of the parties hereunder shall
be
determined in accordance with the laws of the State of New York, except to
the
extent preempted by Federal Law.
Each
of
the Seller and the Purchaser hereby knowingly, voluntarily and intentionally
waives any and all rights it may have to a trial by jury in respect of any
litigation based on, or arising out of, under, or in connection with, this
Agreement, or any other documents and instruments executed in connection
herewith, or any course of conduct, course of dealing, statements (whether
oral
or written), or actions of the Seller or the Purchaser. This provision is a
material inducement for the Purchaser to enter into this Agreement.
SECTION
18. Further
Agreements.
The
Purchaser and the Seller each agree to execute and deliver to the other such
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
Without
limiting the generality of the foregoing, the Seller shall reasonably cooperate
with the Purchaser in connection with the initial resales of the Mortgage Loans
by the Purchaser. In that connection, the Seller shall provide to the Purchaser:
(i) any and all information and appropriate verification of information, whether
through letters of its auditors and counsel or otherwise, as the Purchaser
shall
reasonably request, and (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors and certificates of public
officials or officers of the Seller as are reasonably believed necessary by
the
Purchaser in connection with such resales. Prior to incurring any out-of-pocket
expenses pursuant to this paragraph, the Seller shall notify the Purchaser
in
writing of the estimated amount of such expense. The Purchaser shall reimburse
the Seller for any such expense following its receipt of appropriate details
thereof.
SECTION
19. Intention
of the Parties.
It is
the intention of the parties that the Purchaser is purchasing, and the Seller
is
selling, an undivided 100% ownership interest in the Mortgage Loans and not
a
debt instrument of the Seller or another security. Accordingly, the parties
hereto each intend to treat the transaction for Federal income tax purposes
as a
sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans.
The
Purchaser shall have the right to review the Mortgage Loans and the related
Custodial Mortgage Files to determine the characteristics of the Mortgage Loans
which shall affect the Federal income tax consequences of owning the Mortgage
Loans and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
7
SECTION
20. Successors
and Assigns; Assignment of Purchase Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective successors and assigns of the Seller
and the Purchaser. This Agreement shall not be assigned, pledged or hypothecated
by the Seller to a third party without the consent of the
Purchaser.
SECTION
21. Waivers;
Other Agreements.
No term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
22. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
SECTION
23. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
c) references
herein to "Articles", "Sections", "Subsections", "Paragraphs", and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
d) a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
e) the
words
"herein", "hereof", "hereunder" and other words of similar import refer to
this
Agreement as a whole and not to any particular provision; and
f) the
term
"include" or "including" shall mean without limitation by reason of
enumeration.
SECTION
24. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
[Signatures
Follow]
8
IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
date first above written.
|
▇▇▇▇▇▇
BROTHERS BANK, FSB
|
|||
|
(Purchaser)
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
▇▇▇▇▇
FARGO BANK, N.A.
|
|||
|
(Seller)
|
|||
|
By:
|
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|
Name:
|
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|
Title:
|
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9
EXHIBIT
1
MORTGAGE
LOAN SCHEDULE
(WFHM
2006-W24)
EXHIBIT
2
FORM
OF
OPINION OF COUNSEL
@
@
@
@
| Re: |
▇▇▇▇▇
Fargo Bank, N.A.
Mortgage
Loan Series @
|
Dear
Sir/Madam:
I
am @ of
▇▇▇▇▇ Fargo Bank, N.A. and have acted as counsel to ▇▇▇▇▇ Fargo Bank, N.A.
(the
“Company”), with respect to certain matters in connection with the sale by the
Company of the mortgage loans designated as Mortgage Loan Series @ (the
“Mortgage Loans”) pursuant to that certain Seller’s Warranties and Servicing
Agreement and Mortgage Loan Purchase Agreement by and between the Company and
@
(the “Purchaser”), dated as of @, 2006, (the “Agreements”), which sale is in the
form of whole Mortgage Loans. Capitalized terms not otherwise defined herein
have the meanings set forth in the Seller’s Warranties and Servicing
Agreement.
I
have
examined the following documents:
|
1.
|
the
Seller’s Warranties and Servicing
Agreement;
|
|
2.
|
the
Mortgage Loan Purchase Agreement;
|
|
3.
|
the
Custodial Agreement;
|
|
4.
|
the
form of endorsement of the Mortgage Notes;
and
|
|
5.
|
such
other documents, records and papers as I have deemed necessary and
relevant as a basis for this
opinion.
|
To
the
extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreements.
I
have assumed the authenticity of all documents submitted to me as originals,
the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based
upon the foregoing, it is my opinion that:
|
1.
|
The
Company is a national banking association duly organized, validly
existing
and in good standing under the laws of the United States and is qualified
to transact business.
|
|
2.
|
The
Company has the power to engage in the transactions contemplated
by the
Agreements, the Custodial Agreement and all requisite power, authority
and
legal right to execute and deliver the Agreements, the Custodial
Agreement
and the Mortgage Loans, and to perform and observe the terms and
conditions of such instruments.
|
|
3.
|
Each
person who, as an officer or attorney-in-fact of the Company, signed
(a)
the Agreements, each dated as of @, 2006, by and between the Company
and
the Purchaser, and (b) any other document delivered prior hereto
or on the
date hereof in connection with the sale and servicing of the Mortgage
Loans in accordance with the Agreements was, at the respective times
of
such signing and delivery, and is, as of the date hereof, duly elected
or
appointed, qualified and acting as such officer or attorney-in-fact,
and
the signatures of such persons appearing on such documents are their
genuine signatures.
|
|
4.
|
Each
of the Agreements, the Custodial Agreement and the Mortgage Loans,
has
been duly authorized, executed and delivered by the Company and is
a
legal, valid and binding agreement enforceable in accordance with
its
terms against the Company, subject to the effect of insolvency,
liquidation, conservatorship and other similar laws administered
by the
Federal Deposit Insurance Corporation affecting the enforcement of
contract obligations of insured banks and subject to the application
of
the rules of equity, including those respecting the availability
of
specific performance, none of which will materially interfere with
the
realization of the benefits provided thereunder or with the Purchaser’s
ownership of the Mortgage Loans.
|
|
5.
|
The
Company has been duly authorized to allow any of its officers to
execute
any and all documents by original or facsimile signature in order
to
complete the transactions contemplated by the Agreements and the
Custodial
Agreement in order to execute the endorsements to the Mortgage Notes
and
the assignments of the Mortgages, and the original or facsimile signature
of the officer at the Company executing the Agreements, the Custodial
Agreement, the endorsements to the Mortgage Notes and the assignments
of
the Mortgages represents the legal and valid signature of said officer
of
the Company.
|
|
6.
|
Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Company of or compliance by the Company with the
Agreements, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated
by the
Agreements and the Custodial Agreement; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
|
|
7.
|
Neither
the consummation of the transactions contemplated by, nor the fulfillment
of the terms of the Agreements and the Custodial Agreement, will
conflict
with or results in or will result in a breach of or constitutes or
will
constitute a default under the charter or by-laws of the Company,
the
terms of any indenture or other agreement or instrument to which
the
Company is a party or by which it is bound or to which it is subject,
or
violates any statute or order, rule, regulations, writ, injunction
or
decree of any court, governmental authority or regulatory body to
which
the Company is subject or by which it is
bound.
|
|
8.
|
There
is no action, suit, proceeding or investigation pending or, to the
best of
my knowledge, threatened against the Company which, in my opinion,
either
in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment
of the
right or ability of the Company to carry on its business substantially
as
now conducted or in any material liability on the part of the Company
or
which would draw into question the validity of the Agreements, and
the
Custodial Agreement, or of any action taken or to be taken in connection
with the transactions contemplated thereby, or which would be likely
to
impair materially the ability of the Company to perform under the
terms of
the Agreements and the Custodial
Agreement.
|
|
9.
|
For
purposes of the foregoing, I have not regarded any legal or governmental
actions, investigations or proceedings to be "threatened" unless
the
potential litigant or governmental authority has manifested to the
legal
department of the Company or an employee of the Company responsible
for
the receipt of process a present intention to initiate such proceedings;
nor have I regarded any legal or governmental actions, investigations
or
proceedings as including those that are conducted by state or federal
authorities in connection with their routine regulatory activities.
The
sale of each Mortgage Note and Mortgage as and in the manner contemplated
by the Agreements is sufficient fully to transfer all right, title
and
interest of the Company thereto as noteholder and mortgagee, apart
from
the rights to service the Mortgage Loans pursuant to the
Agreements.
|
|
10.
|
The
form of endorsement that is to be used with respect to the Mortgage
Loans
is legally valid and sufficient to duly endorse the Mortgage Notes
to the
Purchaser. Upon the completion of the endorsement of the Mortgage
Notes
and the completion of the assignments of the Mortgages, and the recording
thereof, the endorsement of the Mortgage Notes, the delivery to the
Custodian of the completed assignments of the Mortgages, and the
delivery
of the original endorsed Mortgage Notes to the Custodian would be
sufficient to permit the entity to which such Mortgage Note is initially
endorsed at the Purchaser’s direction, and to whom such assignment of
Mortgages is initially assigned at the Purchaser’s direction, to avail
itself of all protection available under applicable law against the
claims
of any present or future creditors of the Company, and would be sufficient
to prevent any other sale, transfer, assignment, pledge or hypothecation
of the Mortgages and the Mortgage Notes by the Company from being
enforceable.
|
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which you
initially and directly resell the Mortgage Loans may rely on this opinion as
if
it were addressed to them as of its date.
Sincerely,
@
@
@/@